Plan your money, plant a seed for your future

WHEN we are too optimistic in something due to our past pleasant experience, we tend to subject ourselves to over-confidence bias.

This may plant a seed for poor decision making and even cost us big time if things do not move or happen according to our “prediction”.

This coming week is Global Money Week whereby the theme this year is Plan Your Money, Plant Your Future. I think that this is a very timely message for all.

It is not uncommon for us to see that people can feel restricted due to their financial situation and sometimes we let our financial situation dictate how we would make important decisions in our life.

This leaves us more susceptible to stress and feeling of anxiety triggered by financial circumstances. Apparently, it is not easy to feel that we are in charge when our financial well-being are not doing so well.

One of the ways we can boost our financial well-being is to know that we are able to cope with surprises in life. One of the surprises that is common – and no one is protected from – is market forces and movement in our investment value.

To help us cope with this surprise better, here are some of the things one can take to protect from financial stress that is avoidable (that triggered by investment-related factor).

Understand your risk profile

Kevin Neoh

Our risk profile informs us how much risk we should take.

Our risk profile goes beyond understanding our tolerance for risk-taking but should also consider our capacity to take risk as well as our experiences and our requirement to take risk.

In another word, it should not just consider if a person can take spicy food but also consider if this person is in the right shape or condition to take spicy food.

When we take an aggressive investment when our circumstances do not warrant such action, we could find ourselves in hot water should life throw us a curve-ball.

Diversification and asset allocation

Diversification is a very effective risk reduction strategy.

Investing our money to one single company versus a basket of companies in different sector has different risk and the one that is diversified allow us to have a more peaceful sleep.

Granted, different asset class will ‘behave’ differently during different market conditions. Hence, asset allocation allow our portfolio to have a smoother movement as well as maybe provide a cushion when certain asset class falls hard.


Lastly, recognise that market is dynamic. It can go many way other than the way we predict and that all good things will not stay good forever; the same is true of bad times.

When we invest to something today, we are investing in the future; we cannot invest in the past. So do not make your decision based on what happened in the past.

Lastly, your investment should be in line with your objective and life goals.

When we plan our money base on our personal values, we are certainly planting a seed for the future we really appreciate and would love to see come into life.

Predicting what could happen in the future base on what has happened in the past is not planning – that is simply a guess. – March 19, 2023


Kevin Neoh is a CFP professional and a certified member from Financial Planning Association Malaysia. He is also a financial life coach.

The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.

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