Money: How much is enough?

I was once asked the above question by a friend who served National Service with me. He was referring to my post on investment.

Allow me to respond that it is never enough. But what we do need is probably 6 months of our disposable income in cash (if I am not mistaken this is in line with industry opinion). That is to help tide us through a sudden retrenchment. We would need some early stage illness/ illness (hospitalisation and longer term) and possibly income replacement insurance. These may change though with the revamp of the national insurance system (in Singapore).

Maybe I have quoted this before, a friend’s grandfather suffered from cancer. His battle lasted 6 years and amounted to $300,000. On average, this is $50k per annum.

What is enough? That which can give you some sense of security over the short term say 3-5 years. In the meantime, we need to manage our liabilities. Do we truly need that big a house/flat? Is the car that important? What is important? And we can work on from there.

Revised – 3 May 2015

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