Crashing oil prices and investor nervousness in China got the financial world into another round of turmoil in the early days of 2016. Are plunging currencies and stock markets causing you sleepless nights? Ironically, 2016 was supposed to be the year the USA started pulling the world out of the long trough of low-interest rates, so conservative savers could look forward to some decent interest on their bank deposits.

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So how can one adequately plan and save for the future in such uncertain times?

For the average working millennial, the answer is to go BACK to BASICS. Do not try to be a financial surfboard rider; it is more peaceful to ride out the waves on a passenger cruise vessel. You will get to your destination and be in better shape to enjoy the end of the journey.

Basics may appear boring but all top athletes know that their game must be grounded on mastering the basics of their sport. The same principle applies in the journey to a secure financial future.

Step #1

First, you must put money aside. Frequently spending more than you earn is akin to serving the ball out of court or driving the golf ball out of bounds again and again. Instead of bringing home a trophy, you get a Duffer’s Cup.

How much should you put aside? Well, it is good to note that what you put aside need not be regarded as frozen assets to be preserved only for old age. Wisely deployed, they can not only grow in value but can also be deployed to enhance your earning capacity, such as financing a higher degree; serving as seed money for a business venture; or a downpayment for a property.

So no matter how modest your earnings, do develop the habit of saving. Start by regularly limiting your expenses to half of your earnings. Do you absolutely need that regular cup of fancy coffee or the latest pair of sports shoes to add to the dozen you already have? Chilling out and pampering yourself may be fun, but often the effect is just temporary. But investing in yourself can have long-lasting benefits. The more you can put aside regularly, the more financial resources you will have for investing and for yourself. Isn’t that simply basic common sense?

Step #2

That brings us to the second basic step. Be a Smart Saver, and prudently deploy savings in safe, diversified and good yielding assets. Simply put, don’t just work hard for the money, but make your money work hard for you. To this aim, investing in sound and less risky financial instruments, such as an endowment fund, will not only ensure that your savings multiply for the future but you also get to enjoy yearly payouts to spend as you please now. Endowment funds have an average yield of 3% to 4% as compared to 0.05% in a bank.

Now, simple as these two steps may be, the devil is in the details. The financial world is full of products and services, many clothed in fancy marketing slogans that are nullified in the fine print. No wonder some people cop-out and simply leave their money in the bank, adding the occasional fixed deposit, and let long-term inflation erode the value of their sacrifices. This is, of course, not a viable solution as interest rates are only 0.05% for regular deposits and 1.6% for fixed deposits.This means that you will actually be losing your money over time, given the average inflation rate is 2.5% to 3%.


Step # 3

Get professional help and engage the services of a qualified financial consultant. Not just any FC, but one that can agree to help you be a Smart Saver. One that will not blithely promise “growth” but one who will holistically consider your protection needs and your obligations to your loved ones.

So there you are. Three basic steps to help you ride out financial storms: firstly, abjure unnecessary spending;secondly, be a Smart Saver; and thirdly, find a financial consultant who will follow step # 2.

As Albert Einstein once remarked: “Compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t…pays it.”So let’s all stay on the smart side, shall we?