I met Daphne Ashford-Smith at Singapore’s St. James’s Place Wealth Management office, where she is a Partner.
I wish I could tell you that prior to our meeting I was calm, cool and collected, but in reality, I was nothing short of a nervous wreck. And yet, despite all my doubts and concerns, from the moment I met Daphne, she treated me like an adult and not as the kid I had thought myself to be.
Daphne with 2 of her beautiful children.
Daphne began her career in the finance industry in 1999, when she saw a job advertisement in the newspaper for the role of a financial adviser.
In that moment, despite not having the right experience or qualifications, she decided that this was the job for her. Two years down the line, after getting the relevant qualifications and experience, Daphne became a financial advisor. And after quickly being promoted to management, she moved to Singapore in 2005, where she began building upon her international experience.
Each day she helps people make better decisions with their money; tailoring her approach to their financial goals, time horizon and risk tolerance. And she does all this, while bringing up three children of her own, and somehow finding the time to sit down and talk with people like me. So, as I begin to develop my financial mind, I hope that my takeaways from my meeting with Daphne can help to create some interesting insights for you as well.
Upon voicing my concerns over my young age and lack of confidence, Daphne gave me perhaps the simplest and yet, most powerful words of wisdom she could have. And that is, that the best way to start, is just to start. In fact, the very worst thing you can do is what she calls the ‘ostrich approach’; sticking your head in the sand and doing nothing. But if that alone doesn’t persuade you, then perhaps we need to clarify what starting young really means.
Planning for your future doesn’t just imply planning for retirement. But rather, planning so that you can live the life that you want to live now, while ensuring that you can continue to do so in the future. Financial advisors, just like Daphne, are more than happy to sit down with us in order to give us a basic understanding of things like insurance and investments.
Each person has a unique set of circumstances and preferences, and that means that strategies and products work differently for each of us. Meeting with several advisors allows you to weigh the affordability of options as well as your own circumstances from different perspectives. Moreover, this also allows you to choose the one that you feel you can trust the most. Because at the end of the day, it is your money and your life, so if you can’t trust or communicate with your advisor, then there’s something wrong.
Your First Steps
Going into this meeting I had intended to learn more about investments – what works best, what doesn’t, and how soon should we start. But what Daphne brought to my attention, is that before we can even deliberate upon investments, we first need to protect ourselves through insurance. And regardless of whether your priority lies with health insurance, job protection, or anywhere in between, you will need to build a cash balance.
If you are anything like me, you might think that investing money into a fund or a bond is how you’ll ‘make it’. But what many, including myself fail to even consider, are the pitfalls that can happen in life. Just as Daphne stressed, just because we’re young, doesn’t mean we’re indestructible. She used the case of contracting Dengue fever as an example. Imagine being in your first job; you’ve just started to get a handle of your responsibilities, you love all your colleagues, and everything at home is going well. But what happens when the unexpected occurs? Now, imagine going to the doctors and being told that you have contracted Dengue fever. Without medical insurance in place, you find yourself without a sufficient cash balance to pay for the treatment, with only your investments as a solution. If you had just insured yourself in the first place, all of this could have been avoided, but instead, you might find yourself without a job, without a cash balance and without your investments. At the end of the day, everyone needs a safety net to help cushion a fall, so get protected and get yourself insured.
But What About Debt?
Your student debt is bound to have piled up over the course of your studies. But you don’t have to go through this alone – this is exactly the kind of situation in which a financial advisor can be of immense help. You don’t just need to know how to pay it back, but how much is needed, how much should be deposited each month and which debts should be prioritised. Financial advisors are experts for a reason, and if you find the right one for you, they will work in your best interest. Furthermore, further down the line when you begin taking out other loans, such as mortgage, you will find yourself in debt once again. Your past experience working with financial advisors will make for a smoother transition into paying off your loans in the most effective and cost-efficient way possible.
The Miracle of Compounding
What struck me the most during my meeting with Daphne, was her attitude towards living and saving. She is right in believing that life doesn’t start when you retire, but rather, life is now. While it is important to save for the future, it is equally as important to enjoy the present journey.
Now I am sure I am not alone in thinking that retiring early and being able to travel the world sounds incredible. In fact, it sounds ideal. But, for someone like Daphne to love her job as much as she does, I’ve started to think that maybe early retirement isn’t something that I want. And in the context of saving, early retirement is most definitely not a constructive idea. The biggest benefit that we have as youths is our time horizon. Following Daphne’s advice, “if you budget, live within your means, spend a little and save a little each and every month”, you will be amazed by how even the “smallest level of savings can grow due to the miracles of compounding over the long term”. This makes time just as valuable as the act of saving itself.
Just by having discussions every day, with people who have different kinds of knowledge, experiences and interests from yours, you can learn so much more than you could even fathom. Today was one of those days for me.
So for those of you who were just as lost as I am, the best way to learn how to handle personal finances is from others. The experts know that there is no one way to save, to be insured, or to invest. So embrace your individual set of goals and circumstances, get your head out of the sand, and take the first step in planning and managing your own finances.
This article is written by Braet Elliot, a Business Developer at Wealth Up.