Money is the emerald gold we have been running and chasing after for generations. To this day, the challenge remains a top-tier world crisis. Do you feel the same way about your finance? Fret not, for superwoman Lam Pui Ka is here! As a Million Dollar Wealth Planner and Top of The Table MDRT Member, here’s what she has to say about managing your financial health.
HOW IMPORTANT IS FINANCIAL HEALTH?
Investopedia defines financial health as the state of one’s personal monetary affairs. Your savings, retirement funds and expenditure are all various facets of financial health. It basically covers all aspects of money in your life. So it’s obviously paramount to manage, but how important is it?
Lam Pui Ka says “The most important is your health, not your wealth. Are you sure you are financially healthy for when a catastrophe hits you? Many are medically ‘cured’, but financially ‘dead’. Your medical or physical health can be protected by an insurance medical card, but not your finance. Thus, the importance of financial health.”
HOW HAS DIGITAL FINANCE SECURITY EVOLVED?
“The pandemic saw the peak of finance in its digital realm. Almost everyone and everything transcended into portals, apps and social media platforms. In my line of work, we were dealing with numerous e-submissions”, recalls Lam.
Technology has revolutionised the way the finance industry works. We don’t need to drive to a physical bank to check balances, bank apps on our phones can show us that. Receipts and taxes don’t need to wait days, automation online does the trick. Cryptocurrencies and monetary transactions are more smooth and quicker, changing the form of money. Though, are all these safe?
WHAT ARE SOME COMMON MONEY MISTAKES IN TODAY’S DIGITAL ERA?
We can all name at least three common money mistakes off the top of our heads. Falling for scams, unnecessary spending, and collecting debts aren’t surprising news nowadays.
Lam remarks, “Shopping is a huge scam. Many become enslaved to the promises of fraudsters who act as middlemen in online purchases. They often pose as banks and sellers, contacting victims and asking to verify personal details. And before you know it, you’ve been swindled by hundreds to thousands. This is a common sight in e-commerce platforms, especially during sales and discount seasons. Unfortunately, a number of senior citizens are duped for their life savings.”
“A growing trend, that I too advise my clients to look into is to diversify their savings from the bank into a savings account with their insurance. Besides insurance, they are other options like stocks too. Security is subjective. Thus, it’s recommended to secure your finances with human walls, algorithms that require you to type in SMS TAC (Transaction Activation Code) before each login, biometric authentication asking for your fingerprint or face id and more. Yes, access to money won’t be so convenient, but isn’t that better?”
Be informed. Know your facts. There are laws regulating banks, insurance companies, stock markets and other financial giants. Read up before taking the leap.
HOW CAN ONE AVOID FALLING INTO FINANCIAL TRAPS?
Lam simplifies it saying, “Be informed. Know your facts. There are laws regulating banks, insurance companies, stock markets and other financial giants. Read up before taking the leap.” However, it’s easier said than done, isn’t it? Here are some tips to keep in mind:
- Make a budget.
- Lower expenses.
- Pay in cash.
- Stop taking on debt.
- Meet with a certified financial advisor.
- Be realistic when resolving financial problems.
HOW CAN ONE SHIFT TO A HEALTHIER MINDSET WHEN IT COMES TO FINANCING?
Lam busts a myth you have probably repeated too many times, “One healthy financial mindset to adopt is with saving and spending. The recurring mantra is ‘Spend wisely, Save the rest’. But that shouldn’t be the way. Moving forward, I encourage you to ‘Save first, then spend. When you received your paycheck, set aside 20%. This habit will ensure that you have liquidity in store for emergencies. You’ll also be able to track your expenditure more accurately. Later on, you can choose to save more and spend less!”
HOW CAN STUDENTS AND YOUNG PEOPLE IMPROVE THEIR FINANCIAL LITERACY?
Ever since the digitalisation of money, everyone has access! With that being said, schools and universities are now approaching various methods of digital finance. One way is by providing student cards that can hold their basic information, cash and even qualify for student prices and discounts.
Hence it’s vital that students and young people be financially literate. Lam this to say to students, “If you are a fresh graduate, get a medical card ASAP! This way your medical expenses wouldn’t be a burden to your parents. If you’re working or just got yourself an increment, congratulations! Go save up and learn to be financially independent. Young people can learn discipline, patience and prudence via money management.”
When it comes to when one should start saving, Lam has only one word for you, “Now.”
WHAT ARE SOME POPULAR MYTHS SURROUNDING FINANCE?
Lam reiterates a vital lesson with money management, “Think short. People make a terrible mistake when they say the future is 5 years or 10 years to come. No! The future is tomorrow. In fact, it’s this very next minute.”
“Covid-19 has taught us that our physical and financial are equally important. My favourite thing to say is ‘Don’t be medically cured and financially dead. Be alive both ways.’ if you have a family to look after, the responsibility is yours. Do you want to leave your family with your asset or liabilities?”
Covid-19 has taught us that our physical and financial are equally important. My favourite thing to say is ‘Don’t be medically cured and financially dead. Be alive both ways.’ if you have a family to look after, the responsibility is yours.
‘SIDE HUSTLES’ HAVE BECOME A TREND AMONG THOSE WHO WISH TO BE FINANCIALLY INDEPENDENT. HOW SHOULD ONE APPROACH THIS MARKET?
Young money minds, this one’s for you!
The new generation has redefined work just by sitting at home passive incomes and side hustles are the smart way to earn a glorious number on a check. Lam encourages you to give it a try as long as you do this, “Looking at this trend, I’m glad many people are turning to financial literacy. Here’s my tip: Convert your variable income to guarantee income.”
“This means if you’re an employee and you depend on the supply and demand market, you can try out bonds or stocks. However, always seek guidance from financial advisors before making a decision.
So still think finance is hard? It’s surely not a walk in the park but that doesn’t mean your walk into a bank should be a daunting one. We hope our interview with Lam has shone some light on the most coveted answers to your financial anxieties.