16 June 2011

Financial Planning Tips for Young Working Single Guys

When I was in early 20 years old and started working as a rookie, my salary was considered as low as I was not a lawyer / accountant / doctor. However, due to the lower living cost, I was able to save the money. The tips which I can think of for youngsters are:
  1. Rent a cheaper room if you do not own a house in your working country.
  2. Buy a house when your EPF or CPF has sufficient amount. Do not buy a big house if its purpose is for your own living purpose.
  3. Do not buy a vehicle if and only if your work does not require you do buy a vehicle. It can save a lot of money as a vehicle can depreciate in value for quite a lump sum amount a year. You can consider to buy a 2nd had car with low mileage. 
  4. Save at least 10% a month. Invest it at least twice a year as it is similar to dollar cost averaging. You never know when the market moves up or down. So, always be prepared to the storm. 
  5. Buy a medical card to protect you or reduce the risk for getting critical illness and hospitalization. The medical costs / operations cost is very high in cities such as Singapore or Kuala Lumpur. You must get a good financial adviser so that he knows your needs and provide you the most suitable financial solutions. 
  6. Invest in higher risk asset classes by starting with a small amount. Please do not start a very big amount in initial place. As market will drive you greed or fear, my suggestion to youngster is to invest in average amount in different time frame. When your investment skills grow, then you can leverage the amount in Real Estate Investment or Stock/Shares investment. 
  7. Remember to keep at least 6 months expenses for your emergency fund. I know that you will think it is a waste to put aside a large amount for gaining a very little interest in bank even for fixed deposit. However, it can give you assurance to invest in long term without worries of cash flow shortage in short run.
Related Posts:
  1.  You can be your own fund manager - Part 1
  2. Savings + Investing = Financial Freedom
  3. My Equity Portfolio Construction Process
  4. Long Term Investment Applies to 'Good' 'Business' 'Company'
  5. My Way of Portfolio Rebalancing
  6. Save Money for Your Future
  7. Determination - Path to Success Investment

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