Saturday, June 19, 2010
Easysearch Portals
There are many useful information in the Easysearch Portal. Go to http://www.easysearch.sg/ and click on the Link tab. Select a category and view the resources.
Poor service in restaurant reservations
I wanted to reserve a table at a Tung Lok restaurant at the Esplanade. I went to their website and filled up a web form for Reservation. I provided the essential information. Nobody called me back for two days. I consider that my reservation is not accepted. I arranged to go somewhere else.
I have the same difficulty in making reservations at other restaurants. Last month, I telephoned a restaurant in a hotel in Queen Street. After much difficulty, my reservation confirmed over the telephone. When I turned up at the restaurant, there was no record of my reservation and no table was available. There was a large wedding dinner.
I hope that the larger restaurants takeing reservations should outsourse this activity to a service provider. This will ensure a better standard of service.
Tan Kin Lian
I have the same difficulty in making reservations at other restaurants. Last month, I telephoned a restaurant in a hotel in Queen Street. After much difficulty, my reservation confirmed over the telephone. When I turned up at the restaurant, there was no record of my reservation and no table was available. There was a large wedding dinner.
I hope that the larger restaurants takeing reservations should outsourse this activity to a service provider. This will ensure a better standard of service.
Tan Kin Lian
Voting swing at next general election
I wish to make a bold forecast of the swing against the PAP at the next general election.
In several recent surveys in my blog, the swing is around 50%. Nearly 90% of respondents said that they would vote for another party, compared to 35% at the last general election.
However, my blog tends to attract the people who are unhappy with the Government, i.e. those who lost money on the structuerd notes or are unemployed. So, there is a bias and their results do not represent the general population.
My bold forecast is that the swing will be 15%, after discounting the bias. This will bring down the votes for the PAP from 65% to around 50%. We can expect the next Parliament to have a larger representation from the other political parties.
This will lead to a "more accountable Parliament" with members elected to reflect the views and wishes of the people. It will be a better outcome for the future of Singapore.
Tan Kin Lian
In several recent surveys in my blog, the swing is around 50%. Nearly 90% of respondents said that they would vote for another party, compared to 35% at the last general election.
However, my blog tends to attract the people who are unhappy with the Government, i.e. those who lost money on the structuerd notes or are unemployed. So, there is a bias and their results do not represent the general population.
My bold forecast is that the swing will be 15%, after discounting the bias. This will bring down the votes for the PAP from 65% to around 50%. We can expect the next Parliament to have a larger representation from the other political parties.
This will lead to a "more accountable Parliament" with members elected to reflect the views and wishes of the people. It will be a better outcome for the future of Singapore.
Tan Kin Lian
Land banking - Look before you leap
Read this article in MAS website.
Quote
After all, where there is an opportunity for you to make some money, there is always a chance that you can lose some or all of your money. There is no free lunch. In the case of land banking, you may have seen media reports about investors losing money in land banking schemes in various countries. Some schemes have also turned out to be scams!
Unqutoe
Quote
After all, where there is an opportunity for you to make some money, there is always a chance that you can lose some or all of your money. There is no free lunch. In the case of land banking, you may have seen media reports about investors losing money in land banking schemes in various countries. Some schemes have also turned out to be scams!
Unqutoe
Plan ahead for future MRT interchange stations
Published in Straits Times Forum Page, 19 June 2010
When the MRT system was developed three decades ago, the planners did a great job in designing the interchange station at City Hall and Raffles Place. It is easy for the commuter to change train by walking to the platform within a short distance.
However, the planners did not plan ahead for the expansion of the MRT system.
When the North East and Circle Lines were developed later, the platforms for these lines at the interchange stations had to be located quite far away, due to engineering and safety issues. Commuters have to walk quite a long distance to transfer from one line to another at the Dhoby Ghaut and other interchange stations.
As we are building new lines for the MRT system, it is better to plan ahead for future interchange stations, including those that are not on the drawing board now.
I suggest that every third station on a new line should be planned ahead as an interchange station, using the design of City Hall. This will make it easy to connect a new line in the future. Although this may increase the cost marginally, it can be recouped from the cost savings in the future. The convenience to the commuters will be immense.
Tan Kin Lian
When the MRT system was developed three decades ago, the planners did a great job in designing the interchange station at City Hall and Raffles Place. It is easy for the commuter to change train by walking to the platform within a short distance.
However, the planners did not plan ahead for the expansion of the MRT system.
When the North East and Circle Lines were developed later, the platforms for these lines at the interchange stations had to be located quite far away, due to engineering and safety issues. Commuters have to walk quite a long distance to transfer from one line to another at the Dhoby Ghaut and other interchange stations.
As we are building new lines for the MRT system, it is better to plan ahead for future interchange stations, including those that are not on the drawing board now.
I suggest that every third station on a new line should be planned ahead as an interchange station, using the design of City Hall. This will make it easy to connect a new line in the future. Although this may increase the cost marginally, it can be recouped from the cost savings in the future. The convenience to the commuters will be immense.
Tan Kin Lian
Customer Service and Web Forms
Many organisations have feedback forms on their website. These forms are often ignored, giving a bad impression of the customer service standard of the organisation.
This situation can be easily addressed. The contact center should be made responsible to attend to these forms. The forms are an alternative to getting a call on the telephone. By processing the web forms, the organisation can improve the productivity of its call center as most of the essential information are entered by the customer. If any information is missing, it can be obtained by a call back to the customer.
The web from should be simple in design. It only need to ask for the name, contact number, e-mail address (optional) and a free format text box for details to be entered. All enquiries are placed in the server and marked as attended or not. This ensures that all requests are handled.
