Lessons From Risky Investments and Losing Loved Ones to Cancer: Money Diaries #2

Money Diaries is a new series where we interview real Singaporeans on their financial habits. Through these candid interviews, we hope readers come to better understand how they themselves spend and invest. 

This week’s interviewee is 40-year-old Alain Tan, who works in the procurement and contract management space. He makes between S$6000 to S$8000 a month.

The following is a deep dive into his personal finance habits and investment approach.

Money Diaries #2 - Lessons From Risky Investments and Losing Loved Ones to Cancer

How would you describe the life stage you are in at the moment? E.g. single, married, divorced, going to marry, buying a house etc.

Single, and I just shifted house. I am still adjusting to my new life after leaving my old home. 

I have fond memories from my old house because my friends and relatives stayed close to me. 

I am still actively exploring the area around my new house in search of good food and amenities that I can indulge in and enjoy. 

I am also trying to buy necessary items to complement my new house as I have discarded many items from my old house.

Living situation: are you renting, staying with your parents, or do you own a home, etc?

I own my new home as I downgraded from an executive maisonette and I live alone. I just live a simple life and take each day as it comes.

Breakdown of typical expenses in a month

I spend 59% on food, 8% on transport, 25% on entertainment and 8 % on other items such as handphone and utility bills.

Estimate of how much you save every month.

I save around $3,000 every month.

What are your financial/investment goals:

I hope to achieve financial freedom and to obtain some passive income from my investment and endowment plans. 

This is especially important as more jobs are now contract-based rather than permanent, and job retrenchments are becoming common even in the government sector. 

In the unfortunate event where I get retrenched, I can still get by with my passive income, or in the worst-case scenario, I can work in part time jobs. 

I hope that I can retire by 65-years-old, so that is why I try to find ways and means to increase my investments so that I can live comfortably in my twilight years.

I hope that I can retire by 65-years-old, so that is why I try to find ways and means to increase my investments so that I can live comfortably in my twilight years.

Read also:

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How close/far would you say you are from your financial goals?

I believe that I am still quite far from my financial goals due to increasing inflation and the expensive cost of living in Singapore. 

I always feel that I should try and earn more money in my current job in order to have more money to invest in the future.

Describe your investment approach / What steps have you taken or are taking towards achieving these goals? What are some challenges you’ve faced?

In the past, my mum and I tended to be conservative in our investment approach. 

We always put our money into fixed deposits which are simple to understand, and in the past, these deposits had very high interest rates. 

However, the fixed deposit rates are going lower due to interest rate cuts. 

I did encourage my mum to go for the triple Happiness and Double bonus by DBS bank and earned some money.  It took some time to persuade her as she was more conservative in terms of investing money. 

She was always afraid of losing her hard-earned money from investments because of a bad experience—we previously lost some money due to the Lehman Brothers' collapse back in 2009. 

I also managed to persuade my mum to go for endowment plans instead which are deemed to be safer as we can keep our original principal as long as we retain these endowment plans till maturity. 

Moving forward, I intend to diversify my investment portfolio to include endowment plans, T-bills, fixed deposits, mutual funds, and earn CPF Special Account interest rates so as to minimise my risk of permanent losses. The challenge is that with higher returns, there will naturally be higher risks. 

Moving forward, I intend to diversify my investment portfolio to include endowment plans, T-bills, fixed deposits, mutual funds, and earn CPF Special Account interest rates so as to minimise my risk of permanent losses. 

At the same time, I realise that there is Hobson's choice as fixed deposit interest rates are not keeping up with inflation. 

It is also a challenge as I am pretty conservative in investing my money, yet I need to diversify my investments into more complicated mutual funds that have fluctuations in earnings as well. 

This means that these investments will experience more volatility and there is also a reasonable chance of a permanent loss.

Read also:

• Best fixed deposit rates in Singapore
• Where to park your cash for higher yield? T-bills vs Fixed Deposit vs SSB (Feb 2025)
• Guide to mutual funds in Singapore

How would you describe your mindset with regard to money? Describe some of your money habits and beliefs.

I tend to be frugal when it comes to spending my money. 

I try to keep my spending within a certain budget each month. I also do not own credit cards due to having to pay the annual fees for owning them. 

I also do not intend to own a car as it is very costly due to the extra costs such as COE and road tax that I need to pay every year. 

