Asked by Anonymous
Asked on 21 Apr 2019
You should always get your insurance set up first.
Because of the unknown that can happen.
A simple way to set up your priorities for finance in order is a CSI concept. (Coverage, Savings, investment.)
Let’s say something happens in one year time, 1k into insurance can give you 500k.
Even if you were to put 10k into investment, you will need 500x or 5000% in return to get the 500k.
Set up a firm foundation then build your tower. 👍🏻
Top Contributor (Jan)
Insurance always comes first.
At least get your hospitalization plan settled and purchase CI cover for about 5X of your annual income as coverage.
Then only invest after setting aside 6 months of your expenses behind as emergency cash.
Always INSURANCE first because insurance forms the baseline of any form of financial planning.
Like what Hariz mentioned, make sure that your parents did purchase health insurance for you!
Thereafter, speak to a financial advisor that is abe to consolidate all your policies to show you the coverage that you have. From there, make sure you are adequately covered for ECI (1-2x annual income) and CI (3 - 5X annual income)
Insurance first (Defence first) because it's your basic protections, after that only go offence (investment).
Find out from your parents what's the policy they bought for you, get the details from the agent.
Follow this guide to sort out the insurance.
Next, read this:
and more at Seedly investment blog page to learn more before you start:
All the best :)
3 stages of Financial Planning:
1) Manage your cash flow & establish an emergency fund
2) Protect yourself against financial risk (Insurance)
3) Invest a portion of your monthly surplus
It has to be in this order. It doesn't make sense otherwise.
Regarding the policies that your parents may have taken up for you. Check on what these are. In my opinion, if these policies are endowments they do not count as protection against financial risks as they are designed as saving tools.