Archive for June, 2010
Commit To Excellence
Posted by Stephen Mok in Personal on 30/06/2010
Your Best Life Now
The story went like this…
A certain home builder was down on his luck and did not had much work to do lately. His rich friend took pity on him and decided to help him out. He gave him a set of plans to buid a house and a cheque for US$300,000. He entrusted every detail of the construction to his builder friend as he did not have time to bother with it.
The builder was so excited that he could finally start work and earn some money! But… he started thinking…
“If I cut a few corners here and there, I could pocket some of that $300,000″ So he went out and bought the cheapest concrete, dilute it even further, bought the cheapest lumber. Some were bent and warped but he did not care as they would be hidden behind the walls. He did the same thing with the plumbing and the electrical works. When the house was finally completed, he saved nearly $40,000 which he discreetly pocketed.
He called his wealthy friend to inspect the house and he was quite impressed with it. On the surface, the house looked beautiful and elegant. He would never have guessed that the builder had cut corners, compromising the whole house.
The builder was ecstatic and could not wait to see how much the rich friend would pay him for the job done.
To his surprise, his rich friend said, “You know, I don’t really need this home. I already have a beautiful home. I was just trying to help you and do you a favor.” He handed the keys to his builder friend and said “Here, my friend. This is for you. You have just built yourself a brand new home.”
The builder neraly passed out. He thought, “If I had known it was going to be my own home, I would have built it a whole lot better!!!”
The truth is, whether we know it or not, we are building our own homes. We may cut corners here and there, but it’s not going to hurt anybody except ourselves. Those poor decisions will weaken our foundations causing us problems in the future. What we do when nobody is watching is what really counts!
In the same way, when we compromise to get ahead in life, we will suffer the dire consequences of our actions in future.
A person of excellence and integrity does what is right, even when nobody is watching. People of excellence do what’s right because it is right, not because somebody is forcing them to do it.
Financial Planning For Young Working Adults
Posted by Stephen Mok in Financial Planning on 12/06/2010
Financial Freedom Starts Now
High up in their agenda is to spend on whatever they want! That’s the danger sign!
Most young adults when given their first pay cheques would most probably go on a buying spree. With so much cash in hand, they will be very tempted to buy that iPhone 4, buy that dream car, eat at fine dining restaurants, go for multiple holiday trips in a year. They are free to spend whatever they fancy.
They have never been taught financial planning in school and most parents are not sure how to educate their children in this area because their parents did not teach them either.
Here’s my advice for you, if you have just joined the Singapore work force.
1) Save first, then spend the balance. Not spend first and save whatever is left at the end of the month. How much to save? 50% of what you earn is a good figure to start. Why? Because you are still staying with your parents, you do not need to pay for the utilities and other family expenses. 50% of your salary can go into your bank savings account, start an regular investment savings plan, buy an endowment policy which can be a short term or long term savings plan. Delay gratification is the first discipline you must master here.
Do not be tempted by quick rich schemes or “no money down” investments. If you don’t understand fully what you are getting into, stay out of it because most likely you will not even know it when you have lost all your money! Be prudent and patient when it comes to investments. Keep at least 6 months of your expenses in the bank and invest the rest using the other ways mentioned above. Yoour financial planner can calculate exactly how much you should save per month to achieve your wealth accumulation goals.
2) Protect the most important factor in your income producing model – YOU! Your ability to generate an income is the most vital component of your wealth accumulation plan. You must create the foundation of your financial plan, that is your wealth protection, that is your life insurance policies. You must cover premature death, total and permanent disability, critical illness and disability income. There are many insurance products out there, so getting an independent financial adviser will help you get the best value for your money. Don’t buy from your friend who joined an insurance company just to help him out. You will be paying the premiums for the next 10 to 25 years, so it is very important that you are not over paying for your insurance policies.
3) If you already have a boy friend or girl friend, who is also working, you must instill this financial planning mindset in that person so that both of you will not quarrel or separate because of financial issues. Most couples split because of financial problem. One save while the other spend. Different value sysytems will create havoc in your relationship.
4) Don’t sign up too many credit cards, two cards are enough for most people. You have to keep track of your credit spending. Pay off your credit card bills every month, don’t ever roll over and pay the minimum. If you have done that, quickly pay it off now! Credit cards are for convenience, don’t buy the product if you can’t afford it now. Many adults have fallen into this trap and have declared bankrupt. It is not a joke to be declared a bankrupt. Your bad record will follow you for life.
If you need “uncle Mok” to help you design a financial plan, just make an appointment with me one of these days.
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