Li Hui Cham / notes

For the past six months, I’ve been obsessed with personal finance content. I spent hours listening to podcasts, watching videos, and even reading books to understand the space better.

As I took it all in, I knew I had to put skin in the game to get a real taste of what investing and budgeting could do for my life.

The starting line

A lot of us grew up watching our parents struggle with money, absorbing the belief that adult life is hard and you’ll work your whole life just to get by. Believe me, I was one of those people. Being financially secure felt almost impossible.

It started with a shift in mindset: I can be financially responsible too.

Two books gave me the thinking framework:

• The Psychology of Money by Morgan Housel taught me that personal finance is driven more by emotion than by logic. My favourite line: “Saving is the gap between your ego and your income,” and the reminder that you don’t need a reason to save.

• I Will Teach You to Be Rich by Ramit Sethi has a title that sounds like a scam text or a bootcamp slogan, but it breaks down every component of personal finance: credit cards, emergency funds, investments.

If personal finance were a competitive sport, Morgan's book is the warm-up that gets you in the zone, and Ramit's is the game plan. Start with these two and you'll have a much clearer picture of the why and the how.

Personal finance is quite literally, personal

“wHAt iF i aM doINg iT wrONg?”

No one gets it right the first time. You just have to start somewhere. This post isn’t a guide to personal finance; it’s what worked for me1 and what didn’t.

You don’t need 10 credit cards

There are tons of resources online on strategies to maximise credit card rewards and miles. But my only goal in getting a credit card is to protect myself from fraud2.

Like most beginners, I spent hours comparing cards to squeeze out the best rewards, and eventually realised it was a huge waste of time. Simply put, credit cards are tools banks design to win new customers and nudge you into spending more. The rewards are just a side perk.

Some people keep one card for groceries, one for restaurants, one for online shopping, and so on. I prefer to keep it simple: one cashback card for everything, with extra points on groceries.

At this early stage of my career, learning how to save matters far more than spending to chase rewards.

Zero-based budgeting

When I bring up budgeting with my closer friends, most tell me they don’t really do it. They just roughly estimate how much they can spend before breaking the bank (or don’t estimate at all, because life is short).

Following Ramit’s book and my own research, I use two tools to manage my monthly budget :

• Conscious Spending Plan. A Google Sheet with four buckets, in order of importance:

  1. Fixed costs : essential, non-negotiable expenses like rent, transport, groceries, and subscriptions.

  2. Retirement funds : investments for when I can no longer work (more on this in the next section).

  3. Short-term savings goals : money set aside for my next trip, a new pair of shoes, and the like.

  4. Guilt-free spending : for a fancy dinner out, a theme park, whatever.

• YNAB (You Need A Budget). The app that gives every dollar a job, following Zero-based budgeting method. On the 1st of every month, I assign every dollar in my account to one of the buckets above before I spend any of it.

Say I have $100 coming in. I’ll budget $40 for fixed costs, $30 for retirement, $20 for my next trip, and $10 for a movie night out. By the end, I’m left with $0.

The philosophy behind this is simple : spend on myself before spending on other people or things. The key word is before. With these two tools, my retirement accounts are fully funded at the start of the month, not the end, which leaves me no excuse not to save.

Save for the rainy days

Before you start investing, make sure you have enough saved to last six months without a job. This is more commonly known as an emergency fund. If you don’t have one yet, make it your next savings goal.

I work in tech, and I’ve seen people take more than three months to find a new role after being laid off. So rather than saving the usual three months, I’m building a six-month buffer. If you have a family and want to be extra safe, you might want 12 to 18 months.

Investing can be a KISS

KISS - Keep it Simple, Stupid.

You've probably heard the line, "compounding is the 8th wonder of the world." If you haven't (sigh), read this blog by Money Guy.

Investing is more a habit than a matter of picking the right stock. The market goes up and down (recently, it’s been a rollercoaster lol), and staying calm enough to keep buying while it's falling takes real mental strength.

My go-to strategy is dollar-cost averaging into low-cost index funds. It's also worth considering your risk profile, usually based on age3. I'm in my early 20s, so if the market crashes I have years to recover before retirement, and I lean toward being a risk-taker.

My portfolio4 currently looks like this:

• 55% Core : S&P 500 or World ETFs. Either way, it’s US-heavy.

• 30% Growth : high-growth companies.

• 10% Local : Singapore and Malaysia.

• 5% Defensive : gold, to hedge against everything going on right now: inflation, recession, and a depreciating dollar.

Don’t overcomplicate things.

Golden rules that I swear by

• The best investment is yourself. Invest in your skills and hone your craft.Every month, set $50 aside to learn new things.

• Raising your earning power beats pinching pennies. Learning new skills and chasing opportunities that lift your income by 20-30% gives a far higher ROI than budgeting your morning cappuccino to save a few dollars.

• You don't need to be 100% right. Getting personal finance 80% right already puts you ahead of most people, who never start at all.

• When you're young, you have no money but plenty of time. Use it. To reach $1M by 60, Lily, who starts investing at 25, only needs to put in $184 a month. Bob, who starts at 30, needs $340. That’s almost 2x of what Lily needs to put in! It's proof that starting early with small amounts beats waiting years and trying to catch up with a lump sum when you're older.

• Track your net worth (assets − liabilities). Assets gain value over time; liabilities lose it. If you're an analytics nerd, calculate your savings rate too and drop it all into a combo chart in Excel for a clearer picture.

• Malaysians, don't sleep on EPF. Compared to other retirement schemes like Singapore's CPF or the US 401(k), EPF is literally a gold mine. Not only that it’s low-risk, offers tax exemption and regulated by the Malaysian government, it’s insane annual returns of 5 - 6% beat many "safe" options like fixed deposits. The S&P 500 averages around 8%, but you take on real downturn risk to get it.

• Leave some money for travel.5. As much as I invest most of my income, I deliberately set aside 8% for travel and new experiences. I love the ideas of "memory dividends" and time-bucketing your life from the book Die with Zero.