Saturday, October 13, 2012

LTA App wins International Award

The LTA app, MyTransport.SG has won an international award.,SG
I have downloaded it into my iPad but I hardly use it. My commonly used apps are and SG Bus.
Do you use the LTA app regularly?

Alleged breach of policy conditions

Janet (not her real name) was negligent in knocking down a pedestrian. She reported the accident to her insurance company X promptly, as required by the policy, and X had to handle the injury claim from the pedestrian.

Half a year later, the Police issued an offer to Janet to pay a composition fine of $200 for her careless driving. She accepted and paid the fine.

She was not aware that she would have breached the a condition in the policy which required "Every letter claim writ summons and process shall be notified or forwarded to the Company immediately on receipt." 
X paid a sum of $30,000 as injury claim to the pedestrian and took legal action to recover this payment from Janet, as she had breached the policy condition and was not entitled to be covered by the policy. Janet had to engage a lawyer to fight against the recovery of this sum by X.


A new policy - Cash Cow

Someone sent me the Benefit Illustration of a new policy called the Cash Cow and asked for my views. This policy requires premium to be paid for 10 years and the policy can continue without any further premium payment.

I compare the surrender value under the Cash Cow policy at the end of 10 years and 20 years with the same amount invested in the STI ETF, assuming the same yield of 3.75% and 5.25%, and obtained the following amounts:

The payout from the STI ETF is at least 50% higher than the cash cow, assuming the same interest rate earned.

The life insurance cover provided by the Cash Cow is very low, so the cost is probably less than 1% of the premium that is being saved. The Cash Cow gives a poor return, compared to an investment in the STI ETF.

Motorists to be hit in the pocket again

A new GPS system of charging self-drive commuters
adds pressure to switch to public transport.
(Photo: Spluch)
In time, the GPS method of charging may become
even more unpopular
than the current electronic gantry system.
Some people believe it would be implemented
either long before or after 2016, the next general election.

Some gold trading is Ponzi scheme

Dear Mr Tan

Today's straits times A37 - "Bank Negara:  Some gold traders run Ponzi
schemes.  KL Central banks raids four firms, has another 20 on
consumer alert list"

It is interesting to know what our Authorities intend to do?  Are they
currently allowing some of these companies to liquidate their assets
before taking action or they just deem that their schemes are not
under their preview and they should not take any action.

This has happened in the past with the Minibonds and we are still
allowing such things to happen.

Friday, October 12, 2012

Paying a high interest rate for borrowings

Dear Mr Tan,
Please help to share this sad story in  your blog.

Bob (not his real name) is now 51 years old, a local Singaporean Chinese. Less than 6 six years ago, he  married a young Vietnamese lady through a marriage agency. She was in her early 20s and he was then 45 years old.

Today, he is in debt partly due to his gambling habits and partly due to his generous care of his young wife by providing for her immediate family in rural Vietnam, inclusive of building a family house for them. He also gave a significant portion of his net monthly income as allowance to his wife and paid for multiple trips for her and her mother to visit Singapore. Bob is not rich, just a typical heartland Singaporean with gross income slightly above $3,000 but he has a fully paid HDB flat fund through CPF through his years of hard work.

Bob owes at least six banks through easy credit scheme and cash advance from his stack of credit cards to the tune of $80,000. This debt amount was accrued during the past nine months due to his casino gambling trips. Recently, he even turned to another four "licensed" money lenders to loan for a smaller sum. This easy cash loan is directly deposited into bank account and accordingly to Bob, most of them don't have a shop or office front and there is no formal loan agreement, just through handphone conversations and SMS texts and weekly debt servicing payment also through ATM to a designated account given to him.

Looking into Bob's debt issues, is there anything an individual could learn?  Also, is there anything that our MAS could have done better to control easy credit card applications and approval?

In this case, if an individual earns only a gross monthly income of $3200, can he owns so many credit cards that allows him to have such easy cash advance to the tune of two months of annual salary for each credit card in his hand?  Also, Bob has to pay a weekly 5% interest rate (i.e. annualized rate of 260%). Is there no guidelines in which MAS can impose upon such of debt which many licensed money lender operation to control the max? Bank typically impose a 2% interest rate per month (annualized rate of 24%) for credit cards loan. I have not even mentioned about one last category of dangerous debt which many are exposed to i.e. loan sharks. 

