News and Opinions

What every independent person needs to know. (Part 1)

on . Posted in Commentary.

Do you know what a LifeCycle insurance plan is?

No right?
I guessed so.

In the 21st century, education is touted as the most important tool to attain independence, survival and stability in this dog-eat-dog world. That's the reason behind the paper chase and why we are funneled into the education system for a good 20 odd years of our lives. Unfortunately, the most important type of knowledge we need for survival is never ever taught in schools. And that is: financial education.

By financial education, I mean the knowledge of how to manage your finances, budget, invest and make financial plans to ensure you don't have empty pockets at the end of retirement. In the early years, most of us receive our financial education from our parents. It is passed down from generation to generation. And our parent's knowledge is usually derived from their own personal experiences. This includes good (or bad) choices that they make, which they then pass down to us because that is all they know of. Or they might give us advice which everyone is doing at that moment. (Anyone heard of the 'Herd mentality' syndrome?) That's what we're good at and thus prone to doing. So is it no surprise that the rich get richer and the poor get poorer?

Moreover, people are often 'lazy' to take charge of their finances. Even adults! I often hear people grouse about how the dollar chase is wearing them out and financial independence is an elusive goal. Plus, if you look all around you, you can see many people stuck in dead-end jobs which they slave for all their lives. I saw that in my parents. This laziness is one major stumbling block to financial independence and education. Many people aren’t interested in going ‘shopping’. Wrong, you might say. Singaporeans love to shop! Sure we shop for clothes, house, car, maybe even partner. However many people don’t bother shopping for financial products and plans that would be useful. Or learning, on their own, about finances and expanding their awareness on the issue.

A lot of others are stuck in ‘old mindsets’ of how money should be managed. They choose not to broaden their minds to other possibilities and prefer to stick to the tried and tested formulae (whether or not these were successful is irrelevant to them).

Worse, a strong solid foundation of financial education needs to be cemented from young. Good financial habits need to be inculcated and learnt. Unfortunately, I have had many young peers my age telling me that they aren’t interested in finances yet. That is something that they will only bother about when they start working and are older.

You know, some time after grudgingly admitting to myself that I am not straight and therefore highly unlikely that I will get married or have children; I pictured a most frightening scenario: At the old ancient age of 70, there I am, in my wrinkled skin and graying hair, without children and very likely without a mate. Alone. Probably in a 2 room HDB flat and living on government pensions. Or worse, a nursing home to live out the last of my days. I envisioned these painful worst-case scenarios because by Murphy’s Law, there is an undeniable possibility that it might happen! No matter how small the chance (as the optimist in me likes to think). In the past, I always thought husband dear and my babies will take care of this shriveled prune when she retires. I always assumed that. But no! It is a possibility that people will stay single in the last stages of their lives, without descendants.

And may I add that this also applies to straight people? Even if you have a family, your kids might be un-filial and abandon you. Your husband might die before you and leave you with pittance.Too bad for you.

It was then that I realized the importance of being financially independent. Completely independent from others. And on top of that, financial independence means that even if you cannot work, or are retired, you can still survive financially. And that meant that I had to have a plan. That I can’t wait until I’m at age 40 (with my weight starting to shift to the bottom), and then frantically search for some semblance of a retirement plan. Neither can I wait till I’m 30 and then start doing my homework on finances. Because the earlier you start, the more thankful you would be when you’re older and in a stable position.

So I implore the smart ladies of Sayoni to stay tune for Part Two of this article where I will share the learning experience that me and others recently had’ about financial intelligence. If you are interested about Part Two, I am really glad that I might have convinced at least one person about the importance of financial education. If you aren’t, you either know a lot already or… you just proved my point in the fourth paragraph (lol)’
(End of part 1)

(Part 2)
Warning: Heavy in-depth spiel about finances is about to commence. And has little or no connection whatsoever to being lesbian or bisexual. But it has plenty to do with personal well-being and street-smarts. Read on if interested. Click ‘FORUMS’ if not. Thank you and have a nice day =)

Recently, AWARE organized a Financial Intelligence Training seminar (‘FIT’); in which many useful tidbits of information and basic financial knowledge were dispensed. Besides the explanation of financial jargon, many facets of personal finances were covered and strategies discussed. No matter what age or financial background you come from, everyone took back something useful from the FIT. Below is a brief summary of all the financial knowledge that was covered and hopefully, you would find it of use =)


At the end of every rainbow is a pot of gold =) Thus, our personal financial plans must be driven by a purpose, by an end-point to reach. For some it could be the accumulation of assets (entities you own which earn money for you) or the reduction of debt. What is your pot of gold?

