Saturday, April 24, 2010

Renting your neighbour's car

There is an interesting scheme operating in the UK. Read this article.

ST Forum: Should MAS act?

MANY claims have been made by aggrieved investors in Singapore and other countries of malpractices in the creation and sale of collateralised debt obligations (CDOs) by investment banks.

It was also reported that the United States authorities may investigate other banks that pushed similar CDO products. This is expected, given the copious structures of CDO products prevalent then.

On April 16, Goldman Sachs was charged by the US Securities and Exchange Commission (SEC) with fraud in the structuring and marketing of a debt product tied to sub-prime mortgages.

The SEC alleged that Goldman structured and marketed a synthetic CDO that hinged on the performance of sub-prime residential mortgage-backed securities, and which cost investors more than US$1 billion (S$1.4 billion).

This latest revelation sheds a new light on the debacle and has created widespread public outcry in the US.
But in Singapore, there has been silence from the authorities, although the stakes in Singapore alone are huge, exceeding $100 million of investors' money.

This turn of events prompts at least two questions.

First, should the Monetary Authority of Singapore not open its own investigation into troubled CDOs sold here? In the meantime, should the Government at least stop channelling public deals and business to investment banks that concocted the products, as it suspended local distributors from derivatives sales, until they agree to open their books for scrutiny?

Second, how will the Financial Industry Disputes Resolution Centre (Fidrec) take this into consideration in cases under its judgment in which investors claim mis-selling and malpractice by local distributor-agents and the originator-banks they represent?

How should Fidrec factor this circumstantial evidence into its final decisions pending the outcome of the charges in the US and potential investigations here? Should decisions be deferred or at least be conditional?
Investors, I am sure, look to a constructive and supportive response from the two authorities. For many, this could be the answer to their prayers on what remains a personal dilemma.

Quek Soo Beng

Foreign ownership of Australian property

Dear Mr Tan,

I just read on bloomberg that Australia is going to toughen rules on non-citizen ownership of australian property. The boom in commodities and natural resources, plus lots of liquidity coming from rich Chinese have escalated their property prices over the last year or so.
Seems like the australian govt is pretty sensitive to local concerns and high property prices, even though some statistics indicated only less than 1% are foreigner buyers.
My comments
An important duty of any government is to make sure that housing is affordable to the population. The government should prevent property prices from being inflated by foreign buying, especially if prices are pushed up and the profit is taken away by the foreigners.

Goldman Sach's Prosecution

Goldman Sach's Prosecution threaten to open the floodgates on Wall Street. Read this article.

New migrants

Read this article by Seah Cheang Nee.

HDB dwellers can try RTM1 for World Cup

FOOTBALL fans, good news if you are among the 80 per cent of the population living in public housing. Leonard Lim, Chan U Gene & Jeff Ang.

FOOTBALL fans, good news if you are among the 80 per cent of the population living in public housing.

Chances are, you will be able to catch 20 World Cup games live and another 11 delayed on a free-to-air Malaysian channel - if the unthinkable happens and Singapore fails to secure the broadcast rights to the football extravaganza.

And some HDB dwellers who can receive Indonesian channels such as RCTI and Global TV may even be able to watch all 64 matches live.

Cashew Nut

Friday, April 23, 2010

Seniors and Finance

This article describes the top ten mistakes seniors make with their finances.

TKL Intelligence Quiz (7 houses)

I sold over 1,800 copies of volume 2 of the TKL Intelligence Quiz. There are a few copies left as my print run was only 2,000 copies. I was surprised at its popularity.

Vol 3 is now available for sale in the major bookstores and can also be purchased online for $7.90.

One fan asked me to produce more puzzles, entirely at difficult levels. I have produced a soft copy of a book containing 24 puzzles involving 7 houses. A sample of the puzzle can be downloaded for free here. If you like it, you can purchase the soft copy for $4.90 online.

Tan Kin Lian

Platform for PMET

Mr Tan,

It will be very good if you could create a platform for the "old & poor" PMETs to network and connect.
They may team up to do somethings meaningful with their experiences & resources. Thank you.