I hope that organisations will organise this additional mode to contact the call center. It will improve the standard of customer service in Singapore.
Tan Kin Lian
This situation can be easily addressed. The contact center should be made responsible to attend to these forms. The forms are an alternative to getting a call on the telephone. By processing the web forms, the organisation can improve the productivity of its call center as most of the essential information are entered by the customer. If any information is missing, it can be obtained by a call back to the customer.
The web from should be simple in design. It only need to ask for the name, contact number, e-mail address (optional) and a free format text box for details to be entered. All enquiries are placed in the server and marked as attended or not. This ensures that all requests are handled.
I hope that organisations will organise this additional mode to contact the call center. It will improve the standard of customer service in Singapore.
Tan Kin Lian
Friday, June 18, 2010
Good customer service (SMRT Taxi)
I experienced good customer service at SMRT Taxi. I called their hotline. They asked me to enter my postal code (if I wanted to get a taxi) or press a number to speak to a person. The call was answered immediately. The staff took down my name, e-mail address, telephone number and nature of my enquiry. I get an e-mail reply from the relevant staff within one hour.
I commend SMRT Taxi for this excellent service. It is easy and prompt. Many big organisations can follow this simple approach to improve customer service significantly, and at no extra cost.
Tan Kin Lian
I commend SMRT Taxi for this excellent service. It is easy and prompt. Many big organisations can follow this simple approach to improve customer service significantly, and at no extra cost.
Tan Kin Lian
Bad customer service (Maybank)
I experienced bad customer service with Maybank. I sent a fax to their Johor Bahru Main branch to send me a new cheque book. They did not respond after a week. I called their number. Nobody picked up the phone. I tried with 4 other numbers. It was not answered.
I called their KL contact center. I went through the automated mesages and finally managed to speak to an officer taking complaints. She said that I have to call the Johor Bahru Main branch and give me two new numbers to call. I tried several times, but nobody pick up the phone.
I called the KL contact center again, and lodged a complaint about the bad customer service. I insisted that they take down my complaint and tell the Johor Bahru branch to call me back. She ageed. She was patient and helpful. I commend her.
Many big organisations had bad customer service due to bad operating procedures, which are unfriendly to customers. The customers who have to wait for a long time on a telephone that is never answered. A better solution is to allow the customer to give their name, e-mail, contact number and request in a web based form. The call center can also used this form to enter down the key details. This will allow the relevant staff to call back the customer when they are free.
Tan Kin Lian
I called their KL contact center. I went through the automated mesages and finally managed to speak to an officer taking complaints. She said that I have to call the Johor Bahru Main branch and give me two new numbers to call. I tried several times, but nobody pick up the phone.
I called the KL contact center again, and lodged a complaint about the bad customer service. I insisted that they take down my complaint and tell the Johor Bahru branch to call me back. She ageed. She was patient and helpful. I commend her.
Many big organisations had bad customer service due to bad operating procedures, which are unfriendly to customers. The customers who have to wait for a long time on a telephone that is never answered. A better solution is to allow the customer to give their name, e-mail, contact number and request in a web based form. The call center can also used this form to enter down the key details. This will allow the relevant staff to call back the customer when they are free.
Tan Kin Lian
Buying Cash Value Insurance
Read this article. A consumer ask about a cash value insurance that he is considering. There are many interesting and educational comments from other readers about this product. These comments generally apply to Singapore as well.
Thursday, June 17, 2010
Signage at the Circle Line
I can only guess that the lights were dimmed during the first stage when the line served Bishan to Serangoon. The line had been extended to Marymount for nearly one year and still the lights have not been fixed. What is the reason?
I take the Circle Line only a few times and observed this situation. But there are many commuters who take taking this line daily. Why did they not raise this matter? What about the employees working at the stations?
Is this the state of apathy in Singapore? If so, it would be quite worrisome!
Tan Kin Lian
Accident Photos
If you meet with an accident, please take photos of the damages to both vehicles and send them to your insurance company. You should also keep the photos in your e-mail server for future retrival. If you like an additional place to store the photos, you can use the e-mail account indicated in this document. Read the instructions.
Donation to FISCA
An anonymous reader criticised me for asking for the donation of $1,000 (in return for accepting an invitation to listen to a presentation by a land banking company) to be given to the Financial Services Consumer Association (FISCA). He said that I headed FISCA and that it is more proper for the money to be donated to a charity.
FISCA is a volunatary, non-profit association of members, with the goal to educate the pubmic on financial matters, so that they can void being cheated on their investments in bad financial products. It needs funds to operate and pay its expenses.
I hope that the public will donate to FISCA and also be its members.
Go to http://www.fisca.sg/.
.
FISCA is a volunatary, non-profit association of members, with the goal to educate the pubmic on financial matters, so that they can void being cheated on their investments in bad financial products. It needs funds to operate and pay its expenses.
I hope that the public will donate to FISCA and also be its members.
Go to http://www.fisca.sg/.
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Selective repayment
A land banking compay paid off an investor who gave them a lot of trouble earlier but had agreed to cool off for a month. This amount invested was less than $30,000. Other investors in the same product had been waiting for more than one year, without being repaid. Presumably, they were not so troublesome or had invested a large sum of money.
This company is practicing "divide and conquer". By paying off some investors, who would then tell the other investors, it might motivate the other mitigant investors to be more compliant, in the hope that they would be repaid.
This seemed to me like highway robbery.
A month ago, another investor wrote to me to tell me that she had invested in land banking plots and was quite convinced about the merits of land banking. I knew this investor to be quite sound in financial matters and was quite surprised at her views. I wonder if she was also being paid off in this manner, in return for being an ambassador?
