Speaker 1: You're listening to AC N A podcast.
Speaker 2: Hello, everyone. It's Andrea Heng. You are listening to the
Speaker 2: Money Talks podcast and this is where we discuss all
Speaker 2: things money. Now, if you haven't already, please follow us
Speaker 2: on Spotify. We're also on Apple podcasts and youtube music
Speaker 2: because that way you'll be the first to know when
Speaker 2: a new episode of Money talks drops. Ok. Alright. So Jaini,
Speaker 2: my producer is in the studio with
Speaker 2: me and she is about to hit me with some
Speaker 2: news headlines, Jan hit it when I say Bukit Timah.
Speaker 2: What comes to mind? Oh, ok, Botanic Gardens. That's one
Speaker 2: but also more significantly those good schools, big bungalows, basically
Speaker 2: everything that's out of my price range. Certainly an elite
Speaker 2: part of Singapore. Let's not lie to ourselves. Yes. Ok.
Speaker 2: So Bukit Timah is going to
Speaker 2: go through some changes, not now, but in about 20
Speaker 2: years from now, M and D has announced that 15
Speaker 2: to 20,000 public and private homes are being planned at
Speaker 2: the future turf city housing estate. This is the first
Speaker 2: time in about 40 years that there's going to be
Speaker 2: public housing in Bukit Timah. So for the flats. Experts
Speaker 2: are saying that they're likely to be under the prime location,
Speaker 2: public housing model and make up no more than 40%
Speaker 2: of the new home.
Speaker 2: Ok. No surprises there, obviously because it's a prime location.
Speaker 2: So let's talk numbers. How much would these cost? Obviously,
Speaker 2: it is hard to pinpoint now. But according to experts
Speaker 2: quoted by CN A four room flats are likely to
Speaker 2: be about 600,000 sing dollars. Can't wait to see how
Speaker 2: it's all going to shape up what's next? Ok. In
Speaker 2: keeping with the homes theme H DB has announced a
Speaker 2: new type of flats will be piloted in the upcoming
Speaker 2: Kallang WB
Speaker 2: project and they are calling these white flats. Ok. What
Speaker 2: exactly are white flats? When you're invited to pick your flat,
Speaker 2: you can choose a white flat which won't come with
Speaker 2: partitions or beams. So basically, it's an open concept flat,
Speaker 2: one big space for the living room and the bedroom, right?
Speaker 2: Do you think this is a good idea? I think
Speaker 2: it is because there tends to be this pattern of
Speaker 2: especially younger folks where they want these
Speaker 2: open expansive spaces in an H DB flat. And I
Speaker 2: think this way they immediately get to see what it
Speaker 2: looks like. But the thing is it's about having options also, right.
Speaker 2: So what if you want the beam back at that space? Exactly.
Speaker 2: So Minister Desmond Lee has said that this will cater
Speaker 2: to young people who want more flexibility in the way
Speaker 2: they renovate their homes. But of course, it remains to
Speaker 2: be seen what the price difference will be between the
Speaker 2: white flats and their traditional counterparts.
Speaker 2: So if you've been following me on Instagram and tiktok,
Speaker 2: then you would know about a new feature of the
Speaker 2: Money Talks podcast and that's the money talks challenge. So
Speaker 2: for the first Money Talks challenge ever, my producer Juna
Speaker 2: challenged me to take public transport throughout the month. Here's
Speaker 2: a disclaimer. I only need to think about the ride
Speaker 2: home because my right to work in the early morning
Speaker 2: because I host the morning show on radio that's covered
Speaker 2: by the company. So
Speaker 2: just to give you an idea, a cab ride home
Speaker 2: from work for me is roughly $20. And if I
Speaker 2: have errands to run, which is mostly in town, a
Speaker 2: ride home is about 17 to $18. But that fee,
Speaker 2: it buys me time and that's priceless because that journey
Speaker 2: takes me just 20 minutes. So in contrast, the average
Speaker 2: fare home via train and bus because that's just what
Speaker 2: my journey home entails is a nifty 2 to $3.
Speaker 2: Then while it saves me money, it's also a one
Speaker 2: hour 45 minute journey home. Almost two hours. That's a
Speaker 2: long time spent and it's time I can't get back.
