Saturday, November 17, 2007


My friend told me that he is importing sneakers to be used for line dancing. It is a special shoe that can bend backwards, and is good for dancing.

What is a sneaker? I found the definition from Wikipedia:

An athletic shoe is a generic name for a shoe designed for sporting and physical activities, and is different in style and build than a dress shoe.

Originally known as sporting apparel, today they are known as casual footwear. Athletic shoes, depending on the location and the actual type of footwear, can also go by the name trainers (British English), sandshoes (Australian English) running shoes or runners (Canadian English, Australian English, Hiberno-English), sneakers (North American English, Australian English), sport shoes, gym shoes, tennis shoes, tennies, sneaks, takkies (South African English).

High cost of motoring

My friend told me that the cost of motoring has shot up significantly.

1. It now cost more than $100 to fill up a petrol tank.
2. ERP charges have increased
3. Parking charges are very expensive.

I advised him to use public transport, i.e. MRT and buses and to carry a public transport guide (available for $6 from a bookstore). It is convenient and cheaper and avoid the stress of driving along congested roads.

He agreed to consider my suggestion.

Invest in the Singapore market

Dear Mr. Tan

I read your posting where you said that a 10% correction in the Singapore stockmarket will bring the index down to 3,500 but you prefer to wait for a level of 3,300 to invest.

The index is now at 3,440. Should I wait for 3,300? Will it go lower?


Honestly, I do not know. It is difficult to catch the bottom of the market.

If you are investing a small sum monthly, it does not matter when you enter the market as you will be averaging the cost of your investment.

If you are investing a large sum, perhaps you can break it down into three installments and invest them over the next three months? The current level has already shown a correction of more than 10%.

Invest in Singapore equities

Hi Mr. Tan,

Currently, I have some money sitting in POSB savings account which I do not need it for the next few years.

I am thinking of parking some of this money in the NTUC Income Trust fund. I understand from the company website that the fund's average performance since its inception in 1994 is 9% per annum.

What is your opinion of this fund since it was started during your tenure as its CEO? Best


This fund is largely invested in Singapore stocks and bonds, and have a fairly modest expense ratio. It is all right to invest in this fund, if you are happy with the current level of the Singapore stockmarket.

My preference is to invest in the STI Exchange Traded Fund, which has a similar risk profile, lower expense ratio and is probably more flexible.

If you have a stockbroker, you can ask them about this fund. If you do not have a stockbroker, then you can invest in the Trust Fund.

The Trust Fund performed well in recent years due to the strong stockmarket. You will find that the STI EFT performed much better. However, past performance should not be taken as an indication of future performance.

As a general rule, you should expect a return of 6% to 8% on equities over a long period in the future and a lower return on bonds.

Friday, November 16, 2007

Household Income Disparity

Someone told me that Singapore has a high Gini coefficient, which indicates a wide disparity of income. I searched Google and found the following information from Wikipedia.

The disparity in household income had widened in 2000, reflecting the faster income growth for the higher-income households.

The Gini coefficient, a measure of income inequality, rose from 0.446 in 1998 to 0.481 in 2000. Other measures of income inequality also indicated similar trend of increasing disparity in household income.

In the United Nations Development Programme Report 2004, Singapore's Gini coefficient based on income is 0.425 in 1998, which is ranked 78 among 127 countries in income equality. Here is the ranking of countries:

1 Azerbaijan
2 Denmark
3 Japan
4 Sweden
14 Germany
26 South Korea
28 India
31 France
40 Indonesia
52 United Kingdom
73 United States
79 Singapore
83 Hong Kong
89 China
96 Malaysia
123 Mexico

The income disparity in Singapore is worse than UK and USA, but is better than Hong Kong, China and Malaysia.

Thursday, November 15, 2007

Exchange Rates

I wanted the exchange rate between New Zealand dollar and Singapore dollar for the past three years.

I searched Google and provided the keywords SGD and NZD. It showed a list of websites. I chose the finance website and clicked on Exchange Rates.

