AMA Christopher Tan

Held on 24th Jan 2019, Thursday

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AMA Christopher Tan

(AMA Ended) I have over 20 years of experience teaching financial literacy. Ask me anything!

NOTE: Thank you for participating in our AMA! Christopher will answer all the questions tagged to him shortly! This is part of a series in a lead up to our Seedly PFF2019 happening in March this year as we feature some speakers.

Hi Seedly Community!

I am Christopher, the CEO and Co-founder of Providend as well as Executive Director of MoneyOwl . Providend is Singapore’s first fee-only independent financial advisory firm specialising in retirement planning. Providend was also the firm behind DIYInsurance, Singapore's first insurance comparison web portal. Today, DIYInsurance is part of MoneyOwl, a financial advisory firm as well as fund management company licensed by MAS. MoneyOwl is also Singapore's first bionic financial adviser.

I spent more than two decades of experience in the wealth management and financial planning industry, where I specialise in retirement planning issues and corporate strategies for financial planning and wealth management firms. 

I am also a frequent guest on major broadcast media and a contributor to print media and new media. In my free time, I volunteer with the Securities Investors Association of Singapore (SIAS) as their committee member from 2009 - 2017. Also sitting on the CPF Advisory Panel from 2014 to 2016. Using the "Finishing Well" framework that I developed, I encourage my clients to live a purpose-based life and how to make financial decisions to support their life decisions.

I am here to answer your questions in the following areas:

  1. General financial planning tips and tricks?
  2. Retirement planning and what is the right mindset?
  3. How to let your financial decisions support your life decisions?
  4. Why CPF may be a good strategy to adopt?
  5. What is the right investment mindset?
  6. Any forms of personal finances tips or rules?
  7. Experience going through an investment crisis?
  8. Family financial planning and starting a family in Singapore?
  9. What I define as 'success' for a typical Singaporean

NOTE: The host may choose at his/her preference to not answer particular questions. The AMA is moderated by Wen Fong from Seedly, so let’s keep the questions friendly and open!

  • Asked by Chia Ming Ho

    Isaac Chan
    Isaac Chan
    Top Contributor

    Top Contributor (Mar)

    Level 6. Master
    Answered on 21 Feb 2019
    Hi! I hope that I can shed some light in this space because I had interned at one of such firms before. To be clear, the risk associated here with P2P financing is the default risk , where the firm you have lent your money to has defaulted and can't pay you back. There are many ways that the risk can be managed but my time at the p2p firm has taught me that it's really important to find a trustworthy p2p firm and understand what p2p product is being offered. P2P firms need to perform due dilligence on the borrowers that come on to their platform. When due dilligence is strong and investors trust the team, many investors are a lot more confident about their investments. In fact, the only way you would know about what p2p investment products are on offer and what companies you are lending to is through the p2p firm. Hence, most of the information about who you are lending through is filtered through the p2p firm before reaching you. There are a variety of P2P investment products on offer as well. This ranges from term loans to factoring. The risk and returns for each investment product is very different and it would pay to understand each one of them.
  • Asked by Anonymous

    Eugene Wee
    Eugene Wee
    Level 1. Freshie
    Answered on 20 Feb 2019
    I think the articles written on Seedly well explains the purpose of having an ETF in your portfolio compared to picking individual stocks. Assuming you're only selecting ETFs, having this in your portfolio will be useful should you choose to retire in SG. Unless you're willing to devote a lot of your time picking stocks and chasing gains, a fuss free method of "playing the market" will be ETfs. My current allocation will be 110-my age for percentage in stocks and the remaining for bonds. With the percentage set for stocks, I've diversifited it half into SG markets and half into World markets. Hope it helps!
  • Asked by Anonymous

    Christopher Tan
    Christopher Tan, Executive Director at MoneyOwl Private limited
    Level 4. Prodigy
    Answered on 23 Jan 2019
    Hi Anonymous, thanks for asking the question., And well done for paying down your student debt. I have high respect for people who pay for their own education fees. With regard to your question, many of the participants here have jumped in to give you their answers. I will say that I generally agree with them. So just to summarize it for you and to share my thoughts on this: 1. The first policy you MUST buy is a hospitalization plan. All of us are current covered with MediShield Life. MediShield Life is meant for big bills incurred in public hospital’s B2/C ward. It has an annual claim limit of $100K and also not every expenses incurred is fully claimable. There is also no claim for pre and post hospitalization charges. You also cannot buy riders to lower the payable amount due to deductible and co-payments. In short, the claim amount is much lower than an IP plan. If you can accept that, there is no need to upgrade to an IP. 2. If you want to have the option to pay for alternative treatment in the event you suffer a dread dread disease that cannot be paid by hospitalization plans, consider buying a critical illness plan. A coverage of $50K-$100K should suffice. 3. If you have no dependents, the above should suffice. There is no need to really buy other insurance. However, if you have dependents that will suffer financially upon your unfortunate demise, you can consider buying the MHA/Mindef Group Term Plan. It is probably the cheapest insurance in Singapore. The above 3 plans should suffice for now. Treat insurance as an expense. Buy as much as you need but pay as little as you can,.
  • Asked by Anonymous

