Tag: money goals

With 2025 just around the corner, it’s the perfect time to set new intentions - not only for personal growth but also to strengthen financial security and foster growth to support these aspirations.What financial goals do women want to achieve in the coming year, and how can they kickstart their journey? I am thankful for another opportunity to contribute to the Her World December 2024 issue. The editorial team had gathered some pressing questions and sought expert advice to help ladies set and achieve their money goals for the year ahead. Click HereClick HereClick Here Previous Next As the article has shortened the responses to the interview questions, I’ve decided to share with you my in depth answers to them. Here are the ten interview questions and my answers:Question 1:As an absolute beginner to investing, how can I start and how much is enough? I am intimidated by the process and the jargon; I am also quite risk-averse because I have a scarcity mindset (and don’t know how to get rid of it), and I worry about needing the money for emergencies due to my family situation. How do I have a healthier relationship with money?There are many concerns touched upon in this one question. But the ultimate goal is wonderful - to have a healthier relationship with wealth and success.To achieve this, we must first unlearn the harmful lessons we may have picked up along the way - knee jerk reactions and baseless beliefs need to be questioned. We have to look back at our past and investigate what was our conditioning that led to where we are today mentally. Once we have started to cleanse ourselves from negative thoughts and ideas, we can start to read some wonderful books and attend courses about this subject. The Singapore Government has many schemes and subsidies to make these courses and books accessible to all - such as SkillsFuture and the National Library Board online resources.These will give us time tested, proven, logical ideas about what it means to both protect and grow our wealth confidently - making good decisions, learning profitable mental habits, and seeking the right kind of help along the way. Alongside, start to associate yourself with people who are happy, healthy, positive, and sustainably successful. There is truth in the saying: “We become who we choose to hang out with”.You will start to gain familiarity with the concepts around money. What you now think is scary jargon will simply become your new vocabulary that forms the language of financial wealth management. This will help you learn how to get started on the right footing. You will realise the abundance of financial opportunities out there, and figure out the most suitable proportions for you to allocate your money - be it in your emergency fund, fixed deposits, insurance, and investments. The wise say: plan your work, and then work your plan. You are unique, so will be your needs and the steps you need to take to secure your future and of your family. Question 2:I’m in my 40s and honestly worried about retirement because I’m hoping to do a mid-career switch - maybe in the next 5 to 7 years - after completing my part-time degree. What should I be doing to plan ahead for this and to ease my worries?Here are some of the steps that will help you:Imagine your each of your desired scenarios to the fullest. This includes more than one possibility that you wish to plan for, based on order of priority and probability.Do your maths for each of these scenarios starting with the one that is most likely. How much money do you need, and by when.Look at your current financial situation - assets, liabilities, income and savings per month. How much do each of these add up to in the future? You may also need to make reasonable guesses i.e. assumptions about the future such as inflation, salary, expenses, and investment growth rates. Be conservative making your assumptions so that you avoid unpleasant surprises. You may need to adjust your expectations of future spending based on what your current and likely future financial position adds up to. Finally you will need to do your proper budgeting using the results of calculations above, come up with your ideal, optimised plan of action, and then do all you can to stick to your plan. The above steps will need some accuracy and completeness in your mathematics. One incorrect number and your projections will reveal a very different answer. Hence, you will find it beneficial to seek the help of a trained and competent advisor who has to the software tools that will do the heavy number-crunching for you to give you meaningful & reliable data for good decision-making. Question 3:Everyone says ‘manage debt better’ but they don’t go into detail about what that means. How can one manage debt better, and what would the first step be?This is quite a general question, but luckily we have a pretty useful strategy that can benefit most clients.The first step in managing your debt, as with all financial planning, is to look at your key figures as they stand today - assets, liabilities, income, expenses, insurance. Following that, you wish to take note of your top concerns such as dependants, contingent expenses, goals, and investment preferences.Once you have this clarity, you can start to look at your debt to see what is the best set of actions you can execute to reduce the debt and/or the interest on that debt. One of the strategies that people with a lot of high-interest debt, such as credit card outstanding, can implement is to go to authorised financial services organisations, such as Credit Counselling Singapore (CCS). The CCS can assist you to see how your debt can be restructured or refinanced at a lower interest rate, and they may recommend a longer payment schedule to make it easier to repay it off.Remember, when