One just need to walk into the numerous counselling sessions that are held all over the island to understand the full extent of the debt and loan issues which both Singaporean and non-Singaporean of all races are been traumatized. Bob now has to sell his HDB flat so that he can pay off his debts and he is also in the midst of a divorce proceeding initiated by his wife. He couldn't avoid to hire his own lawyer, but yet agreed to pay for his wife's lawyer for this uncontested divorce.

Thursday, October 11, 2012

Upgrading of Shield plan turned sour

Mr. Wee (not his real name) is in his late 50s. On advice from his friends, he upgraded his Medishield to a private Shield and paid a higher premium. He thought that this would provide higher coverage for his medical expenses, but it turned out to be a nightmare for him.

A few months later, he had a heart condition that required him to be hospitalized on three occasions. Although his private Shield plan allowed him to use B2 ward, he opted for C class ward. The total bill for the three visits was $14,000, which was initially deducted from his Medisave account.

The insurer refused to pay the claims on account of non-declaration of a cancer treatment that occurred 20 years earlier. As there was no recurrence of this problem, Mr. Wee thought that it was a non-issue. The insurer also found that he did not declare his high blood pressure that was under control.

Mr.Wee had been insured under Medishield since its inception. Instead of paying the claims (which is fully recoverable from Medishield), the insurer wanted to cancel the private Shield insurance from inception,  and required Mr. Wee to make a claim directly from Medishield  But Medishield told Mr. Wee that he should claim under his private Shield, as Mr. Wee had transferred his policy to private Shield for half a year. It would be quite difficult to transfer the insurance back to Medishield retrospectively.

Mr. Wee had to move from one party to another and after a few months, his claim was still not paid. He advised the public not to upgrade to a private Shield from Medishield and faced this type of stress.

Singapore Transport rank top

In spite of glitches, Singapore transport still rank top among global cities.

I agree with this assessment. However, there are several simple and low cost measures that can be introduced immediately to make travel more comfortable for commuters.

Effective way to solve a problem

This story shows the difference between an effective and wasteful way to solve a problem. I find many cases of wasteful ways in Singapore and will share them. We need to recognize the wasteful ways and implement measures that are effective in achieve the results and reduce the cost.

Make a Police Report on gold bar investment

Mr. Wong (not his real name) invested over $1 million in the gold bar scheme of the gold trading company that was recently in the news. It represented his entire life savings. He was not aware that the company was on the MAS Alert List. He stopped receiving payment and, to make matters worse, he had deposited his gold bars with the company. He is afraid that his entire savings would be gone. Mr. Wong asked for my advice on the steps that he should take now.

I told Mr. Wong that he should make a Police report. This report may be useful to the Commercial Affairs Department, as they had recently started to investigate the company.

I told Mr. Wong that there is no point to engage a lawyer at this stage, as he would be incurring legal fees and, even if he obtained judgment against the gold trading company, they would probably ignore the judgment.

Other investors in the same situation as Mr. Wong should lodge their Police report as soon as possible, unless they are informed by CAD that this is not necessary.

Tuesday, October 09, 2012

Slow access to data

Recently, I experienced slow access to data on 3G and broadband, in my home and the office. I used two providers, i.e. SingTel and Starhub. Have you also experienced the slow and unreliable response?

Ten Years of Risk Management Debacles

There were 5 big debacles, all of which involve trading and derivatives of banks and security firms.

1. J P Morgan, derivative trading, loss of $5.8 billion
2. MF Global, European bonds, loss ??
3. Merrill Lynch, morgage, loss ??
4. Citigroup, CDO, loss of $60 billion
5. Morgan Stanley, mortgage, loss of $9.6 billion

Citigroup loss is the biggest! These are due to failures of risk management oversight!

Facecard - what details to include?