By selecting the two currency codes, I was able to get the exchange rate for up to 5 years. It was very helpful.

I am discovering each day, the wonders of the Internet.

Dual Currency Investment

Hi Mr Tan,

I started investing in a SGD/AUD DCI 3 years ago, while waiting for the AUD to depreciate to a more favourable level.

I did a few rounds of DCI at an interest rate of 5%+ pa for 1-month tenure and then went into 1-month SGD time deposit (~1.5% pa) for manymonths when the AUD was too high as I did not wish to get converted at that level.

I went into a 1-month DCI again after the AUD came down and got converted to AUD 2 years ago. I then switched between AUD (base)/SGD (alternate) DCI earning interest rates of 5.5% to 7.5% pa. and 1-month AUD time deposit (5.2% to 5.8% pa) when the spot rate was too far away from my conversion strike price (tobreakeven).

In 26 months, I made about 5.13% pa from my initial principal.

I was converted back to SGD at a profit (strike price higher than previous conversion rate), was in SGDbase/AUD alternate DCI for a couple of months, got converted to AUD, and was subsequently converted back to SGD at a profit again.

Now with the AUD near an all-time high and being so volatile, I've gone into a DCI paired with EUR at 4.8% p a for 1-month tenure. This is a temporary measure while I wait for AUD to come down to a more comfortable level before I enter into SGD/AUD DCI again.

Eventually, I wish to get converted to AUD at a favourable exchange rate and intend to place the funds in an AUD time deposit and stop the DCI.

On hindsight,I should have done this earlier which will earn me more in terms of fixed deposit interest without takingrisks. But I couldn't tell back then that the AUD would strenthen so much.


Congratulations on selecting the right currency and making the right timing.

I wonder, if you had invested in straight AUD during this period, would you have earned a much higher return? I suspect that it would have been much better for you. Maybe, you could do some calculation and share the results with me?

Medical insurance from BUPA

Dear Mr. Tan

I'm wondering if I should have myself and my family covered under BUPA? What medical insurance plan did you buy for yourself and your family?


BUPA is a British insurance company that offers worldwide medical insurance with very little restriction. I suspect that their premium rates will be very costly.

Can you find out about the cost of the BUPA plan, and the coverage. Ask them to tell you what the cost is for the current year, and over the next 10 years (taking into account the increase in age, and also the inflation in the premium rates in past years). You will be able to make a better decision, when you have the figures.

I bought the Incomeshield for me and my family. I may decide to cancel these insurances. I can pay the medical bills from my personal savings. I do not really need to be insured.

Inflation in Singapore

Mr. Tan,

What are your view on the inflation in Singapore. Are we experiencing just a little inflation of 1~2% or it is higher? I feel that transportation and health care costs are increasing but I am unable to pin-point how it is reflected in the inflation rate.


The method used to calculate the inflation rate, or consumer price index, is probably not satisfactory. This applies to many countries, not only Singapore.

The key drawback is the time delay in capturing the changes in the price. For example, many people already see that rental rates, for housing and offices, have already increased. But it affects only people who rents the property and whose leases have come up for renewal. The full impact may take a few years to be fully reflected in the inflation rate.

A better method is to reflect the changes in the prices more quickly, but it requires a different approach. Who wants to decide to make this change? The statistician will follow the traditional method (which was devised a long time ago), unless there is a decision taken by a visionary leader.

Private Shield

Hi Mr Tan,

I wish you can read the newspaper article on Sunday Times on 4 November, about a person who lost 40 years of hard earned Medisave funds, just because he wants to save on the premium on a private Shield plan.


For every person in this unfortunate situation, there must be many thousands of people who paid a lot more in insurance premium for unnecessary coverage.

Many people do not have sufficient savings for the future, because they spent too much on unnecessary coverage during their younger days, due to poor advice given to them by people with vested interest.

