VI Blog

Should single parents learn investing?

15 Sep 2022

Should single parents learn investing? | VI College

Investing is a great way to build wealth for your family's future. If you know what you're doing, you can grow and earn passive income from it quite effortlessly. However, most people still don't have the knowledge, nor are they interested to do something about it, because it is more comfortable to support their family by just working and depending on their salary.

If you've been to one of my seminars or heard me speak somewhere before, you'd know that I strongly encourage parents to invest, especially new/young parents. But if you're a single parent, does this still apply to you? 

It can be hard for single parents when it comes to finances. In fact, it may be THE hardest thing you have to manage.

Many of them struggle to do anything else because they simply don't have time or energy after working hard all day to support their families. And when they're not working, they spend their days taking care of the children, and very seldom would they have the support they need.

As a result, many don't do anything at all about their finances, even if it means not having any funds for retirement or their child's future education.

This is, however, EXACTLY the reason why you should invest if you're a single parent. Even more than the average couple, you need to have something earning money for you in the background while you work on your day job and spend time with your children. This can at least generate an additional income that can cover everyone in case you're not able to work.

If you're not doing it already, here are the baby steps you can start taking:

1. Figure out your savings

Should single parents learn investing? | VI College

If you are not actively saving money at the moment, the first thing you need to do is to figure out how much you can afford to save on a monthly basis.

Knowing how much of your salary you can put aside each month as savings will then give you a timeframe for your investments, e.g., how much would you have by this date, month, and year, so you can invest in the stock that you've been eyeing.

On the whole, it is recommended that you save at least 10% of your monthly income, but this is only a guideline. If you can save more, that'll be even better, because the more you can save, the more you'll be able to invest.

It's also important to note that you need to be realistic with your savings goals. You can't set it to be a huge amount and then expect to save it all. You'll have to adjust your savings to fit your lifestyle as well.

2. Set a time to do all the homework

Should single parents learn investing? | VI College

We know it can feel like you have a gazillion things to do when you're a single parent. When you're not toiling away at work, you could be busy taking care of the kids or doing chores which you had to put off before.

That's why I'd suggest taking time early on weekend mornings before all the craze starts. Use this time to learn about investing and analyse stocks. Your children would still be asleep so there are fewer interruptions. And if you need to, get support from your family members or friends who don't mind taking care of your younger children.

Alternatively, you can take an hour a day to read up on investing. This would amount to 365 hours in 1 year already – enough to equip you in creating a second source of income. 

If you are pressed for time, remember that there are also plenty of stock analysis apps/platforms out there that you can use to help you analyse stocks and make wise investment decisions.

3. Join a community of investors

Should single parents learn investing? | VI College

It is difficult to learn to invest and analyse stocks on your own. Yes, the internet has plenty of useful resources, but how would you know which ones work, which ones don't, and which ones are suitable for you? And when analysing a stock, you'll need to know what the company's business is, what its profit margin is, and other important details. However, there's only so much you can do on your own.

That's why, if you're not already a part of an investing community, I'd suggest you join one. This is where you can learn and get advice from people who are in the same financial situation as you are.

More importantly, you can leverage the network and have everyone share their own stock findings. If there are 10 people in the group sharing about 10 different stocks, everyone would have the analysis for 10 stocks by the end.

Joining a community of investors can also be a good way to meet other single parents and learn how they do it – juggling everything and still investing profitably. You're likely to be surprised by what you find. 

While some might think it's better to work and save, single parents need to understand their financial situation and where they're at right now to make informed decisions for their children. If you're in a position where you need to invest to cover your children's future and your own, you need to be ready to do so.

The stock market has made a big comeback in recent years and the dividends, as well as capital gains you can get from investing in stocks, are great. So why not start here?

Join us for a free investment masterclass to learn about the strategies you can use.

~ Pauline Teo