    Christopher Tan
    Christopher Tan
    Level 4. Prodigy
    Answered on 12 Feb 2019
    Dear Anonymous, thanks for the question and sorry for the late reply. As you might know, MoneyOwl is a bionic financial adviser. To be Bionic means to have the best of both worlds – humans and technology. Technology integrates complex financial models into your financial plan with ease and precision. But we understand that money is very personal and involves emotions, aspirations and life decisions. That’s why both our dedicated client advisers and our technology platforms come together to journey with clients throught their stages in life. One more thing about the importance of the human element in advice. While it is easy to design and recommend an investment portfolio using technology, what is tough is when the markets becomes very volatile, or when the markets tank, or even when the markets become exuberantly bullish, machines cannot help us stay invested or prevent us from making silly decisions. This is when human intervention is necessary, to do the risk/investment coaching to help us make sensible decisions. So I don't think that machines will replace humans. But it is really up to humans to work with machines. Hope this helps.
  • Asked by Anonymous

    Christopher Tan
    Christopher Tan, Executive Director at MoneyOwl Private limited
    Level 4. Prodigy
    Answered on 12 Feb 2019
    Dear Anonymous, thank you for your question and so sorry for replying late. It is difficult to answer this question in full accuracy as I do not have the full context. So let me provide a general guide towards planning for retirement as well as make some assumptions. 1. You might want to decide how much money you need per month for retirement. And from the amount that you need, what portion of it is the "die die must have portion". This portion can be taken care of by CPF LIFE. The good thing about CPF LIFE is that it pays out a monthly amount regardless of market condition and it hedges against longevity risk as it is an annuity. Your funds in CPF LIFE is also currently guranteed at 4% p.a 2. So as a guide, if you need say $1400 per month in today's money at age 65, you will need to have about $176,000 (known as the Full Retirement Sum or "FRS) in your RA today at age 55. Currently, the FRS increases by 3% p.a. Assuming that remains the same, in 15 years time, your FRS requirement would be about $274,000. By then, with an FRS of $274,000, the monthly payout can be conservatively estimated to be about $1800 p.m. 3. So if your SA currently has not reach $176,000, you can consider topping up from OA to SA to build your FRS for the future. However, please be mindful that this transfer is irreversible and you need to be certain that you do not transfer so much that there is not enough money in your OA for other purposes such as your mortgage. 4. Nothing is stopping you from doing both the OA to SA transfer and investing in ETFs at the same time. However, I alway find that the STI ETF is too narrowly focused and as Singapore is a very small market, it might be better for you to consider investing in the S&P500. 5. Depending on your risk appetite, you might also want some bonds in your portfolio to moderate the volatility of your portfolio so that you can remain invested even during extreme market volatility. Hope this helps.
  • Asked by Anonymous

    Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent
    Top Contributor

    Top Contributor (Mar)

    Level 7. Grand Master
    Answered on 04 Feb 2019
    If you're single, you may not require any death coverage on your policies. If you're holding on to any WL policies without CI coverage that are also pay WL, then it may make sense to do both. Convert them paid up plus do partial surrender when you require the money. However, if you're still looking to grow your money while in your retirement years, your WL policy right now would usually provide you a steady growth as an investment asset. But lastly, if there's any CI coverage on the policy you require, it may make sense to hold on to it if you don't have any other CI options.
  • Asked by Anonymous

    Nicholes Wong
    Nicholes Wong, Diploma in Business Management at Nanyang Polytechnic
    Top Contributor

    Top Contributor (Mar)

    Level 6. Master
    Answered on 24 Jan 2019
    Can just start from google or learn from Singapore financial bloggers like Seedly. There are a lot of information that can be very helpful for beginners. Just to name a few things like insurance, emergency fund, savings account, investments and so on. But remember to settle the first 3 before going for investments. Only invest what you can afford to lose and invest in things you understand. If you dont understand, its just gambling.
  • Asked by Casey Choo

    JayJay Lin
    JayJay Lin, Millenial at Memes
    Level 3. Wonderkid
    Answered on 22 Jan 2019
    Because it is your money. While not immediately necessary to know, it is still a good idea to know what is being done with essentially, your money. Many seem to brush it off as CPF is more or less untouchable until you apply for a BTO/resale flat. While I do recommend reading up on CPF contributions and employer contributions, OA,SA,MA, CPF LIFE, and using OA to pay for housing, considering that individuals don't have much control over where the money goes, it is objectively not important for undergrads/fresh grads to understand CPF. The next hurdle IMO would be when applying for a BTO/resale. At that point one would most likely have sufficient amounts in their CPF accounts but still would be good to understand what is happening with their monies.
  • Asked by Anonymous

    Christopher Tan
    Christopher Tan, Executive Director at MoneyOwl Private limited
    Level 4. Prodigy
    Answered on 04 Feb 2019
    Hi anonymous, so sorry for the late reply. I will be covering on insurance planning. Specifically i will talk about 1. How long do you need inusrance coverage 2. How much you need 3. What type of insurance is most suitable. You do not need to prepare for it, just come and enjoy the sessions! Hope to see you soon and thank you for coming!
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