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.
Monday, June 14, 2010
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
Saturday, June 12, 2010
Benefit Illustration
A benefit illustration has to be given for each life insurance policy that is recommended to a consumer. More than 100,000 life insurance policies are sold each year. The number of benefit illustrations given out must be at least two times of the number of policies sold. This makes the benefit illustration to be widely used.
Many people criticised the benefit illustration to be too complicated. As a result, consumers do not bother to read or understand them. It is the duty of the insurance adviser to explain the content of the benefit illustration, but most advisers do not do this duty. This is evidenced by the large number of insurance buyers who do not understand the key features of the policy and the key points in the benefit illustration.
There are only two important points that the insurance buyer should be aware:
a) distribution cost
b) effect of deduction
These two key figures determine whether the insurance buyer is paying too much for the insurance or getting too little back as investment return.
If consumers know what to look for, and how to interpret these figures, they can avoid paying thousands of dollars away unncessarily. These key points are explained in my book, Practical Guide on Financial Planning, which can be bought online here for only $12. The book also contained advice on how to identify and avoid bad financial products.
Many people criticised the benefit illustration to be too complicated. As a result, consumers do not bother to read or understand them. It is the duty of the insurance adviser to explain the content of the benefit illustration, but most advisers do not do this duty. This is evidenced by the large number of insurance buyers who do not understand the key features of the policy and the key points in the benefit illustration.
There are only two important points that the insurance buyer should be aware:
a) distribution cost
b) effect of deduction
These two key figures determine whether the insurance buyer is paying too much for the insurance or getting too little back as investment return.
If consumers know what to look for, and how to interpret these figures, they can avoid paying thousands of dollars away unncessarily. These key points are explained in my book, Practical Guide on Financial Planning, which can be bought online here for only $12. The book also contained advice on how to identify and avoid bad financial products.
Friday, June 11, 2010
Land banking report in TODAY
Hi Mr. Tan,
http://www.todayonline.com/Singapore/EDC100611-0000267/Investors-call-for-regulation-of-land-banking
Quote:
Ex-NTUC Income chief executive Tan Kin Lian, who has blogged extensively about land banking, told MediaCorp that any product sold as an investment should be regulated - especially if it is advertised through the media to the general public.
Unquote
HL
http://www.todayonline.com/Singapore/EDC100611-0000267/Investors-call-for-regulation-of-land-banking
Quote:
Ex-NTUC Income chief executive Tan Kin Lian, who has blogged extensively about land banking, told MediaCorp that any product sold as an investment should be regulated - especially if it is advertised through the media to the general public.
Unquote
HL
Singapore Property Market
Land banking - Gathering at Hong Lim Park, 12 June 9.30 am
Countdown for tomorrow ....
The time of the gathering (for land banking investors) has been changed to 9.30 am on Saturday 12 June.
Agenda:
09.30am - 10.00am: Registration and Networking
10.00am - 10.15am: Start of presentation: Short Intro on the aims and purpose of our actions
10.15am - 11.00am: Talk by Guest Speaker, Mr Tan Kin Lian
11.00am - 11.15am: FAQs between Audience and Mr Tan
11.15am - 11.30am: Signing of Petition for Regulatory Action
11.30am - 12noon: Drinks
The time of the gathering (for land banking investors) has been changed to 9.30 am on Saturday 12 June.
Agenda:
09.30am - 10.00am: Registration and Networking
10.00am - 10.15am: Start of presentation: Short Intro on the aims and purpose of our actions
10.15am - 11.00am: Talk by Guest Speaker, Mr Tan Kin Lian
11.00am - 11.15am: FAQs between Audience and Mr Tan
11.15am - 11.30am: Signing of Petition for Regulatory Action
11.30am - 12noon: Drinks
Thursday, June 10, 2010
Hottest issues in Singapore
What are the hottest issues in Singapore to be faced in the coming general election? Based on the first 100 people who replied to my survey (with each respondent choosing up to 3 issues), the ranking of the issues is:
Rising cost of living and stagnant income - 74%
Too many foreigners in Singapore - 68%
High cost of HDB Flats - 60%
High salaries of ministers - 54%
Rising unemployment of PMETs and no retrenchment benefits - 36%
Unemployment of older workers 25%
Low wages (no minimum wage) - 25%
High GST and levies - 24%
Unemployment (of PMET, older workers) and low wages have now become "hotter" than GST and levies.
Tan Kin Lian
Rising cost of living and stagnant income - 74%
Too many foreigners in Singapore - 68%
High cost of HDB Flats - 60%
High salaries of ministers - 54%
Rising unemployment of PMETs and no retrenchment benefits - 36%
Unemployment of older workers 25%
Low wages (no minimum wage) - 25%
High GST and levies - 24%
Unemployment (of PMET, older workers) and low wages have now become "hotter" than GST and levies.
Tan Kin Lian
Effect of deduction and distribution cost
Dear Mr Tan,
My mother just bought a Whole Life insurance that is payable for 24 years. She also tag on a Critical Illness rider.
After reading your numerous posts on how expensive life policies are, I would like to seek your comments on the benefit illustration given to my mother. She is currently still in the 14-days free-look period.
REPLY
The benefit illustration shows that the distribution cost is almost two years of premium and the effect of deduction is more than 40% of the value of accumulated premium. They are both too high, giving poor value to the policyholder.
Please read my book, Practical Guide on Financial Planning to understand these two important measures.
The book provides the benchmark on what is an acceptable level for the effect of deduction for various durations of the policy. You can buy the book at www.easysearch.sg/ishop
.
My mother just bought a Whole Life insurance that is payable for 24 years. She also tag on a Critical Illness rider.
After reading your numerous posts on how expensive life policies are, I would like to seek your comments on the benefit illustration given to my mother. She is currently still in the 14-days free-look period.
REPLY
The benefit illustration shows that the distribution cost is almost two years of premium and the effect of deduction is more than 40% of the value of accumulated premium. They are both too high, giving poor value to the policyholder.
Please read my book, Practical Guide on Financial Planning to understand these two important measures.
The book provides the benchmark on what is an acceptable level for the effect of deduction for various durations of the policy. You can buy the book at www.easysearch.sg/ishop
.
Learning Chinese
Hi Tan,
I know this email is out of the blue, but I just posted an article on my blog entitled “100 Useful Tools to Teach Your Child Chinese” http://www.universityreviewsonline.com/2005/10/100-useful-tools-to-teach-your-child-chinese.html. Anyway I figured I’d bring it to your attention in case you thought it interesting enough to drop a quick mention on your site about it as I’m trying to increase readership of my blog.
Samantha Miller
I know this email is out of the blue, but I just posted an article on my blog entitled “100 Useful Tools to Teach Your Child Chinese” http://www.universityreviewsonline.com/2005/10/100-useful-tools-to-teach-your-child-chinese.html. Anyway I figured I’d bring it to your attention in case you thought it interesting enough to drop a quick mention on your site about it as I’m trying to increase readership of my blog.
Samantha Miller
Legal fees for aborted loan
Hi Kin Lian
I have signed an OTP to buy a flat and proceed to get a bank loan for it. I have subsequently ask for a AIP(approval in principle) loan approval from a bank. It was stated that the loan is void if HDB disapprove the sale.
The sale was disapproved by HDB and I immediately informed the bank. I was assured that it will be void with no further actions needed from my side. However 2 months later, I was told that I have to pay the law firm, which the bank engage to lodge a caveat 1 month after I faxed in the HDB letter. Can you advise if this is a common practice? Who should be paying for the law firm fee?
I have checked with the bank, however they claim that I should pay for it. I'm still contesting it and I'm asking them to state the clause though it was not mentioned to me beforehand. You might want to highlight to the readers when they are taking up loans from a bank.
REPLY
I think that the bank should bear it unless there can show you a clause in the agreement that states clearly that you are required to pay the fee. If they incur the expenses after the loan has been rejected, then they should bear the cost as it was their mistake.
I have signed an OTP to buy a flat and proceed to get a bank loan for it. I have subsequently ask for a AIP(approval in principle) loan approval from a bank. It was stated that the loan is void if HDB disapprove the sale.
The sale was disapproved by HDB and I immediately informed the bank. I was assured that it will be void with no further actions needed from my side. However 2 months later, I was told that I have to pay the law firm, which the bank engage to lodge a caveat 1 month after I faxed in the HDB letter. Can you advise if this is a common practice? Who should be paying for the law firm fee?
I have checked with the bank, however they claim that I should pay for it. I'm still contesting it and I'm asking them to state the clause though it was not mentioned to me beforehand. You might want to highlight to the readers when they are taking up loans from a bank.
REPLY
I think that the bank should bear it unless there can show you a clause in the agreement that states clearly that you are required to pay the fee. If they incur the expenses after the loan has been rejected, then they should bear the cost as it was their mistake.
Root cause of the global financial crisis
The problems occuring in many countries are inter-related. Starting with the meltdown of the housing bubble in the US and Europe, we now see the problems with the government deficits in Greece and other countries. The crisis has been temporarily managed with the huge injection of public funds, but this increases the public debt and many observers expect that things will get worse in the months ahead.
What causes all of these problems? Was it deregulation? Was it deficit spending by governments? What is a possible solution? Please share your views?
What causes all of these problems? Was it deregulation? Was it deficit spending by governments? What is a possible solution? Please share your views?
Wednesday, June 09, 2010
Hot issues in coming general election
What are the hot issues in the coming general election? Share your views in this survey.
General Election 2010
The general election is widely expected to be held in the second half of 2010. Which party will you vote? Take part in this survey (now closed).
Here are the updated results of the survey, based on 100 replies. The results are quite close to the earlier report based on 58 replies. I have now added the general comments of 19 respondents.
Disclaimer: My blog attracts a higher proportion of people who are unhappy with the government. The results of this survey reflects this group, and may not reflect the general population.
Here are the updated results of the survey, based on 100 replies. The results are quite close to the earlier report based on 58 replies. I have now added the general comments of 19 respondents.
Disclaimer: My blog attracts a higher proportion of people who are unhappy with the government. The results of this survey reflects this group, and may not reflect the general population.
Universal Life policy
A consumer sent to me the benefit illustration of a universal life policy. I found the features of this policy to be as follows:
1. The policy requires an investment of a lump sum of $186,000
2. The distribution cost of the policy is $32,000. This is the money that is taken from the premium to pay commission to the agent and the profit of the company. It is a large sum of money to give away.
3. There is a guaranteed interest rate of 3% per annum, but I am not sure how safe or long is the guarantee. In any case, this is not really attractive, especially after considering the deduction of the distribution cost.
4. The policyholder has to incur a monthly expense charge of $500 or $6,000 a year. This seems to be rather high.
5. There is a monthly deduction for the life insurance cover at a rate that is stated in the policy data. This is not shown in the benefit illustration. I am not sure if this charge is reasonable or high.
6. Based on the benefit illustration, the cash value based on guaranteed interest rate of 3% per annum actually decline over the years. The deductions are higher than the guaranteed intereset of 3% giving a negative return.
7. The cash value under the projected interest rate of 5% will show a gain on your investment after 6 years. This projection (which is not guaranteed) is unrealistic.
See Practical Guide on Financial Planning
1. The policy requires an investment of a lump sum of $186,000
2. The distribution cost of the policy is $32,000. This is the money that is taken from the premium to pay commission to the agent and the profit of the company. It is a large sum of money to give away.
3. There is a guaranteed interest rate of 3% per annum, but I am not sure how safe or long is the guarantee. In any case, this is not really attractive, especially after considering the deduction of the distribution cost.
4. The policyholder has to incur a monthly expense charge of $500 or $6,000 a year. This seems to be rather high.
5. There is a monthly deduction for the life insurance cover at a rate that is stated in the policy data. This is not shown in the benefit illustration. I am not sure if this charge is reasonable or high.
6. Based on the benefit illustration, the cash value based on guaranteed interest rate of 3% per annum actually decline over the years. The deductions are higher than the guaranteed intereset of 3% giving a negative return.
7. The cash value under the projected interest rate of 5% will show a gain on your investment after 6 years. This projection (which is not guaranteed) is unrealistic.
See Practical Guide on Financial Planning
Education and reflection
My friend stopped work for one year to study for an masters degree in a UK university. Here are his thoughts as he reflected on his father (who had since passed away)
Hi!
Looking further backward, I didn't really study well when I was a student in both primary school & lower secondary school - because I was too playful. This is my regret.
If my father is still around, he will be quite surprised to know the route that I have chosen and came this far.
He is wise. From his point of view, university education is probably a luxury and he probably never expected me to graduate from a university.
He was correct in pointing out that the most important education was probably during primary and secondary schooling because if the student was brilliant, he or she could gain all the necessary and sufficient knowledge and character to succeed as in business.
