Saturday, September 01, 2012

Medishield should cover congenital and pre-existing conditions.

Excessive charges on payment cards

The UK government is going ahead with its plan to ban retailers from imposing excessive or surprise charges on people who pay by debit or credit card.

Reduce the cost of clearing checks

28 August 2012

Editor, Forum Page
Straits Times

I saw a report that 91 million checks were cleared in Singapore 
in 2000. This is almost 20 checks for every resident in Singapore!

I do not have any more recent figure, and this number is likely to be 
larger today.

Why are so many checks being used, when there are  
more efficient ways to make payments, e.g. through 
electronic banking.

It probably cost businesses a few dollars to process each check, considering
the work that has to be done by accounting staff to mail the check and for the other 
party to receive and bank in the check.

I have tried to make electronic payments for my business transactions and
found the process to be difficult and error prone. After the disappointments, I have decided 
to go back to writing checks.

Can the Monetary Authority of Singapore and the Association of Banks in Singapore
look at how to make it easier for business entities to make electronic payments and to 
promote its usage?

Tan Kin Lian
Tan Kin Lian & Associates Pte Ltd

Singapore's National Conversation

Singapore’s national conversation
 Prime Minister Lee Hsien Loong said
in Singapore’s new phase of development,
there was a need to renew itself continually,
and when necessary, reinvent itself boldly.
The authoritative former Prime Minister Lee Kuan Yew
had little use for public opinion when he was in power,
preferring to set his own agenda.
Now a year after he quit active politics,
his son, Prime Minister Lee Hsien Loong, has indicated
that he wants to move away from his non-consultative phase,
at least for the moment.
Singaporeans who are not used to being consulted by the government
have reacted with some cynicism.
Some, however, gave Hsien Loong high marks for effort.
“We are facing a crucial turning point of our country’s history.
 I think every citizen should try to play a serious part,”
was their consensus.

Facebook price continue to fall

The price of Facebook shares continue to fall. It was listed at $38 (USD) a share and has now dropped to $18. Read this.

I believe that a fair price is $10, giving it a high multiple of 25 times of earnings. There is still some way to go down, but it can happen quite fast. It seemed to be a one way street now.

I hope that people will learn from the lesson of Facebook and know that this will also apply to other assets with inflated values - such as property prices in Singapore.

Friday, August 31, 2012

Trading in the Financial Market

This article shows how you can learn the skill of trading in currencies and stocks. Trading is a zero-sum game and that retail traders will lose out in the long run. But if you trade with money that you can afford to lose, it can be fun.

You do not have to spend $3,000 to attend a 3 day training course, which will not teach you anything. You can learn better with your own trading experience using a Demo Account and with good charts.

Thursday, August 30, 2012

Gross Happiness Index


The assessment of gross national happiness (GNH) was designed in an attempt to measures quality of life or social progress in more holistic and psychological terms than only the economic indicator of gross domestic product (GDP).
The term "gross national happiness" was coined in 1972 by Bhutan's fourth Dragon KingJigme Singye Wangchuck, who has opened Bhutan to the age of modernization soon after the demise of his father, Jigme Dorji Wangchuk. He used this phrase to signal his commitment to building an economy that would serve Bhutan's unique culture based on Buddhist spiritual values. 
At first offered as a casual, offhand remark, the concept was taken seriously, as the Centre for Bhutan Studies, under the leadership of Karma Ura, developed a sophisticated survey instrument to measure the population's general level of well-being.
Two Canadians, Michael and Martha Pennock played a major role in developing the Bhutanese survey, which took a six to seven hour interview to complete. They developed a shorter international version of the survey which has been used in their home region of Victoria BC as well as in Brazil.  
Like many psychological and social indicators, GNH is somewhat easier to state than to define with mathematical precision. Nonetheless, it serves as a unifying vision for Bhutan's five-year planning process and all the derived planning documents that guide the economic and development plans of the country. 
At this level of generality, the concept of GNH is transcultural—a nation need not be Buddhist to value sustainable development, cultural integrity, ecosystem conservation, and good governance. Through collaboration with an international group of scholars and empirical researchers the Centre for Bhutan Studies further defined these four pillars with greater specificity into eight general contributors to happiness—physical, mental and spiritual health; time-balance; social and community vitality; cultural vitality; education; living standards; good governance; and ecological vitality. 
Although the GNH framework reflects its Buddhist origins, it is solidly based upon the empirical research literature of happiness, positive psychology and well-being.The Bhutanese grounding in Buddhist ideals suggests that beneficial development of human society takes place when material and spiritual development occur side by side to complement and reinforce each other. The four pillars of GNH are the promotion of sustainable development, preservation and promotion of cultural values, conservation of the natural environment, and establishment of good governance.

