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Welcome to CNA's Money Talks podcast. I'm Andrea Heng, and it's a brand new year, everybody. And with a new year comes New Year's resolutions. Now, I'm not one to shy away from New Year's resolutions, especially when it comes to money. If you're thinking of new ways to gain more wealth with much less pain, stay with me because I'm gonna ask for some tips from Dawn Shu. She is better known as SG Budget babe and she is here. To help us out. Welcome back, Dawn, to the Money
Talks podcast. Hi Andrea, nice studio. Thank you. And I'm glad that you are the first guest at this new setup. So, back to business. What were some of your financial highlights for 2024? I think a major highlight for me was hitting five digits in passive income through stock dividends. So that was the goal I've been striving towards since I was in my twenties and I finally hit that, which I think is great, and. make it 6 digits. Is that going to be harder though,
do you think? It is, but the good thing about all these is that it really compounds. And the truth is I didn't have to add so much new capital to get to that 5 digit mark. It was really a case of the stocks that I owned, increased the dividends and they grew, right? So it was passive. So that means in 2025, you're going to be a little more active just to get 10 times the amount. OK. I've been seeing all sorts.
Of new money hacks, money habits on social media. One of them was Project Pan by influencer Daisy and Mitchell on TikTok. So basically what it is is she has a goal to finish all her unfinished makeup and skincare. They have to hit pan before she buys a new one. Therefore project. I thought it was brilliant and I'm honestly quite inspired because I have way too much makeup.
But you are SG budget babe. You're all over the internet talking about all things money, so you must have tried quite a few new money habits here and there over the years. Are there any new money habits for 2025 that you're hoping to cultivate? I think it really goes back down to that six digits. Walk me through it. And at the same time, I'm also building other things on the side to get. Closer to greater passive income from multiple sources as I age.
You sound so busy. I do not get enough sleep, but I think it's really important because I've always talked about on my blog that we should have multiple streams of income and a lot of these in my 20s were built on active sources of income. Now that I'm in my 30s and I have children, I realized it's not always possible to exchange our time and energy for money all the time. We need to start building.
Passively, so that comes from building businesses, from investing in stocks or instruments that will give us that kind of passive income. And at the same time, I'm also exploring royalties, which is something new. So then that will create another lake to my table of multiple streams of income. I'm interested in royalties. Is that really a big market? Is there a lot of money to be made? I don't know yet. I'm actually writing a book and it's coming
out in 2025. OK, I always hear things about how authors are not rich. But we'll find out in 1 to 2 years' time. So we know the drill, Dawn, OK. Spend less, save more, but surely it's not that simple. I am testament to that. I am finding it really difficult to just spend less and save more. It turns out that the savings that I get from spending less is really not a lot.
I mean it's pockets here and there and I think it's especially hard to do it this time around because things are a lot more costly nowadays, let's face it. Now, is cutting back the only answer to having more cash in the bank? No, it's not, but I have to say two things. First of all, it is simple, but it's not easy. Yes, it's easier to just spend, it's easier to indulge. It's easy to just go out for a good meal to reward yourself after a hard
day of work. Oh, too easy. Yes, but it's more difficult to Prep that meal and buy groceries so that you save a little bit more. And it's even harder to do that consistently when you have many things running on your plate. So what is simple isn't always easy, but we have to really decide what are the decisions that we're going to make based on the outcomes that we want to achieve. The second thing going back to your question, is cutting back the only way? No, it's not. And in fact,
I feel cutting back is indeed getting harder, right? The cost of living has Increase if you dine out a lot, especially, food costs are up by around 30%. So for people who dine out really often, that's where you now need to start to decide whether you want to do the harder part of prepping your own meals or potentially keep out that
dining out experience but cut back on other areas in life. However, I always feel that cutting back is always a limit because the max you can go is just how much you spend. There is another way to it, which is to increase your earning income. Yes, of course. OK, talk to me about that. So when you increase your earn income, whether through active or passive sources, you can actually get a
lot more money versus what you spend. So when you increase that and still keep your spending moderate, you can actually get a bigger difference than simply trying to cut back because there will be also this point when you say until you're just miserable. And what's the point of life? Exactly, and then it feels like, oh my God, I'm working. so hard to say and nothing is coming out of it.
