If I was 21 years old again, what would I have done differently in my finances?

An edited version of this article was published in the 27 December 2017 issue of Zuu Online and later republished in Yahoo!Finance on 9 January 2018.

(Below is our original article in full.)

The advice I would give to my younger self when just starting to earn an income is:

  1. Diligently invest at least 10-20% of my income monthly into a low cost global equity index fund that is weighted towards academically proven sources of return. To avoid the temptation of selling out when markets go through volatile patches. Try to invest any spare cash during market crashes.
  2. Buy at least $200K of critical illness insurance that covers the rest of your life. This will provide cash for treatment as well as sustain living expenses (in case you need to stop work) during recovery periods from any protracted critical illness. You can either buy this as a rider to a whole life plan or term insurance.
  3. Get an integrated shield plan (using Medisave to pay the premiums). This will cover the bulk of hospitalisation expenses. If you can afford it, go for the private hospital coverage as premiums are low when you are young. You can always easily downgrade the plan later if necessary. On the flip side, it is harder to upgrade any plan later as you may become uninsurable due to new medical conditions.
  4. Work out a budget and stick to it, reviewing it once a year.
  5. Start saving for a house that is affordable enough such that mortgage payments can still be met during periods of unemployment (eg. retrenchment) as well as reasonable interest rate increases.
  6. Engage a financial adviser who is adept at both insurance and evidence-based investing.
  7. Find a spouse who shares the same values about money!

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