Basic Financial Planning Guide (moneysense.gov.sg)

[royalmix]

Basic Financial Planning Guide (moneysense.gov.sg)

The Monetary Authority of Singapore (MAS) and MoneySense, in collaboration with CPF Board and finance industry associations, have developed a Basic Financial Planning Guide to help Singaporeans take simple steps to enhance their financial well-being.

With so many tips on financial planning out there, it can be hard to ascertain if you are on the right track, especially if you do not have a financial adviser.

To help Singaporeans proactively identify and plug gaps in their financial planning, MAS and MoneySense, together with the CPF Board, Association of Banks in Singapore, Association of Financial Advisers (Singapore) and Life Insurance Association, have developed a Basic Financial Planning Guide with rules of thumb to support individuals taking proactive steps to address their savings, insurance, and investment needs.

From January 2024, this Guide will be available in six customised formats to better match the specific needs of individuals at different life stages.


https://www.moneysense.gov.sg/-/med...ed-basic-financial-planning-guide-7oct23.ashx

https://www.moneysense.gov.sg/-/media/faqs-for-consumers-on-basic-financial-planning-7oct2023.ashx

 

[s0crates]

Anyone find the guidelines useful or controversial?

I find the part on investing too broad/open ended to be useful. Lol even small amount of tbills investment can be deemed as being planning for retirement. Wtf. I won't bother sharing this with my noob friends even if it's government endorsed.

It won't drive any meaningful outcome for anyone.

 

[Nofear40]

Very heavily on insurance…

 

[SBC]

Very heavily on insurance…

Looks like they are huge sponsor of this program

 

[zeroX26]

Anyone find the guidelines useful or controversial?

I find the part on investing too broad/open ended to be useful. Lol even small amount of tbills investment can be deemed as being planning for retirement. Wtf. I won't bother sharing this with my noob friends even if it's government endorsed.

It won't drive any meaningful outcome for anyone.

Notice its called "BASIC". Its useful for young adults fresh into the workforce who really have ZERO knowledge on where to start while googling / social media only presents more noise to them until they are paralysed. I've walked thru basic financial planning with enough young adults to think this guide for them is a good start liao.

 

[lzydata]

Anyone find the guidelines useful or controversial?

I find the part on investing too broad/open ended to be useful. Lol even small amount of tbills investment can be deemed as being planning for retirement. Wtf. I won't bother sharing this with my noob friends even if it's government endorsed.

It won't drive any meaningful outcome for anyone.

At least in the infographic it is clearly stated that t-bills are for short-term investments. And we must not forget that many don't even know about t-bills, let alone other things.

From what I have seen, these guides are a good start.

 

[DevilPlate]

Useful lah….at least create some awareness to start planning for retirement.

 

[DevilPlate]

Very heavily on insurance…

It did state that spend at most 15% of income on insurance which is a good guide.

I have heard some yng graduates spent like almost half of their monthly pay into insurance premiums…..xiong sia.

 

[Mephist0pheLes]

Anyone find the guidelines useful or controversial?

I find the part on investing too broad/open ended to be useful. Lol even small amount of tbills investment can be deemed as being planning for retirement. Wtf. I won't bother sharing this with my noob friends even if it's government endorsed.

It won't drive any meaningful outcome for anyone.

already said basic liao. its meant to be a broad guide to steer ppl towards a general direction. most young adults probably dun even know how much is the appropriate allocation to different financial needs or the options available and jus listen to whatever their agents ask them to buy. some others probably dunno where to start and jus defer their planning (until it is too late).

 

[s0crates]

Notice its called "BASIC". Its useful for young adults fresh into the workforce who really have ZERO knowledge on where to start while googling / social media only presents more noise to them until they are paralysed. I've walked thru basic financial planning with enough young adults to think this guide for them is a good start liao.

Let's see what the take up rate then, or how broadly it will be shared and advocated by people.

Frankly I don't see people sharing any of moneysense articles or ifl content, mainly because it is too basic, un-insightful to the extent of making statements like "water is wet". That's my opinion.

Let's see if the newbies on the street remembers or even know of these guidelines 6 months down the road.

 

[SantyBalls]

i mean rather than putting in so much effort to catch scummy insurance agents, better to educate the public right?

the closest thing to this was moneyowl by ntuc, which now nomore.

 

[zeroX26]

Let's see what the take up rate then, or how broadly it will be shared and advocated by people.

Frankly I don't see people sharing any of moneysense articles or ifl content, mainly because it is too basic, un-insightful to the extent of making statements like "water is wet". That's my opinion.

Let's see if the newbies on the street remembers or even know of these guidelines 6 months down the road.

Sample bias. If the population you mix around with is largely a homogenous one, then there's nothing unusual about not seeing pple sharing these articles. I for one usually share such information with the much younger folks I know who are attempting to understand how to manage their finances as part of their adulting life.

 

[BBCWatcher]

Anyone find the guidelines useful or controversial?

This part is just wrong:

Obtain insurance protection for:
• Death & Total Permanent
Disability: 9x annual income
• Critical Illness: 4x annual income

You don’t need a death benefit if you don’t have any dependents!(*) And where’s the Disability Income Insurance, which you actually do need — and more urgently than CI?

It did state that spend at most 15% of income on insurance which is a good guide.

It doesn’t. It says, paraphrasing , “Go ahead and spend more than 15% when you buy whole life insurance.” Ugh.

