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Financial Planning

Your Comments – Replies #2

I have  this comment from a Miss Cecilia Yong who asked on this blog post,

“Question on mortgage reducing insurance: what is the relationship between bread winner (person serving the property loan) and the dependant? Must is be parent-child relationship? What about husband-wife relationship? Can this suffice?”

First and foremost, thank you for visiting and reading my blog and definitely for this valuable comment! And I will try to answer this to the best of my knowledge (my answer is rather personal and there can be some legal element to this, so for better clarification, you may have to consult a lawyer and such)

Let’s first break down the question into different definitions:

1. Bread-winner: this is the general term used to describe someone who is providing the main financial income to the family. Should anything happen to this particular person, there could be some drastic financial crisis unless plans have been made beforehand.

2. Dependents: I have done up a few searches and most sites give the definition as those who depends on the so-called bread-winner for a financial income. So people who can be called dependents could be a) your parents b) possibly your grandparents c) your children d) your siblings (if in some situation, they do depend on you).

3. Mortgage Reducing Insurance: As mentioned in my post, there’s an existence of a mortgage loan between two parties – owners of a property and a Financial Institution who provides this loan. And do note in the case of a mortgage loan, it may not just be the Bread-winner being the main owner of the loan, and one can always add the names of their spouse, parents or siblings to be in the mortgage loan agreement.

Should anything happen to any of the parties as mentioned above, the remaining parties will still continue to bear the remaining loan repayment term.

And to apply for the Mortgage Reducing Term Insurance, the presence of the loan agreement must be there and this also mean that those name(s) listed in the loan agreement are allowed to get covered with the Insurance. Terms and conditions do apply (e.g. home-makers have a maximum limit in insurance coverage and may not be allowed to get covered in full – matching the actual loan)

So What Happened When There’s A Claim?

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2010 – A New Year To Start And Improve Your Financial Plans

Happy 2010!

Phew! 2009 has been a rough year for many and there are many valuable lessons that one can learn from and apply to in 2010.

And some of these which I personally feel that it’s worthy to keep in mind at all times:

  1. It’s wise to be more knowledgeable in what you are investing – nothing is safe till you know the risks involved.
  2. It’s always good to diversify – not just your investment portfolios. Big companies with many years of history may just go bust overnight so do not put all your nest eggs into just one basket. In other words, it’s okay to have the same type of insurance plan with other companies. You need it too!
  3. Not everybody will tell the truth – learn to listen and ask good questions and to put the feedbacks or answers down in writing (do verify after the writing)
  4. What “goes down in March” will “come up in August” – this is an investment lesson or experience that I have personally went through. A unit trust that went real down in March 2009 (also the time when many people choose to sell off) climbed back up in August 2009 (and it was higher than the normal times). So do not follow what other average people do, learn to differentiate and understands from within.
  5. Not all are down during the recession – many stock prices are down but not all and it’s evident in the property market (especially in Singapore) and in the prices of Gold (have you seen how it climb at the last few months of 2009). What this mean to all of us is that we need to understand how the financial market really work – relationship between various investment options like Equities, Commodities, Properties and Cash.
  6. Take good care of your health. 2009 is the year that many people are concerned about their financial health but they are unable to get the insurance that they need. Common illnesses: Hypertension, High Cholesterol and Diabetes!

So will the new year in place, have you set aside some of your resolutions to start and improve on your financial planning?

If not, how about getting some pointers and guidelines from this blog?

For Newborns And Children Starting School (Kindergarten or Primary School)

Read More »2010 – A New Year To Start And Improve Your Financial Plans

How To Plan With $200/month If You Just Started Working

If you have just started work, around the age of 25 and holding a monthly salary of around $2,500 (Gross, before CPF contribution, bringing home around $2000) onwards, then you would love to appreciate this post as I will be sharing with you on how to plan well (coverage in almost every aspect) with just 10% of your monthly “bring-home” income ($200/month).

Note: If you are finding it hard to set aside this 10%, please read my Financial Planning Tip #1 – Paying Yourself First…

Note #2: The plans discussed below are mostly offered by the Insurance Company that I am representing and should not be served as a direct guide. Any queries, please do contact your Financial Planner.

How To Plan With $200/month?

How To Plan With $200/month?

The premiums are derived based on a Male, age 25, and a non-smoker. Rates for Female may differ accordingly.

