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Financial Planning

Reminder – You Do Not Get A Medical Insurance Because Of Company Rebates

This is true and sad!

I just met up with a client who is urgently interested to get a medical insurance plan because the company is offering some form of cash rebates (as a form of encouragement) when any of their employees decide to “upgrade” themselves.

The outcome is that I still went ahead with the application because the client does need that medical insurance because he does not even have the basic medishield plan under the CPF Board. This is despite the fact that the client still feels that it’s not a must to have that medical insurance because he is still young and that nothing will ever happened!

But I do hope that after my fair bit of explanation and persuasion, the client will still hold on to that insurance after the rebate is given…

If You Belong To This Category Of People…

There is nothing wrong if you belong to this category of people and to enjoy the rebates from the company. But as a Financial Planner, I do wish to highlight the rationale behind the company’s decision to offer the rebates and the importance of getting yourself well-covered adequately and early.

Rationale Behind The Rebates

There are still many people who are unaware of the importance of doing a proper Financial Planning and getting themselves covered adequately under an insurance plan. Therefore the rationale behind the rebates is to encourage their employees to be actively involved in knowing what they are covered and how to get covered.

This is precisely what happened to this client. He does not even know what are the insurance plans that he has till date. He even got mixed up that his Dependent Protection Scheme (DPS) has always been his Medishield Plan.

Because of this rebate, he decides to look for me as his Financial Planner and has all his insurance plans reviewed. Though there’s no financial needs analysis done for him, at least at that meeting, he does got himself covered under a proper medical insurance (which I believe is a must-have for everybody, irregardless of how much you do not trust insurance)!

There’s Certain Level Of Importance Behind An Insurance Plan

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How To Self-Manage Your Own Money With A Six Accounts Strategy

Would you like to have better self-management of your money so that you have enough to save for retirement, invest, play & pamper, and at the same time doing your part to contribute to the charity on a regular basis?

If you do, you can actually make sure of this Six Account Strategy that I have learned from T. Harv Eker’s brilliant book called, The Secrets Of A Millionaire Mind.

Why Should You And I Make Use Of This Strategy?

My personal experience from what I learned from most people, who have just received their bring-home income and including my own, is that the money will be used to pay off most of outstanding bills and loans, settle and pay for any necessities and the rest is kept in the bank account (if any is left, of course).

All these are usually done on a irregular amount and inconsistent basis, do you agree as well?

– For Investment And Education Opportunities

For example, if there’s a good (as in really, really positive and good potential) investment or education opportunity that may just come up to you, you may keep asking yourself whether you should go for it and leave a slight cut on your bank account or use it for other personal uses… For most people after this much of pondering and thinking that using the money for other personal uses is better, this one chance may just slip away and never appear!

Such case did appear to me, in one particular case of stock investment where there’s a strong potential growth of at least 20 – 30% capital gain. I do have the money to invest but… I wanted to use that money to spend on some latest Tech Gadgets. So at the end of the day, I did not invest or spend on any Gadgets (because the better ones are coming up, again!). The stock grew and it was too late for me to go into it!

– For Retirement Planning And Charity Giving

Likewise for Retirement Planning, most people do not concentrate much on this particular section of planning and rather spend most of their money on other areas. They only plan and invest towards the last few years of their working life and hope that miracles will happen at the end of it! Usually, such things will never happen to the mass majority!

I am a believer of Charity Giving and I would try to donate to my charity choice once I have the spare cash. I would like to do it on a regular basis but I am, like any other normal person, that these donations should be spent on other uses. And to side-track, do you know that by giving away a bit of what you have to help others, you will get “rewarded” (not just in monetary sense) many times back? That’s why many millionaires are requesting people to step out and do their part in charity giving.

So if you did face such situations before (which I did) and you would like to have a way out, you should try on T. Harv Eker’s Six Jars System today!

How Does T. Harv Eker’s Six Jars System Work?

In general, you need to have so-called six accounts (i.e. actual bank savings accounts or some form of Excel Sheet tracking) to separate your bring-home income.

