SINGAPORE – Comparing one’s finances with others’ can leave people feeling as though they have fallen behind, and investing in oneself remains one of the most important forms of investment.
That was the main thrust of a panel discussion held on July 18 as part of The Straits Times InvestMe campaign that is aimed at increasing the financial literacy of its subscribers.
Alfred Chia, chief executive of financial advisory firm SingCapital, told an audience of about 100 people who attended the talk online and in person that social media has shifted perceptions of what constitutes “enough” money.
For instance, many would assume that those who can travel to Europe for holidays would have more money than those who go to nearby destinations such as Kuala Lumpur.
He also noted that while people have differing needs, they cannot avoid the financial reality that they would need to save a lot more if they want to spend, say, $5,000 a month when they stop working.
As a result, he advised Singaporeans to consider topping up their Central Provident Fund Retirement Account if they can afford to do so because the national longevity insurance annuity scheme CPF LIFE can help shoulder part of their retirement burden for life.
Those who can top up to the enhanced retirement sum of $440,800 in 2026 can expect to receive a monthly payout of about $3,400 from 65 onwards.
“So, (what is) enough is highly personal, but I think all of us can work out some numbers – what is the kind of lifestyle we want; and then you can work that back,” Chia said.
He was one of two panellists at the second ST InvestMe event – Invest to Live, Not Live to Invest – which was held at the SPH Media auditorium at News Centre in Toa Payoh North.
The panel discussion was moderated by ST senior business correspondent Angela Tan and hosted by ST Invest editor Tan Ooi Boon.
Panellist David Teo, senior consultant psychiatrist and deputy medical director at Connections MindHealth at Novena Medical Centre, said people may still feel financially insecure despite what they have because they compare themselves with others.
“I think (money) is a very personal thing, and how much is enough for you or me… I think there is no magic number to that,” he said.
“We have our own life experiences growing up – some may have grown up with more, some may have grown up with less.”
Asked about the three financial priorities people should have, Chia said the first is to ensure that they have basic insurance coverage. The second is to build an emergency fund equivalent to three to six months of expenses.
The third is to adopt the 4-3-2-1 approach to managing their finances, under which 40 per cent of income is allocated to loan commitments, 30 per cent to daily expenses, 20 per cent to savings and investments, and 10 per cent to insurance and protection needs.
Chia noted that CPF should serve as the foundation of Singaporeans’ financial plan because it provides risk-free returns.
He also encouraged self-employed individuals and higher-income earners to make voluntary CPF top-ups where possible, noting that they also benefit from tax relief.
“Like any investment portfolio, you must have a foundation… Maximise CPF first, then look at other investments,” said Chia.
During the Q&A session, Valerie Foong, 33, asked how individuals can balance the desire for lifestyle upgrades with being content with what they already have.
In response, Teo said people often have a tendency to keep wanting more, noting that even after achieving a financial milestone such as accumulating $1 million, some may immediately aspire to accumulate another $1 million.
“If we constantly feel that we need to keep up and that we are chasing after what other people have, then that is a sign that we are not contented and (it) can actually erode happiness,” he said.
Sarah Francis, 17, asked what financial habits she could start adopting now to save more and build financial literacy.
In response, ST Invest editor Tan said that if he could turn back time to when he was 17, he would have asked his relatives not to give him hongbao money during Chinese New Year but instead to contribute to his CPF Special Account.
“If you have spare cash and top up your kid’s account to the maximum of $220,400 now, imagine starting from day zero… When your children continue contributing as employees later, by the time they reach 55, they would become a new generation of Singaporeans with a few million dollars in their CPF,” he said.
In his closing remarks, Tan reminded attendees that the best investment in life is not in stocks or property, but in themselves.
“Your salary or the profits from your business are your real investment returns… Those are the things that actually make people rich,” he said.
“Investing is necessary so that you can enjoy a better life, but don’t forget that most of what pays for your daily essentials will come from your income or the profits generated by the business you have worked hard to build.”
The July 18 event was the second in a series of six financial literacy courses that are being held in the coming months. They cover topics such as smart investing, financing life goals, expense management and property strategies.
To attend these courses, just sign up for the ST InvestMe 24-month All Digital or All Digital and Print subscription package, which costs $29.90 per month.
Existing subscribers can recontract or upgrade their current plan without incurring any penalty for their existing plans.
In addition to the courses, subscribers can access the InvestMe website, which offers practical tips to help them plan their finances better.
The website will also feature columns and articles from ST Invest every weekend. The next financial literacy course – Smarter Ways To Manage Your Money – will explore smart money management tips, with advice on how to spend and borrow wisely.
Subscribers can attend the event at the SPH Media auditorium on Sept 17 or join the session online.