If you are insured under Medishield, you should go to a subsidised ward, where the cost is capped. There is no need to go to an expensive ward or private hospital and incur unnecessary medical cost.

In the case mentioned above, I was told that this person did not have any coverage, not even Medishield. If he had bought Medishield, he would not have to wipe out 40 years of Medisave savings. He only needs to pay the Deductible and Co-insurance.

Dual Currency Investment


I have been doing dual currency investments for 2-3 years as I have a need for a particular foreign currency.

DCI allows one to earn a higher interest rate while waiting to get converted to a foreign currency at a more favourable exchange rate (by setting a strike price which is lower than the spot exchange rate). Of course, if the spot exchange rate drops below the agreed strike price, one will "lose out".

One needs a medium to long-term investment horizon when going into dual currency investments so that if one gets converted into the alternate foreign currency (assuming this is NOT desired), one can do another round of DCI to convert back to SGD.

The interest rate quoted can be quite high (eg. 18%) as it contains an "option premium" (it is higher when the volatility index shoots up like in August 2007) over and above the fixed deposit rate.


If you have made a profit from your investment in Dual Currency products over three years, I am surprised. Perhaps you can send an e-mail to me? I like to discuss your actual experience.

Limited upside gain for a Dual Currency deposit

Dear Mr. Tan,

About three months ago, I was persuaded to buy a dual currency deposit. It was for the Japanese Yen. I wanted to buy Japanese Yen as I saw that it was rising. I was persuaded to pair it with Singapore dollar and given 18.2%.

I took it and eventually when it matured two weeks later, I got back Singapore dollars. Based on your calculations, would it be better for me to buy yen straight? My gut feeling was that I faced unlimited downside risk and was deprived of unlimited upside gain for a small return since it was only two weeks interest.

I will not go for a dual currency deposit in the future.


I am not sure if your 18.2% quoted is correct. If so, then you earn 0.7% for 2 weeks (i.e. 18.2% * 2 / 52 weeks).

If you have invested in the Yen directly, you could have earn 2% to 5% for the period, if the Yen had appreciated significantly. If the Yen had depreciated 2% to 5%, you would have taken the entire loss.

I would not take the risk of a large loss (say 2% to 5%), for a limited gain, i.e. 0.7% for 2 weeks?

Shield plan to supplement employer's medical benefit

Dear Mr Tan

I am working in a Stat Board and am covered under the CCS scheme. The medical bill is taken care of in the proportion of 85% (employer) and 15% (employee). For my dependents, it will be 60% (employer) 40% (employee).

Q1. Should I take a Shield Plan in addition to the medical benefit ?

Reply: I suggest that you and your family take the Medishield plan from CPF, instead of a private Shield plan. The premium should be quite low for young people.

Q2. Should I buy a lower plan, as I do not mind a lower grade ward in Restructured Hospital?

Reply: The MediShield plan from CPF is adequate. It is the lowest cost plan.

Q3. Is the Moratorium Underwriting offered by Aviva is good ?

Reply: Can you give me more details about this feature? I am not familiar with it. More improtantly, will Aviva accept you under the moratorium underwriting when you retire from work and do not have any Shield plan previously?

Q4. How do you compare Aviva's Shield Plan which offer free cover for children if both parents are insured with them, as compared to that offered by NTUC Income's and say Prudential ?

Reply: I do not have details about these covers. Generally, I find that there is no need for the parent to buy a private Shield plan, if they are covered by their employer.

Q5. The CCS medical benefit will not go with me when I leave service with the Stat Board. I need a personal medical plan to take care of the uncertainty.

Reply: If you have a Medishield plan, it will cover you when you leave your current employer. If you are healthy, you can upgrade to a more expensive plan at that time. If not, you can continue with your Medishield plan. Medishield covers B2 ward and is quite acceptable for most people, even for me.

Q6. If I have my own Shield Plan, should I request to convert to the MSO medical scheme where employer pays me a certain % of my salary as medical benefit ?

