Healthy Savings

We are always keen on making money, growing our savings and expanding our wealth.  However, are we prepared to lose them?

One of the major reasons is our health condition. What if our health conditions does not permit us to pursue our plans?

Currently 88% of Singaporean are covered under Basic Medishield plan. Only 58% of these have upgraded with a private shield plans. 

3 simple reasons for upgrade:

1. Insurer will bare expenses for stay in better wards.

2. Add rider (additional premium in cash) to cover co-insurance.

3.Add rider (additional premium in cash) to cover  deductible.

Co-insurance and deductible is the portion not covered by a basic plan. Therefore, these portion of  your medical expenses need to be bare by the unfortunate individuals.

Example:

Mr Fadhly in his 40s, had upgraded his plan with Aviva Myshiled plan with an affordable annual premium of $480  using his medisave. He pays another  $145 in cash for the rider (to cover co-insurance).

His total hospital bill of $203,000 breakdown:

Room and board: $91,000 (Class A)

Surgeon fee: $27,000

Doctor attendance fee: $51,000

Other inpatient cost: $34,000

Total amount payable by insurance: $200,000

Amount payable under myShield: $180,000

Amount payable under rider (Co-insurance 10%) : $20,000

Amount not payable (deductible portion) = $3,000

As Mr Fadhly does not cover the policy deductible of $3,000, he had to pay that amount out of his own pocket (or medisave balance if sufficient). The balance of $2000,000 or 10% of the total bill after taking into account the deductible . The amount of $20,000 was covered by the rider. The outstanding $180,0000 was payable by his MyShiel basic plan.

Had Mr Fadhly opted for a rider that covers both co-insurance and deductible, he need not have cough up a single cent.

You rather spend your medisave on huge hefty medical bills or small affordable annual premiums? And slightly abit of cash to make sure you do not have to spare a single cent for your medical bills. Do you agree now that this is a smarter move to start saving every dollar that you got? Or what some acknowledge it as a financial defense?

Recent Spotlight

remains at 4 to 6 percent. Pushed by car prices

and surging housing costs, the Consumer Price

Index (CPI) rose 5.5 percent in January, its

highest level since November 2008. Economists

expect the MAS to allow the Sing$ to appreciate

to help stem rising inflation. For 2011, the

inflation forecast has been revised from between

2 and 3 percent to between 3 and 4 percent.

PRs last year, a 25 percent increase from 2000.

The average household size was 3.5 people, a

drop from 3.7 in 2000. Among employed

households, the median monthly household

income from work was $5,704 last year. The

average monthly income for the top 10 percent was

around $23,700 whereas the bottom 10 percent

was $1,400.

Most Singaporeans believe their CPF savings are

according to a Nielsen research. Continuing to

work and relying on insurance (whole life &

endowment plans) and investments products were

the most popular ways chosen by people to add to

their retirement fund. One in three Singaporeans

wants to quit before 60. However, only 14 percent

indicated that they are financially prepared.

$112.4b in December 2010 from $111b in

November. The jump in mortgages was even

more significant on a year-on-year basis, up 23

percent over December 2009.

Faith

Making money might be about being very meticulous with numbers, figures, statistics and what have you? Having extensively comprehensive understanding on the fundamentals outlook of every financial instrument, industrial background or the economic structure of countries or companies.

Then we need that analytical capabilities to decide base on various strategy using all the complicated indicators that have been scientifically created to move base on collective of various humans emotions in the respective market.

We have to be very competent whenever we do an investment in either short term or long term and in stocks, funds, currencies, properties and commodities just to name a few.

However, one other MAJOR element of investment discipline is FAITH.
You may study, you may calculate and you may be the most savvy, knowledgeable and sharpest individual but all can be destroy in a split seconds by nature. At the end of the day it is really all GOD’s will.

Only He knows when :
-Earthquake will struck.
-SARS will struck.
-volcano will erupt.
-when tornadoes will hit the towns.
-directors, owners or big players of a huge entity asset got struck with illnesses or sudden deaths.

That is why even economic cycle have already been mention in the holy book Al-Qur’an. It was suttle but meaningfully mentioned in Surah Yusof.

Therefore doing good and having faith is always the best formula and “strategy” to wealth! Its karma and its your own different repercussion in life that you will be living on in future. Whatever skill or knowledge you have are indeed useful but it just give you and added advantage but it doesn’t really work all the time.

Bottom line here is as long as you take action there will definitely be results. Rather the losing on every opportunities by being on the sidelines, not doing anything. Although you might not be intellectually competent but with that little knowledge you gather from a broker, agent, adviser and planner probably be just enough to at least start the ball rolling with great FAITH!

In Berita Harian

FMQ planners are being featured again in Berita Harian today. The attention this time is on our achievements as a group. Beside TOP unit, TOP financial planners and TOP new financial planners was also grab by our guys.

