1 00:00:02,880 --> 00:00:05,210 Speaker 1: You're listening to AC N A podcast. 2 00:00:07,750 --> 00:00:12,170 Speaker 2: Hello, everyone. It's Andrea Heng. You are listening to the 3 00:00:12,180 --> 00:00:15,710 Speaker 2: Money Talks podcast and this is where we discuss all 4 00:00:15,720 --> 00:00:20,969 Speaker 2: things money. Now, if you haven't already, please follow us 5 00:00:20,979 --> 00:00:25,090 Speaker 2: on Spotify. We're also on Apple podcasts and youtube music 6 00:00:25,100 --> 00:00:28,670 Speaker 2: because that way you'll be the first to know when 7 00:00:28,680 --> 00:00:32,479 Speaker 2: a new episode of Money talks drops. Ok. Alright. So Jaini, 8 00:00:32,939 --> 00:00:34,759 Speaker 2: my producer is in the studio with 9 00:00:34,881 --> 00:00:38,180 Speaker 2: me and she is about to hit me with some 10 00:00:38,191 --> 00:00:42,460 Speaker 2: news headlines, Jan hit it when I say Bukit Timah. 11 00:00:42,470 --> 00:00:47,040 Speaker 2: What comes to mind? Oh, ok, Botanic Gardens. That's one 12 00:00:47,050 --> 00:00:54,529 Speaker 2: but also more significantly those good schools, big bungalows, basically 13 00:00:54,541 --> 00:00:57,951 Speaker 2: everything that's out of my price range. Certainly an elite 14 00:00:57,960 --> 00:01:00,570 Speaker 2: part of Singapore. Let's not lie to ourselves. Yes. Ok. 15 00:01:00,581 --> 00:01:01,901 Speaker 2: So Bukit Timah is going to 16 00:01:02,012 --> 00:01:05,202 Speaker 2: go through some changes, not now, but in about 20 17 00:01:05,211 --> 00:01:08,671 Speaker 2: years from now, M and D has announced that 15 18 00:01:08,681 --> 00:01:13,001 Speaker 2: to 20,000 public and private homes are being planned at 19 00:01:13,012 --> 00:01:16,291 Speaker 2: the future turf city housing estate. This is the first 20 00:01:16,302 --> 00:01:18,372 Speaker 2: time in about 40 years that there's going to be 21 00:01:18,382 --> 00:01:22,041 Speaker 2: public housing in Bukit Timah. So for the flats. Experts 22 00:01:22,052 --> 00:01:24,722 Speaker 2: are saying that they're likely to be under the prime location, 23 00:01:24,732 --> 00:01:28,151 Speaker 2: public housing model and make up no more than 40% 24 00:01:28,162 --> 00:01:29,030 Speaker 2: of the new home. 25 00:01:29,142 --> 00:01:33,002 Speaker 2: Ok. No surprises there, obviously because it's a prime location. 26 00:01:33,053 --> 00:01:37,122 Speaker 2: So let's talk numbers. How much would these cost? Obviously, 27 00:01:37,133 --> 00:01:39,672 Speaker 2: it is hard to pinpoint now. But according to experts 28 00:01:39,682 --> 00:01:42,922 Speaker 2: quoted by CN A four room flats are likely to 29 00:01:42,932 --> 00:01:46,343 Speaker 2: be about 600,000 sing dollars. Can't wait to see how 30 00:01:46,352 --> 00:01:48,623 Speaker 2: it's all going to shape up what's next? Ok. In 31 00:01:48,633 --> 00:01:51,623 Speaker 2: keeping with the homes theme H DB has announced a 32 00:01:51,633 --> 00:01:55,123 Speaker 2: new type of flats will be piloted in the upcoming 33 00:01:55,133 --> 00:01:56,172 Speaker 2: Kallang WB 34 00:01:56,424 --> 00:01:59,893 Speaker 2: project and they are calling these white flats. Ok. What 35 00:01:59,903 --> 00:02:04,374 Speaker 2: exactly are white flats? When you're invited to pick your flat, 36 00:02:04,384 --> 00:02:07,134 Speaker 2: you can choose a white flat which won't come with 37 00:02:07,143 --> 00:02:11,274 Speaker 2: partitions or beams. So basically, it's an open concept flat, 38 00:02:11,282 --> 00:02:15,074 Speaker 2: one big space for the living room and the bedroom, right? 39 00:02:15,214 --> 00:02:17,413 Speaker 2: Do you think this is a good idea? I think 40 00:02:17,423 --> 00:02:20,524 Speaker 2: it is because there tends to be this pattern of 41 00:02:20,532 --> 00:02:23,123 Speaker 2: especially younger folks where they want these 42 00:02:23,404 --> 00:02:27,395 Speaker 2: open expansive spaces in an H DB flat. And I 43 00:02:27,404 --> 00:02:30,663 Speaker 2: think this way they immediately get to see what it 44 00:02:30,675 --> 00:02:33,794 Speaker 2: looks like. But the thing is it's about having options also, right. 45 00:02:33,804 --> 00:02:36,464 Speaker 2: So what if you want the beam back at that space? Exactly. 46 00:02:36,475 --> 00:02:38,865 Speaker 2: So Minister Desmond Lee has said that this will cater 47 00:02:38,875 --> 00:02:41,615 Speaker 2: to young people who want more flexibility in the way 48 00:02:41,625 --> 00:02:44,904 Speaker 2: they renovate their homes. But of course, it remains to 49 00:02:44,913 --> 00:02:47,884 Speaker 2: be seen what the price difference will be between the 50 00:02:47,895 --> 00:02:50,454 Speaker 2: white flats and their traditional counterparts. 51 00:02:52,389 --> 00:02:55,899 Speaker 2: So if you've been following me on Instagram and tiktok, 52 00:02:55,910 --> 00:02:58,190 Speaker 2: then you would know about a new feature of the 53 00:02:58,199 --> 00:03:01,899 Speaker 2: Money Talks podcast and that's the money talks challenge. So 54 00:03:01,910 --> 00:03:05,549 Speaker 2: for the first Money Talks challenge ever, my producer Juna 55 00:03:05,800 --> 00:03:09,880 Speaker 2: challenged me to take public transport throughout the month. Here's 56 00:03:09,889 --> 00:03:13,228 Speaker 2: a disclaimer. I only need to think about the ride 57 00:03:13,240 --> 00:03:16,279 Speaker 2: home because my right to work in the early morning 58 00:03:16,288 --> 00:03:19,258 Speaker 2: because I host the morning show on radio that's covered 59 00:03:19,270 --> 00:03:21,038 Speaker 2: by the company. So 60 00:03:21,210 --> 00:03:23,339 Speaker 2: just to give you an idea, a cab ride home 61 00:03:23,350 --> 00:03:27,299 Speaker 2: from work for me is roughly $20. And if I 62 00:03:27,309 --> 00:03:29,799 Speaker 2: have errands to run, which is mostly in town, a 63 00:03:29,910 --> 00:03:34,830 Speaker 2: ride home is about 17 to $18. But that fee, 64 00:03:34,839 --> 00:03:38,289 Speaker 2: it buys me time and that's priceless because that journey 65 00:03:38,300 --> 00:03:42,509 Speaker 2: takes me just 20 minutes. So in contrast, the average 66 00:03:42,520 --> 00:03:45,729 Speaker 2: fare home via train and bus because that's just what 67 00:03:45,740 --> 00:03:49,770 Speaker 2: my journey home entails is a nifty 2 to $3. 