Learn how to futureproof your financial goals with strategic planning and Manulife InvestReady Growth as your investment partner.
Many Singaporeans dream of achieving financial independence and enjoying a comfortable or early retirement. However, not many of us actually set out a financial plan to achieve these goals due to a lack of time or expertise.
As they say, “Those who fail to plan, plan to fail”.
So how can Singaporeans start to plan for their financial future?
In this article, we’ll explore how to kickstart your financial planning and investment journey, including Manulife InvestReady Growth which can help you along the way!
Table of Contents
- Financial Planning 101
- Why Invest?
- Things to Consider Before Investing
- How to Invest as a Singaporean?
Financial Planning 101
While the term “financial planning” may sound intimidating, you’ll be able to get a good grasp of it by the end of this section.
The first step to financial planning is quite simple. All you need to do is track your income and expenses for a few months before creating a budget that suits your lifestyle.
Doing so provides you with an overview of your cash flow or how much money is coming in and going out of your bank account(s). If you’re unsure how to do it, many financial blogs, such as SingSaver, provide articles on tracking expenses and setting up a budget.
The next step would be to protect your wealth by establishing an emergency fund that covers at least 3-6 months’ worth of expenses and obtaining appropriate insurance coverage.
According to the Life Insurance Association Singapore basic financial planning guide, you should obtain insurance protection for:
- Death & Total Permanent Disability: 9x your annual income
- Critical Illness: 4x your annual income
You should also familiarise yourself with national schemes that you are already covered under, such as MediShield Life for large healthcare bills and CareShield Life/ ElderShield for long-term care in case of severe disabilities.
Finally, plan your finances from now till your retirement by saving and investing to achieve your financial goals.
To recap, financial planning consists of:
- Tracking expenses and budgeting
- Protecting your wealth
- Saving and investing to reach your financial goals
Why Invest?
If you’re new to investing, this may sound even more intimidating than financial planning. However, it’s important to understand that investing is not equivalent to gambling. It involves making well-informed and strategic decisions to grow your wealth.
Most of us have a bank account that pays us a small amount of interest on our funds, with the base interest rate giving us a meagre 0.05% per annum (p.a.). While you may be able to jump through some hoops to get a higher interest rate on your bank account, it is a challenge to beat inflation.
What is inflation, though? Inflation is the rate at which the cost of goods and services goes up over an extended period of time, causing your purchasing power to decrease. In short, inflation means your money might not stretch as far today as it did previously Thus, if you leave money in the bank without investing it, you could risk missing out on potential growth opportunities while inflation affects its value.
Investing is a way to build wealth and achieve financial goals. It allows your money to potentially grow over time, benefiting from compound interest, which makes early investments particularly valuable.
Not just that, investing also provides financial security, creating a cushion for emergencies and retirement. By diversifying across various asset classes, you can reduce risk and increase potential returns. Additionally, certain investments generate passive income, while others offer tax advantages. Investing helps protect against inflation and can aid in achieving personal financial objectives like buying a home or funding education. Ultimately, a tailored investment strategy can enhance financial literacy and facilitate legacy building for future generations.
Things to Consider Before Investing
Before investing, it's essential to consider several key factors to ensure your strategy aligns with your financial goals.
First, assess your financial situation, including your income, expenses, and existing debt, to determine how much you can afford to invest. You’ll also need to ensure that you have an emergency fund and insurance to protect your wealth.
Next, you’ll need to clarify your investment objectives—whether you're aiming for long-term growth, short-term gains, or income generation—as this will guide your choices.
Understanding your risk tolerance is also crucial. Different investments carry varying levels of risk (even to the point of losing your principal investment sum), and it’s important to choose those that match your comfort level. Additionally, consider your investment horizon. How long do you plan to invest before needing access to your money? This decision can influence your asset allocation, as some investment types, like stocks and bonds, are more liquid than others and could boost your financial flow in the shorter term.
Lastly, stay informed about market conditions and economic trends, and think about diversifying your portfolio to mitigate risk. Taking these factors into account can help you make informed investment decisions that support your overall financial strategy.