Speaker 2: So while this has been a wallet friendly experiment, it's
Speaker 2: also taught me things that have absolutely nothing to do
Speaker 2: with money, proper planning, multitasking on the go even taking
Speaker 2: the chance to slow down and refresh my mind with
Speaker 2: a podcast or even catching up on articles for work.
Speaker 2: Well, the conclusion now is do the intangible benefits outweigh
Speaker 2: the benefits? I see in my bank account. Not always,
Speaker 2: but I believe they are worth counting anyway because let's
Speaker 2: face it, carrying three heavy bags of groceries after work
Speaker 2: on a long train and bus journey is just not
Speaker 2: the most efficient nor comfortable, is it?
Speaker 2: So that's it. The very first money talks challenge. Let
Speaker 2: me know what you think if you want to find
Speaker 2: me on social media. I'm on Instagram and tiktok, Andrea heng.cn.
Speaker 2: A
Speaker 2: welcome back to the Money Talks podcast. I'm Andrea. He
Speaker 2: now for some people, the 9 to 5 job just
Speaker 2: doesn't cut it right. Getting dressed jostling with crowds, endless meetings.
Speaker 2: That could have been emails. You know what I mean? Right.
Speaker 2: So freelancing can be an empowering option because it lets
Speaker 2: you choose what you want to do and how much
Speaker 2: you want to do. Plus you can work any time
Speaker 2: anywhere and wear anything you want. In fact. Mm. Data
Speaker 2: shows that over 221,000 residents engaged in own account work
Speaker 2: as a regular form of employment as a mid 2023.
Speaker 2: But as Eleanor Roosevelt once said,
Speaker 2: with freedom comes responsibility. That's right. The trade off for
Speaker 2: that flexibility is discipline, discipline in the work but also
Speaker 2: in your finances because no one else is going to
Speaker 2: be doing it for you. You'll also be missing various
Speaker 2: safety nets, right? Like insurance and health care and here
Speaker 2: in Singapore, regular CPF contribution.
Speaker 2: So is there a way for freelancers to be financially secure,
Speaker 2: not just for the now but also while building a
Speaker 2: financially sound future? One of those ways is to get
Speaker 2: advice from Chn Ting whereby she is the CEO of
Speaker 2: Money Owl. Welcome to Money Talks. Thank you, Andrea. So
Speaker 2: happy to be here. So there seems to be this
Speaker 2: common perception that people without a salary have a more
Speaker 2: precarious financial situation.
Speaker 2: Is that really true though?
Speaker 2: Well, Andrea, like you say, with freedom comes responsibility and
Speaker 2: if you look at the mom survey, those that the
Speaker 2: one that you talked about, actually, it seems that over 90%
Speaker 2: have said that they choose this, they choose to be
Speaker 2: freelancers because of flexibility and all that. It's just that
Speaker 2: you do not have these structures that are quote unquote
Speaker 2: imposed on you. You, you come to work, you get
Speaker 2: your salary in your bank account every month and you
Speaker 2: have the CPF and there are already basic structures that
Speaker 2: are there.
Speaker 2: So in Singapore, for freelancers, there are some basics or
Speaker 2: mandatory things that make you do the right thing that
Speaker 2: is good for you, for example, the Medisave contribution, but
Speaker 2: you need to build the rest yourself. So it is
Speaker 2: not necessarily that you can't have those structures to support
Speaker 2: your financial resilience and adequacy. You just have to be
Speaker 2: more aware and know how to go about doing it. So,
Speaker 2: are there common financial issues that
Speaker 2: freelancers actually run into? What do freelancers tend to get
Speaker 2: wrong when it comes to planning their finances? I think
Speaker 2: the first thing is that they don't plan. Right. So
Speaker 2: I'm not sure if it's fair to make this extrapolation.
