Sunday, April 22, 2018

Send SMS before making a call to an unfamiliar person

This is my advice to marketing people, e.g. property agents, insurance agents and others.

If you are calling a potential customer who do not know you, send an SMS first.

Mr. X. My name is Y from (company). I will call you regarding your (enquiry) at xx pm today. OK?

If the customer is not available at this time, he will reply by SMS and give you an alternative time.

If the customer does not reply, you can call the customer at the stated time. The customer will be expecting your call.

Do not:
Do not call the customer unannoncement. Some will not pick up your call. Others will be annoyed at the unexpected interruption.

HDB flats will have no value at the end of the 99 year lease

I asked this question in The Wisdom of the Crowd - Is it fair for the HDB flats to be worth nothing at the end of the 99 year lease?

30% of those who responded said - the owners have been misled by the PAP leaders into investing a large sum of money in a HDB flat that will have no value eventually.

25% said - this is what a leasehold is. The owner must accept this legal fact.

24% said - we should vote a new government to find a solution.

21% said - the PAP leaders owe a duty to the HDB owners to preserve the value of their investment.

See the breakdown of the votes in

Saturday, April 21, 2018

Upgrade to cover 40 dread disease

Dear Mr Tan,
I am a owner of the NTUC Living Policy ( LV85) since 1996 . Its contract covers 36 dreaded diseases and permanent diability (PD) provison for up to age 60 years. Today, NTUC has equivalent policy but covers 40 dreaded diseases and PD for age 70 years.

I opine that for my policy to remain relevant as a solution, NTUC should rationalize my contract that I have coverage of 40 dreaded disease and PD for age 70 year. Not withstanding NTUC as a cooperative, it is also a fair act of social responsibility. In fact I expected them to be proactive and to initiate necessary action .


Invest $500,000 in one bank

Dear Mr.Tan,
Do you think is save to put all my savings abt $500,000 in fixed deposit with Hong Leong Bank. It is a foreign bank wf limited liability.What does limited liability means?

Answer here:…

Bank misled customer into buying a 8 year saving plan

This housewife will lose $10,000 because she was misled by the bank officer to buy a 8 year saving plan when she intended to place a fixed deposit.

The bank officer did not tell her that it was an insurance policy and she would lose all of her savings if she cannot continue the policy for the second year. She had no income and could not pay the second year premium.

This type of mis-selling is quite common. Why is MAS still allowing the banks to carry on this activity?

Read my details and find out how to avoid this grievous mistake here.

Hub and spoke system for public transport

I visited my brother in Central Coast, Australia a month ago.

The main town in Central Coast is Gosford. I took a train from Sydney to Gosford. The journey was 2 hours.

From Gosford, I saw the bus routes. There were local buses that serve the nearby towns. It operated like a hub and spoke system, similar to that adopted by airlines.

For airlines, you take a plane from a small airport to a hub. From there, you take an international flight to go to other cities.

I am in favor of a hub and spoke system for our bus services in Singapore. Many cities adopt this system because it is more efficient for the operators and for the passengers.

In Singapore, the hub can be the MRT stations and the bus interchanges. The spokes are the local buses to take passengers from the nearby areas.

If you live near a hub, you can walk there. If not, you can take a local bus to the hub. From there, you can take the MRT or express bus to a stop near my destination.

Under this concept, the express bus stops every 2 km (roughly five bus stops now). The travel time will be reduced considerably.

From the stop, you can walk to my final destination or take a local bus.

I like to see the bus system in Singapore changed as follows:

a) express buses and MRT will connect the hubs.
b) local buses will take pasengers from the nearby areas to the hubs.

Do you like this system?

Worst decision of the PAP

I asked this question in the Wisdom of the Crowd - What is the worst decision of the PAP in the past two decades?
32% of those who voted said - appoint generals to run the country.

18% said - fix the opposition.

18% said - introduce GST resulting in high cost of living

16% said - introduce the GRC system.

16% said - allow property prices to go sky high.

See the breakdown of the votes in

Poor attendance of MPs in Parliament

I asked this question in the Wisdom of the Crowd - What is your reaction when you see poor attendance of MPs in Parliament?

62% of those who voted said - it is shameful to receive a high allowance and neglect their duty.

24% said - MPs should be full time.

9% said - they should be sacked.

See the breakdown of the votes in

Friday, April 20, 2018

The expiring HDB lease

How can we deal with the problem caused by the expiring lease on HDB flats?

We have to recognize that there are many parts to this problem. Let me list two of them:

a) First, some owners who need to sell their old HDB flat with a lease of less than 60 years has found it difficult to find a buyer. The buyer, who is likely to be a young person, is not able to get bank financing to buy the old flat.

b) Second, owners now fear that they have to vacate the flat on expiry of the lease and will not get any compensation. Their total investment in the flat will vanish into thin air.

The first problem is more urgent. Some owners need to sell their flats now to realize cash to downgrade to a smaller flat or to cover their living expenses.

This problem can be solved by allowing the buyer to use CPF to pay the mortgage for leases of between 30 to 60 years. 30 years is a long time for the new owner.

We need to overcome a mental block. Some people, including the government leaders, think that it is all right for people to buy a 60 year lease because it is long enough to quality as an "investment".

A shorter lease will expire during the lifetime and is "consumption".

This distinction is not valid. All properties have a large component for consumption. It is a matter of degree.

The buyer has to pay a much higher price for a long lease property. Let's say, $300,000. If the same property has a shorter lease, it comes at a lower price, say $200,000.

In both cases, the consumption is $200,000 over the term of the short lease. For the long lease, the consumption is also $200,000 and the investment is $100,000.

The $100,000 that is invested in the property will appreciate over the years. But the same $100,000 invested in equities (or stock market shares) will also get the same return.

My point is that there is no difference in the consumption component between the long and short lease.

I also want to give a warning to all property owners. The property bubble in Singapore has grown too big. It cannot continue to inflate because the earnings of working people cannot sustain a bigger bubble.

The government will be able, hopefully, to stop the bubble from bursting, but you should not count on it growing further. The days of easy money are over!

I will now deal with the second problem - the owner has to give up the HDB flat on expiry of the lease.

This problem is not so urgent. It will come in another 40 years time when many leases will expire. Some of the short leases will expiry earlier, but the number is small and the problem is manageable.

When the time comes and large numbers of leases are expiring, the government of the day can offer an extension of the lease by 5 or 10 years at a time.

This can be done, if the flats are still in habitable condition and there are no redevelopment plans.

A premium has to be paid for the extension of the lease. This will not be cheap, but it wil be less costly than buying a new flat - because you do not have to pay for the building.

Furthermore, it can be justified that the premium for lease extension can be kept at a "moderate" price. After all, these are people who bought and paid for the original property.

This is similar to buy a Certificate of Entitlement (COE) for the use of a car for 10 years or to extend it buy 5 or 10 years by paying a premium.

The HDB scheme has been successful for the past five decades. It has allowed many owners to make a good capital gain on the sale of their flats which they used to buy a bigger flat or a private property.

This huge appreciation was also made possible on the back of a rising property market, which has become a bubble.

We are now at the watershed. With the leases reaching the magical 60 year mark, many owners find it difficult to sell their flats. There is small demand for the old flats with less than 60 years due to lack of financing.

The problem affects large number of people. The fear that the property bubble may burst adds to the panic. It can be quite catatrophic.