For example, one of the most basic financial goals is to grow wealth. To do that you have to

‘..earn the money

‘Keep the money

‘..GROW the money.

Most people can apply the first principle. That’s what they teach us in school for, to equip us with the skills so that we can work and earn! However, people tend to falter in the last two principles. To keep the money, we have to learn how to budget and ‘force’ ourselves to save. To grow the money, we have to invest smartly. To do this, we have to constantly update ourselves on the investment possibilities out there and that means reading up on books on personal finances etc.

Last but not least, in every financial plan you choose to take up, WRITE IT DOWN! Or you will probably forget it. Or perhaps you might waiver in your plans. The problem with most people’s form of financial planning is that their plans are ALL in their heads. From time to time, they play around with it but nothing is grounded. If investment markets had a sudden downturn, some people might be put off, stop investing and re-write their whole imaginary financial plans.

But the problem is markets fluctuate all the time! And people manage their finances with their emotions and impulses instead of thorough careful planning. At other times, people’s financial plans are often short-term, which although is not wrong, is less solid than long term ones. In other words, when you create your financial plan, make sure it is tangible. Write it down somewhere with a timeframe for you to fulfill your financial goal. And do not procrastinate on acting on it!


- Keep a record book of all your monthly spending. Most people tend to forget what they spend and so find this a difficult habit to keep. For me, I like to do my records daily for easier recall. Others key their spending in their Blackberrys. Whichever method you choose, keeping your records gives you a better understanding of your ‘cashflow’ outwards. From here, you can move on to budgeting. Allocating a fixed percentage of your pay/allowance for expenses each month; plus reducing expenditure on unnecessary luxuries.

- Always save part of your income/allowance, FIRST. Robert T. Kiyosaki once wrote in his famous ‘Rich Dad Poor Dad’ financial self-help book series, about the principle of ‘paying yourself first’. That means your first ‘expenditure’ from your wages/allowance is to put money in the bank. By forcing yourself to save first, spend later, you will always ensure that you won’t spend more than you can afford.


- Start practicing good money habits listed above. The younger you start, the more likely you will keep at it when you’re older. (Just like kids who eat lots of veggies when they are young, found them less repulsive than those who don’t)

- Grab any chance you can to learn from your parents. If they are making a trip to the bank for financial services, e.g. housing loan, car loan etc. Follow them and you can learn a thing or two. Also, tell your parents to explain to you all their current, ‘invisible’ expenditure on you (e.g. such as your insurance policies).

- Try, if possible, to start living independently (that means paying for your phone bills, miscellanous expenses, including your insurance premiums)
WHAT AN ADULT CAN DO (Plenty of course!):

- There is much in-depth learning to do about finances as an adult. For example, not many of us tap the maximum potential of our CPF savings. For a comprehensive list of what you can and cannot do using your CPF, go to for more information. Another great website is Less than two months old; this new website does your financial shopping for you! It compares the benefits of different credit cards, savings and fixed deposit rates of most banks.

- Ascertain your investment risk level. By that, I mean how much of your money you are willing to risk in an investment. As a rough guide, young adults have a higher risk level. Being young, you have many years ahead for you to recoup any potential losses. However, if you’re older and have dependents (e.g. parents), your risk level is lower because you cannot afford to ‘gamble’ with too much. For lesbian and bisexual women, our risk level tends to be higher compared to another straight person of the same (old) age. This is because we have fewer or no dependents (i.e. children). To evaluate your personal risk level, go to any bank and they will gladly do a proper assessment of your risk level.

- Insurance plans are an alternative route to grow your money as well. Many of them have investment aspects embedded into it (e.g. investment-linked products). Find out what best suits your needs and risk level. Remember the LifeCycle insurance plan I mentioned? Composed of a mixture of investment tools, bonds (lower risk) and equities (higher risk), it is pretty stable for its risk level changes from high to low over the long term, by varying the composition of bonds and equities in the basket. Thus this follows the average person’s changing risk level (from high to low) as they age.

