Pay an adequate hourly rate

I found, to my surprise, that casual workers are paid as low as $3 an hour, for example, at fast food outlets.

If they work for 8 hours a day, they earn only $500 a month. This is too low to make a living. The cost of living is quite high.

I suggest that the minimum wage should be at least $6 an hour. A person working 8 hours a day should earn about $1,000 a month all-in.

Maybe $6 is still inadequate, but it is better than $3.

Digital navigation system a hazard?

Editor
Forum Page
Straits Times

I refer to the letter entitled "Digital navigation system a hazard?" by Michael Yeo Khee Hiang (St Times, 10 Sept).

I have tried a few PDA and PC-based navigation systems in my car over the past 12 months.

They are very useful and quite safe to use. All provide clear voice directions and do not require the driver to watch the video screen.

By giving directions earlier, it helps the driver to keep to the correct lane and drive more carefully. It avoids accidents due to unfamiliarity with the roads.

It may take a new user a few days to get used to the system. During the initial period, the problem raised by Michael Yeo could arise. But, the benefit will accrue after that.

I encourage more cars to be installed with the navigation system to promote safe driving.

Tan Kin Lian
(sent in my personal capacity)

Car sharing for newly qualified drivers?

The Editor
ST Online
9 September 2005

I refer to the letter from Tan Tiong Heng (ST Forum Online 8 Sep 2005).

NTUC Income operates the car sharing scheme to provide an afforable means for its members to share the use of the cars owned by the cooperative. We operate a fleet of 180 cars located at 70 convenient locations. The current fleet serves 5,200 members.

At present, we impose a condition that a member must have at least 30 months of driving experience. This is to reduce the incidence of accidents. If there are many accidents, the cars will not be available and will adversely affect the quality of service to other members.

New drivers can borrow a car from family members, friends or colleagues. They also often benefit from being accompanied by another experienced driver while practising.

We do not think it is suitable for the car cooperative to mix the needs of new drivers with the general needs of our members. Nevertheless, we do adopt a flexible approach and will be prepared to waive the 30 month bar if the applicant can demonstrate his car handling capability.

We have taken note of the views of Mr Tan. We will see if we can set aside a few additional cars to serve the needs of newly qualified drivers.

Lewis Chen
General Manager
NTUC Income Car Co-Op

Risk is to your advantage

I advise investors to invest in a large, well diversified mutual fund, such as the combined fund operated by NTUC Income. They ask, "is it risky?"

I reply, "yes, but risk is to your advantage". Here is my reason:

- if you invest $100,000 to earn 2.5% for 10 years (ie a safe investment), you will get $128,000

- if you invest to earn 6% (ie a risky investment), you will get $178,000.

- risk can work both ways - you can get more or les than $178,000 at the end of 10 years

- if you get more than $178,000, you can realise your investment

- if the market is bad and you get less than $178,000, you can wait 1, 2 or 3 years for a better time to realise your investment

- risk is to your advantage, if you can wait for the right time to realise your investment.

Many people who attend my educational seminar agree with my statement, "Risk is to your advantage". They choose a fund that has a higher proportion invested in equities.

A wonderful message

A reader of my blog sent me this wonderful message:

Dear Mr Tan

Thanks for putting in the extra effort in writing a blog. Yours is very informative and straight to the point. No nonsense, short and sweet. It's the best I have ever come across.

Fuel Subsidy

Poor countries face a dilemma with rising oil prices.

If the government keeps the domestic price low, they bear the cost of the subsidy. Their people can take advantage of the subsidised price and buy more and make a profit from re-selling the fuel.

If they adjust the price to reflect the world market price, the ordinary people cannot afford the higher price.

What should they do?

Trading in Structured Warrants

Dr Larry Haverkamp wrote an article in Business Times. He said:

- many people are trading a lot of money in structured warrants
- last month the amount was $1 billion, representing 20 per cent of the stock exchange’s total trading volume
- structured warrants are a "zero-sum" game; for every $1 million won by some people, others will lose $1 million.

Dr Haverkamp also told me separately:

- the structured warrants are created by the issuing banks
- they set its price at issuance
- issuing banks are also the market-makers
- they do not reveal how much they charge for issuing the warrants OR for market-making

I have never invested in structured warrants, structured deposits and other complicated products. Without full disclosure of their costs, I prefer to avoid them.

I favour to invest in unit trusts that offer low charges. The investments are likely to earn an average of 5% to 8% per annum over the future. If the charges are less than 1%, I will be able to keep most of the profit for myself.