It is urgent for the government to act and address this problem. As a first step, they should reduce qualifying period for use of CPF savings. Currently, the requirement is that the remaining lease should be 60 years. The government needs to revise it to 30 years.

Tan Kin Lian

Why GST should be abolished in Singapore

I read several reports in the social media about the general election in Malaysia.

One key news that keeps being reported is the complaint from voters about the high cost of living in recent years.

Why was there an increase in the cost of living that affects the lives of the ordinary people?

I am sure that the main culprit is the introduction of the GST in Malaysia on 1 April 2015.

Although GST was exempted for essential items, such as food and medicine, it still have a major impact in increasing the cost of living.

The example in Malaysia show clearly that GST is harmful to the economy and to the lives of the ordinary people, even if it is waived for essential items.

GST is a costly and inefficient tax. As many people have pointed out, it is also a regressive tax, as it hits the lower income people the hardest.

It is not the GST itself. We must also add the cost of administration that businesses have to incur. They have to eploy more staff to take care of the GST calculations and accounting to the government. The additional staff cost will be passed on to the ultimate consumers.

We must also not forget the additional profiteering. The businesses will not only add GST and the higher staff cost, but will also take the opportunity to increase their profit margin amidst the confusion.

Now, I come back to Singapore.

For more than a decade, I have written on many occasions that GST is bad for the economy. I now call for GST to be totally abolished in Singapore.

Can Singapore afford to lose the revenue from GST?

Yes. Singapore collects a lot of revenue from land sale. The amount is not reported, but is estimated to be $20 billion a year. This is revenue that most other governments do not have, apart from Hong Kong.

The revenue from GST is $11 billion a year.

The Hong Kong government does not collect GST because they also collect a large revenue from land sale. There is no justification for Singapore to have GST when it also has a lot of revenue from land sale.

If we abolish GST in Singapore, we can bring down the cost of living by about 10%.

Do you agree that GST should be abolished?

Tan Kin Lian

Thursday, April 19, 2018

No need to call a by-election for Marsiling Yew Tee?

I asked this question in the Wisdom of the Crowd - Do you agree with the High Court decision that there is no need to call a by-election for Marsiling Yew Tee?

62% of those who voted said that the vacancy should be filled as soon as possible.

32% said that a by-election is needed to fill the vacancy vacated by the MP from the minority race.

This makes a total of 94%. The remaining 6% agree with the decision of the High Court.

See the breakdown of the votes in

Wednesday, April 18, 2018

Open letter to Mr. Neo Kian Hong, incoming CEO of SMRT

Dear Mr. Neo,
I congratulate you on your appointment as the next CEO of SMRT.

I wish you success in managing this challenging job. It is difficult but it can be done.

Do not worry too much about the comments of netizens who have already written you off. They said that you did not have any experience in driving a train all your life - how can you manage a train company?

It may be some comfort to you that the same comment could be levied against me when I took up the job as the top person in NTUC Income exactly 40 years ago. I did not have any experience in running a life insurance company or in managing an agency force, which was the lifeblood of the company.

Fortunately for me, there was no social media at that time to write me off.

As it turned out, I did a fairly good job (if I may say so myself). I was able to build NTUC Income into a large and successful insurance company.

If I may, let me give you three tips that you may find useful for you to face your daunting challenge. The first and second tips are based on my 30 years of experience in facing similar challenges.

First, you have to build a good feedback system. In the old days, I had an intranet where the employees and agents were able to give their feedback on what was happening. Often they provided the feedback from the customers. I paid attention to the feedback and made sure that they were attended to.

It was the best way of identifying the real problems that faced my business. What's more, many of the people who provided the feedback were able to offer the solutions.

My task was to use their contribution and make the judgment on what could be done. In many cases, I had to try out the suggestions to see if they could work.

Today, we have the internet. It would be an excellent channel to handle the feedback system.

I know that you may be wary about having to handle several thousand feedback every day. Don't worry. It can be managed. You only need empowered people at two levels to sort out the feedback.

But you have to personally pay attention to some of the feedbacks that are escalated to your level for your personal attention. This is what makes the feedback system works.

In case this sounds "easy to say, hard to do", let me offer the following services to SMRT for free.

I will build the internet website, which I can get ready in two weeks, and manage the feedback process for SMRT.

I only need you to identify the SMRT people who will assist me in handling the feedbacks. Some are customer relations people, but the others are the operational people who can implement some of the suggestions.

I repeat. I am offering the internet system FREE and what's more, my personal time to manage the process. I will do it for at least three months. I will also train a SMRT manager to take over from me.

The feedback can be provided by the public and the staff of SMRT. It will be an open channel for the feedback.

I can stake my personal reputation that this approach will work. If you do not know or trust me, talk to your chairman, Mr. Seah Moon Meng. He knows me personally.

Second, we need a culture of senior people getting their "feet on the ground".

It will do wonders to have the CEO and top managers of SMRT visit the maintenance teams and see how they work in the early morning.

You and your managers do not have to do it all the time. But you can do it some of the time. Have a coffee with them. They will know that the managers care. More importantly, they will also know that they cannot "skive" and get away with it.

Where do you visit? The feedback system will give you the clues on where your managers and you should be visiting.

Do not prepare these visits in advance. Just drop it. It will build a new "work culture".

Third, I have some common sense suggestions on how to deal with the issues that SMRT face daily, i.e. the delays and breakdowns. I believe that they are largely caused by the complicated Thales signal system.

Actually, you do not need a complicated signal system. It is not difficult to operate a MRT system. Each line is dedicated to the trains running on that line. You do not get trains on several lines merging into one line.

The trains on each line are about 2 km apart, based on an average speed of 60 kph and an average interval of 2 minutes between the trains.

This system can be run entirely using people, i.e. train drivers. The driver can stop the train at each station, open the train and platform doors and, after a minute, start the train to proceed towards the next station. It is easier than driving a bus on a congested road.

There is really no need to rely on a complicated signal that gives signal faults now and then.

If you want to be safe and avoid a train collision, you can install a collision avoidance device at both ends of the train. This will detect a train or obstacle ahead and stop the train to avoid a collision.

This type of device is already installed on many cars. They should be effective and inexpensive.

I am aware that SMRT or the Land Transport Authority have already spent $195 million installing the Thales signal system on two NS and EW lines. As this money has already been spent, we should continue to use the Thales system. However, when there is a signal problem, we can switch immediately to manual operations. It should be all right.

I am aware that I might be over-simplying the problems. Engineering may be different from finance. I agree.

However, my 30 years of experience tell me that the key elements of problem solving is the same.

You have to identify the problem; you have to understand what the problem really is. After that, you have get the technical experts to provide the options. As the manager in charge, you can take the decision.

Furthermore, many of the decisions will not work as you had expected. Often, you need to fail in order to get information that were not available before. You may have to try a few times before you finally succeed. Right?

I am suggesting a new work culture, one that is more entrepreneurial, more risk taking.

I am not talking about big risks involving people's lives or large sums of money. I am talking about the smaller risks that need to be taken every day. We will learn to use our common sense to distinguish between big and small risks.

Okay. Here is a test of the new culture that you, Mr. Neo, can bring to SMRT.

Will you send an e-mail to me at or call me at my mobile: 81685845? Will you offer me a cup of coffee and talk to me?

Tan Kin Lian

Will there be "culture issues" in SAF in event of hostility?