Please suggest what are the features that should be made available in this platform or portal. If anyone wish to lead in this portal, please send email to

Article on land banking

Hi Mr Tan,

Having read about " Investing land outside Singapore" in your Blog, I came across this Updated April 2010 Article that says it all: Nevermind the source but go for the facts.

Investing in land outside Singapore

Someone sent me an e-mail to explain the "professional approach" taken by a land banking company operating in Singapore in submitting applications for approval for development for green belt land in the UK. Some other people said that investing in these land banking plots is similar to investing in properties in Singapore.

Some knowledgeable people told me the following poitns:
a) The land banking plots were sold at 20 to 30 times of the real value of the greenbelt land
b) The chance of getting approval is very slim (and I guess that it must be less than 1%)

Many  investors have told me that they invested in these plots and, after waiting for many years they have still not got back their investments. If they sell now, there are no buyers for their plots. Some investors bought the land with an option to sell the land back after 6 or 12 months to the promoter. The options were not honored. They were asked to roll over the investments or to wait for new funds to be available in the future. It will be a long wait.

Tan Kin Lian

Buy insurance directly

Aviva has taken the bold step to offer motor insurance directly to the public. Some motorists have found the premium to be much lower than the rates charged by other insurance companies. A few examples have been posted in this blog.

I encourage commuters to use the quotation service available in Aviva's website to compare their premium rate with the premium rate charged by your current insurer. You can get an idea about the difference in premiums. If Aviva is much lower, you can consider to switch to them on the next renewal.

You should also look at the Term Insurance rates that is offered by Avivia. You can select a level or decreasing cover. Please send their quotes for me to make a comparison against the benchmark set in my book, Practical Guide on Financial Planning.

My benchmark is rather high. If you find a premium that is higher than my benchmark, you should avoid it. In most cases, you should be able to get a premium rate that is lower than my benchmark.

Tan Kin Lian

New fare structure for public transport

A new distanced based fare structure is being implemented in Singapore. The aim is to charge the fare based on distance and not on the number of connections. Under the new structure, those who have to make several connections will pay less (compared to the past) and those who had a direct bus will pay more. Those who have to pay more under the new structure complained that the change is unfair to them.

I believe that this change is necessary and will benefit the public in the long run. It will allow the public transport system to be runned in the most efficient manner and for fewer bus routes and (hopefully) more efficient feeder services.

My wish is for feeder services to be cheaper and have shorter waiting and travelling times. I do not mind taking a feeder bus to the train station or bus interchange and to take a long distance bus (with few stops) to reach my destination. I am used to making transfers between bus to train and from train to train. It is acceptable to the majority of commuters who are mobile. (The needs of the elderly and the handicapped may have to be served differently).

I hope that the public will be patient and try to get used to the changes and the new system. I am hopeful that it will be better.

Tan Kin Lian

Upfront payment

There are a few cases of private schools that closed down, causing large financial losses to students who paid the upfront fees for an education course of one, two or three years. The Ministry of Education has decided to regulate the industry, because the closure of these schools has given a bad reputation to Singapore.

This reminds me of unregulated investment schemes where the promoters promised to pay back the investments after 6, 9 or 12 months at an attractive rate of interest. When the investments mature, the promoters gave all types of excuses and refused to honor the payback arrangement. Complaints to the authority and the police were not followed up.

This is also giving a bad reputation to Singapore. They also have to be regulated. It is easy for the promoters to collect money from investors and difficult for the investors to get their money back.

It is best to avoid all types of unregulated investments. There is no way for you to do due diligence, if the scheme was set up with the purpose of defrauding the public and the regulator is not willing to take the matter to court. This advice is contained in my book, Practical Guide on Financial Planning.

Thursday, April 22, 2010

Land banking investments - survey

If you wish to share your experience in land banking investment or contact other investors in similar situations, click here. It can be both positive or negative experience.