we are given lemons in life, our job is to make lemonade out of them i.e. make the best of every situation. And when you have that kind of mindset with your eyes and mind open, wonders can start to happen. Question 4:Are children worth having financially? How do I get my finances in order should I unexpectedly have a childChildren bring immense joy and fulfilment, but they also come with financial responsibilities. In Singapore, raising a child can involve significant costs, such as education, healthcare, and enrichment activities. However, many parents feel the emotional and personal rewards far outweigh these expenses.If you unexpectedly have a child, getting your finances in order requires careful planning and adjustments. Start by assessing your current budget to identify areas for savings. It is also helpful to create a separate fund for childcare-related expenses to ensure you're prepared for medical bills, diapers, and early education.Consider tapping into government subsidies and schemes like the Baby Bonus, Child Development Account (CDA), and tax relief programs that ease some of the financial burden. You’ll also want to review your insurance coverage—ensuring you have health, life, and accident insurance for both you and your child offers added peace of mind.Long-term planning is key. It is wise to start an education savings plan early and seek financial advice if needed to manage investments or debt. Finally, don’t hesitate to lean on community resources—family, friends, and government-supported childcare options can provide financial and emotional support.In the end, while raising children requires financial discipline, many people find that the experience also brings purpose and deeper connections, enriching life in unexpected ways.Question 5:What is a ballpark of how much I need to set aside for female-related diseases in today's high medical costs era?In today’s era of rising healthcare costs, planning for female-related diseases in Singapore requires thoughtful consideration. A female-related condition can be diagnosed as being in an early, intermediate, or advanced stage. While medical expenses can vary widely based on the specific condition and the type of care needed, it is helpful to have an idea of the baseline.Let’s take cancer for example. In Singapore, the top 3 cancers striking women are breast cancer, colorectal & rectum cancer and lung cancer (Source: Singapore Cancer Registry Annual Report 2022). Later-stage cancer care cost: Average $100,000 – $200,000 per year. That works out to be about $8,400 to $16,700 per month. Early-stage cancer care cost: Average ranging between $9,000 (heavily subsidised in public hospitals) to $50,000 (private hospitals).Source: Ministry of Health ‘Fee benchmarks and bill amount information’ published 2021For reproductive health issues such as endometriosis, ovarian cysts, expenses could range from SGD 10,000 to more than 30,000 depending on complexity and care duration.Given these numbers, it is advisable to set aside at least SGD 100,000 as an emergency medical fund, supplemented with comprehensive healthcare insurance coverage. Comprehensive healthcare insurance should ideally include adequate:Critical Illness protection (covers early, intermediate and advanced stage conditions) - takes care of your ongoing living expenses after discharge. Often there would be additional costs incurred to support your recovery at home, for example, special diet, supplements, alternative therapies, hiring a domestic helper. Health insurance (i.e. Integrated Shield Plan preferably with additional cancer coverage) - covers inpatient hospital expenses and to a certain extent, outpatient treatments and services. Long Term Care coverage (i.e. inability to perform Activities of Daily Living) - pays you a monthly benefit when you cannot look after yourself. Critical Illness insurance plans in Singapore often cover critical illnesses and women-specific conditions, so reviewing available policies and riders is crucial to optimise both out-of-pocket costs and coverage.And I get asked quite a lot on how much is adequate coverage. Imagine if you are not able to work for 3 years, what is the loss in income? If you’re earning $100,000 a year, that would add up to $300,000. In my opinion, critical illness coverage serves as an income replacement. One more thing I’d like to share with Her World readers:Have enough credit card limit when you check-out of hospital. This is the time when having multiple credit cards is a wonderful idea. Our Integrated Shield plan works on a reimbursement basis. That means you have to pay upfront first before you get reimbursed by the insurer. If you are covered under your company’s plan and have access to cashless payment, then you do not have to consider this. Lastly, incorporating preventive measures - regular screenings, vaccinations (e.g., for HPV), and healthy lifestyle choices - can reduce long-term medical costs. While it is impossible to predict exact expenses, early planning and balancing savings with insurance will help manage potential financial risks effectively.Question 6:Regarding retirement: What are the average conditions that would need to be met and how much do I need to put aside? How does this differ for single women, couples with no children, families with two children and so on.In Singapore, the key to retirement planning revolves around factors such as lifestyle expectations, inflation, and healthcare needs. On average, the CPF Life scheme provides a basic monthly payout from age 65, but the amount depends on how much you’ve saved in your CPF accounts by then.General Guidelines for Retirement SavingsFinancial planners suggest having 15 times your annual expenses saved by the time you retire. The ideal retirement amount varies by family structure