1. Medical Insurance (Compulsory) With Rider (Optional)

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Four Effective Habits Of A Good Financial Planner

I got a chance to meet up with a Prospect today armed with a Brochure from other Insurance Company, trying to size me up after being “brain-washed” by the other Financial Planner on how bad (the plans, the company, the claim, the structure, in short everything is bad…).

End point is that the Prospect is very much convinced to get the Plan after the “brain-wash” and just need to make sure that he is doing the right thing and everything that the other Financial Planner has said is true…

So here I am wondering, why does the Other Financial Planner need to do that – just to get the business? Can’t he/she convince the Prospect with the level of service, sincerity, and competence?

As such I decided to do up this post to share my views on the Four Effective Habits Of A Good Financial Planner:

Here Goes…

Four Effective Habits Of A Good Financial Planner

1. Shall Not Bad-Mouth Their Competitors

Read More »Four Effective Habits Of A Good Financial Planner

Financial Planning Tip #5: The Rule Of 100 – Use This To Plan And Invest In Long Term

After nearly a year of blogging and coming up with my series of Financial Planning Tips, I have finally come up with my #5 tip: The Rule of 100 – Use This To Plan And Invest For Long Term and for my other 4 tips, refer below:

  1. Financial Planning Tip #1: Pay Yourself First
  2. Financial Planning Tip #2: Learn How To Set A Budget
  3. Financial Planning #3: Start Today, Not Tomorrow
  4. Financial Planning Tip #4: Settle Your Basic Financial Planning

Why The Introduction Of This Financial Planning Tip?

Rule Of 100

There is a good sign that I am seeing in most people now – they are more open to the idea of

  • Investment (concept of making your money work harder and realizing your retirement) and
  • Dollar Cost Averaging (averaging out the volatility of the financial market to ensure steady growth).

With This Open-ness In Mind, What’s Next?

Read More »Financial Planning Tip #5: The Rule Of 100 – Use This To Plan And Invest In Long Term

Your Comments – My Replies #1

Here is my first attempt dedicating a single post (my replies) to the comments that you have posted in this blog. Also big thanks for taking the time to read the posts and spending some time on this site! Hope this blog has helped you in some manner of Financial Planning and most importantly – Make You Want To Plan Today!

Special Thanks To Andre Of Beginning With Finance For The 4 Comments!

Today, I am lucky enough to have Andre Of Beginning With Finance to contribute 4 of his personal comments to some of my posts and in the comments, he actually raised some good questions (this guy is serious about Planning His Finances) which I intend to post my replies through this post.

Meanwhile do click over to his Blog and read up some tips on managing your Finances!

Answering His Comments…

1. My Post: Have You Started Your Retirement Planning? His Comment: Hey Dexter, 2% for Inflation Is Actually Low? Is It Better To Over-State The Inflation Rate While Planning For Retirement?

My Reply: 2% for inflation is seriously low. The actual inflation rate is on the average of 4 – 5%. To over-state the inflation rate while planning for retirement would definitely be better and you would get more realistic results.

But if you have done the calculations yourself (which I have did), I would need to set aside $600/month for the next 37 years in order to achieve a comfortable retirement income of $2000/month. If I have done up a higher inflation rate, it would only mean that I have to set aside a much higher (than $600/month) which may be beyond my means and also that I may not be that committed to do so.

My personal feel is that if you are able to and are actually setting aside more than $600/month as an average Singaporean (earning around $2500/month) despite having to succumb to temptation of life – entertainment, gadgets, good food, holiday trips, handphone bills and parents’ allowances, is actually a remarkable feat in reality!

Therefore there’s nothing wrong to plan with inflation rate of 2%, as long as you know the fact that you need to really save is most important! Also do note that when stuffs are actually becoming more expensive over the years, there are still some lucky breaks e.g. Chicken Rice are mostly selling for $3 per plate (due to inflation) now, there are some outlets that are still willing to sell for $1.50 to $2.50. Lesser Meat but still fills your tummy!

Key Pointers: Do know that there’s inflation in reality. And you need to save no matter what! Be comfortable with your committed and regular savings!

2. My Post:  You Are Unhealthy For Your Insurance… What Happen Now? Part 2 of 2. His Comment: Hey Dexter, How About Migraine and/or Hep B? Thanks!

Read More »Your Comments – My Replies #1