Tan Kin Lian

Public transport fares

I WAS surprised to read in yesterday's report that bus and train fares will go down by 2.5 per cent ('New bus, train fare system').  To peg charges to the distance travelled is a great system of calculation. Thank you, Public Transport Council, for such a good move.
Bennie Cheok

Bus, train fare system must be fair to all THE Public Transport Council's decision ('New bus, train fare system'; yesterday) to implement a distance-based system to calculate transport fares with effect from July 3 is a novel approach.
While the council says it will lead to greater savings for nearly two out of three commuters, my concern is for the third of commuters who must pay a higher transport fare than at present.
It seems highly unusual that we have to penalise a significant number of commuters just because they have a direct route to their destinations. Through no fault of their own, they find themselves having to pay more so that the majority can pay less. There should be as much fairness as possible and this should not be at the expense of the minority, or anyone for that matter.
The aim should be to improve everyone's life while not worsening anyone's life in the process. I hope that future fare calculations will be done with this in mind.
Gregory Lou

Part time work

Are you interested to do part time work at Tampines St 92 and petrol stations in Serangoon North and Mandai to promote a new taxi calling service? You have to distribute leaflets to taxi drivers and explain the service to them. This is suitable for older people in their 40s or for students during the holidays. The pay will be based on hourly rate and will be for 4 hours a day or longer. If you are interested, you can call Song Kwang (mobile: 97110423) or send an e-mail to

NOTE: If you know of someone interested in this part time work, please tell them about it. Pass the word around.

Wednesday, April 21, 2010

Winning elections

Some views from Yoong Siew Wah.

My comment
It is better to lose an election honorably than to resort to dirty tricks to get re-elected.

Reputation of Shopping Malls

Dear Mr. Tan
A land banking company is using temporary space in Vivocity. They seem to be using legitimate real estate to introduce land banking and high yield investment offerings. The same compay also uses space in Raffles City.

To what extent do the owners of these locations have a responsibility to ensure that the space they rent is used ethically and legally ?. And to what extent does their brand image suffer by being associated with non-ethical investment programs ?

Certain shopping malls in Singapore  have a reputation for cheating consumers even though the majority of retailers in those locations are honest.  High end brands wont move to those locations because of that reputation. Rents and reputation suffer accordingly. Some of these high end shopping malls should perhaps think about how many cheating retailers it takes to make a bad reputation.


Liberal arts education (2)

This is a learning philosophy. Read this letter.

Buy motor insurance directly

Dear Mr Tan,

I wish to share a low-cost online purchase of car insurance with Aviva.
Please share this in your blog if you like.

My profile: Male, 34, married, zero NCD, driving license 7 years, indoor job, 2005 used car, 1.4liter, zero demerit point.
Annual Premium: is $1503 ($500 excess, zero NCD, any 25 years old & above can drive, pay in full with credit card).
I have 5 other car insurance quotes and the next lowest annual premium is $1900+.

I heard over the radio (Class 95) that Aviva is new to the car insurance market in Singapore, They are taking away the middle man and streamline the back office operation and therefore giving a good deal to drivers.
This is a good buy direct service with the Internet.

My comment
It will be easy to get a quote from Aviva through their website.  You do not need to wait for the next renewal date. You can ask for a quote for your current year and compare with your existing premium, just to get an idea about how competitive they are.

Land banking story on CNA - 18 April

The land banking story was aired on 18 April. I was not able to watch it (as I was interviewed at the same time on another programme). Can those who watched it shared your views?

Pain of separation

As I was entering the departure hall at Jakarta Airport, I saw a scene that touched my heart. A little girl (maybe 5 years old) was crying loudly. She was clinging to her father who was leaving Indonesia, probably to work overseas. Her grand parents were trying to console her.

I was very sad that families had to be broken in this manner and that the parents had to be separated from their small children to work overseas. Many of these parents are working in Singapore as domestic maids and foreign workers. Many employers do not like their maids to use the telephone as they may "cause trouble". The maids are also discouraged to telephone to their families at home.

I hope that the employers realise that these maids and foreign workers have family and children back at home. Let us help them to lessen their pain of being separated from their family.

Tan Kin Lian

Photogragh and fingerprints of travellers

I was delayed for 30 minutes at the immigration counter at Jakarta airport. The delay was due to an exercise to capture the photograph and fingerprint of visitors. A friend who arrived in Jakarta later in the day was delayed by 3 hours.