Speaker 2: But perhaps people who like freedom and you know, I
Speaker 2: want to do things my way and all that become
Speaker 2: more creative. People maybe not so structured. So criticism perhaps
Speaker 2: because I'm not naturally very structured myself. And that's why
Speaker 2: maybe by some irony or destiny, I had to do
Speaker 2: this financial planning thing and I tell people all the time,
Speaker 2: build your systems, build your habits and all that because I,
Speaker 2: I know it really helps us. So the first mistake
Speaker 2: is really not planning, right? The second one I think
Speaker 2: is really just ignoring reality, like trying to, ok, where's my,
Speaker 2: I'm going to get that big break and it's all
Speaker 2: dependent on something you can't control. Yeah. And you can
Speaker 2: ignore reality, but you can't ignore
Speaker 2: consequences of reality. You got to be prepared to answer
Speaker 2: to those two. Yeah. That's right. Yeah. So you need
Speaker 2: to face the facts, right? Face the facts and then
Speaker 2: do something according to what you can control because hope
Speaker 2: is not a strategy. It's not strategy, right? And theyre
Speaker 2: not strategy, but it doesn't mean that you can't pursue
Speaker 2: your dreams. It doesn't mean any of that. You just
Speaker 2: have to really get started and at least get a
Speaker 2: basic frame. Yeah.
Speaker 2: Yeah, I think that's really good advice. And I think
Speaker 2: more importantly, it acknowledges the need for certain people to
Speaker 2: have no structure. You still need to have some kind
Speaker 2: of basic rundown of what you need to do, especially
Speaker 2: financially and especially in Singapore. Ok, assuming we've decided to
Speaker 2: go freelance, secured maybe two or three gigs. What do
Speaker 2: we need to set up in terms of accounts, for example.
Speaker 2: Ok, I think perhaps let me suggest a way of
Speaker 2: thinking about your income, right? Because if you go back
Speaker 2: to that 2023 survey. So what are the main concerns
Speaker 2: that people have are the main challenges of these own
Speaker 2: account workers and over about 20% it is really uncertainty
Speaker 2: of finding sufficient work and the lack of sufficient work
Speaker 2: in general and then the health care, their retirement and
Speaker 2: and all these concerns, right? So one is really about
Speaker 2: income and the other one is about
Speaker 2: expenses and long term expenses. So I I think one
Speaker 2: way of thinking about it is this your income is
Speaker 2: very lumpy. So sometimes you have, sometimes you don't have
Speaker 2: and all that, but let's say you're already a freelancer.
Speaker 2: You need to find what is the equivalent that you
Speaker 2: are actually earning in a year. Ok, let's say you
Speaker 2: say that, ok, I'm actually bringing in 50,000 a year, right?
Speaker 2: This is not the same as 50,000 of a full
Speaker 2: time employee. You know why? Because
Speaker 2: no CPF there's another 17% or so for most people
Speaker 2: from the employer, then there's, of course, then the interest
Speaker 2: on that CPF. Then on that's a retirement side insurance,
Speaker 2: there's at least basic like workman's injury compensation. You don't
Speaker 2: have sick leave you don't have, right? So you easily
Speaker 2: need to like almost like discount what you have by,
Speaker 2: let's say 20% right? And then think about it this way.
Speaker 2: So let's say you're talking about, let's say if you
Speaker 2: 3000 a year, what you are talking about is every month,
Speaker 2: you are actually earning about $4000 a month. Ok? And
Speaker 2: some months you will get 1000, some months, you will
Speaker 2: get 30,000. Ok. So how do you think about it?
Speaker 2: So think about it as you are generally earning about
Speaker 2: 4000 a month and then set up a system for
Speaker 2: yourself to make sure that your expenses are within a
Speaker 2: certain amount, make sure that your savings are in,
Speaker 2: set up. So what is the first thing you do?
Speaker 2: So 4000 a year you should be saving at least
Speaker 2: I think for freelance we got 15 to 20%. So
Speaker 2: set it up, set up a standing instruction ok, so
Speaker 2: you have one account in which you get all your money, right?
Speaker 2: Then you set up another account in which you save
Speaker 2: all this money, right? And it is called the Do
Speaker 2: not touch it. Is it is the saving or investment account, right?
Speaker 2: And then you automate it right? You automate it. So
Speaker 2: you pay yourself first. So the first thing that comes in,
Speaker 2: you do that now, but it's a bit hard if
Speaker 2: really you have zero balance right, then it comes down.