Mr. Tan
The outgoing CEO of SMRT spent over 5 years in this position. He employed his kakis, also from SAF, to the key positions. The operations of SMRT got worse during this time. The CEO blamed it on the "work culture".

He did not explain what the problems of "work culture" were.
I have this worry. We spent tens of billions every year on our SAF. In the event of hostilities, can we rely on our soldiers? Will we also face the "work culture" issues?

What has happened in SMRT is a sign that the "work culture" is a big issue. We cannot brush it off as affecting SMRT only. More likely, it affects a big segment of our society.

What are your views?


I share your concern. Singapore now faces big challenges and big problems. We need to go to the root of the issues. We have to change the PAP government.

Excessive bank charges

DBS Bank charged me $18 for processing a MEPS payment. The DBS staff explained that this is an electronic payment. She also said that the charge for a FAST payment is $5. If payment is made by GIRO, the fee is $0.20 for each transfer.

These are charges imposed on corporate accounts. Most people with personal accounts pay lower charges.

I asked the DBS staff - why was the customer not notified about the charges when they use the service? She said that these are posted in their website.

I also told the DBS staff that there are many modes of payments in their online website. I do not understand these different modes. I did not expect the charges to differ a lot. In my case, I made a payment of $44 to a supplier using the MEPS service and was charged an exorbitant a fee of $18.

I told her to give this feedback to the management - as the fees are so large, they should notify the customer at the time of using the service. They should not expect the customer to know the details and small print that were posted in their website.

She promised to do so. But I expect that nothing will happen.

My friend told me that if this happened in Austalia, a commission of inquiry will be set up to look into this matter. The commission will probably imposed a big fine on the bank. That is why the bank charges in Australia are at a more reasonable level.

Welcome to Singapore, friends. It is a place where ordinary people are "screwed up" daily by the government and big companies.

Tan Kin Lian

Inefficiency of the postal service

A condo sent out notice calling for an AGM. To comply with the regulation, the notice has to be sent out at least 14 days before the AGM. The managing agent sent out the notice on 4 April under "certificate of posting". This means that Sing Post certified that they received the mail on that day.

By 17 April, many of the owners have not received the AGM booklet yet. It seemed that Sing Post did not deliver the mail within the expected time. It is possible that the mail was delivered to the wrong address. However, as a large number of owners were involved, it is more likely that the mail was not delivered.

I read from other posts that Sing Post had relied on part time workers to deliver the mail. Maybe, they outsourced the work to contractors who engaged these part time workers. It is difficult to rely on contractors and part time workers. The control and supervision is not effective.

I read a story that an outsourced worker destroyed all the mails that were assigned to him for delivery. He found it easier to destroy the mail rather than deliver them.

To add to the problem, many flats and apartments have installed measures to deter the insertion of mailers and flyers into the letter boxes. This might have made it more difficult for the postal workers to deliver the mail.

You can ask the questionj - why are we still relying on postal mail, when we have the option of e-mail and other electronic form of communication?

The answer is - the government does noT trust e-mail, due to the posibility of hacking. This has caused the volume of postal mail to increase to an unmanageable level.

The quality and reliability of our postal service has deteriorated significantly over the past years. The privatision of the postal service to a listed company, that operates on a profit driven model, is a bad idea.

The inefficiency of the postal service and the high reliance of postal mail adds to the cost of doing business in Singapore. We are an expensive place to do business. It contributes to our sluggish economic performance.

Singapore is facing a lot of challenges. The government under Lee HL is not aware of these huge problems. We are doomed.

Tan Kin Lian

Tuesday, April 17, 2018

May Day Talk - Jobs for Singaporeans

I have accepted an invitation by Gilbert Goh to give a talk on May Day. I will share more details of this event when it is available.

Here is the outline of my talk.

In a recent survey, I asked participants to indicate the item of greatest concern to them - cost of living, jobs and health care.

They chose jobs.

It makes sense. If you have a job that pays a good wage, you can afford the high cost of living and health care. If you do not have a job, you will face financial distress.

In recent years, many people are worried about their jobs. The older workers are worried about being retrenched. The younger graduates are worried that they may not get a job that pays well.

This problem is compounded by the influx of foreigners. Worse, many people have complained that employers prefer foreigners, rather than locals, due to cost and other factors.

What policies and strategies can the government adopt to ensure that locals are able to get a jobs?

I identified three strategies. I will talk about them at the May Day talk.

You can get a preview of the key points of my talk from this video. But I may modify and update my thinking when I present my talk on May Day.

Happy viewing. It just takes 20 minutes.

Please share your views or raise some questions for me to address.

Tan Kin Lian

Should there be a cap on the charges for legal services?

I asked this question in the Wisdom of the Crowd - Should there be a cap on the charges for legal services?

Of those who voted, 53% said the government should set guidelines on legal fees for standard contracts.

16% said the government should set guidelines on hourly charges for litigation.

16% said let the free market decide on the charges.

16% said the maximum charges should be decided by law.

See the breakdown of the votes in

Should visitors be required to give up their NRIC when they visit an office building?

I asked this question in the wisdom of the crowd - Should visitors be required to give up their NRIC when they visit an office building?

Of those who voted - 67% said that it is unnecessary and wasteful and should be stopped.

13% said it is needed for secruity.

13% said we should continue and create jobs for security guards.

7% said that it is needed in case of a fire, to know who are in the building.

See the breakdown of the votes in

Will Dr. Mahathir win over the Malay votes for the opposition alliance?

I asked this question in the Wisdom of the Crowd - Will Dr. Mahathir win over the Malay votes for the opposition alliance?

Of those who voted, 33% said that his appeal to the Malay voted as reduced somewhat as he is no longer the prime minister.

27% said he is well respect among the Malay voters and can attract their votes.

27% said the Malays will continue to support Umno.

13% said he was not well liked by the Malays previously.

A total of 73% said that he would not make a significant impact.

See the breakdown of the votes in

Recognize the consumption component in property ownership

The government has the perception that a short term lease is consumption and a longer term lease is investment. They set a minimum of 60 years lease for the unrestricted use of CPF.

This perception is wrong. All properties have a part for consumption and another part for investment.

For example, if someone buys a property with a lease of 30 years, the purchase price will be consumed within 30 years.

If this person buys a 60 year lease property, he will have to pay a higher price. At the end of 30 years, the value of his property would have dropped, due to the consumption of the property for 30 years.

Suppose the price for a 30 year lease is $180,000 and a 60 year lease is $240,000. The difference is $60,000.

At the end of 30 years, the value of a 30 year lease would have dropped to $0 and for the 30 year lease, it would have dropped to $180,000 for the remaining lease of 30 years would be $180,000. We ignore appreciation in the property values in this calculation.

If he had invested his $60,000 to earn 4% per annum, it accumulate to $194,000.
Hence, in both cases, the property is being consumed at the same rate.

The same argument would apply for a 99 year lease and for a freehold property.

The property with a longer lease or a freehold property cost more than a short lease property.The difference in the purchase price represents the "investment". The underlying amount is the "consumption".

If we assume an average appreciation in property of 2% p.a. he need to earn 6% p.a in alternative investment to be as good as property. This is possible by investing in equities.

If the government recognises this point, there is no need to restrict the use of CPF savings for property with a remaining lease of 60 years or to apply a complicated formula for shorter leases.

