Written by 9:00 am Parenting

Maximise Your Income with Smart Investments for Working Mums

Working mums come in all forms, from part-time staff to full-time employees, and even high-flying entrepreneurs. Regardless of career path or pay grade, every working mum should be maximising her income and growing her wealth. Jennifer Kan, general counsel at Singapore-based digital advisor Endowus, agrees wholeheartedly.

The 40-year-old working mum is working hard to set an example for her daughter who’s seven. She urges all women to put themselves in a better financial position in order to challenge the current situation and insulate themselves against rainy days ahead. She shares some key dos and don’ts that working mums wanting to make smart investments should keep in mind.

✔ DO Plan for the Long Term

Relying on savings alone is no longer enough to help you achieve your ideal retirement lifestyle. You should allow yourself to dream of your ideal future and then take practical steps to making it happen. Start by putting aside an amount that you can afford to invest.

A good rule of thumb is to set aside 20 per cent of your income for longer-term financial goals, such as your retirement or your kid’s tertiary education. You may also want to, on the side, set yourself a personal goal. This could something that is just out of reach, be it a treat for yourself, your family, or your home.

But in general, setting up a regular savings plan — be it a percentage or dollar amount that ideally increases over time — can help you build up the discipline to save. And this gives you the capital to invest and hence achieve longer-term financial goals.

working mums should take stock of their financial goals
Image: WinSon 5293 on Pexels

✔ DO Take Stock of Your Personal Situation

For working mums who are new investors, even before they start to consider different investing options, they should take a step back and understand how much time, commitment, and resources they want to dedicate to investing and money management.

Take time to reflect on your own financial situation and gain a sense of what your goals are. Keep in mind that there are also external factors like the wage gap and longer life expectancy.

Put your goals at the centre of your investment portfolio because investing with a defined purpose gives it focus. You will be able to better identify the right strategy to match your needs, determine how much you need to invest, and the appropriate level of risk to take. A good digital wealth advisor will be able to help you consider all of these aspects.

(See also: “Mum, Are We Rich?” – How Would You Respond?)

✔ DO Take Advice from the Experts

Leverage off the expertise of others. As 37-year-old entrepreneur, Melanie, quips, “In so many aspects of our lives, we would not hesitate to take advice from experts. Paediatricians for our children, plumbers for our home, beauty experts even! Investing should not be any different.”

The mum of three young children explains why she thinks digital advisors are a good option: “My oldest is five years and my youngest not even one. I do not have time or the expertise to actively watch the markets and trade, so I choose to invest passively at a low cost via a digital platform. This way, I can monitor and see the fruits of my investing whenever I have a free moment.

“A digital platform that takes into account my investment horizon, risk tolerance, and curates portfolios that are globally diversified with the best-in-class funds also takes a lot of the headache away from investing. The mental comfort of knowing that I’m growing this nest egg with curated advice empowers me to focus on what’s important every day.”

working mums shouldn't put their eggs in one basket
Image: freestocks on Unsplash

❌ DON’T Put All Your Eggs in One Basket

Risk-averse investors often think that they should invest in one thing at a time, especially if they have little capital. Actually, the reverse is true, especially with digital investment platforms that offer globally diversified portfolios at low costs.

Another common misconception is that you have to start with a large amount. In fact, there are many platforms today that make it easy to start investing with smaller amounts, and at intervals that fit your personal needs. At Endowus, for example, you can start investing with as little as $1,000, and it only takes 10 minutes to open an account.

Despite all the financial jargon out there, investing does not have to be complicated. The growth of fintech companies has made it easier and less expensive for anyone starting on their investment journey.

(See also: How EQ can Equip Your Kids for Financial Security)

❌ DON’T Be Impatient When Investing

It may be enticing to take a more active approach to investing, selling on market highs and buying on lows. But it can be mentally and emotionally draining to try to actively manage and trade the markets, amid other work and family commitments.

Taking a long-term, consistent, passive view on investing is more often than not the safer and easier approach. And this is true for not just working mums, but everyone.

Melanie admits that she learnt this the hard way. “I made my fair share of stressful and costly investing mistakes in the past when I traded more actively. Since choosing to simplify my investment portfolios by taking a more long-term investing approach, I can focus on other pressing day-to-day priorities with peace of mind, knowing that I’m still compounding my wealth over time.”

daughter with mum doing yoga
Image: Ketut Subiyanto on Pexels

❌ DON’T Let Fear Hold You Back

For those who know nothing about investments, the idea may seem risky. As Melanie shares, “I have also been afraid of all the options out there in the market. The fear used to paralyse me into inaction. But while I enjoy my work now, I also want the freedom to choose whether I want to cut back, or even stop working altogether.”

Her investments have already paid off, and not just financially. “Investing has allowed me to make other lifestyle choices, including taking a short break to re-educate myself during Covid-19. It also gave me the opportunity to be more hands-on at home when the future seemed so uncertain.”

Melanie has this advice for other working mums: “We juggle so many things every day, and it’s easy to neglect our personal finances. Taking care of your financial health is important too and it doesn’t have to be another chore on your list. Seize the moment now and find an easy, convenient way to invest your money.”

(See also: Guide to Investment for Stay-at-home Mums (+ a Real-life SAHM Shares))

Smart Working Mums Make Smart Investments

Many women wish they were more financially literate. They hope to gain financial independence and equality, and eventually retire to a lifestyle that they aspire to. However, wishing and hoping won’t get you very far. What will is taking action to grow your wealth during your productive employment years.

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