Change life goals? Use digital tools or consult a financial advisor to reduce uncertainty, Invest News & Top Stories

In today’s rapidly changing world, which is now stricken by a pandemic, the story of Mr. Peter (assumed name) is not unique. He is a good example of someone whose goals have changed over time.

When he was young he wanted to be a restaurant chef. To understand the industry, he started working as a part-time waiter at the age of 14.

But as she got older, her focus changed. He then went on to study viticulture – the scientific study of the process of growing grapes – at a foreign university in hopes of becoming a winemaker, but struggled to find a job because most of the world’s vineyards didn’t have a job. need only one winemaker.

Unable to find a job, he returned to Singapore and started working in sales, but it was not exactly the career he dreamed of while pursuing his university studies.

Now in his early 30s, he is considering moving to another industry, but will likely have to return to college to gain new knowledge.

In addition, one of the goals of Mr. Peter’s life is to travel in space. According to US spaceflight company Virgin Galactic, it currently costs at least $ 200,000 ($ 268,122) and the seats are already sold.

For now, Peter will have to dip into his savings to pay for additional education and also postpone his plan to buy his own home.

However, with no dependents and no mortgage, it shouldn’t be difficult for him to take a year off his paid work.

The key to being financially prepared at every stage of your life is planning and starting to save early.

As you progress in life, your goals may change or you may take a longer detour to achieve them. You should therefore adjust your financial plans accordingly.

Today, it is not uncommon for young people to change jobs and venture into a new field, as digital disruption takes away existing career opportunities, although this can potentially hurt their finances.

However, despite the uncertainties in the world, not everyone is like Mr. Peter.

Even at a relatively young age, some people plan for their future with deadlines to reach milestones such as buying their first car or hitching.

Others have vague ideas of how they see their life unfolding or see their life goals as challenges such as climbing Mount Everest.

Either way, it’s a good idea to set a tangible financial goal like saving a minimum amount once you start working. Such savings would come in handy for buying your first home or paying for that Mount Everest dream.

How Can Financial Planning Help Change Life Goals?

It is often intimidating to build a financial plan in line with your life expectations, and it becomes even more difficult when these change. But there are resources that can help.

Help can come in the form of a self-directed, holistic financial planning tool that can give you personalized ideas and solutions, or a wealth planning manager if a human touch is preferred.

For example, there is DBS NAV Planner – a digital financial and retirement counseling tool – for setting life goals and how to achieve them financially.

Family and friends can act as a sounding board, but they may not be objective or qualified to give financial advice.

“Sometimes you may need the encouragement of a loved one to take your first steps towards saving. But when it comes to advice on other aspects of your financial plan, it’s best to seek professional help, ”said Ms. Lorna Tan, Financial Planning Education Manager, DBS Bank.

These aspects include the ability to assess your financial situation (analysis of your cash flow and personal balance sheet).

It also means establishing a realistic budget, managing cash flow well, ensuring adequate insurance, investing according to one’s risk profile, building diversified portfolios, as well as planning for the home, retirement and succession.

Advisors have no personal interest in your decisions

Keep in mind that financial advice can be partial when it comes from someone who has an emotional interest in your life.

Friends and family may think they know what’s best for you, but their advice can be influenced by their own experiences and lack of financial know-how, Ms. Tan said.

“Additionally, they may have expectations about how you should live your life that may not be aligned with your life goals, needs, and wants.

“You can hear them, but don’t stop there.”

A digital financial planning tool or a wealth planning manager, however, has no personal stake in your decision.

The job of the tool or manager is to stay objective and enable you to achieve your short and long term financial goals.

Goals have a direct impact on your current and future cash flow, whether you’re looking to buy your first home or fund your children’s further education.

DBS NAV Planner’s goal planning feature – Map Your Money – is the first in Singapore to help people plan their life goals with all flows of money in mind.

These include cash and investments, cash flows and the ordinary account balances of the Central Provident Fund, the special account, the retirement account and the supplementary retirement plan account.

All the user has to do is enter their goals and the planner will instantly calculate whether they are achievable and the impact on their current and future cash flow, Ms. Tan said.

This will help users to properly size the goal if necessary, save money and invest to achieve it.

It is wise to seek professional advice

Among those who rely on financial advisers are people like Mr. Peter’s grandmother.

As she approaches her tenth decade, she is concentrating on her daily activities, staying healthy and continuing her philanthropic work.

Before the 2008 global financial crisis, when certain aggressive investment products were widely sold by banks, his private banker – who was rather conservative – told him they were not right for him.

The banker also indicated that setting up a trust was very expensive and was not in his best interests.

As far back as Mr. Peter can remember, his grandmother has regularly donated to a wide range of charities, and that is another goal of his life.

To begin with, he occasionally volunteers with a non-governmental organization that helps foreign workers.

Over the past year, he has helped deliver basic items to foreign workers confined to their dormitories as part of Covid-19 safe management measures.

The writer, a former Business Times reporter, discovered that the hardest thing about financial advice is to act on it.

This is the fifth in a seven-part series in partnership with DBS

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