I have heard of a savings mindset whereby I should spend 50% on my needs, 30% on my wants and 20% on my savings but I intend to adjust this percentage more towards 40% to my savings, 50% to my needs, and 10% to my wants. I hope that having more savings will contribute to a more comfortable lifestyle when I plan to retire later. 

I believe in saving for a rainy day just in case I get retrenched, which in fact happened recently. 

I believe in saving for a rainy day just in case I get retrenched, which in fact happened recently. 

Fortunately, I could dip into my savings without worrying about whether I had enough money to spend or that I might need to find a new job quickly. 

I have heard of people having to wait for at least six months in order to get a new job, so I always try and aim for a contingency sum of savings of at least 6 to 12 months in order to tide me over difficult periods.

Is there an experience(s) that has shaped your relationship with money? How has it influenced your financial decisions?

My experience was when I was at Manulife as a financial planner after my polytechnic days—that was when I believed that I should try and save money through investments. 

I also found that money was very hard to earn even when I studied for my degree. 

My parents had hoped for me to get a high education as it would equates to earning a higher income in my job and being comfortable in life. 

I realised however that degree holders nowadays are very common and it is very hard to differentiate myself and stand out from the crowd, so I decided to turn more to investments in order to complement my basic earnings.

What is the expense you find hardest to cut down on?

Food is the hardest to cut down on as food is the necessity in life in order to subsist. 

I also do not cook at home so I have to turn to buying food from food courts or Kopitiams which is more expensive than cooking at home. There is no control over food prices at food courts or hawker centres as their prices are dictated by high rents and high cost of raw food ingredients. 

The high cost of food is also exacerbated by the uncertain and turbulent world and economic conditions that we are currently living in.

Is there a financial decision you wish you could do over? 

I wish I had learnt to start saving when I was a child as I did not know the importance of saving money until I grew up. 

I wish I had learnt to start saving when I was a child as I did not know the importance of saving money until I grew up. 

That was also because I had not thought of the importance of being thrifty when I was a child, and my parents had always been earning money while I was spending money. 

After growing up and having to earn money through work, I realised that earning money is difficult. I wish that I could have started saving money by doing some simple fixed deposit investments to have the compounding effects from saving when I was a child. 

This is also so that I could have more money to do more investments and to earn more passive income till the day that I can retire comfortably.

I wish that I could have started saving money by doing some simple fixed deposit investments to have the compounding effects from saving when I was a child. 

What are you most concerned about when it comes to personal finances?

I always worry that I will overspend and will not be able to keep to a certain budget that I try to keep to due to the rising cost of living. 

Having to turn to higher risk investments also makes me worried as to whether higher risks will equate to greater rewards as I may end up losing money instead. 

Due to the uncertain economic conditions and greater uncertainty in life, I also worry that I will run out of money when I grow old and when am unable to work.

Having to turn to higher risk investments also makes me worried as to whether higher risks will equate to greater rewards as I may end up losing money instead. 

If you won S$1 million in the lottery tomorrow, what would you do with the money and why? How would your spending/lifestyle change?

I would use half of that money to contribute to funds related to cancer research, as both my parents passed away due to cancer. 

There is still no cure for cancer and it should be treated as a chronic condition as the only more important thing in life is kinship and not only  money. 

The saddest milestone in my life was when both of my parents passed away due to cancer, and I often wondered if cancer could have been preventable, and I could still live on with my parents. 

I would save the other half of that money towards my investments as I always feel that there could always be more money that I could utilise towards my investments. 

I believe that money is not the be all and end all but it is still very essential for us in order to subsist in life.

I believe that money is not the be all and end all but it is still very essential for us in order to subsist in life.

What is one practical financial tip that has been useful in your own financial journey?

Always try and do more research into your investments before you invest in them. 

You need to know and understand what you are investing in and be aware of your risk appetite. 

This is to ensure you have less concerns and also lowers the risks of losing your principal if you are a conservative investor like me.

Always try and do more research into your investments before you invest in them. 

What is a personal finance related lesson you’ve learned that you think others might benefit from?

Always diversify your investments just in case one of your investments fail badly (for example, Lehman Brothers) when you least expect it. 

This is so that you can minimise your losses and at the same time be able to recoup or gain from the other investments. This is so that you will not regret that you have parked all your savings into one or two investments and it could turn out badly for you.

Always diversify your investments just in case one of your investments fail badly (for example, Lehman Brothers) when you least expect it. 

Our Key Lessons

Here's a summary of our key takeaways from Alain's financial journey.

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