Insurance – Greg Fok Advisory

Work hard, and then, work smart!

April 30, 2024
by Gregory Fok

Most of us are told to work hard. I was told by my Mum to rely on pure grit and strength to get ahead to success in life.

We should all work hard, especially early in our lives. Once we have built some stability and fundamentals, it will be time to work smart.

I was speaking to a couple who were trying to impart the values of hard work to their child. And I added, the next step is to work smart. Let your existing resources, assets and income work for you.

And then after a while, it becomes a cycle of it’s own, without you needing to interfere in between. The cycle of growth and re-growth continues as long as one plans well.

So with the recent case, just by reallocating their existing assets, they have managed to increase their value by an extra $2mil using OPM (Other people’s Money)!

If you know someone who would like to find out how to be more creative by increasing their experience and wealth, let me know and we can have an initial meeting at our cost, with no obligations.

Can you imagine crossing this bridge without the railings?

September 28, 2023September 28, 2023
by Gregory Fok

It has been some time since I crossed an overhead bridge..

😅So as I was crossing over and was imagining walking over without the green guardrails. What would the feeling be like? It would seem quite scary. Although I would still walk in the middle and not move to the sides nor go anywhere near the guardrails, I would never have imagined myself crossing the bridge!

💡Well, getting ourselves protected and having risk management in place is a bit like putting the green guardrails in place. We probably will not touch the guardrails and we probably will not use the insurance policies nor do we need to have a diversified portfolio, but we know that in case we tripped and fell over, we will not fall over the bridge!

And the same applies to our finances as well. When we have our “guard rails” for our finances in place, we can walk across the bridge with confidence, with peace of mind and we can even speed up our walk because we know that our risks are managed well.

🦉So the next time you cross the over head bridge, think of me helping you ensure that your safety measures are put in place and you can sprint across the bridge with no fear, which means you can even get to retirement earlier than you expected.

Would you like to put your financial guardrails in place? And how are you reframing the way to build large wealth?

How to plan for retirement?

August 13, 2022August 15, 2022
by Gregory Fok

5 areas to plan my future for retirement.

I have been getting people asking me what they can do to plan their future, especially when it comes to retirement planning. So here are some broad scopes of how you can plan.

5 areas of planning for retirement.

🔥 Insurance planning

Most people will generally be healthy but you never know when an illness or accident can throw a curve ball at you. There is a phrase in Chinese that says you can die but you cannot fall sick because the medical costs – related and unrelated can wipe out your wealth. Plan early to reduce costs.

🔥 Investment planning

Inflation does not affect you in the short run, but over a period of time, it can erode your spending capability. Growing your wealth systematically in a sustainable way is critical, so use CORE strategies to ensure peace of mind and higher expected returns.

🔥 Tax planning

Taxes are getting higher throughout the world due to COVID and high government spending. The mass affluent will be the ones most badly affected by this. Do you know that your investments can be eroded by taxes as well, if not planned right?

🔥 Debt planning

You should be reviewing and looking into your loans. Minimize the use of debt. Debt is a double edged sword, if used inappropriately, it can cause lots of emotional stress. We have seen wealthy individuals who drown in debt.

🔥 Estate distribution

Eventually all of us will no longer be around. So it is important that we leave and ensure minimal costs, confusion and conflict for the surviving members of the family. Assets that are illiquid like properties and businesses are the ones that cause the most conflicts. So we help redesign the portfolio to maximize efficiency and simplify lives.

The above is just a broad base way to look at it but everyone person has either a pain point or a dream to do something special. We listen and try to understand what it is that you really want so that you get the best out of your life!

Reduce your risk and stress. Plan your dream life. Spend your time focusing on what passions you have in life, get peace of mind.

How do I be smart about transfer of wealth?

November 26, 2021November 26, 2021
by Gregory Fok

There are families we know who want to leave a legacy behind for the next generation or their specific beneficiaries. This can be very useful for families who already have some reasonable amount of wealth and they want to be even smarter. However, this only applies for clients who want to leave behind a legacy with their extra money. Do you know you can be very smart about how you want to design the gifting to them by planning smart?

Use discounted dollars

For example, if you plan to leave $1mil behind for your beneficiaries, do you know that you do not need to park that $1mil in cash just lying in wait? Depending on your age and health, you just need to set aside as little as $200k as a lump sum (if you are younger). This figure that you need to set aside will increase with age, depending on when you start the plan. The earlier you start planning, the lesser you need to fork out and the smarter you become. Or if you pay it out over a period of time, it could even be as little as $2k a month to ensure that the same $1mil goes to your family. Every scenario is different so please have an initial chat with us before you look into the figures. No matter how you do the calculations, it will always be more cost effective than having to set aside that $1mil on your own.

