Path to Investing: How You Should Begin

Investing can seem like a very daunting process. Here’s how you could get started.

The sooner you start, the easier it will be to build a big enough nest egg to make life easier in the future.


Investing always includes risk.

Risk of what? Well, simply put, it is the risk of losing your money, and your mind along with it.

Path to Investing by Cherie Tan
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Hence, it is important that you have a solid financial foundation before you begin.

What is a “Solid Financial Foundation”?

A solid financial foundation is your first line of defence: your health, hospitalization and accident insurance, your rainy day & emergency fund savings.

This serves as your first and most important line of defence for your financial health, as it protects your ability to continue earning an income (or at least weathers you through the days in which you can’t)

A couple of things to get right here:

1. For your “defensive” insurance, be sure to include adequate hospitalisation insurance on top of what your company already provides, as company insurance is not portable (you cannot take it with you should you be fired or leave the company). In the event you develop a medical condition during your company cover, and you subsequently get laid off, you’ll not be able to cover this medical condition in your hospitalisation insurance.

2. For self-employed people, ensure your emergency funds can cover expenses, liabilities and loans to be paid off, etc for a good 12 months (6-9 months is recommended for full-time employees)

3. If you have dependents such as children or if you’re supporting your elderly parents, speak with a financial consultant to ensure you have adequate insurance cover. Your financial consultant is trained in providing expert advice and solutions for you.

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Work with what you have, and then some (more).

Plenty of us have a day job. On occasion, you chance upon this certain group of people who seem to have it all – time, happiness, money, and fulfilment in what they do. You begin to wonder why you aren’t in a similar position as they are, and how you could achieve the same.

Side note:
No matter what your circumstances are, and despite your circumstances, you have all the opportunities to become a happy and fulfilled person, too. Perhaps you’re not born with a silver spoon, served lunch on a silver platter every day, neither do you drive a fancy car, but that’s okay. Soon, you’ll realise life is more than fancy cars and houses. I’ll probably pen this down in a blog post later, for now, let’s focus on today’s topic on working with what you have, and then some (more).

Passive & Active Income: You Need Both.

When I first started freelancing at the age of 14, I honestly had no idea what personal finance was nor had I the slightest clue about financial planning and the importance of it. This led to a series of pretty stupid choices, from spending too freely and lending money too readily, ultimately destroying my financial stability. Picking myself up again wasn’t all that difficult, but it took some time getting used to.

I began to understand the kind of power time has on each and every one of us, and how it can be used to benefit or harm ourselves now and in the long run.

One of the key things I felt most strongly about was the ability to create both passive and active income streams. Perhaps this urgency is stronger due to my personal experiences and the fact that I’m a woman. Having both flexibility and a comfortable income was something incredibly important to me and thus urgent for me to establish.

Create Multiple Income Streams for Security and Wealth

Imagine losing your day job. Your family might have some emergency savings to cover for the next five to nine months. Now imagine having multiple income streams to give you the means to keep you afloat for an additional year or so, perhaps more. Neither will you nor your family feel the acute stress of having to find ways to unplug that stream of income. It will also provide much more time to clear your mind and figure out the next steps in your career, instead of jumping into just any job that would offer some semblance of an income and stability. You could even enjoy your period of unemployment and focus on building your side businesses.

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Having multiple income streams in today’s world is key to financial security, but for many of us, it could well be the first time you’ll have to rely on investments and business income.

Currently, I’m building out two sources of income plus my full time job as a financial planner – an education business and an online health and wellness store. I’m considering adding a few more in the next year, too.

With that, let’s explore some possible passive and active income streams you should start tapping into to grow your income and achieve more.

Side note: As I grappled with my first month in a new career, I also learnt the importance of protecting my ability to earn and my future net worth, two topics I will be sharing in future posts.

Active Income: The Definition

Active income is earned by trading your time for money. As long as you find yourself spending more than an hour or two of your time per week on it, it is considered an active income stream.


  • A salaried full-time job, or hourly work
  • A side business or gig, commissioned income (i.e. sales), or side hustle income.

Active Income: The Definition

Active income is earned by trading your time for money. As long as you find yourself spending more than an hour or two of your time per week on it, it is considered an active income stream.

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  • A salaried full-time job, or hourly work:

    There is tranquility in having a full-time, salaried job. From employer CPF contributions into your CPF account (think free money for your retirement) to a full range of medical benefits and even intangible benefits such as having coworkers to socialise with and an easier access to industry-specific networking, a full-time job always has its upsides.
  • A side business or gig, commissioned income (i.e. sales), or side hustle income:

    A side business earns you income differently than full-time workers in that not only do you pay yourself a salary, but you also get to pocket the profits, which makes it a pretty sweet deal.

