Hi Joshua,

• If I pass away (the ‘simple’ scenario) —- I would leave behind enough for my wife and kids, including 1) the payout from my corporate group term life 2) my CPF + DPS 3) my small CI insurance 4) MyCarePlus
• If I hit a critical illness —- then hospitalization cost would be covered by 1) Aviva MySheild, in addition to 2) corporate insurance 3) my small CI insurance
• If I become disabled and unable to work —- then hopefully MyCarePlus plan would kick in with $5k/month.

Beyond these insurance protections, it would be fake to name insurance as the base of my portfolio. Instead, the base of my portfolio is diversified rental properties. They are inflation-proof, generate steady (hopefully stable) income, and can be cashed out with a lead time (unlike insurance plans). These properties may present some tantalizing vision of windfall appreciation, but I am not enamored with windfalls… I stay grounded and I keep a distance from that tantalizing vision.

Another small but life-saving component is contingency cash reserve. I don’t need a lot of cash so far because I’m debt-free basically all my life.

Actually, The real bedrock of my long-term financial planning is career longevity including dev-till-70.

So beside my properties as the base, my contingency reserve, CPF and insurance coverage are my 3 pillars. On top of these pillars and the base, I have built a small diversified portfolio of stocks, bonds and alternative investments.

Term Insurance can’t be the base because it is nonproductive. I liken insurance premium to option premium. Insurance means low-cost, high-leverage risk coverage.

Insurance is excellent diversification. Therefore, I hold a few term insurance plans with zero surrender value. I usually strip off the savings and investment portions as they represent horrible liquidity and paltry return… basically poor leverage. Even if I were patient enough, these investment portions generate such paltry cash flows that I would sink in half a million dollars just to receive a thousand dollars a month.

— risk_capital is a new concept in 2021. If I must name the assets to provide a foundation beneath my risk capital, then

• insurance plans
• HDB + Beijing homes
• CPF
• contingency reserve

Clearly this foundation is different from the earlier “base”.