What has become of Singapore, for a company to take large sums of money from the public, to act in this manner, to be protected by a reputable lawyer firm and to practice selective repayment of their obligations?
Tan Kin Lian
This company is practicing "divide and conquer". By paying off some investors, who would then tell the other investors, it might motivate the other mitigant investors to be more compliant, in the hope that they would be repaid.
This seemed to me like highway robbery.
A month ago, another investor wrote to me to tell me that she had invested in land banking plots and was quite convinced about the merits of land banking. I knew this investor to be quite sound in financial matters and was quite surprised at her views. I wonder if she was also being paid off in this manner, in return for being an ambassador?
What has become of Singapore, for a company to take large sums of money from the public, to act in this manner, to be protected by a reputable lawyer firm and to practice selective repayment of their obligations?
Tan Kin Lian
Flood at Orchard Road
Someone wrote to me to link the flood at Orchard Road to the Marina Barrage. I do not understand how this could be the cause of the flood. However, it does appear that there were two serious floods in Singapore in recent years, i.e. the flood at Bukit Timah and now at Orchard Road. We used to have good drainage sysem in Singapore, but this seemed to have deteriorated. Can the experts share your views?
Tan Kin Lian
Tan Kin Lian
Wednesday, June 16, 2010
Blogs and ballot box
Question: Voters may complain on many issues but when they are at the ballot box, they will vote for stability and economic progress. Do you agree? (The survey is now closed).
Here is the final report based on 100 replies. The results are almost the same as the earlier report based on 50 replies.
The survey suggests a 37% swing against the PAP but this is from a group that is largely unhappy with the PAP. If this is extrapolated to the general population, the swing could be (just my guess) between 10% to 15%.
Here is the final report based on 100 replies. The results are almost the same as the earlier report based on 50 replies.
The survey suggests a 37% swing against the PAP but this is from a group that is largely unhappy with the PAP. If this is extrapolated to the general population, the swing could be (just my guess) between 10% to 15%.
Invitation by Land Banking Company
INVITATION TO X GROUP, SINGAPORE
Dear Mr. Tan,
I would like to personally extend a warm invitation to you to visit our office so that I can introduce you an objective insight to X's business model.
With your keen interest to help educate Singaporeans on land investments, I believe this session will provide you with a more in depth understanding of X's expertise in pre-development land investing and what distinguishes and sets us apart as a company from the rest.
REPLY
Thank you for your warm invitation.
I will attend your invitation on the following understanding
1. X will donate $1,000 to the Financial Services Consumer Associatoin
2. The presentation will be for up to two hours.
3. I can bring along three other persons to attend the presentation - they are from the Association and from land banking investors
4. I will keep an open mind to listen to your business model but will be free to form my own independent opinion
5. You will answer our questions transparently.
Let me have your views.
Dear Mr. Tan,
I would like to personally extend a warm invitation to you to visit our office so that I can introduce you an objective insight to X's business model.
With your keen interest to help educate Singaporeans on land investments, I believe this session will provide you with a more in depth understanding of X's expertise in pre-development land investing and what distinguishes and sets us apart as a company from the rest.
REPLY
Thank you for your warm invitation.
I will attend your invitation on the following understanding
1. X will donate $1,000 to the Financial Services Consumer Associatoin
2. The presentation will be for up to two hours.
3. I can bring along three other persons to attend the presentation - they are from the Association and from land banking investors
4. I will keep an open mind to listen to your business model but will be free to form my own independent opinion
5. You will answer our questions transparently.
Let me have your views.
Keep your existing life policy
Hi Mr Tan,
I bought a poilcy in 1998 to cover critcal illness for 100k. I pay $2200 yearly ( $1600 and $600 for the rider) under a Prime Life policy.
I have to pay till the end of time (i.e. death) for this coverage. Recently was shown another policy which I only pay 20 yrs ... for about the same coverage.
It is strange that the investment outlook was better 12 years ago compard to now and interest rate was much higher, and yet the insurance company can introduce a better produuct now..
If I terminate the plan, I will lose 10k.... but if I keep paying I will breakeven estimated at year 25. Should I change to the new policy?
MY REPLY
My advice is: never terminate an existing life policy to buy a new policy. You will be paying the high upfront cost all over again.You are right that it is not a good idea for the consumer's point of view. It is sad that the insurance agent want to earn commission at the expense of the customer, by asking the customer to switch to a new policy.
I have explained the reason in my book, Practical Guide on Financial Planning. I hope that you have bought it and will read it. Also, you can introduce my book to your family and friends and encourage them to read it. The book can be bought at www.easysearch.sg/ishop
I bought a poilcy in 1998 to cover critcal illness for 100k. I pay $2200 yearly ( $1600 and $600 for the rider) under a Prime Life policy.
I have to pay till the end of time (i.e. death) for this coverage. Recently was shown another policy which I only pay 20 yrs ... for about the same coverage.
It is strange that the investment outlook was better 12 years ago compard to now and interest rate was much higher, and yet the insurance company can introduce a better produuct now..
If I terminate the plan, I will lose 10k.... but if I keep paying I will breakeven estimated at year 25. Should I change to the new policy?
MY REPLY
My advice is: never terminate an existing life policy to buy a new policy. You will be paying the high upfront cost all over again.You are right that it is not a good idea for the consumer's point of view. It is sad that the insurance agent want to earn commission at the expense of the customer, by asking the customer to switch to a new policy.
I have explained the reason in my book, Practical Guide on Financial Planning. I hope that you have bought it and will read it. Also, you can introduce my book to your family and friends and encourage them to read it. The book can be bought at www.easysearch.sg/ishop
Long term investing
Here are some secrets and tips. Ignore the stock market. Don't watch TV. And more.
