Saturday, September 29, 2012

Divisive politics

The Government is treading into dangerous waters ...

Did CPIB used its powers properly?

S'pore GP: Full disclosure, please

I AM dismayed that Singapore has committed itself
to a further five years of Formula One
("Five more years for S'pore race", Sunday; and
 "F1 'to bring bigger benefits' in next lap", Tuesday).
Hosting F1 in Singapore will appear much less triumphal
once its true economic and social costs are weighed
against a realistic assessment of "incremental receipts".

Don't let insurers leave car owners in renewal fix

NTUC Income should know
that accidents can happen unexpectedly
and that they cannot be avoided.
That is why insurance is necessary.
By rejecting my renewal,
how does it expect me to find insurance elsewhere?
In my case, I have already paid a large amount of excess
and lost my no-claim discount.
Are these not enough?
The Monetary Authority of Singapore
should look into market practices that deprive motorists of
compulsory motor coverage.

Concern over marketing tactics at property preview

Tan Kin Lian
The Council for Estate Agencies, the industry's watchdog,
should review the legality or ethics of such practices.

This paragraph was left out of the letter.
I understand that these practices were quite commonly adopted in “previews”. While the past buyers were happy with the outcome in a rising property market, I fear that many buyers would be in dire straits when the market turns around. They might be committing to an overpriced property that they cannot really afford to service and may have to suffer a big capital loss when they have to dispose of the ill-advised commitment.

Give pay revision to non-graduate teachers

25 September 2012 

Editor, Voices
Today Paper

I support the views expressed by Ms Anna Lee "Why no pay rise
for non-grad teachers" (Today paper, 25 Sep). 

Non-graduate teachers are also important to our education system and deserve 
to be treated fairly. They already get a lower salary compared to graduate teachers 
and should not be further discriminated in this pay revision.

I wish to raise another concern. The wide gap between the remuneration 
of graduates and non-graduates are pushing too many of our young
people to pursue a paper qualification, at high cost to their parents and 
to themselves, in many situations where the additional qualification does 
not make an impact on their occupations.

I have seen many polytechnic students, who are not academically inclined,
spend an additional three years or longer to get a university degree. These
diploma holders would be more productive, if they had gained
the relevant experience and knowledge in the workplace. 

I believe that a non-graduate could probably be a good teacher in a 
primary schools, if they had spent the additional years in working in the 
school rather than attending university. They may be more likely to 
stay in the teaching profession, rather than a graduate.

I urge the Minister of Education to review this decision to deny the pay revision to 
non-graduate teachers and to give adequate emphasis to actual performance
and experience, and not over-emphasize paper qualifications.

Tan Kin Lian

Questionable sales techniques

22 September 2012

Forum Page
Straits Times

I accompanied a friend to attend the “preview” to a new property launch. The 
sales techniques used by the marketing agent are questionable.

The potential buyer is asked to indicate interest in a few units, to sign a form
to authorize the marketing agent to commit to the purchase option on behalf 
of the buyer within the indicative price range, and to give a pre-signed 
blank cheque to the marketing agent.

By giving this authorization, the potential buyer is promised the privilege 
to attend the actual launch, where a unit will be offered at a preferential 
discount.  These various discounts, amounting to more than 20 percent, 
are prominently shown in the display boards.

The indicative price for the units appeared to the similar to the current 
market price in the vicinity and does not reflect the attractive discount. 
The posters may be deceptive in conveying a discount that does not 
really exist.

While the marketing agent verbally indicated that they will not exercise 
the option without the approval of the buyer, the actual wordings of 
the agreement showed a contrary legal position. It appeared to give 
the unfettered right to the marketing agent to commit the buyer 
to any unit within the category and price range.

In calculating the monthly instalment to service the loan of 80%, the 
marketing agent used a 30 year term loan and an interest rate 
of 1.1 percent. This is misleading as interest rate is not likely to stay 
at this low level for the next 30 years.

