Financial Matters & Tips #Ep 4 - The True Story of an Asset Rich but Cash Poor Elderly

Straits Times recently reported the plight of an elderly woman who lived in a $4 million condominium but relied on bank loans to get by provides a stark cautionary tale on the consequence of being asset-rich but cash-poor.

When she died in early 2023, her relatives found that she had only $3,700 in her savings account and had chalked up an overdraft loan of over $200,000 secured on her home.

This always led me to wonder how we can keep a good balance between being asset rich and cash rich at the same time.

It is definitely not easy as everyone of us have our daily needs and expenses to tend too, with some having young children and elderly parents to support as well.

It is not never an easy journey to prepare for retirement as it always seems like the last thing on our mind. As such, many people underestimate their needs in old age because they fail to prepare for major unexpected expenses that may strike unexpectedly.

So how do we avoid being in the same plight as the cash poor elderly?

Here are some of the ways that we can do to prepare ourselves for a comforting retirement whilst enjoying our life at the same time:

1) Save hard when you are still young (20s, 30s and 40s) as we will not work forever.

2) Get your finances in order and cut down any unnecessary spending.

3) Work on a side-hustle or acquire additional skills apart from your full-time job.

5) Understand how much you need for retirement and work towards that goal.

6) Invest in broad-based ETF.

7) Focus to reach full retirement sum in your CPF.

6) Build up a portfolio that generate enough passive income to cover your monthly expenses.

7) Top up your SRS funds to reduce tax for higher income earner whilst investing through a number of ways.

The goal isn't to get rich. Rather, the goal is to have enough money to lead the life we want and enjoy our retirement without any worries to pay next month bills and expenses.

Regards,
SG Cashflow Investor