Dispelling The Myths Surrounding Financial Planners

(a useful article extracted from Investopedia Team)

It's tough to go it alone. Some people have the time, ability and drive to manage all their finances, others don't. Either way, professional advisors can provide great insight and judgment in countless instances, and not necessarily at exorbitant cost. But common misconceptions about financial planners prevent many from seeking their counsel. In this article we'll help you avoid these traps so you get the most value from your advisor.

Myth One - Having a financial planner means I don't need to learn anything about investing

This myth sends shivers up our spines! If you take nothing else away from this article, understand that whether or not you have an advisor, the most important thing you can do is educate yourself. Having a solid understanding of investing will ensure you understand what your advisor is doing with your money, and allow you to ask the tough questions. Think of this scenario: you sit down for a review of your personal finances and your new advisor starts with a lecture about asset allocation and diversification and how they are recommending a certain hot new mutual fund. If you understand the terminology you can ask questions like:

- Why are you recommending a 60/30/10 asset allocation between stocks, bonds and the money market?
- How am I more diversified when I already own similar mutual funds?
- What is the MER (management expense ratio) of this new mutual fund? What compensation do you receive if you sell me this?

By asking the right questions you'll understand your portfolio better and also protect yourself from unscrupulous advisors who try to sell you something you don't need. It's just like taking your car into the repair shop and the young attendant tells you your “foo-foo valve” is shot. If you are able to explain that there is no such thing as a foo-foo valve and is therefore unlikely in need of replacing, there is no way they can overcharge you for services you don't need.

Myth Two - A planner or advisor only gives me advice on investing

Picking the right investments is certainly an important aspect of your personal finances, but it's not the only part. Financial planning takes into account all the varied financial aspects of a person's life: taxes, insurance, retirement, budgeting, estate planning, liquidity requirements and other life goals. It considers the various and sometimes conflicting financial aspects of our lives and develops strategies and objectives to make everything work together. For example, what good is it to pick all the right investments but then see most of your return swallowed up in taxes? It's a full-time job just to keep up with all the laws relating to investment income and taxation. With the aid of a financial planner who considers your individual situation, you'll be able to minimize the amount of taxes you pay (legally of course) and have a stronger bottom line in the end.

Myth Three - By law all financial planners are required to be registered with a government agency

Actually, financial planners are not required to be registered, whereas stockbrokers and investment advisors are. Before deciding on an advisor, always look up the person's registration at your local state or provincial Business Services Division. Check to see if there are any complaints or if disciplinary action has been taken against them.

Myth Four - Certification letters after the person's name mean nothing

If you are looking for an advisor, give extra credit to those who have designations such as the Certified Financial Planner® (CFP®). To become a CFP®, an advisor must put in hundreds of hours of studying in order to pass a grueling 10-hour exam. Furthermore, members are required to undergo background checks, agree to a code of ethics and do continuing education to keep the certification. While hiring a CFP® is no guarantee of performance, it's a good indication that the financial professional is legit.

Myth Five - Only wealthy people need a financial planner

Last but not least, this myth is extraordinarily widespread. Financial planning is about helping people of all income levels achieve short-term and long-term financial goals. Many individuals, often those not considered “high net worth”, assume you need to be a millionaire to get professional help. The truth is that for as little as a few hundred dollars you can have a portfolio assessment done by a fee-based financial planner. This breed of planner only takes compensation from the client and receives no compensation in the form of commissions from selling certain products. Many charge by the hour, which means you can get unbiased advice on specific issues without worrying about being forced into some investment.

Conclusion

Some people are confident enough to make these vital decisions on their own. Others need a helping hand. If you do choose to deal with a planner, keep on educating yourself, understand there is more to managing your portfolio that just picking hot stocks, do the homework in terms of both background checks and certifications, and don't think that you can't afford advice just because your portfolio isn't seven figures. Financial planners aren't a guarantee or magic solution but they can be of help in many circumstances.

