How to Live a Well-lived, Joyful Life – Designing Your Life Book Review 1

n episode #74, we share a book review on how to better design your life. Creating a life that is both meaningful and fulfilling is not easy. But this book, which originated from one of the most popular elective courses in Stanford, seemed to have found the hack to designing your life.Join us as we talk about this book in Singapore’s context and learn how you can design a better life moving forward. So you can live with less stress, and navigate well even in uncertainty.

Book: Designing your life by Bill Burnett and Dave Evans

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podcast Transcript

Reggie: Hey guys, you’re going to be hearing more voices this year on the TFC podcast network. In 2021, we’re going to launch quite a few shows. And on this main feed, you will be introduced to various hosts, how they think. You get to know them and see if you want to join them on their main show. 

So today we have Troy in the house. He is the host of the Coconut Avenue podcast, which is a property podcast focused on property investing. But internal circulation says he has read a thousand books in a course of a few years. So an avid book reader is here in the house. He will be taking over the main feed the last Tuesday of every month for a few months, okay. We’re gonna test this out for a few months. If you love it, great. We’ll continue to run book reviews. If you don’t like it, it’s fine. You will just hear more of me la. All right. So without further ado, we’re going to bring Troy in the house. Take it over.

Troy: Welcome to The Financial Coconut. My name is Troy, and I’ll be doing the first book review of The Financial Coconut. Normally, when we think about book reviews, when we see book reviews, they are just summarizing all the main points of a book. More or less, they’re the same, but I like to do things a little bit different over here — which is to summarize this book in a Singapore or Southeast Asian context, to give you more realness to this book, instead of just a normal book review, which you can find on Google. Anyway, I’ll talk about the three main points that I took away in this book in a very local context. So the title of this book is called Designing Your Life.

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I know it sounds airy-fairy like one of those self-help books, where you keep reading and then you nod your head. Yes, yes, yes. But in the end, after you read it, you don’t do anything to improve your life. Now, this is not the case. This is actually one of the most popular elective courses in Stanford. The two professors saw so much benefits that it brought to their graduates, that they decided to turn this course into a book.

So who is this for? It’s not just for the uni student who’s exploring their way in life. It is also for a working adult who has a few years of working experience under his or her belt. Why do I say that it’s for an adult as well? Because if you are unsatisfied with your life and you have worked a few years in the world, you have more experiences to fall back on to know what you like, what you dislike.

And ultimately this book is about helping you craft your way forward. So if you have a little bit of experience, I think it’s even better. This book requires some active journaling, requires some reflection along the way, but it’s not like you need to do it in one week or two. You can spend just 5 minutes, 10 minutes every day doing it and it accumulates over time.

I read this book a few years ago, but I didn’t really apply it because I was just busy jumping to another book. But I read this again recently and I thought that hey, you know, it would be really beneficial if I can share this book with all of you. 

So let’s jump into the first point that I took away from this book, which is called reframing.

The professors actually mentioned that we face two types of problems in this world. The first one is called gravity problem, which as the name implies, it is like gravity. Wherever you go, you cannot escape it. It’s escapable. And the second problem is called anchor problem, which also as the name implies is like the anchor on a ship. You can put an anchor on a sea bed and then you just stay at a spot. And when you want to move, you can pull the anchor up and move to another place and dock the ship again. 

So what they say is that very often, right, we mistake anchor problems as gravity problems. And then we are stuck in a very passive situation where we feel that we don’t have any option. We don’t have any other control in that situation. And we start to feel unsatisfied. We start to feel sien, frustrated, and all these things. So what’s a real life example that I can share with you? Work. Let’s say, you know, from young, I think you and I, we are probably the same. We have heard about this whereby our parents or people around us tell us that you go and find a job that pays you regularly. Don’t talk about passion. Don’t talk about happiness. You are an adult, you have to fulfill your responsibilities. It’s normal to suffer. 

