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“Do high yield bonds have a high default rate during a recession?”

The following is my answer to a Quora question: “Do high yield bonds have a high default rate during a recession?” Yes. These bonds have a lower credit rating, meaning they are not investment grade bonds. These bonds are not rated corporate papers, or sovereign bonds. Their underlying issuer either has a weak financial position,Continue reading ““Do high yield bonds have a high default rate during a recession?””

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“I still need growth on my investment for retirement. Should I avoid bonds?”

The following is my answer to a Quora question: “I still need growth on my investments for retirement. Should I avoid bonds?” That really depends. As you age, and seek growth, you may give greater weightage to equity instead of debt instruments in your portfolio. This should have the involvement of your financial planner toContinue reading ““I still need growth on my investment for retirement. Should I avoid bonds?””

Understanding Whole life insurance

When buying personal life insurance, you’d be introduced to Term life insurance, Whole life insurance, Endowment/savings plans, as well as Investment-linked policies. Each product type has its purpose, advantages and disadvantages. So what is Whole life insurance? Whole life insurance provides coverage for the life of the insured. In addition to paying a death benefit,Continue reading “Understanding Whole life insurance”

What is the difference between stocks and bonds?

Here I’ll briefly summarised from The difference between stocks and bonds explained. If you choose to invest in a company, there are two routes available to you: Equity (also known as stocks or shares) Debt (also known as bonds) Shares are: issued by firms priced daily listed on a stock exchange Bonds are: effectively loans,Continue reading “What is the difference between stocks and bonds?”

How old should your children be before you name them executors of your estate?

The following is my answer to a Quora question: “How old should your children be before you name them executors of your estate?” They may become executors of your estate once they have reached the age of legal majority, which varies from place to place, from as low as 16 years to as old asContinue reading “How old should your children be before you name them executors of your estate?”

Building an Emergency Fund

Why do you need an Emergency Fund? An emergency fund is a sum of money set aside for accidents, sudden injury, or an unexpected loss of income. It’s essentially what you keep aside “for a rainy day”. Unpredictable events can be life-altering as well as expensive, resulting in financial emergencies. An emergency fund gives youContinue reading “Building an Emergency Fund”

What is the best long term advice for newly-wed couple?

The following is my answer to a Quora question: “What is the best long term financial advice for a newly-wed couple?” A lot of marriages flounder because of fights about money. Therefore, have a financial plan, make budgets and keep to them. Put money aside in a separate account for investment, and wealth creation. ThatContinue reading “What is the best long term advice for newly-wed couple?”

How do people shop for life insurance?

The following is my answer to a Quora question: “How do people shop for life insurance?” Depending on where you are, there should be web sites that allow you to compare between different policies of similar type and coverage. For policy portfolio, you need to shop around for a good financial services consultant, instead ofContinue reading “How do people shop for life insurance?”

4 Lessons on Personal Finance from Covid-19

Perhaps you’ve read 4 Key Lessons That COVID-19 Has Taught Me About Personal Finance. They are: Always set aside Emergency savings. Diversify income streams and skill sets. Get suitable and sufficient insurance coverage. Prepare your Will and complete your Nominations. Here I’ll share additional comments and thoughts on the 4 lessons. 1. Always set asideContinue reading “4 Lessons on Personal Finance from Covid-19”

There’s nothing wrong to take a loan.. but..

Did the title catch your attention? I know it did when I first saw it appear on my Facebook newsfeed. I hope you didn’t miss out the end part “first, ask yourself these 5 questions”. What are they? Can you afford a repayment? Will a loan help you reach an essential goal? When will yourContinue reading “There’s nothing wrong to take a loan.. but..”