Books and Thoughts - Sowing the Seeds Of Prosperity

Previously I have shared about the books Growing Your Tree Of Prosperity and Harvesting The Fruits Of Prosperity by our local writer Mr Ng Wai Chung. Recently I have just completed his latest book Sowing the Seeds of Prosperity. Unlike the previous 2 books, which are more for advance investors, this latest book is more about the basics of financial planning. It covers a wide range of topics about financial planning, which includes:

• Earning Your Wealth - Your work and income
• Saving Your Income - Income minus expenses
• Investing Your Money - Where to park the money saved
• Protecting Yourself - Insurance
• Giving Your Wealth Away - Wills and legacy

Like the previous books, this book is also written in the Singapore context, so it is recommended for Singaporeans who want to have an overall idea about financial planning. This book will be a good starting point for those who wanted to try out doing financial planning DIY. Even if you are already engaging the services of a financial planner and you do not intend to DIY, it does no harm for you to know what financial planning is all about so that you can make better decisions about the recommendations from your financial planner.


One of the chapters I like in particular is the one that chartered a Singaporean's life into various stages and what to look out for in the different aspects of financial planning. These stages of life include being a student, being a single working adult, being a working adult with family and kids, and being someone who is about to retire. I would say this chapter is a very useful reference especially for students who are about to graduate and embark on a working life. A lot of people, myself included, did not really bother much about financial planning when we were still students. The most we would do was perhaps to purchase a whole life or endowment insurance policy, without really knowing what it is all about and whether we really need it at all. On top of that some may go one step further to invest in some unit trusts based on promised returns printed prominently in the beautiful brochures, without knowing much about the product. Of course I am not trying to say that it is wrong to invest in unit trusts or purchase insurance policies. What I am trying to say is that all these are financial commitment that may have an impact on you in subsequent stages of your life, and it is better to be prudent and understand more about the products first. Following are some real life examples of financial commitment without proper understanding or planning experienced by myself or someone I know:

The first example was what I have experienced myself. Around the time when I was graduating and starting my working life, I bought some unit trusts in the Technology sector just by looking at the historical data that showed unbelievably high returns. I did not follow any financial news then and neither did I bother to check what were the associated sector risks. Unfortunately I bought them when the sector was peaking, and the technology bubble was bursting. My technology funds never recovered from their losses since, and they were in the red even during the massive bull run in 2007.

Another example is that of a friend. During the early stage of working life, he began committing himself in quite a number of insurance polices. Some were investment linked policies which required quite a substantial premium. Gradually his monthly premium ballooned to over a thousand dollars. It was alright when he was still a single, but things were different when he started a family and have a kid. The rather affordable thousand dollars per month premium payment now becomes quite a burden on his cash flow. Of course some may argue that these policies are supposed to protect you and give you a decent return at your old age. I can't argue with that. But you must at least try to find out what are the exit rules if one day you realize you cannot commit further and needs to cancel the policy.


Talking about cancellation of insurance policy, it brings me to another personal experience. I committed to a whole life policy with some savings element when I was a student. Years later, I became more confident about investment matters, and felt that I should buy term insurance and invest the rest of the money myself. I spoke to my insurance agent, and realized that I will incur a loss if I cancel the policy at that point in time, and it would take another 10 years or more for me to break even. So every month I still have to commit a sum of money for the policy, when I know that I could get more coverage buying term insurance, and have more control of my money by investing on my own.

I have to emphasize again that the above examples are not meant to say that it is wrong to buy whole life, endowment or investment linked policies. It may in fact be suitable for someone who has absolutely no idea or no interest in investing on his or her own. Rather, the examples above are more to point out the need to understand whatever financial or insurance products you are committing yourself to. Books like Sowing the Seeds of Prosperity, which is in the local context and explains some concepts about insurance and financial products will be a good starting point. You can also try to ask your insurance agent or financial planner as many questions as possible until you are absolutely comfortable with the product. Most importantly you have to take note that if it is going to be a long term commitment, you should try to find out what happens if there are any changes to your cash flow in the future, like when you get married and have kids.

The book also comes with some practical guides for beginners in different aspects of financial matters. In one of the examples above, I have mentioned about buy term insurance and invest the rest of the money on your own. This is also one of the ideas advocated in the book. There is one section in the book that provides some guidance about how you can go about purchasing a term insurance from NTUC income. There is also a guide for absolute beginners who want to start investing in stocks in SGX. It includes basic matters like opening a CDP account and a trading account.


Although I am not exactly a beginner, overall I have enjoyed reading the book. There are interesting stories of typical Singaporeans and their outlook in financial matters, which I find very interesting especially when I find that it is similar to someone I know, including myself. In terms of subject matter I still prefer the previous 2 books which have more emphasis on generating passive income. Do hope to see the author come up with more books about practical application of Robert Kiyosaki's ideas like cash flow in the Singapore context, which I feel that the previous 2 books have quite successfully achieved.