68 00:03:50,100 --> 00:03:53,850 Speaker 2: Then while it saves me money, it's also a one 69 00:03:53,860 --> 00:03:58,339 Speaker 2: hour 45 minute journey home. Almost two hours. That's a 70 00:03:58,350 --> 00:04:02,919 Speaker 2: long time spent and it's time I can't get back. 71 00:04:02,929 --> 00:04:05,880 Speaker 2: So while this has been a wallet friendly experiment, it's 72 00:04:05,889 --> 00:04:08,649 Speaker 2: also taught me things that have absolutely nothing to do 73 00:04:08,660 --> 00:04:12,919 Speaker 2: with money, proper planning, multitasking on the go even taking 74 00:04:12,929 --> 00:04:15,529 Speaker 2: the chance to slow down and refresh my mind with 75 00:04:15,539 --> 00:04:18,899 Speaker 2: a podcast or even catching up on articles for work. 76 00:04:19,428 --> 00:04:24,089 Speaker 2: Well, the conclusion now is do the intangible benefits outweigh 77 00:04:24,100 --> 00:04:27,850 Speaker 2: the benefits? I see in my bank account. Not always, 78 00:04:27,910 --> 00:04:31,390 Speaker 2: but I believe they are worth counting anyway because let's 79 00:04:31,399 --> 00:04:35,790 Speaker 2: face it, carrying three heavy bags of groceries after work 80 00:04:35,799 --> 00:04:39,209 Speaker 2: on a long train and bus journey is just not 81 00:04:39,220 --> 00:04:41,570 Speaker 2: the most efficient nor comfortable, is it? 82 00:04:41,950 --> 00:04:44,529 Speaker 2: So that's it. The very first money talks challenge. Let 83 00:04:44,540 --> 00:04:46,049 Speaker 2: me know what you think if you want to find 84 00:04:46,059 --> 00:04:50,170 Speaker 2: me on social media. I'm on Instagram and tiktok, Andrea heng.cn. 85 00:04:50,178 --> 00:04:50,368 Speaker 2: A 86 00:04:52,309 --> 00:04:55,260 Speaker 2: welcome back to the Money Talks podcast. I'm Andrea. He 87 00:04:55,390 --> 00:04:59,410 Speaker 2: now for some people, the 9 to 5 job just 88 00:04:59,420 --> 00:05:04,980 Speaker 2: doesn't cut it right. Getting dressed jostling with crowds, endless meetings. 89 00:05:04,988 --> 00:05:07,769 Speaker 2: That could have been emails. You know what I mean? Right. 90 00:05:08,260 --> 00:05:12,329 Speaker 2: So freelancing can be an empowering option because it lets 91 00:05:12,339 --> 00:05:15,549 Speaker 2: you choose what you want to do and how much 92 00:05:15,559 --> 00:05:18,850 Speaker 2: you want to do. Plus you can work any time 93 00:05:18,859 --> 00:05:23,000 Speaker 2: anywhere and wear anything you want. In fact. Mm. Data 94 00:05:23,010 --> 00:05:29,450 Speaker 2: shows that over 221,000 residents engaged in own account work 95 00:05:29,459 --> 00:05:32,989 Speaker 2: as a regular form of employment as a mid 2023. 96 00:05:33,079 --> 00:05:35,890 Speaker 2: But as Eleanor Roosevelt once said, 97 00:05:36,100 --> 00:05:41,200 Speaker 2: with freedom comes responsibility. That's right. The trade off for 98 00:05:41,209 --> 00:05:46,618 Speaker 2: that flexibility is discipline, discipline in the work but also 99 00:05:46,630 --> 00:05:49,380 Speaker 2: in your finances because no one else is going to 100 00:05:49,390 --> 00:05:52,880 Speaker 2: be doing it for you. You'll also be missing various 101 00:05:52,890 --> 00:05:56,410 Speaker 2: safety nets, right? Like insurance and health care and here 102 00:05:56,420 --> 00:05:59,760 Speaker 2: in Singapore, regular CPF contribution. 103 00:05:59,988 --> 00:06:04,450 Speaker 2: So is there a way for freelancers to be financially secure, 104 00:06:04,459 --> 00:06:07,950 Speaker 2: not just for the now but also while building a 105 00:06:07,959 --> 00:06:12,130 Speaker 2: financially sound future? One of those ways is to get 106 00:06:12,140 --> 00:06:15,940 Speaker 2: advice from Chn Ting whereby she is the CEO of 107 00:06:15,950 --> 00:06:19,579 Speaker 2: Money Owl. Welcome to Money Talks. Thank you, Andrea. So 108 00:06:19,589 --> 00:06:22,328 Speaker 2: happy to be here. So there seems to be this 109 00:06:22,500 --> 00:06:26,700 Speaker 2: common perception that people without a salary have a more 110 00:06:26,709 --> 00:06:28,850 Speaker 2: precarious financial situation. 111 00:06:29,309 --> 00:06:30,850 Speaker 2: Is that really true though? 112 00:06:31,839 --> 00:06:36,450 Speaker 2: Well, Andrea, like you say, with freedom comes responsibility and 113 00:06:36,600 --> 00:06:40,119 Speaker 2: if you look at the mom survey, those that the 114 00:06:40,130 --> 00:06:43,209 Speaker 2: one that you talked about, actually, it seems that over 90% 115 00:06:43,220 --> 00:06:45,709 Speaker 2: have said that they choose this, they choose to be 116 00:06:45,720 --> 00:06:49,190 Speaker 2: freelancers because of flexibility and all that. It's just that 117 00:06:49,200 --> 00:06:51,890 Speaker 2: you do not have these structures that are quote unquote 118 00:06:51,899 --> 00:06:54,909 Speaker 2: imposed on you. You, you come to work, you get 119 00:06:54,920 --> 00:06:57,618 Speaker 2: your salary in your bank account every month and you 120 00:06:57,630 --> 00:07:00,859 Speaker 2: have the CPF and there are already basic structures that 121 00:07:00,869 --> 00:07:01,390 Speaker 2: are there. 122 00:07:01,750 --> 00:07:05,489 Speaker 2: So in Singapore, for freelancers, there are some basics or 123 00:07:05,500 --> 00:07:07,690 Speaker 2: mandatory things that make you do the right thing that 124 00:07:07,700 --> 00:07:11,130 Speaker 2: is good for you, for example, the Medisave contribution, but 125 00:07:11,140 --> 00:07:13,809 Speaker 2: you need to build the rest yourself. So it is 126 00:07:13,820 --> 00:07:18,309 Speaker 2: not necessarily that you can't have those structures to support 127 00:07:18,320 --> 00:07:21,010 Speaker 2: your financial resilience and adequacy. You just have to be 128 00:07:21,019 --> 00:07:24,619 Speaker 2: more aware and know how to go about doing it. So, 129 00:07:24,630 --> 00:07:27,290 Speaker 2: are there common financial issues that 130 00:07:27,484 --> 00:07:30,755 Speaker 2: freelancers actually run into? What do freelancers tend to get 131 00:07:30,765 --> 00:07:33,825 Speaker 2: wrong when it comes to planning their finances? I think 132 00:07:33,834 --> 00:07:37,015 Speaker 2: the first thing is that they don't plan. Right. So 133 00:07:37,024 --> 00:07:39,945 Speaker 2: I'm not sure if it's fair to make this extrapolation. 