Do not invest in unregulated investments

Dear Mr Tan,
I read your blog.
Have you heard about this UFUN (www.ufunclub.com)?
A lot of people (Spore, Msia, Thai) are investing and claim they are getting good returns in the first few months. Is this kind of investment safe?
They give dividends (in the form of e-token) to members and the returns are good.
They are inviting a lot of new members to join.
Each investment can be US$500, US$1000, US$5000, US$10000 and US$50000.
‎Pls comment if you know about this UFUN scheme and if some people have already fallen prey to this scheme.

REPLY
I have not heard about this scheme. My comments below apply to questionable schemes in general and are not related to this specific scheme.

I would advice people to avoid investing money in schemes that are not regulated by the authority. It is easy to give your money away, but quite difficult to get it back.

Even if you are getting back the return, in the form of dividends or principle, remember that the money that is used to pay you may come from the investments of other people. Similarly, your money may be used to pay off the earlier investors.

This type of scheme is called a Ponzi scheme. The Ponzi scheme will grow as more and more people join. Eventually, when there are more people wishing to withdraw their investments, the scheme will close down and the promoters will disappear. The investors will not get their money back.

Lighten Medisave burden on self-employed seniors

Contributed by Dr. Tommy Wong

From 1 January 2014, the Medisave contribution rate for non-pensioners and for those who are age 60 and above is 9.5%. This rate applies to both employee (monthly wage ≥ $750) and self-employed (average monthly income > $1,500). There is a cap of $5,700- on the annual contribution for the self-employed. While this practice appears fair on surface, there is actually a hidden burden to the self-employed.

For the employee, the following table shows the contribution rates by the employer and employee to the employee’s CPF account. So even though the Medisave contribution rate is 9.5%, depending on the age, the employee's ​​contribution rate is ​7.5% or 5.0%.

Employee Age (Years)	Contribution Rate (for monthly wages ≥ $750)
	Contribution by Employer (% of wage)	Contribution by Employee (% of wage)	Total Contribution (% of wage)
Above 60-65	7	7.5	14.5
Above 65	6.5	5	11.5

On the other hand, for the self-employed, since there is no employer’s contribution, they have to pay the entire 9.5% contribution all from their own income. So, compared to an employee, his take home pay is lower. For the self-employed whose financial situation is not well off, this is a real burden.

Can the Government review the Medisave contribution rate for the self-employed seniors so that their burden​ can be lightened?​

Dr. Tommy Wong is the author of the book series "Wisdom on How to Live Life" The ebook series can be ordered at http://c-opal.com/pdfbook/6. His website is at http://wisdomlife.page4.me/.