    Side hustle income includes money earned from driving Grab or GoJek, freelancing in your area of specialty (e.g social media marketing) via Zomwork, or tutoring students by taking on additional tuition classes via tuition agencies such as A1 Tuition Academy.

Passive Income: The Definition

This is the sweet spot we all hope to achieve. Passive income is earned by investing either an upfront amount of time and/or money into investments, income-generating assets, and business ideas that pay you even if you’re not working.

It should be noted that no income stream is 100% passive. It simply requires significantly less amount of time to monitor and manage depending on their different levels of passivity.

For example, a savings account that pays interest needs very little monitoring, while dividend stocks require a bit more attention. A rental unit may require an hour or two of your time per month, or several hours on some days going through legal or renovation works.


  • Dividend income
    Dividend income is turning out to be one of my favorite income streams for the ease of administering and management on day-to-day (or sometimes, month-to-month). Moreover, income from dividends is far more predictable than market fluctuations.
  • Rental income
    As mentioned earlier, rental income is one of the most passive ways to earn a side income stream without having to do very much at all on a day to day basis. However, in order to have rental income, you would need a rather significant upfront capital to purchase properties (single or jointly).

    Side note:
    Most people turn to properties in Malaysia or United Kingdom for the affordability reason. However, don’t forget currency exchange risks and the additional management fees, plus air tickets or travel expenses should you need to visit your property for legal, management, or other purposes, all of which could add up pretty quickly in the long run and requiring much more of your time! Book your appointment for a financial review:

  • Royalties
    Artists, writers, and musicians can earn recurring passive income from royalties paid for the work they have created. This option does require effort upfront in creating these materials (e.g: a book or music album), but the effort pays off in the long run.
    Talent, level of success, recognition, and a sprinkle of luck are needed too, in determining how well this passive income option can be for you.
  • Investment products, investment-linked products, and various savings products from financial services companies
    Many financial products out there are designed to help you earn your income (in the long run) passively. Depending on your age and financial circumstances, there are products out there that would fit your needs and take that headache off your mind.

How many income streams is too much?

My advise would be to start with one and calibrate.

There are some of us who in many cases tend to overwhelm ourselves with too many options and too many side gigs. Take some time to analyze if that income stream is working out for you. Here are some questions to ask yourself:

  1. Am I turning a decent profit?
  2. Is this impacting my mental health in a good or bad way? Can my loved ones benefit or be harmed by this effect on my mental health?
  3. Is my physical health and emotional well-being positively or negatively impacted?
  4. Am I finding both financial and emotional fulfilment with this side income stream (passive or active)?
  5. Am I on the road to burning out, or will I just need to grind this one out for a couple of months and be able to minimize efforts while maintaining the income stream?
  6. How sustainable is this income stream in the long run?

Consider also the security, flexibility, and wealth creation opportunities this income stream would provide for you.

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Your family and financial outlook plays a lot into your decision. It would be good to review this with your spouse and a dedicated financial planner to help ascertain your readiness for taking on another income stream and the potential outcomes.

Secret to making it work? Accountability and Persistence.

The key to creating multiple income streams are two things: accountability and persistence. This is not a get rich quick scheme. In fact, most things in life are never a get rich quick scheme.

Getting started with the right mindset and approach is paramount. If you spend too much time ruminating or waiting, you’re losing out on time something you cannot earn back.

At a minimum, explore financial products with a dedicated financial planner and perhaps open a higher interest-bearing savings account, invest $100 in a stock ETF (Exchange Traded Fund), which are perfect for beginners and those who wish to get a head start in building passive income-generating assets.

Recalibrating your mindset and kicking old habits comes next. You’ll need to actively pull your brain away from being the typical consumer. Smarter money habits help you spend less and earn more. Think constantly about creating sustainable wealth, rather than what drinks you’ll be having next Friday night and the available hangover options the morning after.

When you begin to see each dollar and cent as an opportunity, a potential building block of your wealth, you’ll start to notice how you want to hold onto more of them and keep them safe.

“Earn more, spend less, invest the surplus, protect what you have and what you will own in the future.”

Use your primary source of income (for most of us, that’s our full time job) as the main driver while you slowly build supplemental income. Exceed expectations at your day job. Celebrate the bonuses, the raises, the commissions, but don’t spend them mindlessly or piss them away (literally 🍺🍺🍺)

More importantly, focus on one income stream at a time. Build something that is sustainable and works as either passive or secondary active stream, one at a time, instead of taking on too much at one go and burning out in the end.

Lastly, keep on building, creating, reinvesting, sustaining, and protecting what you have.

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Risks. And Stuff.

Why do some of the richest people go broke?

