INTRODUCTION

When I read in an article that the best asset parents can leave to children is how to manage their financial affairs, it dawned on me that with blogging and twitting such advice can be captured and retained for not only our children but for all others. Times were hard in my younger days and attempting to get food on the table and roof over our heads were about the only financial planning our parents did. Life has changed and children of today do not have such  problems, at least  among the middle income groups. However complacency would set in and if we do not plan our financial affairs early in life; we do not want to regret later in life.

I read a leaflet lying around when I went to the bank recently advising on planning for retirement. The economist who wrote the article was being pragmatic in having drawn a life-graph  depicting the time from being a professional to having a family through to peak period when wealth is accumulated maximally to a steady income phase before retiring at 58 years of age. The corresponding expenditure chart and the inflationary effect on savings makes us uncomfortable what will happen to us after retiring as the life span of men and women is now beyond 70 years. Factor in the cost of living and the impending health costs that come with living in the golden years! The savings we had or what we had planned may not be adequate to cover all and sundry.

Parents are now teaching children from a young age to be prudent in their spending, to be frugal and to uphold the philosophy of the three ‘R’s – reuse, recycle and reduce.  What strategies do we have to beat inflation, should we grow our own vegetables to avoid paying the high cost of greens in a tropical country like ours, should we learn to change the motor oil by ourselves so as to be fleeced by the motor mechanic in doing repairs or changing parts that don’t have to be done? Look around us and you will see the opportunities we have to save for the rainy day. Is there a need to run out to get two items from the  sundry stall two kilometres away if we had planned our shopping in advance once a week?

Parents have to be role models for frugality and being consummate in our spending. The advertisers know more psychology than parents and we tend to fall in like ‘shot down ducks'; when a sale goes on that is shouting about 70% cut down in prices. The strategies are similar, only that they are directed to different individuals from toddler to the old. Fast food joints have toys to be collected for dining with them, the pregnant mother is drawn to special brain food for the unborn and the aged have special formula milk and nutrients for memory loss and invigoration!

I shall approach the subsequent chapters talking about various subjects on financial planning though I am a novice in the subject. If I don’t sound right then I am not getting across my message. The main objective to share with you as young graduates and professionals some rudiments of financial planning as my daughter tells me she does not understand anything about wealth management  except to keep her meagre  savings in a bank for safe-keeping!

Sivalingam Nalliah

20 Nov 2011