134 00:07:39,954 --> 00:07:43,054 Speaker 2: But perhaps people who like freedom and you know, I 135 00:07:43,065 --> 00:07:45,484 Speaker 2: want to do things my way and all that become 136 00:07:45,494 --> 00:07:49,954 Speaker 2: more creative. People maybe not so structured. So criticism perhaps 137 00:07:49,964 --> 00:07:52,864 Speaker 2: because I'm not naturally very structured myself. And that's why 138 00:07:53,179 --> 00:07:55,529 Speaker 2: maybe by some irony or destiny, I had to do 139 00:07:55,540 --> 00:07:58,059 Speaker 2: this financial planning thing and I tell people all the time, 140 00:07:58,070 --> 00:08:00,320 Speaker 2: build your systems, build your habits and all that because I, 141 00:08:00,329 --> 00:08:02,720 Speaker 2: I know it really helps us. So the first mistake 142 00:08:02,730 --> 00:08:05,519 Speaker 2: is really not planning, right? The second one I think 143 00:08:05,529 --> 00:08:09,369 Speaker 2: is really just ignoring reality, like trying to, ok, where's my, 144 00:08:09,380 --> 00:08:11,600 Speaker 2: I'm going to get that big break and it's all 145 00:08:11,609 --> 00:08:15,799 Speaker 2: dependent on something you can't control. Yeah. And you can 146 00:08:15,899 --> 00:08:17,989 Speaker 2: ignore reality, but you can't ignore 147 00:08:18,066 --> 00:08:21,006 Speaker 2: consequences of reality. You got to be prepared to answer 148 00:08:21,015 --> 00:08:23,186 Speaker 2: to those two. Yeah. That's right. Yeah. So you need 149 00:08:23,196 --> 00:08:25,765 Speaker 2: to face the facts, right? Face the facts and then 150 00:08:25,776 --> 00:08:29,145 Speaker 2: do something according to what you can control because hope 151 00:08:29,156 --> 00:08:32,145 Speaker 2: is not a strategy. It's not strategy, right? And theyre 152 00:08:32,395 --> 00:08:35,315 Speaker 2: not strategy, but it doesn't mean that you can't pursue 153 00:08:35,325 --> 00:08:38,565 Speaker 2: your dreams. It doesn't mean any of that. You just 154 00:08:38,575 --> 00:08:41,545 Speaker 2: have to really get started and at least get a 155 00:08:41,556 --> 00:08:42,835 Speaker 2: basic frame. Yeah. 156 00:08:43,252 --> 00:08:45,651 Speaker 2: Yeah, I think that's really good advice. And I think 157 00:08:45,660 --> 00:08:49,122 Speaker 2: more importantly, it acknowledges the need for certain people to 158 00:08:49,131 --> 00:08:53,002 Speaker 2: have no structure. You still need to have some kind 159 00:08:53,011 --> 00:08:56,002 Speaker 2: of basic rundown of what you need to do, especially 160 00:08:56,011 --> 00:09:00,580 Speaker 2: financially and especially in Singapore. Ok, assuming we've decided to 161 00:09:00,591 --> 00:09:04,721 Speaker 2: go freelance, secured maybe two or three gigs. What do 162 00:09:04,731 --> 00:09:07,692 Speaker 2: we need to set up in terms of accounts, for example. 163 00:09:08,179 --> 00:09:11,150 Speaker 2: Ok, I think perhaps let me suggest a way of 164 00:09:11,159 --> 00:09:14,069 Speaker 2: thinking about your income, right? Because if you go back 165 00:09:14,080 --> 00:09:17,549 Speaker 2: to that 2023 survey. So what are the main concerns 166 00:09:17,559 --> 00:09:19,460 Speaker 2: that people have are the main challenges of these own 167 00:09:19,469 --> 00:09:23,239 Speaker 2: account workers and over about 20% it is really uncertainty 168 00:09:23,250 --> 00:09:26,010 Speaker 2: of finding sufficient work and the lack of sufficient work 169 00:09:26,020 --> 00:09:29,059 Speaker 2: in general and then the health care, their retirement and 170 00:09:29,070 --> 00:09:31,820 Speaker 2: and all these concerns, right? So one is really about 171 00:09:31,830 --> 00:09:33,140 Speaker 2: income and the other one is about 172 00:09:33,250 --> 00:09:36,361 Speaker 2: expenses and long term expenses. So I I think one 173 00:09:36,370 --> 00:09:38,491 Speaker 2: way of thinking about it is this your income is 174 00:09:38,500 --> 00:09:41,401 Speaker 2: very lumpy. So sometimes you have, sometimes you don't have 175 00:09:41,410 --> 00:09:43,450 Speaker 2: and all that, but let's say you're already a freelancer. 176 00:09:43,460 --> 00:09:46,221 Speaker 2: You need to find what is the equivalent that you 177 00:09:46,231 --> 00:09:49,731 Speaker 2: are actually earning in a year. Ok, let's say you 178 00:09:49,741 --> 00:09:53,151 Speaker 2: say that, ok, I'm actually bringing in 50,000 a year, right? 179 00:09:53,171 --> 00:09:56,361 Speaker 2: This is not the same as 50,000 of a full 180 00:09:56,370 --> 00:09:58,231 Speaker 2: time employee. You know why? Because 181 00:09:58,341 --> 00:10:01,562 Speaker 2: no CPF there's another 17% or so for most people 182 00:10:01,572 --> 00:10:04,622 Speaker 2: from the employer, then there's, of course, then the interest 183 00:10:04,631 --> 00:10:09,090 Speaker 2: on that CPF. Then on that's a retirement side insurance, 184 00:10:09,151 --> 00:10:13,062 Speaker 2: there's at least basic like workman's injury compensation. You don't 185 00:10:13,072 --> 00:10:16,692 Speaker 2: have sick leave you don't have, right? So you easily 186 00:10:16,702 --> 00:10:19,021 Speaker 2: need to like almost like discount what you have by, 187 00:10:19,030 --> 00:10:21,742 Speaker 2: let's say 20% right? And then think about it this way. 188 00:10:21,752 --> 00:10:23,312 Speaker 2: So let's say you're talking about, let's say if you 189 00:10:23,432 --> 00:10:25,812 Speaker 2: 3000 a year, what you are talking about is every month, 190 00:10:25,822 --> 00:10:29,732 Speaker 2: you are actually earning about $4000 a month. Ok? And 191 00:10:29,742 --> 00:10:32,812 Speaker 2: some months you will get 1000, some months, you will 192 00:10:32,822 --> 00:10:36,132 Speaker 2: get 30,000. Ok. So how do you think about it? 193 00:10:36,213 --> 00:10:39,723 Speaker 2: So think about it as you are generally earning about 194 00:10:39,732 --> 00:10:43,353 Speaker 2: 4000 a month and then set up a system for 195 00:10:43,362 --> 00:10:46,343 Speaker 2: yourself to make sure that your expenses are within a 196 00:10:46,352 --> 00:10:48,402 Speaker 2: certain amount, make sure that your savings are in, 197 00:10:48,523 --> 00:10:50,783 Speaker 2: set up. So what is the first thing you do? 198 00:10:50,794 --> 00:10:53,864 Speaker 2: So 4000 a year you should be saving at least 199 00:10:54,093 --> 00:10:56,494 Speaker 2: I think for freelance we got 15 to 20%. So 200 00:10:56,624 --> 00:11:00,273 Speaker 2: set it up, set up a standing instruction ok, so 201 00:11:00,283 --> 00:11:02,772 Speaker 2: you have one account in which you get all your money, right? 202 00:11:02,783 --> 00:11:05,304 Speaker 2: Then you set up another account in which you save 203 00:11:05,314 --> 00:11:07,513 Speaker 2: all this money, right? And it is called the Do 204 00:11:07,523 --> 00:11:11,023 Speaker 2: not touch it. Is it is the saving or investment account, right? 