So we grow up, you know, even when we go to work, we have this mindset, but the thing is that I’ve seen many people who are also happy doing what they need to do. They are also happy while fulfilling their responsibilities as an adult. So the idea that we’re an adult, we shouldn’t think about being happy while working, we shouldn’t think about being happy while fulfilling our responsibilities — that is an anchor problem, but because we mistake it as a gravity problem, we go into it, or I would say most of us go into work, just unsatisfied la, because we feel like we can’t do anything to change this. And we have to pay our bills. We have to start to earn money. And we’re not happy with the work that we do. And I think that that’s become a major social narrative. That’s why everyone, sometimes it’s so sien, or they say Singapore is one of the most stressful places to work.

And if we were to use reframing, how would that be? Okay, let’s say we are in the same situation and we do not know our way forward. The only thing we know is reframing. So, if you’re in that situation, you can reframe your situation to be like, how can I feel satisfied while fulfilling my responsibilities as an adult?

So anytime you feel that you have reached a situation where you have no choices, reframe it, because you always have choices, it’s just that you’re not seeing it as of now, from “it’s just like that lor, bo pian”  into, “how  can I get X while doing Y?” Something like that. And then you ask me, “Troy, cannot be right? Where got so easy? If so easy, everyone can live a fulfilling life already what.” And that’s true. I tell you, that’s really true. Of course, of course its not that easy. 

That brings me to point number two. The point number two, I will call it knowing yourself, because I think that sounds pretty cool la, and maybe it’s a bit cliche, but I think knowing yourself is better than what they, what they call it? They call it defining yourself. And this is a very interesting section to me because I always thought I knew myself good enough. But until I read this book, I realized that, eh, actually I don’t really know myself that much. So what has knowing yourself got to do with finding your best life or finding your best career?

Of course, it has to do a lot with that. There are a lot of specific questions that the professors ask. Some of them might be: When was the time that you felt the most engaged in your work? Doing what type of work makes you lose yourself when you’re so immersed you’re in a flow state? What type of bosses do you like? Do you like those bosses that give you a lot of autonomy? Do you like those bosses who are really regimented and they set up rules for you and then you do it? Do you like the bosses who talk about a lot of KPIs? Do you like the bosses who care a lot about culture and your vision, your purpose, you know, what type of colleagues do you like being around with? What type of meetings do you like? Do you love it when you suggest something and then your boss takes into consideration and apply it? What makes you fulfilled in your work? Which areas in your job make you do your best work? And then you can flip the whole situation around into finding what you dislike as well.

And there are so many other questions, very specific questions, very good questions. And the answers to these questions will give you more clarity because I’m very sure, very sure there’s some questions that we have never asked ourselves before. Never sat down and think about it. You know, what do we really want? What do we really don’t want? And that’s why spending time to answer these questions will make everything clearer. 

The answers will form the criteria that we take to search for a job that suits us better. You know, sometimes it’s, it’s not just about hitting the income that you want. And at the same time you need other criteria to help you make an informed decision, whether you will be happy at your next job, or you will be unsatisfied even if you get the income that you want. All these answers that you have earlier, we’ll help you do that. 

And yes, let me say again. I’m not saying you’ll get all of these answers in one week or two. In the MRT or in the Grab going home, spend five minutes just answering one question or two questions a day. And before we know it, maybe after one or two months, you have a lot more answers than you previously thought.

Okay? Okay? Understand ah? Step two is about defining yourself on knowing yourself. That’s what I call it, knowing yourself.

 And step three, or okay, it’s not step three la. It’s more like point three. It’s called  prototypes. To me, this is the most mind-opening pointer in this book. 

 So what is this prototyping? How does it apply to our lives? For a very brief introduction, prototyping is like a test product that the product design companies use to test their products. And if we were to apply it to our lives, It’s like testing out what we think we are interested in.

Basically you will be doing low risk activities that help you garner feedback about your potentially interesting future. And these low risk activities, so good, you know. Why? Because you will never fail in doing it. So if you’re worried about the consequences of failing and this and that, don’t worry, you won’t fail.

Because the goal of these activities is to get feedback. Whether or not you get good feedback or bad feedback, it moves you forward. It helps you understand whether this thing that you thought you are interested in suits you or not. So  how can you fail when all you want is to get feedback? 

