Sunday, August 31, 2014

Sunday Weekend Roundup: Insurance and Investments ramblings

It's like as if Rennie is reading my blog and wants to whack me again. Like I mentioned last week, The Sunday Times Invest section usually has people that "invest" in insurance. Another week, another article that I get slammed down by stereotyping.

This week's interviewee is Ms Sabrina Gan from Blackrock. She previously worked at Schroder and also EY. She is a CFA and also is very familiar in alternative investment. This lady is clearly extremely financially literate.

"I plan on both fronts - protection and investments" is the clear winning line here. Like most financially literate people, one of the most basic things is to be able to discern between what is an investment and what isn't. I re-emphasize: Insurance is NOT an investment.

Pretty much the rest of the article is quite normal. Her investments go into 5 mutual funds of different asset classes. Definitely a prudent realist, I admire her and her outlooks on life.

On the next page, there is an article by Cheryl Ong. Now, I don't have a thing against Cheryl Ong, but I kind of cringed when I read the line, "I have also since invested in insurance policies, since they are still affordable when I am young and healthy". I sure hope other people that read the newspaper don't go calling their insurance agents asking them about "investing" in insurance policies. Oh gawd.

However, I have 2 points that I agree with her wholeheartedly. The first point is that as boring, mundane, lame and uninteresting personal finance is, if you don't give a shit, you are going to get shit.

Coming from the local university, I would say that my social circle of friends are generally more educated formally than most. But when it comes to personal finance, I think they are worse than average. On top of having (perhaps unwarranted) high self confidence in their ability to earn money, they completely overlook things regarding personal finance. Also, I think that since they have not seen or suffered much financial hardship, they are a bit delusional about money. Don't even talk about investing wisely, close to none even invest anything and there is a large portion that barely even saves. Inflation eroding savings is a moot point if you don't have any savings to begin with. I have quite a few friends that unfortunately do not has this inflation problem to deal with because they have no savings to speak of. I am meeting a friend for coffee later. I hope I can inspire her to start taking some action in her life instead of spending her salary willy-nilly.
The best time to plant a tree was 20 years ago. The second best time is today.
Why should you expect the government or your family to look after you if you can't even look after yourself? No one owes you a living, you owe it to yourself.

The second point that I agree with Cheryl is regarding a nice quote she supplied:
"Money isn't everything, but without money, you have nothing." 
As harsh as it sounds, it is unfortunately the sad reality that we live in today. The accumulation of wealth should not be the end goal, but to have no wealth is to really be nowhere. Money is supposed to help us achieve the things we want in life, but it shouldn't be the thing we want in life. At the end of the day, money is exchange for something that we enjoy, and the money itself just serves as a medium of goods exchange.

Goh Eng Yeow on the next page wrote an entire article about it, but I think it is summarized best at the end of his article with the quote from Seneca:
As in a story, so is life. Not how long it is, but how good it is. That is what matters.
Enjoy life, you owe it to yourself to make sure you've lived a good one.


  1. Hi MH,

    Interesting dissection of today's Invest section. Enjoyed it.

    I am quite surprised by most of your friends' attitude about money. With so many young bloggers out there and the proliferation of PF books, I thought there should be a significant improvement in financial literacy.

    1. Hi Mr 15HWW,

      Thanks for the comment. There is just a general disinterest in the more mundane and serious stuff. Many of my friends still prefer to use NETS or cash because they are just unaware of the benefits or rebates of credit cards which can help them trim their expenses. It is just too much time and effort to tackle that they decide to look at it another day, which usually never comes.

      As far as personal finance goes, picking out credit cards is way more fun than thinking about insurance or investments, so those things almost never get done. I think if basic personal finance was to be taught in sec schools, maybe there will not be so many late bloomers. Oh well!


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