Criticism of politicians
Dr. Mahathir explains why he will not sue the author of a book that criticises him. Read this article.
Workers in China
1. Is the era of cheap Chinese labour almost over?
A string of suicides at the Foxconn plant in southern China that makes iPads and iPhones for Apple
has focused attention on wages and conditions there.
http://news.bbc.co.uk/2/hi/business/10294850.stm
2. In China, Unlikely Labor Leader Just Wanted a Middle-Class Life
Tan Guocheng is hardly a self-styled labor leader.
Age 23 and introverted, he grew up among rice paddies and orange groves far from China’s big factory towns.
But last month, an hour into his shift at a Honda factory in the southern city of Foshan,
Mr. Tan pressed an emergency button that shut down his production line.
“Let’s go out on strike!” he shouted.
Within minutes, hundreds of workers were abandoning their posts.
http://www.nytimes.com/2010/06/14/business/global/14honda.html
3. What Do China’s Workers Want?
What do these protests say about China’s new generation of workers?
How should multinationals respond, given their huge investment in China’s labor market?
Five experts share their views.
http://roomfordebate.blogs.nytimes.com/2010/06/13/what-do-chinas-workers-want/
My views
The low wages in China is not the only problem. This is made worse by the high cost of living and the high property prices. These issues have to be addressed, so that there is a proper balance between wages, cost of living and cost of a home. These challenges apply to Singapore as well.
A string of suicides at the Foxconn plant in southern China that makes iPads and iPhones for Apple
has focused attention on wages and conditions there.
http://news.bbc.co.uk/2/hi/business/10294850.stm
2. In China, Unlikely Labor Leader Just Wanted a Middle-Class Life
Tan Guocheng is hardly a self-styled labor leader.
Age 23 and introverted, he grew up among rice paddies and orange groves far from China’s big factory towns.
But last month, an hour into his shift at a Honda factory in the southern city of Foshan,
Mr. Tan pressed an emergency button that shut down his production line.
“Let’s go out on strike!” he shouted.
Within minutes, hundreds of workers were abandoning their posts.
http://www.nytimes.com/2010/06/14/business/global/14honda.html
3. What Do China’s Workers Want?
What do these protests say about China’s new generation of workers?
How should multinationals respond, given their huge investment in China’s labor market?
Five experts share their views.
http://roomfordebate.blogs.nytimes.com/2010/06/13/what-do-chinas-workers-want/
My views
The low wages in China is not the only problem. This is made worse by the high cost of living and the high property prices. These issues have to be addressed, so that there is a proper balance between wages, cost of living and cost of a home. These challenges apply to Singapore as well.
Lehman and Enron
Financial Planning Talk, 26 June 2010
I am giving a 3 hour talk entitled "Financial Planning - A Practical Apprach" at SMU on Saturday 26 June, 3 to 6 pm. The last talk had full house. Details can be found at http://www.fisca.sg/.
Fiduciary duty
The director of a company has a fiduciary duty (i.e. a duty of trust) to act in the interest of all shareholders. In the past, many people hold positions of trust and act with integrity. This position of trust also extend to profesionals, such as doctors and lawyers.
In recent years, due to greed and the wish to be super rich, some people (maybe many people) are behaving less honorably. They have less compunction about over-charging on their fees or take take advantage of other people's ignorance to make profit at their expense. In the past, these people would be considered as crooks. Today, these behaviors are considered as acceptable in the free market.
Tan Kin Lian
In recent years, due to greed and the wish to be super rich, some people (maybe many people) are behaving less honorably. They have less compunction about over-charging on their fees or take take advantage of other people's ignorance to make profit at their expense. In the past, these people would be considered as crooks. Today, these behaviors are considered as acceptable in the free market.
Tan Kin Lian
Structured products
A structured product is a financial product that has been created by a financial institution for sale to the public. The terms of the structured product are determined by the issuer (i.e. the financial institution).
When the consumer buys a structured product, the consumer faces the following risk:
a) The issuer may have high margin for their profit or marketing expenses
b) The terms of the contract may not be transparent to the consumer
c) Lack of liquidity - the product can only be sold back to the issuer at a big discount.
d) The terms amy be written in favour of the financial institution and to the disadvantage of the consumer
A life insurance policy has features similar to a structured product. In fact, it is the fore-runner of the structured products that were created by the banks, such as the various types of linked notes.
Many decades ago, most large life insurance companies were organised as mutual companies (i.e. owned by the policyholders) and can be trusted to look after the interest of their policyholders. However, in recent years, this trust has eroded as many companies have become demutualised or have focused on making profits for shareholders.
Many life insurance products introduced in recent years have become less transparent, to give a larger margin to the agents and shareholders, at the expense of the policyholders. In some cases, there were deliberately designed to confuse and mislead the policyholder.
Many structured products issued by the banks have similar characteristics, i.e. lack of transparency and poor return to the consumer.
Generally, I advice consumers to avoid all types of structured products and to invest in exchange traded products. Read my book, Practical Guide on Financial Planning.
Tan Kin Lian
When the consumer buys a structured product, the consumer faces the following risk:
a) The issuer may have high margin for their profit or marketing expenses
b) The terms of the contract may not be transparent to the consumer
c) Lack of liquidity - the product can only be sold back to the issuer at a big discount.
d) The terms amy be written in favour of the financial institution and to the disadvantage of the consumer
A life insurance policy has features similar to a structured product. In fact, it is the fore-runner of the structured products that were created by the banks, such as the various types of linked notes.