Okay, enough of all this philosophy and big talk. How does it play a part in our lives? Prototyping. Let me give you an example. Let’s say Janice is a chemical engineer, and she’s always thinking about being a teacher, but the thought of quitting her stable job and jumping to NIE to teach totally something unknown to her, just scares her. So she doesn’t do that, but at the same time, you know, she’s a bit sian, and she’s a bit unsatisfied with her job.

So what can she do instead of just giving up and staying at her current position, she can do some prototyping. So two prototypes that are thought of right off my mind is she can draw all her friends who are teachers out, and talk to them and ask them what’s being a teacher like. What are their daily schedules like? What are the things that they have to be in charge of not related to teaching?

What are the politics in the office? What type of students do they like to teach? What type of students they don’t like to teach? And how do they manage their emotions when meeting unexpected situations? What makes them the most happy when being a teacher? And what are the things that they found out only after being a teacher that they wish they had known before?

And the second prototype is maybe Janice can go to the local RCCC or nonprofit organization to teach tuition to the kids from low-income families. She can be in the environment. She can check what’s her teaching style like. She can check whether that she really feel satisfied when being a teacher. And what about being a teacher satisfy her?

There’s so many questions. So I think you roughly get it. After six months of talking to her friends, teaching in a real life environment, she will most probably get a lot of feedback, whether this thing suits her or not. 

In other words, it’s as simple as dipping our toes into the sauna to check the temperature. If the temperature suits you, you slowly dip the rest of your body into it. If it doesn’t suit you, you change another sauna. And she can do all these while still remaining in her stable chemical engineering job. And amazing thing is, like what I said earlier, you cannot fail. There’s no consequences of failure.

I know a lot of times, in Singapore, we want to stay on our path because it’s safer. We do not know what’s out there. We are afraid of how people look at us. You know, if we jump here, jump there, but the thing is you can totally remain in your job and try something new. You try until you know whether this suits you or not, and then you make a proper jump if you need to, because in the end, maybe let’s in Janice’s case, she realized that being a teacher doesn’t suit her and she wants something else that she can find in her current job.

Maybe she needs to tell her boss, talk to her boss, whether the boss can give her a different type of project. Whether her boss can put her in a different department to do what she likes. And all these things cannot be played out if she’s just thinking, she’s just worrying in her head. She needs to really go and get feedback, you know, from the reframing stage to the knowing yourself stage to the prototyping stage, where she can really get real life feedback into what she likes, what she doesn’t like.

And the amazing thing about living in this interconnected era is, there’s lots of information out there. There’s a lot of talk about different career paths, about how people are doing in their careers. And there are also a lot of opportunities to volunteer, to do your own projects out there. It’s just all within a touch of a button or a click of a mouse.

There’s no free lunch. Obviously this road of creating your best career, your best life, it’s not going to be easy. Nothing good comes easy, but is it going to be worth it? Only you will know. Will having a satisfying career mean that you will not be upset with your work anymore, you’ll not feel stressed, you’ll not feel tired? No. Being satisfied with your work, sometimes you will feel tired, sometimes you will feel stress, sometimes you’ll feel frustrated as well. You’re going to feel more at peace. That’s what I hope la. Your quality of life improves as well, because you feel that what you’re doing here makes sense.

It is worthy. It’s worthy for you to exchange your time and effort into doing this thing. And probably you feel alive while doing it. You forget the time. It’s no longer a job la.  You’re spending eight to nine hours of a time every day on something that you sort of like. 

And that is why a feel so pushed to share this book with you as the first book review of The Financial Coconut. ‘Cause we have always been talking about financial stuff, financial stuff, but there is no bigger investment than investing in our career because we are spending the next 30, 40 years on this thing. And if we can make it the best that you can ever be ourselves, we are going to have a great time working. 

So, let me recap this whole book review for you again, and hopefully you will read this book after I’ve shared with you this unconventional, new type of book review.

The first point that I take away is about reframing your thoughts. There are many problems in life that are actually anchor problems, that we mistake them as gravity problems. We need to reframe those problems into anchor problems because then, only then we can act on them. 

