Our experts show you how simple it is to manage and insist that it’s never too late to build your wealth - whether you are in your 20s, 30s or even in your 40s.
Our experts show you how simple it is to manage and insist that it’s never too late to build your wealth - whether you are in your 20s, 30s or even in your 40s.
OUR PANEL OF FINANCIAL EXPERTS
20s
UPGRADE YOUR MEDISHIELD LIFE
➝ Starting work? Upgrade your MediShield Life hospitalisation plan to a private medical integrated shield plan.
➝ Build your emergency fund. Set aside three to six months of your living expenses in your savings account for emergency use.
➝ Purchase critical illness insurance. You get to enjoy cheaper premiums when you start your insurance plans at a younger age.
BE DILIGENT AND SAVE
➝ When you begin your first job, be diligent to save and invest, so you’ll have something significant to show in your 30s.
➝ Depending on your risk appetite, your financial consultant can help you grow your wealth.
➝ Leverage on dollar cost averaging. Grow your money by sticking to your regular, monthly investments. Resist the urge to take the cash out despite a bad market, and you will see results.
LEARN ABOUT INVESTMENT
➝ Learn all you can about investment products and strategies. It’s the time to invest, and to grow your money steadily thanks to value compounding.
➝ If you are open to higher exposures to risky assets, do so by overweighting your investment capital in shares versus in bonds or deposits. The warning is to always make sure you can afford the losses in worst case scenarios, and to always stay within your tolerance limits.
30s
START SAVING FOR RETIREMENT
➝ Just purchased your first property? Be sure to have a mortage insurance that pays off your housing loan in case of unforeseen circumstances such as death, disability and critical illness. This is to ensure that the liability will not be passed on to your loved ones.
➝ Start saving for your retirement. Ensure that you have sufficient funds in your golden years. Choose retirement plans that provide you with a guaranteed stream of income in your retirement years.
➝ Write a will. In the event of premature death, plan how your monies will be distributed and who will carry out the distribution. Nominate a guardian if you have children. You may consider setting up a trust.
CONTINUE ACCUMULATING YOUR ASSETS
➝ In your thirties is when you start a family, and possibly begin taking care of retiring parents. Continue accumulating assets. At this stage you can also consider estate planning.
➝ Assets are what you own when you are alive, while your estate is what you leave behind after passing on. Instead of letting the law decide for you, have a say in your estate distribution. Hence, it is always good to write a will or make a lasting power of attorney.
DIVERSIFY YOUR INVESTMENT
➝ Invest regularly. In 2016, markets will remain volatile. Instead of chasing highs and lows, consider spreading your investments out on a monthly basis for instance, by investing through regular saving plans. Such plans help retail investors invest in a disciplined manner, from as little as $100 a month.
➝ Diversify your investment. Savings should not be invested in just one asset class, shares or bonds or fixed deposits, but in a mix of those. That said, unit trusts can provide such diversification and come with active management of risks and opportunities by fund managers.
40s
UPGRADE YOUR ELDERSHIELD
➝ Upgrade your ElderShield. This plan provides a monthly income when a person is unable to perform three out of six activities of daily living. You are strongly encouraged to upgrade this plan as early as in your 40s.
➝ If you are drawing a relatively high income, consider setting aside some cash in your Supplementary Retirement Scheme (SRS). This may provide you with some tax savings.
➝ If you have already started saving in your 20s or 30s, start reviewing your retirement plan and account for changes in your desired retirement lifestyle.
REASSESS YOUR PORTFOLIO
➝ At this stage, you should have acquired a sizeable portfolio. It is therefore important that you assess your portfolio periodically because your risk appetite may have changed, e.g. I wish to prepare for retirement, so I shouln’t be as aggressive in investments.
➝ Your well-being is of utmost importance and hence, it should be well-protected against risks. Many unconsciously make the mistake of having a higher insurance coverage for their houses than for themselves.
PICK YOUR INVESTMENT PRODUCTS ACCORDING TO YOUR PRIORITIES
➝ You are in the position to choose from a wider range of investment options, such as single shares (via online brokerages to access Singapore and international markets), Unit Trusts (Mixed assets, European equities, Government Bonds), ETFs, Fixed and structured deposits.
➝ In this season, you might be focusing more on retirement, family, education planning and savings preservation. Pick investment products according to these priorities, diversify to reduce volatility, and in certain cases, investors might consider embedded income distribution if regular cash is needed.
"Savings should not be invested in just one asset class, shares or bonds or fixed deposits, but in a mix of those"
*The recommendation is intended for general circulation and does not take into account the specific investment objectives, financial situation or particular needs of any particular person.
