It’s that time of the year where festive songs are playing at every corner and you’re busy shopping for Christmas presents! This is also when we set new goals and resolutions for 2019 and take stock of what we’ve achieved this year!
When 1st Jan 2019 hits, we’d all have become one year closer to our retirement and one year less healthy.
And if your policies have been sitting in a corner and collecting dust, it’s time to take a look at them. We have all heard our financial Advisors tell us that our portfolio needs to be reviewed yearly.
Undoubtedly, there could have been thoughts of scepticism that crossed your mind whenever you hear that. “Huh? Why need to? Are you trying to get me to buy more policies again? Lei che leh”
Before we reject the notion of the review, here’s four reasons why you need to review your portfolio:
1. It’s your financial check-up for the year, similar to a medical check-up.
Your portfolio is your financial health report. You go for regular health check-ups to see if your cholesterol has gone haywire because of all that seafood you’ve been eating. Or your blood pressure has shot up with the new boss at work. Likewise, a review of your portfolio is a review of your financial health. You do not wait till you are very ill to go to the doctors – similarly, you should do a regular review of your portfolio to ensure you are on track to reach your financial goals, whatever they may be. If not, it will be good to take action early before it becomes more painful in future.
2. Your earning power increases
As our earning power rises, we all tend to improve our lifestyle and our expenses increase along with it. You need to ensure if disaster does strike, your standard of living does not get compromised badly. You also need to provide enough for the people that are dependent on your income. Ensure that your income is replaced sufficiently so that they can continue their way of life. Remember, the more you have, the more your family stand to lose; the less you have, the less they can afford to lose.
3. Life changing event happened
Within a year, a lot of things can happen. You could have gotten engaged, there’s now a new addition to the family, or you were diagnosed with an illness. All these events alter your needs at that moment and will affect your future. A review of your existing portfolio allows you to take stock to see if what you have is adequate or excessive.
4. You have some investments of sorts
The worse kind of investments you can have are those that you leave there without reviewing them. You do not have to monitor your investments daily but it is your advisor’s responsibility to provide updates on how your investment is performing. A review lets you know how your portfolio is performing and whether you’re on track to reach your end goal.
5. Industry trends and updates
Not every review leads to a sale. It is good to meet up with your financial advisor to get an update on the latest industry trends or find out about any new products or promotions. Sometimes it is also good to just catch up and have a meal!
Your financial portfolio is similar to a road trip. While you enjoy the scenery, there are checkpoints where you need to stop and top up the petrol and make sure the engine is not overheated. You might not be a car expert, and that’s why you need professional advice when you’re doing those checks.
That way, even though there may be twists and turns along the journey, you’d definitely make it to the destination you started out to get to!
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