The second point is knowing yourself. We always think that we know ourselves and you know, there’s no need to ask all these type of questions to define what we like, what we don’t like, but I’ve realized that that’s often far from the truth. We don’t really know ourselves because from young, we are just pushed along the way, you know, exam, exam, exam, study this, regurgitate, that’s it.

Have we ever spend time to really journal down all our feelings at work? What we like, what we dislike? I doubt so, I really doubt so. At least for the majority of the population, including myself, we haven’t really done that before. So this step might seem a bit lame, but it’s really beneficial because this forms the basis for the most important step, to me la.

The third point that I takeaway from this book is prototyping. Only by prototyping can we really garner feedback of whether the thing that we’re interested in really suits us or not. Can we go down that path or not? Otherwise it will be just like fighting a war on paper. You think about this, you think about that. You worry, but there’s no extra feedback. Only by doing it, immersing yourself in a real environment, taking all this different feedback in a situation. Then only can we realize whether we are suited for this career or not. 

So reframing, knowing yourself, and prototyping. Simple right, simple, right? Yes. That’s the main three takeaways that I took away from this book. Of course, this book goes. There are different areas that the professors talk about as well, but they don’t really stand out to me.

So you can have a read of this book and see what stands out to you and apply it, really apply it. That’s a book I can recommend anyone. It will not be those common knowledge books that you’re reading, like “oh, okay, okay” but you don’t really apply anything to your life. I want to recommend you just like what I’ve recommended my friends, something that they can actually apply to their lives, which is this book, Designing Your Life

Have a go at this book and let us know in our Telegram group chat whether you like this book or not. Or whether you think this type of book review is good for you or not. We would like to know more about what you think so we can improve on this, because if you’d like more, we can do more book reviews to let you have a better understanding of what type of books you should read and how does it benefit you.

And if you don’t like these type of books? You’ll never ever hear my voice again. No, no, no. I’m just kidding. You’ll hear my voice more, but yes. Let us know in the Telegram group what you think, guys. I had such a good time doing this book because I’ve read this book and it benefited me so much. 

I hope you like it. I hope you go and read this book, Designing Your Life. Okay, this is Troy here, signing out. I’ll see you next time.

Hey, I hope you learned something useful today and truly appreciate that you took time off to be better aligned with The Financial Coconut. Knowledge is that much more powerful and interesting when shared, debated, and discussed. Join our community Telegram group, follow us on our socials, sign up for our weekly newsletter — everything is in the description below. And if you love us and want to help us grow, definitely share the podcast with your friends and on your socials. Also, if you have any interesting thoughts to share, or know someone interesting that you want us to hear from, or you want everyone to get to know, reach out to us through hello@thefinancialcoconut.com. With that, have a great day ahead, stay tuned next week, and always remember: personal finance can be chill, clear, and sustainable for all.

There is a surge of access in investment tools possibly due to the proliferation of technology. And local regulators are becoming increasingly open to these ideas, right? Things like digital banking, tokenization, financial marketplaces, and database API. Database API is a big thing. It doesn’t look like it’s a big thing, but honestly, if not for Sing pass and the whole proliferation of these databases, it will be very hard for a lot of these apps to create a seamless experience for a lot of us. So database API has changed the way even finance works. So all these new tech tools and financial tools,  we have taken the steps to embrace and regulate rather than clamping down on these tools, which honestly, I agree and applaud. I stand with innovation. 

That of course gives rise to a whole host of other challenges for us, because every time there’s a change, there is some differences la. Then we all have to grapple with the new reality. And retail investors and consumers like us have so many places to go, right, and to put it crudely, what to buy, what should I do? And on this podcast, we have spent a lot of time talking about stocks, ETFs, and in this year ahead, in 2021, we will be expanding the pool to look into things like properties, crypto, structured financial tools, bonds, et cetera, et cetera, to help everybody and help myself understand better because for lack of a better way to put it, I don’t know how to invest in these other things. And I didn’t start with investing in these other tools. So we’ll be bringing on all these guests to potentially help us all make better decisions as we move forward to craft our financial plan. 