He once told me that, the years spent by the top 10 richest Chinese businessmen in Malaysia was less than 15 years. The most important criteria were attitude, determination, willingness to work hard, confidence, self-esteem, respect of elders and teachers.
Treat others like you would like to be treated and have a willingness to serve or help others. These characteristics would made him a successful businessman by bringing valuable products to serve a particular market.
Giap
Hi!
Looking further backward, I didn't really study well when I was a student in both primary school & lower secondary school - because I was too playful. This is my regret.
If my father is still around, he will be quite surprised to know the route that I have chosen and came this far.
He is wise. From his point of view, university education is probably a luxury and he probably never expected me to graduate from a university.
He was correct in pointing out that the most important education was probably during primary and secondary schooling because if the student was brilliant, he or she could gain all the necessary and sufficient knowledge and character to succeed as in business.
He once told me that, the years spent by the top 10 richest Chinese businessmen in Malaysia was less than 15 years. The most important criteria were attitude, determination, willingness to work hard, confidence, self-esteem, respect of elders and teachers.
Treat others like you would like to be treated and have a willingness to serve or help others. These characteristics would made him a successful businessman by bringing valuable products to serve a particular market.
Giap
Office position
I am looking for a person to work part or full time in my office for administrative and accounts work. If you are interested, please reply to kinlian@gmail.com.
Do not follow a bad idea
Hi Mr Tan, I found the insurance information listed on your website very informative and useful. I met up with the insurance agent who has come up with the insurance plan. I am not sure whether I am paying a high premium after looking through his proposal.
I find there are quite a few plans that cover disability so I am concerned whether there is any duplication. I am not to keen to put my savings in an investment-linked policy but my friends, brother all purchase the ILP. It could be good to have one. I would like to seek your advise whether there are anything else that I should take note of.
SY
REPLY
The distribution cost is nearly two years of your savings. The effect of deduction is more than 30% of the value of accumulated premium. These are too high. Read my book, Practical Guide on Financial Planning for an explanation of these concepts.
Do not follow your brother and friends into making the same mistake with a high cost investment-linked policy.
I find there are quite a few plans that cover disability so I am concerned whether there is any duplication. I am not to keen to put my savings in an investment-linked policy but my friends, brother all purchase the ILP. It could be good to have one. I would like to seek your advise whether there are anything else that I should take note of.
SY
REPLY
The distribution cost is nearly two years of your savings. The effect of deduction is more than 30% of the value of accumulated premium. These are too high. Read my book, Practical Guide on Financial Planning for an explanation of these concepts.
Do not follow your brother and friends into making the same mistake with a high cost investment-linked policy.
World Peace Index - ranking of countries
Hi Mr. Tan,
The latest Global Peace Index by The Institute for Economics and Peace:
http://www.visionofhumanity.org/wp-content/uploads/2010/06/2010-GPI-Results-and-Methodology-Report.pdf
Some rankings:
1) New Zealand
2) Iceland
3) Japan
10)Sweden
18) Switzerland
19) Australia
22) Malaysia
30) Singapore
31) United Kingdom
85) United States of America
HL
The latest Global Peace Index by The Institute for Economics and Peace:
http://www.visionofhumanity.org/wp-content/uploads/2010/06/2010-GPI-Results-and-Methodology-Report.pdf
Some rankings:
1) New Zealand
2) Iceland
3) Japan
10)Sweden
18) Switzerland
19) Australia
22) Malaysia
30) Singapore
31) United Kingdom
85) United States of America
HL
Tuesday, June 08, 2010
A vision for an egalitarian economy
In recent years, Singaporeans have experienced a higher cost of living, widening wage gap, stagnant incomes and insecurity of jobs. This is reflected in a falling birth rate, which has become among the lowest in the world. Something is wrong.
What is the alternative? I read a few articles from the website of the Singapore Democratic Party. Here is a summary of their key proposals. You can read more details in separate articles in their website. I find their proposals to be quite sensible.
What is the alternative? I read a few articles from the website of the Singapore Democratic Party. Here is a summary of their key proposals. You can read more details in separate articles in their website. I find their proposals to be quite sensible.
Banks cash top-up scheme
Dear Mr Tan,
I am a regular reader of your blog. I have found it informative and helpful. Many have found the space you have provided a very useful forum. Thank you.
I would like to find out whether there are others like me, finding banks "top-up" schemes unfair and tiring. Because only fresh funds can enjoy higher interest rate, you need to transfer funds and for all the trouble you can only enjoy the higher rate for a short period of time. Initially only Standard Chartered Bank has such scheme. Now UOB and other banks follow suit. I find such schemes very meaningless.
I hope that you can raise this problem in your blog so that others who feel the same way can come together to do something.
Liangxin
My comments
I agree that banks should treat their existing customers fairly. They should not get the customer to go through a lot of trouble just to enjoy a decent rate of interest that is offered to new customers for their deposits.
I am a regular reader of your blog. I have found it informative and helpful. Many have found the space you have provided a very useful forum. Thank you.
I would like to find out whether there are others like me, finding banks "top-up" schemes unfair and tiring. Because only fresh funds can enjoy higher interest rate, you need to transfer funds and for all the trouble you can only enjoy the higher rate for a short period of time. Initially only Standard Chartered Bank has such scheme. Now UOB and other banks follow suit. I find such schemes very meaningless.
I hope that you can raise this problem in your blog so that others who feel the same way can come together to do something.
Liangxin
My comments
I agree that banks should treat their existing customers fairly. They should not get the customer to go through a lot of trouble just to enjoy a decent rate of interest that is offered to new customers for their deposits.
Take photos of damages
Here is my advice to a motorist who is involved in an accident. In all cases take photographs of the damages to both vehicles, using your mobile phone. Send the photos and the particulars of both drivers to your insurance company. Take this action, even if both parties agree not to make any claim, especially if the damage is quite minor. The photos will protect you against any inflated claims that may be lodged against you in the future.
Tan Kin Lian
Tan Kin Lian
An unfair life insurance policy
A policyholder sent to me a benefit illustration of a 20 year endowment policy bought four years ago. This policy provide a sum assured of $100,000 and requires an annual premium of $6,000. It pays an annual cash dividend which can be re-invested to earn an interest rate (illustrated at 3% per annum).
The first year's premium is entirely taken away. For each subsequent year, the cash value increases by about $5,000. This means that the cost of insurance is $1,000 to insure $100,000. The cost of this cover under a group insurance should be less than $100 a year.
If the policyholder keeps the policy to maturity at the end of 20 years, the benefit illustration shows a return of about 3% per annum, but a large portion of this return is not guaranteeed and may not be realised. If the policyholder terminates the policy at any time, including the 19th year, a large part of the potential gain is forfeited. The cash value in most years is less than the total premium that has been invested.
This type of policy goes against the concept of fairness. Why should a large part of the gain be taken away on the 19th year? Surely, in the case of a participating policy, there is the principle that the policyholder should be entitled to 90% of the surplus, rather than have this share to be confiscated.
It is time for our regulator to look into this type of practices that are quite unfair for consumers. Although the features of this policy is shown in the benefit illustration, the consumers (including those who are well educated) cannot be savvy enough to know about these catches.
I encourage all consumers to join FISCA (http://www.fisca.sg/), to attend the FISCA talk on financial planning, and to buy my book, Practical Guide on Financial Planning. Be educated, so that you do not fall frey to bad financial products in the future (even if you cannot do much about the bad products that you have been sold in the past).
Tan Kin Lian
The first year's premium is entirely taken away. For each subsequent year, the cash value increases by about $5,000. This means that the cost of insurance is $1,000 to insure $100,000. The cost of this cover under a group insurance should be less than $100 a year.
If the policyholder keeps the policy to maturity at the end of 20 years, the benefit illustration shows a return of about 3% per annum, but a large portion of this return is not guaranteeed and may not be realised. If the policyholder terminates the policy at any time, including the 19th year, a large part of the potential gain is forfeited. The cash value in most years is less than the total premium that has been invested.
This type of policy goes against the concept of fairness. Why should a large part of the gain be taken away on the 19th year? Surely, in the case of a participating policy, there is the principle that the policyholder should be entitled to 90% of the surplus, rather than have this share to be confiscated.
It is time for our regulator to look into this type of practices that are quite unfair for consumers. Although the features of this policy is shown in the benefit illustration, the consumers (including those who are well educated) cannot be savvy enough to know about these catches.
I encourage all consumers to join FISCA (http://www.fisca.sg/), to attend the FISCA talk on financial planning, and to buy my book, Practical Guide on Financial Planning. Be educated, so that you do not fall frey to bad financial products in the future (even if you cannot do much about the bad products that you have been sold in the past).
Tan Kin Lian
FIFA World Cup
Many people are still angry at the high price of $90 to watch the FIFA World Cup on cable television. They compared it to the price 4 years ago, which was just a fraction of this price.
It is sad to see that the cost of this item has increased many fold, due to the wrong kind of competition, i.e. competing for the rights to broadcast the matches, rather than to bring down the price for consumers.
The lesson has now been learnt, and changes have been made for the future, i.e. to require content owners to broadcast on several platforms.
Back to the World Cup. If the price of $90 is divided by the number of matches, the cost per match is relatively low and can be shared by several members of the family. Even friends can be invited. Compare this with the cost of watching one match at stadium, which must be more than $100.
It will be a good idea for several neighbours to share the price of $90 and to arrange to watch the games together. It will foster the spirit of neighbourliness.
Tan Kin Lian
It is sad to see that the cost of this item has increased many fold, due to the wrong kind of competition, i.e. competing for the rights to broadcast the matches, rather than to bring down the price for consumers.
The lesson has now been learnt, and changes have been made for the future, i.e. to require content owners to broadcast on several platforms.
Back to the World Cup. If the price of $90 is divided by the number of matches, the cost per match is relatively low and can be shared by several members of the family. Even friends can be invited. Compare this with the cost of watching one match at stadium, which must be more than $100.
It will be a good idea for several neighbours to share the price of $90 and to arrange to watch the games together. It will foster the spirit of neighbourliness.
Tan Kin Lian
Price of security
Singapore used to be a safe, peaceful and orderly place. People respect the law. There are sufficient law enforcement officers who are dedicated to their jobs and are respected.
This situation has changed. We hardly see a policman on the road today. Many people prefer comfortable jobs in offices, especially the banks, rather than be a policeman on the beat. There must be an increase in crime in recent years, although they are not reflected in the statistics. Are the statistics reliable?
We have seen an increse in cheating cases involving motor insurance claims and sales of unregulated financial products. Thre are insufficient manpower in the law enforcement agencies to investigate these cases.
On the other hand, we have many older people who remain unemployed for many years. The younger people have taken over their jobs in the offices. But, there are insufficient people who want to be policemen.
The home affairs ministry may celebrate their ability to meet the key performance indicator of reducing manpower cost (which may earn a performance bonus for the people in charge), but this is at the expense of security in our society.
The recent incident of grafitti on the MRT train is an example of how bad things have become. What if there was a bomb planted in the train?
Something is wrong with the priorities in our society.
Tan Kin Lian
This situation has changed. We hardly see a policman on the road today. Many people prefer comfortable jobs in offices, especially the banks, rather than be a policeman on the beat. There must be an increase in crime in recent years, although they are not reflected in the statistics. Are the statistics reliable?
We have seen an increse in cheating cases involving motor insurance claims and sales of unregulated financial products. Thre are insufficient manpower in the law enforcement agencies to investigate these cases.
On the other hand, we have many older people who remain unemployed for many years. The younger people have taken over their jobs in the offices. But, there are insufficient people who want to be policemen.
The home affairs ministry may celebrate their ability to meet the key performance indicator of reducing manpower cost (which may earn a performance bonus for the people in charge), but this is at the expense of security in our society.
The recent incident of grafitti on the MRT train is an example of how bad things have become. What if there was a bomb planted in the train?
Something is wrong with the priorities in our society.
Tan Kin Lian
Monday, June 07, 2010
Inflated claim
Many motorists have encountered this experience. The car in front stopped suddenly. The car at the bank knocked into the bumper. It was a small scratch. Both parties agreed not to file any claims.
Later, the motorist of the rear car received a claim, usually through a lawyer, for a sum that is way above the actual damages. It seemed that the damages have been inflated. If you do not settle the claim, the lawyer would file a legal suit and take you to court.
What would you do, if you received an exaggerated claim? Share your views here.
Tan Kin Lian
Later, the motorist of the rear car received a claim, usually through a lawyer, for a sum that is way above the actual damages. It seemed that the damages have been inflated. If you do not settle the claim, the lawyer would file a legal suit and take you to court.
What would you do, if you received an exaggerated claim? Share your views here.