Reply: It is a good idea to convert to the MSO medical scheme. How much is the additional contribution to the CPF by the employer? I hope that this is an adequate sum.

Multi Level Marketing

Dear Mr. Tan,

What is your comments on the financial model of Sunshine Empire?

I was approached by one agent early this year asking me to join. I find it difficult to believe the returns after listening about the business model. I did not invest.

My good friend, who was very smart in school, invested recently. When news broke of MAS warning, I had a discussion with him on the flaw of the financial scheme, but he insisted that it was no different from other investments.

The thing that troubled me a lot is that sometimes smart people can have very naive view of financial, maybe out of the greed of a good return. Or maybe is it really that there is nothing different between Sunshine Empire and other financial schemes?


I am not familiar with the business model of Sunshine Empire. Can you send some brief details to me?

Generally, I avoid all investment schemes of this kind. I do not spend time to listen to the sales talk.

Wednesday, November 14, 2007

Investing in New Zealand Dollars

Which is better?

Option 1: Invest in NZD for 1 month and earn 7.7% per annum. If NZD appreciate, you earn the appreciation. If it falls, you suffer the loss.

Option 2: Invest in a Dual Currency deposit and earn 8.0% per annum. If NZD appreciate, the bank keeps the appreciation. If it falls, you suffer the loss.

I decided on option 1. Here is my calculation.

I assume:

1) Chance of appreciation: 30%, average gain 1%. Expected gain 0.3%
2) Chance of depreciation: 70%, average loss 1%. Expected loss 0.7%
3) The difference of 0.4% for 1 month is 4.8% for 1 year, which is the difference in interest rate between NZD and SGD

If NZD depreciates, I suffer a loss in both cases.

If NZD appreciates,
- under option 1, I get an additional 0.3% for 1 month
- under option 2, I get an additional 0.025% for 1 month (i.e 1/12th of 0.3%)

Why does option 2 give such a poor return for the risk (i.e 0.25% instead of 0.3%)? I suspect that the bank keeps the difference.

Dual Currency Investment - My Experience

I wanted to place a fixed deposit in New Zealand Dollars to enjoy a higher interest rate.

The relationship manager of the bank tried to get me to invest in a Dual Currency Deposit. She wanted to get the currency specialist to see me and explain the product.

There was no need for a visit. I was able to find the description of the product from the website. Here are the key facts.

Basically, it offers a slightly higher interest rate, but on maturity I get the weaker of the two currencies.

By earning a slightly higher interest rate, I forego any appreciation in the New Zealand dollar. On the other hand, if this currency drops, I have to bear the entire loss.

I decided against the Dual Currency deposit. I prefer to have a lower interest rate and enjoy the full impact of any appreciation in the currency (while taking the loss on a depreciation).

Here is the explanatory note:

Dual Currency Plus is not a deposit but an investment product. With Dual Currency Plus, the principal sum and returns are repayable either in the currency in which the investment is made (“base currency”) or an alternative currency (“linked currency”) at maturity. Early withdrawal of Dual Currency Plus is not permitted. Dual Currency Plus is inherently speculative in nature and carries risks. In particular, foreign currency market movements are unpredictable.

If the proceeds at maturity are paid in the linked currency (as opposed to the base currency), there is a possibility that you will suffer a loss on your principal sum when compared with the amount of the base currency initially invested.

As your investment is denominated in a foreign currency, you are advised to consider the impact of any foreign exchange risk on the net returns of your investment. Foreign exchange controls may be imposed by the country issuing the foreign currency from time to time and may delay or prevent the repayment of principal amount to you.

Capital guaranteed product

If you want your capital to be guaranteed, it is better to buy government bonds. You can get about 18% in total over 5 years.

If you buy any structured product that is "capital guaranteed", you are likely to get a return of less than 10% over 5 years. The cost of structuring and marketing the product will take away up to 10% in total, leaving you with a smaller return.

In most cases, the product issuer will invest a major portion of the money in government bonds or similar instruments to avoid take a risk exposure.