Many decades ago, most large life insurance companies were organised as mutual companies (i.e. owned by the policyholders) and can be trusted to look after the interest of their policyholders. However, in recent years, this trust has eroded as many companies have become demutualised or have focused on making profits for shareholders.
Many life insurance products introduced in recent years have become less transparent, to give a larger margin to the agents and shareholders, at the expense of the policyholders. In some cases, there were deliberately designed to confuse and mislead the policyholder.
Many structured products issued by the banks have similar characteristics, i.e. lack of transparency and poor return to the consumer.
Generally, I advice consumers to avoid all types of structured products and to invest in exchange traded products. Read my book, Practical Guide on Financial Planning.
Tan Kin Lian
Tender Loving Society
Singapore is a tender loving society. We believe in using the tender for most business transactions. The contract is usually awarded to the party that submitted the lowest cost or, in the case of sale of land, to the highest bidder.
This system has bad consequences. When a contractor tender a lower price to get a job, they are under pressure to reduce their cost. This will find ways to cut corners, resulting in lower quality of work. Alternatively, they will seek opportunity to increase their revenue on variation orders or extended scope of work.
If a developer pays a high cost for a piece of land, they will add the cost to the final product tht is sold. This has led to escalation in the price of property. The high property prices have led to high cost of living and other an unfair distribution of income, from tenants to owners of property. This has led to a frenzy of property buying, which has in turn caused the property prices to escalate further.
There is an alternative to the tender system. It is easy to estimate the cost of a contract, using the inputs in materials and labour, and to award the contract based on cost plus a fair margin. The work can be distributed to eligible parties based on fair assessment of quality. This is people are recruited to work in a big organisation.
If land is tendered based on the average price of similar properties and is sold at controlled prices (i.e. cost of land, construction and a fair margin of profit), there is no need for property prices to escalate sharply. The property prices will reflect the true market, without the excessive speculation.
There is an alternative to the "tender loving society".
Tan Kin Lian
This system has bad consequences. When a contractor tender a lower price to get a job, they are under pressure to reduce their cost. This will find ways to cut corners, resulting in lower quality of work. Alternatively, they will seek opportunity to increase their revenue on variation orders or extended scope of work.
If a developer pays a high cost for a piece of land, they will add the cost to the final product tht is sold. This has led to escalation in the price of property. The high property prices have led to high cost of living and other an unfair distribution of income, from tenants to owners of property. This has led to a frenzy of property buying, which has in turn caused the property prices to escalate further.
There is an alternative to the tender system. It is easy to estimate the cost of a contract, using the inputs in materials and labour, and to award the contract based on cost plus a fair margin. The work can be distributed to eligible parties based on fair assessment of quality. This is people are recruited to work in a big organisation.
If land is tendered based on the average price of similar properties and is sold at controlled prices (i.e. cost of land, construction and a fair margin of profit), there is no need for property prices to escalate sharply. The property prices will reflect the true market, without the excessive speculation.
There is an alternative to the "tender loving society".
Tan Kin Lian
Telco charges
The governments of Singapore and Malaysia have agreed to request the telcos to reduce their SMS and mobile charges between the two countries. The current charges are too high.
This is just one example about how businesses use the free market to over-charge consumers. Many examples exist in the banking industry and other businesses. It shows the fallacy of the concepts that the free market need not be regulated and that competition can bring down cost to consumer. In the free market environment, it is also difficult for businesses to agree on measures that are fair to consumers, when their own bottom line are involved.
I hope that the Government will realise that they have a role and a duty to take positive action to bring down prices for consumers and to ensure fair treatment of consumers. These matters cannot be left to good intention or the market.
Tan Kin Lian
This is just one example about how businesses use the free market to over-charge consumers. Many examples exist in the banking industry and other businesses. It shows the fallacy of the concepts that the free market need not be regulated and that competition can bring down cost to consumer. In the free market environment, it is also difficult for businesses to agree on measures that are fair to consumers, when their own bottom line are involved.
I hope that the Government will realise that they have a role and a duty to take positive action to bring down prices for consumers and to ensure fair treatment of consumers. These matters cannot be left to good intention or the market.
Tan Kin Lian
Tuesday, June 15, 2010
Land banking Action Group
If you have invested in land banking or similar products and wish to join the action group, please send an e-mail to Land Banking Action Group.
Intelligence Quiz
Dear Mr. Tan
Thank you for organising the Quiz 6-1 contest. I like this quiz. Where can I get more of such quiz?
REPLY
You can buy TKL Intelligence Quiz here. It comes in Vol 1, 2, and 3. Each volume has 24 quiz at 3 levels, total of 72 quiz. Some people are hooked to this type of quiz and like more volumes of puzzles to try.
Thank you for organising the Quiz 6-1 contest. I like this quiz. Where can I get more of such quiz?
REPLY
You can buy TKL Intelligence Quiz here. It comes in Vol 1, 2, and 3. Each volume has 24 quiz at 3 levels, total of 72 quiz. Some people are hooked to this type of quiz and like more volumes of puzzles to try.
Poor Return from New Plan
A customer sent the benefit illustration for a newly introduced plan called Reach. I analysed it as follows:
This is a 10 year Reach policy with an annual premium of $5,000 payable for 5 years. Subsequently, the policy pays a cash coupon for the next 5 years. The coupons can be accumulated with interest. Based on the non-guaranteed interest rate of 3% per annum payable on the cash coupons, the total amount at maturity represented a yield of about 1.2% p.a. For a 10 year investment, this is a poor yield and is not even guaranteed.
The same company had a single premium plan, called Growth, which gave a non-guaranteed yield of 2.7% or 3.5% over 7 years, which was more acceptable. It seemed that the old plan gave a better return, compared to the new plan.