And also in this current moment, my context… So that is the general idea of the market today, with all these proliferation of tools and all these technology, a much wider array of financial products out there today for the retail investor like myself. Then what about my context? In this current moment, I’m, 28, self-employed, I make about 3000 a month, spend less than 50% of my income. No near intention of settling down , do not own any mortgage or big ticket loans, decent understanding of investments, and a free spirited person.

You can say that my spirit animal is the otter [laughs]. So just doing my thing in the grand scheme of things in Bishan Park. Don’t mess around with the otters, ah, because they get really ferocious, right. But yeah, if you look at them from afar, they’re quite cute la, right? So that’s my spirit animal and that’s me la [laughs]. 

Given the context I’ve established, here is why I choose to buy term and invest the rest. And not surprisingly, my very first reason is I can invest. I’m pretty good at it, okay. And I’m not like amazing, like crazy, you know, but I understand things, right. I can have a very good discussion with the “professionals.” Maybe not the quant guys that are trying to, you know, do all the technical and fundamental and they build all these complex models together, you know. But most of your people that do retail products, most of your guys that are doing fundamental investing, I should be able to have a good discussion with them, right.

So I can hold my fort, I have a fair understanding. And you can too, right? It is not impossible because, let me put it to you this way, okay. When I say I’m good at it, or if I say someone is good at investing, I don’t come from the angle that they are always profiting, ah? Okay. okay. I get it. I get it, “If you lose money, you still consider good ah?”

The idea here is, you know, someone that is good at investing understands what is going on, right. They understand their tool. They have an objectively rigorous investment thesis and are able to kind of ride the ups and the downs, allocate their capital well. It’s not a one hit wonder or for the matter, a few hit wonder, right. You want to consistently perform and consistently do it every year, and you can consider yourself someone that is pretty good at investing. 

So let me give you a little bit more contextual understanding, right. The market is, it’s pretty exciting, a lot of euphoria in the stock market. Even using the word euphoria just kind of shows that I’m taking a stand. But that is what a lot of people think, right. The market, the prices are so high, so crazy, why you still buy, right. So “flying into the crazy territory.” And the reality is everybody has their own way of investing, right? They have their own strategies or trading or whatever, right.

They have different ways of profiting in the market. So your reaction, you know, shouldn’t really be about like, “Eh, this  is right, that is wrong. It’s not about really taking a stance on a moral high ground to say what is right or wrong, but to understand how you do it, right. So in the case of how I do it, yes, I think some of the places have very high valuation. It doesn’t fit my investment thesis. So I am taking a break from these areas. Right. And it is not about like, FOMO or FOJI, you  know, like, FOJI means Fear of Joining In, something I’ve created years ago. 

But you need a base understanding, right? So that you don’t become like a cheerleader, you know, when you have winners , which is why I study, why I win, and why I lose. And both ways I want to be able to get a better idea of what kind of mistakes am I making, or am I, you know, just taking a ride with some of these companies that I’ve chose to invest because of the thesis that I’ve built.

But then it’s not to say you have to invest on your own, right? You don’t need to do that. , Because on top of so much information out there and so much access and much easier basis to learn a lot of these things I think the world is in a place of a highly professionalized environment. They are a lot of professionals, right? The specialist, right. There are many people that spend day in, day out looking at investments. And I’m not saying like your sales specialists. I’m saying investment specialists, right? People spend their days thinking about how to shepherd capital and think about it, right? It is because of specialization that we have a world today.

Imagine if you had to farm your own produce, make your own soap, do your own baking arrangement, find a partner in China that will actually exchange money with you to taobao, you know, what a crazy world, right? So the reality is specialization is why we have our world today. And because there are so many specialists already, right, then we may not even need to learn to be a good investor.

We just need to learn sufficient to find good investors, especially with technology that strings the distance between these specialists and us. Many years ago, maybe in the eighties, it was very difficult to get direct access to a lot of these investment specialists because they hide behind brokers, because it’s just so much tougher technologically.

But today with the proliferation of technology, it’s so easy, right? Everybody, all these apps, you know, they’re backed by very professional investors. So, yeah, in today’s world, you can easily employ some very affordable specialist arrangement like robos or just outright  buy ETFs. 

