Saturday, March 14, 2009

Low cash value on termination

Dear Sir,
I have a PRUCASH policy that started in 2002. The annual premium is $3934. The coverage is very low at $50,000 because it is meant to be an endowment plan. The annual cashback is $2500.

I've only recently educated myself through your website and other sources on how insurance and savings should really work and realised how big a mistake I made when I bought that policy.
The cash value now is about $16000, whereas my premiums paid to date is about $27000.
If I surrender my policy now, I'll "lose" around $9000.

What is my best course of action?Should I continue with the policy and take out the cashback yearly to invest in a low-cost ETF? Or should I terminate the policy and invest in an ETF with the entire sum? The difference in yields required for me to make up that $9000 loss seems to be quite huge.

You should ask the insurance company to explain why you had to lose so much money, if you terminate it now. They owe an explanation to you.

To make a decision on whether to continue or terminate the policy, you should ask for additional information. Please read the relevant document in my website,

Interested in Part Time Work

Dear Sir/Madam:
I’m X, a permanent resident, looking for any part time job (clinic asst, office attendant, call center, packer). A copy of my resume is enclosed for your references. My email address is Y or mobile number Z.

Please register in the portal,

A prospective employer will contact you. As this is just set up, it may take some time before you get a response. Wish you all the best.

To register
Click on Worker Tab, select the postal sector and type of work, click on View (to see other candidates) and then Register.

Flaw in MAS Fast Track Process

Dear Mr. Tan,

I came across this paragraph in the Q&A issued by MAS regarding the Fast-Track process:

"Under the fast tract process, the FI is required to help me prepare a written statement, taking guidance from a checklist of questions (which incorporates inputs from FIDReC. Similarly, the representative/RM who sold me the product is also required to give a written statement, again taking guidance from a checklist (incorporating inputs provided to FIDReC).

To me, this fast tract process seems rather odd and does not make much sense. Here is a situation where I am complaining against the FI, and under this fast tract process, the FI is required to help me prepare a written statement .........

Why should the FI in this instance help me. I would have thought that the FI would try make my statement as weak as possible and at the same time make use of my statement to defend their position against my complaint.


I agree with your view. I suggest that you bring this point up with MAS.

Financial Times: Singapore acts on bank secrecy laws

Singapore promised on Friday to relax its strict bank secrecy laws in a sign of the escalating international pressure on tax evasion.

Hong Kong decided to bring its tax transparency up to international standards, and both moves advance the campaign against tax havens.

John Withers, deputy chairman of Step Worldwide, a professional body for wealth advisers, said: “If Singapore is moving in that direction it narrows down the places to which undisclosed money can easily be banked and it puts pressure on Switzerland to follow suit. It is the beginning of the end of bank secrecy.”

The moves came as the US administration endorsed a bill targeting tax havens. Tim Geithner, US Treasury secretary, promised a “much more ambitious effort to deal with offshore tax havens”.

Singapore’s concession is a big shift for a city-state accused of marketing itself as the “ultimate secrecy jurisdiction” by the Organisation for Economic Co-operation and Development at a US Senate hearing in 2007.

Singapore’s finance ministry said it would amend its bank secrecy laws in mid-2009 to take account of the OECD’s standards on exchange of information. “Once the legislative amendments are passed in parliament, Singapore is prepared to negotiate and conclude double taxation agreements that will enable us to provide further assistance for exchange of information.”

It said: “The decision . . . is in keeping with Singapore’s role as a trusted centre for finance and a responsible jurisdiction, with strong and consistent regulatory policies and a firm commitment to the rule of law.”

The promised changes will allow foreign tax authorities to request information about suspected tax evaders, although Singapore said “information fishing” would not be allowed and there would be confidentiality and privacy safeguards, as allowed under OECD rules.

Even so, its announcement will be applauded by other offshore centres that have lost business to Singapore.

Lee Kuan Yew, modern Singapore’s founding father, told bankers the city-state could not escape the pressure being applied to Switzerland. “We must move with the flow,” he said.

Last week, John Tsang, Hong Kong’s financial secretary, announced plans to legislate by mid-year to bring its tax information exchange provisions to international standards. “I believe that the business and professional community generally agrees that Hong Kong should align its arrangements for the exchange of tax information with international standards so that we can enter into such agreements with more economies.”

Singapore and Hong Kong are among 34 secrecy jurisdictions listed in the anti-tax haven bills introduced in the US Congress this week.

