The view from singapore with British High Commissioner to ... - NUSS
The view from singapore with British High Commissioner to ... - NUSS
The view from singapore with British High Commissioner to ... - NUSS
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money<br />
Spring Clean<br />
a new year has arrived! now is a good time for us <strong>to</strong> quit bad financial habits and<br />
cultivate good ones. Here are 10 simple ways <strong>to</strong> get started.<br />
1Wipe the slate<br />
clean: Clear your<br />
debts where possible<br />
Got a bonus or expect one soon?<br />
Make good use of it by paying off<br />
any existing debts. <strong>The</strong> longer you<br />
delay paying off your debts, the<br />
more interest you pay and the more<br />
expensive the debt repayment becomes.<br />
Pay off debts <strong>with</strong> the higher<br />
interest charges first. But before you<br />
do, find out if there are any fees or<br />
charges for early repayments. If you<br />
have a home loan, check if you can<br />
get a better deal by refinancing.<br />
Tip: Do not take on excessive<br />
debt. As a general rule of thumb,<br />
38 THE GRADUATE Jan-Mar 2013<br />
your Finances for the new Year<br />
your monthly debt commitments<br />
should not exceed 35 percent of your<br />
monthly income.<br />
2make the<br />
‘8th Wonder of<br />
the World’ work for<br />
you: Benefit <strong>from</strong><br />
compound<br />
interest<br />
Compounding helps <strong>to</strong><br />
magnify your savings<br />
through earning interest on<br />
interest already accumulated.<br />
<strong>The</strong> earlier you start,<br />
the more time there is for<br />
Always think about how much money you can afford <strong>to</strong> lose <strong>from</strong> the investment.<br />
compounding <strong>to</strong> work for you.<br />
Fun fact: Albert Einstein was so<br />
impressed <strong>with</strong> compounding that he<br />
referred <strong>to</strong> it as the ‘8th Wonder of<br />
the World’!<br />
3Know how much<br />
risk you can<br />
<strong>with</strong>stand<br />
<strong>The</strong>re is no free<br />
lunch in investing.<br />
If you are offered<br />
higher potential<br />
returns, you can<br />
be sure that these<br />
will come <strong>with</strong><br />
higher risks. Find<br />
out what the risks<br />
are and what can<br />
cause you <strong>to</strong> incur<br />
losses. Consider<br />
carefully if you are<br />
able <strong>to</strong> <strong>with</strong>stand<br />
such risks and<br />
losses before you<br />
place your hardearned<br />
money in<strong>to</strong><br />
any investment.<br />
Tip: If you have a<br />
shorter investment<br />
time horizon, ie you need the money<br />
for some goal or purpose soon, the less<br />
investment risks you should be taking.<br />
Before you part <strong>with</strong> your hard-earned<br />
money, always think about how much<br />
money you can afford <strong>to</strong> lose <strong>from</strong> the<br />
investment.<br />
Do not take<br />
on excessive<br />
debt. As a<br />
general rule of<br />
thumb, your<br />
monthly debt<br />
commitments<br />
should not<br />
exceed 35<br />
percent of<br />
your monthly<br />
income.<br />
4anything is<br />
possible:<br />
Be ready for the<br />
unexpected<br />
An emergency fund will help you<br />
tide over a rainy day, eg if you are
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