I'm turning 30 next year. Neither old nor young. Not middle-age either.
I'm sharing my thoughts about money saving and future planning. This includes retirement.
It may not apply to you, but you can use it as reference for your own financial guide.
1. DIVIDE
Divide your salary is important. I take Gross Salary as a guide.
20% CPF
20% for parents (good for you if you can save this portion up)
20%-25% savings + insurance
10%-15% Household (Utilities Bill, S&CC, Property Tax, Internet Subscription, Home phone line, Paid-TV, Groceries, Maintenance and Servicing Budget)
25% Expenses
If you are single, "household" probably dun apply to you. Thus saving them up for a future house, wedding, or travel will be awesome plan
If you have a car, i assuming abt 15%-30% of your gross salary will go to car installment, road tax, insurance, petrol, parking fees, maintenance & Servicing.
2. MAKE YOUR MONEY WORK FOR YOU
I believe in diversifing my savings. I spilt them into 4 factors
a) Cash
b) Insurance
c) Investment/Shares
d) Gold
Cash
The lowest risk of all is Cash. Keeping the money in bank accounts or FD accounts.
Pros : you can get your money out anytime without any capital loss.
Cons : they dun make much money for you.
A typical FD interest rate is less than 1%. Some banks may offer abit more with some promotion, but generally the $ is low. However, we need this cash component as we may need money anytime
Insurance
Living in SG = have cpf. I used medisave to cover my hospitalisation insurance. It is a must. Buy b4 regrets.
If you have extra cash and/or not in very very pink of health, i suggest you get the full coverage so that you dun need to pay co-insurance and deductible. The extra cash need is little. Few hundred bucks per year. It is worthy.
Life insurance is not in my consideration. Thus when i look for insurance, i focus on 2 pts
- provide my dependent $ when i die and they are too young/old to fed themselves
- option of surrender at old age so that i can withdraw $ to spend during retirement
I'm not sure how much is a good amount to cover myself. For now, i think that $100k per dependent will be minimum. (Considering that my hubby can fed them too)
Pros : Protection
Cons : More money returns than Cash but lesser than Shares
Investment/Shares
This has the highest risk amount the 4 factors mention above. The cash spend here must be extra cash. It is important that the money can be "thrown in" for a long period of time. In general, there are 2 types of gain. Capital gain VS Dividend gain. My hubby likes the former and i prefer the latter. Capital gain may be faster income but more attention needed. Dividend gain is more suitable for me. In general, a gain of 5% - 10% can happen depending on your portfolio and the market trend.
Pros : Make the most money for you... if you are lucky... or skilled
Cons : Highest Risk
Gold
This sounds the most oldie of all investment, but buying them at their lowest cost and selling them at highest price will bring in a good profit.
Some ppl prefer to buy paper gold. Personally i believe in buying physical gold as i cannot foresee the future.
Physical gold is the only thing we can butter-trade in hard time. There is no guaranteed world peace, so this serves as another way of protection.
Pros : Can butter trade during war time and can also bring profit during good times
Cons : Most troublesome.. imho
3. Do your retirement planning while you are young.