So don’t get me wrong. There’s still a learning curve understanding some basics of investing, which I think, whether or not you actually, you know, practice your own investment, you should learn some basics la, right? So you get a general idea of who to use. Don’t gong gong, just sign up with someone because they’re very chill, or very handsome, someone you trust growing up . We’ve talked about this extensively, but we’ve also talked about things like, you know some concepts to level up your REITs game, right? In episode 54. Or three basic pointers in choosing your index ETF, episodes 30. So I think we’ll continue to cover these stuff to help you learn incrementally over time. And if there are some things that you really want us to talk about, and you want us to rush to talk about it, and some guests you want us to talk about, do let us know.

So what is important and what has changed today is this idea of access, right? Access to investment tools that people in the past do not have. And for reference’s sake, you know, a fixed deposit at one point in time was 12% in the early 1980s. So don’t think that uncle don’t know, the uncle downstairs in the coffee shop ah, always scold the Jinghu and keep saying Fixi is very good, but that was those times, they have not kept up with time, right. So keep learning and form your own investment thesis. 

But the central idea why I think you can buy term and invest the rest: because there is so much more accessibility today, a lot of choices, and you don’t even need to be a good investor. You just need to be good enough to look for a good investor.

Which brings me to point number two. And that is: I don’t want my investments and insurance to be tied together. So by now, I think you should have realized that life insurance is a pretty complex tool because it needs to cover so many things, right. From your savings to the cash value at the end, the insurance element, the investment element.

And no matter which blog you read, which blog post, or who you talk to, right. There’s always a lot of like this, maybe that scenario. And it is kind of trying to be that all in one thing that you buy and don’t need to care about anything else, which is one of the pro ideas behind life insurance, which is, you know, you can just kind of buy this thing and handle a lot of these aspects of your life in one.

But I am generally apprehensive of bundling things together, especially, you know, in finances, especially things that run counter interests together just because it is easier. Like some things can bundle, like 3-in-1 coffee, no problem, right. But when it comes to personal finance and some of these more complicated financial tools, I choose not to bundle them.

And without going into the specificity of how some of these policies work, like how in the beginning, you know, there’s a lot of money going into investments, and then after you hit 65, a lot of those money will get diverted to insurance. And then there’s this cash value kick back at a certain time, blah, blah, blah, all those things. So look for your favorite financial planner to help you with that. I think that’s a much better way because everybody carries a slightly different product. 

But the general idea. Okay, I’m just here to give you the general idea. There are two components, right? Insurance and investments are bundled into this thing. General idea, yeah? So when I insure myself, okay, what I want to do, right. I want to pay a consistent amount to mitigate any potential fluctuations that may hit my life la. So to put it in a layman’s term. I want to pay money to someone to take away any random scenarios that I’m not interested to entertain so that I can continue to live the life I want.

And that is kind of where it is. I want to pay and pay and let them take the fluctuation risks. I don’t want to entertain  this risk. Whether is it hospitalization or whether is it things like critical illness, you know, none of those things, I don’t really want to care. That’s why I’m willing to pay a fraction of what I have and mitigate this risk.

But when I look at investments, right, that’s a whole different ball game. I want to capitalize. I want to double down on fluctuations. I want to be able to be opportunistic and I want my money to take on calculated, educated risk for me in the grand scheme of capitalism. Because in essence, I want to ride the wave so that, you know, my net worth will continue to grow and grow and grow and give me more in the end, right. To put it very, very simple, I want risk. I want good risk. And I want to make moolah. If not, why invest? So, okay la, maybe I can beat inflation, whatever, but the idea is, on one end, on insurance, I don’t want fluctuations. I want the risk to be mitigated. On my investments, I want to take on calculated risk and I don’t mind fluctuations. I want to be able to, you know, ride the waves. 