Watch this 3 min video

Read this PDF.

National Conversation - how to overcome scepticism

The Prime Minister has called for a National Conversation. There is promise that sacred cows can be sacrificed. However, many people are skeptical. They have seen a few similar exercises carried out over the past years - and the major policies continued to be unchanged, and things got worse!

The Prime Minister can win over the people just by adopting one major change, such as:

a) Reduce the price of new HDB flats
b) Abolish GST
c) Reduce National Service obligation

Suppose, the Prime Minister ask for a national debate on one or more of these issues and invite people who have proposed alternative views for this debate. And, if one of these sacred cows are really slaughtered, the Prime Minister would have gained a lot of credibility for this National Conversation.

I hope that he will consider my suggestion!

Court case against Profitable Plots

Even as the number of cheating charges at stake has fallen
for the three directors of Profitable Plots,
a tussle over papers has emerged.
The trio asked the High Court yesterday
for access to certain documents -
or their copies -
that the police had seized
from their land-banking and investment firm in a 2010 raid.
The public prosecutor had objected to the defence's previous request
by citing a lack of legal basis,
and this request was also rejected by a lower court -
the Criminal Case Disclosure Conference court -
earlier this month.

Priorities for Singapore

If there is one thing that the Government can do, what should it be?
Give your views in the survey publised in my Facebook,

Debate on GST

My call is to the Finance Minister. If you wish to hear my views about GST or even to engage in a public debate on this matter, I will be willing to participate in it. I strongly believe that GST has been bad for Singapore and has been one major factor in escalating the cost of living and the cost of doing business. The harm to Singapore far outweighs the benefits. I am not asking for GST to be reduced, but to be abolished entirely.

I have written on this matter on several occasions in my blog. See here:

If your Ministry officials wish to present facts to make me change my mind or to hear the statements from me, feel free to contact me.

Giving agents a better role

This letter is published on Straits Times Online Forum

29 August 2012 

Editor, Forum Page
Straits Times

I share the concern expressed by the Alliance representing 15,000 agents 
about the potential job losses that may arise from a drastic change in the
remuneration structure for the sale of insurance policies.

In addressing the difficulty challenge of finding a right balance between the
interest of agents and consumers, I urge the FAIR panel to study the extent
to which consumers have been well served by the current practice of sales 
through commission.

The cost of selling life insurance is too high, and takes away a large portion of 
the modest yield that is earned on long term savings. Most life insurance 
policies give a yield of less than 3 percent, which hardly matches inflation. If the
policy is terminated before maturity, it is likely that the consumer may suffer
a financial loss. 

Quite often, consumers are sold life insurance policies that do not suit 
their long term financial needs. In recent years, I have received many requests from
consumers for advice on their insurance products and have 
become quite familiar with the mis-selling practices.

The regulators in the United Kingdom and Australia have decided that there is
no way to prevent the mis-selling, other than to ban the 
payment of commission on investment type products. This ban does not apply
to the payment of commission on pure insurance products that 
do not promise an investment return, such as health or term insurance.

Of the 15,000 agents that could be impacted by a major change, a large number 
are probably university graduates who have recently entered into this field. They could 
be more usefully deployed in other sectors of the economy.

The consumers could be better served by a smaller number of competent advisers who
give financial planning advice to address their long term needs, such 
as managing their budget, debts, long term savings and insurance protection 
in a more flexible and holistic manner. 

This type of advice should be given for a fee and should not be tied to commission 
payable on the inflexible and costly products that are being recommended 
to consumers.

If the FAIR panel decides to allow the continued payment of commission, they should 
set a cap on the rates of commission payable on various types of products at levels 
that are fair to consumers and agents. This is the practice adopted by most other countries.

Tan Kin Lian
Financial Services Consumer Association

Wednesday, August 29, 2012

Intentional harrassment

Alex Tan has been arrested for intentional harassment by using abusive language.