- by Investopedia Staff

In Hard Times, Take Cover (24-May-09)

We all know that if you are not covered and have a major accident or develop a major illness, it can be financially devastating. The good news is that a comprehensive medical insurance plan can help defray most of the hefty hospitalization expenses.

If comprehensive health insurance is so critical, how come so many people still fail to insure themselve adequately? This article helped to identify the myths & misconceptions that many people have.

Myth No.1: My company pays for my medical bills

Yes. But how much is the limit? And are they portable or transferrable?

Myth No.2: I have bought enough insurance

Are you certain you have bought the right tools? Different insurance plans are designed to cater to different protection needs.

Myth No.3: I already have Medisave & Medishield so I should be okay.

Yes, these are very good instruments that the govt has planned for us.

- The current Medisave is now capped at S$34,500. At the current medical inflation, it is likely that any major surgery would wipe out one's Medisave balance.

- Medishield is meant to cover expenses at Class B2/C wards. It will be insufficient if you are treated in private hospitals or Class A wards.

Myth No.4: I am still young and healthy

Insurability is the reason you need to buy insurance early when you are young and healthy. You must get it before you need it, because if you don't have it when you need it, you may not get it any more.

Myth No.5: I don't need to buy insurance for my children & stay-home spouse

Every single human being who is subjected to possible death, accident or critical illness should have a proper insurance plan in place. Unless you are invincible.... like superman... or Wolverine?

Make Them Money Smart (24-May-09)

You may have started saving late, but you can certainly teach your children the importance of money at a tender age. IF ONLY I had learnt to be more money-savvy or investment-savvy, my positioning could had been so much different. But that is provided 'IF ONLY' exists. But now imagine if you can impart value-adding skills to your child, how different his/her life would turn out to be?

Next time if I have a child, I will make sure he learn the money earning strategy the smart way. Getting an 'A' in exams simply does not mean everything isn't it?

オレンジデイズ (Orange Days)

Orange Days? You must be thinking what is this Orange Days I am talking about? Quite a strange insert into my blog, but just feel like adding to it after re-watching this J-drama again.

This drama highlights the story of 5 youths in a Japan University, trying to make the fullest use of their time in Uni, before they separately venture into the working world. This time frame, they sort of termed it as the "Orange Days". Days where you do not worry for money, do not worry for work, do not worry about survival. But these are the days you plan for friendship, courtship, and things you have full of passion with (e.g sports, hobbies, etc).

Of coz, my personal Orange Days are over. Coming to the age of 31, things will take on a different colour; a passionate red, a vibrant yellow, a moody blue, a gentle violet, etc. But the key idea is... no matter what colour your days are.. make sure you live them fully. Today will not wait for you even if you do nothing.

One thing for sure is, I really do miss my orange days...

Retirement Income - How Much is Enough?

3 Simple Questions:
1) Do you know how much you need for your retirement?
2) Do you know how you can achieve your retirement?
3) Have you done anything to achieve the above two qns?

If your answer is 'no' to any of the above question, do contact me to find out how you can achieve your financial security and success.

Red Passion

Just to showcase my passion for RED stuff...
My Red ASUS EeePC Netbook 1002HA...
My Red Nokia E63...

My Red Waterman Pen
My Red KIA Cerato V2...
My Red Dining Room...
My Red Kitchen...

- Red is a bright, warm color that evokes strong emotions.
- Red is associated with love, warmth, and comfort.
- Red is also considered an intense, or even angry, color that creates feelings of excitement or intensity.

Frustrated over Money Issues?

Hidden Costs of Flying on the Cheap (10-May-09)

I am a frequent flyer on budget airlines to most Asian countries... Thailand, Myanmar, Cambodia, Vietnam, Bali, and even Hong Kong. What's most attractive and appealing from these budget airlines is their competitive pricing. Do watch out for their weekly or monthly promotions, and very likely you can get a good pricing, particular in those off-peak seasons like swine flu period.. non-holiday season... etc. Recently, they are giving 'free' air-tickets, and what you have to pay is just the taxes (I think this one cannot escape one lar, if not they eat what?).