Is this really the only answer. So you're always at privy to the fact that people can raise prices rather than focus on something we don't have control over, I always talk about putting our focus on things that we can control, which is how much we spend. OK. We cannot control if other people raise their prices, but we can moderate our spending and still keep to our budget. We might have to increase that budget, but at least
we're still keeping to one. You know, I'm I've taken one of your old pieces of advice. When I last spoke to you about, you know, buying things in bulk and buying house brands. I know you are like house brand queen. I started doing that and I have saved a chunk of money. Like my grocery bills are not $100 anymore for two people and it
lasts us like months. So thank you for that. I think that it is possible, but you have to go through the hardship of it, like you need to put in the hard work, buying, making sure that you are paying attention to prices, paying attention to calculations. And I personally think while it's a bit tedious, it's worth it. It's absolutely worth it. So what about side hustles?
So you wrote something for us at CNA about how having a side hustle might be an option as a way of diversifying income streams because you know, having a full-time job may not be enough to reach our financial goals, especially when things are so costly nowadays, right? So for those for whom a side hustle is not an option, what would be an option for someone like me, no time, no energy to have a side hustle and I still need to work on my full-time job and give it my 150%.
There's only two ways out of it, right? First, you can think about if you can build a side hustle that requires less time and energy and my favorite side hustle to do is to invest in dividend stocks because I just need to find great companies with great leadership and they are the ones who are running the business, increasing the dividends, not you. Yeah, and all I do is just.
My money in those stocks. Of course, there's always a risk that your money could go down if the company does not do well, but that's where the art of selecting and making sure that you invest in the right stocks, the right companies are at play. You also have to diversify your risk a little bit, so that's the whole conversation there. But the other thing also is I feel in today's times, there has been a lot more options for side hustles that don't take up so much time
and energy as well other than investing. So for instance, in the past you had to be an influencer with a following to do affiliate marketing. That's right. Today, and I've just talked about this very aggressively in the last few months, there are affiliate marketing options to people who do not really have a following. I noticed that I started seeing that on Instagram and TikTok. I'm like, who are these people? And I realized, wait a minute, this is a way that they're earning money
while doing basically everyday things. And the thing is that these platforms have only just launched these features recently. It used to be gated to only those who were, but now the everyday person can do it. There's also UGC content. I know people who create user generated content for brands and they do it for a nominal fee, even though you don't have a following, you
still can earn from that. But of course, if having said that, all of that is still too much time and energy, then the other option, especially for someone like you, would be to increase on your career and you can bargain and negotiate for a higher salary while proving to your employer that you have indeed added more value and it will be their loss if they lose you. Yeah see time for me to make an appointment with my boss. What about putting, you know, a big lump
sum of money that I've saved aside. What can I do with that? So instead of a side hustle per se, could I perhaps put something somewhere and leave it alone and let it grow passively, which is what I do in dividend stocks, right? But at the same time, so there are different options. There is fixed income and there is equities. OK, fixed income includes really safe options like your fixed deficits. your endowments and basically anything that gives you a guarantee
with an exchange for you. It could even include bonds, although bonds are a bit iffy there because you have to pick the right ones. That's right. Even the local banks give you a fixed deposit that could give you a decent 2% or even 3% in exchange for a lockup. So that's one way, right? Or endowments by the insurers, if you lock up for a longer period of time, you could also get those kinds of returns. But at the other side of the picture, if you don't want to lock up your money.
Yeah, then you have to take on more risk. Yes, investment risk, more liquidity equals more risk. Exactly. OK, that's a really clear picture of what we can do, the various options that we can take. Now, what's usually a financial habit that, you know, all of us typically at the start of the year, OK, I'm going to do this and it's going to be successful and then 3 months later, you check in on them and they're like, so how's that new habit going? Oh no, it's a massive failure.
In your observation, what's been that one habit that people, well, don't hope to fail, but they eventually do fail to start investing? Oh, when it comes to money habits, it's always to start investing. I've lost count of the number of times or the number of DMs I've gotten from readers who say that I want to learn investing, but I don't know how. I promise I'll learn it. They read books or they go for courses and I always point my readers to different options.
Free options. Here's your options, including like what I'm free, free, right? You just need the time to go through that. Otherwise, if you want shortcuts, crash course, that like workshops and crash courses that you can go for, or if you want super detailed and you don't mind paying more money for physical, there's of course trainers in Singapore who could do that for you for a couple of thousands as well.