Speaker 2: So ideally before you even start, you should really have
Speaker 2: a certain level and then you do this. But if not,
Speaker 2: then what you need to do is that you say, ok,
Speaker 2: I will save towards something and let me call this
Speaker 2: the so called emergency fund. You know, a lot of
Speaker 2: people don't understand what emergency fund is. They think it's
Speaker 2: really for emergencies, but actually it is for the
Speaker 2: emergency of lacking income. Yeah, exactly. So now that we're
Speaker 2: facing more retrenchments, people understand this actually tied you over
Speaker 2: time to income. So set that one up first and
Speaker 2: then accumulate in that account until you have a certain amount. Ok.
Speaker 2: So what is this amount for most employees? People say?
Speaker 2: Six months, 3 to 6 months. Yeah, freelancers, I would
Speaker 2: just say 12 months. Ok. So fill up this bucket
Speaker 2: of your emergency fund in savings and
Speaker 2: always top it back. So that's the first thing that
Speaker 2: you need to do. And I think as a freelancer,
Speaker 2: you can already do that. You are already in a
Speaker 2: very good space, then we can talk about investments later. Right.
Speaker 2: And then if you want to, you can also take
Speaker 2: up all your other, like, fixed expenses that you already
Speaker 2: have and you can actually gyrate from a different account
Speaker 2: if you want, you can have three accounts. Right. So
Speaker 2: that only one is left to spend on. Right. Yeah,
Speaker 2: it's possible. But I think at a minimum, the first
Speaker 2: thing that you should have is actually this saving
Speaker 2: because not many people can handle three accounts. So at
Speaker 2: least two, at least two, in my opinion, at least. Ok.
Speaker 2: So what about setting up an account for business? Is
Speaker 2: that something that's worth thinking about or do you think
Speaker 2: that's just too many components to consider? No, I think
Speaker 2: it's good because it gives you a discipline to say actually,
Speaker 2: how much are you spending on your business, right. So
Speaker 2: you can actually replicate this thing about like, even when
Speaker 2: you're self employed you're paying yourself. Right. So this is
Speaker 2: actually your salary, like I said, $4000 right? This is
Speaker 2: your salary and then
Speaker 2: that you pay yourself first into your savings. In fact,
Speaker 2: one of the things that I think freelancers after a
Speaker 2: while you can consider is actually to incorporate in the business, right?
Speaker 2: Because when you incorporate business, there are certain advantages, most
Speaker 2: freelancers that I talk to who don't do this, don't
Speaker 2: do it for no other reason than a bit lazy
Speaker 2: to go and find out. And it's a bit late.
Speaker 2: But there are, of course, if you are, in fact, the,
Speaker 2: a little bit more enterprising, there are also these start
Speaker 2: up grant
Speaker 2: and the government gives quite a bit for enterprise Singapore
Speaker 2: and you can really go and all you need to
Speaker 2: do is register your business, right? Register it and then
Speaker 2: you start to get grants. And if you are really
Speaker 2: a company, like a private company, you can also have
Speaker 2: certain sme financing and all that and you make your,
Speaker 2: what you bring to the world actually replicable and sustainable
Speaker 2: as exit business, right? But of course, that's not for everyone, right? So,
Speaker 2: but it's something to consider, at least to look into,
Speaker 2: I would say when you are at the stage, when
Speaker 2: you're about to pay income tax, that means
Speaker 2: you probably might be but do look into it because
Speaker 2: there's quite a lot of support on that part. Yeah, exactly.
Speaker 2: And it's something that individual freelancers don't really think about
Speaker 2: or it doesn't really come to their minds. It's not
Speaker 2: top of their mind because they think of themselves as
Speaker 2: individual workers, not necessarily a business. Ultimately, you are a
Speaker 2: business because you're offering a set of services, right? Even
Speaker 2: though you're just one person. So I wanted to talk
Speaker 2: about what you mentioned earlier, a couple of times the salary.
Speaker 2: That's right. Right.
Speaker 2: And I know it's important to pay myself. But how
Speaker 2: do I define this? Especially when, as we said, some days,
Speaker 2: we're earning 1000, some months, we are earning $30,000. And yes,
Speaker 2: while we should be planning with the year's salary in mind,
Speaker 2: how do we actually pay ourselves monthly then as a
Speaker 2: salary when that income generated is inconsistent? How do we
Speaker 2: tackle this? Ok. I think that the main
Speaker 2: reality you need to face is that how good are
Speaker 2: you as a freelancer such that and how much income
Speaker 2: can you actually generate? And it's actually a mindset that
Speaker 2: is not to do with the income side, but to
Speaker 2: do with the expense side if you spend say 25,000
Speaker 2: a year. Ok. On your basic expenses, you should be
Speaker 2: able to generate income of 50,000 before you even go there.
