Protect your home

In the first 11 months statistics show that fire in homes has increased considerably. There are many reasons but most common one is Electrical overload and carelessness. Now with festive season around, almost all houses have electrical decorations, christmas trees etc.

The fact to note when there is a fire in one apt, it can cause external & internal damage to apartments above and below.

HDB/ Private property management and even Banks who offer the loan, makes it compulsory for all to take basic fire insurance. This covers the external walls and common area.

However, if there is a fire upstairs and your ceiling is damaged, this will not be covered by the HDB. You have to bare the costs of repairing the ceiling or false ceiling. If you are going to sue your neighbor upstairs, you will have to sort it out legally, which can be very cumbersome.

An easy way to handle such situations is to have a home content plan. This plans will cover the renovations & home content and much more. These types of plans also cover public liability, example should there be fire in your place and causes damage to your neighbors home, the cost of repair, legal cahrges etc, will be borne by the insurer.

There are always add-ons to Home content insurance. You will be covered for theft, loss of valuables, personal accident, and home protection when you are traveling overseas.

Again, the home content insurance has a range of premiums from different insurers.

In this high paced lifestyle we live in, we cant take anything for granted. Its always best to transfer RISK to someone who can handle it better.

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Pyramid of Needs for Wealth management

Pyramid is used to in different needs analysis. Food, behavior, money etc.
When analysing why people do what they do, Abraham Maslow, a humanistic psychologist, developed a simple tool to explain why people do things. This is called Maslow's theory. He and other researchers found that people were motivated to do things by their basic human needs. He put these needs into the shape of a triangle with the basic human needs - Physical, Safety and Social needs at the bottom and the higher human needs like Self esteem, self fulfillment at the top.

Working on the same principle, a good financial plans must address the basic needs first before the social and emotional need.
So doing it as a pyramid, its often represented as shown in this figure
Financial plans fail when the pyramid is not balanced as it should be. If priorities on the top of the pyramid are addressed before the base, it would end up in a out of balance and hence fail.
This is a simple but a very effective tool I use to analyse any financial planning. You can review yours too and send in your comments. Swarna