Ten simple ways to ensure 1993 is happy and prosperous

IN the wake of the Christmas cheer and New Year celebratory haze many individuals take the time to make a new beginning, with resolutions ranging from giving up smoking to losing weight. Your Money asked two financial advice firms in Hongkong to come up with 10 things you must do during 1993 to get your personal finances in order. The resolutions have been compiled by Towry Law and Matheson PFC. Some are a bit morbid in nature, but thereis no getting away from mortality. 1. Draft a Will. If you have made one up already then go back and have a look at it. The documentation and details might need to be updated. Most people's financial circumstances change in regular cycles so a Will made up even a few years ago might already be out of date. Individuals who pass off into another world without a Will in place leave a minefield of financial complications and problems for the loved ones left behind. In Hongkong, Inland Revenue can demand that duty be paid on all domestic assets before they can be released to those for whom the remainder was intended. In other jurisdictions, including the United Kingdom, the same rule applies and the future destiny of the deceased's assets lies in the hands of treasury bureaucrats. This can take months to sort out; in the meantime the deceased's family might be penniless. Where the family includes children, the husband or wife making up the will should nominate a guardian for the children. 2. Review your basic life assurance cover. If you have not got any, consider getting some. Towry Law says: ''This is especially relevant if you have had a child in the past 12 months.'' Life assurance can be taken in the form of a straight term policy which offers a lump sum payment to your loved ones on your death. This will allow them to continue their lives with some kind of financial security. For children this might be vital for their further education. Cover can also be bought in the form of a protection and investment. This offers a lump sum at the end of the term whether or not the person covered has died. Towry Law suggests: ''You should increase your basic life cover in line with the projected increase in expenditure over the next few years, particularly where private education is planned.'' The adviser adds: ''Smokers should give up in order to improve both their health and their insurance rates.'' 3. While dealing with insurance, check your levels of disability and health care insurance. These products pay either a lump sum or a regular income when the insured person is off work temporarily or permanently due to unforeseen circumstances. ''These should be maintained at reasonable levels. This is particularly important if you are retiring in the next 12 months,'' says Towry Law. Matheson recommends that you check the small print of the policy to ensure that you are covered for all the countries in the region and the United States. 4. Review your pension arrangements. If you are 30 or older and you have no retirement plan in place then get one. You can never plan too early for retirement. Towry Law says your monthly contributions should increase in the New Year to take account of any increase in your salary. This will ensure that there is some inflation-proofing in the plan and should avoid erosion of the value of the long-term benefit. For UK expatriates Matheson says: ''Start paying voluntary national insurance contributions and maximise the available back-dating in order to protect your UK indexed-linked state pension.'' 5. Make regular provision for your tax bill by setting up a designated account and a standing instruction to transfer 15 per cent of your salary a month into the account. Some banks offer tax saving coupon schemes under which they handle the settling of tax claims from Inland Revenue. 6. Review the interest rate you are receiving for deposit capital. If this is in Hongkong dollars, consider moving your bank deposits into a money market fund. Depending on the length of time it is intended that the money will stay in the account, and whether or not it will be needed in the short term, check the money market rates offered in currencies against long-term bank time deposit rates. Wardley Investment Services has the stated goal to offer the best rate in Hongkong dollars at any given time. Alternatively, Towry Law recommends Jardine Fleming because it has a wide range of currencies and generally has relatively competitive rates of yield. 7. Of great importance this year will be the need to keep an eye on your investment portfolio. Matheson PFC says investors should be prepared for further strengthening of the US dollar. This might call for some professional advice as you need to determine what proportions you should have in cash, bonds, equities and derivatives. A geographic analysis is also needed to decide your exposure to Europe, North America, Japan and Asia. The relative proportions will differ from one person to another depending on age and their financial circumstances. Towry Law says: ''Decide which markets are undervalued and those that can be expected to perform well over the next 12 months.'' South Korea, Thailand, Malaysia and Indonesia are its preferred markets. 8. Matheson suggests you should investigate whether it is worth your while finding a suitable tax shelter for your assets. Individuals will need a minimum requisite level of wealth to make it cost effective. 9. If you have a financial adviser check that he or she is authorised to conduct business in Hongkong with the Securities and Futures Commission. 10. The last resolution is from Your Money and is not supplied by either of the two financial advisers: never take inquiries or follow up calls from insurance agents calling cold. In general they are time-wasters who are in the territory for a short while and are only interested in generating commission for themselves. Always pick an adviser who has an established reputation in the territory or the industry in general.