What Every Employee Should Know About Their Money
The Top 3 Things Every Employee Should Know About Their Money.
(But probably doesn’t!)
1. Your income is NOT limited and you CAN be richer than your boss.
Remember, your income is not limited until you choose it to be. Don’t just work hard, but work smart. You only have 24 hours in a day. No more, no less. Trading your time for money will not get you far ahead. You will end up burnt out and disillusioned with life. All too often, people are trapped in this race because they never bothered to realize where they are headed. If you work mainly for money, it only makes sense that you learn how to maximize the value of your money wisely! The purpose of getting a job for most people is to earn money, but there are also other productive ways to grow your money which was neglected during the process.
Through proper financial planning, a sensible employee with a will to win can end up richer than his/her boss. This is particularly true if your boss lacks the money-management skills that make such a massive difference over the long run. Although the boss may earn more money than you right now, by taking advantage of superior financial planning, you can come out richer than your boss at the end of the day. You may not be able to choose your job position or given salary, but you can learn how to grow your money efficiently! It is not about who have the head start, but rather who finishes the race first!
2. There is RISK if you just leave your money idling in the banks and CPF.
Unless you are comfortable in living with a monthly allowance of 30% of your current income (i.e. $600 if you are earning $2000 per month now) when you retire, you might want to start planning for your financial future. With inflation going at 5% a year and (GST/ERP/fares… and many more) hikes on the way, an interest of 0.25% in your bank means the real value of your dollar is falling each year! You would be incurring high inflation risk that is 100% certain if you do not learn how to diversify your wealth. Unit trusts investment, which offer much higher potential returns, has been the top choice for most CPF and cash investors due to its professional management, the diversification it offers, and how easily it could be withdrawn.
3. You DON’T NEED cash at all for medical insurance.
A medical crisis can hit us when we least expect it. Almost 75% of death related causes in Singapore are due to illnesses such as heart disease, cancer, stroke and pneumonia. Therefore the majority of us Singaporeans will be hospitalized from an illness at least once in our lifetime.
When a medical crisis is short, medical expenses are usually manageable. But when the illness becomes a long drawn affair, medical expenses are likely to pile up and can become a huge financial and emotional burden to ourselves and our families. Be aware that a medical crisis in some cases can exceed $100,000 a year. Are you prepared for something this catastrophic? It simply does not make sense for us to work so hard for half of our lives and then get our savings all wipe out due to the hospitalization.
And the good news is, you can now get yourself and your family covered in the event of hospitalization, without paying a single cent of cash. Yes! You can make use of the Medisave account (MA) in your CPF for hospitalization plans. Premiums can be as low as a few cents a day.
Article written by Ng Zhi Wei
2 April 2008
Leave a Reply