Tan Kin Lian
Land banking - Gathering on 12 June
The leaders of the investor group are arranging a gathering of investors as follows:
Date: Saturday 12 June 2010
Time: 10.30 am
Place: Speaker's Corner, Hong Lim Park
They wish to organise the investors to seek the recovery of their investments on the land banking products. If you are involved in this product, you can attend the gathering and submit your particulars and make contact with the other investors. The gathering can decide on collective action.
They have invited me to speak at this gathering. The organisers will be alerting the media for this gathering to be publicised and covered.
Please take part in this survey.
Date: Saturday 12 June 2010
Time: 10.30 am
Place: Speaker's Corner, Hong Lim Park
They wish to organise the investors to seek the recovery of their investments on the land banking products. If you are involved in this product, you can attend the gathering and submit your particulars and make contact with the other investors. The gathering can decide on collective action.
They have invited me to speak at this gathering. The organisers will be alerting the media for this gathering to be publicised and covered.
Please take part in this survey.
Morality and money
Would a reputable lawyer advise a client to write a contract that is "within the law" but in essence is cheating the public?
Many people consider this situation to be all right for the following reasons:
- it is all about making money, i.e. legal fees
- their duty is to the client (who pays their fees)
- if the law is not clear, it is acceptable for the lawyer to take advantage of the unclarity.
I wonder if the lawyer has a duty that is above making money? Do they have a moral duty to ensure that the society is honest and fair?
I remember an episode in the move "Godfather" where the inhouse lawyer consider it to be his duty to protect the mafia family from being prosecuted under the law, but in all other respects, what the mafia family does is not his concern. Has this type of thinking invaded our society?
The shady practices used to be the work of small time lawyers who seek quick profit. In recent years, these types of practices appear to be acceptable to reputable firms, who have become motivated by greed.
Tan Kin Lian
Many people consider this situation to be all right for the following reasons:
- it is all about making money, i.e. legal fees
- their duty is to the client (who pays their fees)
- if the law is not clear, it is acceptable for the lawyer to take advantage of the unclarity.
I wonder if the lawyer has a duty that is above making money? Do they have a moral duty to ensure that the society is honest and fair?
I remember an episode in the move "Godfather" where the inhouse lawyer consider it to be his duty to protect the mafia family from being prosecuted under the law, but in all other respects, what the mafia family does is not his concern. Has this type of thinking invaded our society?
The shady practices used to be the work of small time lawyers who seek quick profit. In recent years, these types of practices appear to be acceptable to reputable firms, who have become motivated by greed.
Tan Kin Lian
School holidays
I estimate that 20% of Singaporeans are on holiday during June. This is reflected by less cars on the road and less vistors to my blog in June. If you access to some official statistics, please share them here.
A fine society
Singapore used to be a "fine" society. There is a fine for littering and for jay-walking (i.e. crossing the road against traffic regulations". This has been relaxed for the past one or two decades. Nowadays, jay-walking is no longer enforced.
The environmental agency is now taking action to enforce littering. It is time to take action to enforce other aspects of our law, such as jay-walking and cheating. We need to revert back to our fine and orderly society.
Tan Kin Lian
The environmental agency is now taking action to enforce littering. It is time to take action to enforce other aspects of our law, such as jay-walking and cheating. We need to revert back to our fine and orderly society.
Tan Kin Lian
Inflated repair cost
Hello
I'm a 23 yrs old guy who got into an car accident few months back. the accident happened like this, it was red light and when it showed green light the car infront started to move. I was moving at low speed as well and before i knew it, he braked. I managed to brake in time but unfortunately I kissed the back of his bumper and there was no scratches no dent.
I passed him my NRIC, name and contact. However, I did not take down his particulars and did not take any pictures or report to the police about this incident because I thought it was a small matter. Today, he sent me a letter claiming over $6,000 in repair and over $2,000over on 16 days of car rental.
I saw your internet forum about car fraud. How can I prove that the original damage was small? I did offer him to go to workshop to sort this out together but he refused. As there wasn't anyone in my car, I got no witness and evidence. How could i use his evidence against him?
REPLY
You can pass the case to your insurance company to handle. you can make a report that it was a small dent and that both parties agreed not to report the accident and make a claim.
I'm a 23 yrs old guy who got into an car accident few months back. the accident happened like this, it was red light and when it showed green light the car infront started to move. I was moving at low speed as well and before i knew it, he braked. I managed to brake in time but unfortunately I kissed the back of his bumper and there was no scratches no dent.
I passed him my NRIC, name and contact. However, I did not take down his particulars and did not take any pictures or report to the police about this incident because I thought it was a small matter. Today, he sent me a letter claiming over $6,000 in repair and over $2,000over on 16 days of car rental.
I saw your internet forum about car fraud. How can I prove that the original damage was small? I did offer him to go to workshop to sort this out together but he refused. As there wasn't anyone in my car, I got no witness and evidence. How could i use his evidence against him?
REPLY
You can pass the case to your insurance company to handle. you can make a report that it was a small dent and that both parties agreed not to report the accident and make a claim.
Life time savings
I posted a story of a non-working woman who invested all of her savings in a 21 year endowment policy. She would have paid $18,000 in premium and obtained a return of $16,000 on maturity. This gave a negative return. Part of the premium went into paying for a rider to provide additiona insurance protection, but this was over-priced.
She obtained a meagre return of less than 1% per annum on the savings portion of the premium. The insurance company would probably have earned an average yield of 5% per annum. More than 80% of the gains went into the commission, expenses and profit. The meagre return could not even cover the inflation during the years. To this woman, it represented most of her lifetime savings, which has been denied of a fair return for a financial plan that was traditionally supposed to be trustworthy.
When I think about the million of policyholders who have suffered this fate, I wonder about the harm that the life insruance industry and the advisers had done to the people. Perhaps this applied to only some of the companies and agents, and that the other companies could have offered a more decent return. But, to my knowledge, quite a large number of people have suffered from the poor return.
Even life insurance companies that offered decent return in the past could change their strategy to focus on making profit for their shareholders and agents. Their policyholders would be placed in a helpless situation, unless the regulator steps forward to protect the interest of the public. In some countries, the regulators were appalled by the type of predactory practices and have taken steps to control the excesses.
Tan Kin Lian
She obtained a meagre return of less than 1% per annum on the savings portion of the premium. The insurance company would probably have earned an average yield of 5% per annum. More than 80% of the gains went into the commission, expenses and profit. The meagre return could not even cover the inflation during the years. To this woman, it represented most of her lifetime savings, which has been denied of a fair return for a financial plan that was traditionally supposed to be trustworthy.
When I think about the million of policyholders who have suffered this fate, I wonder about the harm that the life insruance industry and the advisers had done to the people. Perhaps this applied to only some of the companies and agents, and that the other companies could have offered a more decent return. But, to my knowledge, quite a large number of people have suffered from the poor return.
Even life insurance companies that offered decent return in the past could change their strategy to focus on making profit for their shareholders and agents. Their policyholders would be placed in a helpless situation, unless the regulator steps forward to protect the interest of the public. In some countries, the regulators were appalled by the type of predactory practices and have taken steps to control the excesses.
Tan Kin Lian
Sunday, June 06, 2010
A matter of chance
Here is a puzzle. You have to guess a number from 1 to 4. Each day the correct answer is drawn. You have 1 out of 4 chance of getting it right. You repeat this exercise for 6 days. What is the probability (chance) of getting the right number for 6 days, 5 days, 4 days, 3 days, 2 days, 1 day and 0 day? Please show in percentages to 2 decimal places. The total must add up to 100%
Send your answer to kinlian@gmail.com. The first correct answer will win my Tangram book.
Send your answer to kinlian@gmail.com. The first correct answer will win my Tangram book.
Saturday, June 05, 2010
Competition Law
I am surprised that SISTIC should be charged, found guilty and fined nearly $1 million for breaching the Competition Act. Here are my reasons:
a) SISTIC competed fairly to win the contract from the venue owners to handle the ticketing of their shows.
b) It is more sensible for the venue owner to get one ticketing company, rather than several companies, to handle the sale of the tickets.
c) The ticket charge (presumably $2) is a small charge for the work of issuing a ticket
d) ticket charge can be considered as part of the total cost of the show. If the customer does not like the total price, the customer is not required to watch the show.
The ticket charge is small, as compared to the charge of $30 imposed by the banks to transfer US$100. If SISTIC should be fined for this charged for this fee, why are the banks allowed to impose a charge that is 15 times of this sum? The work is similar in both cases.
I am not sure if I got my facts and issues correctly, so I look forward to getting the views of other people on this matter.
Tan Kin Lian
a) SISTIC competed fairly to win the contract from the venue owners to handle the ticketing of their shows.
b) It is more sensible for the venue owner to get one ticketing company, rather than several companies, to handle the sale of the tickets.
c) The ticket charge (presumably $2) is a small charge for the work of issuing a ticket
d) ticket charge can be considered as part of the total cost of the show. If the customer does not like the total price, the customer is not required to watch the show.
The ticket charge is small, as compared to the charge of $30 imposed by the banks to transfer US$100. If SISTIC should be fined for this charged for this fee, why are the banks allowed to impose a charge that is 15 times of this sum? The work is similar in both cases.
I am not sure if I got my facts and issues correctly, so I look forward to getting the views of other people on this matter.
Tan Kin Lian
Poor return from endowment policy
Dear Mr Tan,
In 1995, my mother was sold an endowment product. The policy is maturing in about 5 years time. By that time, she would have paid a total of $16,000 in premium for the life policy and $2,000 for the critical illness rider. The insurance company said that the guaranteed payout after 21 years is $14,000 and the projected payout is about $16,000.
This is really a ridiculous situation. If she had left her money in FD over 21 years, she would have got a better return than this endowment product. This product is giving a negative returns over the 21 year period! At that time, my mother was not working and the premium was all she could afford. It is sickening that there are people out there who will even try to milk money out of such poor people, as the agent sold the policy as a "savings plan".
Is there any action that I can take against the insurance company? The agent who sold the policy has long since vanished.
MY REPLY
I agree with your views. A fair return for 21 years should be 3% p.a. This would give a maturity benefit of $21,800, instead of $16,000. Another insurance company has advertised that it gave a return of more than 5% over a similar period in the past. This would have produced more than $27,200.
I suggest that you write a complaint to MAS and to the newspaper.
In 1995, my mother was sold an endowment product. The policy is maturing in about 5 years time. By that time, she would have paid a total of $16,000 in premium for the life policy and $2,000 for the critical illness rider. The insurance company said that the guaranteed payout after 21 years is $14,000 and the projected payout is about $16,000.
This is really a ridiculous situation. If she had left her money in FD over 21 years, she would have got a better return than this endowment product. This product is giving a negative returns over the 21 year period! At that time, my mother was not working and the premium was all she could afford. It is sickening that there are people out there who will even try to milk money out of such poor people, as the agent sold the policy as a "savings plan".
Is there any action that I can take against the insurance company? The agent who sold the policy has long since vanished.
MY REPLY
I agree with your views. A fair return for 21 years should be 3% p.a. This would give a maturity benefit of $21,800, instead of $16,000. Another insurance company has advertised that it gave a return of more than 5% over a similar period in the past. This would have produced more than $27,200.
I suggest that you write a complaint to MAS and to the newspaper.
Avoid markeeteers
In the past, many people have approached me on land banking and time sharing products. These are people who meet me at various events and claimed to know me. They gave me a business cards indicating their involvement in these companies. They wanted to market the products to me. I declined. Some of these marketeers called my home telephone to tell me about the investment opportunities. I also declined to talk to them.
I make it a point to avoid every one who markets investment products. I know that they earn commission from their sales to investors. It is easy for them to tell stories about how much profit can be made from these investments, so that they can close a sale and earn their commission. But the stories of the potential profits are mostly exaggerated.
I do not even bother to spend time to due research on these investment products. I just avoided all of them. This is why I did not know about the min-bonds, pinnacle notes and other credit-linked notes until they busted.
Tan Kin Lian
I make it a point to avoid every one who markets investment products. I know that they earn commission from their sales to investors. It is easy for them to tell stories about how much profit can be made from these investments, so that they can close a sale and earn their commission. But the stories of the potential profits are mostly exaggerated.
I do not even bother to spend time to due research on these investment products. I just avoided all of them. This is why I did not know about the min-bonds, pinnacle notes and other credit-linked notes until they busted.
Tan Kin Lian
Medical insurance
Dear Mr. Tan,
I hope that you can post some advice in your blog on choosing between the Medishield, Shield and hospital insurance.
Reply
You can view some of my postings on medical insurance here. You can get a more complete writeup in my book, Practical Guide on Financial Planning.
My advice is to buy a Medishield plan (from CPF) or a Shield Plan B from an insurance company. There is no need to insure the co-payment and deductible, as these expenses are small and can be paid out of Medisave.
