This week’s interview is with Rachel, who has lived in both Singapore and Sydney.
She writes a blog focusing on key life skills not taught by traditional education systems.
Table of Contents
Discovering the importance of personal finance
Some may call it fate, but Rachel discovered her newfound interest through a series of fortunate events.
She chanced upon Rich Dad Poor Dad by Robert Kiyosaki, which changed her mindset of money completely.
It truly is one of the few life-changing books that she has come across and highly recommends everyone to read it.
I’ve been vouching for this book as well and strongly encourage you to give it a shot!
A few weeks later, she was at a hackathon centred around the theme of Financial Inclusion.
A hackathon is a competition where people come together, form teams and work on a business idea over the span of a few days.
Afterwards, they will pitch the idea to a panel of judges.
She decided to join a guy who pitched an idea for a game to promote financial literacy.
After doing some research, she found some really alarming statistics on financial literacy.
It also made her realise that she lacked a proper education on personal finance!
She started to educate herself, binging on personal finance blogs, videos and books.
Cashflow game and personal finance
The Cashflow game was created by Robert Kiyosaki, and it’s a fun way to learn how to track your
- Income statement
- Balance sheet
Rachel was introduced to the game through a bunch of more experienced players.
By adapting the game and creating their own rules, she was able to get an enriching learning experience every week.
The aim of the game is to invest in assets that provide you with a monthly passive income, such as:
Once your monthly income is greater than your monthly expenses, you become “financially free”.
This means that you no longer have to work for money!
You can still choose to work, but at least you’ll be free to do whatever you really enjoy!
This is what I’m advocating strongly too, to pursue financial freedom and not being a slave to money.
Here are 2 important lessons that she has learnt after playing the game:
Get comfortable with debt
Rachel had never taken on debt in real life. This made her really wary of using debt in the game to find investment opportunities.
During her first few games, she had an occupation with a low income.
By not taking any debt, she was stuck with the little money that she had and could not invest in anything.
She had to rely on lucky breaks in the stock market to have enough cash to invest instead.
That being said, debt should be used wisely! If you are not careful and take on too much debt, you’ll eventually go bankrupt.
Rachel recommends determining your monthly interest payments first. After finding out how it affects your cash flow, you can consider taking the loan.
Negotiate joint ventures
This mainly happens when you:
- Don’t have enough money to invest in a deal, AND you
- Don’t want to take a bank loan
Instead, you can find a partner to split the cash flow and profits of the investment.
It’s a win-win situation for all parties involved!
After seeing how these strategies work in the game, you’d be more likely to do the same things in real life.
In a way, the game makes you realise what is possible!
Rachel chooses to invest in index funds, which is a good starting point for anyone.
It’s especially great for those who prefer not to learn about investing in-depth.
With index funds, you’re able to buy into a large number of companies. Your risks are managed as you’re not dependent on the performance of just one stock!
Rachel uses Spaceship to invest in Australia. It provides a low cost option compared to the usual brokerage platforms. It has no fees on balances below $5,000 AUD as well!
It’s great for people who prefer to use a dollar cost averaging (DCA) strategy, rather than a lump sum.
DCA is when you invest a set amount on a regular basis, regardless of whether the stock has gone up or down.
It is similar to the Regular Savings Plans (RSPs) in Singapore. However, these RSPs have transaction fees for each buy and sell order.
Rachel’s advice on investing: There’s definitely no one-size-fits-all strategy when it comes to investing.
It’s up to you to learn and experiment to find out what works for your own situation.
Her strategy is and always will be a work in progress!
How Singaporeans and Australians manage their money
Australia does not have an equivalent of hawker food where you can get a good meal for $3-5.
Hence, she finds it much harder to save money if she eats out a lot.
Most Australians do meal prep if they want to save on food costs. That’s because groceries in Australia are way more affordable than in Singapore.
Rachel feels that it doesn’t make sense to meal prep in Singapore.
Almost everything is imported and expensive in the supermarket. You can easily get a hawker meal for a cheaper price as well.
However, you may want to steer clear of eating hawker food everyday since it’s not the most healthy of options!
Australia also has really good cafes, so Rachel has a tendency to splurge on coffee.
Then again, Singaporeans may have a similar issue with bubble tea.
The best investment to make in life
Rachel feels the greatest investment you can make is in yourself.
Investing in your mindset and your skill sets enables you to find ways to create value.
Mindset is everything when it comes to crafting your life and achieving whatever you want to do. Just having technical knowledge isn’t enough.
Here are some things Rachel recommends to work on:
- Self-awareness (learning more about yourself)
- Programming your subconscious mind
These will help you to be more effective at what you’re doing!
Rachel feels it’s important to surround yourself with people who are living the kind of lives you want for yourself.
Try to limit your exposure to people who tend to just be negative and hold you back.
The best thing you can do is to find mentors or join mastermind groups.
If that’s not possible, there are many great role models on the Internet to learn from too!
Rachel cautions that you shouldn’t follow all advice blindly.
What works for someone else may not necessarily work for you!
For example, Rachel read the book The Barefoot Investor by Scott Pape.
She dutifully followed the advice to set up multiple bank accounts with an online bank, two for debit and two for savings.
However, it was really easy to transfer money between the savings and debit accounts.
In the end, she spent more than intended!
This taught her to set up a savings account in a separate bank, with no linked debit account.
She had to learn from the experience and adapt her strategy to her own situation.
Lastly, Rachel believes that sharing is caring.
If you’re learning new things and invest in your personal development, please share what you’re learning with others!
It doesn’t matter if it’s already been said by other people before.
Sometimes, you’re the perfect person to reach someone, and inspire them with your unique voice and story.
Rachel wants to continue writing content to share what she’s learnt from books, podcasts and general life experiences.
She aims to reach millions of people globally and empower them through education.
By spreading valuable information to people and enabling them to live up to their potential, she is able to achieve a fulfilling life.
If you’d like to get in touch with Rachel you can check out her blog, which showcases the hackathons and projects she’s been involved in and the lessons learnt from them.