Ribbonhood

I bought my life insurance when I was in my mid-twenties. It was pretty late, due to the fact that I finally starting earning enough to cover expenses for my fixed financial obligation, me, and a bit of extra for the insurance premium. Life sucks, I know. I did get myself a hospital plan when I was younger from Prudential and that was the only coverage I had for the longest time.

I met up with a few agents and none really actually vibed much with me. You could smell the desperation or see when they start to calculate their commissions whenever I tell them about my budget.

I decided to do a bunch of research by myself so that I knew what I wanted without their influence. These are the steps that I took into getting my first life insurance.

Step 1: Learn about insurance

I came across this term BTIR (Buy term, invest the rest) and I was really considering going for it. Basically, the two difference between a Whole Life Insurance vs Term Insurance is:

Whole Life Insurance	Term Insurance
Pay $$ for a set amount of time to have coverage for the whole life	Pay $ for the years you want to be covered
Have a cash component, so that when you die your kids will get the money	Have no cash component, so if you die on the years you are not covered, your kids won’t get any money

The idea is that the money you saved in purchasing Term Insurance, like $200, you should invest them to grow your wealth.

Step 2: Find out how much I need

After talking to a bunch of people, I came up with an amount of how much I want to be covered, and at which stage of my life. I even did a Google sheet and wrote down a 50-year coverage plan.

Basically, I asked my friends how much were they being covered, I also wrote down the obligations my family needs and how much for an x amount of time. It also helped that I talked to a bunch of agents and I saw how they did the calculations.

Step 3: Find insurance plans that fit your needs

I used a lot of these insurance comparison sites such as CompareFirst or GoBear to see what are the plans out there. I went on multiple forums and finance blogs to learn what are their thoughts on the plans. I struggled really long before I decided to go for a hybrid of Whole life and Term life, for the reasons being,

(1) There is always something that is going to be better than now and I don’t want to be stuck paying for $x when the newer generation have a better deal.

(2) Paying premium means I would never get my money back¹. It is basically for my kids. My kids will have access to my CPF funds when I die. I’m salty, I don’t have kids. I don’t feel the need to provide them with such a cushy life. If they want more money, they can pay for my 99-year term life plan until I die.

(3) In the event I get incapacitated or become dirt poor, and is unable to pay my term insurance, at least I have a fallback with my whole life insurance to protect my family and me. It would really suck if I’m 99 years old, and still have to pay term insurance if I became poor.

(4) I was not thinking about growing wealth at that time because I can’t afford to and I did not know where to start.

I will not talk about the specific plans that I bought because the post will not age well. I however found a plan that resonates with me, talked to my partner’s friend² to purchase the plan for me.

I would add that if at that time, I had a little bit more budget, I would pay slightly more to go with my Prudential agent I met years ago because I felt that she was genuine at her job. I would pay more for her³.

1. Unless I surrender my Whole Life [↩]
2. Whom I think only works with high value clients. Bless him for taking me on. [↩]
3. On my Google sheets that there is Prudential term life plan that I plan from her to buy at 40 years old [↩]

Before I started deciding to grow wealth for my future, I had to protect my present first. Without protecting the present, you are exposing yourself to very high risk in case anything unfortunate happens. All of these burdens of being poor is lessen knowing that your present is protected. Especially so if you are taking a gamble on money that could be lost.

These are my baseline before I started thinking about growing wealth:

Getting covered with insurance

I had hospital insurance plan, but not a life plan. I knew at 25 years old, I wanted to be adequately protected. I was constantly having anxiety attacks because who is going to take care of my dad, mom or sister if I passed? However, it was only 2 years later that I earned enough to afford a whole life insurance. Next step, on my to-do list is getting a will.

Opening a high-yield bank account

I made the painful decision to close my POSB account that I had since I was young. It was costing me $2 every single month. At that time¹, I did not have $500 to keep the minimum balance. This high-yield bank account is where I do all my transactions just to hit the highest percentage that I could hit. Every single percent matters if I’m poor.

