Financial Planning for Beginners

Financial planning seems complicated. Where should you begin? Our Financial Planning for Beginners video series explains the basics of financial planning in just one minute!

  • 01

    Asset allocation

    play-button

    Balancing risks and returns by spreading a wealth portfolio across assets of various risk levels to achieve long-term financial goals.

    Related case study
  • 02

    Compounding effect

    play-button

    A strategy that allows the principal and interests earned at regular intervals, to be reinvested in itself. By reinvesting the earnings, the impact of compounding interest will be significant in the long run.

    Related case study
  • 03

    Critical illness protection

    play-button

    Critical illness protection offers the insured a single lump-sum benefit if the insured is diagnosed with a defined critical illness, e.g., cancer, within the policy period. An adequate critical illness protection may allow the insured to cope with medical and family expenses during the hard times of a major disease. The amount of benefits depends on the protection amount purchased. There are choices of multiple claims and availability of a cash value. It may also come as an independent policy or a rider of a life policy.

    Related case study
  • 04

    Life and savings insurance

    play-button

    Life protection with a savings feature, tailored to suit the policyholder’s affordability and savings goal and duration, with an aim to achieving wealth accumulation. It is commonly used for meeting children’s education needs and saving for retirement.

    Related case study
  • 05

    Accumulation with interests

    play-button

    An insurance product with a savings feature normally provides the policyholder with the flexibility of benefit withdrawal. If a policyholder leaves the withdrawable benefits in the policy in the absence of financial emergency, he or she will be able to enjoy more returns.

    Related case study
  • 06

    Annuity plan

    play-button

    Annuity products provide a stable income for the annuitant over a period of time, with the income start age normally coinciding with the retirement age. While retirees normally do not have a stable income from work, an annuity plan can provide a stable flow of payments, and that’s why it is often dubbed as a “self-made lifetime salary” that helps to maintain quality of life after retirement.

    There are generally two types of annuity:

    One is called Immediate Annuity, which means payments start immediately after a lump-sum premium is paid till well into old age.

    The second type is called Deferred Annuity, which allows one to make contributions for a certain period of time before getting old, and to start receiving the “lifetime salary” upon retirement. A deferred annuity plan is usually divided into two phases. The first phase is the accumulation stage, when regular contributions are made well before retirement to let the money grow; the second phase is the income stage, when the annuity payment start age is reached and income is received regularly until the insured passes away or the policy comes to an end.

    Related case studies
  • 07

    Passive income

    play-button

    A person’s income can be classified into two types: active and passive income. Active income is what you earn from work that you need to actively be involved in, and will not be sustained upon retirement or loss of a job. On the other hand, passive income includes earnings from a source where you do not need to be actively involved. With proper financial management, you may be able to build a passive income.

    Related case studies
  • 08

    Dollar cost averaging

    play-button

    A strategy that serves to diversify risks by investing the same amount in the same investment at different times. When unit price is high, the same amount buys fewer units. When unit price is low, the same amount buys more units. This can average out the cost of the units over time, mitigating the impact of short-term market fluctuations on your investment.

    Related case studies


Special thanks to the case study provider: Alvin Lam, Certified Money Coach (CMC)®


The information above is for general reference only. It shall not constitute nor shall it be taken as a substitute for the professional advice from an insurance advisor on the purchase of insurance policies. No aspect of this website shall be solely relied upon for the decision of insurance purchase. You should seek relevant professional advice before taking action on any matters to which information provided on this website may be relevant. For more details, please contact your Manulife insurance advisor or call our customer service hotline on (852) 2510 3383 (if you are in Hong Kong) or (853) 8398 0383 (if you are in Macau).


Talk to the experts on financial planning!