I understand that these practices were quite commonly adopted 
in “previews”. While the past buyers were happy with the outcome 
in a rising property market, I fear that many buyers would 
be in dire straits when the market turns around. They might be 
committing to an overpriced property that they cannot really 
afford to service and may have to suffer a big capital loss 
when they have to dispose of the ill-advised 

I urge the regulator, namely the Council of Estate Agencies, will look 
into the legality or ethics of these sales practices.

Tan Kin Lian

Friday, September 28, 2012

Modify PSLE

MyRetirement Plan

A local bank is actively marketing a new life insurance policy called MyRetirement. Here is an analysis of this product.

Opinion of the people

How do the Government get the real opinions of the people? Alex Au posed this question in

Taking Twinkle for a walk

Twinkle, my pet Schnauzer, waits for me to talk her for a walk every morning. I try to find the time at least twice a week.

 I now use a lease and bring along a plastic bag to pick up her droppings. By flipping the plastic bag over, the dropping is contained inside the bag. I learned this method from another dog owner who took his dog for a walk.

I see many maids taking their dogs for a walk, as the owners are too busy to do this activity. It is a pity to have a pet dog and rely on the maids to carry out the bonding.

As Twinkle is 12 years old, she is in the twilight of her dog's life. But she still looks quite healthy and young.

Thursday, September 27, 2012

Help seniors avoid huge housing loans

Senior citizens like my father,
who have money in their Retirement Accounts,
should be allowed to draw upon it to meet their basic needs
and not be saddled with heavy loans just to secure a roof over their heads.

CPF interest rate remain at 4%

CPF extends 4% interest  till end 2013
The 4 per cent minimum interest rate on CPF savings
in the Special, Medisave and Retirement Accounts (SMRA)
will be extended till the end of next year.

Why is lawyer needed?

Loan redemption's puzzling protocol
Why is a lawyer needed
for the transfer of title deeds to the home owners,
and why are all legal costs
borne by the home buyers?

Cash and voucher incentives

Dear Mr. Tan

Singaporeans know that they need insurance to provide for their family
should the insured passed away.  There are many products in the market
provided by the various insurers which is good as it gives consumers a
wide variety of choice to select the best product for themselves.

Sad to say, because of the competitiveness among insurers, the
insurers resort to giving cash or voucher incentives to agents to help
them push their products.  These incentives are on top of their
commissions.  Example some insurer give as much as $3,000 cash should
they sell $x premiums worth of their products.

With MAS currently looking into FAIR for the Industry, these insurers
resort to giving incentives which may cause agents to be 'product

If a product is good and meets the insured needs, no matter whether
there is incentives or not, a competent agent will recommend to their

On the other hand, insurers are undermining agents professionalism by
entising them to sell their products by giving these incentives.

Maybe it is time, this should be put to a stop.

Insurance Agent

Telling lies through a proxy

The following comments apply to unethical agents, and do not apply to agents who act honestly.

If an insurance agent tells the truth about a life insurance policy, it is likely that the customer will not buy it, because the yield on the long term savings is rather bad. The agent has to resort to half or full lies to get the customer to buy the product. An example, is that the policy can give a yield of 9% because the funds are invested in good emerging markets. The chance of achieving this type of yield, net of expenses, is really quite remote.

It will be inexcusable for an experienced agent to make this type of misrepresentation. The way out is to be an agency leader and to make these statements to the energetic recruits about the "benefits" of the life insurance policy. The new agent does not know that these statements are untrue, and goes about with enthusiasm to spread the word to family and friends.

It is easier to make a false statement when one does not even know that it is false!

Student debts

Is is sad to spend so much money to get a degree and still be unable to find a job. This is the experience of many young people in America and other countries. The high unemployment rate of young people will be quite damaging for society. We need a new economic and social order to solve this problem. What do you think are the "out of the box" solutions?

Improve the public transport information

The government is spending $1.1 billion to improve the bus services. Most of the funds will be 
used to purchase buses and to subsidize the salaries of drivers.

I suggest that some of the funds be used to improve the information system and make it easy 
for commuters to use the bus services.

