Money Is Money

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As your own best financial ally, arm yourself with a decent level of financial literacy. Understand the meaning of opportunity cost, and understand it very well.  

By Kang Beng Hui

“As a young working adult, buy what you want with cash, not credit. If you can’t afford to pay for your wants with cash, you really can’t afford it.”

A parent should start saving for a child’s education expenses as soon as they have the slightest thought of having children.

Whether it is before or after getting married, money is money. If you do not have children as planned, then the money intended for them can still pay for a round the world holiday, or maybe a Birkin.

Question is, do you want a daily premium coffee, or the Birkin?

Opportunity Cost

Understand the meaning of opportunity cost, and understand it very well.

Say, a cup of Starbucks coffee costs an average of SGD 7.00 over the next 10 years.

If you set aside SGD 7.00 a day, four times weekly, that adds up to SGD 28.00 every week.

It amounts to SGD1,456.00 a year.

This amount can be invested at two percent per annum over 10 years, which brings you close to SGD 14,800.00.

The Birkin is the opportunity cost for your daily premium coffee.

Buy With Cash

As a young working adult, buy what you want with cash, not credit. If you can’t afford to pay for your wants with cash, you really can’t afford it.

As your own best financial ally, arm yourself with a decent level of financial literacy, and navigate this info-loaded world with questions.

    • Do I spend or save my pay cheque?
    • Should I pay off debt first, or invest?
    • Is my money working hard for me?
    • Am I insured adequately?
  • Am I paying too much for insurance and investment?

Success lies in having purposeful goals and good habits.

Akin to physical health, financial planning is having an exercise plan where your money sweats for you. It is about eating purposefully, and spending purposefully.

It is not a secret that exercising is good for you on so many levels. Health is wealth. I run at least three times a week, so that I don’t become both old and fat.

Have A Trusted Partner

More importantly, monitor your financial plan. Look out for vital signs periodically.

Research shows that couples who plan their finances together have a higher statistical chance of success.

Compared to someone who goes at it alone, forming good financial habits and investing early together makes achieving sizeable savings much easier.

By setting and monitoring goals with a partner, the temptation to spend unnecessarily through e-commerce platforms becomes more controllable.

Starting Out

To start things off, keep a journal. After a month, you will surprise yourself with knowing, where your money goes.

More importantly, look at insurance policies that offer medical, disability income and critical illness coverage. If you are on a limited budget, at least enhance your MediShield Life.

A term plan that covers death and critical illness is also vital. Ultimately, you want to keep insurance costs low, so that you can have more cash for investments.

“Money is money. It is important to save enough for a year or two when you turn 50.”

Getting Ahead

Today, the availability of financial literature and instruments are much more than before.

If possible, buy assets. These are things that either appreciate over time, or generate an income for you. The more assets you buy at 30, the chances of you becoming financially happier in your 40s and 50s become higher.

At 30 years old, I had an aggressive portfolio of funds and stocks.

I also owned a 980 square feet apartment, and three months’ cash reserves.

I had no fancy cars or watches.

To buy a property in Singapore, aim for 30% down payment, or 15% each with your partner. If you are not making enough, start homeownership with a HDB. Get a second job. It not only gets you extra income, it also leaves you less time to spend.

Plan to Retire

At mid-life, which is 50 years old, you may plan for a sabbatical, take on a less demanding job, or decide to be your own boss.

Money is money. It is important to save enough for a year or two when you turn 50.

Even if you decide to continue working eventually, the savings will help with your child’s education, or contribute to your retirement fund.


Kang Beng Hui is the CEO at FinAlly, the self-help insurance portal aimed at spurring customers to take ownership of their personal finances.

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