Good stocks to invest
This will be a short one.
On 20th April CNA published a Ministry of Manpower report on some of the latest statistics of layoffs. You can read it here. My gripe with this statistics is that, I do not know what they would like us to gain from this information. And as I get older I gloss over these statistics because honestly, how much would knowing this help me in my daily life.
I wish they could present things in a list form. So here are some of the conclusion I got through the report:
- In 2014, 12,930 people became unemployed. In 2015, the figure is higher at 15,580
- Out of the group, more PMETs that are older than 40 year old are laid off, compare to a year ago, versus other age group and category of workers
- If we were to compare the unemployment figures for locals versus foreigners, locals are lower but I can’t really tell the real significance
- Among those who got laid off, they took longer to find a new job. two thirds of those laid off in Jan to Sep found employment by Dec.
- Out of those two thirds who got reemployed, 81% took less than three months
My main take away from this is that you have one third of those laid off between Jan to Sep who hasn’t found employment in 3 to 12 months. And you have 13% who took more than three months.
These are the upper bounds that should be on our mind when we think about how bad our situations can be. My previous article where my taxi driver shared how his ex-colleague’s brother couldn’t find a matching job for 7 months re-emphasis that point.
Many have asked me: Are 3 months of emergency funds enough? Where should I keep it? I heard this blogger keeps 12 months of emergency fund.
An emergency is something that is an unexpected event that you have not planned forth. If you are a good wealth manager, you should over time have less emergencies.
This would mean that if you have thought of unemployment as a scenario, its not an emergency. You should know where to tap your funds in the event comes.
It could be something like this:
- Mortgage: My CPF OA have $20,000 to last me for X months. Same for my wife
- Daily expenses: I have $15,000 from Y accounts that could last me 8 months
- Anything else unexpected I will tap from this $6,000 in Y accounts and selling off part of this portfolio of stocks
In this plan this might or might not be the best of plan, but going through this war-gaming allows you to refine the plan to ensure that it is fundamentally sound, workable and when the event comes, you can just execute this plan.
Here are some related materials:
Here is my comprehensive article on what you need to understand on the Emergency Fund >>
War-game the Scenario of your Salary getting cut from $9500 to $7000 BEFORE it gets cut: On the same trajectory, when you cannot find a job that matches your last drawn income, it is a big problem to have. War-game the scenario in your head first, before the even happens. I see that quite a lot when couples plan their HDB flat.
Gamify your Financial Life: A short article but it is a philosophical piece showing how to make your financial goals fund to keep yourself on it.
Why You Need to Test Out Your Life Goals: 6 Different Life Goals and how you can Test Them: Here is something on the idea of testing and war-gaming on a financial/life context. The idea here is to live and plan for different situations in your head before it happens, and enjoy the long term benefits of it.
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