Overusing Commas

A man has been found guilty of overusing commas in his correspondence.  The judge warned him he can expect a very long sentence.

Quora Answer: What Secrets Do Professionals Use to Choose a Financial Consultant?

The following is my answer to a Quora question: “What secrets do professionals use to choose a financial consultant?” 

There are no secrets.  This is not a magical process.  People want to work with those they know, and are comfortable with.  That financial consultant is most likely from a common business network, has an established reputation, and is a known quantity.  It would be highly unusual for a person serious about his financial planning to simply take the first person who calls.

Quora Answer: As a Public Speaker, How Do You Stay on Track When You Have Other Things on Your Mind?

The following is my answer to a Quora question: “As a public speaker, what do you do to stay on track when you have other things on your mind?” 

This is not a chat with the neighbours over the fence, holding a cup of tea, while we tell them our opinions on random topics.  If you feel this need to talk about whatever you have on your mind, you are not a public speaker; you are simply speaking in public.  Public speaking is an art as well as a discipline.  When we speak, there is an objective, an intent. 

Every public speech has a specific theme.  This is normally tailored to address the needs and concerns of the audience.  The speech begins with an opening statement, a broad brush of the intent of the speech, and the parameters of address.  The speech then goes onto details on specific points that need to be elaborated.  There is narrative pacing, examples to personalise it, and strategic use of rhetorical devices to elicit the appropriate response.  A good speech does not cover more than three points.  This is not the reading of a policy paper, or a research paper.  It then ends with a summation of points and a call to action.  If the speech is crafted properly, there is no avenue for the speaker to go off message.

Quora Answer: Are All Life Insurance Quotes Free?

The following is my answer to a Quora question: “Are all life insurance quotes free?”

If you are only asking for a quote, they are free.  Quotes are generated by the system when you input the required data such as age, occupation, gender, and some financial data.  It does not take much to ask for a quote, and by themselves, they do not tell you much beyond superficial price comparisons.  However, if you are asking for a comprehensive financial health review so that those quotes have a context, and are part of a strategy for risk mitigation, wealth accumulation, and wealth protection, some financial advisors chare for that.  This is because now, you are not asking for a quote; you are also asking for a strategy to fit your needs and your budget.  That takes a bit more homework.

Quora Answer: What is the Best Investment Strategy for an Economy with Increasing Inflation?

The following is my answer to a Quora question: “What is the best investment strategy for an economy with increasing inflation?” 

Inflation is the rate of decline of your purchasing power due to the falling value of the currency you own, relative to the general increase in the prices of goods and services.  That means funds in the money market, and debt instruments such as bonds will decline in value.  Correspondingly, the value of real assets such as stocks, real estate, and commodities such as gold will increase in value. 

Gold has been the traditional hedge against rising inflation.  However, this is a short term measure because once there is a market correction, the value of gold will drop.  Over an extended investment horizon, while there will be an increase in value, unless you happen to live in some sort of banana republic, the rate of increase in value of your holdings will not keep pace with the general increase in value of other forms of investments. 

Real estate is also a good hedge against rising inflation, but there are caveats here.  Real estate prices depend on demographic pressure and other economic factors beyond inflation.  If you are in a growth region, price pressure will trend upwards.  There is also the consideration for types of property, or REITs.  Real estate is prone to bubbles, and investment in real estate involves a lot of leveraging, which is an inherent risk.  Finally, real estate, except for REITs, is not liquid. 

For the risk averse, average investor engaged in long-term financial planning, the best investment is index funds, or blue chip stocks.  Individual stock picks is a lottery unless you have access to the sort of market analysis that investment houses and banks do.  However, the market has always trended upwards.  Investing in an index of the market spreads the risk across multiple regions and economic sectors.  It is relatively affordable.  And most importantly, your holdings are liquid, which means you can pivot towards bonds when the market dampens.

Quora Answer: Is It a Smart Move to Have Multiple Life Insurance Policies for Myself for the Family?

The following is my answer to a Quora question: “Is it a smart move to have multiple life insurance policies for myself for the family?” 

This depends on a few factors.  Firstly, what sort of life coverage do you have?  Only death benefit?  Does it have terminal illness, critical illness, early payor benefit, disability?  Does the death benefit have special provisions for accidental death?  What about self-harm and suicide?  Is the coverage limited by region, or is it international?  Are there exceptions for certain occupations or activities?  If you have any or all of these, do you actually need it? 

Secondly, there are limits to how much coverage you can take on your life.  In Singapore, insurers generally accept a maximum of $6 million for death benefit, and $3 million for disability, although this may vary.  You could ask for that limit to be raised, but that would require special underwriting, and you have to prove you are worth that much.  This means, if you were to decline disclosing prior coverage, and actually have more than the limit, you can only claim up to that limit.  Or the insurer may decline to payout for non-disclosure, and return your premiums less costs to the estate. 

In general, when you get coverage, you should undergo a financial health review process, and obtain coverage that is suitable.  If budget is not a constraint, you want enough that your family has enough to maintain their standard of living upon your death, until they are able to adjust to that loss of income, if you are the primary provider.  Death is an event.  If the coverage is for critical illness, you are likely to survive for years.  There is a likely loss of more than one income in the family, because your spouse or others have to put aside time to care for you, and that is even with the cost of getting help such as a home-based nurse or maid.  If it is disability, you have that, and you could live two decades in that state.  The coverage you need in such a case is likely up to ten times the income you need to protect. 

In such a case, it would be prudent to break it up across a few policies.  Whole life policies have a value, and may function as financial instruments.  In the event that you have problems with your income, you have options such as dropping a policy, taking a premium loan for one or two of them, or halting coverage for a period of time without dropping the policy.  More policies mean more options.

Quora Answer: Does a Good Financial Plan include an Insurance Plan?

The following is my answer to a Quora question: “Does a good financial plan include an insurance plan?” 

The purpose of insurance is to manage risk, and mitigate your exposure to risk.  That is an integral part of financial planning.  No financial plan is complete without planning for loss, for untoward events, or anything that would impact our income, and standard of living.  That is the purpose of insurance.  The more you have, the more you need to protect.  Conversely, the greater your wealth, the greater your need for insurance.