I hope that you can post some advice in your blog on choosing between the Medishield, Shield and hospital insurance.
Reply
You can view some of my postings on medical insurance here. You can get a more complete writeup in my book, Practical Guide on Financial Planning.
My advice is to buy a Medishield plan (from CPF) or a Shield Plan B from an insurance company. There is no need to insure the co-payment and deductible, as these expenses are small and can be paid out of Medisave.
Lawyers and shady practices
Dear Mr. Tan,
The land banking company that is mentioned in many blogs for failing to return the investments on maturity is being advised by a big legal firm in Singapore. This firm is headed by a well known lawyer who is also a MP. How can the Government allow the MP to be involved in advising a company that is engaged in shady practices? Is this why the relevant bodies are not prepared to investigate this land banking company, in spite of many complaints being lodged with the CAD and MAS?
REPLY
I do not know whether this MP is aware about the practices of the land banking company. Perhaps, it is another partner that is advising the company.
The land banking company that is mentioned in many blogs for failing to return the investments on maturity is being advised by a big legal firm in Singapore. This firm is headed by a well known lawyer who is also a MP. How can the Government allow the MP to be involved in advising a company that is engaged in shady practices? Is this why the relevant bodies are not prepared to investigate this land banking company, in spite of many complaints being lodged with the CAD and MAS?
REPLY
I do not know whether this MP is aware about the practices of the land banking company. Perhaps, it is another partner that is advising the company.
Friday, June 04, 2010
RED Map
I wanted to look for GSM building in Middle Road. I went to the RED map, type in "GSM" and found the map immediately. It is easy to use and fast to search. I found that the nearest MRT stations were Bras Basah and Bugis. RED map is available at: http://projects.easyapps.sg/propinfo/Map.aspx
Practical Guide on Financial Planning
I wrote this book to contain tips that are important to every person, from the time that a young person starts work to the later stages of life of raising a family and approaching retirement.
The tips cover:
- need to set aside savings
- investing the savings in a low cost fund
- avoiding structured and unregulated investments
- managing risks of volatile markets
- withdrawing savings during retirement
The book cost only $12 but you will need to spend 12 hours to read and understand the concepts. This can save you a lot of money later on, by avoiding the investments that are bad for you.
The book can be ordered online here. It is an excellent gift for young people who are starting work.
I also give a monthly talk on the key principles contained in this book. The talks are organised by FISCA. Many people attend the talk to ask questions that has been worrying them, especially on advice that were given to them by financial advisers.
Tan Kin Lian
The tips cover:
- need to set aside savings
- investing the savings in a low cost fund
- avoiding structured and unregulated investments
- managing risks of volatile markets
- withdrawing savings during retirement
The book cost only $12 but you will need to spend 12 hours to read and understand the concepts. This can save you a lot of money later on, by avoiding the investments that are bad for you.
The book can be ordered online here. It is an excellent gift for young people who are starting work.
I also give a monthly talk on the key principles contained in this book. The talks are organised by FISCA. Many people attend the talk to ask questions that has been worrying them, especially on advice that were given to them by financial advisers.
Tan Kin Lian
Lawyer to handle a complaint
Dear Mr. Tan,
I wish to engage a lawyer to handle my complaint on the Vista investment plan. I have not been properly adviced about the penalty charges on the early termination of this plan. This has caused me to lose a large part of the amount that I have invested. Can you recommend this lawyer?
REPLY
I am not able to give you a name right now. If I come across a lawyer that is interested to take this case, I will inform you.
I wish to engage a lawyer to handle my complaint on the Vista investment plan. I have not been properly adviced about the penalty charges on the early termination of this plan. This has caused me to lose a large part of the amount that I have invested. Can you recommend this lawyer?
REPLY
I am not able to give you a name right now. If I come across a lawyer that is interested to take this case, I will inform you.
Discounted value of bonus on life policy
Dear Kin Lian
I have a GE policy with bonus @ $14,000. Recently I applied to withdraw the bonus instead of cancelling the policy or take a loan. Apparently I am granted only @ $8,000.
I was informed that my sum assured still remain the same. What I am disturb about is what happen to the balance $6,000. Will I loose it totally just because I draw out $8,000.
REPLY
A bonus of $14,000 is the amount that is payable on the maturity date of the policy or on death. So, this is an amount payable many years into the future. If you wish to withdraw the bonus now, you will get the present value of the bonus, i.e. the discounted value. In your case, the discounted value is $8,000. This is probably a fair amount depending on the rate of discount used to compute it.
I have a GE policy with bonus @ $14,000. Recently I applied to withdraw the bonus instead of cancelling the policy or take a loan. Apparently I am granted only @ $8,000.
I was informed that my sum assured still remain the same. What I am disturb about is what happen to the balance $6,000. Will I loose it totally just because I draw out $8,000.
REPLY
A bonus of $14,000 is the amount that is payable on the maturity date of the policy or on death. So, this is an amount payable many years into the future. If you wish to withdraw the bonus now, you will get the present value of the bonus, i.e. the discounted value. In your case, the discounted value is $8,000. This is probably a fair amount depending on the rate of discount used to compute it.
General election - 2010 or 2011
A reader asked me to conduct a poll on the current government. I have already done the poll on a few occasions in the past year. I believe that the results would probably be the same. You can view the results here:
http://tankinlian.blogspot.com/search?q=general+election
http://tankinlian.blogspot.com/search?q=general+election
US Debt of USD 13 trillion
The debt of the US Federal government has readed USD 13 trillion, is 13 followed by 12 zeroes.
Many governments faced large debts amounting to a high proportion of the GDP. They include many countries in Europe, the UK and Japan. We have seen what happened with the Euro when Greece, Spain and now Hungary gets into trouble. It will be a matter of time, before the loss of confidence affects the US dollar. When that happens, there will be a bigger financial crisis.
I do not have an answer about what can be done to protect our savings from this impending disaster. Perhaps, the best form of investments is in productive assets, i.e. the shares of companies that run an operation and earns a profit. While the values of the shares may drop in a crisis, the company should continue to earn a profit and pay a dividend. If business is bad, the company can cut cost by reducing their workforce.
It is important to reduce debts. When a crisis hits, the banks will pull back the loans. Those who have borrowed money will have to sell assets at highly depressed prices to repay the loans. This will include borrowings to buy investment properties.
The prognosis for the global economy is discouraging. It reflects the failure of the capitalist and free market system. We do not need to revert to full socialism. A better model is a regulated market, fairer distribution of income and higher taxes for those that earn extreme incomes.
Tan Kin Lian
Many governments faced large debts amounting to a high proportion of the GDP. They include many countries in Europe, the UK and Japan. We have seen what happened with the Euro when Greece, Spain and now Hungary gets into trouble. It will be a matter of time, before the loss of confidence affects the US dollar. When that happens, there will be a bigger financial crisis.
I do not have an answer about what can be done to protect our savings from this impending disaster. Perhaps, the best form of investments is in productive assets, i.e. the shares of companies that run an operation and earns a profit. While the values of the shares may drop in a crisis, the company should continue to earn a profit and pay a dividend. If business is bad, the company can cut cost by reducing their workforce.
It is important to reduce debts. When a crisis hits, the banks will pull back the loans. Those who have borrowed money will have to sell assets at highly depressed prices to repay the loans. This will include borrowings to buy investment properties.
The prognosis for the global economy is discouraging. It reflects the failure of the capitalist and free market system. We do not need to revert to full socialism. A better model is a regulated market, fairer distribution of income and higher taxes for those that earn extreme incomes.
Tan Kin Lian
Car park wardens
I visited the National Skin Center two weeks ago. On driving into the car park, I was guided by a uniformed warden to a vacant space. I talked to him and learned that he was 66 years old.
It is a good idea to provide this type of employment for our older workers who need a job to get by. It keeps the elderly worker physically fit and active, and improves service to visitors of the car park. The warden can also provide directions.
If these decisions are left to individual businesss, most of them would prefer to save cost and not create this type of employment. However, if they are mandated to be necessary for car paks of certain sizes, there will be more jobs that are created for our older workers.
Tan Kin Lian
It is a good idea to provide this type of employment for our older workers who need a job to get by. It keeps the elderly worker physically fit and active, and improves service to visitors of the car park. The warden can also provide directions.
If these decisions are left to individual businesss, most of them would prefer to save cost and not create this type of employment. However, if they are mandated to be necessary for car paks of certain sizes, there will be more jobs that are created for our older workers.
Tan Kin Lian
Public transport fares, service and profits
A vandal broke in to a MRT depot and painted graffiti on a train. The vandalism was not noticed by the employees for some time, until a video was posted on Youtube by a passenger. What does this tell us?
SMRT has cut down its employees to be bare minimum to reduce cost and improve profits. It would have been better if SMRT had employed more people and show a smaller (but still healthy profit). This will create jobs for more people to provide better security and improve customer service. They should also run more trains to reduce the congestion and waiting time.
These actions can be taken without increasing the fares, as SMRT is showing a healthy profit. The Public Transport Council has to be more vigilent in moniting the fares, level of service and profits of our bus and train operators.
This is an example of the failure of the unregulated market in getting the right outcome for the country.
Tan Kin Lian
SMRT has cut down its employees to be bare minimum to reduce cost and improve profits. It would have been better if SMRT had employed more people and show a smaller (but still healthy profit). This will create jobs for more people to provide better security and improve customer service. They should also run more trains to reduce the congestion and waiting time.
These actions can be taken without increasing the fares, as SMRT is showing a healthy profit. The Public Transport Council has to be more vigilent in moniting the fares, level of service and profits of our bus and train operators.
This is an example of the failure of the unregulated market in getting the right outcome for the country.
Tan Kin Lian
Thursday, June 03, 2010
Logic Quiz
Try puzzle 8 in this webpage. It is a new type of logic quiz.
Tip
Althought the structure of the quiz is different, I was able to apply the same technique as the Intelligence Quiz to solve this puzzle.
Tip
Althought the structure of the quiz is different, I was able to apply the same technique as the Intelligence Quiz to solve this puzzle.
Trend towards contract work
Dear Mr. Tan
Without good paying jobs, consumption will suffer, which will cause even fewer jobs and less consumption:
http://money.cnn.com/2010/06/01/news/economy/contract_jobs/index.htm
JLN
My comment
I have observed this trend for some time. I agree with the findings. If workers do not have security of employment, things will continue to get worse.
How can top CEOs and bankers continue to make so much money, when other people in the economy suffer a drop in income? This is a consequence of our free market system. The solution is to get back to a more regulated economy - i.e. more regulation on terms of employments, hours of work, security of jobs, fair compensation and other factors.
Without good paying jobs, consumption will suffer, which will cause even fewer jobs and less consumption:
http://money.cnn.com/2010/06/01/news/economy/contract_jobs/index.htm
JLN
My comment
I have observed this trend for some time. I agree with the findings. If workers do not have security of employment, things will continue to get worse.
How can top CEOs and bankers continue to make so much money, when other people in the economy suffer a drop in income? This is a consequence of our free market system. The solution is to get back to a more regulated economy - i.e. more regulation on terms of employments, hours of work, security of jobs, fair compensation and other factors.
Economic growth and asset prices
Some economies were able to achieve rapid growth over an extended period. During the initial years, they adopted economic policies that proved to be attractive for inward foreign investments. This created jobs and lead to a productive economy.
The next stage of the economic development was funded by the rapid rise in property prices. As these assets appreciated in value, the owners felt that they had become wealthy. The governments were also able to use the appreciated values of their assets to take more borrowings to fund national development and other spending. Some of these spendings become wasteful and were not economical justifiable.
After a few decades of inflated asset values, these economies will have to face their reality. Asset bubbles allow more debts and borrowings and do not really create productive wealth. There has to be a payback time.
We have seen the bursting of the asset bubbles in Japan in the 1990s and the continuing pain for two decades. We are now seeing this situation in the USA and Europe. Singapore is also funded on this type of asset bubbles. The high property prices have to be paid through many years of future hard work.
It is sad that in an asset bubble, the earlier owners (including foreign funds) creamed off the big profits and leave the burden of higher asset prices to be paid for by future generations.
Tan Kin Lian
The next stage of the economic development was funded by the rapid rise in property prices. As these assets appreciated in value, the owners felt that they had become wealthy. The governments were also able to use the appreciated values of their assets to take more borrowings to fund national development and other spending. Some of these spendings become wasteful and were not economical justifiable.
After a few decades of inflated asset values, these economies will have to face their reality. Asset bubbles allow more debts and borrowings and do not really create productive wealth. There has to be a payback time.
We have seen the bursting of the asset bubbles in Japan in the 1990s and the continuing pain for two decades. We are now seeing this situation in the USA and Europe. Singapore is also funded on this type of asset bubbles. The high property prices have to be paid through many years of future hard work.
