Your Investment Portfolio & Retirement Needs

We can’t talk about retirement planning without talking about goals. What do you want to achieve in life? Having clearly defined long term goals – both personal and professional – will give you a direction and an aim. At the age of 30, I set myself a goal: to be a corporate CFO in 10 years. I got there at the age of 41, but having a goal meant that I was very selective about the jobs I took in my 30s, always asking myself if they would get me to where I wanted to be.

Today, the landscape of work is different. 60% of the jobs for the future workforce haven’t even been invented yet! So clear targets may not be as applicable, but having a direction is very important. Planning your retirement is a very personal exercise. Think about what kind of lifestyle you want to live when you no longer have to work. Where do you see yourself living? At what age do you want to retire?

Many young people want to retire by 40, and let me tell you, you’ll need a very aggressive growth investment strategy to get there, topped with a good dose of luck and some financial backing to boot. Your lifestyle also probably won’t be the healthiest. It’s a tough order, and while some people can do it, most of us won’t be able to.

A more realistic goal would be to retire in your mid 50s. I set myself a target of 55, but as I got closer to that age, I realised it might be a little ambitious and decided to retire at 62. Setting your retirement age will help you work backwards to figure out the mechanisms you need to have in place to achieve that goal.

The journey to the moon wasn’t a straight line, and life is always going to hand you a curveball when you least expect it. While the decisions you make should support your end goal, know that you will not get it right all the time. Markets are unexpected: as the global financial crisis and the tech crisis have taught us, big interventions will happen that we have no control over.

With retirement planning, accepting that your plans might need to evolve will help you stay calm and enjoy the journey. This could be due to the cycles of the economy or unexpected changes in your personal circumstances.

The Good, The Bad, and The Underrated

Let’s talk essentials. As you start planning your retirement, having sound financial literacy will make sure you’re not making any decisions that will get you in hot water. Some of you, like me, may already have a background in financial literacy thanks to your career. If not, or you simply feel that finance isn’t an area of strength for you, you can always consider seeking help. There are a lot of financial advisors out there whose knowledge and experience you can leverage on.

When working with financial advisors, you need to do your research. While you might be tempted to work with a financial advisor you’ve built a good rapport with, it’s worth testing the waters to seek a diversity of views. Talk to a few different advisors and get an idea of how they think and what value they bring before you choose someone to work with. Financial advisors can have many great ideas, but some of their ideas can be bad.

There’s no such thing as being too careful when it comes to insurance and financial planning. Most times, advisors are tied to particular product sales, which lead to commissions they earn. As a result, they might try to sell you a product that may not suit your needs or best interests.

I’d recommend that you focus on building a balanced portfolio. As much as we’d love to believe that there’s a silver bullet which will get you rich quick and allow you to retire early, having a diverse investment portfolio is a more realistic and achievable goal.

Location is another important thing to consider when you’re planning your retirement. For example, if you’re based in Singapore, retirement planning is going to look fairly different for you than for someone living in China. If you’re in a major tech hub such as Singapore, Shanghai, London or Israel, you can look at opportunities for investment in technology or fintech startups. Don’t just think about dollar investments! Many startups are willing to give you a 10% stake in their company if you contribute your time and expertise to their business. The rise of global tech giants has meant that some of the wealthiest people in the world have a background in technology nowadays.