There’s a debunked myth that says it takes at least 10,000 hours to master a skill. Regardless, it’s true that professionals spend so much time honing their craft. But as the unceasing passage of time marches on, humans are inevitably at the mercy of temporal constraints and deal with the nonstop barrage of choices they are forced to make. Thus, professionals are forced to forego other activities that are equally important but irrelevant to their sphere of expertise.
Some professionals inevitably lack the essential knowledge needed to master their finances, which places them at a disadvantage later in life. To most people, the future is an ethereal concept regarded with a sort of vague acknowledgment. Listed below are several financial potholes that professionals need to watch out for as they pursue their journey to becoming seasoned and experienced experts in their chosen fields.
- Perils of social pressure
The expectation of social norms that a professional must curate an ideal image that befits their perceived status may have an unfavorable impact on one’s financial situation.
Purchasing beyond one’s means — buying an expensive car, acquiring luxury goods, unnecessary gadget upgrades — can be dangerous to one’s financial security. So long as society equates overconsumption with credibility, the individual needs to be more conscious of his expenses. If not, it may lead to a path of personal economic struggle, especially when a professional is just starting out.
- Financial scams: the not-so-great equalizer
The number of cybercrime incidents and online fraud have spiked fivefold during the pandemic, with the Department of Trade and Industry logging almost 15,000 cases in the first 10 months of 2020. Despite the technical knowledge of those who are highly esteemed in their fields, they may still fall prey to unscrupulous characters who use a variety of tricks to relentlessly bait potential victims.
With phishing emails designed to cause panic and lure unsuspecting users, even credit card-carrying professionals are not spared. As online transactions become the norm, especially those who work from home and depend on apps for their essentials, everyone needs to be extra cautious.
Get-rich-quick schemes and investment scams that sound too good to be true; dubious trading apps riding on the cryptocurrency frenzy and guaranteeing returns in a short span of time — these schemes evolved from classic scams that exploit the economic impact of the pandemic on individuals, no matter the socioeconomic background. Letting one’s guard down, even for just a brief moment, could lead to a life of financial ruin.
- Pandemic impact on professionals and their finances
While the pandemic has changed the lives of people from all walks of life, its impact on self-employed professionals forced them to grapple with a reduced income while keeping up with recurring household expenses.
Despite retooling themselves to tap online facilities in order to thrive, others have not fully recovered. And households that contracted COVID-19 even have it worse as they resort to dipping into their savings to settle costs for treatment, medication, and therapy.
Middle-class income earners may be able to negotiate the headwinds until a chain of challenges — someone in the family falls sick, an expected salary increase is put on hold, unpaid bills begins to pile up — reach a tipping point that topples down their financial readiness.
The cushions offered by corporations to their workforce in the form of basic health insurance, periodic bonuses and wellness allowance may appear sufficient on the surface. But these run the risk of giving white-collar employees a sense of complacency and false security. Company perks could only do so much to protect them, but what happens if, say, hospital admission costs exceed the maximum coverage amount or if businesses fail to turn a profit and are forced to cut costs?
- Long-term impact of hanging on a single cash flow
Depending on a single cash flow is a common folly of upper middle income individuals. Many take comfort with the notion that compensation derived from their professional practice can sustain their lifestyle.
This further feeds into the misconception that they are in full control of their future. But when a professional finds himself in a tight spot because of debt, illness, or an emergency that would gravely impact their financial capacity, this is often a consequence of a failure to realize that achieving financial freedom by a single source of income is often an uphill battle.
- Useful ways to be on top of your finances
Managing finances can be burdensome to those who are knee-deep in their work, especially those whose expertise are highly sought by laymen: accountants, doctors, lawyers, and engineers, among others. Fortunately, there are ways to get a handle of this encompassing and lifelong skill, so you can keep your professional eye on the prize:
o AUTOMATION. If you’re a professional on retainer or with regular cash flow, automatically setting aside a certain amount of money for both recurring expenses and investments could boost your savings in the long run.
o SET YOUR EYES BEYOND THE USUAL. Using traditional products like bank deposits are great tools, but diversifying your portfolio is an even better way to expand the reach of your financial assets. For those whose risk appetites are as aggressive as their passion to maintain a foothold in their respective careers, many high-yield investment products are now accessible. In fact, they’re so easy to acquire that hitting the sweet spot where money works hard for you, and not the other way around, is now more achievable than ever.
o TRUST ANOTHER PROFESSIONAL. Navigating the complexities of these products can be time consuming and requires high-level industry expertise. To ease the burden of such an endeavor, seek a Sun Life Financial Advisor — a fellow expert who has spent years mastering the fundamentals of investment insurance, and financial planning to earn a license to serve your needs. From one professional to another, trusting a Financial Advisor could lead to a partnership of lifetime security and prosperity. Schedule an appointment with a Sun Life advisor here.
Whether you’re a white-collar salaried employee or a self-sustaining professional running a business, the pandemic has brought upon unprecedented challenges that have irrevocably changed the way we cope, live, and work. But with a can-do attitude and a bit of help from like-minded experts, you can change for the better and prepare for your financial future today.