Speaker 2: I'm not even talking about C PM and everything right now. Ok.
Speaker 2: So basically if you can't
Speaker 2: achieve that, you're going to be very stressed. So when
Speaker 2: I say think about your salary, let's say 4000. I'm
Speaker 2: not saying that how you cash flow wise, manage to
Speaker 2: extract this and you can keep it aside because your
Speaker 2: bank account is going to look very weird. It's gonna
Speaker 2: be like it's gonna be, let's say you earn 30,000.
Speaker 2: Then after that it's going to minus minus go back up, right? Yeah.
Speaker 2: So that is the minus minus, you need to know. Right.
Speaker 2: So that means that if you really think that in
Speaker 2: one year you're going to earn 50,000 and you should
Speaker 2: have a good sense of that,
Speaker 2: then you should not be spending more than, let's say, 2000,
Speaker 2: 2000 a month. Right. And if you can't do that,
Speaker 2: then perhaps you should delay your entry into this space. Right. Yeah.
Speaker 2: Something also to think about. Right. Freelancers actually can lose
Speaker 2: work at any given time. Projects can end abruptly and
Speaker 2: in an instant one source of income is gone. How
Speaker 2: do we manage our finances at the current going when
Speaker 2: this happens when this abrupt end happens? And
Speaker 2: obviously my projection is gone now. Right. So, what do
Speaker 2: I do? Yeah. So that's what the emergency fund we
Speaker 2: talked about is there. So, so unlike others, these emergency
Speaker 2: fund might actually be drawn down on a little bit
Speaker 2: more so, or you can get sick, right? And you
Speaker 2: cannot work to eat, right. Yeah. So that's why I
Speaker 2: say 12 months because for, for employees, we might say
Speaker 2: six months or even three months. Right. But it's the
Speaker 2: in between
Speaker 2: living with uncertainty is part of being a freelancer, but
Speaker 2: at least you're having that buffer, you know that you're ok,
Speaker 2: you know that you're ok for on paper, it 12 months.
Speaker 2: But in reality, it's more like six months, right? But
Speaker 2: you need to understand that this is why you're doing
Speaker 2: it right. It's not that you can don't work for
Speaker 2: 12 months. Right. You need to understand that you're talking
Speaker 2: really that 12 months for others is effectively a kind
Speaker 2: of 3 to 6 months buff of. And it's from
Speaker 2: that mindset,
Speaker 2: I think that it's really about entering into freelancing. You
Speaker 2: need to know when the right time to enter so
Speaker 2: slow months can really be quite full for freelancers. I mean,
Speaker 2: it really was painful for me and it will be
Speaker 2: tempting at this point to lean on credit. How can
Speaker 2: we prevent our credit or debt from spiraling out of
Speaker 2: control when we are freelancing and and when we get
Speaker 2: the slow months, like I was saying that we have
Speaker 2: to build this buffer, right? So even if it's hard
Speaker 2: that during your good months, then build even more of it.
Speaker 2: I was saying that you treat yourself as always saving that,
Speaker 2: let's say 20% a month. But let's say you have
Speaker 2: a good month and you're not bringing just 4000, right?
Speaker 2: You're bringing in 20,000, right? And you know that you
Speaker 2: also got target annual income is 50,000
Speaker 2: then instead of using the money going to be a
Speaker 2: big party and all that right? 10,000 away it up,
Speaker 2: look it up. Ok? So one of the advantages of
Speaker 2: being a salaried employee is CPF contributions and also income
Speaker 2: tax filings, insurance is done automatically as well. CPF especially
Speaker 2: it's a big plank of retirement adequacy, right?
Speaker 2: So what do freelancers need to be conscious about here?
