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Gideon Lim

09 Oct 2019

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Insurance

What's my next step moving forward?

Just met my financial consultant for a review. Had bought a few insurance policies (medical, CI, and etc) previously, so my fundamental protection is covered. Now I'm considering to do investments but I was told to consider PruWealth, the retirement/endowment fund upon sharing my current planned goals in life e.g. to buy a HDB/condo in the next 8-10 years. I do think that it is important to save up for retirement but that's not my priority or in my capacity for now. So, how should I proceed?

Discussion (8)

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Eric Chia

09 Oct 2019

Senior Financial Consultant at Prudential

Hi Gideon, I'm a bit concerned when you mention that it's not in your capacity to save for retirement now since your priority is on the house coming 8 to 10 years. Quoting Seedly's graph here,

You don't have to start big to start saving for retirement. The best time to start saving for retirement was yesterday.

I feel that you have not fully run through the numbers with your financial consultant. How much do you really need for the house? If it's going to take up every cent of your savings, is it worth it? Best is to split your excess every month into retirement and house, so there's no need to wait until you've saved up for the house before you start saving for retirement.

Loh Tat Tian

02 Oct 2019

Founder at PolicyWoke (We Buy Insurance Policies)

For such cases, it's best to work with someone who can have a holistic view in terms of personal finance.

Understand how to save on taxes, cashflow planning etc etc would be the bare minimum before people even advice on it.

From the recommendation, I believe you do have some amount like at least $300 or $1000 a month, so you may wish to understand a few things basic like,

What is investment meant for?

(1) Cover inflation

(2) Planning for retirement

(3) Long term (in order to be in the positive)

(4) Your mindset on risk and risk acceptance.

Then can anyone advise anything. for 8 to 10 years for an HDB/condo, are you able to accept that you may not be able to cash out in the 8-10 years (because market downturn normally lasts for 3 years, an extended may last for 5 years)?

If you can, it's possible to look into equities investment. But also require diversification to remove unsystematic risk. (ok going to be a wall of text soon so shall not elaborate further).

A topic close to heart that I wanted to draft an article on it, as part of the things I wished could...

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