Autism Financial Planning & Money

 

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For parents

The top priority of parents are the continual survival of their child with autism after they have passed away. This can come in the form of an income or a pension. It can also include care for the children who are incapable of taking care of themselves.

I have heard of the following methods:


Description Advantages Disadvantages
Trust: Provides a source of income in exchange for assets or cash pledged to a foundation. Can have an option for emergencies such as medical treatment.

Terms are flexible if trust is created by oneself. It is unlikely to go bankrupt if managed properly. This may also allow the child to enjoy tax and disability benefits that inheritance may not permit.

This option is usually only possible for wealthier families due to the high expenses and capital involved.
Annuity: Provides a constant source of income for the length of the beneficiary's life in exchange for a large lump sum payment. Affordable for middle income families. Using a will, the annuity can be set up with the assets in the family's estate when the parents pass away.

Potential erosion of value if not inflation adjusted. In addition, the issuing company may go bankrupt. Insurance companies, who provide such services, are also very reluctant to take autistics as clients.

Charity Deal: Family makes a pact with a charity to take care of their autistic child in a house that they purchase on behalf of the charity. Affordable for lower income families if done in a country with lower standards of living. Provides permanent care for the autistic. [Some Singaporeans have done this in neighboring Malaysia.] Natural disasters & government activity may affect the land. There may be potential deception by sham charities. Charities may also go bankrupt or be dissolved.
Rental Income: Family purchases real estate in which the rental income is used to defray the child's expenses. Extra cash is stored up for use in emergencies. A very good hedge against inflation. The real estate can also be sold or used as collateral for a bank loan to provide emergency cash. Natural disasters & government activity may affect the real estate. Usually affordable only for wealthy families. Rental income may be variable and depends on economic situation. The value of the property can go down.
Stock Dividends: Recommended by a millionaire friend of mine who has a child with autism. Works like the rental income method above, except with stocks paying yields of 5% or more annually. Affordable for lower to middle income families. Shares can be sold for emergency cash as needed. It can also hedge against inflation. Dividend income is variable and share prices can drop. The company may go bankrupt, especially during a financial crisis. Companies (especially REITs) can issue cash calls that dilute share ownership.

Fixed Deposits & Government Bonds: The favorite plan of conservative retirees. Cash is taken out of a bank account until it is depleted. Ideally, the interest is sufficient to replenish the withdrawals.

Easy and simple. Can be set up with little money. Highly unlikely to lose capital investment. No financial security when the cash is depleted. The interest rate is very low in the modern economic climate. Erosion of value over the long term due to inflation.
Employment: People with autism work to provide for themselves, to the extent that they can do so. The only truly sustainable long term solution. Having a job could also add meaning to life. The market wages may be very low for people with disabilities and the jobs available tend to be menial. Such jobs are easily threatened by technological advances and globalization. Only jobs higher in the value chain such as designing and programming can provide adequate security.
Start a business: Create a business to hire the person with autism. Basically a variation of the above, except that there is less office politics and more freedom to follow their own work style. Decision making skills require a high level of functioning compared to simply taking orders. People with autism may need much guidance and may not adapt to changing market demands or technological advances. Self discipline is absolutely necessary.

Below are some useful resources:


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For autistics

There are only a few ways to obtain money legally.

  • Inherit it: Requires wealthy parents or ancestors
  • Marry it: Requires luck and (perhaps) attractiveness
  • Win it: Requires luck, is unreliable and often backfires
  • Earn it: The most reliable method that most people use to earn money.

We can earn money by doing the following:

  • Something people cannot do: Use your skills and talents to do something that most people cannot do but need to do, for instance, writing useful software and setting up computer networks.
  • Something people don't like to do: People do not like to do housework, work the graveyard shift, or work for many months away from home on a ship etc.
  • Something people fear doing: People may not want to work as undertakers due to superstition, or put their lives at risk fighting crimes, fire and enemy soldiers.

There are a few financial strategies:

  • Aim for Passive Income: Aim to receive income that requires little maintenance from yourself. (See below.)
  • Spend lesser than you earn: Live within your means.
  • Live a simple life: Buy only what you need. Grow your own food. Recycle rubbish. The less you spend, the easier it is to earn enough money for yourself.
  • Sustainable Hobby: Aim to make a living doing what you like. Do it in a practical and financially sustainable manner so that you do not have to work in another job you dislike just to pay the bills.

Earning a passive income is my biggest financial goal, since it can provide me with great freedom to do what I wished to do. I look forward to the day when I can quit my job without any worries. Here are some possibilities:

  • Rent out a house: Real estate is one of the most popular and reliable means of earning passive income. An ingenious way is to buy a house and then use the rental to cover the installment payments. Eventually, you will own the house and the rent will be your passive income. However, if you enter at the wrong time of the economic cycle or you chose a bad location, your investment can be wiped out.
  • Start a passive income business: A business that does not require your constant input is useful. Since you may not like to or have difficulty dealing with people, you may wish to consider: web services, web advertising, mail order business and intellectual property development (such as writing books, patenting inventions and selling your own image).
  • Earn dividends: You can buy stocks or REITs (Real Estate Investment Trusts) that will pay you dividends. However, buying these at the wrong time in the economic cycle and then panicking can wipe out your savings.
  • Earning Interest: You can buy inflation-adjusted bonds which will preserve the value of your money while giving you an income. However, current interest rates are very low so you will need a huge amount of money to earn any significent income. In addition, bonds are no longer truly risk-free as governments are taking on unprecedented amounts of debt.

Do note that speculating in the financial markets is usually not considered passive income, since you have to manage and monitor your account. You will also have to pay with your emotional health watching the ups and downs in your portfolio.

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