Ranking wise... in terms of overall service, departure accuracy, seat size, air stewardess, etc... I would personally rank it this way.

1) Jetst** / Valu*** (same umbrella)

2) Tig** Airways

3) Air As**

This article highlights the hidden costs of flying budget... which is very true. "Hidden cost" of flying budget airlines includes:

- Separate charges for check-in luggages

- Extra charge for leg space a.k.a. emergency seats

- No refunds. Or very difficult-to-get refunds

- For promotional tickets, high cost of changing dates or passenger. But I guess that applies for conventional international flight as well, so not much complaints on this.

- Difficulty in getting in touch with budget airlines during crisis. This was highlighted recently during the Bangkok riot when the 'victims' cannot find any relevant personnel to turn to.

But if you are looking for a no frill (+ no meal!) low cost flight, budget airlines are a big recommendation for short trip destination. They are really value-for-money! The appearance of these guys really are giving the big boys a run for their money and helped to build up a strong competition in the tourism market. (Two months back I understood that Air As** is even providing flight to England... I am not sure how tough the journey can get....)

But don't complain so much when things get cork up along the way... 一分钱一分货... "We are sorry for any inconvenience caused...."

Balance of Life

This is one article that I came upon in 2007. Very inspirational. Enjoy!

An Inspirational Story, Motivational Story - Balance of Life by Catherine Pulsifer

Mary and Susan were friends for years. They grew up together and attended the same schools. They were now both in their 40's, and both had great careers. They both had a similar upbringing - same education, same family values, similar support and financial position. But there was one main difference. Mary never seemed to have enough time. She watched her life long friend Susan. She had similar responsibilities and interests. Susan had a career, she had three children, she had her hobbies, one of which included golf. Over lunch, Susan was telling Mary about the golf game that she played last weekend.

"Susan, where do you find the time to play golf?" asked Mary. "I never seem to have the time, now with the children older and doing there own thing I thought I would have time to play golf like we did when we were in college."

Susan looked at Mary and laughed, "Mary, we both have the same hours in a day. You do have the time to play golf!"

With a sigh Mary replied, "That's easy for you to say. I never seem to have time. My work takes so much of my time. I am in the office at 7:30, I leave at 6:30 in the evening. By the time I get home and have dinner, it is 8:00! And, then I usually have a briefcase full of work. The weekends are full of more work. Just to keep up, I have to put in the hours. You know what it is like!"

"Of course, I know what it is like," Mary said. "But what would happen tomorrow if you got sick? Who would do the work?"

"Sick. Who has time to get sick! exclaimed Mary. "But if I did get sick, someone else would do the work, I suppose."

"You know something, Mary, I used to be like you. I worked night and day and of course on weekends. When I got home I was exhausted but I would push myself and read my children a bedtime story. By the time I went to bed, I would be more than exhausted. The boss I had was very demanding. She was there early in the morning, late at night, and she always worked weekends. I felt I had to do the same - I needed the job to help support my family - just as you did. But then I had a change of bosses. The man I worked for was older and much wiser, I might add! Of course, I continued to work the hours I had been working. One day he came to my desk and passed me a card that had a quote on it which said, 'What I do today is important, because I will never have today again' - then he left.

I sat there stunned. I suddenly thought of what was important to me. While my work was important, I realized my children were more important. I also realized that time for me was important. It was 4:30, the official closing time of the office. I straightened my desk, felt a twinge of guilt about leaving, but I forced myself to leave. I was home by 5:00. My children and husband were surprised. I had a wonderful evening. It was not a chore to read that bedtime story that evening."

Mary was looking at her friend thoughtfully and then questioned Susan about the work she had left on her desk.