Use the power of compounding effect and growth

Whilst the amount of money is being set aside, it will continue to compound over time as well. Depending on how you structure the plan, the wealth of that $200k will grow over time and you can have some access to it at a much later age. If you be very smart about it, it can have a very significant doubling effect as well.

Guaranteed event

One day, all of us will end up going to heaven, so that $1mil will go down to our beneficiaries. This is an unfortunate event that will happen in ALL our lives for sure. It is just a matter of whether it happens, earlier or later.

To sum up, insurance was designed by the wealthy, for the benefit of the wealthy, for them to continue to be wealthy. If you want to be smart about your wealth and finances, let us have an initial chat to be able to multiply your wealth from all angles!

What are doctors most worried about?

November 20, 2021November 20, 2021
by Gregory Fok

You have worked hard in the early years of your career to master your expertise. Now you finally see some light at the end of the tunnel when your hard work pays off with a reasonable income and you have amassed a decent amount of wealth.

As a doctor, you are most worried about the things you have no control over. What are they and how should you plan to minimize the risks?

You want to protect your income against unexpected health risks.

As a doctor, what can potentially derail your cashflow significantly could be an unexpected health risk. As we all grow older, you see patients and even friends and relatives with medical issues like cancer, stroke, heart attack. And these issues could create a cashflow gap in between now and recovery some time later. And some could take many years before a full recovery could be made while others may affect for a lifetime. Be smart about it and transfer that risk out to a financial institution and you will be surprised how cost effective such solutions could be. It could be as cost effective as 1% of the amount of risk you want to transfer, depending on age and health.

You want to ensure that your wealth and investments will never become zero.

Your expertise and time best spent is with your patients as that is what pays for the bills. As such, you will have no time to track and monitor the markets and you do not want to be speculating with the stock market either. Just imagine, if want a surgeon to be operating on your parent, would you want a junior doctor who spends time on the internet learning about how to be the best surgeon or would you rather have an experienced surgeon who has been doing this for the past 16 years and do this on a daily basis? We are that experienced surgeon you may just want to reach out to.

Using an evidence-based approach that goes back as far as almost 100 years, we are able to design and create a portfolio for you, using low-cost globally diversified instruments, that can withstand the many decades of crisis and wars which allows our clients to reach their goals with the least amount of risk and the highest chances of success.

You are concerned over litigation and reputation risks.

You could be a renowned doctor and are established in your field for many years. You have also created a certain amount of networth with your experience and years of work. However, all it takes is a patient who happened to sue and all the reputation built over the years as well as your efforts of building wealth could just disappear almost overnight. The years ahead could also be quite daunting when reputation is tarnished for your practice.

Being smart to transfer some assets out of your name into a trust or a close family member could be a way to mitigate some of these risks as you never know what could go wrong down the road especially if you have already built a certain reputation and networth.

What do you do next?

We do allow an initial consultation together with us at our cost to allow you to explore and see if there is a fit in what you are looking for and if we are able to add value to you through our many years of experience working and specializing together with doctors.

How high income earners manage their financial risk?

July 7, 2021July 7, 2021
by Gregory Fok

I was speaking to a senior chief executive of a MNC recently. He shared with me that he was so successful at his work that he had no time to look after his personal finance which is a common experience.

Here are some things I noted from the conversation.

1. Senior directors tend to be very busy and alot of their time is devoted to work with limited time for family.

2. They are worried and afraid that their high income ability tend to end earlier than most of their peers and they find it difficult to be rehired at a similar position or pay scale.

3. Their stress level is very high which makes them unable to continue the hectic pace for their careers over a long period of time.

4. The stakes are high to get to that position so they may not have many close friends they can share their real struggles with within the organization or even outside.

What can they do?

Find a trusted advisor who understands you and appreciates the situation you are in when planning for you.

Structure an investment plan to build a nest egg for themselves as quickly as possible in shorter periods and as early as they can. Time and automation becomes your friend.

Protect your income ability against unexpected health risks of critical illness as you have a strong earning ability over a 5 year period.

The investments should be automatically deducted from your income account and it should be a self rebalancing portfolio. This minimizes decision making which reduces mistakes and risks along the investment journey as well.

Build skillsets and close relationships with clients, staff and peers around you so that you become more difficult to replace as relationships and networks are an integral part of building any business.

Take time once or twice a year to focus on the important but not urgent things in life and you will live a much more fulfilled and balanced life.

What should I do with reduction of par policies?

June 24, 2021June 24, 2021
by Gregory Fok

Given the historically low interest rate environment we have been in for some time, with potentially foreseeable low rates going forward, the insurers have to reduce their projections to give consumers a more realistic range of projected investment returns.

Part of the reason is that insurance companies tend to have a higher bond allocation in order to give consumers the guarantees that the insurance companies provide customers but bond yields have been low.

To begin with, the primary purpose of insurance is for protection and safety. However, we also do know and acknowledge that insurance has it’s own limitations with regards to the long term investment returns.