205 00:11:11,033 --> 00:11:13,504 Speaker 2: And then you automate it right? You automate it. So 206 00:11:13,614 --> 00:11:15,804 Speaker 2: you pay yourself first. So the first thing that comes in, 207 00:11:15,815 --> 00:11:18,594 Speaker 2: you do that now, but it's a bit hard if 208 00:11:18,604 --> 00:11:21,044 Speaker 2: really you have zero balance right, then it comes down. 209 00:11:21,054 --> 00:11:23,465 Speaker 2: So ideally before you even start, you should really have 210 00:11:23,474 --> 00:11:26,635 Speaker 2: a certain level and then you do this. But if not, 211 00:11:26,645 --> 00:11:28,544 Speaker 2: then what you need to do is that you say, ok, 212 00:11:28,554 --> 00:11:30,635 Speaker 2: I will save towards something and let me call this 213 00:11:30,645 --> 00:11:32,835 Speaker 2: the so called emergency fund. You know, a lot of 214 00:11:32,844 --> 00:11:34,974 Speaker 2: people don't understand what emergency fund is. They think it's 215 00:11:34,984 --> 00:11:38,474 Speaker 2: really for emergencies, but actually it is for the 216 00:11:39,200 --> 00:11:42,770 Speaker 2: emergency of lacking income. Yeah, exactly. So now that we're 217 00:11:42,780 --> 00:11:46,020 Speaker 2: facing more retrenchments, people understand this actually tied you over 218 00:11:46,030 --> 00:11:49,349 Speaker 2: time to income. So set that one up first and 219 00:11:49,359 --> 00:11:54,069 Speaker 2: then accumulate in that account until you have a certain amount. Ok. 220 00:11:54,200 --> 00:11:58,299 Speaker 2: So what is this amount for most employees? People say? 221 00:11:58,309 --> 00:12:01,890 Speaker 2: Six months, 3 to 6 months. Yeah, freelancers, I would 222 00:12:01,900 --> 00:12:05,150 Speaker 2: just say 12 months. Ok. So fill up this bucket 223 00:12:05,229 --> 00:12:07,390 Speaker 2: of your emergency fund in savings and 224 00:12:07,500 --> 00:12:10,200 Speaker 2: always top it back. So that's the first thing that 225 00:12:10,210 --> 00:12:12,280 Speaker 2: you need to do. And I think as a freelancer, 226 00:12:12,289 --> 00:12:14,789 Speaker 2: you can already do that. You are already in a 227 00:12:14,799 --> 00:12:17,780 Speaker 2: very good space, then we can talk about investments later. Right. 228 00:12:17,789 --> 00:12:20,359 Speaker 2: And then if you want to, you can also take 229 00:12:20,369 --> 00:12:23,109 Speaker 2: up all your other, like, fixed expenses that you already 230 00:12:23,119 --> 00:12:25,700 Speaker 2: have and you can actually gyrate from a different account 231 00:12:25,710 --> 00:12:27,969 Speaker 2: if you want, you can have three accounts. Right. So 232 00:12:27,979 --> 00:12:30,539 Speaker 2: that only one is left to spend on. Right. Yeah, 233 00:12:30,549 --> 00:12:33,619 Speaker 2: it's possible. But I think at a minimum, the first 234 00:12:33,630 --> 00:12:35,919 Speaker 2: thing that you should have is actually this saving 235 00:12:36,429 --> 00:12:38,630 Speaker 2: because not many people can handle three accounts. So at 236 00:12:38,650 --> 00:12:41,669 Speaker 2: least two, at least two, in my opinion, at least. Ok. 237 00:12:41,679 --> 00:12:45,630 Speaker 2: So what about setting up an account for business? Is 238 00:12:45,640 --> 00:12:47,569 Speaker 2: that something that's worth thinking about or do you think 239 00:12:47,580 --> 00:12:51,409 Speaker 2: that's just too many components to consider? No, I think 240 00:12:51,419 --> 00:12:53,739 Speaker 2: it's good because it gives you a discipline to say actually, 241 00:12:53,750 --> 00:12:55,770 Speaker 2: how much are you spending on your business, right. So 242 00:12:55,780 --> 00:12:58,650 Speaker 2: you can actually replicate this thing about like, even when 243 00:12:58,659 --> 00:13:00,669 Speaker 2: you're self employed you're paying yourself. Right. So this is 244 00:13:00,679 --> 00:13:03,330 Speaker 2: actually your salary, like I said, $4000 right? This is 245 00:13:03,340 --> 00:13:04,320 Speaker 2: your salary and then 246 00:13:04,559 --> 00:13:07,429 Speaker 2: that you pay yourself first into your savings. In fact, 247 00:13:07,440 --> 00:13:09,750 Speaker 2: one of the things that I think freelancers after a 248 00:13:09,760 --> 00:13:13,590 Speaker 2: while you can consider is actually to incorporate in the business, right? 249 00:13:13,599 --> 00:13:17,228 Speaker 2: Because when you incorporate business, there are certain advantages, most 250 00:13:17,239 --> 00:13:20,260 Speaker 2: freelancers that I talk to who don't do this, don't 251 00:13:20,270 --> 00:13:23,189 Speaker 2: do it for no other reason than a bit lazy 252 00:13:23,200 --> 00:13:24,650 Speaker 2: to go and find out. And it's a bit late. 253 00:13:25,969 --> 00:13:29,539 Speaker 2: But there are, of course, if you are, in fact, the, 254 00:13:29,549 --> 00:13:32,489 Speaker 2: a little bit more enterprising, there are also these start 255 00:13:32,500 --> 00:13:32,989 Speaker 2: up grant 256 00:13:33,229 --> 00:13:35,739 Speaker 2: and the government gives quite a bit for enterprise Singapore 257 00:13:35,750 --> 00:13:37,090 Speaker 2: and you can really go and all you need to 258 00:13:37,099 --> 00:13:39,549 Speaker 2: do is register your business, right? Register it and then 259 00:13:39,559 --> 00:13:41,590 Speaker 2: you start to get grants. And if you are really 260 00:13:41,599 --> 00:13:43,949 Speaker 2: a company, like a private company, you can also have 261 00:13:43,960 --> 00:13:47,880 Speaker 2: certain sme financing and all that and you make your, 262 00:13:47,890 --> 00:13:51,608 Speaker 2: what you bring to the world actually replicable and sustainable 263 00:13:51,619 --> 00:13:55,070 Speaker 2: as exit business, right? But of course, that's not for everyone, right? So, 264 00:13:55,080 --> 00:13:58,349 Speaker 2: but it's something to consider, at least to look into, 265 00:13:58,520 --> 00:14:00,049 Speaker 2: I would say when you are at the stage, when 266 00:14:00,059 --> 00:14:01,510 Speaker 2: you're about to pay income tax, that means 267 00:14:01,619 --> 00:14:04,419 Speaker 2: you probably might be but do look into it because 268 00:14:04,429 --> 00:14:07,119 Speaker 2: there's quite a lot of support on that part. Yeah, exactly. 269 00:14:07,130 --> 00:14:10,919 Speaker 2: And it's something that individual freelancers don't really think about 270 00:14:10,929 --> 00:14:13,479 Speaker 2: or it doesn't really come to their minds. It's not 271 00:14:13,489 --> 00:14:15,479 Speaker 2: top of their mind because they think of themselves as 272 00:14:15,489 --> 00:14:19,789 Speaker 2: individual workers, not necessarily a business. Ultimately, you are a 273 00:14:19,799 --> 00:14:23,380 Speaker 2: business because you're offering a set of services, right? Even 274 00:14:23,390 --> 00:14:25,349 Speaker 2: though you're just one person. So I wanted to talk 275 00:14:25,359 --> 00:14:29,340 Speaker 2: about what you mentioned earlier, a couple of times the salary. 276 00:14:29,349 --> 00:14:30,039 Speaker 2: That's right. Right. 277 00:14:30,500 --> 00:14:33,049 Speaker 2: And I know it's important to pay myself. But how 278 00:14:33,059 --> 00:14:37,159 Speaker 2: do I define this? Especially when, as we said, some days, 279 00:14:37,169 --> 00:14:41,390 Speaker 2: we're earning 1000, some months, we are earning $30,000. And yes, 280 00:14:41,400 --> 00:14:45,820 Speaker 2: while we should be planning with the year's salary in mind, 281 00:14:45,979 --> 00:14:49,320 Speaker 2: how do we actually pay ourselves monthly then as a 282 00:14:49,330 --> 00:14:53,719 Speaker 2: salary when that income generated is inconsistent? How do we 283 00:14:53,729 --> 00:14:57,239 Speaker 2: tackle this? Ok. I think that the main 284 00:14:57,486 --> 00:15:00,575 Speaker 2: reality you need to face is that how good are 285 00:15:00,585 --> 00:15:03,265 Speaker 2: you as a freelancer such that and how much income 286 00:15:03,276 --> 00:15:07,135 Speaker 2: can you actually generate? And it's actually a mindset that 287 00:15:07,145 --> 00:15:09,406 Speaker 2: is not to do with the income side, but to 288 00:15:09,416 --> 00:15:13,315 Speaker 2: do with the expense side if you spend say 25,000 289 00:15:13,325 --> 00:15:16,906 Speaker 2: a year. Ok. On your basic expenses, you should be 290 00:15:17,046 --> 00:15:20,745 Speaker 2: able to generate income of 50,000 before you even go there. 