If you are not sure how much details to include in your facecard, you can start with your name, e-mail address, telephone (optional) and company (or school). This should be sufficient. You can add more details later on. Just give it a small start. And send a link to your friends.  

Increase in motor premium rates

Motor premium rates have increased by an average of 10% per annum over the past four years. This is not due to bad driving. What is the cause of the increase? Find the reason here.

Providing a service to the public

The purpose of insurance is to cover losses due to unexpected events. These are accidents and are not intentional.

Most people driving on the road do not wish to have an accident as it would lead to loss of life, injury or property damage. Sometimes, they are not careful and may miss or misjudge the timing of a red light. This is how an accident happens.

When they meet with an accident, they already pay a heavy price, through the payment of the Excess and the loss of the No Claim Discount. This can amount to a big financial loss, especially to a person on a tight budget.

Do they regret their carelessness? Of course, they do. This is how people learn through experience.

The purpose of insurance is to cover these types of unexpected events. It is not the duty of the insurance company to "punish" the driver, and act like the prosecutor and judge. Any such punishment should be left to the relevant people, who are trained in such matters.

Is it right for the insurance company to reject the renewal of the insurance and to impose an excessive loading to recover their loss? This is a separate issue.

If I were the regulator, I would impose certain conditions on what is fair, and what is unfair. If an insurance company behave unfairly to consumers, they should not have the licence to transact insurance business. This is not just a business - as there are responsibilities to the public to act in a fair manner.

Property price rise will lead to inflation

I AGREE with the views
of Mr Goh Khee Kuan ("No reason to fear if property prices fall"; last Friday)
and Mr Harry Leong ("Think of the Singaporeans to come"; last Friday).
Most retirees should be very concerned
if inflation keeps creeping up as it will erode their savings.
Inevitably, there will come a time
when some of us may have to downgrade our property,
move to retirement homes
or migrate to a cheaper country to survive.

Refusal to renew insurance

 AM DISMAYED by letters supporting Mr Tan Yau Cher
("...'Compulsory' rule must apply to insurer too"
 by Mr Leong Kok Seng, last Wednesday; and
 "4 ways for fairer renewals"
 by Mr Tan Kin Lian; last Thursday)
over NTUC Income
("No insurance renewal for dangerous driving", last Wednesday);
the first of two Income replies defending its decision against renewal.
Motorists must accept the responsibility and financial issues
that come from driving and vehicle ownership.
... let us not be unreasonable towards insurers,
for they are the ones that enable us to drive daily.

Zeng Yanzhi
My comments
There are many people who share the same view as Zeng Yanchi. They seem to think that people who drive carelessly do it on purpose.

When they meet with an accident due to a careless mistake, they will learn that accidents can happen even to careful drivers. By that time, it will be too late and they have to suffer the same fate as Mr. Tan Yan Cher. I hope that they will then be brave to accept the consequences and not ask me for help.

Poor record? It's our only claim

NTUC Income chief executive officer Tan Suee Chieh's reply
("Income defends renewal rejection"; last Friday)
to my letter
("Don't let insurers leave car owners in renewal fix"; Sept 29)...
Yes, my younger daughter made a serious driving error.
However, mistakes on the road are not uncommon,
and that is why motor insurance is mandatory for all vehicles.
While Income's intention in preventing reckless driving is commendable,
the decision as to whether it should be the reason to punish her
should be a legal, and not an arbitrary one.

Advice from Jack Bogle

This is excellent advice for investors looking for better yield over the long term

Name card on the Cloud

You can put your Name Card on the Cloud (go to  Here are the advantages:

1.  If you are involved in marketing, it is easy for a potential customer, especially someone who knows you previously, to search for you by name. He or she might have lost your business card.

2. If you are a retiree, the people who know you before, e.g. former colleagues, friends, classmates and neighbors, can search for your name card.

3.  If you are a student, it is a good way to build up your future contacts. You can keep in touch with people that you know and be updated when they change their jobs or contacts.

Those who use LinkIn now will know the advantage. Here is an additional channel, and is easier to use. Try it. A mobile version will be available in Apple App Store soon!