They can allow the unrestricted use of CPF with a lease of at least 30 years or even shorter.

Alternatively, the government can reduce the compulsory contribution to CPF and allow the people to use the money in any way that they wish, for example, to rent a property or to buy a short lease.

This is the standard practice in most or all cuontries around the world. There are few countries that have a CPF system that forces the savings to be used to buy properties.

Tan Kin Lian

Note: the figures of $180,000 and $240,000 are quite realistic. They are taken from this table.

When the lease on the HDB flat runs out

What happens when the HDB flats runs out of its lease of 99 years? Many of the owners will have to return the flat to the HDB which will return the land to the government. They would have lost the entire investment in the flat, including the use of CPF.

Someone suggested that the government should increase the lease to 150 years. He did not indicate if a premium should be paid to extend the lease by another 50 years.

I wish to suggest that the government consider the following measures:

a) Allow the existing owner to continue to rent the flats at a subsidised rate, provided that the flat is still in habitable condition and there are no immediate plans for redevelopment.

b) Allow the existing owner to renew the lease for another 5 or 10 years at the time. A premium have to be paid but this can be fixed at an affordable sum. This would be similar to buy a COE on a car.

As there is a lot of uncertainty now, it would be useful for the government to announce a policy to allow these options.

Tan Kin Lian

Monday, April 16, 2018

What will happen to the MPs when they are charged for mis-managing the Aljunied Town Council?

I asked this question in The Wisdom of the Crowd - What will happen to the MPs when they are charged for mis-managing the Aljunied Town Council?

47% of those who voted said they will be imposed with a big fine and be disqualified as MP.

26% said they will not receive any serious penalty.

27% said they will be made bankrupt or go to jail.

See the breakdown of the votes in

Would Chen Show Mao be a better leader for the Workers' Party?

I asked this question in the Wisdom of the Crowd - Would Chen Show Mao be a better leader for the Workers' Party?

42% of those who voted said that his performance as a MP in Parliament has been disappointing.

26% said that he does not get much support from the cadres in the Workers Party.

32% are in favor of him for two reasons.

See the breakdown of the of the votes in

Will the Worker Party forge ahead under Pritam Singh?

I asked this question in The Wisdom of the Crowd - Will the Worker Party forge ahead under Pritam Singh?

48% of those who voted said that he will get the support of the older and young members and cadres.

32% said that he will have to rely on the background support of Low Thia Khiang.

19% said that he does not have the charisma and track record of Low Thia Khiang.

See the breakdown of the votes in

Make the HDB Lease Buyback Scheme more popular

I wish to comment on the difficulty faced by seniors in selling their old HDB flat.

The government has a scheme to meet their needs. It is called the Lease Buyback Scheme. Details of this scheme are set out here.

I suspect that this scheme is not popular and that few people have taken it up.

Let me make a guess why it is not so well received. This is just a guess. I shall be happy if someone is able to give more substantive information.

Suppose the remaining lease of the HDB flat is 50 years and the owner has to sell off the tail end of the lease of 25 years. The owner would expect to get 50% of the current market price.

However, it does not work this way. We have to take into account the time value of money. The next 25 years that the owner stays in the flat is certainly more valuable than the last 25 years.

The owner should get only 27% of the current market value. This is based on the discounted value of the 25 and 50 year lease.

If the owner expects 50%, and that is an unrealistic expectation, he will consider the offer of 27% to be unattractive. Perhaps this is why the scheme has not been successful.

I obtain the 27% by looking at the figures shown in this table, i.e. 54.6/74.7 = 73%. Deduct from 100% to get 27%.

One possible approach is for the HDB to appoint a financial adviser to give independent and impartial advice to the owner. Maybe, the financial adviser can convince the owner that the offer of 27% (or whatever is the actual percentage) to be fair.

The financial adviser can be paid a fee by HDB to give this work. Maybe, it can be $250 or whatever is a fair amount to compensate for the time needed for them to explain the calculation to the owner.

The HDB can make it more attractive by offering a bonus of 20% higher than the calculated value, and this bonus can be funded by the government. This is how the bonus can work.

If the market value of the flat is $200,000, and the sale of the last 25 years of the lease is 27%, it will work out to $54,000. If the bonus of 20% is given, this will add another $10,800 to make $64,800. The owner may find it attractive as they get a bonus that is funded by the government.

Do you like this idea? If so, give me a Like and Share it.

Tan Kin Lian

Sunday, April 15, 2018

Tell the difference between ordinary and bad people

Young children in Singapore are taught by their parents to be wary of strangers. Do not talk to strangers. They may take you away.

They grow up to be fearful of strangers. Should they be suspicious of every stranger? Should they avoid talking to strangers?

Is there a better approach? Can we teach the kids on how to tell the difference between ordinary people and bad people? Can we allow the young to learn through experience?

I recall an incident. i was on a bus to Johor Bahru. The bus was caught in a congestion. I asked a girl in the bus if she came from Johor and is familiar with where I should get off.

She replied to me. We continued with a conversation. She came from Perak and has worked in Singapore for the past year. She is going to Johor to buy groceries.

I told her that it was nice for her to talk to me. She said, "I was taught to show respect for older people".

She was not suspicious of strangers. She knew who can be trusted. She also knew how to handle people.

Avoid investing with borrowed money

You can invest in a property without owning it. This is explained in this article. You can invest in a REIT (real estate investment trust).

However, many people found that they make a bigger gain by investing in a property.

Why is this the case?

When they buy a property, they are taking a loan, say 80% of the purchase price of the property. They only put in a down payment of 20%. This is called "leverage", i.e. investing with borrowed money.

Leverge is good, if the invested asset appreciate. If it goes up 10%, a leverage of 5 times give you a profit of 50%. This is what happened when the property market goes up and up.

But the property market can also go down. When it goes down 10%, your leverage of 5 times means that you lose 50%. Are you able to top up this 50%? If you can't, the bank will sell off your property at a depressed price. You will lose all of the money that you invested. The bank may sue you for the excess, and make you bankrupt.

Over the past decades, many investors have been burnt during the down cycles of the property market. They have lost all of their properties and gone bankrupt. You do not hear about these cases, because they are not publicised.

You only hear about the millions that many people make on their property investments, right?

If you invest in REIT, it is all right. You are not investing with leverage. If the price fall 20%, you still have 80% in your investment. You can wait for the price to recover. It always does. Maybe, you have to wait one, two or there years. Be patient.

Remember this. The property market is extremely high. The risk of a falling market is high. It can cause you to be bankrupt if you invest with borrowed money, including a loan on your property. Be careful.

Is President Trump performing well as President of USA?

I asked this question in the Wisdom of the Crowd - Is President Trump performing well as President of USA?

47% of those who voted said that he is carrying out his promise to make America great.

32% said that he is creating chaos for America and the world.

21% said that he is acting in an irrational and whimsical manner.

A slight majority of 53% has a negative opinion of him.

See the breakdown of the votes in

How well in Xi Jing Ping performing as President of China?

I asked this question in the Wisdom of the Crowd - How well in Xi Jing Ping performing as President of China?

59% said that he is raising the stature of China in the world.

24% said that he is creating prosperity and a better life for the people of China.

17% has a negative view of him for two reasons.

See the breakdown of the votes in

Do you expect the trade war between US and China to get worse?

I asked this question in the Wisdom of the Crowd - Do you expect the trade war between US and China to get worse?

