Imagine, before leaving for work,you said goodbye to your father in the morning at 6 am and by 11 am you are at the hospital the doctor is telling you your father is gone. And if you think this is some scene from some Korean or Hong Kong drama then you are wrong. This happened last Thursday to a friend of mine and I start to realise I cannot seem to be helping people fast enough to get them insured.
Why? There are many times when I ask friends who they are concerned about, who they love and care and tell them they have to consider the repercussions if something unfortunate was to happen. Ask them for their loved ones contact so that I can talk to them to prevent unnecessary financial cost if sometime happens.
Not only will there be financial cost but also the cost of living for those they leave behind. Even if death do not occur, financial liabilities will come from medical and living expenses of both the sick and the living.
In short many times I ask for referrals from people and the usual answer: don't have anyone in mind. I call them and ask them first. They are not free. They need they will call you.
The truth is when do people need insurance? When their loved ones pass away, when they are critically ill, when they are hospitalised, when they are disabled. But by the time those things occur, you need also cannot buy. Just like the life jacket on the aircraft.
If I ask anybody who has traveled on a plane before where the life jacket was, everybody will say under the seat. But the truth is do we actually know if it is physically there? We do not even pay attention to the air stewardess when she is explaining how to put on the life jacket, which tube to blow into to inflate, when to pull the tab to inflate the life jacket. We take it for granted that the plane will not fail.
And isn't that what we do in life? We take it for granted that all will be fine. We think we will never die, never fall sick, never get hospitalised never need that life jacket under the seat.
And that's the difference in life and on the plane. You know that if the plane was to fail and you hear the captain telling you to put on the life jacket, you can be rest assured the life jacket is there. If its not and if you survive the plane failure you can sue the airline company later.
What about life? When one is in an unfortunate incident, are we able to pull that life jacket out from under the seat? At the point when you actually need that life jacket can you tell the insurance company you want to buy one now? Who do you sue if you manage to come out of it. Will you still be able to live life at your current standard of living or has most of your assets been used for the medical and other cost?
That's where financial planning comes in. And yes I know this term has been used too loosely and its been abused by many. Many advisers tell people financial planning but eventually push a product and yes I understand its because of these people that many refuse to refer.
If you have read my earlier post, financial planning is a process where one go through what an accountant will do for the company. We first see an individual or family cash flow and net worth. This allows one to see if the individual or family is overspending. We see if the assets are allocated properly to achieve a desired return. We use past expenses and current assets, project them into the future with inflation and rate of return. We will then choose risk management theories to mitigate our risk. Then we implement solutions suitable for one's situation. After the implementation of the solutions, we become auditors. We need to monitor and review if the solutions implemented are still relevant. Certain events will render one's solution irrelevant, events like: getting a promotion, changes in expenses or income, buying a property, getting married, having a kid, kid going to school, retirement, changes to the economy, inflation, changing government policies, strike 4D, TOTO, big sweep. This list is not exhaustive.
So if you are reflecting on what kind of solutions you have and it has not been audited for some time, better consider doing one. Because many of the events mentioned above WILL happen, and the time to do something about it is NOW! And that is called planning. Stop taking things for granted because we do not have a life jacket like we do on a plane. And just like the life jacket we never want to use it but we are at peace its there. We may not want to use all the solutions in our financial plan but be at peace it is there.
So pick up your phone and give your financial adviser a call, tell them you want your plans reviewed. If you do not have one drop me an email tngjinyau@gmail.com or call, text, whatsapp 9180 3448. And if you still think its not going to happen to me, think again..
I apologise to those who take offence to this post so close to Chinese New Year. But my heart felt condolences go out to my friend and his families who has lost someone close.
To all my Chinese friends Gong Xi Fa Cai.
