Tan Kin Lian's Blog: Tips for young people

Saturday, April 17, 2010

Tips for young people

I wrote the book, Practical Guide on Financial Planning to educate young people who has just started work, about the importance of savings and the need to invest the savings in a liquid form so that they can be withdrawn without any penalty for urgent cash needs. You can save lot of money by avoiding high interest payments on borrowings or installment payments.

You should NOT lock up their savings in a life assurance policy that has a high distribution cost, poor liquidity and a heavy penalty on withdrawal. Be careful of insruance agents who will approach you soon after you started work. They are well trained to tell one-sided stories about the benefits of life insurance, but not the serious drawbacks.

Do not worry about protecting yourself against the risk of death. You only need to worry about it when you get married. If you can buy a group term insurance (i.e. SAF or SAFRA) or personal accident insurance, go ahead. If not, it does not really matter that you are not insured when you are still young.

Remember: when you sign on the dotted line to buy a high cost insurance policy, you will be giving away one or two years of your hard earned savings.

You should spend $12 and 12 hours to buy and read my book which is available online. By being educated, you can save several thousand dollars by avoiding bad investment products. Do your friend a favour. Order additional copies to sell to them or present as a gift to them. It may be the most valuable gift that you can give them.

Tan Kin Lian

3 comments:

Conspiracy said...: I agree that investment products especially those which hawk mutual funds should be avoided. In any case, it will not be long before the baby boomers will start retiring and will start to pull out their money from te stock market in order to pay for retirement and medical expenses. With fewer people in the current and future generations, the stock market will most certainly decline in a simple case of demand and supply.

Financial education is an individual responsibilty, tkl books and other sources are all important for us. The average insurance agents should not be our source of financial advice.; April 17, 2010 3:36 PM
Anonymous said...: Don't let the insurance agents frighten you about insurability. Yes, it is possible one's insurability can be lost but what is the probability.The odds are low but the odds that the insurance agents make a lot of commission from selling products to you are high.
The scare tactic is as old as the trade.People are scared about death, diseases and disability but don't get too paranoiac about them. Insurance agents always put it as if you will get it or you will be the one to get it.Worse they sell you a product that is NOT ENOUGH to take care of the risk .While you wonder what hit you the insurance agents laugh all the way to the bank.; April 17, 2010 7:13 PM
Anonymous said...: "The average insurance agents should not be our source of financial advice.

April 17, 2010 3:36 PM"

99.9% of the agents are average.
They are super dupers and sales champions. They have nothing to advise you. They only have expensive products to dump on you so that they can make good commission to qualify for mdrt, cot and tot.
How else do they qualify? Advise you on CPFLife? Advise you to transfer your OA balance to SA account? No, their annuity is better. Their endowment is better.; April 17, 2010 11:33 PM