Financial Planning Singapore


Many people are focused on making money in the stock market.It is very unfortunate that some of them lost significant amount of wealth. It is not because of the lack of skill in the stock market but because of the lack of financial planning especially in Singapore.

Financial protection or insurance is horribly misunderstood. Have you heard of these before?

Just what happen?

It is a pity that while we are on the journey to reach financial freedom, some of us might tripped over simple facts of life that impacts our ability of earn money. These are simple facts like a disability, critical illness or hospitalisation. A simple hospitalisation might cost over $100,000. Do you want to use your investment returns to cover for your bills.

Unfortunately, many of us first learnt about insurance from our friends or families who might have a certain experience in insurance. Most of whom, have bad experience due to pushy financial planners. The lack of clarity in insurance gives many people big risk when it comes it comes to journeying with money.

The “fortunate” story

Time and again, I have heard of stories how young successful businessmen or executives would lost their homes and their money because of an illness. In Singapore, it is a fast-paced society. Many young passionate individuals like yourself usually spend most of their youths trying to “make it”. Have you have friends that will do overtime just because it is a company’s culture? Or do you have friends who stay up late at night just to complete a job? Yes. They might be successful and climb up the corporate ladder at a young age. People might be impressed on their success. But is it all worth it?

I know of a friend who was very successful. He had a Masters Degree and was working in a public listed company in Singapore. He had several double promotions and his salary scale rise exponentially. His friends were all in awe as he was changing cars every 3 years. What the friends didn’t see was his sleepless nights and hours spent sleeping in the office. Finally, after 10 years in the company, he have became a Vice President. His salary scale flew off the charts. This time round though, he had his first scare. He was driving home while sweating uncontrollably, having intense headache and cold shivers. He knew something was wrong. He immediately called his wife and his mother and admitted himself into hospital. He was experiencing symptoms of heart attack. After several checks, the doctor concluded that he was having only a panic attack. That was when he realised he have been under constant pressure for the last 10 years. It was only then that he realised that life isn’t all about wealth. It was all about health. He then thought of his family and decided to do up a will and also reviewed his financial insurance portfolio.

While this is a happy case scenario, insurance is a financial tool that protects you from unforeseen circumstances. These are rainy days that we saved for. It protects you from the downside while giving some form of upside. Journey with money hopes to shed some light when it comes to insurance and how you can use it to cushion financial impacts.

 

I find it shocking that many people in Singapore refuses to take care of this fundamental part of life. Especially living in an expensive country in Singapore, financial planning becomes even more important. What would this family do if there there was no financial plan when things took for a worse?

 

The “unfortunate” story

This reminded me of a taxi uncle I met 4 years ago. When I first met him, he told me that he had already bought a lot of insurance and refused to do a review. I gave him a call once every year to give him an update. Unfortunately, it will always be met with a busy tone or an angry reply saying he is not free to talk. 4 years later, he gave me a call on a Saturday afternoon.

“Sir. Could you come and meet me tomorrow afternoon?”

I still remember the my fear when I heard his voice over the phone. It probably wasn’t good news. Indeed. when I went over to his flat he told me he was diagnosed with colon cancer. He had already went for several operations and wanted to consult me on the medical bills. I later learnt that he had quit being a taxi driver as he could no longer concentrate on driving. His wife earns $1000 a month as a cashier. They still have a flat to pay for (they have no CPF contributions) and also 2 young children, who were 10 and 14 at that time. The two children didn’t know what the fate of their father. At this time, you probably would expect to hear the miracle of life insurance. Unfortunately, this wasn’t the case. This is a case of reality. The family only had a basic hospitalisation plan on them. His wife asked me.

“Can he claim anything from insurance?”

She knew that they didn’t have much insurance planning. I looked at her and shook my head. I told her he can only claim part of the hospitalisation bills. I still remember they were discussing how to pay for the flat, pay for the hosptial bills and also feed the family with the $1000. Would you like to that to happen to your family? When having a place to stay become a question? Where you can’t even provide or feed your own children?

 

What should you do?

Now, there is a solution. If you don’t have to be like the taxi uncle’s shoes, you need to be financially literate. That’s how the birth of journey with money came from. You can either work it out yourself by reading tons of research papers or work together with a Financial Planner. He or she will be able to guide you to make informed choices of what you need and when you need such plans. He or she will be able to guide you through several financial pitfalls like how to pay for a obscene hospital bills, unlock a money reservoir especially during critical illness and also replacing your income when you can no longer work. This peace of mind will give you the courage to chase your goals while also be certain that there will be money when in need.

You might be the one supporting the family right now. You might be the one holding family together by providing for the house and the meals. Imagine if you are taken out, due to an illness. The whole house will fall. This will hurt not only yourself but your family. With the right financial planning (singapore), we want to create pillars of support so that if something were to happen, the family will not be hurt or harm.

There are several financial tools that are important in your journey with financial planning. These includes the following (which will be explained in the future posts)

  1. Medical Expenses a.k.a Hospitalisation
  2. Critical Illness planning
  3. Disability/Life provisions
  4. Accidental planning
  5. Legacy planning
  6. Old age disability

To do that we need to have a plan and the first way to do it is to get your expenses in order. You can read more at Financial excel cheat sheet.

In Journey with money, we want to empower individuals to retire early and avoid financial pitfalls such as this. Such a financial pitfall will delay retirement by at least a decade if not forever. If you already have done financial planning (singapore) or have a financial planner, that’s fantastic. You should be proud that you have taken the first step. However, there are many still unaware of this. We will like to offer our readers (even if you have a plan already or not) a free review by our in-house Financial Planner. He will cater a uniquely designed portfolio for your specific needs and your journey with money.

Feel free to leave comments below or contact him at chengkokoh@gmail.com