Speaker 2: I know you mentioned that the Medisave top up contribution
Speaker 2: or rather the Medisafe contribution monthly needs to be there
Speaker 2: as a freelancer. But what else do we need to
Speaker 2: be aware of? So that's by law, right. Medisafe and
Speaker 2: all that and many people don't know that by the way,
Speaker 2: a lot of answers actually don't know. I didn't know
Speaker 2: actually at the time that I was supposed to call,
Speaker 2: contribute to my Medisafe, even if I couldn't afford contributions
Speaker 2: to my O A. Yeah. So actually a lot of freelancer,
Speaker 2: friends of mine didn't know this and they got penalized
Speaker 2: as a result. So please take this as a PSA
Speaker 2: if you are a freelancer, you need to at least
Speaker 2: contribute to your Medisave. But yes, what else should we
Speaker 2: be aware of for CPF is really for the long
Speaker 2: term and it's really for your retirement, right?
Speaker 2: And if you look at what the employees actually contribute
Speaker 2: to their CPF, I think that's a good starting point.
Speaker 2: So I think when you start, and I'm talking about
Speaker 2: special account because special account is really the retirement
Speaker 2: and I think the younger folks will start at 6%
Speaker 2: of their salary, right? And then goes up seven. So
Speaker 2: can you contribute at least that? Right? As if you
Speaker 2: were an employee? And remember I said that you have 50,000, right?
Speaker 2: Then you can go and top up. Right. I think
Speaker 2: in the case of special, don't do it all at
Speaker 2: one go. Yeah, you, you should save all at one
Speaker 2: go that 10,000. But at least take that step of
Speaker 2: saying that, ok, I'm not worse off than if I
Speaker 2: were
Speaker 2: an employee because I've taken this step myself and I've
Speaker 2: seen people who have done that because they appreciate that 4%
Speaker 2: will compound and it's really a big difference. Yeah. And
Speaker 2: don't say to yourself that I'm only going to start
Speaker 2: later when I am in this stage because time is
Speaker 2: your friend and you just delay 10 years and you
Speaker 2: have to save, I think of an eye and you
Speaker 2: have not much to begin with. That's right. Yeah. And
Speaker 2: especially in a freelancer, you're dependent on your own labor,
Speaker 2: your own health, your own,
Speaker 2: you know, so unless you build an editable business, you
Speaker 2: will depend on yourself and one day you will no
Speaker 2: longer be able to earn and you will still have
Speaker 2: to spend. And that is the reality. This is why
Speaker 2: they say health really is wealth without health. You can't work,
Speaker 2: but you can't control some things, right?
Speaker 2: You can't control something. Yeah. Correct. I wanted to go
Speaker 2: back to insurance and the same thing when I was
Speaker 2: freelancing for something like over a decade, my insurance agent
Speaker 2: or my financial planner at the time said, ok, now
Speaker 2: that you're freelancing, I think you should consider
Speaker 2: the different kind of plan. So for example, a plan
Speaker 2: with stronger income protection because if anything were to happen
Speaker 2: to you physically and you won't be able to earn
Speaker 2: the same that you're earning now that income protection will
Speaker 2: be in place to make sure that you're covered. So,
Speaker 2: is that something that we should be thinking about as well?
Speaker 2: The type of insurance plans that we should be looking at? Ok. Yeah,
Speaker 2: know where that's coming from, right. So there are roughly speaking,
Speaker 2: two types of risks that you need to guard against, right?
Speaker 2: One is the big bills and those are almost always
Speaker 2: medical bills, right? So if you're going to hospital and
Speaker 2: all that, right? So the good thing is that we
Speaker 2: all have a Medishield Life, right? We do recommend that
Speaker 2: you take an integrated Shield plan because they
Speaker 2: there are limits to Medishield Life and this integrated Shield
Speaker 2: plan is not expensive. Yeah, we're talking about a few
Speaker 2: $100 from your Medisafe. Don't do the private one or
Speaker 2: at least do the B one. Yes, correct. And the
Speaker 2: main thing you are insuring that is your insurability and
Speaker 2: because if you start too late by the time you
Speaker 2: want to do something you can't. So this is one
Speaker 2: type of insurance, right? Then the other type is actually
Speaker 2: income protection, correct? Loss of income. Yes, that's why. Yeah.