It is sad that in an asset bubble, the earlier owners (including foreign funds) creamed off the big profits and leave the burden of higher asset prices to be paid for by future generations.
Tan Kin Lian
How to end the meaningless struggle?
Extract from Tommy Wong's book, "Wisdom on How to Live Life"
Tom: Can you elaborate further on living as souls?
Guru: As we live as souls and we know that souls’ existence is eternal, we’re not too interested in undertaking tasks that are merely for the sustenance of our bodies.
Tom: So life is not about working for a living?
Guru: It should not be, but unfortunately many do and life becomes a meaningless struggle.
Tom: Meaningless, why meaningless?
Guru: Because many struggle just to keep their bodies going and yet their bodies are bound to perish. That’s why it’s meaningless.
Tom: Can we make life more meaningful?
Guru: Sure, by undertaking tasks that is good for the soul.
Tom: Such as?
Guru: To know spiritual truths, and to live with these truths and discriminate against falsehood.
Tom: Name one spiritual truth.
Guru: We are souls and not bodies.
Tommy Wong
This book can be purchased online here.
Wednesday, June 02, 2010
Training videos
Youtube is an excellent channel for businesses to upload videos for staff training, communication and marketing. It can be done in a simple, lost cost way and can achieve good results. Here is an example of the use of videos for marketing.
www.easysearch.sg/videos
www.easysearch.sg/videos
Survey for university thesis
Dear Mr Tan,
I would like to request for your favor, if possible, to kindly help to publicize my survey on food consumption pattern in CBD. The survey consist of 10 questions and would only take approximately 3 minutes to fill up. The target audience would be anyone who is currently working in CBD area.
Survey Link : http://www.surveymonkey.com/s/8VH2DVG
The findings from this survey are going to be used for university thesis. Thanks in advance for your help. I really, really appreciate it.
Claire
I would like to request for your favor, if possible, to kindly help to publicize my survey on food consumption pattern in CBD. The survey consist of 10 questions and would only take approximately 3 minutes to fill up. The target audience would be anyone who is currently working in CBD area.
Survey Link : http://www.surveymonkey.com/s/8VH2DVG
The findings from this survey are going to be used for university thesis. Thanks in advance for your help. I really, really appreciate it.
Claire
Improvement in service
I wrote to my bank to suggest that they should allow the customer to enter a reference number for an ATM funds transfer. This will allow the recipient of the funds to know the party who has made the transfer.
The bank acknowledged my suggestion but did not give me any reply for several weeks. This type of poor communication is quite common in Singapore.
I sent a reminder to the service quality manager. She replied that the bank is now studying the technical feasibility of providing a virtual keyboard on the touchscreen of the ATM.
I suggested that they should just implement the numeric input, which just involves a simple change to the software and is quite easy and inexpensive to implement. There is no need to make any hardware modification to the ATM machine and can be done with ATM machines that do not have a touch screen. It will probably meet the needs of most people involved in the funds transfer.
It is better to look for simple and inexpensive ways to implement improvements. There is no need to spend a lot of money or time to make comprehensive and complex changes. They should also learn to call and talk to the customer, rather than work independently to find their own solutions.
Tan Kin Lian
The bank acknowledged my suggestion but did not give me any reply for several weeks. This type of poor communication is quite common in Singapore.
I sent a reminder to the service quality manager. She replied that the bank is now studying the technical feasibility of providing a virtual keyboard on the touchscreen of the ATM.
I suggested that they should just implement the numeric input, which just involves a simple change to the software and is quite easy and inexpensive to implement. There is no need to make any hardware modification to the ATM machine and can be done with ATM machines that do not have a touch screen. It will probably meet the needs of most people involved in the funds transfer.
It is better to look for simple and inexpensive ways to implement improvements. There is no need to spend a lot of money or time to make comprehensive and complex changes. They should also learn to call and talk to the customer, rather than work independently to find their own solutions.
Tan Kin Lian
Positive thinking
Some people have a habit of looking at the negative side and to focus on what could go wrong. This habit is developed over the years, and could be attributed to the education system. They do not acquire the skill of looking at the positive side.
Here is an example to illustrate my point. My friend, who is a skin specialist, wanted to create a website for patients to submit their case for consultation through the internet. I helped him to carry out a survey.
Several respondents to the survey pointed out why this approach would not work, as the specialist needs to see the patient to be able to give the right treatment.
They overlook to see the cases where this approach might work, e.g. where the symptoms are adequately described in the laboratory tests or medical reports. In these cases, a personal visit and examination may not be necessary.
Even if the specialists needs to see the patient before coming to a medical decision, the earlier submission of the medical reports and tests would be helpful in reducing the time that needs to be spent by the patient or the doctor at the visit. So, the website would still be useful.
If we learn to see the positive side, to see what can work (rather than what cannot work), we will have a different outcome. We need to learn to have a positive approach and see the positive side.
I wish to share a story that is almost 30 years old. A minister was chairing a meeting to develop a recreational facility for workers. The planners came and give several reasons why the site was not suitable. The minister asked them to go back and look for the reasons why the site was suitable. They planners came back with these positive reasons. The project went ahead. This story, which was told to me by a friend, showed that there is a positive and negative side to any issue. The correct approach is to see both sides and come to a balanced decision.
Tan Kin Lian
Here is an example to illustrate my point. My friend, who is a skin specialist, wanted to create a website for patients to submit their case for consultation through the internet. I helped him to carry out a survey.
Several respondents to the survey pointed out why this approach would not work, as the specialist needs to see the patient to be able to give the right treatment.
They overlook to see the cases where this approach might work, e.g. where the symptoms are adequately described in the laboratory tests or medical reports. In these cases, a personal visit and examination may not be necessary.
Even if the specialists needs to see the patient before coming to a medical decision, the earlier submission of the medical reports and tests would be helpful in reducing the time that needs to be spent by the patient or the doctor at the visit. So, the website would still be useful.
If we learn to see the positive side, to see what can work (rather than what cannot work), we will have a different outcome. We need to learn to have a positive approach and see the positive side.
I wish to share a story that is almost 30 years old. A minister was chairing a meeting to develop a recreational facility for workers. The planners came and give several reasons why the site was not suitable. The minister asked them to go back and look for the reasons why the site was suitable. They planners came back with these positive reasons. The project went ahead. This story, which was told to me by a friend, showed that there is a positive and negative side to any issue. The correct approach is to see both sides and come to a balanced decision.
Tan Kin Lian
Dual currency investments
A reader asked why dual currency investments are risky. I have described this type of risky investments in several postings in my blog. You can read them here:
http://tankinlian.blogspot.com/search?q=dual+currency+
There is a chapter in my book, Practical Guide on Financial Planning, that explains the the risk of various tyoes of structured products, including dual currency investments, and of unregulated products, such as land banking, ponzi schemes and other scams.
http://tankinlian.blogspot.com/search?q=dual+currency+
There is a chapter in my book, Practical Guide on Financial Planning, that explains the the risk of various tyoes of structured products, including dual currency investments, and of unregulated products, such as land banking, ponzi schemes and other scams.
Tuesday, June 01, 2010
Civil servant's pay
Mr Tan Kin Lian,
It came upon me an interesting article from BBC. UK government is making effort to make the salaries of senior civil servants transparent. The names of person who earns above GBP 150,000 per year were revealed.
This is what the British Prime Minster said. "Openness will not be comfortable for us in government, but it will enable the public to hold our feet to the fire. This way lies better government."
http://news.bbc.co.uk/2/hi/uk/10200387.stm
From Cashew Nut
Some 171 civil servants are paid more than Prime Minister David Cameron's £142,500-a-year salary, according to Cabinet Office figures.
It came upon me an interesting article from BBC. UK government is making effort to make the salaries of senior civil servants transparent. The names of person who earns above GBP 150,000 per year were revealed.
This is what the British Prime Minster said. "Openness will not be comfortable for us in government, but it will enable the public to hold our feet to the fire. This way lies better government."
http://news.bbc.co.uk/2/hi/uk/10200387.stm
From Cashew Nut
Some 171 civil servants are paid more than Prime Minister David Cameron's £142,500-a-year salary, according to Cabinet Office figures.
Risky financial products
This article explains that the approach taken in Hong Kong may not be sufficient to protect the investors.
My comment.
There is a mention of Deposit Plus which is similar to the dual currency deposits sold in Singapore. It is risky and should be avoided.
My comment.
There is a mention of Deposit Plus which is similar to the dual currency deposits sold in Singapore. It is risky and should be avoided.
Fraud in the financial sector
Read this article about securities and market fraud in Hong Kong.
My comments
The same challenges apply to Singapore.
My comments
The same challenges apply to Singapore.
Investor sues land banking company
Read this report.
My comment
Many investors have approached me for assistance on similar investments which were not repaid after the maturity date.
My comment
Many investors have approached me for assistance on similar investments which were not repaid after the maturity date.
20 year impasse
Someone attacked me for posting my views about the 20 year impasse in reaching agreement on the bilaterial issues and challenged me to state what I would have done if I were "PM, SM or MM". It is difficult to be engaged in a discussion with a vile person whose primary purpose is to attack another person under anonymity.
I like to give my views in this hypothetical situation. It would not be possible to judge if my approach would achieve any useful results. I would approach this issue on the personal values that I follow:
- honesty
- fairness
- positive
- courage
- public service
If we are honest and fair, it would be easy to win the trust of the other party. Both parties can look at the positive aspects and focus on what each side could gain from the cooperation.
I sense that one side felt that the Points of Agreement was not fair to them (for whatever reasons) and although it was agreed, they would find other ways to get out of the deal. The other side insisted that "a deal is a deal" and should be honored. This explains the impasse that lasted for 20 years. Both sides need the courage to recognise that the earlier deal would not work, and that a new approach had to be taken (without waiting for 20 years).
As this is a hypothethical case, no one know whether it would have worked. I invite other people, wishing to give their views, to give their name and to refrain from passing judgement in this hypothetical case, or to make personal attacks.
Tan Kin Lian
I like to give my views in this hypothetical situation. It would not be possible to judge if my approach would achieve any useful results. I would approach this issue on the personal values that I follow:
- honesty
- fairness
- positive
- courage
- public service
If we are honest and fair, it would be easy to win the trust of the other party. Both parties can look at the positive aspects and focus on what each side could gain from the cooperation.
I sense that one side felt that the Points of Agreement was not fair to them (for whatever reasons) and although it was agreed, they would find other ways to get out of the deal. The other side insisted that "a deal is a deal" and should be honored. This explains the impasse that lasted for 20 years. Both sides need the courage to recognise that the earlier deal would not work, and that a new approach had to be taken (without waiting for 20 years).
As this is a hypothethical case, no one know whether it would have worked. I invite other people, wishing to give their views, to give their name and to refrain from passing judgement in this hypothetical case, or to make personal attacks.
Tan Kin Lian
Monday, May 31, 2010
Dr. Goh and frugality
Hi Mr Tan,
The said insurance company, published in full page in 4 languages in the national newspapers (on 29 May), including TODAY paper today (31 May). It pays tribute to the great founding father, the late Dr Goh who inspired the setting up of the first insurance co-operative - 40 years ago.
Dr Goh was the Chairman for the first ten years. He leads a frugal life and does not waste money and resources. I am sure that if Dr Goh is still alive, he will not approve such wasteful and unnecessary spending of policyholders' money. There are other frugal and economical ways of paying tribute to the late Dr Goh
It said that it celebrates it 40th birthday as a co-operative.
How sad that all the efforts started by the late Dr Goh in pioneering the co-operative movement has been eroded by the new management team. It is no longer a simple co-operative, but a 'commercialised co-operative' with many benefits taken away
We need leaders like you to highlight through the forum, the wasteful spending of policyholders money in such unnecessary publication of the tribute to the late Dr Goh.
CK
My comment
Dr. Goh Keng Swee's contribution to the welfare of 2 million families in Singapore who has benefitted from NTUC Income is immense and immeasurable. The money spent on recognising this contribution is small and, although it comes from the policyholder's funds, is worth spending. Many young people may not be aware about the part that Dr. Goh has made in this important aspect of the lives of Singaporeans. It is just as important as the building of the economy to create jobs for Singaporeans, which was well covered in the media.
I hope that NTUC Income will recognise the value of frugality that Dr. Goh has lived his life, and money should be spent wisely so that the policyholders can continue to enjoy a good return on their savings.
Tan Kin Lian
The said insurance company, published in full page in 4 languages in the national newspapers (on 29 May), including TODAY paper today (31 May). It pays tribute to the great founding father, the late Dr Goh who inspired the setting up of the first insurance co-operative - 40 years ago.
