Robo-advisers, robo-insurers, commission-free brokerages are just amongst a few developments in the rapidly changing fintech landscape. The exponential growth in the industry has presented a unique conundrum for the average consumer. This phenomenon is referred to as choice overload and it could potentially cost you money.

Easy access to information is a modern technological marvel that cannot be understated, however for all its benefits, the burden of choice is a heavy one to bear. To understand this paradox, we need to understand the concept of decision fatigue. It refers to the erosion of your ability to make sound judgement over time as you are subjected repeatedly to the process of decision making. We humans have a finite pool of resource for processing and filtering information along with a wide array of complicated cognitive processes which enables us to make decisions. This limited resource is used throughout the day as we process and evaluate choices from the miniscule like; what to wear, to the large career shaping decisions. By increasing the number of options available, more resources are required to process the additional variables. Exhausting this resource results in a decision-making fatigue, often results in one of two outcomes: avoidance or unsound decision making.

Herein lies the crux of the problem, you leave money on the table when you invest as an afterthought. You are potentially exposing yourself to more risks than anticipated whilst simultaneously missing opportunities. Consider the following when developing your investment strategy to mitigate these undesirable effects:

Weave a Strong Safety Net

Apart from managing your daily expenses which vary from individual to individual, there are two baseline requirements I generally recommend, especially for the young working professionals:

Insurance up to 10% of your net income

Generally speaking, 10% of your income on insurance policies is sufficient to cover you in situations whereby you are forced to take a leave of absence from work for an extended period of time. This is provided you select policies with adequate coverage; speak to your financial consultant on this or research into the right policies for you

6 months of your net income in liquid assets

Buy yourself enough runway to make it through an emergency or unforeseen circumstance. During a financial recession, the probabilities of retrenchment are naturally higher. Conversely, it is more likely the investments you have made have not matured yet and therefore liquidating your positions may yield undesirable returns. Having sufficient cash on hand to tide you through hardships could mean years of difference over a long period of time.

Apart from managing your daily expenses which vary from individual to individual, there are two baseline requirements I generally recommend, especially for the young working professionals:

Set Attainable Targets

Your journey in investing is entirely unique to you and is determined by what you aspire to achieve. Identify your goals before working out a suitable timeframe to achieve them. Certain investments forgo liquidity and matures over a longer period of time in exchange for a lower risk, these investments might not be suitable for you are looking at achieving a short-term goal. I usually recommend pegging your investment goals to key life events like buying a house, a car, marriage, or retirement. If you are unsure, consider consulting a financial consultant, they can help holistically evaluate your current situation and align them with your investment and life goals.

Evaluating your Risk Profile

Your risk profile is determined by how tolerant you are to taking risk; certain financial instruments carry higher inherent risk than others and might not be suitable for you or your investment goals.
For example, certain fixed asset products do not direct interface with market forces and therefore carry less risk than assets traded on an open market like equities and commodities. Understanding your risk profile helps determine what kind of investments you should be making as well as directly impacting your diversification strategy.

Learn the Tools of the Trade

There are various classes of assets and getting familiar with them all will require a considerable time investment. In addition to understanding the specific likes entry barrier, inherited risks, and product life cycle, consider the availability of the product. For example, certain assets are only accessible by accredited investors.
Additionally, investment tools like equities and cryptocurrencies are made accessible via various platforms, understand and compare the various fees, charges, and hidden costs associated with using the platforms before deploying funds.
It is also important to understand the time commitment associated with actively managing your own portfolio. While it might initially seem easy enough to balance, keep in mind that this is an ongoing time commitment directly proportional to your investment goals.
If this may seem intimidating, understand that these financial instruments are designed to aid you in reaching your goals more efficiently. Similarly, a financial consultant can help you utilise these tools effectively if this is more time than you are willing to commit.

Diversify Smart

Creating a diversified portfolio is one of the most common investing advice liberally given. However, what is often neglected is that there are layers to it. Having a lower risk tolerance does not necessarily mean steering completely clear of higher-risk products. Investing a relatively small percent of your overall portfolio into different asset classes is a form of diversification that allows you to tap into the unique opportunities presented in higher-risk assets like equities and commodities. This will limit your exposure to market forces whilst still allowing you to reap the benefits. Within each asset class, there are varying degrees of risk associated with individual products, for example, certain exchange-traded funds (ETFs) mimic the performance of global indices and therefore is already inherently diversified. Whereas certain ETFs are composites of specific sectors like mining or technology. Depending on your investment thesis and strategy, you might want to take into consideration specific industries or geographic regions when crafting your portfolio. Like baking, there is no one perfect recipe. The composition of a portfolio must be tailored to your preferences and beliefs, whilst fully utilising the available tools to maximise the potential.


Efficient investing requires a substantial time commitment and objectivity. It is a vastly expansive and deep ocean requiring degrees of expertise. There are serious long-term implications that could affect your quality of life if you are not thoroughly prepared.
Understanding your own limitations is as integral to investing as the fundamentals of wealth management. Take the time to understand the processes and actual costs of investing, neglecting to do so can have an adverse impact on your ability to excel in your chosen profession as well as your ability to generate income and potentially your health. If, however, this is not a journey you want to undertake solo, consult your financial consultant to find out more.


Jarrod Wong

Jarrod Wong has built an impressive network of clients despite his age. The charismatic young consultant exudes enthusiasm and candour and is often attributed with qualities and knowledge beyond his years.
Drawn by the rapidly shifting finance landscape, the ambitious young consultant makes it a point to stay on the bleeding edge in order to keep his clients ahead of the curve.

Contact Jarrod Wong at:

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IPP Financial Advisers Pte Ltd

78 Shenton Way #30-01 Singapore 079120Tel: +65 6511 8888