The Secret to Financial Planning (Pst, Coffee Helps!)

Did you know that there was more to it than meets the eye for coffee? Here, we elaborate on what this humble drink can teach you about financial planning.

FSM Apr 09, 2018 6505


As you instinctively reach for your coffee every morning, have you ever wondered when you developed a liking for coffee and started to appreciate its taste? As a child, you baulked at its taste - bitter and sometimes sour, what was this nasty drink that many seemed to love? Yet somehow along the way, the taste of coffee grew on you as you developed a palate for it, learning to appreciate the taste and effects of coffee. Perhaps then a lesson to learn is to not be so quick to judge.


Drinking your daily cup of coffee, have you ever wondered what other life lessons you could take away from this drink? Perhaps the barista's determination to make a good cuppa, the patience required to roast the beans or even the precision needed for espresso extraction and the steaming of the milk. With this humble drink offering numerous life lessons to be learnt, we elaborate on three that we think are applicable to financial planning.


#1 One Size Doesn't Fit All

Fancy ordering a cup of "Magic" or how about some Irish coffee? With coffee drinks varying in sweetness and intensity, this caters to the different preferences of various coffee drinkers. For example, the diet conscious may opt for a sugar and dairy-free coffee such as an Espresso or Americano while those craving for a sweet caffeinated drink may then opt for a Mocha or Frappuccino.

Likewise, numerous different types of insurance and policies are available to suit the varying insurance needs. With there being no one size fits all policy and/or approach to insurance, different life stages thus requires different policies. This is to ensure that your policies are relevant and can provide sufficient coverage for your financial needs. To devise a suitable financial plan or insurance portfolio, it is important for you to first understand your protection needs and shortfall. This prevents over or under insuring and ensures that suitable coverage will be obtained.


#2 Assumptions

We may be inclined to assume that soy lattes are a pretentious order, but what if there was a dietary explanation behind this drink? With the rich, nutty flavour of soy milk acting as a good substitute for milk, this allows those who are lactose intolerant to still be able to enjoy their drink.

Similarly, if we were to assume that we would earn RMX amount 10 years later, it would result in us purchasing life insurance with a higher sum assured. However, what if RMX amount is an unrealistic figure that would not be attainable within the next 10 years? This may then result in us being over insured and paying for unnecessarily expensive premiums. Alternatively, if we were to assume that policies bought 20 years ago at a different life stage are still relevant now, then we may find ourselves under insured when a disaster strikes. Therefore, rather than to second-guess your insurance coverage, instead consult a professional when in doubt or use a life protection calculator to determine your protection gap. This then ensures that you will receive adequate coverage in the event of a mishap.


#3 Two Sides To Every Coin

Is caffeine actually healthy? While studies conducted have shown that caffeine could result in the reduced risk of liver cancer and may have positive effects on long-term memory,1 harmful effects of caffeine have also been found. These include the increased chances of gout and heart attacks and also an increased risk of early mortality.2

Likewise, insurance policies have their respective advantages and disadvantages. Therefore, while a policy may be suitable for others, this doesn't necessarily mean that it will be suitable for you. For example, an individual looking to leave a legacy may wish to opt for a whole life policy. However, if you do not have that intention or are simply looking to receive temporary coverage for your protection gap, then a term life policy may be more ideal.


How FSM INSURANCE can help you get on track

Our team of friendly advisers are able to help you review your financial objectives, long term commitments, and customize investment and insurance advice specific to your needs. Email us at for more information.


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