The herd mentality could be one reason. When you’re with a certain social group, you tend to keep up with the lifestyle and expectations and social norms of the group. If everyone’s spending $50 on lunch every other weekday, it would seem entirely normal and perfectly alright to do the same for yourself, since everyone’s doing it. If everyone owns a classic Chanel caviar leather flap bag, then it would too seem normal to purchase and own one (or a couple) of your own. If everyone’s blowing their cash and breaking the bank (and credit cards!) on the latest cars, or an entire collection of Macallan M’s, then it’s easy for you to imagine the same for yourself.

Whether that bag, that watch, that car, that lifestyle translates to a status of wealth, a feel-good factor, or is simply accepted as part of the norm within your social circle, it can be refreshing to take a couple of steps back and look at what truly matters to you.

Some of the richest people go broke because they partake all too readily in the herd mentality and readily welcome the kind of lifestyle their social circle indulge in, without seriously considering the risks and impact on themselves when things do go awry. When reality finally hits, it hits hard and fast. It will be nearly impossible to build the same sort of finances and income when you’ve reached that breaking point. Time to pick yourself back up again, hopefully?

How Does One Mitigate Such Risks?

NFL Player Justin Tuck* sets a great example of someone who’s had a great (and cash rich) career in his 11-year stint as one of the top NFL players, yet has made some seriously smart decisions to help him avoid the financial death trap of most NFL players raking in the same kind of income he’s enjoyed.

The typical career lifespan of a NFL player is anywhere between 1 to 10 years. Justin Tuck stretched his over 11 years, but conscientiously chose to mitigate the risks and impact that the end of his NFL career would bring about by investing in education (in one of the most prestigious schools for finance, I might add). He knew there was an end to his lucrative and awe-inspiring career as a NFL player, and he made the intelligent decision of investing in himself in a different industry, crafting out another source of income and career path for himself for those days when he will no longer be a part of the NFL.

When you’re caught up with living, you know, the whole “I am adulting, working, earning an income, trying to make sense of my life as a new parent, blah blah blah” shenanigans, don’t forget you’re still playing the game of life. You still need your long term strategy, and you will still have risks you need to plan ahead for to mitigate, and hopefully avoid without too much damage to your financial, emotional, and physical health.

Think about your life as a game, you know, one of those city-building roleplaying games where one city goes to war with another to expand territories and such. You know better than I do that in order to expand your territory successfully, you’ll not only need to protect what you currently have, you’ll also have to plan resources to both attain new land and protect that new plot of land. You’ll then have to allocate resources and time and effort to grow the new plot of land, all while spending resources in building a thriving community on the lands you currently own, protecting what you already have, and strategising on the next land acquisition.

Your lands are what you own – tangible and intangible assets.

Financial plans are a means of protecting and acquiring new plots of land.

Good financial consultants are there to help guide you on strategy, on products, and helping you acquire things you need to both safeguard and increase what you own.

*NFL Article – Justin Tuck

Your Retirement Strategy & The Case of a Marathon Runner

At a tender age of ten, my physical education (P.E) instructor at the public, neighbourhood school I attended, would scream at the top of his lungs as we struggled to complete the entire obstacle course,


Our feeble attempts were in vain. Most of us, myself included, collapsed by the side of the running track, desperately gasping for air. I sat clutching the side of my stomach, resisting the urge to throw up.

The end in mind for me was to complete the entire course.

No matter how many times I fell over, stopped to catch my breath, steady the unbearable churning in my stomach and attempt to swallow the hot acid sitting at the back of my throat, I was determined to get to the finish line alive and live to brag about it.

This is a story I enjoy sharing with my clients when I broach the topic of retirement planning and retirement strategy.

Whatever we’re doing right now, time isn’t going to stop and wait for us. It keeps moving ahead, waiting for nothing and no one. All the obstacles and challenges, all the distractions in life make tempting reasons to blissfully ignore the fact that we are all going to approach this one common goal that lies ahead of us: retirement.

What we choose to do right now, today, this month, this year, is inevitably going to impact how well we’re going to live in our retirement years.

We could choose to wait, for we might feel there are more important, up and coming challenges to address.

Challenges and obstacles we can see immediately ahead of us can be incredibly distracting.

A sprinter would think of giving his all for those ten precious seconds, while a marathon runner would decisively pace himself throughout the entire course, ensuring to preserve enough energy to complete the race well and alive, while exerting just enough to meet and conquer all the hurdles and obstructions and impediments that will come his way.

A marathon runner inherently knows and is always consciously aware that his progress will be impeded one way or another.

If he should exert too much energy at the beginning of the marathon in order to get ahead of some of his peers, he risks running out of strength to keep up his pace to complete the marathon.

