Insurance & Costs of having and raising a child

(30-08-2012, 11:09 AM)yeokiwi Wrote: How many of the forum members here seek professional financial planners?

I don't.

I am not aiming for perfect insurance coverage. So, based on my simple financial planning knowledge, I am more or less covered for majority of the personal financial meltdown. If I suay suay kanna one condition that my insurance is unable to cover, then I suck thumb loh.

Same with maintaining health, I can spend loads of cash for the best doctors, best specialists and best medical checkup. Or I can just have a simple routine health checkup that weeds out common health problems.(kidney, blood, eyes, heart...).

If I kanna a disease that is out of the scope of the simple health checkup, then I suck thumb loh.
But, even with the best financial planner or best doctor, there is no guarantee that all loopholes are plugged.

Basically, the point of covering the ass fully is simply not tenable in most situations and not available to all.

For me, if I can cover 95% of the possible financial wrecks, I am ok. The last 5% is going to cost me an arm and a leg.

The point is human beings are so unique that i know a case where the husband is an USA. trained Neuro-Specialist and his wife is a GP but he could not cured or do anything much for his wife's "sickness that has something to with Neuro/nervous system. She is completely normal most of the time. But when the sickness attack her, she is completely unable to do anything. She can hardly move at all. You can say she is almost completely "immobilized". Till now no one can really pinpoint her "illness" except suspect something to to with her "neuro-system". Ironically her husband is a Neuro-Specialist. And she herself is GP.

Another real case:
My wife's colleague who was so concious of healthy living and eating very carefully and going around advising colleagues to eat steamed food instead of fried food, passed away at the age of 50+ only because of cancer.
It was a shock to all her colleagues because she is so careful with her health yet she got cancer and die quite young.
So really, we can worry or fuss all the way we want but just like the stock market, no one can predict what is going to happen next.

As a believer, we are all at the Grace, Blessings & Mercy of God.
No one can really know what's going to happen to us next.
So why worry, be happy.
Just do whatever you think you can or want.
Amen.

I Googled for this "$15k and cannot afford kids" couple. The article is still online at malaysia-chronicle. As it turns out, they do want kids, just not now.

Excerpts:

Being financial planners, the couple have worked out their sums.

By their estimation, it will cost them $3,000 to $4,000 a month in fees for enrichment classes, pre-school, wages for a caregiver and a maid, and the cost of diapers and food to raise a child.

"Don't forget you also have to save for their education - you can't rely on CPF because most of it will go towards housing," says Mrs Bandar-Tay.

Mr Tjetty estimates that by 2023, the cost of local university education will amount to $150,000, while an overseas education will cost double of that. The couple do want to have kids, just not now.

Said Mr Tjetty: "I wanted to have five, but after doing the sums, anything more than two will be a stretch."
...
"Don't forget, we're self-employed - we don't get CPF - so we have to put aside savings each month," he says.

=======

So it's a question of what they wish to spend on each child. Also, since they are self-employed they do not get a regular salary. That is probably one of the bigger issues - you can't feed the kids less in any one month just because you earned less. They could have wide swings in income, and there could be long periods without income at all. So if they built in a 50% buffer, that would mean planning on the basis of $7.5k monthly, which, based on their goals for their kids, means a limit of two.

If AFFORDABILITY is defined as '$3,000 to $4,000 a month in fees for enrichment classes, pre-school, wages for a caregiver and a maid...' + stay at home housewife ie single income, then yes, they are right - They can't 'afford' to have kids...

Using similar reasoning,

I can't 'afford' to buy a house in Singapore - My needs are simple, I need a landed property next to the sea where I'd like to berth my own boat + the necessary maids, security, butler, cook,... boat captain + maintenance crew,...etc.

Conclusion : It's a lifestyle choice. If it's not, then anybody who earns less and yet still have kids, they wouldn't be able to help them with any financial planning...

KopiKat Wrote:If it's not, then anybody who earns less and yet still have kids, they wouldn't be able to help them with any financial planning...

Given their stated level of income, it's likely they are focused on high net worth (or at least high income) clients. That may also influence their choice of lifestyle.

For marketing purposes it might not be appropriate to arrive at your client's bungalow in a Chery QQ, or wear a Giordano T-shirt to your client's house party. Likewise, if your clients ask you for an informed view of where to send their kids for pre-school, it may not be the best idea to say "PCF is cheap and good".

