Photo taken in Nov 2017, Spain, Alcazar of Seville
I have this client, 57-year-old now, single, I met her in 2013. She intends to retire at Age 65 and I have helped her to create her Retirement Plan which will be paying out a Retirement Income of about $110,000/year from Age 65 onwards.
During my planning, I noticed that she was envious of her colleague who has been buying continental cars like BMW and Merc and she wished she could also own on of those cars. Hence I made provision for her to upgrade her existing 3-year-old Japanese car to a Merc C-Class by Year 2015.
She also wants me to make provision for a $200,000 gift which she intends to set aside $40,000 for the wedding of each of her 5 nieces and nephews.
Now, 2018, all her nieces and nephews have gotten married and enjoy the $40,000 she gave them wholeheartedly. But she has yet to get her Merc C-Class because she thinks that it is too expensive, and she should not spend that kind of money.
Recently, she called me again to find out the cost of the latest Merc C-Class and pushed away the idea again after knowing that the car costs about $160,000 now.
To help her decide, I asked her two questions below :
How long did you need to ponder over the decision of giving your nieces and nephews each $40,000 for their wedding? She said – Oh, instantly, when the idea come to her
And why do you take 5 years and still cannot decide whether you should get a $160,000 Merc C-Class just to pamper yourself a bit? She said – this is an interesting question and she will have to think hard about it.
I have another client, Age 68, he called me in June last year. He excitedly told me that he went and test drive the new Toyota Altis the day before. He is driving the previous version of the car. He told me that, the new car infotainment system is top notch, the leather has a nice feel, the engine is smoother now and the new car is bigger too.
Feeling his excitement, I told him to go and get it, since he like the new car so much. He exclaimed, telling me that his existing car is only 3.5 years old. I assured him that it is fine, and he is already 68 years old and he should just enjoy whatever he likes. As long as he can afford it.
Ultimately, he took my advice and bought the new car using the interest earned from his CPFOA account which has been accumulating for the past 5 years.
Personally, I can’t stand it when my clients do not treat themselves better. But when it comes to family members, they do not hesitate to provide financial assistance when being asked.
My clients also ask me – Why do I keep asking them to spend money?
My answer to them is always – Because this is what they deserve.