Commuters like to know the following:
  • The bus service to take and the place to make a connection
  •  Waiting time for the bus to arrive
  •  Where to alight from the bus

The Land Transport Authority can make the bus arrival information available for developers 
to develop mobile apps that can provide the above information. Mobile tablets can be installed at all 
bus stops to provide bus arrival information at a modest budget and can be implemented quickly.

There are already existing apps that help commuters to get the best connections using the buses 
and trains. LTA can educate the public on the use of these apps.

Many commuters avoid the use of buses due to lack of awareness about the bus services 
to use.   If they have easy access to the information, more passengers may find the 
bus services to be more convenient.

The buses should also have an electronic display to show the stop number and name of the 
bus stop. This will make it easy for the passengers to alight at the right stop. This simple 
and useful  display is used in several cities, including London, Hong Kong and Shenzhen.

With more convenient connections, I am confident that many car drivers will opt to give up 
their cars and take public transport. I am personally one of the converts.

I hope that the Land Transport Authority will implement some of these suggestions quickly 
to improve the public transport system in Singapore.

Tan Kin Lian 

Wednesday, September 26, 2012

Link between Raffles Place MRT to Marina Bay Financial Center

I visited a friend who works at the Marina Bay Financial Center. It comprise of three tower blocks. DBS Bank has just moved there.

There is an escalator that goes to Marina Bay Link Mall, which is at basement level. It is possible to walk on the underground passage all the way to Raffles Place MRT passing through several shops and eating places.

There is no need to walk at road level, and face the risk of traffic. This is an interesting part of city life in Singapore that is familiar to the people working there, but is not generally known. I only discovered this link today.

Sad stories of people who lost money on fraudulent schemes

Mr. Goh (not his real name) is in his late 50s and now works as a security guard at Midview City. He told me that he had invested his life savings in a land banking product and is not able to get his money back. It must be the product which guarantees a return of the principal and interest at 10% after one year. His wife is very angry with him.

Without any savings, he now has to work long hours as a security guard at a miserable pay. He is very angry at the Government and Monetary Authority of Singapore for failing to stop this land banking company to cheat people like him.

Mr. Lee (not his real name) sought my help a few months ago. His wife had wanted to invest in the gold scheme, which pays 2% every month for and promised to return the 100% of the capital at the end of 3 months. She had stayed away from the product for one year, after reading my advice to avoid it.

Her friends had had invested in the scheme and were able to collect the 2% return quite safely. To catch up for the lost time, the wife and her family had put in a large part of their savings in the scheme, against the advice of Mr. Lee.

Mr. Lee has now read in the newspaper that the company promoting the gold scheme had been sued by another investor and did not appear in court to contest the case. Mr. Lee is worried that his wife still had a lot of money invested in that company, and could suffer the loss. He wondered why the Government did not take action earlier to stop this operation.

The lack of action of the authority has led to so many losses from naive investors. In Malaysia, these operations had been closed down by the Government, but they were allowed to continue in Singapore, leading to a false sense of security of the public.

Our government leaders can say that these investors did not open their eyes and were greedy.  This is not such a simple matter. Like Mr Lee, he tried to tell his wife to avoid the investment, but she would not listen.

Distorted views about taxes

US Presidential Candidate made a remark about taxes and low income people that was damaging to his campaign. He is out of touch with the reality.

Many of our Singapore leaders, who are elites and earn high incomes, hold the same distorted views.

There are several articles of interest for consumers to read in the FISCA  website.

Tuesday, September 25, 2012

A loyal new citizen of Australia

It is interesting to hear the remarks of Steve Wozniak who is choosing to be a citizen of Australia

Germany is able to create jobs

This is an interesting study on how jobs are created in Germany that have high wages.

Gold trading firm taken to court by customer

Gold trading firm
taken to court by customer
She wins interim judgment;
other lawsuits may follow.
The Ministry of Trade and Industry has released this paper. One recommendation is to improve productivity of our businesses. I have given many feedback about the time wasted in submitted mandatory returns to government agencies, such as CPF, MOM, ACRA, IRAS, SAF and other agencies and accessing information from government websites on these regulatory requirements. Many of the feedback were sent to the Pro-Enterprise Panel under MTI. I hope that the Minister will get his senior officials to contact me and understand the issues that I have raised.