It is better for the consumer to invest in the STI ETF, which is flexible and gives a better long term yield. Read my financial planning book for more information.
This is a 10 year Reach policy with an annual premium of $5,000 payable for 5 years. Subsequently, the policy pays a cash coupon for the next 5 years. The coupons can be accumulated with interest. Based on the non-guaranteed interest rate of 3% per annum payable on the cash coupons, the total amount at maturity represented a yield of about 1.2% p.a. For a 10 year investment, this is a poor yield and is not even guaranteed.
The same company had a single premium plan, called Growth, which gave a non-guaranteed yield of 2.7% or 3.5% over 7 years, which was more acceptable. It seemed that the old plan gave a better return, compared to the new plan.
It is better for the consumer to invest in the STI ETF, which is flexible and gives a better long term yield. Read my financial planning book for more information.
Willingness to change
Many people are afraid to change, because the change may go wrong. The fear the consequence of a mistake - that they may lose a well paying job.
Here are my views. We have to make many changes, in the hope that some will succeed and that the benefit of success will outweigh the cost of the failures. Usually, it is not possible for us to know if a change will succeed or fail, unless we are willing to try it. We only need to make sure that the cost of the failure is small and is affordable.
Sometimes, we need to fail the first time, in order to succeed the second time. The lessons of the first failure can be a great way to learn what the real world situation is like. If we never try, we will never know.
I wish to share this interesting personal experience. In the early 1980s, I headed an insurance company that launched, for the first time, the life annuity product. We did a great deal of planning, preparation and training of the agents and employees. We also advertised the product on a modest budget. It failed. The consumers do not accept a product where they can lose their capital on early death.
Three years later, we launched a modified life annuity product that provided a guaranteed payment for 15 years but gave a smaller payout. It was a roaring success and established a domiant market share for the insurance company. The lessons from the first failure was the trigger for the changes that led to the success of the second attempt.
I wish to encourage people, especially the younger ones, to be willing to try and to change. It will be fun to experience the succeess, failures and to learn from the results.
Tan Kin Lian
Here are my views. We have to make many changes, in the hope that some will succeed and that the benefit of success will outweigh the cost of the failures. Usually, it is not possible for us to know if a change will succeed or fail, unless we are willing to try it. We only need to make sure that the cost of the failure is small and is affordable.
Sometimes, we need to fail the first time, in order to succeed the second time. The lessons of the first failure can be a great way to learn what the real world situation is like. If we never try, we will never know.
I wish to share this interesting personal experience. In the early 1980s, I headed an insurance company that launched, for the first time, the life annuity product. We did a great deal of planning, preparation and training of the agents and employees. We also advertised the product on a modest budget. It failed. The consumers do not accept a product where they can lose their capital on early death.
Three years later, we launched a modified life annuity product that provided a guaranteed payment for 15 years but gave a smaller payout. It was a roaring success and established a domiant market share for the insurance company. The lessons from the first failure was the trigger for the changes that led to the success of the second attempt.
I wish to encourage people, especially the younger ones, to be willing to try and to change. It will be fun to experience the succeess, failures and to learn from the results.
Tan Kin Lian
Safe-to-fail
There is a controversy in the Straits Times about an article written by a journalist arguing that we should accept the "safe-to-fail" situation. Some readers said that it would lead to complacency.
I wish to share my view. "Safe-to-fail" does not necessary lead to complacency. We do what we can, and do not have to over-worry about the unlikely events, if these events do not lead to disaster. This will foster a spirit of enterprise and entrepreneurship.
We have a weakness in Singapore which has been described as the "kiasu" attitude. It is an attitude of extreme caution that lead to the unwillingness to take responsibility, and waiting for the boss to decide. This pervades many stratas of our society, including the mindset of our leaders.
It is time for us to be bold and be willing to change. I am not advocating complaceny, but a balanced approach towards making changes.
Tan Kin Lian
I wish to share my view. "Safe-to-fail" does not necessary lead to complacency. We do what we can, and do not have to over-worry about the unlikely events, if these events do not lead to disaster. This will foster a spirit of enterprise and entrepreneurship.
We have a weakness in Singapore which has been described as the "kiasu" attitude. It is an attitude of extreme caution that lead to the unwillingness to take responsibility, and waiting for the boss to decide. This pervades many stratas of our society, including the mindset of our leaders.
It is time for us to be bold and be willing to change. I am not advocating complaceny, but a balanced approach towards making changes.
Tan Kin Lian
Monday, June 14, 2010
Categories of investments
When you invest your money, you should take note of the following categories of investments:
a) exchange or market traded products
b) structured products
c) unregulated products
Category (a) include shares, bonds, currencies and commodities traded on an exchange or over the counter. You can buy or sell the product and has to pay only the spread and other charges. These costs are transparent to you.
Category (b) include life insurance policies, dual currency investments, linked notes and other structured products. You can only buy the products on the terms designed by the issuer. There is the risk that the issuer has creamed off a large margin to cover their profit and marketing expenses, giving you a poor deal (relative to the risk of the investments). As they are regulated, the investor should study the benefit illustration or prospectus that is mandated by the regulator. If you find these documents to be confusing, you should avoid these investments. You should understand the risk and make sure that you can commensurate return, before you make any investment.
Category (c) are land banking, time share and other unregulated products. These products are the most risky and require careful study. They should only be invested by sophisticated investors. The ordinary investors should avoid these products.
These points are explained in more detail in my book, Practical Guide on Financial Planing, which is written for the layman. I advised investors to invest in category (a) product and to manage the risk through diversification.
a) exchange or market traded products
b) structured products
c) unregulated products
Category (a) include shares, bonds, currencies and commodities traded on an exchange or over the counter. You can buy or sell the product and has to pay only the spread and other charges. These costs are transparent to you.
