OVER-SAVED. OVER-INVESTED. OVER-INSURED. ☠️

Finally, a non-medical post, but something serious nonetheless 🥺

As a doctor working in Singapore, I am by NO means rich, and in fact I’ll tell you guys something: I’m STRUGGLING to make ends meet on a daily basis 😰

I am NOT paying for a car; I live in a 2 bedroom high rise flat, NOT a landed house; I go on a holiday once a year or less; and I am not a victim of gambling or related debt or online scams.

The reason? I OVER-SAVED, OVER-INVESTED, and OVER-INSURED 💀

Doctors are usually regarded as decent-earning, comfortably-living people, and most won’t want to openly talk about shameful life situations especially when it comes to money and finances. But for better or for worse, I think my story needs to be told, and here it is…

Good financial advice typically sounds like this 👉🏻 be prudent, save, invest, make your money grow and work for you, plan your nest egg early, get covered, get insured…

We’ve heard of the 50-30-20 rule; people are saying start investing from young to “beat inflation” and secure a comfortable and early retirement. They say: defer or delay gratification. But little did I know that it’s as crucial to be wise about your immediate expenses and needs as it is to do all of the above.

My monthly premiums paid to investments and insurance amount to about $10K SGD - yup that’s money I have to spend on a monthly basis rain or shine or the policies will vanish leaving me with a loss. I’m not even counting CPF and Medisave stuff - this $10,000 is all cash up-front premiums. Then I have a housing mortgage, utilities, and transport costs, income tax and CPF. That essentially leaves me with hardly anything else for myself on a daily basis.

So, how did I get into this financial rut? 😫

Of course, it started with advice from bankers and insurance agents. It’s always the same: you’ll need this, you’ll need that, you’ll be devastated if this happened, if that happened. You’ll want to secure your early retirement, you want passive income…

Once you get hooked on the first policy, an annual review is really an excuse and opportunity to check if you got promoted or had a pay rise and SQUEEZE you dry once again. “Congratulations on your $2k raise, you now NEED this new policy with a monthly premium of $5k!” Or WORSE - “I know you’re going to start a new job next year where you’ll be making loads! So you can get this new policy first and pay exorbitant premiums with funds you don’t already have - because you are a bright young doctor with such a good future ahead of you, you can surely make back the money!”

I now SUPER hate annual insurance/finance reviews - virtually every one leaves me with less and less cash flow. You name it, I have it: term plan, endowment, savings plan, snowball savings plan, life insurance, hospitalisation, critical illness, accident, mortgage, premium financing with loan switch, ILP, hybrid plan, mutual funds, unit trusts, equities, and more…

The tipping point ⚠️ came when I realise that one of the plans I was sold was paid for using a loan I was encouraged to take from the bank - over $150K SGD - and I was accumulating monthly interests to the bank that was steadily COMPOUNDING! This was to finance a $1M plan (if I die, my family can take $1M.) And nobody bothered to check if I was actively repaying the loan or the interests or advise the same; they were only checking how much my salary increased year after year, so I can buy new plans and policies 💀

By the time I found out how much it had already compounded against me, I was shocked! You know what? If I really didn’t start repaying the loan, by the time I die at 85, I would owe the bank around $40M!! 🤯 So when I die at a ripe old age, my family gets $1M from this plan, then they have to settle my $40M bank loan debt 🤔 makes perfect sense eh?

When my first son was born earlier this year, the medical bill shocked me and my bank account so badly! I depleted all my savings (in the first place, very scanty - how much can you save when you’re paying $10K a month for insurance and investments.) What was supposed to be a joyous occasion was a miserable reflection of the reality of how I’m financially struggling despite making a five figure monthly income. I don’t know how I’m going to comfortably afford diapers and formula milk for my growing son, or when he can go on his first holiday (based on my calculations - maybe about 7 years time.) 🍼

They said beware of online love scams, job scams, but who knew a licensed, professional agent you meet in person, and who even does annual financial reviews in person (not gonna run away with your money, right?) engages in scammy business tactics. I sure feel scammed!

It’s a painful lesson 😫 and I hope more people will be aware: saving, investing, insuring - they’re all good, but don’t get sweet-talked by smooth operators into overdoing it - to the point where you can’t even afford your daily basic expenses!

Be wary, and I mean VERY wary of that next policy or plan you’re signing up for. Consider your own immediate needs and cash flow first, because anyone interested in selling you another plan or policy for their own gain will almost certainly NOT help you look out for them! If your agent is taking every annual meet up as an opportunity to check out your pay rise and push you to buy more stuff - RUN!!!

So for now, I’m struggling to get back on my feet and making ends meet assembling my monthly diaper money fund. Wish me luck, and be safe guys! ❤️‍🩹

#mindfulspending #RealTalk #Lemon8Diary #finance #investment #insurance #savingmoney #budgeting