Discount on FISCA talks

FISCA members will now enjoy a $20 discount on attending the FISCA educational talks on financial planning, investments, insurance and other consumer-oriented talks. Each talk is for 3 hours held in SMU or other venues. The fee is $30 for the public and $10 for members.

The membership fee to join FISCA is $36, so by attending two talks, the member already gets back more than the fee. There will also be a subsidized dinner talk for members to meet each other and exchange views.

To register, go to and click on Register. Details of the talks are shown under Event. The articles posted in the website can be found under Information.

Mobile apps from TKL Associates

Here are some interesting apps developed by Tan Kin Lian & Associates
You can take part in a weekly contest and win prizes.

Monday, October 08, 2012

Regulate the banks

PM Lee said that it is difficult to regulate the banks more tightly

The other extreme, which he seemed to favor, is to let the market takes care of bad behavior of the banks.

There is a middle path. The regulators can be more active in regulating the products offered by the banks. Many of the financial products are bad, and should be stopped in the first place. Paul Vocker recently said that the only useful innovation in the financial sector is the invention of the ATM. He suggested that all the other financial innovations are dubious. Link.

The Frank Dodd bill on financial regulation and protection of consumers mandate the regulators to approve plain vanilla financial products. This is a necessary step.

Name card in the Cloud

Many people print out Name Cards to introduce themselves to their contacts. The trouble is - the contacts may not keep the name card in a Box or enter the details into the contact book.

Here is a better option. Create a Name Card in the Cloud. Your contacts and friends can find your details there, when they need it. And retrieve your name card into their virtual Box.

You can also send a link to your contacts, so they can keep a link in their Box. And what's more, each time you update your card, all your contacts will be notified immediately and can access your latest details,

This is called your FaceCard. You can create it at

Sunday, October 07, 2012

Gold trading scheme

My friend attended a Gold seminar and gave me this report a month ago.

QUOTE: The company was rated among the Top 100 SMEs in Singapore. They showed pictures of the boss with political and influential people and favorable write-up by media.The company said that they are trading in gold and the GST on the trading will be waived in October, as part of a plan to make Singapore into a GOLD HUB.The investor buys 1 kg of gold for $91,000 and is given the gold bar on full payment. The investor is paid 1.7% or $1,500 every month for 3 months. After three months, the investor can renew the contract every quarter. If the investor return the gold bar, the company will pay you back the $91,000. The price of the gold bar is 20% higher than market price.It attracted many retirees with money. UNQUOTE
Here are my views.
If a stranger approaches you and ask you to give him $18,000 and he will pay you $1,500 a month, will you trust him? If this stranger tells you that he is approved by MAS, will you take his word for it? After collecting your money, the stranger can run away with it. He can also lied to you about being approved by MAS.
Even if the gold company is able to pay the return to you for a few months, it is likely to be a Ponzi scheme. The company takes money from the later investors to pay the earlier investors and pocket the difference! When new investors stop putting in the money, they will fold up and run away. This has happened many times in the past. It is not possible for the gold tracing company to earn a return o 17% from gold trading.

How to cool down a hot drink quickly

Have you ever wanted to drink something but it was too hot? These methods will help bring down the temperature. It is especially good for cooling down tea for people who don't like it too hot.

1) Take your drink and pour it from one cup to the other cupRepeat until your drink has cooled down.
2)  Put one or two ice cubes in your hot drink.Stir your drink.
3)  Trying pouring some milk into your drinkStir well.
4)  Get a fan, and aim the fan at your drinkIf you do not have a fan, try blowing on your drink, but not too hard.

Read this also

Investor Alert List

I disagree with the approach taken by the Monetary Authority of Singapore in putting up an Investor Alert list.

A better approach is to have a conversation with the promoters and to ask some relevant questions. They can tell the promoters that they are potentially breaking the law on deposit taking and money laundering. If the promoters insist on continuing the activities, MAS could ask the CAD to investigate the matter.

A pro-active approach will be more effective in stopping potential scams.

Survey for the National Conversation

The following survey contains useful information for the National Conversation

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