Friday, 1 May 2015

Thoughts on blogs and insurance

Have been pretty busy over the last couple of weeks traveling for business. Thank goodness for this long weekend. Counting thy blessings.

Came across a blog called LivingAFI which I would rank as one of the top three financial freedom blogs that I've come across. Have been quite a fervent reader of the The Financial Samurai and Early Retirement Extreme since commencing my "career". The Financial Samurai feels very relatable as we basically come from the same industry and Early Retirement Extreme seems like a hardcore straight out logical thinking fellow who's pretty impressive -I could never do what he has done to get to where he is. 

But LivingAFI, at the risk of sounding like I have a man crush, boy I've hadn't such an inspirational feeling from reading a blog since goodness knows when. Have gone through almost all of his posts and his attitude towards work, though in a different industry, is strikingly similar. Although the effort taken to elucidate our blog posts are rather different - I literally just regurgitate my thoughts all over blogger instead of taking the time to do nice illustrations and frame my thoughts in a coherent manner.

I think most financial blogs in Singapore generally comprise of investments, analysis on what to buy next and what not, but I seldom see local blogs portray a strong attitude to championing FIRE, nor provide a how to FIRE description in a local context. Fucking boring. I honestly think the investment concept is pretty simple - for folks just starting out in investing, a low cost Vanguard (or similar) index fund that tracks say the S&P 500 index or a global world index would be your best bet. If you want to do stock picking, I suggest starting a mock portfolio first and tracking your performance over 5 years before actually implementing it. There would be a high probability that you'll generate lower alpha on a portfolio basis as compared to low cost indexing.

On a side note, I think the worst place to start learning about investing, money management or FIRE would be from the "Me & My Money" series on the Sunday Times. That used to have a few gems, but I would say almost every single article that has been published in 2015 lacks character. You'll be served better following the blogs linked above or I would probably go out on a limb and say this blog.

So I managed to meet with my insurance agent over the last couple of weeks for a yearly "catchup". It's been three years since we've caught up because I didn't see the need to do so. I've got this term insurance policy which costs c. S$600 p.a. for a payout of S$200k on death or suffering caused by total/partial permanent disabilities or sickness (I think there are 30 plus of them). I bought this when I began working sometime back on the pretext that my family could be taken care of with S$200k, with the assumption of some form of medical insurance from my employer. Now I've accumulated a certain net worth which covers the insured amount by [ ]x and I am thinking of discontinuing this term policy. After all, if I pass, or fall ill, my family gets to inherit that net worth, and past a certain inflexion point it wouldn't make sense to pay out that S$600 p.a.

Question to the internet: What would be the net worth that you'll be comfortable with prior to discontinuing term insurance?

Further to that, assuming ceteris paribus, I think I'll have a maximum of 5 years in banking left before I can call it quits for good. To do that I estimate a net worth of S$2.5 - 3.0m, excluding property (i.e. investable net worth that can generate passive income through dividend distributions or portfolio rebalancing). Thus I've begun to explore hospitalisation and medical insurance, with the whole idea of complementing the government's medishield life such that you won't have to pay for any hospitalisation bills at all. I'm not yet 30 years of age, but I think these are important concepts from an FIRE perspective. If I've missed any other types of insurance (please don't get into life insurance with ILPs proponents...), kindly hit me up.


  1. Hi Retireby35,

    Dropping by to say hello. Came to your blog via your comment at treeofprosperity(chris's blog).

    I have a similar plan to yours but not as ambitious since it's semi-retirement at around 35. And I also doubt I can accumulate as much as you ($2.0m +++). Guess being in banking in your first job helps. =)

    Enjoyed your writing and will definitely check out LivingAFI since it's so highly recommended by you. I am a big fan of ERE, MMM and BNL.

    And I do agree with you on your take on the local finance blogosphere. Most of us cater to the taste of the average Singaporeans (to get traffic) and even I am guilty of that at times too. Oh well...

    With regards to insurance, hospitalisation and term life insurances are the only insurances I have now. And I also think that I will terminate my term life insurances within a decade. That's when they get expensive and hopefully, obsolete to my needs.

    Cheers and all the best to your 35 goal!

  2. Thanks much for coming by. I think when I first started looking at local financial blogs, yours was one of the first that came up. I especially like the expenses tracking posts that you have done. Do you use any apps to track these expenses?

    I hope you found livingafi a good read! :)