I’m a financial planner and these are 3 pieces of money advice no one ever wants to hear

I remember my mom telling me to eat more vegetables when I was younger. At that time, I absolutely hated broccoli and only ate it because I can only play with my playstation after that. Years later, I can only assume eating broccoli was a great decision because I don’t really fall sick as often as my peers. I did not appreciate my mom’s nagging advice (I mean who did at that time) until years later.

Turns out that nagging found its’ way into adulthood. As a financial planner, I’m constantly giving money advice that no one wants to hear. But those who listened and applied the concepts tend to have better cashflow, protection and investment portfolio.

You might not like it, but it is for your own good.

3 pieces of money advice no one ever wants to hear

3 pieces of money advice no one ever wants to hear

 

#1: You Got To Save To Have Money To Invest

“I want to invest but investing more than $100/month is too much because…”

To set the context, these are people with good monthly income of around $3000 to $6000. I find it scary to have so many conversations with people who have issues setting aside money every single month BUT wants to invest. It is like wanting to bake a chocolate cake with no chocolate. Often, not having a Level #2: Abundant Surplus Creator set up is one of the main cause of failure.

Saving more than you need will buy you opportunity and freedom in the future. The usual guideline is to set aside at least 25% of your take home salary. This 25% will buy you opportunity and also freedom that you desire.

 

#2: Have A Backup Plan

“You will fail in life 33% of the time. Do you have a backup plan?”

Cancer hits 1 out of 3 people in Singapore. Each and every of us have a 33% chance of our income source robbed away when we are unable to work when we are ill. If you are lucky and detected it early, the effects may be temporary. However, if it is a major critical illness, the effects will be longer term in nature.

With COVID-19 still looming over our heads, I think it is clear that the next war we will be fighting is a Health War. No one likes to imagine the worst cause situation but if something really happens, you will be glad that you have a backup plan Level 4: Aegis Of War aka insurance especially medical and critical illness coverage.

Other forms of backup includes having adequate emergency funds.

 

#3: Don’t Time The Market. Invest For The Long Term

“I want to wait until the market crash (like in March 2020) and invest.”

You will be waiting for a long time. Before March 2020, it was Sept 2008. Before Sept 2008, it was April 2000. From 2000 to 2021, S&P500 is up roughly 189% with a CAGR of around 6%. It is certainly very easy to look back in 2008 or 2020 to say that it is the best time to invest BECAUSE it has already happened.

It is virtually impossible to predict the market. Investing may be all sunshine in 2020. However, it is not as fun and sexy as you think it is. The recent pull back has shattered some confidence in the market and you might be wondering what to do next.

Build a strategic investment plan and stick to it. We want to invest in companies that is of value and growing and hold it until it rewards us. You can take a look at some of the largest companies now that is rewarding investors. Companies such as Apple and Facebook are rewarding investors with price appreciation and also dividends over the last 10 years whether it is market crash or not.

 

Final Thoughts By Wealthdojo

Eat your veggies. Trust me, it is good for you.

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
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The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

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