Friday, March 13, 2009

Management fee for REIT

Dear Mr. Tan,
I am a unit holder of Frasers Commercial Trust. Currently the pricing of the unit to pay for the management fee is based on average daily market price.The daily market price could be 15% of the net asset value of the unit when market for REIT is very low, and the number of units issued to pay for the management fee per year could be more than 6% of total number of unit, this will cause the dilution of the unit.

I suggest that the trust deed be amended. The pricing could be based on the net asset value of the unit instead of average market price when computing the number of units to be issued for Management Fee.

Mr Tan, I hope you can help us to bring this issue to the relevant authority.


More time needed to respond to MAS consultation paper

Hi Mr Tan
It is encouraging that MAS has submitted a consultation paper on investment in structured products. The review should be studied very carefully and the comments collated and set to MAS.

However, I feel that the April deadline is too short. MAS should give at least 3 months for comments.

I wish to carry out a survey and collate the feedback of the participants. I also feel it would be worthwhile to run a seminar for the public to voice their views.


Register for the Part Time Work Portal

29 workers have now regiestered for part time work in this portal. Registration is free. Tell your friends to register. When there are sufficient workers, we will actively approach the employers to offer part time work


I asked a friend in Cambodia. What language did you study in school?

He studied French initially. Around early 1990s, the main langauge of instruction was changed to English. Cambodia decided to join Asean, and follow the other countries which used English for communication.

The standard of English is now quite high in Cambodia, compared to the other countries in Indo China. Most people are able to converse in English.

World's happiest countries

Perhaps, one day, Singapore can become one of the world's happiest countries. Read here.

The 12 happiest countries are:
1. Denmark
2. Switzerland
3. Austria
4. Iceland
5. Bahamas
6. Finnland
7. Sweden
8. Bhutan
9. Brunei
10. Canada
11. Ireland
12. Luxembourg

Here are the ranking of some familiar countries:
17. Malaysia
18. New Zealand
23. USA
35. Germany
41. UK

53. Singapore
62. France
82. China
90. Japan
125. India
167. Russia

Ranking of all countries is shown here.

Tuesday, March 10, 2009

Loss of SGD 70 trillion in 2008

The world suffered a loss of SGD 70 trillion in 2008. This is the drop in asset values in all the markets around the world. Prior to this drop, the world had assets of probably between $150 to $200 trillion. Is the world really poorer now, compared to 2007? Were the assets destroyed?

The same assets (i.e. businesses, hotels, properties) were still around. They are now partly unutilised, due to the drop in consumer demand, but in terms of physical quality, they are not impaired. In this case, why should they be considered as losing one third to half of their value?

This is a weakness of the free market system that formed the foundation of the economic system that has now collapsed. By depreciating the value of these assets to this extent, the world does not become better. In fact, it becomes worse when the values keep wpiralling downwards. People react to this situation by cutting down on their speding, making matters worse for the wider economy.

To solve this problem, we must give people the confidence to continue spending as before. This will generate demand, which will create employment, help to pay for the mortgage on their homes.

A possible solution: give people access to personal credit (especially if they lose their jobs or suffer a drop in earnings).

SCMP:Investment complaints for SFC

The Monetary Authority has referred to the Securities and Futures Commission seven complaints regarding a licensed bank’s promotion of Lehman Brothers investment products, to decide whether follow-up action is needed. The authority has received 20,345 complaints so far about the Lehman Brothers products and is investigating 4,876 cases.

SCMP:Minibond blame for government

About 60 per cent of respondents to a Civic Party survey said the government had to share responsibility for the minibonds saga. Of 1,000 respondents, 72 per cent said the Monetary Authority and Securities and Futures Commission failed to make full reports of their bank investigations.

WSJ: Sands President Abruptly Resigns

Read this report. This resignation may cause problem with Marina Bay Sands.

Minibond Investors

There are two groups coordinating the Minibond investors:

a) Group 1 (Minibond Victims Group) coordinates the investors who bought from the banks

b) Group 2 (Minibond Investors Action Group) cooridnates the investors who bought mainly (but not exclusively) from the brokerages.

Group 2 wish to inform the investors about their website, as follows:

I wish to advise investors to study the approach taken by the two groups and to decide which group suit your interest better.

Gilbert Goh's book: How to survive unemployment

Video of book launch. This is a useful book for people who are retrenched or unemployed.