Susan replied, "I never thought this possible, but I actually accomplished more the next day then I had in weeks. As I was leaving the next day I stopped at my new boss's office and thanked him for the quote. He told me a story about advice his dad had given him many years ago when he was working night and day. He referred to it as 'Balance of Life'. His dad told him to keep balance in his work, in his family life and in time for himself. He explained to me, while all aspects of our life are important, without a balance, you become addicted and like all addictions you lose -

- no balance with your family - you lose them
- no balance with your work - you lose your perspective and you actually lose focus on the important aspects of your job.
- no balance with yourself - you forget who you are and when you retire you have nothing!

Or worse than that, if you lose your job through a company sale or downsizing you lose your identity.

He went on to tell me that who we are is NOT what we do to make a living. Who we are is a balance of our family, our work, ourselves! It truly was the best advice I ever received."
Mary took a drink of her tea and tearfully looked at her friend, "But I would never get my work done if I left at 4:30!"

Susan looked thoughtfully at her, "When you go to work on Monday, look at what you have on your desk. Make a list of everything you have to get done and beside that list write the impact of not doing it. Then focus only on the top three items that have the most impact. Do that everyday for a week. At first, you will find it difficult to leave. But, after awhile, you will find that you will have more energy, and you will be more focused in your work because you have BALANCE! There are times when we have to lose balance - a special project at work, or a family matter at home - but consciously focusing on balance keeps everything in check."

Mary smiled at her friend, "Thanks for talking with me. We have been friends for so long. Thank heavens I have balance with your friendship! You have convinced me. I will leave the work in my briefcase this weekend. On Monday, I will make the list first thing. Perhaps next weekend, I will have the time to go golfing with you!"
"Balance of Life" - important for us ALL!

Investing in Stock Market?

Out of curiosity, I went to attend a Technical Analysis Training Program Preview by a company that dealt with 'design, development and commercialisation of financial market solutions'. It was quite interesting indeed after the 2hrs session.

The speaker mentioned, basically in stocks trading, there are two main school of thoughts:

i) the Fundamental Analysis part where people believe in the true value of the company, analyze the P/E ratio, Balance Sheet, and many other ratios, then match whether the existing stock price is undervalued or overvalued.

ii) the Technical Analysis part where all these ratios are thrown out of the windows. It is simply chart trending and trying to predict how the movement of the stock prices. Because market shares are governed not only by fundamentals, but sentiments as well. History does repeat itself.

And thus there exist a third school that tries to combine the strengths of both Fundamental & Technical Analysis together.

From the preview seminar, the speaker also highlighted 3 common mistakes why people lose money, which I kinda agree:
1) Buying simply because it is CHEAP. The recent bull market had caused most stock prices to fall down by 50~70% from their peak, including blue chips. Many are now taking the opportunity to buy 'popular stocks' (e.g. blue chips belonging to banks or property), simply they looked cheap on the surface. Sounds logical? To a certain extent yes. But do some homework before you throw your hard-earned money in it. Just remember the story of Leh*** brothers.

2) Hope that stock will rebound. What is your waiting duration? Wait until durian drop? 'Experts' advise it's wise to have a stop-loss or profit target for any stock so that you do not get caught in an ugly situation.

3) Missed opportunity. Many people got stuck in the Buy & Hold strategy for stocks. Not willing to cut loss or take a profit because of fear and greed. Holding on to a lousy stock simply means missing out opportunity on a good stock.

So are you ready for the stock market? Or is the stock market ready for you?

Insurance Firms Expanding Talent Pool (04-May-09)

Everyone needs some form of insurance in one way or another. As fresh graduates flock into the financial planning industry due to difficulty in securing a 9-to-5 job, competition is going to be very tight. But pls remember that ultimately that when you purchase a new policy, it should always be done with a certain objective in mind. Not because it makes you feel good that you are buying more, or simply just supporting a friend or relative.

At this point, do you know what is the kind of coverage that you need for yourself or for your family, in terms of Pre-mature Death, Total & Permanent Disability, & Critical Illness respectively? Are you underinsured (which is commonly the case) or overinsured (which is not money-sensible)? Are you paying the right dollar for the right policy? If you have any doubt, pls feel free to contact me for a good financial review.