12 people became 13 people

I received this by e-mail. The 12 people became 13.
Do you know where the additional person came from?

Misleading yield on life insurance policy

If you find a new life insurance policy that gives you an attractive yield on maturity - be careful. It can be misleading. Here is how you can find out.

Top blue chips and REITS - August 2012

Here are the top blue chips, sorted by dividend yield, as at 31 August 2012

Here are the top REITS, sorted by dividend yield, as at 31 August 2012

Punishing the very poor

I share the views expressed by Alex Au and like to see the law changed

Skewed maturity benefit projections

Some life insurance companies have introduced new policies with skewed maturity benefit projections. They seem to give an attractive yield on maturity but the yield during most of the terms are poor. I find this type of projection to be unacceptable, as the life insurance company is not distributing the bonus in a fair manner. The bonus distribution is quite arbitrary. The danger of this type of projection is that the insurance company may reject the projected maturity payout on the grounds that they are only projections and the investment climate is bad. I advice consumers to avoid all types of life insurance policies with skewed maturity payout - i.e. if the bonus is quite low for most of the years but is bumped up towards maturity. See an example here:

Bank fees

Banks in America are now charging a fee for the use of ATM and for their check accounts. This trend will come to Singapore. Read (Information). 

Layoffs in banks

Many graduates like to work for the banks, because they pay higher salaries. But, they should be aware of a global trend in layoff bank workers. Read (Information) for my analysis of this trend. 

Raise taxes on the rich everywhere

The global economic is in bad shape because the most wealthy and top income earners pay too little tax. The  governments do not collect enough revenue to pay for the services and expenditures, including the welfare for the very poor. These governments have run large deficits which are not sustainable.

To overcome this budget deficit, the governments have to raise the tax revenue on the very rich who are earning a disproportionate share of the national income. Different tax rates in various countries allow the rich people to use creative accounting to move their earnings to countries that charge the lowest rate of tax. This "beggar thy neighbor" competition, including tax havens, is causing further damage to the global system.

A possible solution, as advanced by Hilary Clinton, is to "raised taxes on the rich everywhere". It requires an international agreement. It is a necessary step to solve the global financial and economic malaise.

Read this article

SAF Portal

I had to apply for make-up pay for the reservist training attended by my 
employee. My login, with SingPass, to the SAF portal was rejected for 
some unknown reason. I received a message to call the SAF call center

The automated messages programmed at the call center was quite inconsiderate.
I was asked first to identify my category - whether I was in SAF or Home Team. I 
did not fit into it. But there was no other option.

I tried SAF and was led to another automated message listing a number of
enquiry types. Again, I fitted into none of the pre-arranged choices. I tried the closest
choice and had to wait for someone to pick up the call. No one picked up the call. I gave up.

I sent my enquiry by e-mail and received a reply to call the same call center 

My employee agreed to submit a manually filled form and asked me to sign and 
stamp it. Subsequently, I still received an e-mail to verify some transaction in the
SAF portal. My login to the portal failed again. 

I received the same message to call the call center. I tried and once again, 
got lost among the automated messages.

This transaction must have wasted two hours of my time. I wonder how many 
employers faced the same type of difficulty. Surely, it is time for SAF to wake up
and change their process? Surely a form that is signed by the employee and 
employer is sufficient and does not need to be re-verified? 

Can our economy afford to waste so much time on these mindless processes?

Tan Kin Lian

The power of statistics and the National Conversation

My survey on the Ferrari crash is a good example of the power of statistics.

The survey asked the participants to give their views on the decision of the insurance company to deny liability for the accident as the Ferrari was driven recklessly. The first 10 replies showed an equal balance between those who support and those who do not support the decision. The same results were reflected based on the first 20 replies, the first 30 replies, the first 40 replies and now a total of 50 replies. The results were split evenly based on all the progressive reports.

Clearly, this is a matter where the public is evenly split on this matter. Those who support the decision of the insurance company felt that reckless driving should be punished. Those who disagree with the decision felt that the insurance company should abide by its contractual obligations.