Some "sick" people make it a habit to be insulting and attacking me and to do it anonymously and continuously. I suggest that they make their insult in an e-mail, so that their identity can be proven.

Clarify uncertainties in health insurance

This letter has been published with some changes made by the Editor.

26 August 2012

Editor, Forum Page
Straits Times

I refer to the letters from Jerry Lam and Phillip Williams regarding 
their health insurance policies (Straits Times 24 August 2012).

More Singaporeans are relying on insurance to take care of the
escalating cost of health care, especially for the elderly.

I urge the Monetary Authority of 
Singapore and the insurance associations to clarify the uncertainties 
faced by consumers when they are faced with 
stiff renewal terms, changes to the existing coverage, and 
exclusions for pre-existing conditions.

Consumers need to be assured that their
rights and interests are protected, and that they do not have to incur
legal expenses to overcome unreasonable rejection of their claims.

It is also important for consumers to realize that insurance is not the only solution.
They should consider other risk management methods, such as loss control 
and retention of risk. 

This should not rely on insurance to pay for expensive and futile treatment 
that have an extremely low chance of success and does not improve 
the quality of life.

Tan Kin Lian
Financial Services Consumer Association

Tuesday, August 28, 2012

Fallacies of the GST

The Goods and Services Tax (GST) is a regressive tax. It takes a higher proportion of the income of the poor, compared to the rich. Most people felt that is is bad.

However, the proponents have put forward a few reasons why they felt that GST is good for Singapore. I like to state some of these reasons and point out why there are fallacious.

1. GST is a tax on spending. It is good to encourage people to save, instead of spend.

Fallacy: Most people, except the very rich, have to spend almost all of their wages to meet the daily necessities. They do not have any choice to avoid this spending. The tax hits them hard, by adding to their burden.

2.  GST is an efficient tax, as it has a low cost of collection.

Fallacy: It may be low cost to the tax collectors, but it adds a high cost to the business to account for the input and output tax. Nearly all transactions have to be accounted for. The tax has to be computed for almost every transaction, adding significantly to the compliance cost.

3.  By introducing GST, the government can reduce income tax and encourage rich people from around the world to migrate to Singapore.

Fallacy: The rich people do not have to pay income tax on their earnings outside of Singapore. We do not really know how much income tax that they contribute to Singapore, but I suspect that it is not that much. They did buy expensive property and in the process inflate the property prices and adding a burden to the local residents.

4. People can avoid income tax, but it is difficult to avoid GST.

Fallacy: Singapore has an efficient system of collecting tax and tax leakage is relatively small.  We do not need GST to solve a non-existent problem.

5.  The government needs to expands its tax base and collect sufficient tax to meet its obligations to the citizens.

Fallacy: The government already collects more than sufficient revenue from many other sources. It collects too much tax and have to make regular refunds. It is costly to collect the tax and make the refunds. Why not reduce or remove the tax in the first place?


GST is unnecessary and harmful for Singapore. It has added to the cost of living and the cost of doing business. I hope to see, one day, that GST be abolished entirely.

Apple copyright case against Samsung

When I read the news that the jury awarded compensation of $1 billion to Samsung for the copyright case, I was shocked.

However, the following news report sounded quite optimistic

A few analysts had shared the same view. But I was not convinced. It seemed too optimistic.

My instinct turned out to be correct when the share price of Samsung dropped by 7.5% in Seoul on the first day of trading. It seemed that the shareholders are quite worried about the impact on Samsung.

Yes. it is difficult to trade in shares and to interpret the news. It is also difficult to know which analyst to believe and not to believe.

Now, here is the million dollar question. Should you buy Samsung now, when it has dropped 7.5%? 

Issues involving paternity leave

The government has to be aware of the following issues regarding paternity leave.

A matter of political will

Address the systematic issues

Monday, August 27, 2012

Why I dislike GST

GST is not necessary and bad for Singapore. Here are my reasons, and also the views of other people, including some who disagree with me.

Taxes will have to go up

There is nothing wrong when taxes have to go up to fund higher social spending, provided that the taxes are levied on people with high incomes and does not cause a burden on the lower and middle classes that are struggling.,-taxes-will-eventually-go-up

But I disagree with the approach to levy high taxes, especially through GST, and then have a big budget surplus that has to be returned to the people through GST vouchers. It is a wasteful exercise.

