Do you always wonder why you’re losing money? Perhaps it has something to do with your mindset. Some of the beliefs and customs you adhere to may be doing your hard work a disservice and costing you money over the long run. Here are 5 reasons we can think of.
1. Getting financial advice from friends and relatives
Remember the infamous Geneva gold buy back scam of Suisse International or the Profitable Plots? The people behind these get-rich-quick schemes have already been arrested and subjected to the full effects of the law, but it doesn’t change the fact that many Singaporeans have already lost tons of money.
These types of “investment opportunities” are unregulated by the Monetary Authority of Singapore (MAS), yet why is it that so many Singaporean still fall for them? The answer is pretty simple: we trust our loved ones and friends. When they recommend to us something, we listen to them.
Don’t get us wrong. Listening to your family members and close friends is good. But let’s face the facts. Most of them are no experts and their financial advice, in spite of the best of intentions, are not always right. When they turn out to be wrong, they can cost you thousands to even millions of dollars.
2. Allowing ourselves to be bribed with gimmicks
Meet Madam Han, an admin executive who, for some reason, was enticed to take out an insurance policy whose yearly premium is more than her annual earnings and whose guaranteed returns are much lower than what she’s paying for. This was offered and “advised” to her by a reputable financial institution, along with some freebies.
As crazy as it sounds, it seems like we are easily blinded by the more familiar freebies. This murky tactic is fairly common, as financial institutions have been practising this for many years prior to stricter MAS regulations. Telcos, meanwhile, can lure you with a tech add-on like an Xbox, a camera, or another smartphone.
If you are thinking of getting a freebie, do something else like volunteer at your residents committee. A bank is the LAST PLACE you should expect to get freebies.
3. Believing in prepaid packages
At least 30 couples are now left in limbo and thousands of dollars poorer after a bridal salon suddenly closed. They are not the first and would definitely not be the last.
In recent years, more salons and spa has shut down that CASE (Consumers Association of Singapore) had to (finally) intervene.
We love prepaid packages as it saves us the hassle of paying for every session. Businesses tend to also dangle cheaper price if we purchase prepaid packages. But there’s sometimes a catch that may even be more expensive than we hope to pay.
Fortunately, with CASE Trust, you’ll feel more assured to engage in businesses with the accreditation, but still remember: businesses can come and go at any time.
4. Not bothering to compare financial products
Have you ever tried taking up a loan using a blank cheque? Convenient isn’t it? Here’s the problem: you might end up spending a LOT of money simply because you have not taken the time to check out and compare interest rates!
However, it turns out that we just don’t like to compare financial products at all. It may be because we tend to get confused or we don’t have the time.
5. Opting for the cheapest deal
Cliché says not everything that glitters is gold. Choosing the most affordable deal doesn’t have to necessarily mean savings. Take, for example, two credit cards, one of which has a balance transfer feature. The add-on can cost you extra, but in case you get cash-strapped, you can transfer the balance of the high interest-bearing card to the one with a much cheaper interest rate. Not only are you able to clear one of your credit card debts, you benefit from the new lower interest charge.
One of the biggest barriers to becoming wealthy, financially stable, and money savvy is your wrong mentality. Get rid of it before it completely ruins you.
This article was contributed to us by SingSaver.com.sg