My dad came home recently, waiving a factsheet on an insurance scheme that someone had shared with him on his way home.
He thought that the rate of return seemed pretty good but after we went through it, with all the non guaranteed and what nots, it actually turned out to be fairly poor returns.
Insurance has never been on my investment radar. Not that we dont believe in it. We believe in adequate coverage especially for medical, hospitalisation and accidents. It has been so so critical especially since my kids have had a few accidents. One of the serious ones was when my daughter got hit by a racing teenager and she fractured her elbow ( She took more than 6 months to recover!). It was a relief that I just had to concentrate on getting her to hospital and the admission was being settled while we were on our way there. Also, my agent arranged for a specialist who came down in the middle of the night and managed to check her in for an operation in the wee hours of the morning. Of course the bill was an “eye popped out of socket” kind of bill but thankfully she was fully covered.
So, yes, I have fully utilised my insurance benefits and believe that sufficient coverage is very important especially for children.
Anyways, we buy insurance for the sole purpose of insurance. We haven’t found any plans worth buying into for its returns. Thus far, we haven’t been convinced enough by any agent yet about returns, though we are open if there is possibly something worth considering.
Instead, our preferred method of investing is property.It helps that I get an insider view of it as well. We have achieved some degree of satisfactory returns from property so far, hence we are likely to continue with this strategy.
We personally like property because it doesn’t need constant monitoring unlike stocks where if you missed the hour to sell, you might not get that same moment back again. Also, we like that you can leverage, hence your returns are actually magnified. For example, you only need to put in 35K cash to buy a 700K property, but the rental and capital returns will be based on a percentage of 700K rather than on 35K.
Of course there are risks in owning property, but this is where i believe knowledge is key. If we do the homework, study the possible risks and analyse the property on the correct parameters, it should mitigate a lot of the risks. A good agent who will be able to provide advice and recommendations to fit your budget and objectives might be worth a consideration.
With all the change in regulations and huge capital outlay for a property and car in recent months, we are now in the consolidation phase – saving money for possible future investments. However, we recently chanced upon an opportunity for an investment that will pay us 10% per annum. We listened and spoke to the relevant person. The opportunity was great but we had some concerns about the company. After much thought, we decided that it was worth the plunge so we are going to put some money in just to keep our money working hard.
Its been an interesting investing journey thus far, lots more to learn but looming forward to building a decent egg nest for the future.
If you want to make better informed financial decision for your family, one of the most important things you should consider is LPA. You can read up more about LPA and why we (my hubby and I) implement it for our family here.