Speaker 2: So there are actually three types of things that can
Speaker 2: cause you to lose your income or three types of
Speaker 2: risks which you can't control. One is death. Yeah, obviously
Speaker 2: this only matters to you if you have dependents and
Speaker 2: the under the CPF scheme, as long as you have
Speaker 2: some money in the O A for them to deduct,
Speaker 2: to premiums for the dependence protection scheme gives you 70,000
Speaker 2: sum assurance coverage. But it's not for you. It's for
Speaker 2: your dependence because it's there.
Speaker 2: right? You'll be gone. But yeah, it depends a lot
Speaker 2: on your dependents whether you have dependents. Sure that if
Speaker 2: you do and you need that, then the other option
Speaker 2: that you can consider is uh besides that if you
Speaker 2: are an NS Man or NSF, the SF group insurance
Speaker 2: or ma mh A group insurance is very good value
Speaker 2: and it, that's the most important thing. It is portable.
Speaker 2: So I like a lot of group insurance. What do
Speaker 2: you mean by portable means? You, in this case, you
Speaker 2: don't have to be a min
Speaker 2: employee on NSFNS Men in order to continue with it.
Speaker 2: My first career was with Mindef as a civilian officer, right?
Speaker 2: So I actually hold that plan still to today. Wow. So,
Speaker 2: so even if you had not been a mind dev
Speaker 2: employee for a long time after you just need to continue, right?
Speaker 2: And so that applies to like half the population because
Speaker 2: everyone is an NSF, right? So then you just continue
Speaker 2: as an NS man and and pay that part because
Speaker 2: during your ns
Speaker 2: days, Minde pays for that, that portion of home team
Speaker 2: pays for that portion. This is one of those tricks
Speaker 2: because nobody will sell you guys. There's no commission to
Speaker 2: check with my husband about his. Yes. Yes. And then
Speaker 2: he can cover, you can cover you. Right? Yeah. Yeah. So,
Speaker 2: so there's a low cost way. So DP si mean
Speaker 2: they have mh a group insurance but if not, then
Speaker 2: there's a direct purchase insurance, purchase insurance. You don't have
Speaker 2: commissions and all that. You can even go online and
Speaker 2: all that.
Speaker 2: Now the recommendation is nine times your income or you
Speaker 2: can do a better what your family need and all
Speaker 2: that kind of thing and it actually can be very
Speaker 2: cost effective. So that's one way. So the first thing
Speaker 2: about income protection is really death, right? And then the
Speaker 2: second thing is critical illness. Now the critical illness is
Speaker 2: basically cancer, heart attack and that kind of thing and
Speaker 2: the basic critical illness is to cover you in the
Speaker 2: late stage, right? And so so people think that oh,
Speaker 2: I need this to cover for my
Speaker 2: expenses actually. No, for chemotherapy dialysis, all this outpatient stuff
Speaker 2: is actually covered by your shield plan, right? So what
Speaker 2: is this for? This is in case you cannot work.
Speaker 2: So that could have been what your financial planner was
Speaker 2: saying you have a critical illness. That's right. That's right. Yeah.
Speaker 2: But the thing is that nowadays with screening and all
Speaker 2: that we detect early critical illness quite a lot. That's right.
Speaker 2: And most of these plans do not cover early critical illness.
Speaker 2: But if you buy early critical, it's very expensive. So
Speaker 2: the thing is that you have to balance, right.
Speaker 2: So we usually say go at least for the late
Speaker 2: stage one because that's when you really can't work a
Speaker 2: lot of people during the early stages of cancers and
Speaker 2: all that, they can still work. In fact, they just
Speaker 2: take MC and go and then they go back. So
Speaker 2: what you need, you need to cover your hospital bill,
Speaker 2: then you need to be able to get back and
Speaker 2: do that and then do your chemo that right? So
Speaker 2: what you can do is because most early stuff is
Speaker 2: actually have cancer, most of most cancer, correct? Yeah. So
Speaker 2: you can get very cheap cancer plans that cover you.
Speaker 2: So that's that.
Speaker 2: So that's the second type. So the critical illness recommendation
Speaker 2: including MS basic financial planning is about four times your
Speaker 2: income for your annual income. That is actually for recuperation
Speaker 2: because why four times because when you get a late
Speaker 2: stage critical illness, it tends to be that either you
Speaker 2: survive beyond four years or you don't. So that's the recommendation.