(*) The traditional argument is that, “Oh, you’ll have dependents in the future.” Well…has anyone looked at Singapore’s total fertility rate lately?!? This is the 2020s, and this modern society just isn’t having many children. Would it have killed them to put, “If you have at least one dependent…”? Somehow they found room for a pro-whole life insurance footnote but failed to mention dependency.

 

[RedsYWNA]

Curious that the investment advice on unit trust and ETFs made no mention of diversification and cost. While being so specific on insurances...

 

[BBCWatcher]

Curious that the investment advice on unit trust and ETFs made no mention of diversification and cost. While being so specific on insurances...

Specific and wrong on insurance, and no guidance on investment concepts like diversification, costs, and discipline (dollar cost averaging). For all anyone knows after reading this infographic it’s a great idea to “invest” all savings (after buying lots of whole life insurance) in a gold unit trust with a 3% sales charge and 2% expense ratio.

This infographic could be better, a lot better.

 

[s0crates]

Well... This infographic is produced in collaboration with the folks that are selling the expensive financial products no? Lol. These are the exact guys that will use this infographic to newbies and claim that buying too many policies, or buying expensive financial products, are government endorsed.

Association of Banks Singapore, life insurance association of Singapore, association of financial planners.

Still think this is a good starting point for beginners? LOL

 

[s0crates]

It is very naive of us to believe that the government is acting in the best interest of us with this kind of content.

You look at the members under those associations. The likes of Prudential, AIA, DBS etc hires thousands of people who pay huge personal income taxes and the companies themselves pay huge corporate taxes.

What happens to these agents and these companies if government endorsed buying term insurance, and on a needs only basis? Job loss, less taxes for government, even though it is objectively better for consumers .

Unless you guys are saying that the government don't know buying low cost index funds and term insurance products are better? Hahahaa

 

[royalmix]

https://www.dbs.com.sg/personal/art...EgxI8R4aQjGLi-cw5tNOEKKQgZTsjlMacxhLBOpyqOlkA

Tips from DBS website (extracts):​

Factors to consider when using the Guide

1. Do a financial needs analysis
The guide lays out basic and simple steps to set up a financial plan that are broadly applicable to most. This means that the guide may not cater to every individual’s specific needs, circumstances, and preferences.
While it provides guidance on how you can meet your key and basic financial planning needs, it is not exhaustive.
As such, consumers are strongly encouraged to do a financial needs analysis either by themselves or with a professional financial adviser to assess their situation, before making informed decisions on the steps to fulfil their financial objectives.

2. Deviation from Rules of Thumb
As part of the financial needs analysis process, financial advisory representatives are required to take into consideration the customer’s specific needs, and this could mean recommendations which deviate from the new guide.
Of course, there should always be a reasonable basis for recommending the solution.
For example, the level of adequate emergency funds could differ from person to person. While individuals who enjoy a steady paycheque can make do with at least 3 to 6 months of emergency cash, freelancers with unpredictable income may require 12 months or more to account for unexpected lull periods in their income.
In the same vein, an individual’s insurance and investment needs will differ depending on his specific circumstances, such as affordability, number of dependants, risk profile and time horizon. This means he may require insurance covers that have lower or higher cover and/or risker investment solutions, than the rules of thumb indicated in the new guide.
While the rule of thumb indicates spending up to 15% of salary on insurance protection (such as term and medical plans), do note that this excludes premiums for bundled products such as whole life insurance as they contain both investment and protection elements.
Integrated Shield Plans are also not mentioned in the new guide but may be a suitable additional health cover for those who desire a higher level of medical care.

3. Upgrade your knowledge and review your financial plan
The new guide is an additional resource and an avenue to upgrade your financial literacy and build a strong financial foundation. Putting in place a good financial plan is a gift to your loved ones and to yourself.
It is a prudent to constantly review your financial plan. For example, should you find that you have purchased more or less coverage compared to the guide’s rules of thumb, you may wish to review your needs and preferences, to determine if your existing coverage continues to suit your unique circumstances.
After all, it is common for consumers to adjust their insurance coverage at different life stages given that their needs and preferences would evolve over time.
Reviewing your financial plan will also enable you to allocate and invest your financial resources in different asset classes for diversification, and build a portfolio that is better aligned to your situation, risk profile, objectives and time horizon.

 

[royalmix]

Financial Planning is a personal decision.

When I started working, I bought whole life insurance (death, tpd, ci) as my parents are my dependents. I travel overseas on the job, so I see a need for whole life insurance as I do not want to pay and lose if nothing happens and I could afford this savings plan. I do not see a need for other insurance as my company covers me for medical and hospitalisation. That was at this early stage of my career. Needs do change as I progress and so do my financial plan.

Everyone's needs and consideration is different, so long you know what you are doing.

Now so many types of insurance is mandatory: Medishield Life, Careshield Life and CPF Life (longevity), so there is less decisions or financial planning considerations to be made

 

[Okenba]

Financial Planning is a personal decision.

When I started working, I bought whole life insurance (death, tpd, ci) as my parents are my dependents. I travel overseas on the job, so I see a need for whole life insurance as I do not want to pay and lose if nothing happens and I could afford this savings plan. I do not see a need for other insurance as my company covers me for medical and hospitalisation. That was at this early stage of my career. Needs do change as I progress and so do my financial plan.

Everyone's needs and consideration is different, so long you know what you are doing.

Now so many types of insurance is mandatory: Medishield Life, Careshield Life and CPF Life (longevity), so there is less decisions or financial planning considerations to be made

I'm very certain most people don't know what they are doing.
Most buy insurance based on personal relationships and trust.
Even those who *think* they know what they are doing may not know what they are doing.