Hello, I am Ann. I have been investing for >2 years since graduation. My Personal Finance journey began after coming across the FIRE movement when I was an undergraduate.
I spent hours binge reading finance blogs and learnt so much from all the bloggers. They taught me how to be savvy with my finances and avoid their mistakes.
Since then, I have accumulated $100K by age 25, by maximising my savings rate while living a fulfilling life. Here’s what I did
1. Increase income
I moved to a company with a higher growth potential and secured a role with greater responsibilities.
Transitioning to a new job, negotiating for your salary, asking for a promotion and networking are intimidating.
These books helped me in navigating my career.
When to jump: The four steps to leave your unfulfilling job - listen to the little voice, make a plan, let yourself be lucky and don’t look back
Never eat alone: The specific steps and inner mindset necessary to develop a network of relationships
Who Gets Promoted, Who Doesn't, And Why: The secrets to climbing the career ladder and strategies for career advancement
I have multiple side hustles and a 9-5 job to strengthen my financial safety net.
My 9-5 role made up the bulk of income and my side hustles cover my monthly expenses.
I have 2 side hustles.
2. I'm a freelance digital marketer. My secondary side hustle gives me the opportunity to hone in-demand job skills.
These books help me to sharpen my focus and manage my time, in order to make the most out of my weekend for these side hustles.
Useful time management techniques
I invest in Index funds, Reits, Bonds and Stocks after building up sufficient emergency funds and buying my insurance
I started out with index funds. It’s the ultimate solution for beginners who want investing to be efficient and simplified.
Index funds are a smart investment because
Investing your time to hone and pick up the necessary skills provide a greater ROI, than spending hours doing research. You probably might not have enough capital to make significant returns in your early 20s. Therefore, the most efficient way to make money is through side-hustling and being good at your job.
Spend your 20's in acquiring skills, building income streams and accumulating assets
I started to invest in individual stocks in May 2020 and took interest in technology and growth stocks such as Tesla, Lemonade and Revolve. I also took the time to learn from experienced investors via courses, before the pivot.
As your capital grows and you feel more comfortable in picking stocks, you can make the pivot gradually.
I wrote about my reits portfolio here
It’s really important to never stop learning, and adopt a growth mindset. Investing can be overwhelming but it is financially rewarding. You can start small with index funds while taking your time to understand how stock picking works. These are the books on investment which I really enjoy
I have a high savings rate generally (>50%) as I adopt a minimalistic way of living. But Covid-19 showed me how I could reduce my spending even more. It's interesting to observe the differences in my expenditure pre-Covid and during Covid.
This means that my savings rate could be even higher by eating out lesser. But I don’t compromise the quality of my life in order to reach F.I. earlier. I know I would be happier in spending on things and experiences that I truly value (food and travel).
Side note: it is okay to buy what you truly desire and makes you happy
Here’s how I manage the biggest expenditures: food, transport, shopping and housing.
- Food: Bringing lunch to work and having my dinner at home at least 4 times a week saves me >$200 a month.
-Transport: I rarely cab. Since I listen to podcasts or catch up on my readings (you could probably guess that I am a huge bookworm by now), taking public transportation is alright.
-Shopping: I typically make my purchases annually/bi-annually on non-necessities. I try to purchase quality items that can withstand the test of time and find alternatives (getting a iMac instead of a Macbook).
- Housing: I live with my parents
We are conditioned to be consumers, with advertising messages telling us what we need to own in order to feel a certain way. Adopting the habit of consuming mindfully and letting it be ingrained into your lifestyle takes work.
The truth is, we can manage our expenses by spending smarter and learning how not to misthink money.
There are ways to overcome biases and think better, in order to make better money decisions.
These books taught me how to outwit marketing tactics, manage psychological triggers of influence and make better money decisions.
3) Psychology of Success
There's a big difference between money and wealth. Money is what you earn as you contribute your time. Wealth is the assets that work for you. You want to seek wealth, not money over the long run.
To build wealth, you need to have a success-oriented mindset, in order to move towards the fulfilment of your full potential and build wealth.
Here’s some of my favourites
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Thank you for visiting. I hope you enjoy the site!
- Ann, Scrappy Finance