Better Late Than Never

I feel fortunate to realize the importance of financial planning just before I started working.

As we all know, schools do not teach us financial planning, be it in secondary schools, colleges or universities.

My parent did not teach me about it either and we definitely did not talk about it among friends during our school days.

I knew about it after reading a book regarding financial planning while waiting to start my working career.

When you know about it and start to practice it, it doesn't mean that you are already good at it or you can do it in a right way.

It takes time to understand and perfect the art of financial planning.

I'm not saying that I'm very good at it and actually I still have a lot to learn.

I have not achieved financial independence yet but at least I'm still in a good shape. If I don't do any form of financial planning, I think my family and I should be struggling now.

A lot of people should have heard about financial planning. However, they might only heard about it and do not really understand the importance of it.

Perhaps they think that they are still young and have a lot of time, and they don't have any financial difficulties, yet.

After reading that financial planning book, the points I took home were: save as much as I can, invest my money instead of putting them in the banks, buy enough insurance and write a will.

So, I spent my money cautiously. Fortunately I grown up being frugal so avoid spending unnecessarily was not too difficult for me.

I called a unit trust agent to place almost all my savings there, called an insurance agent to purchase my first life insurance (even though I had no dependants at that time) and wrote a will through Rockwills (even though I was still single and had close to zero assets at that time).

If I'm given a chance to restart, of course I'll do it differently.

Even though I didn't do it correctly at initial stage, at least I understand the essence of it, which is ESPI (not Robert Kiyosaki's ESBI): Earn more, Spend less, Protect adequately, Invest wisely.

Along the lonely yet exciting journey, I learn new things, identify my mistakes and make necessary adjustments.

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Many years ago when my younger sister started to work, I borrowed that financial planning book to her. I hoped that she could benefit from it like I did.

I told her the importance of financial planning but I think she didn't really understand because until now she never read that book.

Recently she revealed to me that at current age of between 35 and 40, she doesn't have much savings and she has no emergency fund.

She doesn't have a car or a property under her name as well. She has a small amount of unit trust and does not invest in stock market.

A few years ago, I lent her Cold Eye's stock market investment books and guess what, she also didn't read it.

When the stock market was hot since last year, she started to have interest in stock market investment.

If she has prepared herself well before year 2020, she might have a good chance to earn handsome profit from the stock market by now.

However, it's always not too late to start.

Since we are not staying together, I find it hard to "teach" her about stock market investment especially when she is totally new to it. 

I asked her to read Cold Eye's books but she seems not interested to read books and prefers to watch videos.

So I just recommended a few "value investing gurus" sites whom I think are good to her.

Whenever she has doubts, she will ask me.

Before she started to buy shares, I recommended StashAway to her to build her emergency fund, even though I myself do not put my money in it yet.

Now she has purchased the first stock in her life which is SUNREIT, a stock that I don't think I will ever buy before I retire.

When she told me that she was interested to buy SUNREIT, I told her that she should concentrate on capital gain first and SUNREIT was not that kind of stock.

I recommended a few potential "growth stocks" for her to study but she ended up with SUNREIT anyway.

I'm totally OK with her decision because her risk appetite is low and REITs might be a good choice to start with to gain confidence of not losing money.

Who knows SUNREIT might go up from RM1.40 to RM1.80 and my "growth stocks" lose money?

After SUNREIT, she was interested in D&O. I just told her that its PE valuation is quite high, but it doesn't mean that its share price won't go higher in current situation.

I try not to tell her which stocks she should or shouldn't buy. I only give my views and the final decision is always hers.

I think she hasn't buy D&O yet. If she does, she should have made 50% by now.

It's certainly not easy to get rich by working for other people. All of us have limited time. 

The only way to achieve financial freedom for employees is to invest their salary wisely over a period of time and let the money rolls to make more money.

Undoubtedly we should start as early as possible, because time and experience are money in investment, especially in property and stock market.

Nevertheless, it's always not too late to start. It's better late than never.