Is money ever enough? That is the BIG Question!
It is never enough. At least for me.
One of the key learning points during this Covid-19 pandemic is that I need to always have my emergency savings with me.
To be honest, towards the end of 2019, I have lost close to 10 thousand dollars due to the closure of my foot massage store in Serangoon Gardens! But luckily for me, I also sold my Feet Haven Katong in Jan 2020 before the Covid-19 virus became a pandemic. I was able to minimise and contain possible further losses.
Ever since the start of the Covid-19 Circuit breaker, I have been counting on my part-time teaching as a main source of income. I know that a lot of freelancers like actors, emcees, events managers, singers, coaches, have lost their income as gigs, shows, assignments and performances were cancelled.
Luckily for me, I am not just counting on acting as my main source of income. Apart from my part-time teaching with the various universities here, I am also a Financial Adviser with AIA. Thanks to my good friend and mentor Alex Chong, I have taken the various financial tests required in 2018, and by Dec 2018, I was certified as a licensed financial advisor and began to sell protection, personal accident, health and retirement saving plans to my friends and customers.
So, if you like, I am currently counting my income from teaching, financial planning, acting, public relations and referral marketing. I also do adhoc stuffs like pitching production projects, writing a book or trying to stage a play.
It sounds like there’s a lot on my plate. And yes, it is definitely achievable.
Obviously, I have been doing a lot of reflection, particularly on my finances. I have been thinking about how I spent my money, my savings, my insurance, my house, my car, my expenses and my sources of income.
End of the day, money fuel our passion. And passion brings us back our money. So I was particularly interested in knowing the recent Financial Impact Survey for Covid-19 conducted by OCBC bank.
This is not a sponsored post. I chanced upon the report and thought I should highlight some of the key findings there.
OCBC surveyed 1,000 working adults in Singapore to find out how COVID-19 has affected their finances and what actions they are taking in response to the crisis.
Here’s 5 interesting points:
1) Only a third have enough funds to last them more than 6 months if they were to lose their jobs now; more than half have reduced their savings.
This is rather interesting. Assuming your monthly expenses Is $3K, this means that 70% of the people do not have at least $18,000 in their savings account. Based on the 1000 people surveyed, 50% earns $2000-$4999, 31% earns $5,000 - $9,999 and 19% earns $10K and above.
It has already been well established in the financial management world, most experts believe you should have enough money in your emergency fund to cover at least 3 to 6 months' worth of living expenses. This is indeed a worrying trend. Perhaps most people are either not earning enough, or have spent way beyond their earning capacity.
2) Retrenchment and wage cuts were their biggest worries. Some are working harder to keep their jobs or taking up online courses to better prepare themselves.
Based on the survey, 46% of the respondents are worried about retrenchment. This is a valid concern since we have seen many reports about companies closing down due to the covid-19 pandemic. 36% of the respondents were concerned about pay cut.
This is also a key concern as I have had many friends telling me about their pay cuts. Some were even forced to take more no-pay leave during this period.
3) In the same survey, it was also reported that 31% intend to take up a second job and more than 53% attended more online courses then before.
I believe the Covid-19 circuit breaker got many thinking about their job and how recession-proof their profession could be.
Based on a Sunday Time Report dated 14 June, it was reported that Singaporeans deem Artists, Telemarketers, Social media Managers, Business Consultants and Human resource managers as non-essential jobs. So exploring a second income stream is definitely a good income generating strategy.
4) 4 in 10 are worried about having sufficient insurance coverage, yet 12% of insurance policyholders intend to decrease or terminate their policies.
This is very true. I have seen a lot more friends asking about their insurance coverage during this period. Perhaps when we are now caught up at home, and not doing much, we begin to re-look into the existing policies we have. As a guide, based on an insurance guru, Dr Sanjay, suggests that 10x of annual income should go towards our Life Cover. 5x of annual income should go towwrds income protection. 20% of the income should go towards retirement planning and 5% of the income should go towards kids education.
It is no wonder that most people have insufficient coverage based on these formulas.
5) Those in their 20s are the group making the most out of the Circuit Breaker; 64% are taking more online courses than before, and 23% are setting aside more funds for retirement
This is an interesting trend. Much have been said about the millennials being the strawberry generation. This Covid-19 Pandemic could in fact be their first taste of hardship or an uncertain future to come. The percentages suggest that perhaps this group could be more resilient than we think they are. Based on the results, 64% [Against Average 61%] are saying they are working harder. 64% [Against average of 53%] are saying they are taking up more online courses.
38% [against average 27%] have increased their savings. This could suggest that they have stopped spending on luxury items and unnecessary items. 30% [against average 26%] have indicated that they intent to increase their investments. 23% [against 19%] have indicated they are setting aside more funds for retirement. Perhaps the circuit breaker has given them a taste of what retirement could be like, and sparked their curiosity on retirement planning.
So what do I see might be the trend in the next few months?
1) More people will definitely explore a second source of income.
2) More people will go online and start their own personal and professional initiatives.
3) More people will be concerned about their insurance coverage and the lack of it.
4) More people will reduced their expenditures, and spend on things that are more essential at this juncture.
The above statistics and Information are retrieved from OCBC Financial Impact Survey. Thank you for the survey, OCBC. [https://www.ocbc.com/group/covid19-support/assets/pdf/ocbc-financial-impact-survey.pdf]
If you like me to assist you in your insurance planning, and perhaps explore a second income stream; I welcome you to WHATSPP ME. I would love to explore the options with you.