So when you start to see that these two major aspects of your personal finance, insurance and investments, they are actually very different things. Why do you want to bundle them up together? It’s like you put coffee and Coke together. It’s a bit weird, right? So I don’t want my investments do affect my insurance. Neither do I want my insurance to affect my investments. They run a very different trajectory and I don’t want them to have any kind of influence against each other, as I grow old in my life, 

But of course that is not to say that life insurance does not have any use, right? Depending on your goals, depending on what you’re trying to achieve, most importantly is to understand what you want. You know, what is available out there, it’s vast. A whole world of all sorts of financial tools.

If you have a certain budget, someone is willing to come up and create a tool for you. And sometimes it’s a struggle to match them. So find someone that you can trust who is professional and who you can work that through together, right? And you can actually take on loans against your life insurance, you can have cash value at the end of a sudden time period, et cetera, et cetera.

There are many other perks, you know, that comes with life insurance, but all these features  are not what I’m interested. It’s like I’m going to the fruit stall to buy apple. And the guy is trying to sell me durian. And you want to look at the seller in the eyes and say, “Give me that apple, I don’t have any interest in durian; I don’t care if it’s in season.” So there’s a lot more to be said here. So if you have not heard our interview with Chris from Providend, episode 2 of Chills with TFC, which was last Thursday , head over because I think he’s the pro, right? I’m a commentator, an edutainment person, right. So he has a lot more to share and I’m sure you’re gonna pick up a lot of good stuff from him.

Which brings me to point number three. I am relatively certain about my medium term of life, like 5 to 10 years. So there is two parts to this, right? Why I only got insurance now and where I see myself in the medium term. I think the fundamentals of insurance, like I said, is risk management, essentially paying someone to remove all these random things that you don’t want to have, and they will offer you a price. And you think whether the price is fair. Ultimately they are trying to profit and you are trying to mitigate risk. So as long as the interests are aligned, yeah, we’re good to go. So when you first start making money, you probably get bombarded by a lot of these financial planning stuff la, insurance, retirement, investment, blah, blah, whatever, alright.

But why do I only look at insurance now? Because when I first started, I don’t know what I want. I was just exploring my life. You know, I was getting myself all over the place, right. I was just trying to figure out my life. So if I’m not settled down in my life, I’m not, you know, kind of cemented a career path, or a certain a way of life that I love and I want to preserve, then what about risk management? If I don’t even know the thing that I want to manage against, then what kind of risks are we talking about? 

So I know there are like all these medical risk and all those blah, blah, blah, right? They’re not wrong, not wrong. But in my view, the biggest risk in your life is you if you have not yet gotten some clarity as to where you want to go la, right?

Once you have some clarity, then, okay, risk management starts to make sense, because I want to preserve this way of life for the next 5 to 10 years. And I’m willing to pay an amount every year to preserve this “normality” in my life. And that is why I am even considering insurance now. And I’ve got very simple stuff, like critical insurance, like hospitalization and essentially all your term la.

And like I said, why do I buy term and not life? I think I’ve established some two reasons above, but more importantly, I think when I look at it, you know, one of my top reasons is that I don’t want to over-commit to something. Life insurance tends to have the very big penalty if I were to cancel it, or if I feel like I want things to take a different path, go down a different way then, yeah, you know. Some of these things makes it a bit more complicated. Every time someone wants to cancel life insurance the penalty is there, and I get it, from the company’s point of view, I get it. But from an individual point of view, if I have not sorted out the life that I want, then why do I want to commit into something that will give me such a big penalty?

And so to end off today , I think there are a lot of complexity in insurance products. But I will not go into the details because everybody is slightly different, but the general idea is this. I want you to be able to see that your life forms the basis of insurance, right? Because if you don’t have a life that you love, then what are you trying to protect against? What are you trying to manage risk against? So on a cheeky side note, right, it is probably easier to add insurance then remove. So once you’ve sorted at your life, then you can add a little  bit and you can add a little bit more right. Don’t think about add enough and then remove.

And try not to see insurance as a jackpot game la, like “Eh I insure a million dollars, so if any shit happens, I get a million dollars.” Dude, dude, dude, dude, dude, don’t think like that. Just go and be more financially savvy, work on your capital or work on your life and you can make the million dollars. Don’t need to wait until shit happen then you leave a million dollars behind, okay? 

