Today's post will cover the one story that started it all. The one that made me realize there are wolves out there. And if you're not the predator, you'll become the prey.
It all started when i entered the workforce. I was finally earning my own keep. Like others, i'm no longer bounded by the allowances I receive, not bounded by the little income I can get teaching tuition or working part-time after school. A sense of freedom enveloped me which i later realized was the ability to meet my own needs.
I was now in a situation which was sustainable. My expenses were lower than my income; exactly the meaning of living within my means. And that just means i could save that difference of income minus expense.
Now with this spare cash, you could do countless other things. The one thing i knew back then was that the banks were giving me miserable interest. I had to do more in order to make better use of my accumulating savings. I had the misconception that because i was not a finance person, investing was beyond me and i best outsource this scary and complex task to some one else.
In came, this very kind FA by the name of Z.
Z was a young skinny lad, probably not much older than i was. The only clue i had about him was that he was already working during my days in National Service as that was when he first contacted me. Till today, i believe an acquaintance of mine left my contact with him. Z knew my profile and didn't bug me too much about buying a product with him for a good 3 or so years when i was in school. However, he continued to stay in touch, slowly leaving an impression in me.
When Z contacted me this time round, my profile has changed. I was now well-fed as a prey rather than a malnourished young cub which won't satisfy much of his satiety. Z was smart and patient to have stalked this young prey till now. Honestly, young FAs out there could take a leaf out of this book. I thought he was sincere enough to have followed me for so many years so i agreed to a meet-up.
With an income, some savings, complete ignorance in finance, i make the perfect candidate to sell some toxic products. "I want to invest some of my spare cash because the interest rates are very low." This was what i told Z on our first meeting. Oh how foolish was I. I thought i was so smart to know the little bit about low interest rates. Z must have peed a little in his pants at this point. He must have been a very good actor as well because I don't recall him being terribly excited at that point. I did get fantastic efficiency in processing my paperwork and that coffee was on him.
And so, i started paying for an ILP and perhaps also, a bit of Z's car loan. Looking back, i should have bought from a sweet, young thing in tight skirt instead of Z. At least i could have a more pleasant meeting and a good feast for the eyes. But i digress.
After several months, i logged in to the platform the insurer provided. I was shocked to see that 90% of my savings went to costs and only 10% was actually buying some funds. I took out the policy documents and indeed, this was already presented to me. I guess their sales tactic worked as it successfully managed to divert my attention to the good stuff and forgot about the bad ones. Obviously now, the coffees we had during that fateful meeting was borne by me.
I quickly terminated the policy at a loss and got back a mere fraction of what i spent. It could have been much worse like the folks who have paid for years. With a street-trained mahjong background, i took this as necessary school fees. I then embarked on educating myself on finance and has never looked back ever since. I don't fully blame Z for selling me that product because i asked for it. But he could have done a better job in explaining to me the full intricacies of the product. It was clearly not suitable for me.
Now that i have a few years managing my own finances under my belt, still novice in the world, i can proudly say that investing is not THAT scary or complex a creature. With a good dose of discipline and self-control, it can be made simple.
Onwards, the posts will become a bit more random covering values, concepts and examples as and when i find good lesson material in my day-to-day life.
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