But some of them, interestingly, even if they take that first step to learn, right, the act of implementing it is. missing because I would then ask them, and I like to ask my students because I run those free workshops or crash course at a very affordable fee for just a couple of $100 right? And I like to check in on them to ask. So guys, how many of you have started investing this year? A lot of them have said, so I've completed the lessons, but I haven't
yet started. It's that inertia, it's that fear, and then I would ask what can we do to, you know, help you overcome that. But At the same time, there's also very little that we can do. The person has to be the one. Of course. And I'm curious about that like what is it in the inertia to make that first step? Is it fear? Is it uncertainty? Is it just risk averse? I think it could be all of that and more. Sometimes it's
really the fact that it's just inertia, right? If you want to, for instance, a common New Year's resolution is to get fit. But it's a lot of inertia to get off the couch, not Netflix, and go for a run, right? So in the same vein, a lot of people, it's just easier to leave the money in the bank or just pass it over to the insurance agent to manage or pass it over to the banker, so you don't have to get involved yourself. But the truth is it's not that hard.
I think the bigger problem is a lot of people overcomplicate things. Today it only takes a couple of seconds to open up a brokerage account because of pass, right? And then when you're in a brokerage account, if you want. Something super simple. They are like exchange traded funds that track the index, the market index. So as long as you invest in relatively safer markets or less volatile markets, you'll still be relatively OK. But at the same time,
people don't really do that. Or even if we look at guaranteed options, OK. I remember not too long ago when I talked about how use bank savings accounts, versus normal bank savings account. How many people actually make the switch? Yeah. It's one thing to do the research, it's one thing to be excited. About it and then you don't do anything about it, then you're not going to earn anything from it, are you? OK,
I felt that one. I felt that one. It's the time of the year where we take stock of things, where we are in our financial portfolios and plans. When we review these plans, what's the most important thing to look at whether you're on track. So I always feel, and everyone's goal is going to be different. If for instance, you have been spending more and you feel guilty about that, that's me. Action plan would be to cut back on the spending or earn more. So you can spend without that guilt, right?
And for instance, if you feel that you are underinsured and you really want to get to it before anything happens on your health or at the insurance site, then get to it. It's not that hard to just book and insurance agents are going to be very happy to just here at your house in your convenience to help you get that set up. But what if we don't have the time to, you know, shop around, compare prices, see if we need to
You know, change insurer and stuff like that. I mean, are there, is it OK to just sit there and Be OK and stick with what we have. I love that you're asking this question because I always feel that time is always just an excuse. We can always make more time. It's not that we don't have time. It's just not a priority, right? So if it's not a priority, then what are our options? Well, it's OK to just
let it sit. If you are OK with the trade-offs and the potential consequences, or if you find out that your current plans are pretty still pretty good, exactly. If it ain't broke, don't fix it. Right. Exactly. And I feel that when it comes to reviewing, people don't have to stress out so much about having to review their insurance portfolio so often. Yeah. I always
say just do it when your life milestone changes. So if nothing changes this year, you didn't buy a new property, you didn't have a new kid, you didn't have a new dependent or lost a dependent, then maybe you don't really have to review it. Wait for the next life milestone and then do it then. But more importantly is that when you act on this and you review, are
you meeting your goals? Because if you You're not, every year is a great chance to make sure that we recalibrate and get back on track because otherwise we'll all be talking about how I want to retire at this age with this amount of money or this passive income or having this amount of interest or use or dividends, but you never get there because you never built it despite having the last 1015, 2030 years
to do so. Yeah, indeed, indeed. And I think this is one of those biggest tips like if you know, reviewing shouldn't be so. most stressful and I think that the tip here that I really like is, you know, do your review at the major milestones in your life because that's when things really change and you need to take stock of what's happening. I'll also give my template for the annual reviews that I do for myself. All I look at is how much did I earn, how much did I save. So
I don't look at how much I spend anymore. I used to, but now I look at how much I save because it's the difference that makes all the more important, and it's how much you saved in proportion. To what you earn. Exactly. And then the last thing I look at is my protection. So if nothing changes in my life milestones, I'm not going to review that. This year, I'm not reviewing that at all. And the
final one, so just 4 buckets, right, it's investing. I'll look at my investment performance on the whole to see if there's anything I can improve and most importantly, how did I fare against the markets. Right? So just just 4 things and I think that should be a 30 minute exercise at the most. Dawn, it's been great. Thanks very much for coming on the Money Talks podcast again. Thanks for having me. Hope you've gained some insights into how to be better
money-wise in 2025. If you've got any comments or questions, feel free to drop us a message. Money Talks is available on Apple Podcasts, Spotify and YouTube Music as well. Do leave us a rating. We're gonna give credits to the team as well. Christina, Robert, Tiffany Ag, Junaini Johari, Joanne Chan, Hanida Amin, Saya Wyn, and Chris De Leon. I'm Andrea Heng. Thanks for listening to Money Talks.