The "structuring" does not improve the product. It adds to the high cost, and is deducted from your return.

Many investors in these types of structured product have obtained a poor return over the past seven years.

If you are offered any capital guaranteed product, ask a few questions, such as:

1. How does the issuer invest the money?
2. What is the charges taken away to structure and market the product?
3. What is the chance of earning a higher return, and what is the amount of the higher return?

When you get the honest answers to these questions, you will realise that the product does not give any value to the investor.

Dubai Metro

From Wikipedia

The Dubai Metro will be a driverless, fully automated metro network under construction in Dubai, United Arab Emirates.

The network will have two third rail collection system powered lines that will both run underground in the city center and on elevated viaducts elsewhere on double tracks.

The first phase of the network is being built by Dubai Rapid Link (DURL) Consortium which comprises Japanese companies including Mitsubishi Heavy Industries, Mitsubishi Corporation, Obayashi Corporation, Kajima Corporation and the Turkish company Yapi Merkezi.

The Dubai Metro will be operated by the Dubai Road and Transport Authority. The Dubai Metro system will be the longest fully automated rail system in the world. Completion of the first section of the system is projected for 2009.

Plans for the Dubai Metro began under the directive of Dubai Ruler Sheikh Mohammed bin Rashid Al Maktoum who expected Dubai's other projects to attract 15 million visitors by 2010. This combined with Dubai's rapidly growing population expected to reach 3 million by 2017 and severe traffic congestion necessitated the building of an urban rail system to provide additional capacity to public transportation, relieve motor traffic, and provide infrastructure for additional development.

In July 2005 a design and build Contract was awarded to a consortium known as Dubai Rail Link (DURL) that is made up of Japanese companies including Mitsubishi Heavy Industries, Mitsubishi Corporation, Obayashi Corporation, Kajima Corporation and Yapi Merkezi of Turkey.

The first phase (worth AED 15.5 billion\ US$4.2 billion) covering 35-kilometers of the proposed network, including the Red Line between Salahuddin Road and the American University in Dubai and the Green Line from the Qussais 2 to Jeddaf 1, is to be completed by May 2009.

Extensions to both routes are included in the second phase, which is now expected to be functional by 2010.

Dubai Municipality Public Transport Department projects to carry 1.2 million passengers on an average day, 27,000 passengers per hour for each line, and 355 million passengers per year once both lines are fully operational. Bus routes and stops will be organised around the backbone provided by the rail system.

When completed, Dubai Metro will have a total of 70 kilometres (43.5 miles) of lines, and 42 stations (including 9 underground stations). It is estimated that it will comprise 12 % of the total trips in Dubai. Taxi stations and park-and-ride facilities will be included in key Metro stations. Trained wardens will accompany passengers on the Dubai Metro system to help with emergencies.

Dubai Metro network
There are four lines which use 99 five-car trains each 75-meters long with seats for 400 passengers:

Red Line: 50-kilometre (31-mile) line with 35 stations from Jebel Ali Port, the American University in Dubai, through the city centre, and to the Airport Free Zone.

Green Line: 20-kilometre (12.4-mile) line with 22 stations from Festival City, through the city centre, Dubai International Airport Terminals 1 and 3, and to Rashidiya.

Blue Line: 47-kilometre line along Emirates Road, exact route currently unknown.

Purple Line: 49-kilometre line along Al Khail Road, meant to be an express route between Dubai International Airport and Dubai World Central International Airport.

Rail Transit system in Dubai

Dubai is building a rail transit system, similar to our MRT. It will be ready in 2009. It will run from along Sheik Zayed Road, which is the main road in the modern part of Dubai. In most parts of the system, the rail will be above ground. This is less costly and faster to build.

Postal service in Dubai

In Dubai, each person rents a post box at the post office. Mail is delivered to the postbox. The owner has to collect his mail from the post box.

This appears to be a common system in the UK. People visit the post office to collect their mail.

