As a Chinese Malaysian girl born into third generation Chinese immigrant parents in Malaysia, saving money and being frugal was a common refrain in our family vocabulary. Learning to invest and adjusting to the concept of the risk-reward ratio was a journey that came later in life for me.
In the Psychology of Money, Morgan Housel says: “your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works” – a quote that rings true when I reflect on my journey to financial literacy. The generation you come from, the parents who raised you, where you grew up, all contribute to our unique worldview of how money works. I’ve learnt that how you handle your money isn’t about how smart you are, but mostly bound up with your emotional relationship with it.
I was socialised into a scarcity mindset
My early memories on the subject of money revolved around my father. He often talked about money not from a place of empowerment, but a place of scarcity – instilled with fear that it could all slip away. His mother was influential in shaping this worldview. She was the matriarch of the household, tasked with raising her three children whilst her husband worked. Stories of her would inevitably turn to her tight fisted nature. The word he used in hokkien dialect was ‘kiamsiap’ - which translated to ‘miserly’.
My father was the first to break the cycle, and the first of his generation to attend University. In his 20s, the passing of his sister’s husband left her family stranded financially. With a strong sense of familial duty, my dad took on the responsibility of sending money regularly to his sister’s kids and would always tell me stories of how both my mother and him worked long hours and saved religiously – not only to send money home to his family, but to save money for our future.
This upbringing formed the context for his unbending desire for stability. My father had a dominating presence, who wore the badge as breadwinner, with a heavy mix of burden and pride. His attitude to money was ‘work hard, save harder’. Combined with an innate suspicion of others, his hard-earned money needed to be protected at all costs. He worked his way up the ranks in the corporate world, retiring as a regional director for a public listed company and retained the position as board member well into his early 70s.
Why would I take that kind of risk?
An intelligent man in business, I remember being befuddled by his desire to prioritise saving over investing. I vividly recall my father referencing interest rates as the savviest benchmark for growing money. “Why would I take that kind of risk? I’m better off putting money in the bank and earning interest” I recall him saying. It’s this mindset that explains why my mother would make regular trips to the bank on their behalf and transfer money to the bank account offering the best interest rates. My father never invested in the stock market, property market or anything that involved any sense of risk. He was too emotional to deal with the volatility. And with that, he placed his trust with banking institutions above all else.
"Financial literacy and investing is indeed a feminist act, and I’m determined to raise girls who understand the value and power of money"
What I saw and what I heard permeated my subconscious and shaped my upbringing. I was always careful with money because I carried a sense of responsibility (and a generous dose of guilt) that I was spending my parents’ hard-earned money. I was bound to my parents through the contract that said “we work hard to pay for your education, so your job is to study hard and get the grades” and “when you work hard, you save hard”. This is what I believed. It was the tried and tested formula. It was my Asian upbringing.
My journey towards investing, risk and reward
Making my money work for me never entered my periphery until around 29. It was partly through instinct, a bit of luck and some conversations with friends that sparked my journey into financial literacy. Living in Singapore, the housing market was at an all time low and I knew things were starting to recover. Interest rates were at an all-time low of 2%, even though the mortgage me and my then fiancée committed to (a 40-year loan period) seemed eye wateringly insane.
We moved to London six years later, and the Singapore property had appreciated 50% in value. This next step was crucial. More accustomed to risk taking, a friend advised we take out a second mortgage on our Singapore home and apply for a third mortgage in the UK, and buy the biggest house we could afford in London. Her rationale being that the bigger your capital outlay, the bigger the potential return. Despite knowing that London property was taking a corner, it was certainly not an undertaking I wanted on my shoulders. Eager to convince me otherwise, she explained how maximising my mortgage when I had a long runway in my career, was a sound calculated risk, but most importantly, a winning strategy. I looked at the risk-reward equation I was willing to stomach and took the plunge. Juggling three mortgages felt like a massive undertaking and sharpened my career focus in the long term.
These series of decisions turned out to be my accidental financial education and a drawn out lesson in the concept of long-term investing. In many ways, I stumbled into it blind. In hindsight, I could have started investing earlier. Had my family upbringing been different, I might have approached my career not by simply repeating the career patterns of working hard and saving hard.
Financial learning and investing is a feminist act
Now I’m in my 40s, I’m educating myself on stock investments and financial markets, something that has taken quite some time to get comfortable with, but something I’m learning is essential to establishing financial freedom. The more I learn, the more I’m discovering that the financial industry is designed to intimidate. Financial jargon makes simple mechanics sound more complicated than it needs to be all with the raison d’etre of profiting off our fears. But it doesn’t need to be that way, and simply educating yourself and staying up to speed on the financial news has had a positive impact on my confidence.
Along the way, I’ve also learnt that patriarchy has loomed over the financial system to exclude women from financial independence for far too long. Breaking the cycle of my family’s saving mindset, it’s these lessons I will pass down to my two daughters, aged 8 and 13. I want them to feel confident about money. I have opened junior ISAs for them, excited to show them (with evidence) the magic of compounding as each year passes. I’m already asking them what companies they would invest in, what brands they think are worth investing in and why. It’s these conversations that need to start early. Financial literacy and investing is indeed a feminist act, and I’m determined to raise girls who understand the value and power of money.
Women have the power to transform their realities
But when I zoom out and reflect on three generations and our respective attitudes to money, I become more convinced of the power of psychology when it comes to financial literacy, and the power we as women have to transform our realities. It’s also helped me realise how formative our unique upbringing can be in shaping this relationship. For my father’s mental health and peace of mind (and our whole families too), perhaps sticking everything in the bank was indeed the best decision for him. His strategy maximised for how well he would sleep at night.
But for me, it’s recognising the ability I have to make my money work for me and my family – and that’s a life skill which I’m still learning. A skill that should be taught in schools, alongside quadratic equations and the history of the Cold War. Too often though, money is treated as a taboo subject – something that we as women shouldn’t talk about. That’s because women associate investment conversations with power hungry wall street bankers and resort to quickly saying “I’m not money minded. Money doesn’t motivate me.”
But why shouldn’t money motivate us as women? Why shouldn’t we talk about money or strive towards wealth? I‘ve learned that money is more about freedom, and that investing carves the path to establishing a life on your own terms. With that, comes independence, autonomy, the ability to say to oneself: “no one owns me. I can choose the jobs I want, how I add value to the world and who I spend my time with.” There’s power in that, and that’s certainly something worth fighting for.