In summary, Money Wisdom focuses on how to uplift your financial wellness in three broad aspects, 1) Personal Finance and Wellbeing; 2) Insurance and Risk Management; and 3) Wealth Accumulation and Retirement Planning.

Generally, most of us will find this book easy to read. In fact, I managed to complete it within a week. With this in mind, let me share my thoughts in this post.

Table of Contents:

1. The Book in 3 Sentences
2. Impressions
3. How I discovered the Book
4. Who should read it
5. How the Book changed me
6. My Top 3 Quotes

Part 1: The Book in 3 Sentences

1. Insurance: Given that insurance premium is an expense, you should spend as little as you can to get as much coverage as you need.
2. Investment: By and large, you can reach most of your financial goals by investing prudently.
3. Industry: At this time, the insurance industry feels more like a sales business than an advisory service.

Part 2: Impressions

Part 2.1: Controversy

From time to time, Christopher (the author) will drop hints on why you should work with his firm for financial planning. As an illustration, the advisors in his company are salaried. As a result, there is no monetary incentive for an advisor to recommend a high-commission product. In contrast, he suggests that the typical insurance agents (from an insurance firm) have a (comparatively higher) tendency to promote a high-commission product.

To clarify, I believe these statements are pointed towards insurance agents who emphasise on sales over advice. However, generalising such statements mean that every insurance agent in the industry is grouped together. Obviously, this is not fair to those who insist on working in the right manner. Despite that controversy, I agree with Christopher on some of the current industry practices that he has raised in his book.

Part 2.2: As a Consumer

To begin with, this book gives you six financial health markers to help you manage your day-to-day finance better. Thereupon, you can become more confident to make the right financial decisions in life.

Since health is wealth, the book develops insights on personal risk management. For example, a good healthcare insurance policy helps to reduce out-of-pocket expenses for your medical bills. Moreover, you should hedge against potential income loss during your working years. With this purpose in mind, Christopher strongly advocates towards the use of a term insurance policy for income replacement. In his words,

It is better to keep insurance pure and simple.

Accordingly, he prefers to use a term insurance policy over

• a participating whole life insurance; or
• an endowment; or
• an investment-linked policy.

After all, insurance premium is an expense. Hence, you should not overspend on benefits and features that you do not need.

Thirdly, Christopher shares how he plans for his clients’ retirement by investing prudently. In detail, he created the six buckets approach, RetireWell® to meet three basic needs for retirement;

1. A fully paid house;
2. Reliable healthcare; and
3. Steady stream of monthly income.

Part 2.3: As an Advisor

Though I’m not new to the financial services industry, I am grateful for Christopher’s selfless sharing in his book. To point out, this book has put together a good structure on what we should know (as an advisor), and how we can improve together as an advisory service.

To illustrate, Chapter 27 questions an advisor’s competence and highlights four expectations that you (as a consumer) should have when it comes to investment.

1. Firstly, an advisor should clarify your needs, ability, and willingness to take risk.
2. Next, he must be capable to use an evidence-based approach to craft a plan that fits into your profile.
3. Thereafter, the advisor is able to determine the most suitable tool to help you reach your goals.
4. Finally, the advisor should be there to keep your emotions in check. Additionally, he should provide responsible advice through regular reviews.

After reading this book, I felt refreshed as a consultant. While I like to think that I’m in a sales business that is not doing sales to get a sale, not everyone feels the same. Despite that lack of support from some, I look forward to the day when we can be respected as a professional.

If we (advisors) want to compare ourselves to doctors or lawyers, then are we practising in the same way in reality?

In any case, I truly believe that there are insurance agents in the industry who sweat blood to do their best for their clients over their personal wellbeing.

Part 3: How I discovered the Book

To explain, Christopher Tan is no stranger in the financial services industry. In fact, I came across a couple of publications that he has made for the media. As a result, I wanted to see how I can

• Improve myself as a consultant for my clients; and
• Be respected in the financial services industry.

Part 4: Who should read it

In a word, everyone. Regardless of your role (i.e. consumer or an advisor), I feel that this book can add value in various ways. For instance, a consumer can learn about the basics of insurance and how to manage his money. On the other hand, an advisor can pick up some concepts to improve the quality of his business.

Despite that, I will suggest not to read this book for professional advice. This is because everyone’s position is unique. Therefore, a generic advice should not be regarded as a professional advice. Instead, this book may serve as a reference to help you improve your financial wellness.

If you are keen to read the book, then you can either

• Order it from Providend directly;
• Buy it from the local bookstore, e.g. Books Kinokuniya;
• Get the Kindle Edition from Amazon; or
• Borrow one from National Library Board.

For one thing, Money Wisdom is a popular book in Singapore. If you intend to borrow the book, then you may consider paying $1.55 to reserve your copy.

Part 5: How the Book changed me

In summary, Money Wisdom is a wakening call to advisors who continue to put sales above their clients’ welfare. Given that consumers have become more savvy than before, it is crucial for advisors (including myself) to brush up our capability. Otherwise, I’m certain that the market forces will eliminate us eventually.

Moreover, I look forward to a day when insurance agents can be respected in the industry as an advisory business; and hopefully the insurers will dare to take this first step towards changing the entire landscape.

Part 6: My Top 3 Quotes

• Money is a resource. With it, you can make many things happen in life, not just for yourself, but for others as well. With every dollar wasted, it is an opportunity foregone to help someone really in need. With good planning, you can have enough for yourselves and still bless many others around you.
• In the world of finance, it is marked by too much cost, and not enough value; too much speculation, and not enough investment; too much complexity, and not enough simplicity. In the business world, it is focused too much on counting and salesmanship, and not enough on trust and stewardship. Our society at large is too obsessed with charisma and wealth, and not enough with character and wisdom. – In the book Enough: True Measures of Money, Business, and Life – John Bogle
• Contentment is not a passive acceptance of your situation. Instead, contentment is a conscientious choice to enjoy, appreciate and accept what you have, while giving up the cravings of the things that you do not have. Because you know and accept that you can’t have everything and you don’t need to have everything.

Like this book review? Book Notes is a new genre that I will be building on my blog. In this new genre, I intend to share a summary of the book as well as my thoughts about it. If that’s something that interest you, then be sure to subscribe to my newsletter.

Reference:

Money Wisdom, Christopher Tan (ISBN: 9789811426124)