In Singapore, we are used to mail being delivered to our residential address.

Tuesday, November 13, 2007

Value of financial advice

Dear Mr. Tan,

In your view, are the commissions paid to insurance agents too high? What is the situation in other countries? Please be frank.


In some countries, the financial adviser helps the customer to achieve significant savings from income tax or estate duty. To qualify for these savings, the customer has to meet certain requirements. These are complicated for the ordinary person. They need the professional advice of the financial adviser.

Although the financial adviser earns a large commission, the customer still achieves a net saving from the savings in income tax or the higher return from investing their savings in the life insurance or investment product.

A good example are the tax incentives given to encourage people to save for their retirement, such as superannuantion funds in Australia or the 401k in America.

This type of tax savings is not available in Singapore.

As the financial adviser is not able to create any tax saving for the customer or give other tangible value, it is important that the commissions should be kept low.

In my view, the customer is better off by investing in large, well diversified, low cost funds.


In Malaysia and Indonesia, the commission rates are about 30% to 50% lower than similar products sold in Singapore. These limits are set by the authority to ensure that the products offer fair value to the consumers.

In my view, the commission rates in Singapore are too high. In the case of NTUC Income, the commission rates are lower than the market - so their products provide relatively better value to the customer.

Monday, November 12, 2007

Public transport in Dubai

I visited the Deira City Center Mall.

I wanted to take a taxi to return to my hotel. The taxi queue was long. I asked the shop attendant how long it I had to wait in the queue. She estimated 30 minutes.

I went to look for an alternative. I wanted to take a bus or shuttle that will take me to another location. I might be easier to find a taxi from there. Several people could not give me the direction to the bus stop.

I returned to the taxi queue. I finally managed to get into a taxi after waiting in the queue for over 1 hour.

The public transport in Dubai is inadequate. It is difficult to get a taxi and buses are hardly used. Most people depend on a car, and the roads are congested.

Sunday, November 11, 2007

A good time to invest in the stock market

Hi Mr. Tan,

The stockmarket has corrected. When is a good time to invest in the stockmarket? At what level?


It is difficult to pick the bottom. Some people think that it is all right to invest when the market has dropped 10% from its peak. Based on this formula, the right level is 3,500 on the Straits Times Index. I prefer to wait for it to drop further to around 3,300 on the ST Index.

Poor return to policyholder

A friend told me about the business model operated successfully by a life insurance company in Singapore.

1. They paid high commission to the insurance agent. They organise sales contests and provide attractive prizes such as overseas trips and motivational activities.

2. The high marketing cost are added to the product. They use high projection to make the product look attractive to the consumer. These projections are "not guaranteed".

3. Their agents are well trained to highlight the marketing points of the products. They are trained to brush aside the negative aspects, under the technique called "overcome objections".

4. After the customer buys the product, they are locked into it for 20 to 30 years. They have incurred the upfront cost and can only get out by suffering a large loss. The policyholder get a poor return.

5. This company has successfuly applied the same marketing model and made a lot of profit in several Asian countries.

Guaranteed return plus bonus

Someone asked me, "How is it possible for an insurance company to guarantee a return of 2% on its product, and give bonus on top of it"? Can it invest all of its funds to earn 8% of which 2% is guaranteed and the remainder is not guaranteed?

Can the Central Provident Fund operate on this model in paying its interest rate?

Here is my reply:

1. When the insurance company guarantee a return of 2%, it will invest 70% of its funds in government securities to earn 3.5% (the current rate). The remaining 30% will be invested in equities to earn an average of (say) 7% per annum. The average return on the fund is likely to be 4.5%.

2. After deducting about 1% to cover its expenses and profit, the insurance product can give a return of about 3.5%.

3. It is not possible for the insurance company to give a guarantee of 2% and invest all of its funds in equity to earn 7%.

Lesson: If you wish to get a good return, you have to take the risk and invest in an equity fund. If you invest for the long term, say 10 years or longer, you can average out the return over good and bad years.

