Uncle VS Inflation

Now, let me share with you about the saving(based on true story)

Few days ago, i heard from my colleague that there is a rich but single uncle (don’t know why,didn’t discover the reason), his hobby is saving. He love to  work hard and accumulate his “money bag” become bigger and bigger. Beside, this uncle has a goals in saving, is to purchase a unit of high class condominium and enjoy for his retirement life. He is plan to pay by cash, because he is not so believe with those financing / loan firms  and banks.

After few years, the saving is become more but he still can’t afford to buy the condominium (due to inflation, products / housing price increase). He never find out the problems behind and keeping work harder and save more. The time passed by really fast, the value of the money he save is keep decrease but the inflation is keep on increase year by year, but he still don’t know what is happening. Then he go to looking for my colleague. Finally, the uncle understand that the interest rate  given by the bank can’t against the inflation rate. But he already wasted a lot of time in saving, and now he have to buy the condominium by loan.

In this story, we can see that the uncle using most of his lifetime is saving, but at last he still can’t withstand the inflation. So, for the younger generation like you all, what have learn in this story? Saving is a tool to accumulate your wealth, but beside that you still need to accelerate your wealth in order to against the inflation.

Mr.A & Mr.B

Let me share with you guys another story about my clients.

Mr.A is a busy businessman, he spent most of his free time to do research and monitor about the investment portfolio or online to look for the update of investment market. Slowly, Mr.A has getting some good return from his investment and he also expanded his business. Beside the business & investment, he also have a happy family – a pretty wife & 2 cute kids. But unfortunately, an serious accident is happen to Mr.A in a night. Because of the accident, Mr.A become total permanent disability and nobody is monitor his investment portfolio.

Furthermore, the share of Mr.A is slowly taking over by the other shareholder. His wife and child can do nothing to stop it and let the shareholder do anything at will. After that, his wife and childs have to work in the hawker center for the living cost and the education fee of his children. All of their friends feel sad and pity of them. Do you think that Mr.A is a responsible husband or father to his family??

For Mr.B, he is a totally different with Mr.A. He is a normal working adults with introversive and fainthearted. He work as a manager in a company and his wife is a insurance agent. So, when it come to the end of months, his wife will ask him to take out some money to help her to hit the sales target. For Mr.B, his goals is to save some money every month and invest but his investment plans were delayed because of helping his wife to hit the sales target. So, actually his wife is earning a lot Mr.B money, and most of their money is allocate in the protection part, and it doesn’t help them to gain the higher returns. How they going to achieve their financial freedom??

From this story, we can know that NO PROTECTION or OVER PROTECTION will not help in you financial plan. Only with the SUITABLE PROTECTION, GOOD STRATEGY, & WELL CASH ALLOCATION then you are able to achieve your goals in your financial plan. So, you are Mr.A or Mr.B??