When I first set out to get my first job, I had no grandiose illusions about money.
Coming from an average middle-class family that earned just enough to keep a roof over our heads, food on the table and us kids in school, I never imagined life beyond just earning a salary and living off it.
This meant working until I retired at 55 as my parents did, and then living off money I’d saved over my entire career.
But unlike my mum, who has a pension to see her through retirement, and both my parents, who held the same jobs for over 25 years, I knew that my work and therefore ‘money’ arc was going to be very different.
For starters, there wasn’t going to be a pension or medical benefits waiting for me at the end of it.
Work at the same company for decades? Hmmm….probably not.
One thing was certain for me though, and it was that I knew that I had to start saving as much as I could right out of the gate.
And The Work Begins
So I did, and I did it by always working two jobs or more at any given time.
I worked as a writer in publishing during the day and freelanced at night.
I’ve not been perfect with money by any stretch of the imagination — I’ve made plenty of mistakes, big and small — but I think I’ve done a pretty decent job of it, seeing that:
- I have zero consumer (and by this, I mean credit card) debt.
- My average savings rate is 60% or more on most months (I managed to hit an overall savings rate of 76% in the first half of this year, thanks to the Covid 19-induced MCO).
- I have a healthy 3-year emergency fund in place (just in case, because….life).
- I’ve grown the money I’ve earned into a portfolio of investments that bring in a five-figure income annually.
But….I didn’t get here without plenty bumps, valleys and blind spots.
Like anything else in life, the trick to overcoming these is to be highly aware of where you went wrong and not make the same mistake twice (although we all know that that’s easier said than done).
The Biggest Money Lessons I’ve Learned
Now that I have the benefit of hindsight, it only makes sense to share the lessons I’ve learned along the way so that if you can avoid making the same mistakes that I did.
LESSON #1: I COULD (AND SHOULD) HAVE STARTED EARLIER.
Although I started tracking my spending, setting a budget and investing in my mid twenties, I wish I’d started even earlier….like teens earlier.
As a teen, I was absolutely atrocious with any money I had, spending just about any cash that came my way simply because I didn’t know any better.
It still pains me to know that if I had channeled all the ang pows, allowances and cash I’d earned from the part-time work I did then into investments from the time I was 15, I’d be sitting on a pretty pile of cash by now and a whole lot closer to my FI number, thanks to compound interest.
LESSON #2: SAVING IS GREAT, BUT INVESTING IS BETTER.
I’m glad that I started investing consistently in unit trust funds (not the most cost-efficient, I know. But back then, it was the only other alternative to stocks) and stocks a couple of years into working at my first job.
But seeing how the payouts and dividends have been making a big difference to my overall income, I wish I’d put more into investing versus saving (stocks in particular) in those early years.
This would have given me more time in the market for capital growth and an earlier start with building a healthy stream of dividend income.
While I wish Malaysians had access to a wider range of lower-cost index unit trust funds to invest in, we have more investment options (think robo-advisors, peer-to-peer lending and equity crowdfunding) than ever to choose from.
LESSON #3: SHOPPING SHOULD NEVER BE A HOBBY. EVER.
I feel really lucky to be living in a time where I can basically get anything I want quickly and easily, 24 hours a day, 7 days a week without having to even go to the ATM.
The downside of this convenience and endless options is that it makes spending money way too easy.
While I’ve never gotten into any kind of consumer debt, I did let myself slide into a phase of mindless, compulsive shopping at one point.
Yes, I was saving a fixed amount of money every month, but I was also spending a lot of what was left over from my income.
A couple of things led me into it, one of them being what I call the Salary Complacency Syndrome (spent this month’s salary? No problem…there’s always next month’s salary to look forward to), allowing shopping to become my default habit when I had free time on my hands, and of course, constantly seeing other people love their shiny new thing of the week.
What got me out of this money-sucking pit of mindless spending?
Cleaning out my home and realising that I’d probably wasted tens of thousands of ringgit on useless stuff I never used over the years.
Let’s just say that compound-interest FOMO hit me really hard that week, and I never looked at spending money the same way again.
LESSON #4: LISTEN TO COMMON SENSE, NOT GREED.
Like anyone else, I’ve had occasions where greed got the better of me, like the time I dumped RM20,000 of my hard-earned cash into a foreign currency account thinking that I’d be able to turn a quick profit from the Australian Dollar as it rose.
Very, very bad move.
The very next day, the 2007 financial crisis reared its ugly head and everything tanked.
As a result, my cash was stuck in this account for years before I could withdraw it because I didn’t want to turn a paper loss into a real one.
I came out of this situation with a pitiful profit of just over RM500 while having my money in a fear-induced lock-down over five whole years.
Moral of this story: It’s a lot easier to get burned when you’re chasing after a quick profit (there are exceptions of course).
For most regular folks like you and me, making financial decisions based on long-term goals and sound fundamentals is the best way to go about growing your wealth.
LESSON #5: ALWAYS BE NEGOTIATING.
This is going to sound appalling, but for the first 10 years of my working life, I never negotiated my salary.
To be fair, my colleagues and I were paid according to a fixed salary scale at the time, and we had unions that regularly negotiated for better pay on our behalf.
And honestly, I was easily making making double or triple my basic salary at my first job on most months thanks to generous bonuses and allowances throughout the year (as you can probably tell, these days are long gone), so there was never a reason for me to complain.
Until I left this job and realised that out in the ‘real’ world, you don’t get paid what you think you’re worth — you only get paid what you ask for.
Asking for more money is still something that doesn’t come naturally to me and I find very uncomfortable to do, so learning to negotiate is a long-term process for me.
It wasn’t until I started making salary negotiations a part of my job-hunting journey that I was able get a 62% salary increase in the space of just 2 years.
And now that I’ve built a strong financial foundation for myself, I find that I’m better able to stand my ground and walk away when a negotiation (or any kind of work situation) isn’t swinging in my favour.
If you find yourself doubting if you should ask for more when you’re presented with a new opportunity, do it anyway (gracefully and professionally, of course).
After all, it’s easier to negotiate for a healthy pay bump before you start a new job than when you’re already in the thick of one.
LESSON #6: I SHOULD HAVE LEFT DEAD-END JOBS EARLIER.
And by dead-end, I mean work situations where you’ve hit a wall, learned all there is to learn in your role and there’s no way for you to move up or grow in terms of influence, salary or skill.
Looking back at my 20-year work life, one of my biggest professional regrets is staying at jobs that no longer felt right way past the point where I felt bored and stuck.
So I did something that not many of my colleagues were doing at the time: I quit and spent a couple of years pivoting into marketing before getting a full-time role in this niche.
LESSON #7: I AM THE CFO OF ME.
After close to 15 years of managing my own finances, I thought: Why not treat it the way a business would?
So I investigated what an actual chief financial officer would do, and found this…
…which is pretty much what I do, but for me.
To up my ‘personal CFO’ game and make sure I’m in not only in the green but have a net worth that’s constantly growing, I’ve been tracking every ringgit I earn and spend over the last 3 years.
I know it may sound a little excessive, but the insights I’ve been getting on my money habits from this whole exercise (which I don’t plan to stop doing any time soon) and the peace of mind that comes with it have been absolute gold.
I’ve still got plenty to do until I reach my financial independence goals, but knowing where I’m at, where I’m headed and an idea of how I’m going to get there helps plenty.