It would be quite troublesome to visitors, if all the countries decide that they need to capture the photographs and fingerprints of all visitors. Surely, the information can be captured once, e.g. at the home country, and can be allowed for access by immigration authorities in all the countries that are being visited?

Perhaps a global organisation like Google or Microsoft can provide this service and encourage immigration authorities to access a common server? As a traveller, I am happy to have the images captured once and be accessed globally.

Tan Kin Lian

Visitors to TKL blog

I used to have 2,500 to 3,000 visitors to my blog during weekdays. This week, it increased by 50%. Why is there a sudden jump? Is someone asking other people to visit my blog?

Gold Investment Program

Dear Mr Tan,

I've recently come across a gold program which provides a guaranteed return of 9% in 6 months through the purchase of physical gold - good delivery bars (999.9).

The outline of the program is as follows:
Day 1: Client purchases and collects gold based on retail price, less initial Cash Discount 3%, plus GST 7%
Day 90: Client receives 3% Sell-Back Incentive - credited into the client's bank account.
Day 180-187: At this point, client needs to decide whether to keep the gold or exercise a sell-back option. The two scenarios are included below.
(a) Keep the gold: Receives 3% bonus
(b) Exercise Sell-Back option based on purchase price: Receives 3% bonus, 7% Sell-back bonus equivalent to GST, agreed Sell-back price (100% of Purchase Price)

In effect, by choosing (b) the sell-back option, clients will receive a 9% nett return.
After the conclusion of the six-month agreement, clients may choose to take up a new 6-month agreement.
Would like your thoughts on the program?

The retail price of the gold sold to you is likely to have a high markup from the wholesale price. If the price of gold drops, the promoter is likely to default on the buy-back option, so you will have to keep the gold at its depreciated price. You will suffer a further loss from the markup that you paid.

If more people are buying into this program compared to those who redeem, the promoter may honor the buyback option to entice you to re-invest and get more friends to join in. This is how a ponzi scheme operates.

Avoid all types of unregulated invetment products. Read the tips in my book, Practical Guide on Financial Planning.

Financial Underwriting

Dear Mr Tan,

Recently, I wanted to buy an Aviva term insurance with coverage of $350k that covers premature death, In the application form, I was asked to list down the insurance policies that I already had. Subsequently, our insurance agent informed us that Aviva would require us to furnish them our financial information which includes submission of income tax assessment as my total coverage for all his policies is more than $1m.

I would like to enquire whether it is a norm for insurance company to request for financial information and whether I should submit to Aviva as I find that the information required is quite personal. Is it true that one could not have coverage more than $1m?

Most insurance companies needs to do financial underwriting - where the total sum insured exceed a large sum. This is to prevent moral hazard. Different companies have different thresholds. I think that $1 million is probably a reasonable threshold to ask for this information. Although Aviva is covering for only $350k, it is still necessary for them to consider the total picture.
You can read my book, Practical Guide on Financial Planning,  for tips on buying life insurance coverage.

Philosophy of Life - Mexican fishermen

Source: e-mail sent to me

A boat docked in a tiny Mexican fishing village.
A tourist complimented the local fishermen on the quality of their fish and asked how long it took him to catch them.
"Not very long." they answered in unison.
"Why didn't you stay out longer and catch more?"
The fishermen explained that their small catches were sufficient to meet their needs and those of their families.
"But what do you do with the rest of your time?"
"We sleep late, fish a little, play with our children, and take siestas with our wives. In the evenings, we go into the village to see our friends, have a few drinks, play the guitar, and sing a few songs. We have a full life."
The tourist interrupted, "I have an MBA from Harvard and I can help you! You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat."
"And after that?"
"With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers.
Instead of selling your fish to a middle man, you can then negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to Mexico City , Los
Angeles , or even New York City !
From there you can direct your huge new enterprise."
"How long would that take?"
"Twenty, perhaps twenty-five years." replied the tourist.
"And after that?"
"Afterwards? Well my friend, that's when it gets really interesting, " answered the tourist, laughing. "When your business gets really big, you can start buying and selling stocks and make millions!"
"Millions? Really? And after that?" asked the fishermen..
"After that you'll be able to retire, live in a tiny village near the coast, sleep late, play with your children, catch a few fish, take a siesta with your wife and spend your evenings drinking and enjoying your friends."
"With all due respect sir, but that's exactly what we are doing now. So what's the point wasting twenty-five years?" asked the Mexicans.