If a survey is carried out in an unbiased manner, the results for the first (say) 25 replies tend to be representative of the views of the population.

Perhaps the National Conversation should be assisted by survey results on several important topics affecting the people of Singapore. The survey can be based on 100 people, who are selected to represent the population. Several survey can be carried out with on different topics and can involve a different group of people - to reduce the stress on any single person answering too many questions.

Monday, September 24, 2012

The Police does not know the law!

The quality of governance in Singapore has been deteriorating over the past two decades. Here is another example of a shameful state of affairs ....

A report in the newspaper about "rent-a-mob" said,

"Check with lawyers first, police say. Want a flash mob? Speak to a lawyer first. This is the advice from the police .... To avoid running afoul of the laws, organizers and participants should seek advice from their own legal counsel before organizing or participating in flash mobs. "

If the police, who is supposed to enforce the law, does not know what is or is not legal, how would an ordinary lawyer know? How would the public know? How would the police react, if a complaint is received from the public?

Is this a satisfactory state of affairs? We have seen many examples about one government agency pushing responsibility to another, and that has become the standard operating procedure in Singapore.

I leave it to Prime Minister Lee to reflect on this state of affairs, and to instruct his Law Minister and Home Affairs Minister to do something about making the law clearer to the citizens and to the law enforcers.

Corruption in Singapore

Mr. Feed has his interpretation of corruption in Singapore.

Sunday, September 23, 2012

Mobile apps and contests

My staff is introducing a few mobile apps that are good for training children and adults. You can also participate in weekly contests to win prizes. Go to

Affordable housing prices

It seems that China has a better approach in keeping housing affordable, rather than let the prices escalate under the concept of "asset enhancement".

Insurance claim on Ferrari accident

Do you support the decision of the insurance company to reject the claim on the Ferrari accident?
Give your views in this survey.

Display sequential stop number in the bus

I have written to the newspaper to suggest that the sequential stop number should be displayed when the bus arrives at a stop. This allows the passenger to know if the number of remaining stops before their destination. They can find ask for the stop number before or on boarding the bus.

The newspapers did not publish the suggestion, so I posted in in my blog and facebook. My friend, who visit Hong Kong regularly, told me that the sequential stop number is displayed on buses in Hong Kong and Shenzhen. I asked him to get photos for me.

I hope that the part of the $1.1 billion can be used to implement simple and low cost ideas to make our buses more convenient for consumers.

Interest rate on installment plan

Courts advertised their regular sales. They show the cash price and the installment play for many products. Do you know the interest rate charged on the installment plan? It is 46% per annum. The calculation is shown here.

Innovation in the Financial Industry

Quote from Paul Vocker, former chairman of the US Federal Reserve Board, a highly respected personality:
Volcker has been known to defy the stereotype of a Wall Street insider. A profile in The Week for February 5, 2010, claimed that Volcker doesn't even buy the conventional wisdom that "financial innovation" is necessary for a healthy economy. In fact, he likes to say, "the only useful banking innovation was the invention of the ATM."

Danger of low interest rates

Governments around the world have reduce interest rate to almost nil, in their attempt to stimulate the economy and create jobs. It does not seem to work. In spite of low interest rate for more than a year in America and Europe, unemployment remained at a high level.

The low interest rate has caused asset bubbles to form in the property and stock markets around the world. It has also damaged the earnings of retirees who gets almost nothing for their savings. The harm that is posed by low interest rate is quite serious and is not being recognized. The longer it continues, the worse will be the bubble and other damages.

In the near future, people will abandon cash and buy gold and other commodities. This is already happening and may become a flood. This may lead to high inflation, as money is being abandoned. We may have to study the hyper inflation in Germany in the 1930s to understand how this situation will play out. Read this article.

Governments can combat inflation by increasing the interest rate. This happened in the 1980s under President Reagan. Paul Vocker was the head of the US Fed. Read this article.

Will we have high inflation to be followed by high interest rate?  We have to watch the events closely!

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