Speaker 2: So this to the
Speaker 2: third one is what you call occupational disability. So sometimes
Speaker 2: you get something, it could be an early critical illness
Speaker 2: or it could be, let's say a presenter and the
Speaker 2: loss of your voice or whatever. Yeah. And the cancer,
Speaker 2: the critical illness insurance is not going to pay out.
Speaker 2: You're not gonna pay out, but you might also suffer
Speaker 2: in some cases like depression and all that. These are
Speaker 2: all good to have. Yeah, but at them
Speaker 2: up, right. Add them all up. MS Basic financial planning
Speaker 2: guide says all your insurance should not exceed 15% of
Speaker 2: your take home pay. Ok. So I would say that
Speaker 2: even 10% sounds a bit much because 15% here then
Speaker 2: you need to save, right? Isn't it bad? I rather
Speaker 2: you have as much in savings as well, then you
Speaker 2: need to eat right? So 50% of that insurance and
Speaker 2: then accumulation for the future and remember that
Speaker 2: you don't have CPS. So it's not 100% another 70
Speaker 2: before you know it, all of it is used up
Speaker 2: and allocated already. That's right. Yeah. So I think insurance
Speaker 2: really pay as little as you can maximize your coverage.
Speaker 2: Use term insurance, use, use nice hacks like S a
Speaker 2: group insurance, use direct purchase insurance and then all the
Speaker 2: other fear and uncertainty or that, that that might be
Speaker 2: used on you. You just have to have that enough
Speaker 2: knowledge and literacy to, to say, look, I have to
Speaker 2: focus on
Speaker 2: my financial plan must be based on my being able
Speaker 2: to earn, being able to thrive, not based on me dying.
Speaker 2: And that's exactly the literacy is exactly why we are
Speaker 2: doing this episode. So, Chun Ting, thank you very, very
Speaker 2: much for walking us through all of that, very comprehensive indeed.
Speaker 2: And you know what, I wish I had this advice
Speaker 2: when I was freelancing all those years ago. But you
Speaker 2: know what, it is still beneficial even if you are
Speaker 2: a salary employee because you never know what's going to happen.
Speaker 2: Now, before we let you go, there's a segment here
Speaker 2: on the Money Talks podcast. It's called Questions from Ahead.
Speaker 2: And that's exactly what it is. I'll just need you
Speaker 2: to pick one hand it to me and I ask
Speaker 2: you the question. All right. Ok. And your question is,
Speaker 2: oh, what do you spend the most money on?
Speaker 2: Ok. Let's put aside kind of mortgage and all that
Speaker 2: because I think that's probably one of the biggest. Yeah.
Speaker 2: So I think I spend the most money on my Children,
Speaker 2: Children stuff and all that. But even I have to
Speaker 2: look at it and say actually what they want most
Speaker 2: from you is probably your time,
Speaker 2: your attention to bond with you. We don't always have
Speaker 2: to go for that expensive restaurant and all that. Yeah.
Speaker 2: So it's a good reminder to myself to think about
Speaker 2: what really matters. That's what's priceless, isn't it that time?
Speaker 2: And that energy and that love with the kids, it's priceless.
Speaker 2: You can't put a dollar sign on that lovely answer.
Speaker 2: Chun Ting. Once again, thank you so much for being
Speaker 2: on the money. Thank you for me. Yeah,
Speaker 2: and listener, I hope this episode assures you that it
Speaker 2: actually is possible for you to achieve good financial habits
Speaker 2: and health. While freelancing, there are ways for you to
Speaker 2: survive and also thrive as a freelancer. If you have
Speaker 2: any thoughts or questions about this episode, please send us
Speaker 2: a message we'd love to hear from you.
Speaker 2: This podcast is available on Apple podcasts and Spotify as
Speaker 2: well as youtube music. Don't forget to rate us if
Speaker 2: you are enjoying this podcast. My thanks to the team,
Speaker 2: Joanne Chan Tiffany, Ang, Christina Robert, Juani Johari and Sai
Speaker 2: Ye Wint. I'm Andrea Heng. Thank you for listening to
Speaker 2: the Money Talks podcast.