Category (b) include life insurance policies, dual currency investments, linked notes and other structured products. You can only buy the products on the terms designed by the issuer. There is the risk that the issuer has creamed off a large margin to cover their profit and marketing expenses, giving you a poor deal (relative to the risk of the investments). As they are regulated, the investor should study the benefit illustration or prospectus that is mandated by the regulator. If you find these documents to be confusing, you should avoid these investments. You should understand the risk and make sure that you can commensurate return, before you make any investment.
Category (c) are land banking, time share and other unregulated products. These products are the most risky and require careful study. They should only be invested by sophisticated investors. The ordinary investors should avoid these products.
These points are explained in more detail in my book, Practical Guide on Financial Planing, which is written for the layman. I advised investors to invest in category (a) product and to manage the risk through diversification.
Non-PAP politicians
I am responding to a suggestion by a commenter to create this survey on non-PAP politicians. Here is your chance to give your views. Survey is now closed. 100 responses were received within 8 hours!
UPDATE
Final results based on 100 respones.
UPDATE
Final results based on 100 respones.
Experience and perspective
An engineer in the late thirties told me that tehcnology is changing so fast in this field that it is difficult for him to keep up and compete with the young engineers that are trained in the new technology.
I asked him to focus on his strenghs, which are the experience and perspective that he has gained over the years, rather than to compete in his areas of weakness.
I posed him a problem of how to write an algorithm to compare one image with another image and see if they fit. The images are formed from the tangram pieces. We discussed several options, including comparing pixels by pixels, but he pointed out that this would take too much power and would drain the battery of the mobile phone.
He then suggested an approach, taken from a previous project. Instead of comparing every pixel, the program could compare every 10th pixel across and down. This would reduce the comparison by the factor of 100 to 1, and would still produce the same answer. It was an excellent solution to a problem that had bugged me for a long time.
I wish to quote this example to encourage the older people that your experience and perspective is valuable, but you have to use it effectively. Instead of competing with younger people in new technology, the older people can use their experience and perspective to guide the young, and can continue to play a useful role in the business.
Tan Kin Lian
I asked him to focus on his strenghs, which are the experience and perspective that he has gained over the years, rather than to compete in his areas of weakness.
I posed him a problem of how to write an algorithm to compare one image with another image and see if they fit. The images are formed from the tangram pieces. We discussed several options, including comparing pixels by pixels, but he pointed out that this would take too much power and would drain the battery of the mobile phone.
He then suggested an approach, taken from a previous project. Instead of comparing every pixel, the program could compare every 10th pixel across and down. This would reduce the comparison by the factor of 100 to 1, and would still produce the same answer. It was an excellent solution to a problem that had bugged me for a long time.
I wish to quote this example to encourage the older people that your experience and perspective is valuable, but you have to use it effectively. Instead of competing with younger people in new technology, the older people can use their experience and perspective to guide the young, and can continue to play a useful role in the business.
Tan Kin Lian
Sunday, June 13, 2010
Lasting values
MR Tan Kin Lian,
Singapore’s ‘worship’ for “pragmatism” is as much an “idol”. In my own analysis, “pragmatism” is only a good tool, but a grave guiding values system. It gave Singapore a jump-start in national survival; but we need lasting values to build Singapore into a nation with its own soul. The years of preaching “pragmatism” now produce the unique Singapore phenomenon we witness in public and private arena.
Cashew Nut.
Singapore’s ‘worship’ for “pragmatism” is as much an “idol”. In my own analysis, “pragmatism” is only a good tool, but a grave guiding values system. It gave Singapore a jump-start in national survival; but we need lasting values to build Singapore into a nation with its own soul. The years of preaching “pragmatism” now produce the unique Singapore phenomenon we witness in public and private arena.
Cashew Nut.
Growth in millionaire club
Dear Mr. Tan
The Straits Times front page has an article that showed Singapore to have the largest increase in millionaire households last year. I am somewhat disturbed by this article. Was it written to give an impression that our economic progress is the best in the world? I do not see any improvement in my circumstances and for my friends around me. Was this to prepare for the general election?
My reply
I tried to understand how the statistics was compiled and how it should be interpreted.
It showed the number of households that have an assets more than 1 million dollars (USD). This could be due to the sharp increase in property price last year, which is good for owners of multiple properties, but make no difference to those who own only one property for own occupation. Furthermore, I think that the study measures the value of assets and do not take away the liability (i.e. loans to purchase property).
The growth rate of millionaires was 35% in Singapore, but for China and Indonesia, the growth was 31% and 21% respectively. The report does not measure that proportion of the population that can be classifed as millionaires - but the growth in the numbers of these rich households during 2008.
In one respect, it probaly reflects the widening disparity in income in these countries. For each person to be rich, there must be 100 people that has to be relatively poorer.
The report does convey the impression that the economy is doing well, when in reality, more people are suffering from the high cost of living - driven by high property and asset prices.
The Straits Times front page has an article that showed Singapore to have the largest increase in millionaire households last year. I am somewhat disturbed by this article. Was it written to give an impression that our economic progress is the best in the world? I do not see any improvement in my circumstances and for my friends around me. Was this to prepare for the general election?
My reply
I tried to understand how the statistics was compiled and how it should be interpreted.
It showed the number of households that have an assets more than 1 million dollars (USD). This could be due to the sharp increase in property price last year, which is good for owners of multiple properties, but make no difference to those who own only one property for own occupation. Furthermore, I think that the study measures the value of assets and do not take away the liability (i.e. loans to purchase property).
