08 March 2016

Mortality - Are We Well Protected?

Oh dear, oh dear. It's been one death after another ever since the start of Chinese New Year. It was a spate of half a dozen who passed on in recent weeks. In all cases, they were aged parents of friends and colleagues.

Most recently, I found out that a friend had suffered a tragic medical incident. He's in very bad shape and I fear he may not make it. As a single income family with two teenagers, it is a situation that will be of grave concern and worry.

I can totally empathise with the implications as my family is likewise dependent on me as the single bread winner, with a pair of teenagers going through the paces of education. The exact situation as my friend. It led me to ask myself, how will my family tide through should anything happen to me? *touch wood* [major wood]

A quick review suggest that with my holdings in shares and unit trusts, Supplementary Retirement Scheme investments, CPF, cash in bank accounts, and insurance upon death, it would amount to $1.7m. Would that be enough?

Assuming a 4% dividend payout with $1.7m invested, it would be $68,000 per year. Wifey has her own portfolio that is generating $6,000 worth of dividends per year. So in total, that's $74,000 of passive income per month.

The car is fully paid up, although it will eventually reach its 10-year mark within a few years. The house is almost fully paid up, with less than $50,000 principal outstanding. No other debts, beyond the monthly credit card bills. I think, $6,000 a month should be enough. Worst case, wifey may have to pick up some work to supplement.

ONE major problem though: Will wifey know how to invest that $1.7m to generate a steady and safe 4% dividend return? Got to work on that. Perhaps the simplest solution is to teach her how to buy STI ETF?

Meantime, whatever faith and beliefs you might subscribe to, wish my friend and his family well. They need all the help, physically and spiritually.

Wishing all, and especially my family and me safe, healthy and happiness in the year and years ahead. Cherish what we have.

Mortality, am once again reminded.


Createwealth8888 said...

I have this same problem with my wife. she doesn't believe in the stock market so I have little choice to leave behind significant portion of net worth in non market volatile assets.

The stock investment portfolio under joint account will probably let it rotting there for dividends if any. LOL

starlight said...

What about taking 1.7mil divided by the number of years before the teenagers are indept? It shld still be quite a decent sum per year

Lizardo said...


Didn't cross my mind to check on joint account. Can one do that with POEMS? I guess it's one way to preserve the investments and rot as you say. Ultimate passivity!

Lizardo said...


I suppose that is another possibility. But wifey would then be wholly dependent on the kids and herself to generate income thereafter. It would involve significant sacrifices on the kids as well. I suppose it could be further mitigated if wifey monetise the house and move in with one of the kids. That's assuming they get along then!

starlight said...

Right size the house. The only uncertainty is the medical costs

Createwealth8888 said...

Step is like this

Joint Bank account first --> Apply for Joint CDP account with your Joint Bank Account ---> Apply for Joint Broker Account linked to Joint CDP account.

Transfer share from cdp account to joint CDP account. Remembered $10++ per counter(not sure any change)

Lizardo said...

Thanks Createwealth8888.

Lizardo said...


Makes sense to downgrade housing and free up capital. There will be some inertia I'm sure. As for the medical cost, the Medishield+ plans will help, along with spare cash to tide over. But it means that regular premiums will need to be paid.

Createwealth8888 said...

I have been through it before but not planning. It is almost close to reality!

Saving, insurance and investment and all these three will add up substantially.

The Three Matters On Personal Finance: Saving, Insurance, and Investment!!! (2)