And the moral of this story is: Know where you're going in life... you may already be there.

Immigrants into Singapore

Read this article by Yoong Siew Wah.

My comments
The writer said that 30,000 PMETs have lost their jobs and are still unemployed. I do not know if this figure is accurate. Can someone help to find the source?

Tuesday, April 20, 2010


This cartoon would be considered as defamatory in Singapore. It is why Singaporeans learn to shut their mouth. How sad. We breed a nation of people without courage or character.

Gambling with the economy

The banks have forgotten their roles in raising funds for industry. They are now operating a large casino, taking bets. Read this story.

My comment
I sat in an interview panel of students applying for a place in a university. Half of the students wanted to work in a bank or the finance sector. This is bad for the future of the country. They want to earn big money from a business that makes its profits from gambling, and pretending to be other than gambling.

Private banking - legal suits between banks and clients

Read this report.

ATM Funds transfer in Jakarta

Several banks in Jakarta allows customers to transfer funds at ATM machines by entering the amount, recipient account number and a reference number. The ATM will show the name of the recipient for confirmation. The reference number allows the recipient to know who made the payment.

Our banks in Singapore now allow customers to transfer funds through ATM machines but does not allow a reference number to be entered. The recipient does not know who made the payment.

I hope that our banks in Singapore can provide a similar service, i.e. allow the funds to be transferred by ATM and allow a reference number to be entered. This will reduce the need for customers to send cheques for business payments. It will improve efficiency. I hope that MAS can encourage the banks to offer this service.

Tan Kin Lian

Monday, April 19, 2010

Personal sacrifice by Goh Meng Seng

Goh Meng Seng helped me to deliver the Mandarin version of my speeches on several occasions to the investors at Hong Lim Park in the last quarter of 2008.  His assistance to me, and to the investors, was invaluable.

A mutual friend told me that Meng Seng is selling his HDB flat to raise funds for the general election campaign in Tampines. He is the Secretary General of the National Solidarity Party. I check with Meng Seng to verify the accuracy of this information and he replied:

Yes, I am selling my flat to raise some funds for my campaign. As the leader of the party and the Tampines team, I need to build up my war chest in preparation for the eventual battle.I am able to do this basically because my wife and daughter are working and studying in Hong Kong and I am taking care of my aged mother (81 years old) by staying with her now. Most importantly, I am fortunate to have a very understanding and supportive wife. Freedom is not free. Pursuing Freedom and providing others the freedom of choice is not free. Some have asked me why don't I just take a personal loan. I don't like to have too many liabilities in life. On the other hand, selling my flat may serve me well. If I lose, so be it. Maybe by then, it would be much easier for me to join my family in Hong Kong to start fresh again. It is never easy to maintain a family in two places. If I win, I would be able to buy a flat in Tampines and become the Full Time MP there. Things will have to be rearranged in either outcomes.I think the most important thing is for people to realize that politics is about public service; not just opposition politics, but it is expected of the ruling party politicians as well. Public service may mean sacrifices on both financial as well as family time. Meng Seng
My comments
Meng Seng is sincere and willing to serve the people of Singapore. I like to wish him success. I hope that Singaporeans realise the personal sacrifice that people like him have to make to make to provide an alternative voice for the people.

HDB's place in Singapore's history

Richard Lu wrote about the special place of HDB in Singapore's history and how the role has changed (in the wrong direction) over the years. Read his article here

My comments
I agree with his view that HDB flats should be kept affordable and should not be a means of generating wealth. .

World Movement for Democracy

This organisation held its general assembly in Jakarta. President Yudhoyono opened the meeting. This important meeting was not covered in our Singapore media. Here is a report in Temasek Review.

Lucky Tan and Mini-bonds

Read this article by Lucky Tan.

From 5Cs to 5 Ks

Are Singaporeans still craving for the 5C's : Car, Condo, Credit Card, Club membership and Career?