Setting aside 6 months worth of take-home pay

The rule of thumb is 6 months worth of your expenses. However, I don’t want to risk it by saving that low. There are a lot of people in my family depending on my salary. Imagine if my sister needs a new laptop for school, boom! that’s like a chunk out of my savings gone. Or my grandmother decided to switch out the 3rd maid in a year! I wouldn’t have enough money to pay for the maid’s loan.

Getting a cashback credit card

Getting a credit card was not part of my baseline, however I thought it was important to (1) establish a good credit score, (2) stretch my money as much as I can. That is why I got a cashback credit card instead of a miles card. At that time, I just bought a house FOR my mother and was shouldering all the renovations and furniture cost. The cashback I got from my credit card was significant, it was as though I got a free fridge and a washing machine!

Establish a financial habit

I’m not disciplined in tracking where my money goes. However, I think it is important to do it for at least a month – to have a rough number on how you spend/save. It is especially useful when you’re relooking into your financial goals. Other habits that I have was to constantly update my financial obligation sheets, look at my bank statements often, paying my bills on time², and much more. These habits further amplify my belief that every single dollar counts and my drive to get out of this poverty circle.

So yup! These are my financial baseline before I started investing. I hope whomever is reading this have at least some financial baseline before they start thinking about growing wealth.

1. Which was just a few years ago [↩]
2. I always had late fees charged to me – the cost of procrastination [↩]

Wealth Growing was never a part of my family’s mind. In fact, my father discouraged me from investing in stocks. It was lonely, learning about this all by myself. Especially, when I wanted to make my first investment, I had to find my own courage to do so.

The reason I bought Mapletree Commercial Trust (N2IU.SI) is pretty simple. So simple that a friend in the financial industry said that that was not the right way to invest. I still think I made a good choice.

Basically, I woke up one day and had this strong feeling that I should invest in a REIT that will benefit from the Greater Southern Waterfront development¹. I won’t go into numbers because I still find it hard to understand what does the number means. However, these are the main reasons why I got it:

(1) Vivocity
Mapletree Commercial Trust (N2IU.SI) owns Vivocity. Which would benefit from the Greater Southern Waterfront development. If it doesn’t, it is still the only mall that tourists have to pass to get through Sentosa.

(2) Business Buildings
Mapletree Commercial Trust (N2IU.SI) owns multiple business buildings such as PSA Building, Mapletree Anson, etc.. They all have high tenancy rate which means these properties are in good health.

(3) Growth
If you look at their historical chart, you’ll see that the stock has been performing quite well and is steadily growing. That to me, is a sign of growth.

And that’s it! My reasons on why I picked Mapletree Commercial Trust (N2IU.SI) as my first stock. I obviously went through multiple articles on the internet and took a day or two to think before I invested. I admit I was a little FOMO when I saw everyone was buying during the COVID-19 market dip in March. I guess, FOMO-ness was the push I needed to invest in my first stock.

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After writing my first article and realising how noob-ish my thought processes are – I decided to put a disclaimer on the header instead of my tagline.

1. I was at a phase where I kept day-dreaming about my future house like all girls do. [↩]

I got Ribbonhood 11 years ago in 2009. Ribbonhood is my first domain that I bought as a teenager and is a testimony of how far I’ve come. I started writing about boy crushes in school, meeting my first ex boyfriend – whom i thought was the love of my life, then about my friends, my heartbreak from the latest ex, and now I’m back here. A different person from 11 years ago.

I have been working for a few years now. In a company where professionalism is held in high regard. As it is for every well-established company. So I decided to hide all of my old posts and hope that this doesn’t bite me in the ass. I would also be taking down everything that can tie back to me in real life.

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Anyhow, if you knew where I came from, you would understand I did not have the best financial circumstances in my family. We were living beyond our means with no savings and I wasn’t taught financial literacy at all. Which meant, I started saving when I was very late into my 20s. This bring forth to my main point. I’m turning this blog into..

My late journey to financial independence.

The tagline is a mouthful right now, but I’ll find something that sticks. Until then, see you guys soon. 🙂