My dad turned 52 this year, which also happened to be the year when he opened his first-ever brokerage account and bought shares of the SPDR S&P 500 trust.
A little bit about my dad. He was born into a family of six children in Northeastern China, in a very small village that was set up around the coal mines. My dad was the first in his family to attend and graduate college, majoring in Computer Science, and he later moved to Singapore in the 90s after marrying my mum. With just enough English to get by, they worked hard to make enough money to move out of the single room they were renting, into a HDB flat where they could raise me and my brother. When his job required that we uprooted ourselves to move to Suzhou, China, we left behind everything we had in Singapore to start life in a new city, where my dad would start working on the company’s burgeoning operations in China.
There’s no doubt that my dad is a hardworking man. He takes a lot of pride in his work, and my earliest memories of being in an office were when he would take me to work and show me who he worked with and what he did. He had taught me the importance of having a good work ethic since young, and I’ve always aspired to be as amazing with people and dedicated as he is. And no matter where he went and which projects he headed, I saw his determination to see things through and provide for his family.
The reasons why he didn’t start investing until his 50s are probably similar to why most members of the middle class in his generation don’t venture into it – investing and money, especially in Asian cultures, tend to be a taboo subject. Investing has a reckless and risky connotation, and it goes against the belief that the amount of ‘hard work’ you put in should determine your level of wealth and social standing. And although my father was well-read and interested in the business world, it seemed that these norms, coupled with stories of people losing their savings, had already taken effect to form too significant a psychological barrier.
Like any other child, you admire and appreciate your parents for their hard work and sacrifice, but more than anything you want them to enjoy the things in life that make them happy, to have time and energy to pursue their interests and passions that lie outside of making money. My dad loved his job but loved history and the idea of being a tour guide too. And I wanted my dad to be financially secure so he would have time to pursue other things that we wanted to do without worrying about money.
One day when we were talking about a company that I was looking at, I asked my dad whether he had ever invested or had any interest in investing. My parents had previously invested in stocks that resulted in losses, and it had made my dad’s view of investing very negative. He told me that at his age, he wanted to make sure that once he retired his earnings over the decades would be safe to go towards my parent’s retirement as well as be given to me and my brother. Gambling with his hard-earned money was neither something he felt confident enough in nor something that had high enough a return to justify its risks.
I then told him about the different kinds of investing, particularly what a defensive investor looked like. I then showed him how the S&P 500 index had performed historically. Since I knew my dad, I knew that he’d be more assured if he didn’t have to constantly make significant decisions regarding his investments and spend a lot of time poring over financial statements and agonising over buy or sell decisions. I also thought that the idea of dollar-cost-averaging into an index fund suited him, and was able to understand perfectly why it would help him incur lower average costs over time, time that he could spend learning about history and training to be a local tour guide. He was happy when it went up, but fundamentally I could see that he understood the investment as a long-term strategy that he felt comfortable and happy with, and not as a random money-making opportunity.
Investing, or essentially making money work for you, seems too good to be true until you realise that it’s not. Money can work FOR you, and the top professionals in the most innovative and impactful companies in the world can work FOR you as well. Investing is not necessarily gambling, instead it gives you the controls to how you manage your money and grow your wealth so that you get to decide the life you want to have. If we are informed of the risks and know the options at our disposal, we are in the driver’s seat, and we decide what we’re putting our hard-earned money into.
This is perhaps the reason why I believe so deeply in the cause we advocate here at the Seven Dollar Millionaire. Investing, with all its fancy, professional jargon and the huge dealings, seems far away and unsuitable for the general public, but it’s not. Investing is for everyone, it’s empowering people to live their own lives, and helping them realise the power their money has to impact businesses and the world to help others lead better lives.
Being financially secure should be a universal right. And it starts with education, and breaking down psychological barriers so that people dare to think more and make more intelligent decisions on how they can unleash the amazing power of their money. And for my dad and many others like him, the journey starts with small steps like dollar-cost averaging into index funds.