And so to sum up today as to why I only just bought term insurance now and why I believe in a “buy term, invest the rest” strategy.

Number one is because I can invest, I’m pretty good at it. And you can too, because tools are very available today. If you want to learn, it’s not that difficult. There are a lot of resources out there like us, like many other people and if you don’t want to learn, you can even just learn a little bit and pick a specialist that is sufficiently  good, right? The access to a lot of these investment tools are so prevalent and so much more advanced than many, many years ago. 

And number two is I don’t want my investments and insurance to be tied together. They form very big parts of personal finance and they serve a very different function. So I don’t want my investments on any level to affect my insurance and I don’t want my insurance on any level to affect my investments.

And number three is, I am relatively certain about my medium term of life. So that is why I’m going to get term insurance now. And that’s also why I don’t want to commit into something that is like for life or forever, where the penalty, if I were to change, it’s going to be very, very high.

And honestly, I think the Singapore government has done a decently good job in trying to create a social safety net. Of course, there are a lot of social problems in terms of, you know, the gig economy and all those. Yeah, those things we’ll cover as we go along, but in the grand scheme of things, you know, if you choose to live in Singapore and you choose to subscribe to the whole CPF strategy, then actually it’s not too bad honestly, in my view. All right, so I hope you learned something useful today. See ya!

Hey, I hope you learned something useful today and truly appreciate that you took time off to better your life with The Financial Coconut. Knowledge is that much more powerful and interesting when shared, debated and  discussed. Join our community Telegram group, follow us on our socials, and sign up for our weekly newsletter. Everything is in the description below. If you love us and want to help us grow, definitely share the podcast to your friends and on your socials. Also, if you have some interesting thoughts you want to share or know someone that you want us to talk to or you want to  hear more from , reach out to us at hello@thefinancialcoconut.com. With that, have a great day ahead, stay tuned next week, and always remember: personal finance can be chill, clear, sustainable for all. 

Test test. Okay, so I hope you learned something useful. It’s very conceptual. Because I’m not like an insurance product pro, I don’t really want to go into like product details and yeah. Maybe next time we can bring some of these companies that, you know, craft all these tools to come on and actually talk about why they craft it in a certain way and whatnot.

So we hear from the pro, I think that’d be way more fun. But these are fundamental ideas. I hope it benefits you when you decide how you want to manage your insurance and your investments going forward. And this Thursday, this Thursday, I have a great friend of mine who is coming on the show. Actually this episode I have recorded has been in the backlog for a really, really, really long time. Yes, we record in bulk, if you have not realized But I have not found an opportunity to slot him in. And I think in the theme of, you know, starting well and in the theme of like World Economic Forum and sustainable living, I think it is a good time to slot him in.

So Chris, a very good friend of mine , the ex-General Manager of Edible Garden City, a very, very big believer of sustainable living. The way he handles his money, the way he looks at life and the way he looks at how to invest with alignment to his ideology. I think those are pretty interesting. And we had a very good discussion very long ago, and I’m just happy to be able to release his episode to all of you.

So I hope you have fun this Thursday, which is in two days’ time and next week… next week, we’re going to try something different. You don’t want to hear from me every week, or maybe you want to, right — if you want to let me know, but next week we’re going to try something different, right? Every last Tuesday of the month, we are going to go with a book review, like a TFC book review. Because I think we are trying very hard to propagate people to learn more and read more, you know, and we want to share with you guys some book reviews. And Troy, my cohost on Coconut Avenue, which is a property podcast that we’ll be releasing next month, will be hosting this book review segment, where he will come on on a monologue arrangement and talk about, different, different books.

And the book for this Thursday is Designing Your Life. And it’s a pretty interesting book created by one of the universities that’s very popular. So, yeah, if you’re a fan of the book, come on and have a good discussion. If you are new to this thing, then why not learn some things. We will pick up three points that we believe are great from the book. And we hope you learn a different perspective and hear from different people. 

So welcome as we continued to develop our content, we are going to be trying a lot of new formats. So help us, let us know what you like, let us know what you don’t. And we can continue to craft this channel together and craft this podcast network together.

Meanwhile, take care. See ya next week.

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