What should you do with a retrenchment payout?

a business. I also know someone who took his 6 month package to bring his aging mother for a month-long holiday somewhere just because he felt like he didn't spend enough time with her. Yeah, so. How about you, Tiffany, do you know anyone who use their golden handshake?

Today she's helping people manage and plan their finances. Welcome Lily

of a closure of a major line of business. If I were to describe the feeling is like, if you could imagine like a ton of bricks hitting you directly, technically, I shouldn't be surprised. Really because I was part of the decision making process as well to close that major line of business. And also as head of finance, I understood that companies are not charitable organizations, right? Most companies exist for bottom line, right? So redundancy was just part of the equation.

But then I have to say this, even knowing it didn't make it any easier. Yeah, so you could imagine my emotions back then. I would say I was devastated and disappointed as well because I spent my 20 years of youth, right, with the company. I was headhunted in this organization at the age of 28. And then by then I left them, I was 48, so literally I sold my youth to the company, right, and I was super passionate about my career.

I love it all. It was more difficult for me, maybe because I felt that this job was more than a job for me, right? Because it was like a part of my identity. It was my passion, right? So knowing that this passion is going to go away, so it was quite hard for me to take it.

it's more on best practice. So it ranges between for every one year service, you get a week to a month. That is average, the norm. OK.

I have always been super passionate about wealth accumulation and financial security for my past 26 years of corporate life. So I did build my own financial safety net over the course of my career. Of course, this lump sum money is actually a cream on top for me. And I guess the most important combination that I would say would be, first thing first, be financially secured and I took like 26 years to build that. So that's important.

So on hindsight, yes, if anybody were to ask me when I guide my younger clients, that's what I tell them to build that financial. Safety net early and then with the redundancy money that comes over and above, it's like a right where you can sort of still be able to dream and plan for more. Exactly right. So not so much dream about, oh, how do I start spending this lump sum? Can I, should I buy myself a car or what? It's not so much about that.

But rather having choices in life for you. And it also gives you the ability to let's say, pursue a second passion. Maybe something that you have put aside in your younger days and then what is it that resonates with you. What is your mission? What is your purpose in life, right? That you think you could, OK, take a pause from the corporate world and then do something different. So instead of responding out of Yeah, we can react with intention. So for me, it's different, right?

Because I'm in a different stage of life, if I were to say it. So if a younger generation gets hit with redundancy, it's not necessary for them to pause to say, hey, I want to go into my passion to do something different. They can still go into corporate, but at least it gives them that bandwidth to pause and think. And do their inner works to decide what they can do. So at that point of time, did you have any

say aging parents to take care of? Do you have children, younger kids as well, but I have kids in uni and then I have my dad and then you have home loan that you were servicing. Yes, so how many months of emergency savings did you plan for before you had this extra bonus? OK, I think I usually hear people say 6 months. Easily I had 2 years. Wow, OK, OK. That sounds extremely healthy. Yeah, financial definitely not an issue for me.

That's why I could take time, right? I literally took a year to figure out exactly what I want to do. And even after figuring out, it took me a while to search for the right organization to join, for example. Yeah, and then having to sit for all the exams because it's a total. Pivot, right? Yeah. So let's talk about that. What was that pivot that you did? Why did you do it? Right. So I'm now an independent financial advisor. Back then, I have to say when the redundancy news hits me, I

had two choices, right? One is to choose the safer option, which is to go back to the corporate world, find another employer. Yeah, to be a CFO in another company, right? Was it going to be Easy for you if you. Definitely easy because I was only 48 back then. So still I'm in my prime years, I have to say, right, to be a CFO in a company. So no issues with that. In fact, I went for several interviews, but then I kindly rejected their offer. Because back then I was still toying with the idea,

what do I want to do in my life. I was so passionate in my previous corporate role and I know based on my personality. I'm going to chase my tail one more time. My second option is to challenge myself, to take the leap of faith to do something totally different, which was financial advisory. Was that something that you had always wanted to? Not really. I started to ask myself a few questions like how did I even decide to become a financial advisor, right?

So first question that I asked myself was, how can I leverage my 26 years of very rich and solid finance experience to do something more meaningful. I didn't want to start from scratch in a totally different I didn't want to because my strength is in finance, right? So I started to ask myself those questions. What are the transferable skills? What is it?

That I can do to do something more meaningful. Meaningful in my perspective back then was, how can I help individuals rather than supporting stakeholders in MNCs, for example. That's where I said, all these questions sort of came

to a realization. I felt that hey, it will be so interesting if there is a qualified finance professional, literally a chartered accountant, right, out there who's been through and navigated the corporate life, right, and who understood all these corporate leaders, right?

It will be so powerful if there is such a person to empower them to also start planning for their own financial road map so that One day, if uncertainties hit them, just like myself, they will be able to react with confidence rather than out of fear. So I thought, hey, that's interesting. I'm going to give that a shot, but I must ask though, because at the back of my head, I'm still thinking that OK, you had this high six figure sum, right? Did you need so much money to study, get certification

in financial advisory? What else did you do with the money that you had? The truth is I took the entire lump sum and I invested it. That yeah, can be quite risky, isn't it? Oh, because I know where to place my risk, right? Yeah. So I actually diversify my portfolio quite well and In fact, this lump sum was strategized towards capital preservation more than anything else, but the whole intention of that

was to generate passive income, right? Because I wanted this lump sum money that I have worked so hard and is my sweat and blood in it, right? I want exactly and my youth in it. So I wanted that lump sum to work harder for me. So that's where I decided. I'm not going to place it in the bank and just have the comfort that I have that money. So just in case my financial advisory business fails, then I can go back to this lump sum, right? No. So to me, I think one thing is about mindset, right?

