Have you Done these Must-dos Before You Invest?

By Shawn Lee
Aug 13, 2021

The journey to begin to invest is a difficult path on its own. Most people are attracted by the high returns that investments could potentially provide but fail to understand the risks of investing. Many investors jump into the sea of investments and end up drowning. Fear strikes me when my peers get overly excited about “investment opportunities” and when they are too eager to begin investing before laying the foundations.

As with everything in life, we prioritise and take care of what is important first.

Debts, Emergency Savings & Essential Expenses

Debts: In our financial plans, we know that we first have to take care of our Debts. Do you know that many credit cards effective interest rate are at 24.9% and above per annum now? It would not be logical for us to invest before clearing these debts, loans and cash lines with high interest rates. It is not possible to achieve 24.9% investment returns per annum consistently.

Emergency Savings: An Emergency Savings of at least 6 months of our monthly expenses is recommended because this take cares in an event of a stoppage of our income such as an unexpected retrenchment. The emergency savings is also critical to cover unexpected expenses such as medical expenses for our loved ones, household, vehicle repairs and other unfortunate events.

Important expenses: If we expect expenses coming up such as hosting a wedding banquet, a house renovation or the birth of a child, we should save up for these expenses in cash. (These expenses could easily add up to S$60,000 and more in cash requirement for a couple) We cannot afford to invest and be forced to sell off our investments at a low when the bills are due.

Protection from Financial Risk

Insurance: To protect ourselves from financial risk means to “insure”. There are a few events which can impact our accumulation for retirement or financial independence.

  1. Medical bills: In the case where we have insufficient savings to cover for our own medical bills, we would be loaded with a mountain of medical bills if we fall ill.
  2. Loss of income due to medical crisis or death: Another risk of not having sufficient insurance coverage is that we are not able to provide for our dependents due to our loss of income (Eg. Spouse, children and parents) in our unfortunate death or disability.

The state of the insurance industry is that financial planners are mostly remunerated by commissions based on product sales. The amount of premiums we pay may not necessarily translate to the amount of insurance coverage we are covered for and need. The truth is that it is easy and possible for us to be adequately insured at a reasonable cost if we purchase the right insurance products.

Purpose & Type of Insurance Products



Type of Insurance

Death & Permanent Disability

Outstanding Loans

Children’s Education

Living expenses for Dependents

Term Life Insurance & Total Permanent Disability (TPD) Insurance


Monthly payout for Loss of Income due to disability/illness

Disability Income Insurance

Long-term Disability

Monthly payout for Care-giving cost

Long-term Care Insurance (Eldershield)
*For age 40 & above

Critical Illness

Alternative Treatment cost

Critical Illness Term Insurance


Hospital bills

Private Integrated Shield Plan

It is possible for one aged 35 years old with average income and moderate needs to be adequately insured for S$200+ a month.

You can easily find out how much insurance coverage you need here: Click here to find out your life insurance needs and Click here to find out your critical illness needs.

Have you done the above must-dos?

If you have not, please do so now. We do not want to risk having our hard-earned savings and investment gains wiped out due to our own greed and carelessness by not prioritising. We have to protect our existing assets and plan ahead for any unexpected events first. The journey before investing could take years and it is important to be patient before diving into the markets.

Let’s encourage one another to clear our debts, build our emergency savings, plan for our important expenses and insure ourselves adequately now. We are not only doing ourselves a favour but a very important favour for our loved ones as well.

To compare and purchase insurance, DIYInsurance – Singapore’s First Life Insurance Comparison Web Portal by Providend Ltd aggregates products from various insurance companies and provides 30% commission rebates in addition to ongoing promotions. Staff from DIYInsurance are all paid fixed salary and do not participate in sales-based compensation or incentives of any kind. Not being remunerated on a commission-basis means there is no hard-selling and over-selling involved.

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