These achievements could never be made possible without the unconditional support and trust from the public to our businesses and services all these years. We could only always consistently do our best for our clients but if it is not them who give us the opportunities to show them the way towards a systematic and dynamic financial road map for them, then we would not be where we are today.

Thanks for the strong words of encouragement and inspiring support given to us. We look fwd to continue to give our best to individuals and families along with our core mission and vision in moulding our society to be more savvy and more aware on the importance of proper financial planning as we move together to an era where there are too many uncertainties and challenges.

Below are the cut out of the article.

Parents who care

Many parents, especially new age parents these days are very careful with what they want for their kids.

Two area of concern:
1.Medical coverage
2.Saving for tertiary education

Medical coverage
It is very necessary to get the right medical cover for hospitalization because kids are prone to injuries and to cover hospital expenses as critical ill child can cause considerable financial strain.
Identify the difference and the importance of:
1.Critical illnesses and disability (lump sum payout to assist financially for outpatient care expenses)
2.Personal accident (% on sum assured lump sum payout to assist financially for outpatient care expenses)
3.Hospital expenses ( important to take note whether it covers deductible and co-insurance as well)
4. Hospital Income ( income replacement)

Saving for tertiary education
Can save via regular investment plan or an endowment or combination of both depending on individual needs and risk profile.
Regular investing plan has been historically proven to give better returns and provides flexibility. Average annual MSCI Global Index yield between 5% t0 9% where endowment only gives around 3.8% on maturity.

It is important to set a provision for your kids education but however keep it open on who is able to utilize this fund when the time comes because there are possibility they might not need it and you might need it more than them. In an extreme case for education expenses you can always get loan but not for retirement.
Last but not least is to discuss with financial adviser not just on the policy features but also on who is suppose to be the owner, who is life insured and whether are there nominations required etc.

Dollar Cost Averaging

How to invest when i am not financially savvy?
If i have no time to monitor can i still invest?
But what if i have no lump sum or big capital to invest?

There is good news for all of you who have those issues mentioned above but are still keen on investing. Dollar cost averaging is an approach of investing in a consistent manner.
It is a timing strategy of investing equal dollar amounts regularly and periodically over specific time periods (such as$100 monthly) in a particular investment or portfolio. By doing so, more unit shares are purchased when prices are low and fewer unit shares are purchased when prices are high. The point of this is to lower the total average cost per share of the investment, giving the investor a lower overall cost for the shares purchased over time.

The illustration above explains the cheaper the price of a unit share the more units that can be gathered. Continue to gather units and simply sell back at the original price it could already possibly be doubled. What more if the price climbs up and you give it more time?
Although by doing so we might not achieve the highest potential returns however we can actually safe the trouble monitoring them intently.
Furthermore the longer you invest, the higher the chance that you will receive positive returns and lower the chance that you will lose money.

House Loan

A very big percentage of Singaporean are tight down to loans for their entire life. One of the MOST common ones are house loans/mortgages. Over more than 15 to 30 years loan was taken up since the very first day we committed to having our own house.

How do we able to eliminate this house loan as soon as possible? I may also worked out for you on how you could be able to reduce the loan in half the time AND half the price.

How important it is to you to be free from any loans as soon as possible?

I am not here to give you any monetary support to clear your debts. However I am here to show you a strategic approach to make these possible. It only requires your own personal commitments. Every individual have different needs. Therefore i can only preview the opportunity here and i can only advise on a personalized basis.

Below are some illustrations to explain the benefit of eliminating your house loan.

The future has several names. For the WEAK….it is IMPOSSIBLE; For the FAINTHEARTHED..it is UNKNOWN; But for the THOUGHTFUL & VALIANT….it is IDEAL.

You saved for your BIG DAY. But have you saved enough for your entire married life?

I am really looking forward and excited to speak infront of almost 100 couples in a workshop organized by www.urusanpengantin.com. It is really a priviledge to be one of the speaker to educate and share with participants in our different area of expertise. This is a brilliant effort put together by urusanpengantin.com and several other wedding service providers.

Below are the topic I would be talking about on; A WEDDING: Behind the scenes
24 January 2010
@ Art House1 Old Parliament Lane

Firstly, i would like to congratulate these brides-to-be and grooms-to-be. Besides congratulating them on taking a step forward to another stage of their life, i would also like to congratulate them because most of them by now have probably started doing what they have never did before. Which is saving prudently for a clear purpose, THE BIG DAY!

Therefore, I would like to encourage them to continue this good habit as part of their lifestyle for what other purposes that may arise besides other than for their weddings.

It is never too early to cultivate the good habits of savings, because the sooner you start, the longer the period your money gets to grow. This is my general advice especially to people in their 20s and 30s, because they should take special heed as they tend to overspend.

Despite our grand new year resolutions to start saving more, many seems to always fall behind their planned saving schedules. It is best that you put your money aside in a systematic manner. Start with an amount you feel comfortable with and gradually step it up when you gain more confidence in setting aside the committed amount.