And under the Six Jars System, you should have these accounts and the percentage of your bring-home income in it:

1. Financial Freedom Account (10%) – This account is meant for your Investment Purposes. Making sure your money works hard for you! Please do not try to use this money to try on the lottery. The money in this account is meant to go into good investments like Stocks, Unit Trusts, Properties or any assets that will give you a significant rate of return as compared to the usual bank savings account rate. Any dividends can be re-invested or to go into your Long-Term Savings Account.

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What Makes You A Good Financial Planner

What Makes You A Good Financial Planner…

I have decided to write a post on this after a personal conversation with my relative during our Chinese New Year dinner. And it was this conversation that I finally got to know the reasons why he did not engage my financial services even though he knows that I am in this career for over 4 years plus.

This post is also a reminder to myself, to any person who is inspired to be a Financial Planner or are already one – on our duties and obligations to any clients that we are attending to! Even if you are a person who believe in the benefits of insurance, you can read this post to know your rights as a client!

What Did I Gather From The Conversation?

My relative believes in the benefits of insurance and have taken up a lot of plans (and paying a lot of premiums) when he was in his working age. His neighbor happens to be starting out as a Financial Planner and also happened to be his first point of contact – as such, my relative took up all kinds of insurance that she recommends. He even recommended his colleagues and friends to support the neighbor. This lady rose up the ranks and achieved many accomplishments like MDRT.

She is retired and she has since passed on all her portfolios to her son. And her son is supposed to be the servicing agent of my relative.

My relative was well taken care of by the Lady – she responded to most of his queries and needs. But after the son took over, things changed. Whenever my relative has a question with regards to his existing policies, all he got from the new Agent is a simple few word answers. Nothing more than that. My relative wanted to file a claim but was told on the phone that it cannot be done and there’s no further explanation.

The time that my relative really hear from the new Agent is when he needs to hit his sales target and wanted the support from my relative. At that point of time, my relative is already retired but… he still supported with a 15-year Endowment Plan (when he actually wanted a Term Insurance and Health Insurance).

All these happened 6 years back and in this year itself, my relative feels that he does not really know what he has been paying. He wanted to terminate the plan but was told that the surrender value for his 6-years-old Endowment Plan is a big Zero! Of course, he was shocked to hear that and was told to keep paying… My relative does not know what other options that he can have…

And this is just a small part of his bad experiences. He related all these to me and expressed that he has been quite foolish to have committed so much yet do not know what he has bought at the end of the day. He bought because of the friendship and support for his neighbor. Now.. he is beginning to hate Insurance…

It was this conversation that really got me thinking real hard of what makes a good Financial Planner… And the five pointers below are what I feel are the duties and obligations of a good Financial Planner…

My Top Five Duties And Obligations Of A Financial Planner

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How To Financially Prepare Yourself For 2011

2010 is coming to an end soon and we will be welcoming 2011 in around 11 days time! And before the year ends, this is a good time for you and I to look into our Financial Planning.

What Are The Areas That We Can Look Into?

In simple terms with regards to Financial Planning, as long as it involve some form of monetary sense, it’s always good to look into. And if you like to know something concrete, here’s a list of what you can start looking into:

>> Your Financial Investments

Financial Investments would include your Investment-Linked Plans, Stocks, Shares, Unit Trusts. This can also include your investment properties (though not much changes can be done in the physical area). And basically, you will need to know with the past and present economical changes, how has it impacted your investment portfolio?

You may ask yourself these questions:

– What Am I Doing These Investments For? Retirement? Mid-Term Wealth Accumulation? On Impulse? Answers to these will help you to keep track of your final objectives.

– How Are My Funds Performing? As compared to end 2009 and now end 2010, how’s the performance been? Any changes needed to make sure that I am on track to my objectives?

– Do I Need To Pay Particular Attention To Any Investments? This will better prepare yourself for 2011, keeping track of funds that need your most attention will make sure you will not face any last minute economical shock.

>> Review Insurance Portfolio

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