Dr Goh was the Chairman for the first ten years. He leads a frugal life and does not waste money and resources. I am sure that if Dr Goh is still alive, he will not approve such wasteful and unnecessary spending of policyholders' money. There are other frugal and economical ways of paying tribute to the late Dr Goh
It said that it celebrates it 40th birthday as a co-operative.
How sad that all the efforts started by the late Dr Goh in pioneering the co-operative movement has been eroded by the new management team. It is no longer a simple co-operative, but a 'commercialised co-operative' with many benefits taken away
We need leaders like you to highlight through the forum, the wasteful spending of policyholders money in such unnecessary publication of the tribute to the late Dr Goh.
CK
My comment
Dr. Goh Keng Swee's contribution to the welfare of 2 million families in Singapore who has benefitted from NTUC Income is immense and immeasurable. The money spent on recognising this contribution is small and, although it comes from the policyholder's funds, is worth spending. Many young people may not be aware about the part that Dr. Goh has made in this important aspect of the lives of Singaporeans. It is just as important as the building of the economy to create jobs for Singaporeans, which was well covered in the media.
I hope that NTUC Income will recognise the value of frugality that Dr. Goh has lived his life, and money should be spent wisely so that the policyholders can continue to enjoy a good return on their savings.
Tan Kin Lian
Relevance of Tommy Wong's book
Tommy Wong's book, Wisdom to Live your Life, is relevant to the people who have lost money on the mini-bonds and other credit-linked notes.
Tommy talked about the greed in the materialistic world where the following people make a lot of money (and in the process made other people poorer):
a) politicians
b) top CEOs
c) bankers
He also talked about how to find happiness in the spiritual world by living on certain principles. This came give some comfort to those who have been made poorer by the greedy financial institutions.
His book has relevance to the situation in Singapore. It is easy to read. You can buy his book online here.
Tan Kin Lian
Tommy talked about the greed in the materialistic world where the following people make a lot of money (and in the process made other people poorer):
a) politicians
b) top CEOs
c) bankers
He also talked about how to find happiness in the spiritual world by living on certain principles. This came give some comfort to those who have been made poorer by the greedy financial institutions.
His book has relevance to the situation in Singapore. It is easy to read. You can buy his book online here.
Tan Kin Lian
Sunday, May 30, 2010
Low cost investment funds
Dear Mr Tan,
I've read your blog regularly and you're an advocate of low cost index fund as the primary tool for investments. While the idea it's great in principle, I find the lack of index fund products in Singapore to be somewhat inconvenient. Based on my analysis, we only have the following products locally, either through unit trust or traded at SGX:
Singapore Stock
There is only StreetTracks STI ETF and DBS STI ETF. Both track the same index. In my opinion the STI Index is not that well diversified, it only has 30 companies (compare it to S&P 500) and it comprises only of large cap stocks. There is no index fund or ETF that tracks a Singapore small cap index, or even an index that has more companies making up the index (e.g. a Singapore total market index that has small + large cap companies).
Singapore Bond
There is only the ABF Singapore Bond ETF, which is to my knowledge the only passively-managed bond fund in this country. However, the ETF suffers from problems like liquidity, large bid-ask spread and trading prices not tracking its NAV properly. It behaves more like a stock than a bond index fund at times. Considering that it invests only in SGD-denominated government bonds, that shouldn't be the case. As for bond unit trust, most do not invest in local bonds and is subjected to currency risk. Bond unit trust also have expense ratios like ~1% which makes extremely unattractive. The last way is to invest in SGS bonds direct, but regularly saving into SGS bonds is difficult as they have fixed issuance dates. To complicate the matter, SGS bonds cannot be bought online (unless you consider FSM secondary SGS bond market).
International Stock
Many of the Lyxor series of ETF which do cover international stocks are usually single country fund and are not a good form of diversification. There are some regional/global ETFs, but the whole range of Lyxor ETFs suffer from liquidity problems too. There is only 3 unit trust that are passively managed, and those are the Lion Capital Infinity series that are feeder funds into Vanguard index funds. However, Lion Capital slaps a 1% management fee just for feeding money into Vanguard index funds... real easy money for Lion Capital for just doing almost zero work!
I was hoping if you could comment on this in your blog one day. It certainly would help if we had more good index fund based products in Singapore.
Garrett
My comment
Read my book, Practical Guide on Financial Planning available at www.easysearch.sg/ishop
Some people commented about the lack of liquidity of the STI ETF. This should not be of concern to the long term investor. The ETF manager will create more units to meet demand. The ETF is not suitable for short term trading, but is suitable for long term investing. Just place your order at the price indicated by the index and wait for someone to sell the units to you. Be patient.
I've read your blog regularly and you're an advocate of low cost index fund as the primary tool for investments. While the idea it's great in principle, I find the lack of index fund products in Singapore to be somewhat inconvenient. Based on my analysis, we only have the following products locally, either through unit trust or traded at SGX:
Singapore Stock
There is only StreetTracks STI ETF and DBS STI ETF. Both track the same index. In my opinion the STI Index is not that well diversified, it only has 30 companies (compare it to S&P 500) and it comprises only of large cap stocks. There is no index fund or ETF that tracks a Singapore small cap index, or even an index that has more companies making up the index (e.g. a Singapore total market index that has small + large cap companies).
Singapore Bond
There is only the ABF Singapore Bond ETF, which is to my knowledge the only passively-managed bond fund in this country. However, the ETF suffers from problems like liquidity, large bid-ask spread and trading prices not tracking its NAV properly. It behaves more like a stock than a bond index fund at times. Considering that it invests only in SGD-denominated government bonds, that shouldn't be the case. As for bond unit trust, most do not invest in local bonds and is subjected to currency risk. Bond unit trust also have expense ratios like ~1% which makes extremely unattractive. The last way is to invest in SGS bonds direct, but regularly saving into SGS bonds is difficult as they have fixed issuance dates. To complicate the matter, SGS bonds cannot be bought online (unless you consider FSM secondary SGS bond market).
International Stock
Many of the Lyxor series of ETF which do cover international stocks are usually single country fund and are not a good form of diversification. There are some regional/global ETFs, but the whole range of Lyxor ETFs suffer from liquidity problems too. There is only 3 unit trust that are passively managed, and those are the Lion Capital Infinity series that are feeder funds into Vanguard index funds. However, Lion Capital slaps a 1% management fee just for feeding money into Vanguard index funds... real easy money for Lion Capital for just doing almost zero work!
I was hoping if you could comment on this in your blog one day. It certainly would help if we had more good index fund based products in Singapore.
Garrett
My comment
Read my book, Practical Guide on Financial Planning available at www.easysearch.sg/ishop
Some people commented about the lack of liquidity of the STI ETF. This should not be of concern to the long term investor. The ETF manager will create more units to meet demand. The ETF is not suitable for short term trading, but is suitable for long term investing. Just place your order at the price indicated by the index and wait for someone to sell the units to you. Be patient.
Survey on Orphaned Policies
Dear Mr Tan,
Thank you for referring your readers to my "Orphaned Insurance Policy" poll. The 2-minute-only poll is still open and they can help out if they haven't. The updated results, charts, and comments are available at:
http://cliftonphua.blogspot.com/2010/05/updated-results-from-orphaned-insurance.html
Below is my take on results from the first 40 respondents.
(1) Respondents are mostly over 35 years old with 3-8 policies.
(2) More than 4 out of 5 Singaporeans have at least 1-2 orphaned policies.
(3) Most orphaned policies came from AIA, Prudential, and NTUC Income - the most established insurance companies in Singapore.
(4) Original financial advisor usually left without giving reason, joined another insurance company, changed career or retired - fair enough, this happens in any company and industry.
(5) Out of those Singaporeans with orphaned policies, only about 1 out of 4 of their new financial advisors have contacted them. 1 out of 8 have assisted them before and to very little satisfaction. In my opinion, this is an unacceptable service level. Policy holders don't seem to care… only until something rare but dramatic happens…
(6) Usefulness of financial advisors is questionable
"It's good to know about what you bought. I've no problem living without an adviser as I have find out more than enough information / procedures should I need any form of service or claims. It makes no difference with or without an insurance adviser."
"This is to be expected. No stepmother will treat you better than your real mother. It is wishful thinking that the orphaned policies will get better treatment from the new agent since the bulk of the commission is already given to the original agent. It is time that a separate channel be made available for people to buy policies without going through agents since they do not add value anyway nowadays."
(7) Commission-only incentives for financial advisors are evil
"It is a shield (medical) plan, the company could have assigned a new advisor but didn't. probably because the premium is small and the new advisor will not get renewal commission."
"The new financial advisor is only interested to generate new sales for herself."
"Commission-based selling is the culprit!"
Clifton Phua
Thank you for referring your readers to my "Orphaned Insurance Policy" poll. The 2-minute-only poll is still open and they can help out if they haven't. The updated results, charts, and comments are available at:
http://cliftonphua.blogspot.com/2010/05/updated-results-from-orphaned-insurance.html
Below is my take on results from the first 40 respondents.
(1) Respondents are mostly over 35 years old with 3-8 policies.
(2) More than 4 out of 5 Singaporeans have at least 1-2 orphaned policies.
(3) Most orphaned policies came from AIA, Prudential, and NTUC Income - the most established insurance companies in Singapore.
(4) Original financial advisor usually left without giving reason, joined another insurance company, changed career or retired - fair enough, this happens in any company and industry.
(5) Out of those Singaporeans with orphaned policies, only about 1 out of 4 of their new financial advisors have contacted them. 1 out of 8 have assisted them before and to very little satisfaction. In my opinion, this is an unacceptable service level. Policy holders don't seem to care… only until something rare but dramatic happens…
(6) Usefulness of financial advisors is questionable
"It's good to know about what you bought. I've no problem living without an adviser as I have find out more than enough information / procedures should I need any form of service or claims. It makes no difference with or without an insurance adviser."
"This is to be expected. No stepmother will treat you better than your real mother. It is wishful thinking that the orphaned policies will get better treatment from the new agent since the bulk of the commission is already given to the original agent. It is time that a separate channel be made available for people to buy policies without going through agents since they do not add value anyway nowadays."
(7) Commission-only incentives for financial advisors are evil
"It is a shield (medical) plan, the company could have assigned a new advisor but didn't. probably because the premium is small and the new advisor will not get renewal commission."
"The new financial advisor is only interested to generate new sales for herself."
"Commission-based selling is the culprit!"
Clifton Phua
Ranking of cities by Quality of Life
Here is another ranking by Mercer
http://www.mercer.com/qualityoflivingpr
My comments (revised):
Each survey uses its own criteria, as explained in the report.
The top 5 cities are:
1 Vienna
2. Zurich
3. Geneva
4. Vancouver
4. Auckland
Singapore ranked 28 but is highest in Asia.
http://www.mercer.com/qualityoflivingpr
My comments (revised):
Each survey uses its own criteria, as explained in the report.
The top 5 cities are:
1 Vienna
2. Zurich
3. Geneva
4. Vancouver
4. Auckland
Singapore ranked 28 but is highest in Asia.
Investing savings for a debt free family
Dear Mr Tan
We wish to seek your opinion on what we should do with our savings. Currently, we have paid off our HDB loan, car loan, and we are practically debt free. We are in our 30s and we have 2 sons from age 5 to 10. We have some investments and they are doing well fetching us dividend yields of 5 to 9% per annum. We have sufficient insurance coverage should we report early to heaven and have also been buying education plans for our children since they were 1. We have learnt to live beneath our means and have saved a bit of money through the years.
You see, we have some savings and we would like to accumulate our wealth but we do not know what to do now. In addition, we did think about investing in a private property but prices are rocket high now. In your opinion do you think it is right to purchase a private property for investment purposes in Singapore? Do you think properties prices will go down soon?
TO
REPLY
Invest in a low cost investment fund as suggested in my book, Practical Guide on financial planning. It can be bought online. Visit www.easysearch.sg/ishop
We wish to seek your opinion on what we should do with our savings. Currently, we have paid off our HDB loan, car loan, and we are practically debt free. We are in our 30s and we have 2 sons from age 5 to 10. We have some investments and they are doing well fetching us dividend yields of 5 to 9% per annum. We have sufficient insurance coverage should we report early to heaven and have also been buying education plans for our children since they were 1. We have learnt to live beneath our means and have saved a bit of money through the years.
You see, we have some savings and we would like to accumulate our wealth but we do not know what to do now. In addition, we did think about investing in a private property but prices are rocket high now. In your opinion do you think it is right to purchase a private property for investment purposes in Singapore? Do you think properties prices will go down soon?
TO
REPLY
Invest in a low cost investment fund as suggested in my book, Practical Guide on financial planning. It can be bought online. Visit www.easysearch.sg/ishop
Land banking - in the news
Hi Mr. Tan
Here are two newspaper reports on land banking:
http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_526464.html
http://tnp.sg/news/story/0,4136,241645,00.html?