How this impacts you is that if you are planning for long term goals like retirement, you will need to be able to have some of your portfolio into the longer returns of the market like a stronger allocation towards equity using the power of capital markets, but into a very globally diversified portfolio. But for someone closer to the retirement date, he would prefer to have it more in safety but there will still be some money that he may not touch till 5 or 10 or 15years later. So the right fit would be determined by your customised goals you have, where we can explore further together.

Therefore, we can add value to you to do an educational webinar if you have interest.

How do I build large amounts of money reliably and sustainably for long term goals like retirement other than from insurance products?
What is the research and evidence-based approach to investments that produces the higher expected returns?
How do I manage risks and volatility for myself while investing?

If you know of someone who would like to find out more on the above topics, I will be happy to have a session for you, your family, friends and colleagues. Thank you.

Reduce your wealth and health Risks

May 18, 2021May 18, 2021
by Gregory Fok

I met with a friend who was referred to me about few years ago.

Her Mum was about 60 years old and had some existing medical conditions. Given her Mum’s health condition of blood pressure, diabetes, cholesterol etc, she knew it would be difficult to get her Mum insured, but she told me this. “I would rather pay a few hundred dollars every month than to be hit with a sudden big amount at the most unexpected time which I may not be able to afford..”

Using my expertise, we searched for an insurance company who was willing to insure despite having some basic existing medical conditions. Of course, the amount was limited but something was still better than nothing at all. We proceeded with the application and some simple medical questions. Her Mum was insured promptly.

About a year later, I received a call. Her Mum went in and out of hospitals as she was unwell, and was later found to be diagnosed with cancer. Being unable to work, her Mum loss her income during that period of time and that also affected the family members who had to take turns to take care of her. There was emotional stress, physical stress and huge financial stress at the same time.

We started the claims process, and after a very detailed check, the insurance company paid out a cheque to the family which was substantial compared to the cost of premiums funded. Definitely, there was still the emotional and physical stress, but when the financial stress was lifted from the whole family, there was room for comfortable adjustments so that things are not as difficult as what it would have seemed initially.

When we are touched lives for the families we work with to the point of making a BIG impact, we feel appreciated for the work we have done.

That is why people come to us to be smart about how they should manage their finances so that they do not need to worry about the unexpected scenarios of life, whether they live too long, die too soon or get into accidents or critically ill in between.

Things to note before hospitalization and surgery

February 5, 2021February 6, 2021
by Gregory Fok

In the past, a number of insurers have allowed for cover for every dollar of the bill to be claimed. This unfortunately led to a trend of overconsumption of medical facilities and bills in Singapore.

Patients will walk into a clinic and if they can claim everything, there were hardly any questions to the doctor about whether the procedure is necessary. After all, the whole bill is paid for by the insurance company.

The claims experience for hospital bills was increasing over time. Premiums were skyrocketing over a number of years so the government has decided to step in about 3 years ago, before it gets worse.

For those who used to get full cover, the contracts have been amended over time due to the introduction of new laws, which means that it is no longer full cover as it used to be.

As such, here are some pointers to note before being hospitalized or getting a surgery.

Check if the doctors are in the panel of the insurance company.
Get a pre-approval from your insurance company before you proceed with any surgery.
Take note of the deductibles that will be levied before you get to make any claim due to non panel doctors and non pre-approval.
Due to the recent changes by the government, there will be co-insurance as well.
Be aware that your premiums may jump in future if you had made any claim before.

It will continue to change on a year to year basis so these are some notes to be aware of.

While hospitalization and surgery cover is important, another thing to cover for is critical illness! When a patient is discharged, he goes home for recovery and costs incurred at home will be born by the patient himself. The loss of income will impact his ability to service his household expenses and banks may come in to request for top ups of loan facilities given out before the illness.

Spend some time to relook at what you have and whether it is up to date based on your needs at the moment.

Gun and Shield

February 4, 2021February 4, 2021
by Gregory Fok

When a person goes to battle, he needs to be able to plan and fight strategically and efficiently.

If a person brings only a gun, all it takes it for the enemy to find a small spot of loose entry, the person will be killed.

If a person brings only a shield, he can protect himself well, but he will not be able to advance past the enemy line.

A smart soldier will need to have both – the gun and the shield. What similarities does it have with financial planning? In financial planning, we need both the gun and shield too. That is what all wealthy people do, by being smart.

The gun is there to help us advance in terms of getting to our long goals in a more efficient manner so that we do not need to work as hard on our part. Let time and patience be our best friend.

The shield is there to protect our income ability and existing assets. In case of an unexpected death, accident or critical illness, your income can be protected and any existing assets will still be intact without the urgent need to liquidate at a loss.

Have your fine-tuned your gun and beefed up your shield recently so that you put in the least effort to get to your dreams in life with the best achievable results?