Before moving back to Toronto, Jenna Li worked in both LA and Silicon Valley, at Guthy-Renker, GREE International, and Crunchyroll. After her dynamic life experience traveling and living in multiple international cities, she became fascinated with the concept ‘Minimalist lifestyle’ (Minimalism) to bring focus back to her life. Now Jenna is working at her own company, Happy Square Studio. We have sat down with Jenna and explored the ways in which Minimalism has helped her organize her personal finances and her own life. Check it out below!
What is Minimalism (‘minimalist lifestyle’)?
The concept minimalist lifestyle first became popular in Joshua Fields Millburn and Ryan Nicodemus’ blog. They define minimalism as:
“Minimalism is a lifestyle that helps people question what things add value to their lives. By clearing the clutter from life’s path, we can all make room for the most important aspects of life: health, relationships, passion, growth, and contribution… Even though everyone embraces minimalism differently, each path leads to the same place: a life with more time, more money, and more freedom to live a more meaningful life. Getting started is as simple as asking yourself one question: How might your life be better if you owned fewer material possessions?”
Minimalism & Essentialism
Julie: You mentioned that the minimalistic lifestyle trend influenced you a lot. However, it’s a broad concept to apply to individuals. How do you take the minimalistic trend for yourself?
Jenna: There is a fine line between minimalism and essentialism. By definition, I am more of an essentialist than a minimalist. I see that there are a lot of pictures being shared on Facebook, showcasing people’s homes before and after “tidying up”. I probably wouldn’t want an empty house – I still enjoy having things and colors in my living space. I am not against buying things at all, as long as you do not splurge. Store sales still work on me, but I only buy things that I absolutely need.
Julie: After incorporating minimalism into your life, what do you find worthwhile to spend your money on? On the other hand, what types of things have you stopped spending money on?
Jenna: I stopped buying “small” things including stationery, tools, accessories, and books that I never read. I also stopped eating out. These small things really do add up overtime. However, I don’t mind spending money on things that make me happy or add to my life experiences, like language classes, Friday night outings, gym memberships, Netflix, and books that I would read right away. I don’t recommend living like a stoic, or a complete epicurean. It’s all about balance.
– Spending money on small things adds up! Read about the 17 most common things you might be wasting your money on.
– Read about The Latte Factor, and think about how you can start spending less and saving more!
Minimalism, Personal Finance & Investing
Julie: Has applying Minimalism brought any impact to your personal finances?
Jenna: Yes. Minimizing your material possessions and your mental desires help you understand what truly matter in your life. Those who follow a minimalist lifestyle tend to purchase less. And when you spend less money on things, you simply end up with more money to invest.
Minimalism can be also applied to how you manage your investment portfolio. Looking back, one big reason that I shed away from investing at an earlier age was that I was overwhelmed by all the financial products and stocks out there. There were simply too many choices and I didn’t want to make any decisions. So I procrastinated. Now I have decided to only focus on 1-2 sectors at any given time. Because I have worked in the Media Industry before, this is my area of focus at the moment.
Julie: If you are only focusing on stock investments in the media industry, doesn’t this go against the principle of diversification?
Jenna: Yes, it does go against the principle of diversification. I believe that less is more – by focusing on industries that I understand and have interests in, I think I can generate better returns over the long term. However, concentration strategy is not for everyone, especially for the volatile media industry. You must know what you are doing.
– Diversification Vs. Concentration: Investors are often advised to diversify their portfolio to reduce risk. However, concentration can potentially bring higher return if the investor understands the sector very well, and can wait for the long-term return. Read more here.
Past, Present, and Future
Julie: Looking back, is there anything you would do differently in terms of your money management?
Jenna: Looking back, I would have started investing much earlier, perhaps in my early twenties. I actually do have a degree in Finance and Economics, but I just never really trusted myself with money. Maybe because I learned that it’s very difficult to out-perform the market in school.
Spending a lot of money on tuition also made me feel I do not have enough money to build a portfolio. However, the truth is you really don’t need too much to start investing. You can always start small.
– A lot of investment vehicles only require a relatively small amount to start off. For example, a lot of mutual funds require a minimum initial investment of $500.
– Investing early is recommended for many reasons including the concept of compound interest. The longer your keep your investment, the more return you will likely obtain.
Julie: Do you have any long-term financial goals? What type of retirement do you envision at this point?
Jenna: Retirement means different things for different people. If you want a full retirement at an early age and want to travel around the world, I would recommend taking on high-paying jobs so that you can put a substantial amount into your retirement fund. But not everyone is like that.
It is actually pretty cheap for Canadians/Americans to retire in Southeast Asia now, so if you don’t mind living in another country then you can be more flexible with how much you spend today. My personal financial goal is to reach certain levels of savings at different ages, but I really don’t envision retirement because I don’t think I will ever fully retire.
– Retirement to a foreign country requires in-depth research and strategic planning. For Canadians, research especially tax (bi-lateral tax agreements), RRSP, and health and medical services and costs. Read more from here.