- If all these is too mind boggling for you, you can also hire a financial advisor (‘FI’) to do part of your homework for you. But first, there are two types of FIs. One type is linked to a firm, the other is independent. Of course, the benefit of an independent FI is that they are less likely to push company-linked products at you. And personally, I feel that independent FIs that charge an annual fee are the best of all. This is because some independent FIs might get commission from selling certain financial packages to you, but fee-based FIs do not earn such commission, hence you might get a more objective assessment/advice. Go google ‘IFAS’ and you might find a website which gives a list of the independent FIs available in Singapore.

- If you are above age 40, perhaps it would be a good idea to seriously calculate how much you need for retirement (if you haven’t done so already). Most Singaporeans have no or only a rough idea of how much they need. Worse still, many do not have enough savings to last them when they actually retire. Do you want to get a bad shock when you’re older, jobless, and hence largely helpless? A sound retirement plan is imperative if you desire to live out the sunset years with a peace of mind. Go find out how you can start planning and what to look out for (e.g. investments/insurance plans that suit your financial goal)

- One last useful website:

This concludes an extremely brief summary of what can be learned in the 8-hour long FIT course. Hopefully, you would have found it useful! Either way, its time to start doing your financial homework now. And get down to making some serious plans and changes. Because as one of the instructors in FIT said, ‘If you don’t plan. You plan to fail.’ All it takes is a little bit of effort and diligence to insure yourself against financial failure. Plus it’s not rocket science, whether you want to grab your pot of gold is entirely up to you =)
Carpe diem.



# ww. 2010-02-02 03:05

w. said,

June 6, 2006 at 5:12 pm

Well written – very comprehensive and straight-to-the-point. I agree that financial planning is something that most of us (youths) have prioritised below most other things in our lives when it should honestly be one of the most important things to start thinking about.

Thanks for the links too – I’ve been reading up online during my summer break so that I can take over my insurance policies etc and start thinking about what to invest in when I turn 21, and it’s great that I could get some useful information off here. :)
# victoriasecret 2010-02-02 03:05

victoriasecret said,

June 6, 2006 at 5:16 pm

i do agree that all of us must have somekind of financial management,, but i do not agree with financial independence stuffs.. =P

i do not believe there is such things as financial independent and retire at the age of 40 =).. life would be so boring without works, challenges and small level of stress…

the moment we set our goal for financial indepedent, it will be the start that we are losing our life for something that we could never reach…

i would rather choose to live simply, just spend on what we need, give some $$ to the less fortunate, save some $$ for emergency, still extra $$ then start a small biz and grow the biz…

the thing is.. once we put our money in insurance or somekind of investment, we lost the excitement of creativity and innovation..
# pleinelunee 2010-02-02 03:06

pleinelune said,

June 6, 2006 at 10:10 pm


1. She was NOT talking about retiring at 40 – she was talking about KNOWING how much you will want when you do retire. Please read carefully.

2. What’s unreachable about financial independence? How does having financial independence make life boring? It just means that you won’t be picking half-eaten food from garbage cans if one day you lose everything

3. Try having the excitement of creativity and innovation when you are diagnosed with cancer and you have no insurance.

Please don’t bring in absurd philosophical arguments into financial planning – they have no connection.
# Authorofthispost 2010-02-02 03:06
Authorofthispost said,

June 6, 2006 at 11:24 pm

actually, speaking about investment and insurance… I would consider investment an art AND a science, becos frankly speaking, its VERY difficult and challenging to invest. Most ppl think that investment is just about putting the money n letting it grow.

However it’s not that simple, in order to succeed at investing u have to do ALOT of background homework. Also, to invest is to risk, and wld’nt that provide excitement? ;)

And, i feel that financial planning/independence FREES us and enables us to do the things in life that are meant doing. Alot of times, GOOD financial advisors wld ask u this qn: What do you REALLY want to do in life? For some ppl, its to go to Ethopia and help the cause of hunger. For others, its to travel the world, meet other ppl and cultures. And for the sympathetic ones, they might want to dedicate their lives to social work! However, financial ’slavery’ prevents them from doing the very things they want to do in life. Becos they have to work. And have no time for other things.

Financial independence is a reachable goal. There are real life examples all around u to prove it. And ALSO there are examples all ard u to PROVE the existence of those who have quit the fight. Whether u get sthg in life, is up to how much u are willing to strive for it. And the first step, is to change the mindset that we are destined to be forever stuck in a dead-end job.

Lastly, i forgot to add, i might’ve made financial independence sound like sthg tt is EASY to do. And wld give u a better life (yes). HOWEVER, u have to make sacrifices in order to attain financial independence. In many ways, it is like a job. You have to work at it, be good at it. Many ppl actually don’t have the apptitude to invest and hav problems attaining financial independence. However, financial independence is a special job. Its a job whereby u have an option to really quit. To stop completely. Whereas for ordinary jobs, you never really quit. You might change jobs, or be temporarily unemployed.