60% said that this is just posturing; the two countries will find an amicable solution to the dispute.

30% said that the trade dispute will worsen as both sides do not want to back off.

10% said China will give concessions to reduce the trade imbalance.

A total of 70% are optimistic that the trade dispute will be solved.

See the breakdown of the votes in

Free up the market for old HDB flats

Many seniors now find it difficult to sell their aging HDB flats (with remaining lease less than 60 years). They faced a dilemma - they have inadequate CPF savings and need to sell the flats to realise cash for their living expenses.

They are disappointed that the promise made by PAP leaders in past years that HDB flats are a good investment had turned out to be untrue.

Let me first address the issue on why it is difficult to sell the old HDB flats.

The property market is now weak. There are more sellers than buyers. Many units are vacant. Rentals have fallen. This applies to the whole property market, namely the private properties and the HDB flats.

The economy has been weak for the past few years. Business has been bad. There are less foreigners who need to rent a place to live in.

The seniors would probably be happy to rent out a room to tenants, but they probably have difficulty in finding tenants in this weak market.

Apart from the poor market conditions, the HDB owners face two obstacles. These obstacles applies to HDB flats and not private properties.

They can only sell their HDB flats to eligible buyers, who must be citizens and permanent residents. They can only sell after the "minimum occupation period".

These two obstacles may not be too serious.

There is another obstacle that cause the problem. The buyer of the old HDB flats find it difficult to get financing for the purchase. The banks are reluctant to finance the purchase of HDB flats with a remaining lease less than 60 years.

Many people (including me) are not aware that the government now allows CPF to be used for leases of at least 30 years, subject to conditions.

I am not able to find out exactly what the conditions are. I used the calculator provided in the CPF website some inputs. I obtained an answer "Not eligible".

I have two suggestions to overcome the problem faced by the seniors in selling their old HDB flats.

First, we need to change the current regulation on the use of CPF savings.

At present, CPF can be used quite freely for the purchase of a property with a remaining lease of at least 60 years. We need to change the 60 years to 30 years.

In other words, a person should be allowed to use his CPF savings to buy a property of 30 year lease as freely as he is now allowed to buy a property with at least 60 year of remaining lease.

There might be some concern that the property will have no value at the end of the lease of 30 years. This means that the CPF savings is used for consumption over 30 years.

This argument is flawed. The buyer of a 60 year lease has to pay a higher price. One part of this higher price is consumption; the other part is for "investment". The consumption element for a 30 year lease and a 60 year lease is the same.

If we can get rid of this mental confusion between consumption and investment, we can free up the market that is now affected by this artificial obstacle. We will open up the market for the aging HDB flats with a remaining lease of less than 60 years.

Some young families may opt to buy the old flats because they are cheaper or located closer to their parents. The seniors will be able to sell these flats to realize cash.

With a more active market, the prices of the old flats will reflect the market price, rather than a depressed price.

If CPF can be used freely for properties with a remaining lease of at least 30 years, the banks will be happy to provide the loan. After all, they have been lending for purchase of cars that have a lifespan of 10 years. They should be happy to lend for purchase of a property tht have a lifespan of 30 years.
I have a second suggestion; the HDB can buy back some of the old flats and rent out the flats to eligible occupiers. This will increase the supply of rental flats for young families.
Some newly married couples may opt to rent the flats for a few years while saving to pay the deposit for the flats that they will eventually buy.

If the HDB does not want to be involved in this renting operation, it can formed a subsidiary to perform this function.

My two suggestions are aimed at freely up the market for the old HDB flats, so that the seniors can realize their investment in the HDB flats and get a fair market value.

It will also provide more housing options for the newly formed families and make it possible for more people to start a famly earlier.

I am not saying that all young familes should buy the old HDB flats. Many may be happy with the current arrangement, and may opt to wait longer to buy a new flat. This option will continue to be available.

However, we should also provide the option for the young families to buy an old HDB flats at a lower price or even to rent these flats for a few years.

If you like this suggestion, please click on "Like" and "Share" it widely.

Tan Kin Lian

Saturday, April 14, 2018

How to find a buyer for your aging HDB flats

I posted a comment from Jim Lion concerning the prospect that HDB flats will have no value at the end of the lease. This would destroy the savings of the HDB owner.

This post attracted 20,000 views in 24 hours. 100 people liked it and 30 people added their comment. Most of them expressed their dismay that they were misled by the PAP leaders.

One of the commenter asked for my views - what can be done to address this shocking state of affairs. I agreed to give my reply and I do it here.

First, allow me to share my personal story. In 1983, I bought a leasehold townhouse for $650,000. I could have spent 20% more and buy a freehold semi-detached house. The townhouse in the condo with facilities looked more suitable.

After a year, I started to worry about the 99 year lease. What would happen at the end of the lease? I asked my uncle for his view.

He said - at the end of 99 years, the government will take back your property. They will pay you $0 for the townhouse. You will be damned lucky that they do not ask you to demolish the townhouse, which would be very costly.

At that time, i had thought that a building would last for 200 years and will still be liveable after 99 years. I thought that it would be unfair for the government to take the building without paying any compensation to the owner.

Nevertheless, I accepted the fate that my big investment would be worth $0 at the end of the lease.

I lived in the townhouse for 12 years and rented it out for the next 20 years. The remaining lease is now less than 60 years. I could still sell it for $2.5 million on the market or twice of this sum, if the enbloc sale is successful.

What the PAP leaders, including Mr Lee KY said, was true. A property was a good investment. There is a caveat - provided you bought it earlier at a low price!

I emphatize with the dismay of seniors who now find it difficult to sell their aging HDB flats to realize cash and to downgrade to a smaller property.

it is mainly due to the cycle of the property market now. There are more sellers than buyers. Many foreigners have left Singapore due to the economic slowdown during the past two years. Business had been bad.

Many private properties are vacant. Rental rates have fallen sharply.

There is another reason. The current government policy made it difficult for aging HDB flats to be sold. There are restriction on who can buy the HDB flats and on the use of CPF savings to pay the mortgage for the flats. These restrictions have to be revised.

I will give views on a separate post.

To these seniors, I will give a few words of comfort. Be patient. There will be a solution. Your HDB flat is still a good investment, but it may not be as good as you had thought it to be. If you had bought it many years ago, you would still be able to sell it at a profit.

Wait for my next post, OK? But I need 100 likes before I write the next post, OK?

Tan Kin Lian

Friday, April 13, 2018

How to solve the magic cube puzzle

You can watch my grand daughers Vera and Nadya solve the magic cube (aka snake) puzzle. If they can do it, you can also, right?



And this is how it is done. They learn from me.

Views about Bogor, Indonesia

Here are a few videos taken from Bogor, Indonesia.

Who pays the property tax?

Some people complain that they should not be required to pay property tax on leasehold properties. They argue that the land owner should pay the property tax, and not the leashold owners.

I do not accept this argument.

Under the law in Singapore and in most countries, the property tax is paid by the owner who tenanted their properties for short term leases, say three years or shorter.

When the lease is for a longer term, the lease agrement will specify who pays the property tax. Usually, it is the lease holder.

It does not really matter. If the owner pays the property tax, they will add it to the rental of the property. If the tenant pays the property tax, they will pay a lower rental.

So, it is more practical for the owner to pay the property tax for short term leases, as the tenant may change every few years.