291 00:15:20,926 --> 00:15:23,145 Speaker 2: I'm not even talking about C PM and everything right now. Ok. 292 00:15:23,156 --> 00:15:24,505 Speaker 2: So basically if you can't 293 00:15:24,581 --> 00:15:26,502 Speaker 2: achieve that, you're going to be very stressed. So when 294 00:15:26,512 --> 00:15:28,671 Speaker 2: I say think about your salary, let's say 4000. I'm 295 00:15:28,682 --> 00:15:31,841 Speaker 2: not saying that how you cash flow wise, manage to 296 00:15:31,851 --> 00:15:35,041 Speaker 2: extract this and you can keep it aside because your 297 00:15:35,052 --> 00:15:36,781 Speaker 2: bank account is going to look very weird. It's gonna 298 00:15:36,791 --> 00:15:39,942 Speaker 2: be like it's gonna be, let's say you earn 30,000. 299 00:15:39,952 --> 00:15:43,182 Speaker 2: Then after that it's going to minus minus go back up, right? Yeah. 300 00:15:43,192 --> 00:15:45,661 Speaker 2: So that is the minus minus, you need to know. Right. 301 00:15:45,671 --> 00:15:47,721 Speaker 2: So that means that if you really think that in 302 00:15:47,731 --> 00:15:49,671 Speaker 2: one year you're going to earn 50,000 and you should 303 00:15:49,682 --> 00:15:51,601 Speaker 2: have a good sense of that, 304 00:15:51,859 --> 00:15:55,359 Speaker 2: then you should not be spending more than, let's say, 2000, 305 00:15:55,369 --> 00:15:58,960 Speaker 2: 2000 a month. Right. And if you can't do that, 306 00:15:59,270 --> 00:16:03,239 Speaker 2: then perhaps you should delay your entry into this space. Right. Yeah. 307 00:16:03,369 --> 00:16:06,820 Speaker 2: Something also to think about. Right. Freelancers actually can lose 308 00:16:06,830 --> 00:16:11,080 Speaker 2: work at any given time. Projects can end abruptly and 309 00:16:11,090 --> 00:16:14,489 Speaker 2: in an instant one source of income is gone. How 310 00:16:14,500 --> 00:16:19,450 Speaker 2: do we manage our finances at the current going when 311 00:16:19,460 --> 00:16:21,719 Speaker 2: this happens when this abrupt end happens? And 312 00:16:22,169 --> 00:16:25,309 Speaker 2: obviously my projection is gone now. Right. So, what do 313 00:16:25,320 --> 00:16:27,489 Speaker 2: I do? Yeah. So that's what the emergency fund we 314 00:16:27,500 --> 00:16:31,119 Speaker 2: talked about is there. So, so unlike others, these emergency 315 00:16:31,130 --> 00:16:32,919 Speaker 2: fund might actually be drawn down on a little bit 316 00:16:32,929 --> 00:16:35,419 Speaker 2: more so, or you can get sick, right? And you 317 00:16:35,609 --> 00:16:37,900 Speaker 2: cannot work to eat, right. Yeah. So that's why I 318 00:16:37,909 --> 00:16:40,950 Speaker 2: say 12 months because for, for employees, we might say 319 00:16:40,960 --> 00:16:43,309 Speaker 2: six months or even three months. Right. But it's the 320 00:16:43,320 --> 00:16:44,039 Speaker 2: in between 321 00:16:44,340 --> 00:16:47,020 Speaker 2: living with uncertainty is part of being a freelancer, but 322 00:16:47,030 --> 00:16:49,349 Speaker 2: at least you're having that buffer, you know that you're ok, 323 00:16:49,359 --> 00:16:51,760 Speaker 2: you know that you're ok for on paper, it 12 months. 324 00:16:51,890 --> 00:16:53,880 Speaker 2: But in reality, it's more like six months, right? But 325 00:16:53,890 --> 00:16:55,919 Speaker 2: you need to understand that this is why you're doing 326 00:16:55,929 --> 00:16:57,539 Speaker 2: it right. It's not that you can don't work for 327 00:16:57,549 --> 00:16:59,719 Speaker 2: 12 months. Right. You need to understand that you're talking 328 00:16:59,729 --> 00:17:03,719 Speaker 2: really that 12 months for others is effectively a kind 329 00:17:03,729 --> 00:17:06,089 Speaker 2: of 3 to 6 months buff of. And it's from 330 00:17:06,099 --> 00:17:06,760 Speaker 2: that mindset, 331 00:17:07,380 --> 00:17:11,000 Speaker 2: I think that it's really about entering into freelancing. You 332 00:17:11,010 --> 00:17:14,119 Speaker 2: need to know when the right time to enter so 333 00:17:14,130 --> 00:17:17,560 Speaker 2: slow months can really be quite full for freelancers. I mean, 334 00:17:17,569 --> 00:17:20,420 Speaker 2: it really was painful for me and it will be 335 00:17:20,430 --> 00:17:23,688 Speaker 2: tempting at this point to lean on credit. How can 336 00:17:23,699 --> 00:17:27,459 Speaker 2: we prevent our credit or debt from spiraling out of 337 00:17:27,469 --> 00:17:31,359 Speaker 2: control when we are freelancing and and when we get 338 00:17:31,369 --> 00:17:34,199 Speaker 2: the slow months, like I was saying that we have 339 00:17:34,209 --> 00:17:37,000 Speaker 2: to build this buffer, right? So even if it's hard 340 00:17:37,479 --> 00:17:40,260 Speaker 2: that during your good months, then build even more of it. 341 00:17:40,780 --> 00:17:43,579 Speaker 2: I was saying that you treat yourself as always saving that, 342 00:17:43,589 --> 00:17:45,750 Speaker 2: let's say 20% a month. But let's say you have 343 00:17:45,760 --> 00:17:49,060 Speaker 2: a good month and you're not bringing just 4000, right? 344 00:17:49,069 --> 00:17:51,290 Speaker 2: You're bringing in 20,000, right? And you know that you 345 00:17:51,300 --> 00:17:53,760 Speaker 2: also got target annual income is 50,000 346 00:17:54,119 --> 00:17:56,119 Speaker 2: then instead of using the money going to be a 347 00:17:56,130 --> 00:18:00,389 Speaker 2: big party and all that right? 10,000 away it up, 348 00:18:00,770 --> 00:18:03,948 Speaker 2: look it up. Ok? So one of the advantages of 349 00:18:03,959 --> 00:18:07,680 Speaker 2: being a salaried employee is CPF contributions and also income 350 00:18:07,689 --> 00:18:12,420 Speaker 2: tax filings, insurance is done automatically as well. CPF especially 351 00:18:12,430 --> 00:18:15,280 Speaker 2: it's a big plank of retirement adequacy, right? 