Birds of a feather flock together. Although I know some wealthy people who have no airs, there are others who will only associate with those they deem wealthy enough.

Hi Yeokiwi,

What you say is true.

The part where an experienced IFA can help is highlight details that is not so obvious to a person reviewing a particular policy.

These details might impact that 95% coverage you think you are getting.

Also, you might not have access to products that are more suitable to you because it is possible to get these only though a IFA or broker etc...

What about pre existing illness ? Self Service or consult an IFA?

So should you still self service ?

(30-08-2012, 11:09 AM)yeokiwi Wrote: How many of the forum members here seek professional financial planners?

I don't.

I am not aiming for perfect insurance coverage. So, based on my simple financial planning knowledge, I am more or less covered for majority of the personal financial meltdown. If I suay suay kanna one condition that my insurance is unable to cover, then I suck thumb loh.

Same with maintaining health, I can spend loads of cash for the best doctors, best specialists and best medical checkup. Or I can just have a simple routine health checkup that weeds out common health problems.(kidney, blood, eyes, heart...).

If I kanna a disease that is out of the scope of the simple health checkup, then I suck thumb loh.
But, even with the best financial planner or best doctor, there is no guarantee that all loopholes are plugged.

Basically, the point of covering the ass fully is simply not tenable in most situations and not available to all.

For me, if I can cover 95% of the possible financial wrecks, I am ok. The last 5% is going to cost me an arm and a leg.

(30-08-2012, 06:31 PM)flinger Wrote: Hi Yeokiwi,

What you say is true.
The part where an experienced IFA can help is highlight details that is not so obvious to a person reviewing a particular policy.
These details might impact that 95% coverage you think you are getting.
Also, you might not have access to products that are more suitable to you because it is possible to get these only though a IFA or broker etc...
What about pre existing illness ? Self Service or consult an IFA?
So should you still self service ?

I agree that an experienced IFA can possibly value-add to a person's insurance planning. However, it is unmeasurable.
And, just like a doctor, he can only diagnose base on the data given and provide advices based on existing products and past experiences.
For personal data, the IFA can't possible know better than me.
For existing products, the more popular ones and almost every plan are widely covered in internet.
Past experiences are the edge that IFAs have. But, the advantage of it is not that great.

(30-08-2012, 10:04 PM)yeokiwi Wrote: For personal data, the IFA can't possible know better than me.
For existing products, the more popular ones and almost every plan are widely covered in internet.
Past experiences are the edge that IFAs have. But, the advantage of it is not that great.

*clap clap* Totally agree
Only can reply on oneself

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(30-08-2012, 03:36 PM)d.o.g. Wrote: By their estimation, it will cost them $3,000 to $4,000 a month in fees for enrichment classes, pre-school, wages for a caregiver and a maid, and the cost of diapers and food to raise a child.

$3k - $4k per month? Too high right.

So far based on my experience is about $1k per month and that is already consider high side

(31-08-2012, 02:41 PM)palantir Wrote: So far based on my experience is about $1k per month and that is already consider high side

$1K per mth for pre-school, food, diaper, maid, caregiver ... Your experience of $1K is high may i ask is how many decades ago?

My experience is even got money you will not have a place in pre-school. My boy waited for 2.5 years for a place in childcare. I queued for him all the centers near my house. Only 2 replied and that is 2.5 years later. This is the amount of foreigners our govt have let in and yet refuse to increase on facility and infrasture spending.

(31-08-2012, 03:34 PM)Bibi Wrote:

(31-08-2012, 02:41 PM)palantir Wrote: So far based on my experience is about $1k per month and that is already consider high side

$1K per mth for pre-school, food, diaper, maid, caregiver ... Your experience of $1K is high may i ask is how many decades ago?

My experience is even got money you will not have a place in pre-school. My boy waited for 2.5 years for a place in childcare. I queued for him all the centers near my house. Only 2 replied and that is 2.5 years later. This is the amount of foreigners our govt have let in and yet refuse to increase on facility and infrasture spending.

My experience is alright though. We had to wait for a few months only. Normally, the vacancies are available at the end of the year as kids are "promoted" to the next grade.
Around my place, within 200m, there are easily 10 centres. The old estates tend to have vacancy problem due to inavailability of void deck for conversion to childcare centre.
For new estates, typically, there will be one or two centres per HDB cluster using HDB void deck.

Hmm... I think 1k is enough for pre-sch and maid only. Will need more for food and diapers, not to mention caregiver.