Needs are those that have to be met. They are compulsory and cannot be avoided. Wants are those that are discretionary.
Needs - to pay tax, school fees, to have meals, transport.
Wants - toys, entertainment.
What do you consider to be Needs and what are Wants? Do you have any interesting story to tell about real life experiences?
15 comments:
Even in the Needs, we can still control on the amount of money spent.
For instance under transport, we can take public transport instead of taxi or drive. For meals, we can eat home-cooked food which is cheaper and more hygenic instead of takeaway.
starlight
piggy bank has hole and you need to issue loan to continue operation.
party away and laugh and want to reassure everything is ok, life still goes on.
Insurance agents have been selling on wants becuase it is easiest and no responsibility, no need analysis, no requirement of recommendation on reasonable basis and it is caveat emptor.
They can push products and put the blame on the consumers.
You hear insurance agents' excuse when things go wrong and they go like this.
1.they want it , waht.
2. they like it waht.
3. they chose it and not me, hor.
4.they want early return waht.
5. they want see cash fast waht.
6. they have only this budget, waht.
7.they scared , waht
8.my wife say so, waht.
9. they know what they want, waht.
10.they only want better than bank, hor.
I was broke 7 years ago. Then i know what i need. Now i would say i am ok. And the side-effects is those then-wants gradually become a need now.
So i think needs and wants have a direct relationship to one's networth.
In this millienia, money is a need.
This is especially true in Singapore.
Without money, one cannot buy food or even water to live!
Well, what I learnt in life is that once you get used to a certain level of comfort, it becomes hard to "downgrade".
The same goes for gadgets. Once you get used to something, you find it hard to do without it.
In both cases, you need a certain level of income to sustain. Once that is gone, then you have no choice but to adjust.
In doing my postgrad studies, I had to live off my savings, and I quickly learnt how to cope with the lack of income.
The lesson to be learnt here is to live a reasonably simple life and be flexible.
I have few problems with public transport, but many of my car-driving friends cannot countenance taking the MRT.
We all need a house to live. It is one of the basic needs. We can live even in a rental house. Many people want to own a house when they can't afford to pay for it. In that case it becomes a want. Many a times,if you decide to satisfy your want, without adequate resources, you get into trouble.
I know a friend who obtained housing loan and built a big house (bigger than the size needed for him! Isn't it a want?). Within a few years he was forced to sell it to settle the loan. His family members became so sad and depressed.
We can have wants, only when all our needs are satisfied and when we have adequate resources to satisfy the want.
Want should serve as a motivational force to achieve success but not as a trap to make you a failure.
When most of the needs are met, next is to focus to increase retirement saving & achieve financial independent.
Helping to plan some form of saving for your children is also important as they are not going to have a easy life once they start working e.g. cheap foreign talents, High cost of living, expensive HDB, most expensive car in the world and continuous "double-digit" growth projection for Ministers' pay.
It is hard to distinguish between what is a need or a want sometimes. I can go on all day.
Let's say the issue of housing. Basic need: roof over my head, with facilities to deal with my humanly waste in a hygienic manner.
More than basic need (i.e. want?)sufficient room for my furniture, in a safe neighbourhood where I don't have to worry about rapists, robbers, thugs; will not take me hours to get to work....
Just conduct a test to see what you desire is a need or want.
Need is something that MUST be met if not met you will suffer discomfort, pain, difficulty,and hardship.
Some needs must be met immediately and some can be postponed.
Want is something you desire but only be satisfied after you have met your needs. They can be delayed and will not cause of any of the hardship or discomfort even they are not met.
Therefore it is logical to meet needs first then want in that order.In other words the horse must be in front of the cart.
Insurance falls under needs that must be satisfied IMMEDIATELY.But alas, it is not so. It is often the need of the insurance agents that comes first and not the consumers.LIA report shows and corroborates this cart in front of the horse situation caused by insurance agents, under insurance. This under insurance is swept under the carpet and the insurance agents and their companies blame it on the inertia of the consumers. The truth is the under insurance is caused by the agents who are greedy, scheming, not putting the clients' interest first, unethical and unscrupulous.
So the next time you engage an adviser and not insurance agent, make sure your insurance needs are FULLY MET IMMEDIATELY if you love your family and yourself.
The Watchman
NTUC agents sell on wants so that they can push products that give them high commission. So that they can avoid need analysis. So that they don't need to recommend because their customers want it, one.
They sell koyok also. You can see them at roadshows peddling koyok products, the cure all koyok. Why they sell koyok is because they can earn them high commission at your expense.
Wants and Needs.
There are clear wants and needs and as an individual, it is easy to separate them. Then there are some grey areas which one cannot decide. Again the important thing is meet the needs first. If unclear and no need to settle immediately, then put it as wants and take time to decide later.
One example is insurance product. Is this a want or a need? To me, it is a want as it is difficult to imagine you need it immediately e.g. the agent will try to convince you that it is a need as anything can happen the next day. To me, what happen tomorrow is beyond one's control. Take time to understand the kind of insurance products available and decide what suits you.
Same goes to investment. It is understandable that the bank's interest rate is lower than inflation. It should be consider as a want as there is no necessity to plunge into a investment just to beat the inflation.
Spend a couple of hours to understand the product, talk to some friends, ask TKL or Lion investor for 2nd opinion. FA will try to convince you that it is a needs, but it is better to understand the product and ask around then getting into a product you don't even understand e.g. Minibond. The Minibond has a brochure that misled heartlanders all the way to professionals and in the end, their losses ranges between 20% to 100%. Don't depend on MAS or Govt to help as this Lehman saga has proven they will not lift a finger as they have more important thing to do i.e. winning election.....
Let's get clear.
Needs are something that you MUST have and if you are without it when it happens then you will suffer hardship, pain and discomfort.
There are needs that are IMMEDIATE and there are some that you can take your time to have it in place. They are needs but they can wait.
EG;
Immediate----,insurance
medium term--emergency fund; buy a house ,saving for college; making a will
long term--- retirement.
In contrast wants are things that you can do without....it is a wish and you will not suffer pain if you do not have.
EG. saving for holiday; leaving a legacy; an endowment plan
The problem is consumers often put the cart in front of the horse.. Usually this is due to emotion... Setting up a education plan for their children; buying insurance for their children when the goose that lays the eggs is not adequately insured. If the goose is dead whatever plans you have for the children are useless.Those waivers of premium embedded in children plan are useless and conjob.
I don't blame the consumers for this confusion. This is caused by insurance agents. They are salesmen and they are not PLANNERS and they also don't care about priority so long the customers buy something and they get a commission.
A qualified planner should be able to help you sort out your priorities.
To insurance agents every damned thing is a need and they also create needs.Isn't what insurance companies are doing? They have products that cover 3 ,4 diseases occuring at the same time and 2,3 generations ahead. They are scams.
Example: They tell you , you need to save for your grand or great grand children, education will be expensive in the future. or
you need to take up a big plan becuase you might have 10 children.
or
When you are old you are sure to die so buy a wholelife and leave as legacy
All these products aim at your ignorance, fear, stupidity, emotion and to ridicule or insult your intelligence.
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