Crafting a Personal Financial Planning in Singapore

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financial planning singapore

Our schools haven’t taught us to have a good relationship with money. If we had strong financial principles ingrained in us when we were young, as adults we wouldn’t be so clueless. To live a good life that can set you up for the future isn’t hard. You also don’t have to revolve your life around money, where you are penny pinching and trying to control your expenditure with a host of apps that help you keep your budget to a minimum.

All you need is to be very aware of your financial situation and have very strong do’s and dont’s.

This is all you need.

The main difference between normal people and wealthy people is they put their money to work. Saving your monthly salary and having it in cash is just pointless. Learn to put your money to work. Another very important tip is to make sure you are bringing more money into your kitty instead of deciding to become a budget nazi. The focus should be on increasing your income and your way of life, instead of trying to budget and live like a hermit. These are some of the important things we are going to cover in this article. So let’s get to business.

  • Figure out how much money you are actually making on a monthly basis.

You can obviously tell yourself this. How much are you making, and how much are you bringing in on a monthly basis. This will give you a good idea of where you stand. Find out if what you are getting paid is according to industry standard. If it is then good, if it is not, then what can you do about it?

  • You have to change your job
  • You have to add more skills to your resume
  • You might have to get a degree that pushes you up the corporate ladder

The point of this exercise is to make sure you are getting paid enough from your day job. If you can do better, you should always gun for doing better. Other things you can do is

  • Spruce up your profile and make yourself marketable
  • Work on Public Speaking and do sessions outside your workplace which builds your brand and brings in head hunters.
  • Constantly keep updating your skillset to the latest standards.

2. How much do you need to live a good life?

This is obviously subjective, and I’m asking you the question. What is good enough for you? Use this expense list to factor in your expenses

  • Monthly Rent or a Mortgage
    • Internet
    • Electricity
    • Water
  • Fuel Expenses including the trips that you take in your car
  • Grocery and Food Expenses
  • Monthly recreational expenses – Outings, Dinner, Night Outs
  • Clothing and Other Products
  • Out of country travels
  • Gifts for Friends and Family
  • Holidays

The point of this is to give you a clear picture of what all your expenses are. For example, your rent and necessities are not going to dent your income because they are expected. It’s the splurging during shopping and expenditure during night outs which really dent the bank balance.

I want you to figure out what your average expenditure during a night out is. And how much you are willing to spend on a monthly basis for recreation.

Avg Spend X Number of Times = Total Amount

So you know how many times you are allowed to get out of the house. You just have to remember this number. If you are allowed to get out 10 times a month. Train to reign yourself till the end of the month before you go out for the eleventh time.

Have a handy list of entertaining things you can do instead of going out. Catch a movie or finish up the book you were reading and make sure you have these non-expensive events in your life that you could always resort to.

3. Invest

Now this is where you need to get smart. Knowing about money isn’t restricted to people only in the finance space. You should know how to Invest, Period.

  • You have the usual investment options like Stocks, Funds and Bonds.  You need to think of options that go way beyond. Your money should work for you means, you should put it in high-growth opportunities.

Spend more time understanding business opportunities and how different businesses make money. For example, all over the world, smoking a shisha (sheesha) has become a big rage among the people. Shisha parlours have crazy margins. You can serve each sheesha for $30 and the cost material for that is under $2. If you have a decent enough space and put a system in place, this parlour can work as a great side business for you. The point of this example was not to get you to start a sheesha parlour, but for you to think of opportunities that you can tap into. By the way, Shisha is been banned in Singapore.

Another great way to use your money is to put it into early stage businesses that are looking for funding. Have you heard of this person called Ram Shriram? I doubt it. He was one of the early investors in Google and his networth is over $1 Billion. Ram Shriram put his money in the perfect place and he din’t have to do anything about it.

What was the difference between getting early into the business and Investing when it IPO’s? You can get a much larger stake when the company is at a the very early stage.

If you could put yourself in a position where you are funding these early stage companies, you put yourself in the fast track to wealth. You could also choose to put your money in businesses that make money if you are not too sure about mobile apps and other latest non-money making business models.

Stock Market

Investing in strong companies that are listed and pay dividends is another way to put your money to good use. Companies that pay good dividends are great because they bring into your account cash apart from capital appreciation. You can invest for life in some businesses that bring constant dividends.

You have to keep making sure that you keep increasing your main income while your putting your saved money to good use. Think of other channels of investment apart from the obvious ones and you will do better than most.

Also read: Try to invest your money properly by knowing what you need to invest on!