Me and My Money: Simran Kaur, Founder of Girls That Invest
1. Are you a saver or a spendthrift?
I always joke about working in extremes, so I would say both.
Some months I’ll wait two to three months before deciding on a $ 13 shirt. In others, I will easily spend between $ 2,000 and $ 3,000 on technological equipment for my ancillary activities.
I have had models who were both spenders and savers and couldn’t decide which option was better. I always try to find a balance between worrying about my future and enjoying the present.
I try to practice financial minimalism, which is only buying things that provide value and that I need. It is satisfying not to have too much material possessions.
2. What has been your biggest financial lesson, success or failure?
My biggest financial successes are saving for a first home at 23 and running a six-figure business at 24.
Money was such a taboo topic growing up, which is why we talk about the importance of financial independence on our podcast. It can dictate stress levels, health outcomes, relationships, and the ability to walk away from dangerous situations.
My biggest financial failure was when I wasted about $ 20,000 on one of my side businesses (an e-commerce business) while in college. At this point, it was the most money I had made in my life. I spent it all on frivolous things like food and shopping online.
At the end of the year, I had $ 5,000 left. Instead of saving him, I ended up traveling abroad.
3. What do you know about money now that you wish you had known earlier?
That the investment world is not as intimidating as it is claimed.
It is not just for a certain gender, race or income. The first time I was introduced to investing, I rejected it on the spot.
Once I got a Certificate in Financial Markets (US) for my personal learning, I was almost angry at the over-complexity of such a simple concept for the average person.
With the help of micro-investing platforms, people can invest in a low-cost passive index fund (which Warren Buffet considers a good place to start for newbie investors) with as little as $ 1.
4. Give an example of a recent purchase that you consider to be good value for money.
I recently purchased a “ring” WiFi doorbell for $ 199.
Whenever someone approaches my door or rings the doorbell when no one is home, they alert my phone with video footage. The app even lets me chat with someone at the door – handy if I’m away from home.
I really like technology: it’s the thing I splurge the most on.
5. What is your favorite form of investing and why?
Being comfortable with risk, I love stocks.
Due to the lower barrier to entry and liquidity, I particularly like investing in Exchange Traded Funds (ETFs), which are based on index funds.
I like that I have full control over what I invest in and that I can increase the amount I invest in my investment portfolio.
Investing in the stock market allowed me to buy my first home. The Kiwis have a love affair with real estate, but we forget that to get into real estate investment, the barrier is much higher than other forms of investment.
For many millennials and Gen Z, it’s just not possible to make real estate money grow right away.
In saying that, I love to arrange my house. I plan to buy my next one shortly.
6. Three tips you would give to new investors in stocks?
First, to just get started.
It is important that people reject the idea that they are not smart enough or smart enough to understand it. Concepts such as why the stock market fluctuates and how to make money from stocks are simple and can be learned.
Second, understand that investing in stocks can be risky in the short term, but it is much less risky in the long term. Every crash, including the GFC and more recently, volatility from COVID-19, has recovered. This does not mean that past performance guarantees future success. But that puts an end to the idea that investing in stocks is like gambling.
Third, diversify. If someone were to invest only in shares of hotels and airlines, they wouldn’t be very happy in 2020. But if they also had tech stocks, like Microsoft and Zoom, the risk would balance out.
According to Warren Buffet, the best way to diversify is to use low-cost passive index funds like the S&P 500 (the top 500 companies in the United States, for example Apple, Amazon, Google) or the NZX 50 (the 50 leading New Zealand companies, e.g. Air New Zealand, The Warehouse Group).
7. What’s your best tip for saving money?
Wait a few days before buying something I want.
If I forget it, I clearly don’t need it. If it’s still on my mind, it’s something that’s likely to add value to my life.
This strategy has helped me avoid splurging. The wait also helps me appreciate the article more.
8. The best financial advice anyone has ever given you?
To avoid the lifestyle creep.
It is the concept that the more a person earns, the more he spends: he neither saves nor invests more than before.
The idea is that people always spend less than they earn and invest the rest. In college, I remember reading how a professor told his students not to go out and buy a flashy car with their first paycheck, but to continue to “live like a student” during the months. first years.
During my first year out of college, I cohabited with college students, which unintentionally helped me spend like a student.
I saved a good chunk of my income. It was the best advice ever.
The opinions expressed in this article are personal and do not constitute professional financial advice.