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8 Tips To Help You Be On F.I.R.E

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In case you haven't heard of the F.I.R.E movement 🔥🔥🔥, it is spreading like wildfire worldwide right now. For the uninitiated, F.I.R.E stands for Financial Independence, Retire Early.
Many have dreamt of retiring early and enjoying the rest of their lives sipping a cocktail on the Bahamas. But dreaming alone isn't going to make it happen - you need to TAKE ACTION! It's hard, but life will be so sweet once you get there.
Here are 8 tips to help you get fired up (pun intended 😆).
#1 - Start saving aggressivelyI have seen F.I.R.E. advocates saving between 30% to 60% of their income. The more you save, the more you can invest and grow your wealth!
#2 - Cut unnecessary spendingLive like a minimalist (check out The Minimalists). Practise delayed gratification - do you really need that Apple Watch now? A dollar that you don't spend is an extra dollar that can be invested to make more money.
#3 - Have multiple sources of incomeDon't depend solely on your salary. As the COV…

Credit Ratings of Life Insurers in Singapore 2020

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This is a follow-up from a post 3 years ago, where I compiled the credit ratings of the life insurers in Singapore, to have an idea of the differences in terms of their credit worthiness.
Flawed AssumptionPeople often think that life insurers and the policies they issue are homogeneous (the same), and often compare benefit illustrations as if two companies are going to make the exact same amount of profits, exact same amount of investment returns, have the exact same amount of business operating costs, and et cetera.

How far away from the truth that flawed assumption can be. 

Every life insurer holds a different asset mix in their insurance funds, and have different profits/returns/costs. Even their shareholders may demand a different dividend rate on their shares.

Therefore it is not surprising that life insurers with larger assets and bigger operations in Singapore tend to be the ones rated higher by Standard and Poors (S&P), one of the foremost rating agency in the world (www.spglo…

Is Your Critical Illness Insurance Enough? Here's 4 Steps to Find Out.

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Critical Illness (CI) insurance - most of us have it. And many think that they have sufficient coverage. Besides, who in the right mind would want to sit down with a financial planner and talk about diseases such as cancer, heart attack, stroke, or kidney failure befalling upon us and our family? 

Why people don’t buy enough CI insurance 
When I meet clients in their twenties, a common response is that they are fit and healthy and nothing will happen to them.  When it comes to clients in their thirties, they would justify that they have housing and family commitments and they would prefer to focus on those at the moment. And since they are still relatively young, CI insurance is not an important priority yet. 
When clients in their forties come and see me, they come with sincerity and recognise that illness is fast becoming more of a possibility — they see their friends getting this-and-that. That worries them. However their age is higher now, and so are their insurance premiums. But …

Financial Planning Is Not About Buying Insurance Policies

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Today a business friend asked me if there is any way to insure her parents, who are in their late 70s, against medical costs.

I told her that unfortunately the policies at my disposal have a maximum entry age of 75, and therefore I’m not able to provide cover for them. However I advised her on a viable alternative, that is “self-insurance”.

I asked if she has any other siblings and she replied yes. I then went on to suggest that from now on, she and her siblings should start contributing some money into a medical fund for their parents, and this pool of money becomes an “insurance fund” for them. Coupled with Medishield Life as well as their Medisave funds, this approach should help to alleviate most of the medical costs.

Suddenly I can see an imaginary light bulb lit up in her mind — an “a-ha” moment! She said that if each sibling contribute $200 monthly, it seems like this is a do-able strategy.

Financial planning isn’t always about buying more insurance policies. Sometimes, seemin…

Credit Ratings of Insurers in Singapore 2017

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I got curious about the different credit ratings across Singapore's life insurer and started to compile the data. Here is the result of my curiosity.

Standard and Poors (S&P) is one of the top three credit rating agencies in the world (alongside Fitch and Moody's) and their opinion is highly regarded in the financial and economic world. The ratings are a reflection of S&P's opinion on how likely a company is able to meet its financial obligations. In the context of insurance companies, that means the policy payouts and cash values.

To give a better perspective of the credit worthiness, all three local banks (DBS, UOB, OCBC) are rated AA- (http://www.straitstimes.com/business/banking/dbs-ocbc-uob-get-aa-credit-rating-from-sp).

In the case of the latest entrant in the market (FWD Singapore), it's apparent that their credit rating is way lower than the other more established brands. (Note that FWD's rating is by Fitch, which runs on an equivalent scale to S&am…

Top 5 Most Popular Insurance Policies

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As I approach my tenth year in the life insurance and financial advisory business, it has come to a point in my career where I am embarking on a new challenge, that is to groom and train young people into successful financial consultants. As such, I have been away from writing articles for a while, busy juggling both client consulting and mentoring responsibilities.

All newly minted financial consultants have to undergo intensive product training, mastering one product at a time, until they reach a level of proficiency and experience where they can flap their wings and fly on their own. While I was training the new blood of our industry, it is inevitable that that the new consultants ask which products do our clients like the most.

Although financial planning is a highly customised affair, and no two persons' financial needs are exactly the same, some products are indeed in higher demand than the rest. This may be due to a greater awareness for certain types of policies. And durin…

Term Life Insurance - Not All Are Made The Same.

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Last week, a client asked me to help examine a very affordable type of term life insurance policy that all Singapore NS-men are entitled to purchase - Aviva SAF Group Term Life policy. He wanted to know if it is a better deal as compared to the other term insurance plans out in the market.

First and foremost, it is a common misconception that all term life insurance policies are the same. It is also incorrect to assume that since all term policies are the same (which is not true), then the one with the cheapest premium is the best.

Different insurance policies have different wordings, and what may be claimable from one policy may not be claimable from another. Also, different insurance companies differs in claim experience, cost of operations and distributions, size of their life funds, and investment performance. When it comes to service, different insurers also differs in continuous client engagement, speed and ease of claims, and personalised customer support through agents.

Therefore…

Human's Financial Behaviour Explained (Via Monkeys)

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Just came across a thought provoking video on TED about how humans often make illogical financial decisions. Little did we know that we aren't so different from monkeys after all...

Check out the video below:




How to build a lasting family fortune

You may have heard that Donald Trump, the billionaire real estate developer, has decided to run for the President of the United States of America. Beside his undisputed success in the real estate world, Donald Trump also boasts an impressive track record as a businessman, investor, and reality television star.
Admittedly, his skills in influencing people, negotiation and cutting deals are second to none. However, I was more keenly interested in how he got started, and how he had the money to go into real estate development, which is extremely capital intensive. Therefore I did some research on his background.

Donald’s life might have been very different if not for the financial support and tutelage from his father, Frederick “Fred” Trump, who born in in 1905 in Queens, New York City to German immigrants. Fred was also an entrepreneur and real estate developer, and this rubbed off on young Donald, who wanted to follow in his father’s footsteps. By the time of his death, Fred Trump was es…

MediShield Life - How does it affect you?

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You may have already heard  about the upcoming launch of MediShield Life. I have received many enquiries about how it would affect policyowners of private Shield plans. In this article, I’ll share with you what industry practitioners know about MediShield Life so far, and its impact on you. To understand the situation better, we have to first understand how MediShield Life, and its predecessor MediShield works.