Save Wisely for your Child's Varsity Fee (03-May-09)

As I explained in the earlier article, the rising cost of education will soon be a major problem for parents planning to send their kids to university. A recent survey shows that most parents' education fund will not meet actual future expenses. If you are a young parent now, are you prepared for the high fee in 20yrs time?

There are many ways on how the parents can plan to achieve that desired sum for their child's education. Be wise to choose the most appropriate instrument.

Car Cover Cheap is Not Always the Best (03-May-09)

With the falling COE price and car prices, the number of cars on the road seemed to be ridiculously high. Every morning without fail, the road from KJE (starting CCK) to PIE to Tuas will jam from one end to another. I am one of them.

For many of us, paying for insurance is often seen as a burden rather than a service. We will try to get the cheapest deal with the best cover. For car insurance, it is highly advisable to get the comprehensive coverage insurance so that most of the loss/damage are being transferred over to the insurance company. Do not end up on the wrong side of the road and find yourself being underinsured.

And of coz, drive safely. But you cannot guarantee the safety rule applys for everyone on the road!

High Five for Fair Play Guideline (26-Apr-09)

NEW GUIDELINES (in brief):

1. Fair dealing is central to a financial firm's culture

2. Products & services offered are suitable for a firm's target customer segments

3. Financial firms have competent representatives providing quality advice and appropriate recommendations

4. Customers receive clear, relevant and timely information to make informed decisions

5. Financial firms handle customer complaints in an independent, effective and prompt manner

What customers really want (12-Apr-09)

5 common complaints against Financial Advisers:
1. Lack of product knowledge
2. Not disclosing the downside
3. Not sincere!
4. Continuity problem
5. Claims handling

So my advise is, find a competent financial adviser who is really trustworthy, well-knowledged, and able to add value to your lifestyle. Do not simply pick anyone from the roadshow and think that the more policies you get, the better is the coverage. It will really be unfortunate if you find yourself having a 'not-so-good' policy when you need the coverage most. By choosing an independent financial adviser, you can expect to get the best policy in the market that suit your needs best. Simply because we are unbiased (i.e. not tied to any insurance company) and stand on the side of the clients.

How to Beat Inflation (06-Apr-09)

What is inflation? In very simple terms, a bowl of noodle long long time ago cost 20cents. Now it is at least $3.50 at foodcourts. 20yrs later? I think $10/bowl is not an impossible mathematics.

Recently a 油条王 (You-Tiao King) opened up in Yew Tee MRT. A typical looking you-tiao is selling for S$1.00!!! I cannot believe how much flour can cost me.... but it is actually happening. When I was still in primary school, it was selling only for 15cents.... And my father had been complaining how his Kopi-O had risen to $1.20 for one of the food courts he visited.

So how to beat inflation? Here are the 10 recommended ways...
1. Cut down spending, leave within your means
2. Try to save 20% of your pay, or more....
3. Do not be overly conservative
4. Don't rely solely on guaranteed products
5. Save regularly via an investment platform
6. Take on sensible level of investment risk
7. Invest for returns that will beat inflation
8. Understanding the power of compounding
9. Invest in asset classes that will appreciate
10. Limit exposure to depreciating assets

Sounds easy and logical? But not easy to do. If you do not have the discipline in saving regularly, it's time to start now. Engage the service of a competent financial planner if you face difficulty. One important key advise is to pay yourself first'. How the old man/lady (a.k.a. YOU) is going to survive in their golden years depends on how much you are saving for them now.

Make market cycles work for you (29-Mar-09)

Advise from an avid investor as stated in this article:

First, estimate which stage of the cycle we are in.

Second, try to identify the major trend direction - upwards or downwards.

Finally, position ourselves accordingly; basically the strategy to take is to go with trend rather than go against the trend. "

It all sounds so simple. But yet the numbers still show that there are more losers than winners. Why? The art of investing is not easy because people are not only govern by the statistics, but also govern by "gut feeling" or simply just by gossips or rumours or more commonly, 'recommendation' from friends/relatives/colleagues?

