(Post 83/week 68)Learning investing/trading together part 16: Practical Guide On Financial Planning (By Tan Kin Lian) part 2

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Continuing on from part 1 here…

11.Good Financial Products

  • Criteria for good financial products: transparent, fair charges and value for money
  • Product traded on an exchange such as stocks are transparent and available to all, you can either be a buyer or seller
  • Invest in renown company stocks that have high volume transaction per day, avoid fund or stock has less than $100 million in asset
  • Once again…avoid insurance saving plan!
  • Stay away from any complex product that you do not understand!
12.A financial adviser
  • Contrarily to the book, Simply, just avoid them or find a trusted financial advisor (or DIY yourself,there are many information about various product on bank websites, there is no need for a financial adviser)
13.How to deal with inflation
  • Simply put, earn more money(1001 way to do this!)
14.Planning at a later stage
  • Start saving early
15.Higher commitments
  • Allocate your saving and expenses according to your income(see part 2:Start a financial plan here)
16.Investing on your own

  • Before investing in the stock markets, you should be aware of the following risks:
  • Poor performance of invested company
  • Failure to take up right issues
  • High expenses of trading
  • Bad timing decisions
  • Trading in shares requires a close knowledge of the market, most of the individual investors like you and me do not have the time or resources to monitor the market, that is our disadvantages against a large fund
  • Investment research information is more readily available to large fund, they are able to act quickly to take advantage of the news.
  • On the other hand, our advantages are that we are able to hold on our stocks throughout the bad times, large fund have to consistently make a profit and show results to shareholders
  • We may end up selling at a low price or buying at a high price due to the delay in getting relevant information
  • When a company makes a right issue, new shares are available for a discount, existing shares are diluted and drop in value
  • Hence, avoid companies that have a habit of making rights issue regularly
  • Don’t rely on an investment tip
  • In a bull market, investor make a profit by buying shares
  • In a bear market, investors sell their shares

17.Cost of term insurance

  • Get one of this,I got one under the SAF Aviva
  • Term insurance will pay out after a person death

18.Cost of health insurance

  • Get one of this

19.Cost of life insurance

  • Also, get one of this

20.The fun of gambling
  • Don’t start gambling, simple as that, unless its new year!
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