However, for long leases, say 30 years to 99 years, it is more practical for the lease holders to pay the property tax.

Tan Kin Lian

Maintenance of MRT tracks

Why is it necessary for SMRT to close some stations for track maintenance during the weekends? Is this a regular feature in some other countries?

We are dealing with routine track maintenance. How long does it take to "maintain" the track? What is involved?

We are not talking about faults in trains. These faults can be attended in the maintenance depot. We are not talking about signal issues.

For track maintenance, I suspect that there are some parts of the tracks that need to be replaced. These parts are still working but does give problem to some trains some of the time.

The first step is to identify the sections of the tracks that give problems. This can be done by looking at the data that is collected when the trains pass through. I shall describe it as "smart maintenance", i.e. using data to locate faults. Is this being done?

If all the tracks that need to be "maintained" are identified, how long does it take to repair or replace these sections? I don't think it will take hours. It should be possible to carry out the work during the five hours in the early mornings, when the system is shut down.

For the maintenance work to be done effectively, we need property trained maintenance technicians who are given the right tools and are properly supervised by competent supervisors. Is this happening?

In some countries, the quality of the workforce is poor. The workers are slack. The supervisors are not competent and not on the site supervising the work. Are we facing the same syndromes in Singapore?

I repeat. I suspect that there is no need to close the tracks for regular maintenance. The work can be done using smart data analysis, competent technicians and supervisors.

This is another sign of the bad state of affairs in Singapore under the current government.

Tan Kin Lian

Tan Kin Lian

Use of CPF for lease of at least 30 years

CPF allows its savings to be used to pay a mortage of at least 30 years. But it is extremely complicated.

I tried it and got a negative response. I am not able to see the actual rules. I can only try with the calculator.

Yes, this type of convoluted arrangement is the hallmark of Lee HL. No wonder few people knew about this rule (including me). It was supposed to have been around for 5 year!

Why I cancelled 3 Grab bookings

Some people wondered why I cancelled three Grab bookings and had to pay a penalty of $5. Was I acting unreasonably? Was I acting unfairly to the Grab drivers?

This is what happened.

I asked for a Grab driver to take me from the Grassroots Club to my rented townhouse for an urgent appointment. The fare was $9. It was high, but acceptable to me.

I got a response. The driver would arrive in 9 minutes as he had to drop off the current passenger. I cancelled the booking immediately. Please note that the driver still had his current passenger.

I tried again and got a similar response. The driver would arrive in 9 minutes as he had to drop off the current passenger. I cancelled the call immediately.

I tried the third time. I got the same outcome. There was a mention of a penalty of $5, but I did not notice it. I cancelled the call immediately.

In all three cancellations, the driver was dropping off the current passenger. He was not on the way to pick me. I did not cause the driver any inconvenience.

Why was I not willing to wait for 9 minutes?

I had this bad experience on a few past occasions. On one occasion, the waiting time was supposed to be 5 minutes because the driver had to drop off the current passenger. It turned out to be 15 minutes. What happened? he said that he had to drive up and down a multi story car park.

For the other occasions, the waiting time was usually a few more minutes compared to what was reported.

Why should I pay a higher price and still have to wait for a long time? I went to the road side, hailed a taxi in 2 minutes and paid a lower fare.

Grab refused to refund the penalty of $5. I don't think they gave it to their driver. They did offer me a promotion code for $5 for my next ride. I rejected it.

The bubble in HDB flats

Jim Lion said:
I remember having debates with colleagues in the 1980s whether the HDB flats will worth zero when the 99 lease is up.
Most have unquestioned faith that the PAP government will take care of them in their old age n will never let this happen.
If you dig out videos on LKY, he did sell us at many different times that the prices of HDB flats will continue to rise forever.
This fed their faith n the cycle went on. It was only recently that the Minister bursted this bubble in Parliament.

Suddenly Sinkies woke up to the realities which they should have known all along:
1. The PAP government is deadset against welfare n has always been hard headed when money is concerned.
2. It should common knowledge on the law of how leases work.
3. Sinkies must be able to think for themselves n not be too reliant on the government to make financial decisions for them as SG has never been n will never be a welfare state.
4. Knowing that so many Sinkies rely on the government, the PAP should not have made those rosy promises about HDB flats.
5. The day of reckoning is approaching when the 99 year lease is up n the land will return to HDB n flat is worth zero. All their monies poured into the flat is gone, which is the worst investment in their lives.
6. Unless there is a drastic change, on the present course I see disaster n crisis ahead for millions of flat owners n their progeny as I have foreseen more than 30 years ago.

I am afraid that the outcome will be even worse than painted by Jim.
I agree with him that HDB flats will have $0 at the end of the 99 year lease.
Here is a worse situation - the current prices are inflated, and higher than their true value. The owners have paid too much for an asset that will have no value in a definite time in the future.
This is what happens when people rush to invest in a financial bubble. It is rather sad that the HDB flats, the bedrock of Singapore's success, turns out to be a bubble.

Tan Kin Lian

Want to be a smart nation?

I finally managed to pay the stamp duty on the tenancy. It was a really big hassle.

I had to go through so much trouble to make the payment. I must have spent at least one hour to stamp the tenancy agreement.

Someone said that the IRAS website has this kind of issues for years or decades. They did not improve, in spite of many feedbacks over the years.

I wish to make this suggestion to IRAS.

They should provide an option to pay by credit card. Many people are paying by credit card, and they do not have any issue.

I have made hundreds of payments by credit card for online purchases. It is completed easily, with no hassle. Why should I be required to spend one hour to pay the stamp fee of $110 using NETS?

I am not the only person facing this issue. I asked my tenant to pay the fee online, as I was travelling. He tried and gave up.

Here is my message to our prime minister who wants his two ministers, VB and JP, to head the smart nation. Be smart. Just introduce credit card payment as an option to NETS for IRAS. It is a low lying fruit.

You do not need to spend tens or hundreds of millions on grand projects that take years to realize.

Tan Kin Lian

Allow CPF members to invest and earn a higher return

Mr. Tan
Will CPF's low interest still provide adequate retirement needs for the middle-class after the value of one's BTO plunges after 35 years?

The low interest of 2.5% paid by CPF is inadequate to take core of the retirement needs of the members. The higher interest rate of 4% paid on the savings account is just barely adequate.

The benchmark for an adequate interest rate is a return of 2% higher than inflation.

If the inflation rate is expected to be 2% over the long term, we need a CPF return of 4% per annum. If the inflation rate experiened by the middle and lower class is actually higher than 2%, they need a higher interest rate on their CPF savings.

We know that the inflation of medical fees is much higher than 2%. For the elderly, the medical expenses form a significant part of their expenditure.

In the past, most people rely on the appreciation of their HDB flats to compensate for the low rate of interest paid by CPF. They were able to sell their flats at the appreciated value to get some cash to downgrade to a smaller flat and to spend on their retirement needs.

This method is no longer possible for most seniors. They are not able to find buyers for their aging flats, which now have a remaining lease of less than 60 years.

There is a big supply of these aging flats and a small demand. The supply and demand situation had reversed and now worked against the owners.

The method that worked in the past is not working now. Many of the seniors are strugglying with inadequate cash flow from the CPF savings and an overpriced HDB flat that they are not able to liquidate.

What is the solution?

For the immediate future, the government must change the regulation to allow CPF to be used to buy a property with a shorter lease.

