Tan Kin Lian's Blog: Investing savings for a debt free family

Sunday, May 30, 2010

Investing savings for a debt free family

Dear Mr Tan
We wish to seek your opinion on what we should do with our savings. Currently, we have paid off our HDB loan, car loan, and we are practically debt free. We are in our 30s and we have 2 sons from age 5 to 10. We have some investments and they are doing well fetching us dividend yields of 5 to 9% per annum. We have sufficient insurance coverage should we report early to heaven and have also been buying education plans for our children since they were 1. We have learnt to live beneath our means and have saved a bit of money through the years.

You see, we have some savings and we would like to accumulate our wealth but we do not know what to do now. In addition, we did think about investing in a private property but prices are rocket high now. In your opinion do you think it is right to purchase a private property for investment purposes in Singapore? Do you think properties prices will go down soon?

TO

REPLY
Invest in a low cost investment fund as suggested in my book, Practical Guide on financial planning. It can be bought online. Visit www.easysearch.sg/ishop

5 comments:

Anonymous said...: You claim that you have sufficeint insurance. What is sufficient?
Rule of thumb , I presume you have $800k for death coverage; you have at least $300K critical illness; a disability income insurance to replace your income and a medical insurance to cover all the 4 areas of risk?
What about your spouse? What about your retirement? You have already embarked on an education funding plan for your children since they were young.You have put this cart in front of the horse. It is ok if you are have NOT compromised your priorities otherwise never do it.Your retirement is more important to you.; May 30, 2010 7:45 PM
Anonymous said...: Being debt-free is already the first step to the road of financial independence.; May 30, 2010 9:48 PM
Retired said...: Stay your course. Do nothing now.
Stay liquid and wait 2 - 3 years.
property prices WILL drop, but please do not think that it will cost only $1 for a bunglow.
Do your homework now.. which property do you like, why and what if you need to live in it yourself?
will it be suitable?
How much loans would you need? calculate a loan and simulate an interest rate of 6% and decide if you can afford paying that for 10,20 years.

Buy term insurance.. dont worry about the kid's education costs.. it wil take care of itself. Its your retirement funds that is more important.. unless you know with absolute certainty that your kids will be able to support your medical bills for life.

So far you are on track.. keep it up! STAY LIQUID!!; May 30, 2010 10:52 PM
Anonymous said...: Be careful not to step some shit along the way.Good chance that you may meet a product peddling insurance agent who may lead you into a cesspool.Living out your financial life is a journey fraught with dangers. You must tread carefully and avoid a lot of undesirable people like insurance agent disguised as financial consultants.If you fail to see through the disguise you are entering into their trap that you will not be able to get out with suffering heavy losses. These salesmen are sales conmen no difference from the magic stone salesmen or snake oil conmen.Don't judge them by their cover. The business suit is a cover like wolves covering themselves in sheep's clothing.Rebranding is actually grafting a new skin over a rotten inside.; May 30, 2010 11:13 PM
Anonymous said...: TO,
The fact that you and your family are able to pay off all your loans and is debt free is applaudable. It is enviable that you are only in your 30s.

I dare say that beside those born with a silver spoon not many people in Singapore are in a better financial situation then you and your family.

Congratulations at achieving finanical freedom. Bravo!!

Merlion; May 31, 2010 11:31 AM