facebookWhat are your opinions on Manulife's Invest Ready? My friend has suggested it to me as a way of building my knowledge through the fund talks. Any advice? - Seedly

Jamie Voon

09 Jun 2020

Insurance

What are your opinions on Manulife's Invest Ready? My friend has suggested it to me as a way of building my knowledge through the fund talks. Any advice?

I am brand new to investing and spend this CB researching various investment means. My concern is the 10-year lock-in period that comes w/ invest ready. My other concern is that I have BTO and marriage expenses coming in the next 4-6 years and have saved quite a portion. Should I keep all the money liquid (in a high-yield) or invest it considering the timeline?

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Pang Zhe Liang

09 Jun 2020

Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)

Fact

Above all, you build your knowledge through reading and learning; not by putting your money into a financial instrument that you do not know much about.

Cash Flow

Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit.

Here is a Guide:

Understanding Your Personal Cash Flow

Goal

Next, we shall spend quality time to do proper calculation on your BTO and marriage expenses. Through this process, it helps us to determine the amount of money that we need.

For example, it could be to save $150k in 5 years' time. When we break it down further, it becomes $30k a year, $15k per person, or to save $1,250 every month. From there, evaluate on the possible financial instrument that is capable to help us grow our money through compound interest.

More Details:

What is Compound Interest

Budget

What's more, I will suggest for you to create a budget to ensure that you achieve your goal on time. The best way to do this is via automation.

How I do My Budget:

How to create a Monthly Budget

Investment

After we have the basics settled (fulfil short-term goal), we will check our cash flow again to determine whether you have additional surplus that you can set aside for investment. All things considered, investment yields only non-guaranteed returns. Therefore, you need to take careful steps to ensure that you do not jeopardise your short-term goals.

As for the proposed investment-linked policy, I will suggest for you to speak with your agent to find out the associated cost, as well as the track record and growth potential of the investment-linked funds. This helps you to better understand the situation and let you evaluate whether the charges and net returns are reasonable.

Meanwhile, I will also suggest for you to compare against similar financial instruments. This helps you to make a more objective decision to this end.

Commitment

As for the 10 year commitment, it won't be a huge hurdle once you have conducted comprehensive financial planning for yourself. After all, you are at most 35 to 40 by then and you will definitely be spending more money that you are today. Therefore, it definitely makes sense to start accumulating more money for your future.

I share quality content on estate planning and financial planning here.

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