The current regulation actually allows CPF to be used for a remaining lease of 30 years, but the rules are quite complex. It should be simplified.

Over the longer term, the government must allow members to opt for their CPF savings to be invested in equities to earn a higher return. Although equities may fluctuate in value from time to time, this does not concern people who are investing for the long term and can ride out the fluctuations.

CPF members can be educated to understand how to manage this risk through diversification and investing for the long term.

In Australia, many people are investing their superannuation funds to earn a yield of more than 10% a year. This is much better than the "safe" yield of 4% paid by CPF.

CPF members need a better return to earn enough for their retirement needs. The current CPF regulations should be changed. We need a new approach.

Tan Kin Lian

Thursday, April 12, 2018

Get rid of the "stupid" GRC system

Mr. Tan
Do you agree with the decision of the judge in this matter?…/high-court-dismisses-bid-for-…

I empathise with the judge. He was given a very difficult matter to decide.
The root of the problem is the "stupid" GRC system. It is better to get rid of the GRC system and revert to single seats.
There are better ways to ensure minority representation. They can be appointed as non-constituency MPs, if the minorites are not adequately represented in Parliament.

It is difficult to pay stamp duty to the government

I wish to share episode #2 of the e-stamping of tenancy agreement.

I went to the IRAS website to do the e-stamping. I had to go through a lot of trouble. It asked for a lot of detailed information. I suspect that some of the information are not necessary.

The website was also buggy. On a few pages, I had to wait for several minutes to get a response. It is not the poor internet connection in my office, as I am using fibre optics. Furthermore, I do not have the problem surfing other websites. It is the buggy IRAS website.

Finally, I managed to complete the transaction and have to make payment.

It uses NETS. I have to read their detailed instruction on the type of browser to use, etc. Wow, do we really need all this kind of hassle?

I finally got through to DBS Bank. I provided by user id and password. Then the bank asked for my token. I did not have it.

As I was travelling for two days, I asked my tenant to make the payment. It is really his responsibility to pay for the e-stamping.

On my return from overseas, I asked my tenant if he had made the payment. He told me that he tried many times and could not get through. There was issue with the version of the browser that he used. He is IT savvy and much younger than me. He also faced this trouble. It is clearly the bad website that is designed.

Now, I have to pay payment using the DBS token in my home.

Why does it have to be so complicated to pay stamp duty to the government? Why can't the government allow payment by credit card?

Perhaps the government finds the credit card charges to be too high and want to avoid it? Why can't the government set reasonable limits on the credit card charges imposed by the banks?

I am convinced that Singapore is doomed under the government of Lee HL. Each new episode reinforces this pessimistic view.

Tan Kin Lian

Tan Kin Lian

A bad business practice

I had a disagreement with Grab over their penalty for cancelling my booking. I wanted to delete the app. I checked the app and found that I had a balance of $35 (or thereabouts) in the Grabpay account. There was no way for me to transfer the balance back to my credit card.

I wrote to ask Grab Support on how this is to be done.

I received a reply that I had to forfeit all my points and incentives when I delete my app. I was asked to confirm that I wish to close my account.

I do not care about their points and incentives. I find them difficult to understand and to use. I don't know how much they are worth. I don't want to waste my time over these small things.

I had to ask them about the money in my Grabpay account. They replied that it would be forfeited when I close my account. They sent to me the "terms and conditions".

I asked Grab if they are trying to "cheat" me of this balance? Was the staff trying to help Grab to earn some revenue by forfeiting my balance? This is money that I put into the account, and not the points and incentives that Grab gave to me.

I told them that they are not authorised to close my account. I will use the balance and close the account myself.

I find this business practice to be bad.

Tan Kin Lian

A more efficient form of local transport?

Bogor is referred to as the city with "satu juta angkot", i.e. one million public transport vehicles. Angkot is short for angkutan kota or "transport for town".

It is an exaggeration. There are many angkots, but not one million. The population of Bogor is just one million.

Many of the towns in Indonesia rely on the angkot. It can take 10 people. It is a vehicle that is bigger than a taxi but smaller than a bus.

I believe that the angkot ply a fixed route. It picks up passengers from designated places but can drop them off anywhere along the route.

It is a cheap and convenient form of transport. As there are many angkots, the waiting time is short.

It helps to reduce the cost of living for the residents of the town. It also creates jobs for many drivers. I think the angkot is an efficient form of local transport.

The "light bus" system used in Hong Kong operates in a manner similar to the angkot. Most visitors and locals find the light bus to be efficient.

The big buses and the taxis in Singapore are more expensive and not convenient or efficient.

Maybe, we should rethink our mode of transport?

Tan Kin Lian

Poor customer service

I booked Grab for my trip from airport to home last night. I had a cash balance in Grabpay that I have to use, before I delete the app.

I was able to get a Grab driver within 5 minutes. As it took me 5 minutes to clear customs and walk to the pickup point, the driver had arrived. The fare was $19.

Uber showed a fare of $18, so the difference was small.

I should be able to clear off my Grabpay balance within the next two trips, so I would be saying goodbye to Grab.

My recent experience showed that the customer service of Grab is quite bad. They followed SOP blindly and turn me off. If they had exercised initiative and common sense, they would not lose me as a customer.

I hope that Grab will wake up.

This is the "mentality" of many large organizations in Singapore. Their employees apply SOP blindly and cause a lot of harm in customer relations.

I hope that our large organizations realize this weakness and address it.

Allow CPF to be used to pay mortgages for short leases

Several people have expressed concern over the difficulty faced by seniors in selling their aging HDB flats to realize cash to down grade to a smaller flat and to use their cash for retirement.

Their aging HDB flats have a lease less than 50 years, compared to the original 99 years.

The problem is an outdated policy that needs to be revised.

Currently, the bank will not finance a mortgage on a lease less than 60 years old. The CPF will now allow the savings to be used to pay for the mortgage to purchase on old flat.

The first step is to allow CPF savings to be used to purchase flats with a lease longer than 20 years. In other words, the threshold should be reduced from 60 to 20 years.

Some people may argue against this change on the grounds that a short term lease is consumption and a long term lease is "investment".

The reality is that all property is partly investment and largely consumption. It is a matter of degree.

A short lease property is cheaper. Although a larger portion of the mortgage payment is consumption, the absolute amount used for consumption is probably the same as for a longer lease property, even though the consumption proportion may appear to be smaller.

If people can get financing to buy short leases at lower prices, there will be a market for the aging HDB flats. The seniors will be able to sell their flats into this market and realise cash for their living needs.

Some younger people may opt to buy a short lease as it is cheaper. By that time, they will also realize that a property is largely consumption. It is similar to renting the property but they are locking up the rental rates over the term of the lease.

If CPF changes its rules, the banks are likely to follow the cue and offer financing for short leases. After all, the banks are financing cars on short lease of up to 7 years. What is the difference between cars and property?

The key is therefore a change in CPF rules. Will our elites who run the government, including the highly paid ministers and civil servants, wake up and deal with this looming issue?

Tan Kin Lian

Income gap

I prepared this chart to give a talk about Singapore to a group from Europe.
It tells an interesting story.

Singapore and USA have a high per capita income. But they also have a high income gap.
Switzerland has a higher per capital income than Singapore and USA and have a smaller income gap.
Germany and Austria have a lower income gap than Switzerland but their per capita income is also lower. 