and lifestyle:Single Women: Likely to need more savings due to longer life expectancy and higher healthcare costs. A prudent estimate would be SGD 800,000 to 1 million.Couples with No Children: If both are working, joint savings of SGD 1.2 to 1.5 million could sustain a comfortable retirement.Families with Two Children: They may face higher living expenses early on, so starting saving early is essential. For a moderate lifestyle, they might need SGD 1.5 to 2 million.Beyond CPF savings (i.e. that translates to CPF LIFE payouts), supplementing retirement income with private investments, the Supplementary Retirement Scheme (SRS), or private annuities is advisable. Vital and adequate healthcare insurance - critical illness protection, long term care cover, and health insurance i.e. Integrated Shield Plan - plays a crucial role in mitigating unexpected medical costs.It is important to note that your idle cash should be invested. Currently, bank fixed deposit interest rates are attractive (between 2.7% and 3.2%) for risk-averse investors. If you do not need the money for 5 years or more, then equity investments can be considered for high potential returns.It is vital to regularly reassess your retirement plan, adjusting for changing goals and inflation. Planning early offers more flexibility and peace of mind.Question 7:How much should a woman earn to live independently and comfortably in Singapore, given the market trends and inflation that we might see in the coming years?To live independently and comfortably in Singapore, a woman should ideally aim to earn around SGD 6,000 to 8,000 per month. This estimate accounts for basic expenses, savings, and inflationary trends.Here’s a rough breakdown:Accommodation: Renting a one-bedroom apartment can cost SGD 2,500 to 4,000, depending on location. Opting for shared accommodations in central areas can reduce this to SGD 1,500 to 2,000. Utilities & Groceries: Utilities like electricity, water, and internet average SGD 200 to 300 monthly, while groceries cost SGD 400 to 600. Transportation: Public transport passes typically cost SGD 150 to 200, with occasional Grab or taxi rides increasing this figure slightly. Dining & Entertainment, Shopping: This will require around SGD 500 to 800 monthly, factoring in lifestyle habits. Healthcare & Insurance: Life insurance premiums tend to remain the same throughout the payment term. Allocate about 15% of your salary to insurance protection. For health insurance, premiums increase with age as well as medical inflation. It is best that you refer to your health insurer for the current and future premium rates. It is prudent to set aside a savings ‘pot’ just for health insurance premiums. Savings & Emergencies: Allocating at least 10% of income for savings ensures future security.Given inflation trends, especially in housing and food, a comfortable salary ensures enough leeway for savings, investments, and personal growth. While many live on less through careful budgeting, aiming for SGD 6,000 to 8,000 provides a balance between meeting current needs and securing long-term financial health.Question 8: What is a strategy I can utilise in 2025 to build passive income so that I can enjoy financial freedom, travel and afford luxury, without the need to workAchieving financial freedom with passive income requires a strategic blend of investments, entrepreneurship, and careful planning. Here’s a roadmap you can consider in 2025:Invest in Income-Generating Assets:Focus on assets that appreciate while providing regular income, such as dividend-paying stocks, unit trusts, REITs (Real Estate Investment Trusts), or bonds. Given Singapore’s stable economy, a well diversified portfolio of unit trusts, local REITs and ETFs are a great place to start.Real Estate Rental Income:Explore short-term rental opportunities (e.g., Airbnb) or invest in properties abroad. Singapore’s tight real estate market may have high entry costs, so overseas markets could yield higher returns.Start a Digital Product or Business:Launch an online business—like a course, subscription service, or e-commerce store—that can run with minimal involvement. Automation and outsourcing will allow you to free up time for travel.Create Content for Passive Revenue:Develop content on platforms like YouTube, a blog, or a podcast, monetizing through ads, affiliate marketing, and sponsorships. Consistent, high-value content can generate ongoing passive income.Explore P2P Lending or Crowdfunding:Peer-to-peer lending platforms or crowdfunded investments offer alternative income streams but come with risks—ensure you diversify.Optimise and Automate:Use financial planning tools and automate your investments for consistency. This helps keep wealth compounding over time.It is important to diversify across these streams to reduce risks. Passive income takes time to build, but starting early with a disciplined approach will help you achieve financial freedom.Question 9:I am starting to review my existing insurance coverage for 2025. What are the policies that I can let go or downgrade and at what life stage(s) should I do so and why? What new policies should I be looking at instead, as I transition into those different stages of life? What are some policies I should absolutely never, ever let go or modify? How would it vary for someone who is a parent versus a single woman or a DINK (dual-income, no kids)?When reviewing insurance for 2025, life stages and personal circumstances are crucial in determining what policies to keep, downgrade, or add.At Early Life Stages (20s-30s): First thing first, when you are still in the pink of health, get a good health insurance plan (i.e. Integrated Shield Plan). Premiums will be relatively cheaper at this stage. Understand the scope of coverage of the main plan and the optional