Why Singaporeans fail financially?

Statistics regarding the financial well being of Singaporeans are depressing.  In a recent survey published by HSBC in 2011 (The future of retirement), it is identified that many household financial plans contain significant gaps: About 1 in 3 of those in their 50s do not have retirement savings and 1 in 4 couples with children say they do not have life insurance.  

This prompts me to ponder the reason why some Singaporeans fail financially? Is it due to external factors or internal factors? Are people's choices forced by circumstances or chosen by their free will? 

Let’s explore some factors that affect one's financial well being.

 

Because we are in this blessed land called Singapore, certain external factors do not really affect us to a great degree and thus I strike them out. It is unfortunate that there are still a small minority of Singaporeans who are struggling financially due to economic conditions, unemployment, major illnesses and disability. These are conditions that one has little or no control of.  It breaks my heart whenever I see our old folks in their 70s cleaning tables in kopitiams or blind people selling tissue papers in hawker centres.   Personally, I hope that our social safety net can be cast wider to assist those in need, especially since our country has such massive cash reserves.

Internal factors would include failure to construct plans, lack of discipline and procrastination etc…

My experience in wealth management have led me to conclude that most Singaporeans, especially the younger generation are actually financially savvy individuals.  However many often over focus on certain aspects such investment planning and neglect the other aspects which are equally as important. I do not know many people in their 20s to 30s who are not investing in the stock market or have no intention of doing so if they have the financial means.  

As a financial practitioner, I consider retirement planning and insurance planning to be the most essential elements of one’s financial plan. The reason is simple.  We only go through retirement and death ONCE in our entire lifetime.  Unlike other aspects of personal finance like investments, one cannot “learn” through experience. It has to be done right the first time.

Internal Factors are within our circle of influence and can be controlled by implementing and following through on a practical financial plan.  I stronger urge readers of my blog to get their financial plans reviewed by a competent advisor while we are still young, healthy and earning an active income. The feeling of regret is magnified many times over if we know the right path yet we choose not to do it. 

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