If you wish to have a guaranteed return, you can get at best a return of between 2% to 4%. It may be better to invest in government bonds to earn close to 3.5%.

Policy with annual payout

Dear Mr Tan,

An agent wanted to sell me a life insurance product with an annual payout. Is this a good product?


When you pay this type of product which is offered by several insurance companies, you are paying two premiums:

1. $x is used to provide the death and maturity benefit, like an endowment policy
2. $y is being used to provide the annual payout back to you.

The problem is that the agent earns a high rate of commission on the $y and you actually get back less than $y from the second year onwards. The $y completely disappears from the first year.

It is better for the policyholder to pay $x for the endowment policy (and get a return of 3% to 4% per annum) and save the $y in a bank account. At least you get the $y back every year, with interest at say 1%. This provides better liquidity and flexibility.

Alternatively, you can invest the $y in a unit trust and take your risk and reward.

Dubai - work around the clock

I woke up at 3 am Dubai time. There is a time difference of 4 hours, so it is 7 a.m. in Singapore.

I went to the hotel lobby to access the wireless internet. I was surprised to find that the lobby was brightly lighted and that several people were busy with work. It seems to be in the evening hours, rather than the early morning. Dubai never sleeps!

In my hotel, there were many workers from mainland China providing front line service. They speak English well. Previously, these jobs were filled by workers from India or the Philippines.

Avoid abusive comments

Someone has been posting abusive comments against insurance agents and the Revosave product. I have blocked more than 1 dozen of these comments during the past few days.

I will only allow comments expressed that shows respect to other people.

Regulation of financial products


There are two sides of a coin and it's not always fair to say that this company or product or agent is bad or good without considering the context where the event took place.

By the way, since MAS is the regulatory body, if such practices are not condoned, how come never shut them down?


For the past five years or more, the regulator (i.e. MAS) has taken the approach that the product issuer is required to disclose certain specific details of the product. Each consumer should take his or her own financial decision.

This has led to the following situation:

1. Many financial institutions design products that offer poor value to the consumer.
2. The life insurance or structured product is disclosed in a document that cover 30 to 100 pages.
3. The document is difficult to understand, even for an expert.
4. The agent who markets the product makes a verbal summary that is different from the written document. The customer is misled, but does not have any evidence.

Many consumers invested billions of dollars in these types of products that make huge profits to the distributors and issuers, but give a poor return to the consumer. My friend said that ten of thousands consumers have been "taken for a ride".

I hope that the regulator will review its approach and ensure that the financial products are fair to consumers. It is difficult for a lay person to be able to look through the complex product and know about its drawbacks.

On my part, I will do my best to educate the consumers, by writing in this blog. .

Simplified taxi fares

Recently, there were press reports about over-charging by taxi drivers preying on tourists. This will give a bad image of the taxi service in Singapore.

The source of this problem is the de-regulated taxi fares. The differing fare structures and many surcharges are confusing to the public. This allows bad taxi drivers to exploit the situation.

We have to adopt a regulated, simplified fare structure. I suggest the following:

1. Have a higher flag down fare (say $3.50) and an increase (say 10%) in the charge based on distance. Allow the fare to increase according to time, if the taxi is caught in a traffic jam.

2. Abolish the surcharge on peak hours and for ERP. Allow the taxi driver to pay a flat daily fee (say $20) and avoid paying any ERP charges.

3. Reduce the taxi call charge to $1. This will help to cover some of the cost, but should not be a source of profit to the taxi driver. It makes more efficient use of the taxis.

The basic fare can be adjusted to ensure that there is a balance between supply and demand for taxis. It should cover the operating cost of the taxi and offer a fairly attractive earnings to the taxi driver.

Autumn in Dubai

I am now in Dubai. It is approaching autumn. The weather is like Singapore, but slightly cooler. Many people are not aware that Dubai is in the temperate zone, and has four seasons. It is very hot in the summer, and can be quite pleasant in winter.

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