Looks like Car & Condo will be elusive because of Higher COEs and High Property Prices for now whereas, on the other hand, looks like some are concerned about the 5K's

Kiasu (scared of losing)
Kiasee (scared of dying)
Kiabor (scared of wife)
Kiaboh (scared of having nothing)
Kiachenghu (scared of government)


Sunday, April 18, 2010

US Securities Exchange Commission sues Goldman Sachs

The US Securities and Exchange Commission has taken the bold step to sue Goldman Sachs for fraud in connection with the creation of complex financial products that are sold in the market. They involve the packaging of the sub-prime mortgages into collateralized debt obligations and credit default swaps. One argument put forward by the SEC is that Goldman Sachs knew that the sub-prime mortgages were already in trouble at the time that these products were created.

This is only the first step. Many other investment banks were also involved in creating similar products and may face similar actions by the SEC.

Our equivalent of the SEC is the Monetary Authority of Singapore. I hope that our MAS will also see if there is scope for similar actions to be taken in Singapore in respect of the complex products that were sold here. These products, such as the Mini-bonds and Pinnacle Notes, have caused huge losses to the retail investors in Singapore.

Tan Kin Lian

News clippings:

Reward for finding car key $30

There is a reward. Click here:

Overseas orders for Financial Planning book

I received a few orders from overseas for my book, Practical Guide on Financial Planning. I am not sure if they are from Singaporeans who live or work overseas or from foreigners who like to learn about financial planning for their own environment. A large portion of my book contain financial education that is applicable in other countries as well.

Tan Kin Lian

COE and car prices

I spoke to someone, who is familiar with the motor trade. He made the following points:

a.  The recent change resulted in a drop of 40% in COE allocation. This caused COE prices to shoot up due to the cut and also to increased demand generated by fear of further price increases. It is better to have a more stable market, rather than fluctuating prices to drive consumer behavior.
b.  Taxis are now in the same category as private cars. They should be kept in a spearate category as the owners of taxis are driven by commercial consideration.
c.  There is need to improve the feeder services, so that more people will take the train and buses at the interchanges.
d.  Taxis should be considered as public transport. They are more efficient than cars and do not require parking spaces. The taxi fares should be simplified into a flat rate structure. Taxi drivers should be allowed to own a taxi licence and build a taxi business, rather than be renters of taxis.

I agree with these points and will bring them up at the TV program tonight. I will also raise them in other occasions in my blog.

Tan Kin Lian

Vera has artistic intelligence

I made the shape of a cat using the tangram pieces. I asked my grand-daughter Vera (3 years old) what is the picture. She looked at it for a short time and said "Cat".  Next, I  made the shape of a man sitting down. She said, in a naughty manner "House". Later. She said "Man". My tangram book containing 100 puzzles and solutions, will be available soon and can be bought online.  I will take advanced orders now.

Tan Kin Lian

Inadequate savings for retirement

The Sunday Times have an article that showed that many people have inadequate savings for retirement. Why is this the case? The same question was posed to me by a journalist recently. I gave the following reasons:

1. People spent too much money on their property.
2. They got a poor yield on their savings in life insurance policies, due to the high charges which takes away more than 30% of their accumulated savings
3.  They were badly advised by insurance agents to switch from an earlier policy to a new policy, incurring the high upfront charges again. This can occur several times during a working lifetime.

Better late than never. Consumers should be educated to avoid bad investment decisions.  They should spend $12 and 12 hours to read my book, Practical Guide on Financial Planning.  This book also contains tips to the consumers on:

a. What to do with their existing life insurance policies
b. What should they do with their future savings?
c. How should they invest their money during retirement?
d. What type of life annuity should they pick?
3. How much should they spend on a property?

They should advise their children to start their working career on a proper footing and avoid making the same mistakes. Order online.

Tan Kin Lian

Investors of Pinnacle Notes

A US law firm, Kirby McInerney, has spoken to investors about possible legal action that can be taken in US Courts in connection with the Pinnacle Notes. 45 investors have expressed interest to join this action. Other investors of Pinnacle Notes who are interested can send an e-mail to quoting the following: your name
mobile phone
email address
amount invested
type of Pinnacle Notes.

Tan Kin Lian

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