How to Invest as a Singaporean?
The options available to invest are vast, which is why many companies and individuals prefer or require financial professionals to handle their investments. As we all know, Singapore is a fast-paced society and many of us do not have the time to familiarise ourselves with investment tools and understand market trends.
Thus, having a trusted professional to handle your finances till retirement is often the better option.
If you’re looking for a way to protect your wealth and invest to achieve your financial goals, Manulife InvestReady Growth is a great way to kickstart your investment journey.
The whole-life investment-linked plan invests 100% of your regular premiums into your choice of funds while giving you ample flexibility to top up or withdraw your money.
Manulife InvestReady Growth not only invests and helps you achieve your financial goals, but it also gives you coverage against death and terminal illness at a higher sum of 101% of your total premiums paid or account value.
Moreover, you’ll receive several bonuses that include:
- Welcome Bonus: Get a head start with additional bonus units in the first policy year
- Annual Premium Bonus: Receive additional bonus units in the first policy year when you pay your premiums annually
- Premium Bonus: Receive additional bonus units for continued premium payments
- Booster Bonus: Receive a one-time bonus if your account value is equal to or lower than your invested amount at the end of your Minimum Investment Period (MIP)
- Loyalty Bonus: Enjoy a yearly Loyalty Bonus after the end of your chosen Minimum Investment Period (MIP)
Manulife InvestReady Growth isn’t the same as just buying a stock or fund on your own. You’ll also benefit from the expertise of Manulife’s financial consultants, who will guide you through planning and support you throughout your investment journey, ensuring you make the right financial choices as a Singaporean!
Additional Welcome Bonus Promotion: Limited time offer - Invest today and enjoy a 5% Additional Welcome Bonus on the first year Basic Premium. Additional Welcome Bonus Promo T&Cs apply.
Invest-to-win Promotion: From now till 31 December 2024 - Purchase a Manulife InvestReady Growth plan and stand a chance to win an iPad Pro AND an unforgettable trip to Paris for 2 people, with business class tickets and a 2-night stay at a 5-star hotel! Promotion. Invest to Win Extravaganza Promo T&Cs apply.
Terms and conditions apply. Please refer to Manulife InvestReady Growth Product Summary for more information.
Important Notes
Manulife InvestReady Growth and its supplementary benefits are underwritten by Manulife (Singapore) Pte. Ltd. (Reg. No. 198002116D). This advertisement has not been reviewed by the Monetary Authority of Singapore. Buying a life insurance policy is a long-term commitment. There may be high costs involved if you terminate the policy early, and your policy’s surrender value (if any) may be zero or less than the total premiums paid. Your investments are subject to investment risks, and you may lose the principal amount invested. The performance of the InvestReady Growth Fund(s) is/are not guaranteed. The unit prices and any income accruing to it may fall as well as rise. The fund managers shall have the absolute discretion to determine whether a distribution is to be made in respect of the InvestReady Growth Fund(s) as well as the rate and frequency of distributions to be made. The intention of the fund managers to make the distribution and the distribution yield for the InvestReady Growth Fund(s) is not guaranteed, and the Fund Managers may review the distribution policy depending on prevailing market conditions. Distributions may be made out of income, net capital gains and/or capital. Past distribution yields and payments are not necessarily indicative of future distribution yields and payments. Any payment of distributions by the InvestReady Growth Fund(s) may result in an immediate decrease in the net asset value per unit.
This article is for your information only and does not consider your specific investment objectives, financial situation or needs. It is not a contract of insurance and is not intended as an offer or recommendation to purchase the plan. You can find the full terms and conditions, details, and exclusions for the mentioned insurance product in the policy contract.
This policy is protected under the Policy Owners’ Protection Scheme, which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the LIA or SDIC websites (www.lia.org.sg or www.sdic.org.sg).
We recommend that you seek advice from a Manulife Financial Consultant or our Appointed Distributors before making a commitment to purchase a policy.
Information is correct as of 19 November 2024.
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