Dollar-Cost Averaging (29-Mar-09)

Dollar-Cost Averaging is a simple yet effective strategy for most. How does it work? By putting a regular sum into an investment portfolio (for e.g. monthly) rather than a lump sum, the price paid for a share or unit trust is averaged out. This means that more shares are bought when prices are low and fewer when prices are high.

Over the long run, if the stock is making good progress, yr portfolio is logically to make a profit. BUT the clause is that if the stock is sky-diving downwards and showing no sign of recovery, this strategy will not work. This seemed to contradict the market cycle strategy which I will post in the latter stage? No, not really. The thing is that your long-term investment portfolio is not there to stay unchanged forever. Your financial planner must be able to monitor its performance and readjust the portfolio on a regular basis or when the needs arise. A balance of static and dynamic change is necessary to make sure your financial freedom path is on the right track.

Are you now on the right track? When was the last time your insurance agent service you?

Sale of Investment Products (15-Mar-09)

As a follow-up to the collapse of the United States investment bank Lehman Brothers' MinibondSeries, the MAS has finally come out with "NEW stuff" to protect consumers' interest.

Consumers can expect more information disclosure and better protection of their interests when new proposals on investment products take effect soon.

8 things to know about the review:
1. The 'Product Highlight Sheet' is given to the consumers before they make investment decisions. It will set out key product information in a simple and concise manner. And guess what, it will not be in "fine print" anymore...
2. Complex Products. Health Warning to be slapped on all the product's marketing and advertising materials. They can only be sold after some form of advice is being given.
3. Risk rating to be given so that investors can assess their suitability
4. Fair and balanced advertising materials. The aim is to ensure that these materials present a realistic and balanced perception of the product and its features and risks.
5. Bank Tellers cannot act as Product Introducers. I think this is really a good move. How many aunties and uncles and the ignorant were "directed" to the wealth managers... believing that these mini-bonds give you much high returns than FD?
6. Sellers to exercise greater diligence. Advisory firms must document in greater detail the basis of their recommendations.
7. Restrictions on product sale without advice. Advisory firms can waive the need to give adviceonly if the customer contacts them on his own initiative to buy a product.
8. Enhancing MAS' powers. More power! More control!

MAS Proposal on Sale of Structured Pdts (13-Mar-09)

Your Ticket To Investing Wisely (22-Feb-09)

This is one of my favourite article to explain the meaning of investing smartly.

Taking the analogy of a plane, we have to establish where you are going and how to get there. In other words, you need to know your destination (your goal, your aim) and how much time you need to reach there.

When you are on board a plane, you are exposing yourself to risks as a passenger. But of coz we can so-called reduced the risks by choosing a better track-record airlines. You are unable to choose who you want to be your pilot, but in financial terms, you can have the option to find a good financial planner to serve you.

Sometimes, we face turbulence during airborne. But you also will realise that the turbulence doesn't last very long. Once the plane is out of the air pocket, it will fly smoothly again.
The current financial crisis is the turbulence in our investment horizon. Investors can expect the market to be volatile. The market will eventually recover, but we just need to sit tight and ride out the market turbulence.

Remember, don't jump out of the plane without wearing your parachute! You may lose more than what you can gain back. Think twice.

Asian Giants offer Value for Money (22-Feb-09)

Price fluctuations mean investors have an opportunity to buy wisely when prices fall sharply, so they can sell them when prices to make a handsome profit.
This is called value investing, which essentially focus on buying assets for less than they are worth because of bearish times.
Value investing is different from growth investing, as it really is buying shares that are cheap relative to measure of some intrinsic worth like a company's earnings.

By contrast, growth investing is about looking for fast earning growth and paying a premium for it.

So, are you a value investor or growth investor?

