I used to believe that financial consultants offer financial advice well. But throughout my life experience, I realized that it is not nesscessary so.
Financial Advice does not nesscessary come from Financial Consultants. Especially young financial consultants in their 20s, who are still trying the grasp their sudden boost in paycheck. Unknowingly, they might develop bad financial habits themselves. Ironically.
(Disclaimer. I am not trying to blast down financial consultants with this post, so calm down. I only have the intention to educate about general financial advice)
I have come across enough forms of financial advices and even went for financial consultancy examinations before. I want to humbly say, I might be able to educate you on this subject of financial advice.
Seeking financial advice is what from my experience, generally a tough task. Personal finance is a very touchy subject. A few people are willing to declare their expenses and savings face to face; towards their close friends, their family members or even their life partners.
Today, I want to give you basic financial advice-
I believe that financial advice in most cases, should come from people who are older than you. Most of the time, all financial advices boils down to these 3 things: Expense management, investing and diversification.
Expense management plays the biggest role in financial management. Think about it for a moment. The less you spend, the more you get to save and invest. Think about the subscriptions that you are paying for, and the lifestyle that you are living. Are they worth the money or do you see yourself living at a higher standard than you should? Personally, I eat hawker centre and kopitiam food daily, because I understand that there is no shame to live frugally in my 20s. Moreover, the kopitiam and hawkers in Singapore tastes really good and I'm sure many in Singapore will agree with me.
Investing, there are 5 main asset classes, namely cash, bonds, equities, derivatives and alternatives. It is highly recommended to study what all these 5 are, especially on alternatives where you might have interest in. Example: collecting figurines, watches, cards, cryptocurrencies or even propeties.
Diversification, as the saying goes: do not put your eggs in one basket. Diversification means putting your cash into many different places at once. By doing this, you spread the risk that you take through investing. A good diversification example may be this:
1) Invest in blue chip, real estate and growth stocks for the capital appreciation.
2) Having a savings plan for capital preservation.
3) Tweaking for a life you feel satisfied with, spending only on things that contributes to your happiness. Why is spending a form of diversification? Because you invest in yourself, by spending.
This example is very basic, it is up to you to find out what variant of diversification suits you.
-In conclusion, the above is very basic, but foundational financial advice that are applicable for the mast majority. Do read and try to understand the concepts of these 3 important concepts of expenses, investing and diversifying. With a good understanding of these, you will be good at personal finance.