supplementary riders. Next, consider a whole life plan that provides lifetime protection (for death, total & permanent disability and critical illness). As this often costs more than a term life plan, the sum assured taken up at this juncture is usually around $100k to $150k.Your hospitalisation plan and whole life cover form the foundation of your financial plan. This means, they should not be cancelled or terminated.And as financial commitments build up as you progress in your career and family life, to boost protection of your biggest asset i.e. your ability to earn an income, adding appropriate term life insurance is essential. For singles, health insurance, critical illness protection and long term care coverage are essential. DINK couples should prioritise income protection and hospitalisation plans. As for parents, they need to have in place health insurance for the entire family, life insurance (death, disability, major illness) with higher coverage to secure the on-going living expenses of their dependents as well as their own. Parents should also make it a point to secure an education savings plan each for their children. Some parents prefer a strategy of investing (growth, volatility) and endowment plan (safety, assurance).Note: Always get mortgage insurance. Your mortgage loan is likely your biggest liability. Note: Starting age 30, all Singaporeans and PRs will be automatically enrolled into CareShield Life (long term care). Do not opt out of this because it provides the basis for you to further enhance your monthly disability income payouts.At Mid-Life (40s-50s): Insurance is the best investment. It can pay you a six figure sum, guaranteed and in a lump sum. And the best thing is you can use it however you wish.Savings would have grown but it is still wise to keep the insurance policies that you had purchased, especially if your health status has changed. I would not suggest that you reduce coverage at this point. At this stage, you are probably at your career peak and earning a good income. In fact, with income growth and inflation, your coverage needs to be enhanced to match your income.For singles, health insurance, critical illness protection and long term care coverage remain essential. DINKs may consider increasing their disability income or long-term care payouts to secure financial independence in case of health issues. Parents should evaluate the children’s education funding goal and maintain solid health insurance.Approaching Retirement (60+): Life insurance coverage could be reduced unless there are dependents. Prioritise retirement savings plans and long-term care policies to cover medical and nursing expenses. At this life stage, health insurance premiums will be in the 4-figure zone. Many Integrated Shield plan holders will rethink the plan type and the rider they are covered under. A common action taken is to downgrade to the plan below the current tier, for example, from private hospitals class A to Government hospitals class A. DINKs may need robust retirement annuities, while single women should focus on comprehensive health coverage and estate planning.Non-Negotiable Policies:Health insurance is critical for all, given Singapore’s high medical costs. Critical Illness protection serves as your income replacement. Disability income insurance is also recommended, especially for DINKs and single women.Regularly reviewing insurance ensures it aligns with your evolving needs. Consider consulting a financial advisor to navigate these choices confidently and maximise benefits based on your life stage and personal goals.Question 10:What are some of the investment trends on the horizon for 2025? Are market conditions favourable for those looking to get into the riskier ones next year? What advice would you give those who want to go into the riskier instruments?In 2025, key investment trends are expected to revolve around emerging technologies, green energy, and geopolitical shifts. Areas like AI, blockchain, and biotechnology are poised for growth as innovation accelerates. The ongoing transition toward sustainable energy also presents opportunities in sectors like EVs and carbon credits.However, market volatility may persist, driven by inflationary pressures, geopolitical tensions, and evolving central bank policies. This makes riskier investments, such as cryptocurrencies, startups, or speculative tech, both attractive and challenging.For those considering riskier instruments, timing and research are crucial. While potential returns can be high, so are the risks. It is essential to diversify your portfolio - balance high-risk investments with safer assets like bonds or ETFs to spread risk. Additionally, liquidity should be considered; only invest money you can afford to leave untouched for an extended period.Seek professional financial advice, especially if you're new to these markets, and stay updated on macroeconomic trends. Risk management tools like stop-loss orders and regular portfolio reviews can also protect your capital.In short, while 2025 offers intriguing opportunities, it demands a well-thought-out strategy. Stay cautious, start small, and gradually increase exposure as your understanding of the market deepens. 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Tag: money goals

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Tag: money goals

Her World Dec 2024 x Karen Tang – The Expert Guide To Achieving Money Goals

Join my Telegram channel

Karen Tang's Money Mantras

Stay up-to-date with relevant financial advice, ideas, news, and action steps for your wealth journey

Join Now

Are you a professional woman aged 30 to 50?

KAREN TANG

USEFUL LINKS

ENGAGE

BLOG CATEGORIES

Legal

Stay up-to-date with relevant financial advice, ideas, news, and action steps
for your wealth journey