Regulate Private Health Insurers to Minimise 'Cherry-Picking' (15-Feb-09)

In HEALTH insurance terms, there are two types of people: cherries and lemons. Cherries are sweet young things in the pink of health. Every insurer wants them on his books, to pay premiums for benefits they don't claims. Then there are "Lemons'; puckered, sour things that have a bad habit of falling sick, requiring medical treatment and making large claims.

The Health Ministry has rules for insurers who offered enhanced Medishield products, but these are on things like co-payment and deductibility. No authority looks at health insurers to scrutinise their practices to make sure the terms they offer patients are fair and equitable.

Hence the need to propose of regulating private health insurers to make sure more people can get the coverage they need in the first place.

10 Things You Need to Know about CPF Life (13-Feb-09)

A very useful article to let you understand more on the new CPF Life.
1. How much do I pay? How much do I get?
2. What choices do I have?
3. If I die early, do my family get a refund?
4. Am I covered by the new scheme? When does it starts?
5. Is it compulsory?
6. What happens to my CPF money when I turn 55?
7. How is CPF Life different from the current Minimum Sum Scheme?
8. Will my CPF Life payouts be indexed to inflation?
9. Who will run the new scheme?
10.What happened to my feedback?

Tough Time to Buy but Good Time to Invest (01-Feb-09)

Many experts will claim that it is always a good chance to enter the market during crisis and make a shopping spree for supposedly good stocks which are undervalued. I agree to this theory to a certain extent, but do invest with due care as we never know how the stock market will react. It is now at its very volatile stage.

Looking at another side, deflation is starting to step in.... make good use of this opportunity to buy things that you NEED to buy like a new plasma TV, or a new car? Of course I am not encouraging you to buy things just because they are cheap, but now the advantage is on the consumer side. =) Just looking at how the car dealers, the shopping centres, the shops in your neighbourhood that are trying to induce more promotion to attract consumers' spending.

Get Adequate Insurance (09-Dec-09)

"Travel Insurance should be the first thing that people buy the moment they confirm their travel bookings"

When I was young and wild and with no commitment on my back, I do not believe in Travel Insurance at all. Taking it to chance is my form of gamble. I will risk the few dollars of travel insurance and spend it on food and postcards. Silly move.

As I grew up, I realize the importance of this little travel insurance. Just look around us, the riots in Thailand resulting in a close off of the airport, and Asean ministers have to be heli off to the Phuket airport to run off from the riots during their Meetings. On a personal note, I had suffered diahorrea in Cambodia, and my wife also suffered diahorrea in Nepal. Back then, I wished I had bought travel insurance then.

Don't be penny wise but pound foolish.

Jolted into Taking Stock of his Finances (30-Nov-08)

A simple story to illustrate how a spend-a-holic started to do financial planning...

Valuing a Stock (16-Nov-08)

"Buy low Sell high".. aiyar.. who don't know this theory... but this is easier say than done. Before you start trading, better do your homework first.
To accurately determine a stock's value, you cannot look at the stock in isolation. You need to look at other factors, such as how stocks in the same market are faring. You also need to be aware of how the overall market is faring. Simple e.g. the stock gain by 5%, but the overall market gain by 10%. Who's the winner? And vice versa when we talk about losses.

Two valuation measures commonly used for comparatively purposes are a stock's price-to-earning (PE) ratio and its price-to-book (PB) ratio. Read abt it in details.

Have Spare Cash for Investment (02-Nov-09)

KEEP CASH IN HAND

The saying goes that a crisis is an opportunity. The truth is - a crisis is only an opportunity for those with an opportunity fund. For people who do not have the cash, a crisis is just a crisis.

The day I almost lost my head...over AIA insurance policies (05-Oct-08)

Are you still worried by the AIG issue? Don't be overly worried. Since AIA's assets and life funds are in Singapore, they would be ring-fenced here and out of AIG's reach. In the worst-case scenario, AIG may simply opt to sell its life subsidaries in Asia. And if that happens, AIA policies would end up being managed by another insurer.