352 00:18:15,819 --> 00:18:18,579 Speaker 2: So what do freelancers need to be conscious about here? 353 00:18:18,589 --> 00:18:21,520 Speaker 2: I know you mentioned that the Medisave top up contribution 354 00:18:21,550 --> 00:18:24,920 Speaker 2: or rather the Medisafe contribution monthly needs to be there 355 00:18:24,930 --> 00:18:26,579 Speaker 2: as a freelancer. But what else do we need to 356 00:18:26,589 --> 00:18:29,800 Speaker 2: be aware of? So that's by law, right. Medisafe and 357 00:18:29,810 --> 00:18:31,979 Speaker 2: all that and many people don't know that by the way, 358 00:18:31,989 --> 00:18:34,699 Speaker 2: a lot of answers actually don't know. I didn't know 359 00:18:34,709 --> 00:18:37,459 Speaker 2: actually at the time that I was supposed to call, 360 00:18:37,555 --> 00:18:40,694 Speaker 2: contribute to my Medisafe, even if I couldn't afford contributions 361 00:18:40,704 --> 00:18:43,574 Speaker 2: to my O A. Yeah. So actually a lot of freelancer, 362 00:18:43,584 --> 00:18:46,114 Speaker 2: friends of mine didn't know this and they got penalized 363 00:18:46,125 --> 00:18:48,264 Speaker 2: as a result. So please take this as a PSA 364 00:18:48,275 --> 00:18:50,454 Speaker 2: if you are a freelancer, you need to at least 365 00:18:50,505 --> 00:18:53,655 Speaker 2: contribute to your Medisave. But yes, what else should we 366 00:18:53,665 --> 00:18:56,604 Speaker 2: be aware of for CPF is really for the long 367 00:18:56,614 --> 00:18:59,255 Speaker 2: term and it's really for your retirement, right? 368 00:18:59,589 --> 00:19:03,810 Speaker 2: And if you look at what the employees actually contribute 369 00:19:03,819 --> 00:19:06,060 Speaker 2: to their CPF, I think that's a good starting point. 370 00:19:06,180 --> 00:19:08,189 Speaker 2: So I think when you start, and I'm talking about 371 00:19:08,199 --> 00:19:10,810 Speaker 2: special account because special account is really the retirement 372 00:19:11,119 --> 00:19:14,729 Speaker 2: and I think the younger folks will start at 6% 373 00:19:14,739 --> 00:19:17,880 Speaker 2: of their salary, right? And then goes up seven. So 374 00:19:18,189 --> 00:19:21,199 Speaker 2: can you contribute at least that? Right? As if you 375 00:19:21,209 --> 00:19:24,119 Speaker 2: were an employee? And remember I said that you have 50,000, right? 376 00:19:24,130 --> 00:19:26,369 Speaker 2: Then you can go and top up. Right. I think 377 00:19:26,380 --> 00:19:27,819 Speaker 2: in the case of special, don't do it all at 378 00:19:27,829 --> 00:19:30,469 Speaker 2: one go. Yeah, you, you should save all at one 379 00:19:30,479 --> 00:19:33,569 Speaker 2: go that 10,000. But at least take that step of 380 00:19:33,579 --> 00:19:36,280 Speaker 2: saying that, ok, I'm not worse off than if I 381 00:19:36,290 --> 00:19:36,739 Speaker 2: were 382 00:19:37,030 --> 00:19:39,879 Speaker 2: an employee because I've taken this step myself and I've 383 00:19:39,890 --> 00:19:42,698 Speaker 2: seen people who have done that because they appreciate that 4% 384 00:19:42,709 --> 00:19:45,260 Speaker 2: will compound and it's really a big difference. Yeah. And 385 00:19:45,270 --> 00:19:47,010 Speaker 2: don't say to yourself that I'm only going to start 386 00:19:47,020 --> 00:19:50,889 Speaker 2: later when I am in this stage because time is 387 00:19:50,900 --> 00:19:54,530 Speaker 2: your friend and you just delay 10 years and you 388 00:19:54,540 --> 00:19:57,349 Speaker 2: have to save, I think of an eye and you 389 00:19:57,359 --> 00:19:59,849 Speaker 2: have not much to begin with. That's right. Yeah. And 390 00:19:59,859 --> 00:20:02,569 Speaker 2: especially in a freelancer, you're dependent on your own labor, 391 00:20:02,579 --> 00:20:03,920 Speaker 2: your own health, your own, 392 00:20:04,300 --> 00:20:06,670 Speaker 2: you know, so unless you build an editable business, you 393 00:20:06,680 --> 00:20:09,640 Speaker 2: will depend on yourself and one day you will no 394 00:20:09,650 --> 00:20:12,599 Speaker 2: longer be able to earn and you will still have 395 00:20:12,609 --> 00:20:15,300 Speaker 2: to spend. And that is the reality. This is why 396 00:20:15,310 --> 00:20:18,660 Speaker 2: they say health really is wealth without health. You can't work, 397 00:20:18,670 --> 00:20:19,718 Speaker 2: but you can't control some things, right? 398 00:20:19,880 --> 00:20:22,790 Speaker 2: You can't control something. Yeah. Correct. I wanted to go 399 00:20:22,800 --> 00:20:25,569 Speaker 2: back to insurance and the same thing when I was 400 00:20:25,579 --> 00:20:29,709 Speaker 2: freelancing for something like over a decade, my insurance agent 401 00:20:29,719 --> 00:20:32,889 Speaker 2: or my financial planner at the time said, ok, now 402 00:20:32,900 --> 00:20:35,339 Speaker 2: that you're freelancing, I think you should consider 403 00:20:35,619 --> 00:20:38,150 Speaker 2: the different kind of plan. So for example, a plan 404 00:20:38,160 --> 00:20:41,800 Speaker 2: with stronger income protection because if anything were to happen 405 00:20:41,810 --> 00:20:44,910 Speaker 2: to you physically and you won't be able to earn 406 00:20:44,920 --> 00:20:48,540 Speaker 2: the same that you're earning now that income protection will 407 00:20:48,550 --> 00:20:51,140 Speaker 2: be in place to make sure that you're covered. So, 408 00:20:51,150 --> 00:20:53,390 Speaker 2: is that something that we should be thinking about as well? 409 00:20:53,400 --> 00:20:58,479 Speaker 2: The type of insurance plans that we should be looking at? Ok. Yeah, 410 00:20:58,670 --> 00:21:02,239 Speaker 2: know where that's coming from, right. So there are roughly speaking, 411 00:21:02,250 --> 00:21:05,208 Speaker 2: two types of risks that you need to guard against, right? 412 00:21:05,339 --> 00:21:09,550 Speaker 2: One is the big bills and those are almost always 413 00:21:09,560 --> 00:21:12,300 Speaker 2: medical bills, right? So if you're going to hospital and 414 00:21:12,310 --> 00:21:14,420 Speaker 2: all that, right? So the good thing is that we 415 00:21:14,430 --> 00:21:18,250 Speaker 2: all have a Medishield Life, right? We do recommend that 416 00:21:18,260 --> 00:21:21,609 Speaker 2: you take an integrated Shield plan because they 417 00:21:21,859 --> 00:21:25,420 Speaker 2: there are limits to Medishield Life and this integrated Shield 418 00:21:25,430 --> 00:21:28,160 Speaker 2: plan is not expensive. Yeah, we're talking about a few 419 00:21:28,170 --> 00:21:31,260 Speaker 2: $100 from your Medisafe. Don't do the private one or 420 00:21:31,300 --> 00:21:34,149 Speaker 2: at least do the B one. Yes, correct. And the 421 00:21:34,160 --> 00:21:36,369 Speaker 2: main thing you are insuring that is your insurability and 422 00:21:36,449 --> 00:21:38,109 Speaker 2: because if you start too late by the time you 423 00:21:38,119 --> 00:21:40,270 Speaker 2: want to do something you can't. So this is one 424 00:21:40,280 --> 00:21:43,500 Speaker 2: type of insurance, right? Then the other type is actually 425 00:21:43,510 --> 00:21:46,369 Speaker 2: income protection, correct? Loss of income. Yes, that's why. Yeah. 426 00:21:46,692 --> 00:21:48,612 Speaker 2: So there are actually three types of things that can 427 00:21:48,621 --> 00:21:50,670 Speaker 2: cause you to lose your income or three types of 428 00:21:50,682 --> 00:21:54,401 Speaker 2: risks which you can't control. One is death. Yeah, obviously 429 00:21:54,411 --> 00:21:57,271 Speaker 2: this only matters to you if you have dependents and 430 00:21:57,281 --> 00:22:00,281 Speaker 2: the under the CPF scheme, as long as you have 431 00:22:00,291 --> 00:22:02,911 Speaker 2: some money in the O A for them to deduct, 432 00:22:02,921 --> 00:22:07,521 Speaker 2: to premiums for the dependence protection scheme gives you 70,000 433 00:22:07,531 --> 00:22:10,031 Speaker 2: sum assurance coverage. But it's not for you. It's for 434 00:22:10,041 --> 00:22:11,421 Speaker 2: your dependence because it's there. 