Tips for young people

I gave a talk on "Financial Planning for the Young" at the National University of Singapore. My key points are:

1. Save 15% of your earnings after you start work
2. Keep the earnings in a bank account until you have accumulated an emergency fund of 6 months earnings
3. It will take you about 3 years to accumulate this fund. Just keep your savings liquid. Do not think about investing the money.
4. You should avoid investing the money in a life insurance policy or investment-linked policy - as you may need the money in an emergency and there is heavy penalty on early withdrawal.
5. You do not have to worry about buying life insurance until  you start a family. But, if you wish to have life insurance earlier, you should buy a term insurance and pay not more than $30 a month for $300,000 of insurance cover.
6. When you are ready to invest, you should invest in a low cost investment fund, such as the Straits Times Index ETF (exchange traded fund).
7. You should attend the 6 hour workshop organised by FISCA to get more details,

I also told the students to tell their parents and older siblings and relatives to attend the Financial Planning workshop organised by FISCA. They have money and are likely to invest in the wrong products and lose a large part of it. When they found that they were misled or cheated, it is TOO LATE for them to recover their money. They have to spend some time and a small sum of money to get educated to avoid losing BIG MONEY.