So I'm the kind of person, I have gone through so many business cycles. I let the organization through success every time there is a crisis. So I told myself, I cannot fail, even if I move on to financial advisory.

maybe not the most useful manner, right? Then there's the middle group of people who I think the majority, they use it to do something for their careers, they transit, maybe use it to manage some of their loans, and then we have people like Lily, who had been planning their careers, their finances all the while. And then right now at this point, they are just Using the golden handshake as to open up more options for them in the future.

get out of my comfort zone. I'm going to start all over in a new role, self-employed, totally going into the uncertainties of self-employment. It was really scary. My heart was beating super fast, right? But then again, I guess different stage of life, right? So for me, it's no longer about money anymore because if it's all about money. I would just go through the traditional route to be a CFO of another company. I just have to close

my eyes, do my best. Every month I get my paycheck, you would just hit for stability, exactly, right? I asked myself, what would my next career going to look like.

I call it a redirection, right? Try to leverage on your strengths and even your transferable skill sets and then see what is a good match to find your new path. And the last part which is to respond to your question, Gerald, is my advice would be try to avoid impulse spending, OK. Because I think to a lot of people, right, they hardly see such big lump sums. That's the truth, right. And when they see, they are very like tempted to

just spend it very quickly, right? For people that have debts, try to look at like the high interest. debts to try to pay down some of the debts because I think it doesn't quite make sense to have money sitting in the bank that is generating so minuscule kind of interest rate and then at the back, you are still paying high interest for debts, right? Try to maneuver that. And then for people that is already quite settled, maybe they can just put aside some for rainy days, just

a few months to fight them through. Try to invest the balance, but don't invest it in high risk because you want to preserve your capital. These are good advice. I mean, just to summarize, so don't impulse spend. Secondly, is to cut your debt as much as possible. But of course, weigh up the interest that you are paying because some people might say that, but the interest that I'm paying is not going to get me what

I'm going to get from my investments. So which brings us to the third point, which is try and invest as much as you can, go and learn, speak to people, make sure that the money grows for you. But I think there will be a group of people who will also say, but you know, Lily, I worked so hard all my life, a bit like you as well. I want to pamper myself or I'm in my early twenties.

My runway is still very long. I want to just go and splurge and I don't know, go and see the Northern Lights or go on that. Very nice train in Switzerland or whatever. I mean, should we be telling these people to delay their gratification? If I were in their shoes, I will. The reason is really because you don't want to come to a crossroad where you took all the money and spend it all very quickly. And then you realize that, oh, I'm stuck. That's when

you start panicking. So once you have fear, you start panicking, you become desperate and you make wrong decisions. Exactly. When you become desperate, you will make the wrong decision to your point. So that's the whole problem and we don't want to get there because once you react out of fear, it may not necessarily be putting yourself in a good place. You want to have that safety.

so that you can take your time to really do your inner works as well and network to get to know more people, speak with more people to see what is the right next game plan for you. Thank you so much for coming on and sharing with us this. I mean, if anything, I feel that if I ever am in that position, I would love to speak with you again and go, what should I do, you know, with this money? Obvious.

we try and give our listeners a bit more broad brushstrokes of what they can do with their money, but everyone's situation is very unique and like you say, sit down, ask yourself, where are you at this stage of your life? What are your needs and where can you better deploy the money first before you start considering, OK, what else can I do? So thank you for giving us so many helpful tips. Thank you. Thank you for having me.

Hi, welcome back to our Ask Me Anything segment where we take on a question that you have sent us. Our listener who I'll call Lucy sent us this one. Lucy is in a small team of about 8 people. Everyone is working in a high pressured environment with long working hours. It's a specialist job and they have been asking for more manpower because they're afraid to make mistakes. Several mistakes have already been made because people are overworked.

As a result, the team has been subjected to a few internal audits and they're just told to do better. Now when they highlighted that they need help, management shuts them down according to Lucy, and calls a few of them troublemakers. Lucy is asking if middle management is not listening to them and there are problems caused by a manpower shortage. How can they escalate this and to whom?

close to the ground? You know, if they're close to the ground and if they are really caring about the operations and the work that they do, right, then maybe there's a chance that I can look for the right leader to speak to. You also know that there are leaders who are just on the ground for tokenism, just to show face. They're not really caring about the workers. So I think she needs to see other such people, such managers in the office.

I think also in many companies they have got employee sentiment, engagement surveys. Has there been certain things like they've done before and

to make work very unbearable. Yeah. So at this point of time for Lucy's case, I think it's either you stand your ground and you try to hope for the best, look at the leaders that you have and try to see whether you get to the right person or wait for the right opportunity for things to change. That's one. The other one is, of course, you leave, you find another place where you can contribute meaningfully because I think

she loves her work. Yeah, so find a place where you can perform, you can do your role without all these situations and environmental factors. Of course, there's also a third thing, right? Some people would say, you should be the change. You should stay on and you know the issues well, raise your hand volunteer to try to solve it, but that's a long shot. Whistleblowing, whistle blowing, if the policy is there and if the

management is indeed serious about it. My own gut feel from this is that they know, but they're not doing anything about it and they're just pushing the blame down and letting the people on the ground shoulder it. So if that's the kind of response from the management then. No amount of blowing our feedback will help.

is by Carrie Lim, video by Hanida Amin. I'm Gerald and I'm Tiffany. Have a smooth work week ahead.