Before you move on with any of your investment plan and ambitious money-making idea, or prior to making any daring action to satisfy your crave to be bold by participating in any extreme outdoor activities, it is always imperative that you make sure your back is covered.

While many will think of this as an unwelcome or ‘Pantang’ distractions or stumping block that delay their plan, in fact, this should be dealt with as the first step to any dream or bold moves.

Despite the well accepted fact that everybody have unique circumstances, however, in general each of us should really do the followings:

• Establish an emergency fund;
• Ensure sufficient insurance coverage is in place for your dependents in the event of death or at the onset of critical illness;
• Ensure you and your partner have wills on how your estate should be distributed in event of death.

Emergency Fund
Set aside or follow a disciplined effort to built up an emergency fund that is sufficient to cover at least 6 months of your income (given the current economic condition you may want 9-12 months and more if you have a young family), so that you will not feel nervous or helpless during sickness, retrenchment, or when looking out for new job after resigning. This emergency fund should be kept in deposit or money market account which will give ease of liquidity when it is needed. With an adequate emergency fund backing up, things could not go too wrong as you have buffer to support you through the rough tide.

Insurance Coverage
Just sit down and imagine that you have stop breathing yesterday. How much is needed to settle your debt today? Debt that most of us have, for instance, mortgage, credit card, study loan (such as PTPTN), Hire-Purchase, etc. How will your dependent continue to survive with those challenges and financial hurdles? Things will become worse if you are the breadwinner in the family or a big portion of your household income is brought home by you? If you were to become ill long term, how much of your current income or savings can continue to support you and family, for how long? Just ensure that you will have at least this amount of life insurance coverage in place. Also, ensure that you have a basic medical insurance in place, so that your emergency fund and hard-earned savings will not be wiped out overnight by hefty hospital bill.

You may seek the help of licensed financial advisor to have a personalised insurance solution for you, as they will be able to integrate plans from different companies to cater to your unique need.

Write a Will
A will is a legal document which sets out who is to benefit from your property and possessions (your estate) after your death. There are a number of ways of making a will but, to be on the safe side, it is advised that you ask a licensed financial advisor on how your wills should be drafted in order to cater to your unique situation and wishes.

It is important to have a Will in place as if you were to die ‘intestate’ (i.e. without having made a will), there is a danger that your assets will not end up in the hands of those that you would have wished to have them, not to mention that it will take relatively longer time for the court to issue clearance order.

Depending on your circumstances, you may wish to include guardianship arrangements in your will so that, in the event that your children are left parentless, there will be someone to take care of them: you obviously need to get the agreement of the people you intend to name as guardian(s) beforehand.

This may conflict with your priority of achieving your goals but, by building up this financial cushion (and maintaining it), you will protect yourself in the event of things going wrong and in a better position to work out alternatives, and you will be able to focus on the next step with peace of mind.

This article is written by Mr. Kevin Neoh, a CFP ^{CERT TM} Professional and Licensed Financial Planner from VKA Wealth Planners Sdn. Bhd. Kevin is the 2nd Top-Scorer in the 2015 Malaysian Financial Planner of The Year Award that was organised by Financial Planning Association of Malaysia (FPAM).