What do Long term Financial Plan mean??
It mean your retirement, your insurance. This are the pillar of the pyramid. You get them right, you get them strong, if anything happened to you, you got money, you can come back again.
For Singaporean, average protection coverage is about 500k.
Retirement needs is approx 2 Mil, which can last for 15 years at 5k permth.
You get these right and the short term or medium additional income from investment or endowment plan will supplement the shortfall bit by bit.
Then Why long term first?
Imagine, if you trade on stocks now without any long term financial plans. 2 scenario will happen.
1)If you make money, in the short or medium term, you are good. You are happy. You can proceed with the long term goal.
2) If you dont make money and lost some, you cant fulfill your short term goal. You will have difficulty getting your long term financial plans. You suffer. You think that just dont think about it, hope that things will turn well. Most of the time it would turn worst.
On the other hand, if you get your long term financial plans right, tendency are you will still allocate some cash to build up your long term goal, at the same time you do other short and medium term plans. If you fail in the short of medium term plans, you still have your long term plans.
So which one is a safer bet for your life? Would you like to have your investment return to buy a house, go holiday or pay for medical expenses? If you do not want to get a protection, the tendency are when trading you wont obey the cut lost price too. So rethink you financial planning. Rethink your strategy.