When it comes to financial investment, customers should never make hasty decisions, be it buying or selling them.

An early surrender (for long term policies) would have meant losing a significant portion of my premiums and missing out on future annual and maturity bonuses. That includes the Total & Permanent Disability (TPD) and Critical Illness (CI) coverage as well.

Before you Surrender your AIA policy... (21-Sep-08)

Many were stricken with fear when they heard about the possible collapse of AIA's parent firm AIG and were concerned that their hard earned savings, which were embedded in their policies in the form of cash values, would go up in smoke.

Before you do so, think of the following questions:
1. Do you need the insurance coverage
2. Are you in good health?
3. Have you checked the cash value of your policy?
4. Paying higher premiums for your next policy
5. Losing your entitlement to terminal bonuses
6. Should you terminate your term policies or medical policies now
7. Should you terminate our ILPs?
8. Is AIA really going bust?
- It seems the risk is much lower now with the bailout of AIG and the positive statements from MAS & AIA on the sufficiency of assets to meet policyholders' obligations.
9. Taking a loan on your policy

If you are still in doubt, do seek professional advise before you just hop on the wagon blindly.

Want to Buy a Car? Read this First (30-Nov-08)

I bough my KIA Cerato Variant 2 for $48k in Jan08. One year down the road, the price of a brand new chio chio KIA Cerato Forte with free bodykits and gifts cost around $45k. Urgh.... all thanks to the plunging economy and falling demands of car. But oh well oh well.... nothing much I can do now but just envy those new KIA Forte owners.

Drawn by lower car prices & COE rates at a record-low levels, potential buyers have been flooding showrooms to check out their dream set of wheels. But is this really the best time to get a new set of wheels? Do consider the following factors before you sign that piece of paper:

1. Positive cash flow? Don't put yourself in an ugly position just to look good on the outside
2. Cost of owning a car?
3. Needs versu wants. Are you sure u need it?
4. Determing the type and size of car. If you cannot swim, don't say the swimming trunks too big.
5. Buy from an established firm
6. Should you choose the highest car loan available? Depends.
7. Find out the 'effective' loan interest rate. Be aware of it!
8. Check around for suitable loan packages
9. What if you are an existing car owner - should you sell your car to get a new one?
10. Find out your new car's potential COE rebate

My advise is, be aware of your own cash flow statement to see if you can afford the ride. Buying a car is the next big commitment other than your first property.

10 Tips to Survive the Downturn (16-Nov-08)

It's a tough world out there. Unemployement rate are going up. Share prices have gone down in free fall. But don't despair.

Here are 10 tips to ride out the recessions:
1. Take stock of your cash position
2. Home Loan
3. Credit Card Debt
4. Consolidate your debts
5. Review insurance policies
6. Review your investment portfolios
7. Investment checklist
8. Use of CPF top-ups
9. Use the SRS
10 Recession proof your job.

My view? Life goes on. Try to make the best out whatever situation you are in. Be prepared for any waves that comes in and continue to aim for shore. Planning is still critical to make sure you are ready with your armour even when you are caught in an unexpected scenaro.

Tying the Knot? Thrash Out the Money Issues First (02-Nov-08)

It is a true fact. Many couples quarrels over financial issues. And worse still, some end up in divorces. They quarrel about what kind of house to live in, which kind of car to buy, to have a separate or joint bank account, and blah blah blah.. the list goes on. If one has alot of $, maybe no need to think so much about what kind of budget to spend. But unfortunately, most do not have that luxury.

Here's a financial checklist for couples to sort out their financial status:
1. Establish financial goals
2. Savings and spending strategy
3. Knowng your combined financial worth
4. Setting up a fund for emergencies
5. Handling of monthly household expenses
6. Maintaining separate banking accounts
7. Deciding on contribution to the joint account
8. Handling increases in earning power
9. Planning to buy a house
10. Handling the investment of the joint savings
11. Reviewing your existing insurance policies
12. Updating your CPF nomination