Trend of bad behavior

I agree with this concern expressed by Prime Minister Lee.

The stress of life in Singapore is causing this bad behavior. But, it does not give us the excuse to behave badly. 

Should you buy life insurance early to enjoy a lower premium rate?

Should you buy life insurance at a younger age to enjoy a lower premium rate?

This is the argument put forward by insurance agents to convince customers to put aside a large part of their savings towards a life insurance policy. This reasoning is flawed, as it fails to address the following key points:

a) Is the insurance necessary in the first place?
b) Is the consumer buying the right type of insurance?
c) Is the consumer paying the right price for the insurance cover?

In most cases, the answer to these questions is "no". The consumer is buying an insurance that is not needed, is buying the wrong type of insurance, and is paying a high cost for the cover.

What then, is the right type of insurance?

Life insurance is needed when a person has financial commitments, e.g. a family with dependent children, and needs to provide for their financial security in the event of premature death. A young person who is not yet married does not have this commitment. The priority is to accumulate and invest savings that may be needed in the future.

What about buying life insurance early to enjoy a lower premium rate? It depends on the type of insurance that is bought. For term insurance, which covers death from all causes, the premium rate is quite flat for people below age 55, which is the period that insurance is really needed. After that age, the consumer should have accumulated sufficient savings with a proper financial plan, and does not need to rely on insurance.

Life insurance should be used to protect against premature death, and should not be used as a form of savings and investments - unless it is able to provide a yield that is comparable to other types of investments. In most cases, the yield is terribly low!

At the younger ages, the biggest risk is premature death caused by accidents. The premium rate for an accident insurance is flat, regardless of age.

It does make sense to get a life insurance policy, especially a term insurance policy, at an early age as part of your financial plan. But, make sure you pay a premium of not more than 0.15% of the amount that is covered. For example, you should pay not more than $450 a year to insure for $300,000. If you opt for personal accident insurance, you should pay $180 to $360 depending on your occupation.

Do take your time to look for a suitable insurance cover. There is no great hurry.

Sunday, August 26, 2012

Right approach towards insurance

Barclays Cycle Hire - used in London

Here are the details of the successful bicycle hire scheme used in London - also called the Boris Bikes.

A member pays GBP 45 for 1 year of membership and can use the bike for 30 mins each time, without any charge. They have to pay a fee for using the bike longer than 30 mins.

Share Taxi

Dear Mr Tan

I recently read an interesting blog you wrote about using smartphone and GPS technology to help people share taxis and ease congestion. This concept is something that I totally agree with you on.

I'm pleased to inform you that I (along with three business partners) have recently launched such an app for the iOS platform to do exactly that. It is called GoMyWay (you can download it thru the iTunes app store for your iPhone or iPad). Also do check out:


We also have had some articles written about our app, as per below:





We believe the app would give people in Singapore a viable commuting alternative and increase the liveability of Singapore. However, this requires widespread adoption and we are working very hard in marketing this app at the moment. In this vein, it would be great if you could write about our app on your blog given you have such a wide and loyal following.

Ken Ng
CEO and Co-Founder

Reality of Forex Trading

Comment posted in this blog:

t is true that FX trading is best to left to professional traders from banks and hedge funds. it is almost impossible for retail trader to make money in long run. According to CEO of FXCM, one of the few largest US based retail FX broker, he said he will be surprised if there are more than 5%of the retail FX traders can make money in long run. 

For those ISO/SME Awards, it is for show only, so long a company afford to pay, it is not very difficult to get it and it doesn't guarantee the trading strategy is a successful. Did you ever heard Warren Buffet goes to apply ISO??? 

Don't easily believe the story from those school marketer, I don't care how fast the coach turns his personal accout from 1K to 1 million, how I know how many accounts he got margin call before getting a profitable one, and almost certainly , the super high returns is link to over-leveraging, just likes someone said a fundamental news suddenly came up in the middle of the night from US/Europe is good enough to act on.

Understanding a diplomat and a lady

When my friend was appointed Singapore's ambassador to another country, he told this story. "When you make a request and the diplomat said yes, he meant maybe. When he said maybe, he meant no ". He continued, "When you make a request to a lady and she said no, she meant maybe. When she said maybe, she meant yes. And when she said yes, she is not a lady."

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