SCMP: Former finance chief willing to testify about Lehman fiasco

9 Mar 2009
Former secretary for financial services and the treasury Frederick Ma Si-hang yesterday said he was willing to testify in the Legislative Council about the Lehman Brothers minibonds fiasco, but refused to comment on the proceedings so far. "You all know that I have always been very co-operative with Legco," said Mr Ma, who also served as secretary for commerce and economic development before he resigned for health reasons. "But since I am no longer an official, I do not have access to all the records {hellip} If I go, it will just be me and my brain." His successor, Chan Ka-keung, has told Legco that he did not know what a minibond was until the fiasco. Mr Ma refused to reveal how much he knew about minibonds, saying: "You will have to wait for the Legco hearing."

Monday, March 09, 2009

Tough Job Market

A first time job seeker said, "I am disturbed about threats from ridiculous employers during interviews. They said that this is an employer's market. Frankly, they are out to exploit fresh graduates with unreasonably low pay offers, e.g. $2.200 for 24/7 standby and plenty of unpaid overtime opportunities".

An employer said, "Our graduates are still not adjusting to realities. They still have high expectations".

Many businesses are finding it difficult just to survive. So, they cannot afford to pay high salaries. Even the businesses that are profitable are making lower profits compared to previous years. They are reluctant to pay high salaries.

What are your views? Survey.

Here are the survey results.

Creating jobs

We are now in an economic recession. More workers will be retrenched. There will be a bigger pool or unemployed people and first time job seekers competing for a diminishing number of new jobs. 

We need an innovative way to create new jobs that never existed before. These are jobs that exist in the community, for example, to take care of the environment, to take care of elderly people and children, to improve education, to run errands and to work in small businesses in the nerighbourhood. They will not be full time work, but part time work that is  paid by the hour.

We need a new way to match the people who are willing to do the part time work with the employers who have work to be done. The employer should look for workers that live nearby, so as to reduce travelling time and cost to get to work. This matching has to be done in an efficient and inexpensive way. 

I have created a new portal that will allow the matching to be done. It will be launched soon. Meanwhile, interested workers are invited to register in this portal.

This portal is also targeted at students who wish to have part time work during the school vacations.

The part time worker has to register in the portal and provide a mobile number as the contact. A potential employer will send a SMS to contact the part time worker for a telephone interview.

I hope that the publicly funded organisations will take the initiative to create some of these part time work in the community.

Tan Kin Lian

Debt Advice Tips

Read this article.

Survey: How will you vote in the General Election (2)?

Take part in this survey
Here are the survey results based on 219 replies.
Here are the comments given by some respondents. 

Key finding
If the alternative parties are able field credible candidates, 89.9% of the respondents will vote for the alternative parties. 

The main reasons are:
> alternative voices in Parliament 80.2%
> make PAP listen more to the people 72.0%
> more active debate in Parliament 64.3%
> dislike high salaries of ministers 62.3%
> a more just society 48.3%

Reasons give to vote PAP are:
> stablility in Singapore 66.9%
> PAP has been a good government 45.8%
> ensure Singapore's continued prosperity 38.1%

These scores are quite close to the previous scores based on 121 replies.

Survey: Suicide in universities

Participate in this survey.
Here are the survey results (48 replies)

Sunday, March 08, 2009

Better than the free market

Many people think that the free market is wonderful. It allows people to work hard, accumulate wealth and improve their standard of living. This is only partly true.

The free market is also a place where the strong exploit the weak and smart, dishonest people  get away by cheating the naive. For example, look at the complicated financial instruments introduced by dishonest people to make hundred of million dollars, which led to many ordinary people being financially destroyed. This is the bad aspect of the free market.

As we rebuild the future, we have to find an alternative to the free market. I like to introduce the concept of the "fair market", which has the positive aspects of the free market, but it inclujdes the restraints to prevent cheating and exploitation. 

The fair market requires the elected leaders to discharge their responsibilility in looking after the interest of the ordinary people. The leaders cannot just sit by and leave matters to be decided by the "free market". These leaders with a clear vision of what is good for society. They have to embody the values of honesty, fairness, public service and courage.

We also need the people to understand that they have to be more self-less, rather than be selfish or self-centered. This is best explained in the following poem by Martin Niemoller.

First they came for the Jews
and I did not speak out because I was not a Jew.
Then they came for the Communists
and I did not speak out because I was not a Communist.
Then they came for the trade unionists
and I did not speak out because I was not a trade unionist.
Then they came for me
and there was no one left to speak out for me.

Tan Kin Lian

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