The growth rate of millionaires was 35% in Singapore, but for China and Indonesia, the growth was 31% and 21% respectively. The report does not measure that proportion of the population that can be classifed as millionaires - but the growth in the numbers of these rich households during 2008.
In one respect, it probaly reflects the widening disparity in income in these countries. For each person to be rich, there must be 100 people that has to be relatively poorer.
The report does convey the impression that the economy is doing well, when in reality, more people are suffering from the high cost of living - driven by high property and asset prices.
Nelson Mandela
I watched the opening concert of the World Cup. I was moved by the public respect that the crowd had for Nelson Mandela or "Madiba". I saw the video clip of his speech when he was elected President. He pledged to spent the remaining years of his life "not as a prophet" but "in the service of the people".
He was prepared to step down from office on completing his term to become a private citizen. This allowed new leaders to be elected democratically, who can adapt the national policy to suit the changing needs of the people. Although South Africa may be economically poorer than Singapore, the people seemed to be quite happy and proud of their country.
I hope that, one day, Singapore will have great leaders like Madiba.
Tan Kin Lian
He was prepared to step down from office on completing his term to become a private citizen. This allowed new leaders to be elected democratically, who can adapt the national policy to suit the changing needs of the people. Although South Africa may be economically poorer than Singapore, the people seemed to be quite happy and proud of their country.
I hope that, one day, Singapore will have great leaders like Madiba.
Tan Kin Lian
Security - role of government and business
The Mnistry of Home Affairs has said that security should not be left to the Government and that businesses should also play their part. They were referring to the recent incident of lax security at the MRT depot in Changi.
I agree. However, it is important for the Government to spend more money on security and that it should be supplemented by business entities. The Government cannot leave this matter to the business entities as there is no clarity on the level of security that is needed and businesses are more focused on their bottom line.
It is important for the Government to put in sufficient funds and effort to ensure a hgih standard of security, law and order, and ask business to play their part to supplement the government's efforts. Our standard of security and many other aspects of public life has dropped during the past decade, due to the policy of cutting cost and leaving things "to the market". We should be prepared to increase our pubic budget in line with the increase in the population.
Tan Kin Lian
I agree. However, it is important for the Government to spend more money on security and that it should be supplemented by business entities. The Government cannot leave this matter to the business entities as there is no clarity on the level of security that is needed and businesses are more focused on their bottom line.
It is important for the Government to put in sufficient funds and effort to ensure a hgih standard of security, law and order, and ask business to play their part to supplement the government's efforts. Our standard of security and many other aspects of public life has dropped during the past decade, due to the policy of cutting cost and leaving things "to the market". We should be prepared to increase our pubic budget in line with the increase in the population.
Tan Kin Lian
Countdown to 2 million visitors (2)
My earlier estimate was that the unique visitors to my blog will reach 2 million by 30 June 2010. This target is likely to be achieved a few days earlier.
City Harvest Church
Title: Minister Shanmugam said that investigation on City Harvest Church when “a complaint was received”. What about the thousands of complaints that were made against structured products?
I refer to the report made on 12 June 2010 on Today newspaper by Alicia Wong. It was reported that Minister Mr Shanmugam said "One shouldn't look at this (City Harvest Church investigation) from the perspective of churches or mega-churches. The way this has been approached is, a complaint was received - a complaint about how funds were used - and the Commissioner of Charities (COC) called in CAD (Commercial Affairs Department)."
It is laudable that government would start an investigation upon “a complaint was received”. The government should use the same resolve on the investigation of structured products.
The government should investigate the financial institutions that are responsible for the issuing and distribution of structured notes (such as Minibond, Pinnacle Notes, High Note etc).
There where thousands of written complaints, as compared to only “a complaint” in the case of City Harvest Church. There are many who are still not satisfied even when partial compensation is made. I hope the government would extend the same assertion to investigate the issuers and distributors of these structured products. In fact its effect is even more far reaching than City Harvest Church or Ri Ci Hospital’s issues. It affects the banking institution and the thrust of banking system at large.
Straits Times should provide coverage of the individuals who are behind these financial products.
In the case of Abbot Min Yi and Pastor Kong Hee, there was extensive coverage of their personal life and works prior to conclusion of the investigation. We have not seen any coverage of the individuals who are behind these structured products who brought anxiety and pain to many Singaporeans.
Cashew Nut
I refer to the report made on 12 June 2010 on Today newspaper by Alicia Wong. It was reported that Minister Mr Shanmugam said "One shouldn't look at this (City Harvest Church investigation) from the perspective of churches or mega-churches. The way this has been approached is, a complaint was received - a complaint about how funds were used - and the Commissioner of Charities (COC) called in CAD (Commercial Affairs Department)."
It is laudable that government would start an investigation upon “a complaint was received”. The government should use the same resolve on the investigation of structured products.
The government should investigate the financial institutions that are responsible for the issuing and distribution of structured notes (such as Minibond, Pinnacle Notes, High Note etc).
There where thousands of written complaints, as compared to only “a complaint” in the case of City Harvest Church. There are many who are still not satisfied even when partial compensation is made. I hope the government would extend the same assertion to investigate the issuers and distributors of these structured products. In fact its effect is even more far reaching than City Harvest Church or Ri Ci Hospital’s issues. It affects the banking institution and the thrust of banking system at large.
Straits Times should provide coverage of the individuals who are behind these financial products.
In the case of Abbot Min Yi and Pastor Kong Hee, there was extensive coverage of their personal life and works prior to conclusion of the investigation. We have not seen any coverage of the individuals who are behind these structured products who brought anxiety and pain to many Singaporeans.
Cashew Nut
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