435 00:22:11,523 --> 00:22:13,374 Speaker 2: right? You'll be gone. But yeah, it depends a lot 436 00:22:13,384 --> 00:22:16,784 Speaker 2: on your dependents whether you have dependents. Sure that if 437 00:22:16,792 --> 00:22:19,813 Speaker 2: you do and you need that, then the other option 438 00:22:19,823 --> 00:22:22,673 Speaker 2: that you can consider is uh besides that if you 439 00:22:22,683 --> 00:22:25,973 Speaker 2: are an NS Man or NSF, the SF group insurance 440 00:22:25,984 --> 00:22:27,913 Speaker 2: or ma mh A group insurance is very good value 441 00:22:27,923 --> 00:22:30,264 Speaker 2: and it, that's the most important thing. It is portable. 442 00:22:30,273 --> 00:22:33,104 Speaker 2: So I like a lot of group insurance. What do 443 00:22:33,114 --> 00:22:35,504 Speaker 2: you mean by portable means? You, in this case, you 444 00:22:35,513 --> 00:22:36,264 Speaker 2: don't have to be a min 445 00:22:36,355 --> 00:22:39,696 Speaker 2: employee on NSFNS Men in order to continue with it. 446 00:22:40,225 --> 00:22:43,156 Speaker 2: My first career was with Mindef as a civilian officer, right? 447 00:22:43,166 --> 00:22:46,855 Speaker 2: So I actually hold that plan still to today. Wow. So, 448 00:22:46,865 --> 00:22:49,196 Speaker 2: so even if you had not been a mind dev 449 00:22:49,205 --> 00:22:51,946 Speaker 2: employee for a long time after you just need to continue, right? 450 00:22:51,955 --> 00:22:54,975 Speaker 2: And so that applies to like half the population because 451 00:22:55,005 --> 00:22:57,776 Speaker 2: everyone is an NSF, right? So then you just continue 452 00:22:57,786 --> 00:23:00,365 Speaker 2: as an NS man and and pay that part because 453 00:23:00,375 --> 00:23:01,095 Speaker 2: during your ns 454 00:23:01,387 --> 00:23:04,737 Speaker 2: days, Minde pays for that, that portion of home team 455 00:23:04,767 --> 00:23:06,427 Speaker 2: pays for that portion. This is one of those tricks 456 00:23:06,436 --> 00:23:08,618 Speaker 2: because nobody will sell you guys. There's no commission to 457 00:23:08,637 --> 00:23:11,008 Speaker 2: check with my husband about his. Yes. Yes. And then 458 00:23:11,017 --> 00:23:14,067 Speaker 2: he can cover, you can cover you. Right? Yeah. Yeah. So, 459 00:23:14,078 --> 00:23:17,078 Speaker 2: so there's a low cost way. So DP si mean 460 00:23:17,088 --> 00:23:20,197 Speaker 2: they have mh a group insurance but if not, then 461 00:23:20,208 --> 00:23:23,316 Speaker 2: there's a direct purchase insurance, purchase insurance. You don't have 462 00:23:23,328 --> 00:23:25,657 Speaker 2: commissions and all that. You can even go online and 463 00:23:25,667 --> 00:23:25,927 Speaker 2: all that. 464 00:23:26,209 --> 00:23:29,510 Speaker 2: Now the recommendation is nine times your income or you 465 00:23:29,520 --> 00:23:33,079 Speaker 2: can do a better what your family need and all 466 00:23:33,089 --> 00:23:35,420 Speaker 2: that kind of thing and it actually can be very 467 00:23:35,520 --> 00:23:38,159 Speaker 2: cost effective. So that's one way. So the first thing 468 00:23:38,260 --> 00:23:41,478 Speaker 2: about income protection is really death, right? And then the 469 00:23:41,489 --> 00:23:45,069 Speaker 2: second thing is critical illness. Now the critical illness is 470 00:23:45,079 --> 00:23:48,709 Speaker 2: basically cancer, heart attack and that kind of thing and 471 00:23:48,719 --> 00:23:50,829 Speaker 2: the basic critical illness is to cover you in the 472 00:23:50,839 --> 00:23:53,839 Speaker 2: late stage, right? And so so people think that oh, 473 00:23:53,849 --> 00:23:55,550 Speaker 2: I need this to cover for my 474 00:23:55,660 --> 00:24:01,319 Speaker 2: expenses actually. No, for chemotherapy dialysis, all this outpatient stuff 475 00:24:01,449 --> 00:24:04,209 Speaker 2: is actually covered by your shield plan, right? So what 476 00:24:04,219 --> 00:24:06,199 Speaker 2: is this for? This is in case you cannot work. 477 00:24:06,260 --> 00:24:08,739 Speaker 2: So that could have been what your financial planner was 478 00:24:08,750 --> 00:24:11,250 Speaker 2: saying you have a critical illness. That's right. That's right. Yeah. 479 00:24:11,569 --> 00:24:14,040 Speaker 2: But the thing is that nowadays with screening and all 480 00:24:14,050 --> 00:24:17,000 Speaker 2: that we detect early critical illness quite a lot. That's right. 481 00:24:17,010 --> 00:24:20,199 Speaker 2: And most of these plans do not cover early critical illness. 482 00:24:20,719 --> 00:24:23,270 Speaker 2: But if you buy early critical, it's very expensive. So 483 00:24:23,280 --> 00:24:25,000 Speaker 2: the thing is that you have to balance, right. 484 00:24:25,109 --> 00:24:27,839 Speaker 2: So we usually say go at least for the late 485 00:24:27,849 --> 00:24:30,369 Speaker 2: stage one because that's when you really can't work a 486 00:24:30,380 --> 00:24:33,319 Speaker 2: lot of people during the early stages of cancers and 487 00:24:33,329 --> 00:24:35,160 Speaker 2: all that, they can still work. In fact, they just 488 00:24:35,170 --> 00:24:36,819 Speaker 2: take MC and go and then they go back. So 489 00:24:36,829 --> 00:24:38,688 Speaker 2: what you need, you need to cover your hospital bill, 490 00:24:38,699 --> 00:24:40,579 Speaker 2: then you need to be able to get back and 491 00:24:40,589 --> 00:24:42,650 Speaker 2: do that and then do your chemo that right? So 492 00:24:42,660 --> 00:24:46,339 Speaker 2: what you can do is because most early stuff is 493 00:24:46,349 --> 00:24:49,729 Speaker 2: actually have cancer, most of most cancer, correct? Yeah. So 494 00:24:49,739 --> 00:24:53,810 Speaker 2: you can get very cheap cancer plans that cover you. 495 00:24:53,819 --> 00:24:54,479 Speaker 2: So that's that. 496 00:24:54,810 --> 00:24:58,209 Speaker 2: So that's the second type. So the critical illness recommendation 497 00:24:58,219 --> 00:25:01,229 Speaker 2: including MS basic financial planning is about four times your 498 00:25:01,239 --> 00:25:04,930 Speaker 2: income for your annual income. That is actually for recuperation 499 00:25:04,939 --> 00:25:07,339 Speaker 2: because why four times because when you get a late 500 00:25:07,349 --> 00:25:09,989 Speaker 2: stage critical illness, it tends to be that either you 501 00:25:10,000 --> 00:25:13,629 Speaker 2: survive beyond four years or you don't. So that's the recommendation. 