NL
Here are two newspaper reports on land banking:
http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_526464.html
http://tnp.sg/news/story/0,4136,241645,00.html?
NL
What is the "worth" of anything in life?
THE SOLDIER
Horror gripped the heart of a World War-I soldier, as he saw his lifelong friend fall in battle. The soldier asked his Lieutenant if he could go out to bring his fallen comrade back.
"You can go," said the Lieutenant," but don't think it will be worth it.Your friend is probably dead and you may throw your life away."
"The Lieutenant's words didn't matter, and the soldier went anyway. Miraculously, he managed to reach his friend, hoisted him onto his shoulder and brought him back to their company's trench.
The officer checked the wounded soldier, then looked kindly at his friend. "I told you it wouldn't be worth it," he said. "Your friend is dead and you are mortally wounded."
"It was worth it, Sir," said the soldier.
"What do you mean by worth it?" responded the Lieutenant. "Your friend is dead."
"Yes Sir," the soldier answered,"but it was worth it because when I got to him, he was still alive and I had the satisfaction of hearing him say.... "Jim...I knew you'd come."
REFLECTION
Many times in life, whether a thing is worth doing or not, really depends on how you look at it. Enjoy the little things, for one day you may look back and realise they were the big things. Fhe way to love anything is to realise its worth and that it might be lost. Also, relationships are like crystals, you dont realize how much it's worth until it breaks.
Take up all your courage and do something your heart tells you to do, so that you may not regret not doing it later in your life!!
Horror gripped the heart of a World War-I soldier, as he saw his lifelong friend fall in battle. The soldier asked his Lieutenant if he could go out to bring his fallen comrade back.
"You can go," said the Lieutenant," but don't think it will be worth it.Your friend is probably dead and you may throw your life away."
"The Lieutenant's words didn't matter, and the soldier went anyway. Miraculously, he managed to reach his friend, hoisted him onto his shoulder and brought him back to their company's trench.
The officer checked the wounded soldier, then looked kindly at his friend. "I told you it wouldn't be worth it," he said. "Your friend is dead and you are mortally wounded."
"It was worth it, Sir," said the soldier.
"What do you mean by worth it?" responded the Lieutenant. "Your friend is dead."
"Yes Sir," the soldier answered,"but it was worth it because when I got to him, he was still alive and I had the satisfaction of hearing him say.... "Jim...I knew you'd come."
REFLECTION
Many times in life, whether a thing is worth doing or not, really depends on how you look at it. Enjoy the little things, for one day you may look back and realise they were the big things. Fhe way to love anything is to realise its worth and that it might be lost. Also, relationships are like crystals, you dont realize how much it's worth until it breaks.
Take up all your courage and do something your heart tells you to do, so that you may not regret not doing it later in your life!!
Land banking
Hello Mr Tan
See this report from the UK on the site at Cherry Tree grove.
While it may have seemed that they were actively chasing this the reality is that the planning and appeals process is just filling in a few forms and paying small fees. So they have kept this site alive for three years with a very small investment while telling investors they are actively getting planning permission. Anyway this is the last round of appeal so now they have to tell investors it has failed. If you look on their website they are still talking about getting planning approval for this site.
http://www.chelmsfordweeklynews.co.uk/news/colchester/8189096.Green_gateway_hotel_plan_turned_down
http://www.profitablegroup.com/plots-ctg.aspx
Here is a report on the commotion at the office of a land banking company:http://www.todayonline.com/Singapore/EDC100529-0000082/Profitable-Group-slams-irate-investors
SF
See this report from the UK on the site at Cherry Tree grove.
While it may have seemed that they were actively chasing this the reality is that the planning and appeals process is just filling in a few forms and paying small fees. So they have kept this site alive for three years with a very small investment while telling investors they are actively getting planning permission. Anyway this is the last round of appeal so now they have to tell investors it has failed. If you look on their website they are still talking about getting planning approval for this site.
http://www.chelmsfordweeklynews.co.uk/news/colchester/8189096.Green_gateway_hotel_plan_turned_down
http://www.profitablegroup.com/plots-ctg.aspx
Here is a report on the commotion at the office of a land banking company:http://www.todayonline.com/Singapore/EDC100529-0000082/Profitable-Group-slams-irate-investors
SF
Foreign language and culture
There are some words or expressions in foreign languages that have a deep meaning or philosophy. I wish to introduce some of these expressions to you. I hope that you can contribute other expressions:
Schadenfreude (German): pleasure derived from the misfortunes of others
Savoir-faire (French): the ability to say or do the right or graceful thing.
There are many examples from the Chinese, Japanese language and other languages. These words convey special meaning that shapes the behavior and culture of a people.
We have our own Singapore examples, such as "kaisu" and "kiasi".
Schadenfreude (German): pleasure derived from the misfortunes of others
Savoir-faire (French): the ability to say or do the right or graceful thing.
There are many examples from the Chinese, Japanese language and other languages. These words convey special meaning that shapes the behavior and culture of a people.
We have our own Singapore examples, such as "kaisu" and "kiasi".
Remembering Dr. Goh Keng Swee
How should Singapore remember Dr Goh Keng Swee, a founding father and one of the most brilliant architects of our nation? Appreciate your vote in this survey:
http://www.surveymonkey.com/s/T3BBHBH
Terence Chua
http://www.surveymonkey.com/s/T3BBHBH
Terence Chua
Rules of the game
It is interesting to watch how the rules of a game influence the behavior of the participants.
There is a popular game called Hearts. It is available as a standard game with Microsoft Windows. Here are the rules of the game:
a) The game involves exactly four players. At the end of the game, when one player accumulates at leat 100 penalty points, the player with the lowest point is declared as the winner. The other three players are considered as having lost the game.
b) The game comprises many rounds (or "hands"). 26 penalty points are awarded to the players on each roudn.
c) There is a special feature that if one player accumulates all the 26 penalty points during a hand, the player is considered as having "shot the moon". In that case, the 26 penalty points is awarded to the other three players.
The rules of this game influence the behavior of the players as follows:
a) As the game progresses, all the three losing players (i.e with the higher points) cooperate among themselves to prevent the leading player (with the lowest point) from widening the lead.
b) In each hand, the players cooperate among themselves to prevent one player from "shooting the moon". They will keep a strong card to prevent this situation and will be willing to take one or more penalty points to prevent this outcome. This is for the benefit of the other players.
The behavior of Singaporeans is also shaped by our economic environment and our education system. We were told to be "excellent" and be better than our classmates and get to the "top of the class", When we start work, we were told to "look after ourselves" as "nobody owes us a living".
This environment develops Singaporeans to be competitive, selfish and incompassionate. Generally, we consider the unemployed or unsuccessful people as being "lazy" or have "bad attitude".
When we become victirms of these circumstances, we begin to realise that it could be due to bad luck or unfairness. By that time, we lament that other people do not step forward to help us as they are only looking after themselves.
There are Signaporeans who are exceptions to this observation. But, I do believe that many Singaporeans show the behavior that I have described.
Tan Kin Lian
There is a popular game called Hearts. It is available as a standard game with Microsoft Windows. Here are the rules of the game:
a) The game involves exactly four players. At the end of the game, when one player accumulates at leat 100 penalty points, the player with the lowest point is declared as the winner. The other three players are considered as having lost the game.
b) The game comprises many rounds (or "hands"). 26 penalty points are awarded to the players on each roudn.
c) There is a special feature that if one player accumulates all the 26 penalty points during a hand, the player is considered as having "shot the moon". In that case, the 26 penalty points is awarded to the other three players.
The rules of this game influence the behavior of the players as follows:
a) As the game progresses, all the three losing players (i.e with the higher points) cooperate among themselves to prevent the leading player (with the lowest point) from widening the lead.
b) In each hand, the players cooperate among themselves to prevent one player from "shooting the moon". They will keep a strong card to prevent this situation and will be willing to take one or more penalty points to prevent this outcome. This is for the benefit of the other players.
The behavior of Singaporeans is also shaped by our economic environment and our education system. We were told to be "excellent" and be better than our classmates and get to the "top of the class", When we start work, we were told to "look after ourselves" as "nobody owes us a living".
This environment develops Singaporeans to be competitive, selfish and incompassionate. Generally, we consider the unemployed or unsuccessful people as being "lazy" or have "bad attitude".
When we become victirms of these circumstances, we begin to realise that it could be due to bad luck or unfairness. By that time, we lament that other people do not step forward to help us as they are only looking after themselves.
There are Signaporeans who are exceptions to this observation. But, I do believe that many Singaporeans show the behavior that I have described.
Tan Kin Lian
New railway in Malaysia
I am delighted that, after twenty years, Singapore and Malaysia has resolved their differences on the railway station in Tanjong Pagar. The new railway station will move initially to Woodlands. We can look forward to a new railway system being developed in Malaysia over the next few years.
Many advanced countries have a high speed railway system to connect its citiies. For example, the progress in China and Taiwan is amazing. Malaysia can catch up for lost time. Many Singaporeans would love to have the chance to travel to Kuala Lumpur and Penang by train, rather than by plane. This will also benefit many Malaysians who work in Singapore.
Some people wonder why it took twenty years for the leaders of the two countries to resolve the differences. This shows that high salaries of leaders do not lead to better performance. However, as the saying goes, "Better late than never!"
Tan Kin Lian
Many advanced countries have a high speed railway system to connect its citiies. For example, the progress in China and Taiwan is amazing. Malaysia can catch up for lost time. Many Singaporeans would love to have the chance to travel to Kuala Lumpur and Penang by train, rather than by plane. This will also benefit many Malaysians who work in Singapore.
Some people wonder why it took twenty years for the leaders of the two countries to resolve the differences. This shows that high salaries of leaders do not lead to better performance. However, as the saying goes, "Better late than never!"
Tan Kin Lian
Quarrel on the MRT train
Two persons were quarrelling on the MRT train. A young girl, while seated and talking in the mobile phone, carelessly knoced against a young man seated next to him. The young man complained, as he was listening to his music. The lady complained loudly about the remarks and abused the man continuously for scolding her for an unintended act. She called her friend on the mobile phone to tell loudly about this incident. She also challenged him to get down at the next stop for a fight.. From the accent, both of these persons were foreigners who have lived in Singapore for some time.
This is an unntended consequences of allowing many foreigners to live in Singapore in a short time. The culture and social behavior of the people livng in Singapore has changed consideraly.
Tan Kin Lian
This is an unntended consequences of allowing many foreigners to live in Singapore in a short time. The culture and social behavior of the people livng in Singapore has changed consideraly.
Tan Kin Lian
Life is more difficult
I met a few relatives at a wedding reception.
One drives a bus. The insurance premium has increased sharply. He now has to drive longer hours and get his grown up son to take the third shift to make ends meet.
Another runs a mini-mart. He complains about the regulations on placing goods outside his shop and the summon that he received from the town council. After seeing his MP, he was issued with a courts summons.
Another runs a catering business. He is worried about the competitive environment, low margin and high operating cost.
All of them said that life is more difficult today, compared to the past. They face stress due to the high cost of living, rules and regulations and competition.
Tan Kin Lian
One drives a bus. The insurance premium has increased sharply. He now has to drive longer hours and get his grown up son to take the third shift to make ends meet.
Another runs a mini-mart. He complains about the regulations on placing goods outside his shop and the summon that he received from the town council. After seeing his MP, he was issued with a courts summons.
Another runs a catering business. He is worried about the competitive environment, low margin and high operating cost.
All of them said that life is more difficult today, compared to the past. They face stress due to the high cost of living, rules and regulations and competition.
Tan Kin Lian
Friday, May 28, 2010
Sudoku Pocket books
If you are going for a holiday and you like a pocket book of Sudoku puzzle, you can buy them here (Logic9). A limited number of pocket books is available. There will be no reprint.
Orphaned policies
Dear Mr Tan,
Please help me publicise the following poll in your blog. It will be much appreciated.
http://cliftonphua.blogspot.com/2010/05/orphaned-insurance-policy-poll.html
Clifton Phua
Please help me publicise the following poll in your blog. It will be much appreciated.
http://cliftonphua.blogspot.com/2010/05/orphaned-insurance-policy-poll.html
Clifton Phua
Thursday, May 27, 2010
Why no need to worry about dying
Extract from Tommy Wong's book, "Wisdom on How to Live Life"
Tom: How are you, Guru Harry?
Guru: I’m very well, Tom.
Tom: I thought the doctor said that you only have a few more days to live.
Guru: Yes, that’s true. But that only means I’ll leave my body in a few days time.
Tom: You mean you’re not worried about dying?
Guru: Well, dying means the soul is separated from the body but the soul will continue to live while the body is left behind. You know we are souls and not bodies, so why should I worry?
