Financial Management...

Forced 2 go for a financial management talk last Friday...
Thot dat it wuz 1 of those borrrriiinngg talks...
But apparently it was quite informative... some stuff i din noe...
Actually Financial Management is quite important for everybody...
Did you know that when u put money in the bank for safekeeping and accumulating interest by the year, you are actually losing value of your money..? Well i din noe dat...
Even tho u put in the best-est bank (3-4% interest), you are still losing the value of your money thru inflation which is @ 7.5% this year.(May 2008) Once again, i din noe dat...
Singapore Inflation Watch

The speaker continued on talking about why we shuld invest...
Nvr really specify wat investment lah... Juz invest...
N also touch on Retirement... So far off you say...?
Actually ppl ard my age shuld start preparing for retirement liao...
1 million 2 be saved by retirement(55-60)... Yeesshhh...
Start young so when old later no need to suffer...
N correct me if im wrong, NOW is the time to buy...
N for the umpteenth time, please take a look @ diz...
CPF Retirement Savings Calculator

Lemme share some equations on how much is safe N not safe...
Added mai own version real life examples too...

Basic Liquidity ratio =

Cash

_______________

Monthly expenses

The basic(safe) guideline = Shuld last you 3 to 6 months.

Example: If you spent $1000 per month, your savings/cash on hand/bank/under pillow shuld be at least $3K to $6K... Bcoz of rainy days which includes retrenchment, health related injuries or toilet bowl got stuck N it flooded the entire floor kind of emergencies

Debt/Loan service ratio =

Total monthly/annual loan repayments
_______________________________
Monthly/Annually take-home income(less CPF)

The basic(safe) guideline =
0% is the best (my philosophy)
35% or lower is adequate
45% or higher is excessive

For those with no housing loan, HDB or housing bank loan =
0% is the best (my philosophy)
15% or lower is healthy
20% or higher is excessive

Example: If you earn $1000 per month, your iPhone($50/mth), Cherry QQ($250) and Nigerian remittance for inheritance($150/mth), would add up to 45%, thats bad. Shuld really ditch the iPhone by passing it 2 me...

After this the speaker went on 2 explain 2 more equations but by dat tyme, i wuz bz calculatin in my head hence, paid no attention 2 them...
Lemme juz post them up, hoping i can understand them...
before it's too late... gulp...

Debt to Asset ratio =

Total debt
__________
Total assets

The basic(safe) guideline = 50% or less is considered safe...

&

Solvency ratio =

total net worth
____________
total assets

The basic(safe) guideline = The higher the ratio, the less susceptible is an individual is to a decrease in asset values... (so cheem Ingrish..)

Then we had a coffee break N then i din return back 2 the talk...
Had 2 prepare for my montage thingy... Wat a waste... haiizz...
Anywayz, i dun agree wif the speaker fully...
But there's also some truth in his "lecture"...
I haf yet 2 talk 2 someone on investments/shares...
But i got my backup plan...
Hopefully he is still with his bank...
U noe, afta de High 5 and the Pineapple thingy...
Hope he is well... Will call him 1 day...

N finally a real life example...
How did i manage to save up for my marriage & honeymoon...?
Now datz Financial Management...
:)

I am proud of the man I am now, the Ring I wear N...
the huge, irritating pimple on my forehead... (of all places..!)