502 00:25:13,880 --> 00:25:15,109 Speaker 2: So this to the 503 00:25:15,209 --> 00:25:19,189 Speaker 2: third one is what you call occupational disability. So sometimes 504 00:25:19,199 --> 00:25:21,489 Speaker 2: you get something, it could be an early critical illness 505 00:25:21,500 --> 00:25:23,800 Speaker 2: or it could be, let's say a presenter and the 506 00:25:23,810 --> 00:25:26,379 Speaker 2: loss of your voice or whatever. Yeah. And the cancer, 507 00:25:26,390 --> 00:25:28,060 Speaker 2: the critical illness insurance is not going to pay out. 508 00:25:28,089 --> 00:25:30,629 Speaker 2: You're not gonna pay out, but you might also suffer 509 00:25:30,640 --> 00:25:33,569 Speaker 2: in some cases like depression and all that. These are 510 00:25:33,579 --> 00:25:35,500 Speaker 2: all good to have. Yeah, but at them 511 00:25:35,630 --> 00:25:38,219 Speaker 2: up, right. Add them all up. MS Basic financial planning 512 00:25:38,229 --> 00:25:40,619 Speaker 2: guide says all your insurance should not exceed 15% of 513 00:25:40,630 --> 00:25:43,188 Speaker 2: your take home pay. Ok. So I would say that 514 00:25:43,199 --> 00:25:45,989 Speaker 2: even 10% sounds a bit much because 15% here then 515 00:25:46,000 --> 00:25:48,219 Speaker 2: you need to save, right? Isn't it bad? I rather 516 00:25:48,229 --> 00:25:50,739 Speaker 2: you have as much in savings as well, then you 517 00:25:50,750 --> 00:25:53,729 Speaker 2: need to eat right? So 50% of that insurance and 518 00:25:53,739 --> 00:25:55,910 Speaker 2: then accumulation for the future and remember that 519 00:25:56,319 --> 00:25:58,839 Speaker 2: you don't have CPS. So it's not 100% another 70 520 00:25:59,689 --> 00:26:01,780 Speaker 2: before you know it, all of it is used up 521 00:26:01,790 --> 00:26:04,199 Speaker 2: and allocated already. That's right. Yeah. So I think insurance 522 00:26:04,209 --> 00:26:07,449 Speaker 2: really pay as little as you can maximize your coverage. 523 00:26:07,459 --> 00:26:10,429 Speaker 2: Use term insurance, use, use nice hacks like S a 524 00:26:10,439 --> 00:26:14,290 Speaker 2: group insurance, use direct purchase insurance and then all the 525 00:26:14,300 --> 00:26:17,229 Speaker 2: other fear and uncertainty or that, that that might be 526 00:26:17,410 --> 00:26:20,109 Speaker 2: used on you. You just have to have that enough 527 00:26:20,359 --> 00:26:23,698 Speaker 2: knowledge and literacy to, to say, look, I have to 528 00:26:23,709 --> 00:26:24,500 Speaker 2: focus on 529 00:26:24,719 --> 00:26:27,020 Speaker 2: my financial plan must be based on my being able 530 00:26:27,030 --> 00:26:29,300 Speaker 2: to earn, being able to thrive, not based on me dying. 531 00:26:31,489 --> 00:26:35,500 Speaker 2: And that's exactly the literacy is exactly why we are 532 00:26:35,510 --> 00:26:37,939 Speaker 2: doing this episode. So, Chun Ting, thank you very, very 533 00:26:37,949 --> 00:26:41,760 Speaker 2: much for walking us through all of that, very comprehensive indeed. 534 00:26:41,770 --> 00:26:44,589 Speaker 2: And you know what, I wish I had this advice 535 00:26:44,599 --> 00:26:46,948 Speaker 2: when I was freelancing all those years ago. But you 536 00:26:46,959 --> 00:26:49,479 Speaker 2: know what, it is still beneficial even if you are 537 00:26:49,489 --> 00:26:51,709 Speaker 2: a salary employee because you never know what's going to happen. 538 00:26:56,479 --> 00:26:59,339 Speaker 2: Now, before we let you go, there's a segment here 539 00:26:59,349 --> 00:27:02,310 Speaker 2: on the Money Talks podcast. It's called Questions from Ahead. 540 00:27:02,319 --> 00:27:04,219 Speaker 2: And that's exactly what it is. I'll just need you 541 00:27:04,229 --> 00:27:06,229 Speaker 2: to pick one hand it to me and I ask 542 00:27:06,239 --> 00:27:11,229 Speaker 2: you the question. All right. Ok. And your question is, 543 00:27:12,229 --> 00:27:16,179 Speaker 2: oh, what do you spend the most money on? 544 00:27:18,270 --> 00:27:20,670 Speaker 2: Ok. Let's put aside kind of mortgage and all that 545 00:27:20,680 --> 00:27:24,040 Speaker 2: because I think that's probably one of the biggest. Yeah. 546 00:27:24,219 --> 00:27:26,550 Speaker 2: So I think I spend the most money on my Children, 547 00:27:27,770 --> 00:27:30,889 Speaker 2: Children stuff and all that. But even I have to 548 00:27:30,900 --> 00:27:33,500 Speaker 2: look at it and say actually what they want most 549 00:27:33,510 --> 00:27:34,959 Speaker 2: from you is probably your time, 550 00:27:35,185 --> 00:27:38,755 Speaker 2: your attention to bond with you. We don't always have 551 00:27:38,765 --> 00:27:41,474 Speaker 2: to go for that expensive restaurant and all that. Yeah. 552 00:27:41,484 --> 00:27:44,313 Speaker 2: So it's a good reminder to myself to think about 553 00:27:44,324 --> 00:27:47,555 Speaker 2: what really matters. That's what's priceless, isn't it that time? 554 00:27:47,564 --> 00:27:50,734 Speaker 2: And that energy and that love with the kids, it's priceless. 555 00:27:50,744 --> 00:27:53,504 Speaker 2: You can't put a dollar sign on that lovely answer. 556 00:27:53,535 --> 00:27:56,064 Speaker 2: Chun Ting. Once again, thank you so much for being 557 00:27:56,074 --> 00:27:57,494 Speaker 2: on the money. Thank you for me. Yeah, 558 00:27:58,119 --> 00:28:01,680 Speaker 2: and listener, I hope this episode assures you that it 559 00:28:01,689 --> 00:28:05,829 Speaker 2: actually is possible for you to achieve good financial habits 560 00:28:05,839 --> 00:28:09,619 Speaker 2: and health. While freelancing, there are ways for you to 561 00:28:09,630 --> 00:28:12,979 Speaker 2: survive and also thrive as a freelancer. If you have 562 00:28:12,989 --> 00:28:15,929 Speaker 2: any thoughts or questions about this episode, please send us 563 00:28:15,939 --> 00:28:17,739 Speaker 2: a message we'd love to hear from you. 564 00:28:17,885 --> 00:28:21,784 Speaker 2: This podcast is available on Apple podcasts and Spotify as 565 00:28:21,795 --> 00:28:25,025 Speaker 2: well as youtube music. Don't forget to rate us if 566 00:28:25,035 --> 00:28:28,594 Speaker 2: you are enjoying this podcast. My thanks to the team, 567 00:28:28,604 --> 00:28:33,175 Speaker 2: Joanne Chan Tiffany, Ang, Christina Robert, Juani Johari and Sai 568 00:28:33,185 --> 00:28:36,305 Speaker 2: Ye Wint. I'm Andrea Heng. Thank you for listening to 569 00:28:36,314 --> 00:28:37,535 Speaker 2: the Money Talks podcast.