Does this chart suggests that the most efficient income gap should be that figure shown for Switzerland?

Although the per capita income of Germany and Austria are lower than Singapore, the majority of their people are better off than the people of Singapore. We need to take one third of the per capita income for Singapore for the comparison, because the gap is three times of these two countries.

Monday, April 09, 2018

Shuttle bus to Singapore General Hospital

I have visited Singapore General Hospital many times during the past years. I always walk to the Eye Center from the MRT station. I did not take the shuttle bus.

Why? I was not aware that there was a shuttle bus service. The sign was not prominent.

On a few occasions where I wanted to take a shuttle bus, I was not able to find the shuttle bus stop.

I wish that there was a more prominent sign in the MRT station to show the location of the shuttle bus stop. Maybe there should put it in the location map.

Security checks at condos

I visited a condo with a big backpack. The security guard was not interested to check the content of my backback (i.e. it could easily contain some explosives). He was busy recording the particulars of a car that is visiting the condo. He is not interested to check if the car contain explosives.

I wonder what the security check was for?

Recording visitors to office buildings

I visited UOB Plaza this morning. The security guard wanted me to pass them my NRIC for safekeeping. They also asked for my mobile number, but I decline to give it to them.

I wonder what is the purpose of recording visitors to an office building?

Somebody said earlier - in case there is a fire, they will know who are in the building. Really? How often does this occur? Once in a lifetime?

What about shopping malls or cinemas? Do they need to record customers, to know who are in these places, in case there is a fire?

Why is there a need to record visitors to office buildings, which are public places?

I guess that many decades ago, some minister decided that this was necessary and the practice continue since. What a waste of manpower. No wonder we had to employ security guards from other countries, to keep the cost low.

It is better to stop the unproductive and unnecessary activities.

If there is a security risk, I prefer the security guards to check backpacks and keep an eye for terrorists carrying explosives, rather than record the particulars of visitors.

Sunday, April 08, 2018

What is your opinion of Law Minister Shanmugam

I asked this question in the Wisdom of the Crowd - What is your opinion of Law Minister Shanmugam?

50% of those who voted said that he is a bully.
39% said that he is not honest.
11% said he is capable and focused.

A total of 89% has a negative view of him.

See the breakdown of the votes in

Han HH's removal from the Select Committee hearing

I asked this question in the Wisdom of the Crowd - Do you agree with Han HH's removal from the Select Committee hearing.

36% of those who voted said that the was unfairly targeted by the panel.
24% said that she acted in a provocative manner
20% said that she was causing a disturbance.
20% said that she was minding her own business.

A total of 56% felt he removal was not justified. 44% thought otherwise.

See the breakdown of the votes in

Lengthy grilling of the historian Thum Ping Tjin

I asked this question in the Wisdom of the Crowd - Do you agree with the lengthy grilling of the historian Thum Pin Ping Tjin?

48% of those who voted said the grilling was out of focus to the main issue.
37% said the law minister was a bully.
7% said the grlling was too long.
7% said that it was necessary to question his objectivity.

A total of 93% were against the lengthy grilling.

See the breakdown of the votes in

HDB flat is no longer an investment for old age

This letter was publised in the Straits Times Forum a few days ago.

The notion that owning a Housing Board flat is an investment for old age is no longer valid today.

This is made worse by the announcement by National Development Minister Lawrence Wong that not all old HDB flats will be eligible for the Selective En bloc Redevelopment Scheme (Sers) and that once flats reach 99 years, they will have zero value and owners will have to vacate (Don't assume all old HDB flats will become eligible for Sers, cautions Lawrence Wong, March 24, 2017; and Understanding what happens at the end of a 99-year lease, Dec 28, 2017).

Presently, many seniors who want to downgrade to Built-To-Order studio apartments for the elderly are in a fix as they are unable to sell their old flats.

They stand to lose their deposits on their new flat if they cannot sell their old flat.

Most of them were hoping to downgrade and live on the profits from selling their flats but have become disillusioned.

The Government needs to step in to manage this problem and not just leave things to market forces.

Ronnie Lim Ah Bee

Seniors are not able to sell their old HDB flats

Hi, Mr. Tan,

As seen from news as reported that most of the elderly citizens/residents who staying in the old HDB apartments, which are having slightly more than half of the 99-year leasehold balance, thus now find themselves cannot really enjoy better value of the premises(assents) as retirement benefits.

Due to depreciation, and value declinding because of lease-property, thus it could be detrimental to the expection of most elderly citizens/residents as what had been earlier told in the different sceanario.

As most of the elderly citizens/residents have lesser or even no retirement fund under CPF, it would be an hardship to all of them, and would HDB offer them better amount in the "Lease Sales Back" Scheme.....???

Thanks for your comment.

HDB flat owners should understand that their HDB asset is a leasehold and a depreciating asset.

It is not different from buying a COE that last for 10 years only (and people are buying $50,000 or more for the COE) or a car that have a limited life span and will have no value at the end of its life.

They should not look at the HDB flat as an investment that will always appreciate in value. Instead, it should be just an advanced payment for the use of the flat for the remainder of the lease.

The seniors face a double whammy. They have a HDB flat that has depreciated in value due to a shorter remaining lease and to age. They also faced the additional short of a lack of demand for their flat.

The government can help to ease their burden in the following ways:

a) Encourage banks to provide a loan for short leasehold and allow the CPF to be used to pay off these loans
b) Provide financing for these old flats through the HDB.

Will the government step forward and do its part to reduce the burden for the seniors? Or will they neglect their duty?

Tan Kin Lian

Saturday, April 07, 2018

Have a curious mind, be willing to give it a try

I have shown my wooden puzzles to many people. I will share with you the most common reaction.

At least 9 out of 10 will reply - it is too difficult for me. I am not good at this kind of things.

They reflect a total lack of curiosity, an unwillingness to even give it a try. It showed a totally closed mind.

This is a characteristics quite common among Singaporeans. I think most Asians have this trait. I am not sure about westerners. Maybe, they are more open minded and curious?

I am quite different from most people. I have a curious mind. I want to try any new puzzle, even at my age!

I also learned that any new puzzle, any new challenge, can be learned. Especially, if there is someone around to teach us.

During the Genting Dream Cruise, I decided to join the Cha Cha Dance lesson. I knew Cha Cha before, but I lost it due to lack of practice. After 1 hour, I got back the basics. I will be watching a few Youtube videos to brush up.

Back to the wooden puzzles. If you want to open up your mind and curiosity, watch this video on the Magic Cube Wooden Puzzle. You can but the wooden puzzle in Jogjakarta or Bali.

Magic cube wooden puzzle

This is an interesting wooden puzzle. I call it the magic cube. I bought it in Jogjakarta, Central Java.
It is a challenging puzzle. I had to try it more than 100 times to get the solution. I created this video to show how to solve this puzzle.
Magic cube wooden puzzle.

Will North Korea give up its nuclear development?

I asked this question in the Wisdom of the Crowd - Will North Korea give up its nuclear development?

35% said that North Korea is likely to give up its nuclear ambition in exchange for trade and aid.

35% said that the North Korea leaders cannot be trusted. They are just playing a game.

15% said that the leaders wanted North Korea to prosper.

15% said that there will be peace in the Korean peninsular.

A total of 65% are positive towards the development in North Korea.

You can view the votes in

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