I have just gotten this book written by Jonathan D. Pond and have benefited much from the 101 Personal Finance Tips shared within. Benefited so… Read More »(Read) Grow Your Money – 101 Easy Tips To Plan, Save and Invest
When it comes to Financial Planning, have you asked yourself what is more important – Your Needs or Your Wants?
Not too sure what is the difference between the two?
In a general sense, your Needs can be anything from Goods to Services that are necessary for living, e.g. Food, Clothing and Shelter
In a Financial Planning sense, your Needs can be setting up an Emergency Fund to providing an Income Replacement in the event of Death, Permanent Disability, Critical Illnesses and even have enough coverage for Hospital & Outpatient Expenses.
In a general sense, your Wants can be anything from Goods to Services that may not be necessary for living, e.g. Toys, Cars, Games and Entertainment.
This can be saving enough for a Expensive Car, for a Private Property when you already have a Shelter, and even for a Luxurious Retirement.
Even though the meaning behind a Need and a Want can be quite straightforward like what’s mentioned above, but do you know that when it comes to differentiating and prioritizing one’s needs and wants, many people are still having difficulties?
Read More »Financial Planning Tip #7: Know Your Needs Versus Wants
Do you know the importance of going through a Financial Planning Process with your Financial Planner?
And this process is not just plainly buying insurance plans through your Financial Planner but rather more of understanding of your personal and financial situations, current/future needs and objectives.
If you have not really done so or do not know what is this all about, I will be sharing what are the benefits that you can actually get out from going through one.
To Financial Planners, this is the process known as “Knowing Our Clients” and every insurance companies do have their own means in the form of either a software or booklet, ranging from between 10 to even 20 pages and in which a lot of your personal information and particulars will be recorded.
Certain Important Particulars Like:
1. Occupation (to assess the risks) and Family Dependents
2. Total Savings, Investments and Loans/Debts
3. Current Total Income and Expenditure
4. Your Available Budget
And to your benefits of this, there will also be calculations done and these numbers will be of great importance to you! These numbers, if properly calculated based on your full and truthful declaration, will let you know whether you are:
– Protected Against Any Financial Risks Or Long Term Care
There’s enough means for you carry on your lifestyle in situations like a sudden short-term illness/injury or for your family to continue living in any case of premature death.
What about conditions that are long term or permanent? Knowing your numbers will help you to take care of this situation and also lessen any burdens on your family.
– Protected Against Living Too Long
You have enough money to last through your retirement based on the lifestyle that you want. You will also be able to “really” retire by then and not having to continue to work just to keep the income coming in.
– Able To Pay For The Costs Of Raising Your Children And Their Education
Read More »The Financial Planning Process And Its Importance To You
Have you asked yourself this question before – Are people around you living longer or shorter?
If you do not have an answer or do not wish to answer this, my suggestion is that you flip through the Straits Time and just have a glimpse at the Obituary Page. You do not have to understand in details but just have a rough feel at the age of people passing on…
My personal opinion is that the answers to the above are both a yes! And the point that I want to bring across is – Have You Planned for both situations?
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:
There is a good sign that I am seeing in most people now – they are more open to the idea of
Read More »Financial Planning Tip #5: The Rule Of 100 – Use This To Plan And Invest In Long Term
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!
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…
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!
