“I came to realise that how much you made didn’t matter; your emotional stability and discipline did.”
A $5,000 impulse buy forced ex-broker Ellie Kim, 42, to rethink her flashy lifestyle. The independent financial consultant now earns only 10 per cent of her former five-figure salary – but is in better financial shape, she tells ARETHA LOH.
“I used to think financial planning meant making loads of money. I couldn’t have been more wrong. Growing up in Gwangju, South Korea, I was given the recipe for a good life: study hard, go to a good university, get a good job. I graduated with a law degree from the prestigious Yonsei University in 1996 when the South Korean economy was booming, and started work as a marketing executive at electronics giant LG.
Young and arrogant, I expected to do life-changing work, but found myself on a team doing mundane tasks. I quit eight months in. The 1997 Asian financial crisis hit shortly after, and I was jobless for 11 months. I felt nothing but shame. Here I was, a top graduate, surviving on handouts from my dad. Things were tough on him too – a civil servant, he was the sole breadwinner in our family of five, and he was giving me a third of his salary.
Climbing the corporate ladder
Once you’ve hit rock bottom, there’s nowhere to go but up. This realisation hit me late one night after I’d chugged four bottles of beer in misery. I eventually found a three-month contract job at Chase Manhattan Bank in Seoul. It paid a mere S$800 a month and I sometimes had to work till 3am, but I was grateful. From there, my luck turned. In 1999, I landed a back-office job at the Singapore branch of Chase Manhattan (now J.P. Morgan), then found out about a forex broking job at an inter-dealer money broker, and jumped ship in 2002.
My new $3,000 salary was a step up, but I found myself in a competitive and crude male-dominated environment. One of my colleagues made a comment about the size of my boobs in my presence! When I threatened him with a lawsuit, he laughed. I learnt that the best way to respond to such behaviour was to go with the flow and joke with them. Once I learnt to laugh at myself, not many other people dared to laugh at me.
My Bag Epiphany
Within two years, I went from greenhorn to pro banker. My salary doubled and my spending shot up. My female colleagues’ lives revolved around designer labels, It bags and luxe holidays. Though I’d met my Singaporean husband by then and was focused on settling down, there was still pressure to keep up with my pretty, single co-workers. At one point, I even believed that a woman’s career was ‘upgraded’ in tandem with what bag she carried.
Though I was never fashionconscious, I was always in the loop about what to buy next. Friends and colleagues would tell me about musthave classic models and the latest designer items. We even had bag schedules – if Colleague A carried her Chanel on Mondays and Wednesdays, the rest of us would carry ours on other days. I started making regular visits to designer boutiques at Ngee Ann City. It started with a $600 purchase… then a few buys under $1,000… then a $2,000-plus buy.
The numbers crept up until my ‘bag epiphany’. It happened after I had forked out $5,000 for my newest bag. There was an air of excitement as I swiped my credit card in the perfumed store and enjoyed the staff ’s undivided attention. Outside, I basked in the envious looks of passers-by who’d seen the huge shopping bag slung across my forearm. Strangely, the euphoria vanished almost as quickly as it had come.
I was still a stone’s throw from the store, but I suddenly felt nothing for the luxurious leather or the fine finishings. Instead, I had a sense of deja vu – I’d felt that same void after previous purchases, and knew I was likely to experience it again with my next big buy. What would it be? A first-class air ticket? A BMW? These weren’t things I wanted. I had only bought the bag to show others I could afford it.
More Money, More Problems
I used to think earning more would solve all of life’s problems. But I now discovered that being wealthy didn’t make you better with your money. First-year investment bankers typically graduate at the top of their class and command $90,000 to $140,000 annually. Yet I’d observed how some of these folks developed screwy relationships with money. The men tended to fall prey to drinking and gambling. The women went crazy with their shopping.
As for myself, my savings were hardly proportionate to my five-figure monthly salary. After years of working, I had only one general account with a balance that hovered around $50,000. This was my minimum ‘base amount’ – I felt free to spend everything else. My savings never grew as a result. I came to realise that how much you made didn’t matter; your emotional stability and discipline did. After my bag epiphany, I knew I needed to figure out what I wanted to do with my life and money.
A Financial Cleanse
First, I took major steps to streamline my spending. I opened a savings account into which I deposited 30 per cent of my salary every month. I specifically requested not to have an ATM card or Internet banking to prevent me from withdrawing money. Then I created three accounts to monitor our family’s monthly expenditure: one for our expenses, one for emergency cash, and another for our savings. This helped us live within our means and save at the same time.
I also transferred our two kids from their upmarket childcare centre to a nearby kindergarten. Despite my career in finance, I was clueless about investing my savings. So I read up and attended a string of property and stock investment courses. My husband and I also signed up for a course on financial planning which covered insurance, investments, wills and CPF nominations.
I knew my days as a forex broker were numbered, given that it’s a competitive, ever-changing industry. In 2013, I quit my job and, on the same day, cancelled my platinum credit card. The bank tried to change my mind by offering to absorb the annual fee, but it wasn’t about the fee. It was about ditching the extravagant lifestyle that came with the card.
A Second Career
As I tweaked my financial habits, I began thinking about retirement. Most people assume they’ll stop work at 65 and chill on a beach; that we should escape work when we retire. What most fail to recognise is that a job is a critical avenue for connecting with the world and continually honing our abilities. My father’s death in 2011 drove home this point. After retiring, he didn’t know what to do with his time.
He didn’t have hobbies or friends to meet as his entire life had revolved around chasing the next promotion. As a result, his emotional and physical health deteriorated. He died of stomach cancer at 67. To avoid such a fate, I resolved to continue working so as to occupy my time meaningfully for the rest of my life. Drawing an income would also supplement my savings. I started to see retirement as ‘re-tiring’ – not hitting the brakes, but changing tyres to go the extra mile.
In South Korea, they call it a ‘second cropping of life’. I became a financial consultant. It’s a job I can do after my 60s, lets me spend time with my two children, and suits my personality – I like to meet people and talk about money. These days, I only earn 10 per cent of what I used to, but the trade-off is worth it. As a broker, I could only spare 20 minutes a day for my eldest child, Yiru.
I didn’t even know what school events she had until a fellow mum told me. Now, I get to spend more time with her and her younger brother, Junyi. In January, I wrote a book, Why I Ditched My Chanel, which details my journey to conscious living and money mastery. The message? Be clear about what you want from life and how to handle your finances. Don’t let money manipulate your life.”
• Clear Debts Quickly “My husband and I paid off our car and home loans as soon as possible using bonuses and money from investments. When most people buy a home, they check only if they can afford the monthly payment. But you should calculate the interest you’re paying for the entire loan period – it can be staggering.”
• Educate Yourself Constantly “I frequent www.valuebuddies.com for its tips on value investment and personal finance matters.”
• Plan for a post-retirement job “Do something meaningful that gives you a steady source of income. It doesn’t need to be as intensive or high-paying as your current role. I met a retired journalist who’d chosen to be a cabbie because it allowed him to continue talking to people.”
“I began to see retirement as ‘re-tiring’ – not hitting the brakes, but changing your tyres to go the extra mile.”
Why I Ditched My Chanel is available in major bookstores and at www.whyiditchedmychanel.com for $18.80 (excluding GST).