CJH Financial Planning

Loans are double-edged swords. Firstly they work on the assumption of the continuity and certainty of one's future income. Banks only lend you money when they are sure that you can work and pay them off. What if one becomes disabled or retrenched, and loses the future income stream? Secondly they work on leverage. Pay a downpayment (say 20%), borrow the rest (80%). There will be no problem if one has assets equalling or exceeding the 80%. But most people are asset rich and cash poor. If they were to just lose a couple of months of income, their world would come crashing down. With the recent euphoria over property and car purchases (mostly on future income and leverage), there are bound to be many people being burnt by the inability to repay their loans when interest rates rise, or the value of their property falls. Looking at the unhappiness over MAS implementing a 50-60% cap on car loans, it is evident that many people do not have enough assets to make up for the downpaym

Relying on your company insurance may be disastrous. 1. Cover is usually not complete as companies wish to save costs (as shown in the article where only $45 was paid out for stroke). 2. You lose your cover when you leave the company. 3. You may be 'forced' to leave the company in the event of a prolonged illness or disability. 4. You may change job and your new company offers even lesser coverage than the previous one. 5. When you try to apply for personal insurance when points 2, 3, or 4 happens, you realize that your health is not insurable anymore due to your deteriorated health (weight, blood pressure, cholesterol, etc), a past illness, injury or hospitalization. So why take the unnecessary risk? The days of relying on a company for employee welfare are long over. Now is the age where companies' main focus is on profits. Ensure your personal insurance is in good shape and don't leave things to chance, cos you might not be able to afford it when chance h