In summary, the objectives of my sharing would very much focus on managing cashflow.

How to effectively manage your needs, wants and desire?
House? Cars? Nafkah? Infaq? Zakat? Increasing expenses?
How should we design our cashflow?
Why consistent savings?
What religion says about savings?
How CPF savings work? Medisave? DPS? CPF Nomination?
What are the benefits of savings?
What are the alternative methods of savings?

Will only start saving when i have enough?

The question here is when will it be enough? It is never too little or too early to cultivate the good habit of saving, because the sooner you start the more months you can take from your monthly paycheck/income to save and the longer your money gets a chance to grow.

You could be surprise when you do reality check of yourselves. Like counting the number of paychecks left before you reach your retirement. 10 more years time for instance, thats just another 120 paychecks away! You still dare to wait?! And choose to just spend all the money month in and month out?

Despite our grand new year resolution to start saving more, many seem to always fall behind their planned saving schedules. It is best that you put your money aside in a systematic manner through an insurance plan, a regular savings plan, a recurring investment programme. Start with an amount you feel comfortable with and gradually step it up when you gain more confidence in setting aside the commited amount.

I congratulate you if you are commited in savings and growing your savings!! Pad at your back. Well done! Thats a gd start.

But what if anything happen? Kidney failuire for instance, can cost you close to $10k per month on just dialysis and medication! Isn’t that means it will eventually deplete your hard sweat savings? You are too weak to work and besides the cruel fact is, who would want to keep a sick employee?

Thats why we need to protect our wealth as well by putting our risk to others. Others? Relatives, siblings and parents? Hoping that they will help us when we in need?

NO pls don’t! I am sure you would naturally feel bad to seek help and burden your love ones who also have their on lifestyles to account for. Therefore be smart! Put or transfer the risk to any financial institution NoW!

You maybe young but you are not immortal. Even more challenging if we still living but are diagnos with illnesses. Statistic do show that we are now five times more likely to suffer for illnesses than to die before age 65.

Hope you see why it is very important to make it enough today! What not enough when you in good health today is still something attainable. Not when it is already too late.

Love Your family?

If you are reading this entry, keep reading if you truly love and treasure your loves ones. I should congratulate you in advance if your are still reading. It shows that you are eager to be there for your family. It’s the first step to determine whether or not you really LOVE your Family. I’m sure you LOVE them. But how much?

Let’s answer the questions below one by one and see where it lead us.

1. Are you a newly wed? or Are you Married? Or Are you Planning to get married? (this can apply to singles too even if you don’t plan to get married just yet)

2. Do you love your family? i.e. your spouse/future spouse and (insya Allah) your future children.

3. Do you agree with me, if I say that Today is a PRESENT and Tomorrow is a MYSTERY? Are we ready to face the uncertainties on the next day and the following days ahead? You tell me.

4. Do you agree that everyday, we are exposed to RISK. E.g. Risk of driving a car, risk of crossing the road, risk of riding a bike, risk at work and etc.

5. So, do you still want them to be well-provided for despite whether or not you are capable to bring back rezeki back home? E.g. Buy food, Pay for the House, Children’s education, Car, bills and etc.

6. As a muslim, we are asked to ‘ikhtiar’ before we actually leave everything to Allah. Do you agree? Usaha, Doa dan berserah. Am I right?

7. So, do you want to be able to plan and be financially well equipped to face the uncertainties? (Jodoh, Pertemuan, AJAL MAUT ditangan Allah. Even if we don’t passed away during the accident, we could be disabled and not able to work = no incoming income (no rezeki/nafkah) can we sustain?)

8. Do we still need to eat? Do Your Children still need to go to School? Pay the bills? Settle the House Loan? Do you want to know how you can manage your risks?

9. Do you think you can set aside say for a start a minimum of $100 dollars from your monthly salary for your savings (for your children’s education, necessities and liabilities)?

If your answers is YES to ALL. That really shows that you love your family. You are not selfish and you want them to reach their dreams even if anything were to happened to you.

Do you know that a minimum of $100 can do wonders for your wife and children in a long run?
Do you want to do wonders? What is $100 to the assurance of of their dreams and it’s all for the ones you love?

Do you know that savings and takaful (insurance) are important?
In fact it is similar with the fact that.. when you are hungry.. what do you look for?
Shirt? Trousers? NO. You look for FOOD.

SAVINGS is equally important in a way, the only difference we cannot feel or see the needs until something happened and by then its too late.
and IF that happens (e.g. total permanent disability, death or critical illness) We NEED SAVINGS and TAKAFUL to sustain ourself in a long run (pay for medical bills, house, home bills, educations and more).

Think about it. Leave me a message if you want to know more on SAVINGS the Islamic way.
I’ll be more than glad to assist you. (:

P.S: the keyword is; start SMALL.

Remember, You are here because you LOVE your family. Show your love by commit to proper planning. Email me or contact me to get started today!