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Help needed. Newbie mistake

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Old 15-01-2020, 08:01 PM   #1
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Help needed. Newbie mistake

Hi guys, I'm a 21 years old Poly graduate just coming out to work (I'm a regular). Earning a gross income of about 3k and taking home 2.4k per month, I naturally wanted to start saving as well as investing. I planned out a budgeting plan of saving $1500 per month into my savings accounts. (Split between $1000 in a POSB savings account and $500 into a OCBC account)

The reason why I split the amount is because I plan to use the $500 to invest in the future once I study and read up a bit on it. Due to tough training, I never really had time to do an in depth research into this topic.

Long story short, I was contacted by this insurance agent from Great Eastern and he introduced me to 2 plans. GE Life Advantage and GE Flexi Cashback. His method of approach was really shady looking back in hindsight but I'll skip that for now. Being a young and naive kid (I really regretted it) I signed for it and did not actually used the free looking time to research on it. Now that I did, I realised I've signed up for one of the worst plans. An ILP plan.

The amount I allocated each month to the plans are $300 to GE Life Advantage and $200 to GE Flexi Cashback. Needing an advanced payment of up to 2 months. I've already paid 1k to GE. What should I do? Should I cancel it, or is there a chance I can ride through it and not make a loss since I'm still young and the insurance part should not be too expensive?

Sorry if I am asking stupid questions but I am really new to this and I really do not want to burn any more money on this.
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Old 15-01-2020, 08:33 PM   #2
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If it is within 14 days freelook period, just cancel and get back your money.
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Old 15-01-2020, 08:33 PM   #3
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Are you still in the cooling-off period? Then you can cancel and get a refund.
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Old 15-01-2020, 08:35 PM   #4
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Sadly the freelook period is over
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Old 15-01-2020, 08:48 PM   #5
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Sadly the freelook period is over
I'd just say the following:

1) Keep the Flexi Cashback but choose the option of accumulation (instead of getting the cashback)

2) Surrender the GE Advantage (cut loss)
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Old 15-01-2020, 09:00 PM   #6
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If you can "sacrifice" the $500/month, keep until it breaks even then sell. Should take a couple of years. The opportunity cost is not that bad if you go calculate how much you can earn using say 500x12x3=30k. At an average of 3% a year it only earns $800 after 3 years.

Else be decisive and cut loss now, but you lose 1k immediately.
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Old 15-01-2020, 09:01 PM   #7
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Hi guys, I'm a 21 years old Poly graduate just coming out to work (I'm a regular). Earning a gross income of about 3k and taking home 2.4k per month, I naturally wanted to start saving as well as investing. I planned out a budgeting plan of saving $1500 per month into my savings accounts. (Split between $1000 in a POSB savings account and $500 into a OCBC account)

The reason why I split the amount is because I plan to use the $500 to invest in the future once I study and read up a bit on it. Due to tough training, I never really had time to do an in depth research into this topic.

Long story short, I was contacted by this insurance agent from Great Eastern and he introduced me to 2 plans. GE Life Advantage and GE Flexi Cashback. His method of approach was really shady looking back in hindsight but I'll skip that for now. Being a young and naive kid (I really regretted it) I signed for it and did not actually used the free looking time to research on it. Now that I did, I realised I've signed up for one of the worst plans. An ILP plan.

The amount I allocated each month to the plans are $300 to GE Life Advantage and $200 to GE Flexi Cashback. Needing an advanced payment of up to 2 months. I've already paid 1k to GE. What should I do? Should I cancel it, or is there a chance I can ride through it and not make a loss since I'm still young and the insurance part should not be too expensive?

Sorry if I am asking stupid questions but I am really new to this and I really do not want to burn any more money on this.
I assume by 1k you mean 2 months of $500 each right? If I were you I wld just take the 1k loss
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Old 15-01-2020, 09:02 PM   #8
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It is still early to cut loss.

Treat it as a tuition fee.

After cutting loss, you can make a better investment plan.
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Old 15-01-2020, 09:47 PM   #9
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If you can "sacrifice" the $500/month, keep until it breaks even then sell. Should take a couple of years.
That's a big drain with $2,400/month of take home pay. It'd be really helpful to gain some financial "altitude" sooner rather than later.
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Old 15-01-2020, 10:05 PM   #10
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I say cut loss. Surrender GE Life Advantage.

FYI on one of the threads not long ago:
https://forums.hardwarezone.com.sg/m...k-6092410.html
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Old 15-01-2020, 10:08 PM   #11
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It is still early to cut loss.

Treat it as a tuition fee.

After cutting loss, you can make a better investment plan.
agree better cut loss now

500 a mth on a 3k gross is a huge commitment

i think breakeven would take much longer than 2yrs ... usually ILP, first year premiums are not even invested (from my own ILP experience)

as for the Flexi Cashback, I m guessing at least a 15yr holding period before it is somewhat meaningful and again no guarantee ... the BI shld be able to tell
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Old 16-01-2020, 04:29 AM   #12
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The good news is that you have only paid for 2 months. This makes the pain of canceling and cutting loss a lot more bearable than those that have paid annual.

Seriously $6k/year is a crazy amount of money to be spending on insurance products for a fresh grad.

Sadly, that agent will be pocketing about 50% of what you have paid and will just continue to find the next sucker to sell his products to.
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Old 16-01-2020, 07:23 AM   #13
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Cancel to min loss. Have friend who have paid 10k to date after 5 years and has no choice but to hold on until the ILP makes a profit. FYI current value is around 6-7k so far
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Old 16-01-2020, 08:41 AM   #14
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If I were you, I will surrender all.
But why did you fall for a "he".
I am very comfortable in saying NO to male agent/seller.
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Old 16-01-2020, 08:56 AM   #15
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Cancel it.

1k is cheap learning cost.

Frankly as a regular you are in a good shape as compared to the rest of your peers.

Save up your emergency funds.

Set up your insurance policies (term).

Save up for investment while you are learning more.

You have 3 advantage.

1. $
2. Time till retirement
3. Time to learn before investing
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