So which job would u prefer? =)
# victoriasecret 2010-02-02 03:07

victoriasecret said,

June 6, 2006 at 11:52 pm

patience2 pleine..,. i dont know why i seem to always gets on your nerve.. =$.

thx for hte writer who clarified. BTw, who are you?
the article is well-written and well-explained and i believe it benefits many of us.

i disagree with you not because of the piece, it’s because i have my own set of financial concept. =)
i believe in financial stewardships and not independence =)

sorry, should my previous post is rather rude..
# Authorofthispost 2010-02-02 03:07

Authorofthispost said,

June 7, 2006 at 1:43 pm

What do u mean by financial stewardship?

Lol, i think i did mention that at the start, that one of the problems hindering sound financial education and planning is ‘old mindsets’. you have to broaden ur mind to the possibilities that there are OTHER, possibly better ways of managing finances out there.

You don’t have to take it up and do it. But at least do urself a favour and get informed =) more choice is better than no choice.
# victoriasecret 2010-02-02 03:07

victoriasecret said,

June 7, 2006 at 1:58 pm

i dont know how to explain this..
but what i observe among most ppl.. many ppl are over-spending and living on future income…
many are using credit cards and living on debts..

i think all of us must be responsible for our finances… living within our means and have the wisdom to manage what is left..

as for your points.. i simply disagree with the notion of financial-independent… =)… i dont think that should be our goal in life… for a very simple reason.. we dont know what will happen tomorrow…

having said that.. it doesnt mean i wont buy insurance or doing some investing when i have unused resources… as for me.. i will buy insurance just enough to coever my loved ones to cover losses for a year or two… or just sufficient medical insurance…

as for investing.. i believe in investing.. we got brain to know that money in the bank will do nothing but depleted in value.. =)

but in all that i do.. the purpose is never to achieve financial independence.. =).. it’s jsut a big no no.. hehehhe
# humphh 2010-02-02 03:07

humph said,

June 7, 2006 at 6:47 pm

victoriasecret, you don’t seem hard-wired for logic. what you said is very confusing but it’s ok, some people are like that. just as long as you know what to do with yourself and not try to convince other people.
# pleinelunee 2010-02-02 03:08

pleinelune said,

June 7, 2006 at 7:16 pm

*scratches head* I have no idea what you are saying, VS. You are contradicting yourself all over the place.

Let’s try this from the top: what do YOU define as financial independence, because it seems we are talking about two separate things.
# victoriasecret 2010-02-02 03:08

victoriasecret said,

June 7, 2006 at 11:00 pm


sorry if i am so confusing.. i think i just could not the my opinon across… *scratches head too*..

i do not think i should elaborate furhter cos i will even confuse more ppl..

# onekell 2010-02-02 03:08

onekell said,

June 8, 2006 at 5:03 pm

First up, thanks to the author and the FIT instructors for offering so many ideas and suggestions.

If I may, I believe victoriasecret was initially making a few points:
- working gives us purpose, challenge and learning; it’s not just about making money
- she would like to employ a different strategy of generating income through building her own enterprise
- she values other benefits of enterprise, such as exercising creativity.
- her idea of stewardship is taking responsibility for and controlling how her money is used

victoriasecret, I agree with your point about personal responsibility for our finances and the wisdom to live within our means.

I don’t think the author is encouraging us to stop working but rather, free ourselves from having to work for money.

The idea of financial independence is not the same as materialism. Neither is the author saying that it should be our only goal in life.

We may not live past tomorrow and we should value the present, but simultaneously, we can prepare for the possibility that our lives may be long and that with age, comes increasing risks of personal illness and accidents. The older we get, the more the possibility becomes an eventuality.

Inflation erodes the value of the savings we have accumulated. For example, correct me if I’m wrong, at the average rate of inflation of 3%, $1 million today might have lost half its value in 20 years.
However, if the rate of return that you earn on that $1 million is greater than 3%, then you are not losing any value.

What we all have in common is an appreciation that money is necessary and that there are many worthwhile pursuits in life.
# victoriasecret 2010-02-02 03:08

victoriasecret said,

June 9, 2006 at 12:59 am

thx 1-ker…
i think thats roughly what i meant.. =)

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