Security of employment

Jobs are no long secure in Singapore due to the following reasons:
a) global competition
b) outsourcing of jobs in public sector
c) easy entry of foreign workers
d) pro-business environment
e) weak protection of workers and managers

I cite the case of a friend who lost a job after 11 years due to a change of management, as the new management wish to bring in his buddies. The friend had a good testimonial from the previous management. He was given only 3 months of salary as a severence package. He has a family and an elderly mother to support.

In an environment where jobs are not secure, it is important to avoid making financial commitment, such as:
a. buying an expensive home on mortgage
b. raising a family.

Perhaps, it is not necessary for me to raise these points, as many Singpoareans are aware about the sitaution and have decided not to get married or to have children. This is probably the reason why Singapore has perhaps the lowest birth rate among all countries in the world.  This is due to the lack of employment security and the high cost of living in Singapore.

It is important for each person to have a large emergency fund, comprising of personal savings of up to six months of earnings. This fund may have to be drawn down in an emergency. It should be kept in liquid form, and not invested in a inflexible investment, such as a life assurance policy. Read my tips in my book, Practical Guide on Financial Plannng.

For older people who are already committed to a expensive mortgage and a family, it is time to stop further commitments and to build up the emergency fund early.  Search Youtube for the videos by Suze Osman, who is a presenter in CNBC programme. She has been giving the same advice for the past two years, i.e. build an emergency fund.

Tan Kin Lian