By ignoring the importance of pacing himself throughout the run, and failing to effectively execute his pacing strategy, he knows that the likelihood of him ever completing the marathon would be much less than if he had a strategy and stuck with it until the end.

Our retirement is the end goal we should begin planning a strategy for as soon as we receive that very first paycheck. That paycheck acts as the whistle that slices through the deafening silence at the beginning of any marathon, telling you it’s time you give your very best shot.

What is your retirement strategy like and how are you with executing it?

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3 Ways Women can Protect and Maintain a Standard of Living

As more career-driven and purpose-driven women are actively joining the workforce, there is a need to recognise the fundamental disparity between what women will need over their lifetimes due to women’s longer lives, time out of the workforce to raise families and common female-specific illnesses prevalent in today’s society.

What all this means is that women need to think about their financial goals and plans differently than men. Here are 3 ways women can protect and maintain a standard of living they require:

Ensure that you are adequately insured

When it comes to insurance, it is easy to assume that by having an investment-linked policy (ILP) or a savings plan as “having adequate insurance” or “enough insurance”. A common misconception about having insurance is that having more than the average number of policies for a woman you age is “more than enough”. However, to truly decide if you are adequately covered as a woman, you will need to consider the following:

  1. Do you have enough coverage for an event of sudden death, or inability to continue employment for the rest of your life?
  2. In addition to point #1, do you have streams of income to support grandparents or children who are dependent on you for food and shelter?
  3. In an event of a female-specific illness, such as breast cancer, do you have enough to cover the huge medical costs you are about to incur?
  4. In addition to point #3, do you then also have streams of income to support grandparents or children who are dependent on you, while you’re recuperating and recovering, and unable to work for a period of time?
  5. Do you know the in’s and out’s of your hospitalisation insurance plan to make the best use of it, ensuring a comfortable hospitalisation stay without worrying about racking up those bills?
  6. Do you have protection against injuries incurred due to accidents, such as losing a limb or suffering from burns?
  7. In addition to point #6, do you know if your hospitalisation plan covers adequate outpatient medical bills to treat your injuries which you suffered from accidents?

As you transition through different life phases (finding a new job, getting married, having children, losing a parent, divorce, etc.) you will need to speak with your financial advisor to review your protection needs and make any necessary adjustments to ensure that you are not under-insured or over-paying for protection insurance based on your needs. Such protection and insurance review is encouraged to be done once per year with your trusted advisor.

To get a good idea on the costs of medical bills for common female-specific illnesses and surgical bill estimates, you can visit the Fee Benchmark and Bill Amount Information (Ministry of Health, Singapore)

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Ensure you have income streams planned for days after your desired retirement age.

All of us want comfortable retirement years spent happily with our grandchildren and traveling around the world. If you plan to stop working by a certain age and spend the remainder of your days exploring every corner of the world, you’ll need to decide how you’re going to support yourself throughout these years.

For some of us, we might be lucky enough to have both a place to live in and an investment property we can sell when we choose to retire, so we can use the proceeds from the sale of the investment property as the main retirement lifestyle funding source.

However, for the majority of Singaporeans, the house we live in is our one and only property. Options do include downgrading to a smaller, cheaper home, but you might find yourself still short of the minimum retirement amount you need to live the retirement lifestyle you want.

The first step to figuring out your retirement plan is to decide on:

  1. When you’d like to retire
  2. How much you want to/need to live on during your retirement years (calculate this on a per-year basis)
  3. And how many years of retirement you expect yourself to live through

Planning for retirement should start the moment you receive your first paycheck.

If you’re currently in your twenties:

you’re in the best time of your life to start saving, investing and planning for your retirement years. The more time you have ahead of you, the easier it becomes to set aside funds to start growing your retirement nest egg.

Have a partner or a spouse? Working on your financial plans at an early stage of your journey together can help ease a lot of obstacles along the way:

Planning to get married or just started settling down with a baby on the way? This is one of the most crucial times for you to sit down with your spouse or partner to tease out financial details and plan for your growing family.

Financial obstacles place a huge burden on couples, and it is one of the most common root problems to marital issues.

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My rule of thumb when it comes to marriage:

Plan early, get comfortable talking about money with your partner or spouse, figure out all possible forms of financial obstacles and how to get around them, before they hit you.

Review Your Current Financial Commitments

It’s always healthy to track our personal finances and financial commitments. Take the last weekend of each month to review your monthly expenditure, available savings, and existing mortgages or loans, and credit card debt.

Keeping track of all your current assets and liabilities, as well as your long-term liabilities, gives you a good idea on your financial health and how you can work out the budget for the upcoming months to ensure you stay on a healthy financial track.

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