Tommy Wong's book can be purchased here.
Tom: How are you, Guru Harry?
Guru: I’m very well, Tom.
Tom: I thought the doctor said that you only have a few more days to live.
Guru: Yes, that’s true. But that only means I’ll leave my body in a few days time.
Tom: You mean you’re not worried about dying?
Guru: Well, dying means the soul is separated from the body but the soul will continue to live while the body is left behind. You know we are souls and not bodies, so why should I worry?
Tommy Wong's book can be purchased here.
Wednesday, May 26, 2010
Toxic fumes in industrial building
Dear Mr. Tan
I work in an industrial estate complex belonging to a listed industrial REIT in Ang Mo Kio Ave 10. Since late last year, a unit next to the ground floor lift lobby have been discharging a foul smelling air. This pervades the lift lobby and on cold days, drifts up to even the third and fourth floor. The smell of this discharging is nauseating although the discharge is intermittent and the intensity varies from time to time.
I was wondering if the gas is toxic or carcinogenic. So I sent a mail to NEA and also notified the management of the building. After much tai-chi and wayang, the situation did not change significantly and I think no real measurements and test of the air was done after a full 6 months.
What can we do to these people especially the NEA? Are they not supposed to act like civil servants looking after the people's health and interest? Must we wait until someone dies or get cancer before something happens?
HW
I work in an industrial estate complex belonging to a listed industrial REIT in Ang Mo Kio Ave 10. Since late last year, a unit next to the ground floor lift lobby have been discharging a foul smelling air. This pervades the lift lobby and on cold days, drifts up to even the third and fourth floor. The smell of this discharging is nauseating although the discharge is intermittent and the intensity varies from time to time.
I was wondering if the gas is toxic or carcinogenic. So I sent a mail to NEA and also notified the management of the building. After much tai-chi and wayang, the situation did not change significantly and I think no real measurements and test of the air was done after a full 6 months.
What can we do to these people especially the NEA? Are they not supposed to act like civil servants looking after the people's health and interest? Must we wait until someone dies or get cancer before something happens?
HW
Tuesday, May 25, 2010
Jobs Central
I have posted two job openings at this portal:
https://secure.jobscentral.com.sg/
a) Business development
b) Developer - Nokia Qt or C++
Interested candidiates should visit the portal and respond.
https://secure.jobscentral.com.sg/
a) Business development
b) Developer - Nokia Qt or C++
Interested candidiates should visit the portal and respond.
Posting an article in my blog
I invite readers to send their article to me at kinlian@gmail.com for posting in my blog. If you do not wish to disclose your name, I can use your initials. I have posted the views of TY who sent it to me by e-mail.
Employment and older workers
Hi Mr Tan,
I refer to one of blog's article titled "Wages of older workers".
The survey done by SNEF/MOM/NTUC is merely a red herring and a public relation exercise by the govt. Which employer in their right mind would tell the surveyors that they automatically cut the wages of workers who are 60 or older?? Do SNEF/MOM/NTUC verify or audit what the employers tell them? Of course not. This survey only tells us the percentage of employers who are stupid enough to admit that they automatically reduce the wages of older workers! The best part is, our govt is leading the charge with depressing our wages by reducing the employer CPF contribution rate for older workers.
Notice that shortly after the survey results were published, Capt James, who heads the pilots union at SIA, recently criticised SIA for discriminating against S'porean pilots (who face pay cuts and/or placed on pay-if-you-fly contract when they get older) in favour of expat pilots who are provided with a generous package. I am not disputing that pilots are paid well and most can retire comfortably, but the pertinent point is the fact that S'poreans are being discriminated against in our own country!
I can empathise with the your friend's plight. He must have felt betrayed by his employer. The govt claims that S'pore is a meritocratic nation and so by natural extension, employers will find the best talent for the job without any discrimination. Frankly, that is just wishful thinking on the part of out govt. It is extremely naïve to believe that personal relations don't play a part in employment. Say a company hires a Filipino manager.....he will try his best to hire his countrymen since they share the same cultural background and mother tongue. This is not meritocracy. This is pure stupidity of our national policies.
Like you said, how can S'poreans have more babies when our livelihood is in danger? I guess that the a key downside to paying our ministers and senior civil servants outrageous salaries......they begin to live in their own world.
TY
I refer to one of blog's article titled "Wages of older workers".
The survey done by SNEF/MOM/NTUC is merely a red herring and a public relation exercise by the govt. Which employer in their right mind would tell the surveyors that they automatically cut the wages of workers who are 60 or older?? Do SNEF/MOM/NTUC verify or audit what the employers tell them? Of course not. This survey only tells us the percentage of employers who are stupid enough to admit that they automatically reduce the wages of older workers! The best part is, our govt is leading the charge with depressing our wages by reducing the employer CPF contribution rate for older workers.
Notice that shortly after the survey results were published, Capt James, who heads the pilots union at SIA, recently criticised SIA for discriminating against S'porean pilots (who face pay cuts and/or placed on pay-if-you-fly contract when they get older) in favour of expat pilots who are provided with a generous package. I am not disputing that pilots are paid well and most can retire comfortably, but the pertinent point is the fact that S'poreans are being discriminated against in our own country!
I can empathise with the your friend's plight. He must have felt betrayed by his employer. The govt claims that S'pore is a meritocratic nation and so by natural extension, employers will find the best talent for the job without any discrimination. Frankly, that is just wishful thinking on the part of out govt. It is extremely naïve to believe that personal relations don't play a part in employment. Say a company hires a Filipino manager.....he will try his best to hire his countrymen since they share the same cultural background and mother tongue. This is not meritocracy. This is pure stupidity of our national policies.
Like you said, how can S'poreans have more babies when our livelihood is in danger? I guess that the a key downside to paying our ministers and senior civil servants outrageous salaries......they begin to live in their own world.
TY
Security of employment
Jobs are no long secure in Singapore due to the following reasons:
a) global competition
b) outsourcing of jobs in public sector
c) easy entry of foreign workers
d) pro-business environment
e) weak protection of workers and managers
I cite the case of a friend who lost a job after 11 years due to a change of management, as the new management wish to bring in his buddies. The friend had a good testimonial from the previous management. He was given only 3 months of salary as a severence package. He has a family and an elderly mother to support.
In an environment where jobs are not secure, it is important to avoid making financial commitment, such as:
a. buying an expensive home on mortgage
b. raising a family.
Perhaps, it is not necessary for me to raise these points, as many Singpoareans are aware about the sitaution and have decided not to get married or to have children. This is probably the reason why Singapore has perhaps the lowest birth rate among all countries in the world. This is due to the lack of employment security and the high cost of living in Singapore.
It is important for each person to have a large emergency fund, comprising of personal savings of up to six months of earnings. This fund may have to be drawn down in an emergency. It should be kept in liquid form, and not invested in a inflexible investment, such as a life assurance policy. Read my tips in my book, Practical Guide on Financial Plannng.
For older people who are already committed to a expensive mortgage and a family, it is time to stop further commitments and to build up the emergency fund early. Search Youtube for the videos by Suze Osman, who is a presenter in CNBC programme. She has been giving the same advice for the past two years, i.e. build an emergency fund.
Tan Kin Lian
a) global competition
b) outsourcing of jobs in public sector
c) easy entry of foreign workers
d) pro-business environment
e) weak protection of workers and managers
I cite the case of a friend who lost a job after 11 years due to a change of management, as the new management wish to bring in his buddies. The friend had a good testimonial from the previous management. He was given only 3 months of salary as a severence package. He has a family and an elderly mother to support.
In an environment where jobs are not secure, it is important to avoid making financial commitment, such as:
a. buying an expensive home on mortgage
b. raising a family.
Perhaps, it is not necessary for me to raise these points, as many Singpoareans are aware about the sitaution and have decided not to get married or to have children. This is probably the reason why Singapore has perhaps the lowest birth rate among all countries in the world. This is due to the lack of employment security and the high cost of living in Singapore.
It is important for each person to have a large emergency fund, comprising of personal savings of up to six months of earnings. This fund may have to be drawn down in an emergency. It should be kept in liquid form, and not invested in a inflexible investment, such as a life assurance policy. Read my tips in my book, Practical Guide on Financial Plannng.
For older people who are already committed to a expensive mortgage and a family, it is time to stop further commitments and to build up the emergency fund early. Search Youtube for the videos by Suze Osman, who is a presenter in CNBC programme. She has been giving the same advice for the past two years, i.e. build an emergency fund.
Tan Kin Lian
Minimum wage
The government leaders have been telling the people that a minimum wage will cause the jobs to be lost. This is only partly true; largely, it is false.
A minimum wage is necessary to ensure that the worker earns enough to pay for the cost of living by doing a full day's work. If the wage is below the minimum, the worker has to work longer hours. This will cause other people to be unemployed. For a stable society, we need to have most people, who are able and willing to work, to be able to find a job and earn enough enough to raise a family and be a contributing member of society.
A decent wage, as opposed to a sub-minimum wage, does not cause the loss of jobs. Wages are only one component of the total cost of production. The other components are cost of property (i.e. rental), government taxes and shareholder profits. If wages are too low, more of the cost goes towards rental and profits. The imbalance, between wages and rental, is one factor leading to the high property prices in Singapore.
Many of the jobs in a country are in the service sector. They are part of the domestic economy. They have to be done in the country and cannot be lost. Examples are education, health, transport and personal services. A minimum wage to these sectors affect all businesse and will be added to the cost of providing the service. It can be kept low, if the other components, such as rental, taxes and profits, are kept at the fair market levels - and are not inflated due to the failure of the market, e.g. if there is a near monopoly.
Many global businesses come to Singapore to enjoy the low wages contributed by foreign workers who work in Singapore. The social cost of these foreign workers have not been properly factored - i.e. the overcrowding and the strain on the public services (i.e education, health and transport). If these are properly accounted, the strategy of low wages, i.e. no minimum wage, in creating jobs in Singapore is not compelling.
I believe that it is time for a minimum wage to be introduced in Singapore and for the market in labour to find its new level. I believe that we are among the few developed economies that do not have a minimum wage.
Tan Kin Lian
A minimum wage is necessary to ensure that the worker earns enough to pay for the cost of living by doing a full day's work. If the wage is below the minimum, the worker has to work longer hours. This will cause other people to be unemployed. For a stable society, we need to have most people, who are able and willing to work, to be able to find a job and earn enough enough to raise a family and be a contributing member of society.
A decent wage, as opposed to a sub-minimum wage, does not cause the loss of jobs. Wages are only one component of the total cost of production. The other components are cost of property (i.e. rental), government taxes and shareholder profits. If wages are too low, more of the cost goes towards rental and profits. The imbalance, between wages and rental, is one factor leading to the high property prices in Singapore.
Many of the jobs in a country are in the service sector. They are part of the domestic economy. They have to be done in the country and cannot be lost. Examples are education, health, transport and personal services. A minimum wage to these sectors affect all businesse and will be added to the cost of providing the service. It can be kept low, if the other components, such as rental, taxes and profits, are kept at the fair market levels - and are not inflated due to the failure of the market, e.g. if there is a near monopoly.
Many global businesses come to Singapore to enjoy the low wages contributed by foreign workers who work in Singapore. The social cost of these foreign workers have not been properly factored - i.e. the overcrowding and the strain on the public services (i.e education, health and transport). If these are properly accounted, the strategy of low wages, i.e. no minimum wage, in creating jobs in Singapore is not compelling.
I believe that it is time for a minimum wage to be introduced in Singapore and for the market in labour to find its new level. I believe that we are among the few developed economies that do not have a minimum wage.
Tan Kin Lian
Monday, May 24, 2010
Wages of older workers
This letter appears in the Online Forum of the Straits Times on 24 May 2010.
I refer to the letter entitled “Less than 3% of private firms cut older worker’s wages” (ST 20 May) sent in jointly by the Singapore National Employer’s Federation, Ministry of Manpower and the National Trades Union Congress.
Employers in Singapore have the flexibility to terminate an older worker for a variety of reasons, including restructuring and outsourcing. This has been practiced quite often in the private and public sectors. There is little need for them to keep workers until age 60 to have their wages reduced under the Retirement Age Act. This probably account for the low percentage of employers exercising this wage cut.
I cite the case of a friend who has worked for 11 years in regional business development for a local insurance company. He was rated as a good performer by the previous management. Recently, with a change of top management, he was asked to leave and was offered a compensation of only 3 months of salary.
He asked for my assistance on how to make an appeal to the Ministry of Manpower, as he still has a family and an sick elderly mother to support.
I hope that our tripartite partners will recognise this type of difficulty faced by many Singaporeans. The current employment practices offer little protection to workers, especially those at the older wages, when the top management outsource the work to contractors to reduce their cost or replace senior people with their own buddies.
It is time for Singapore to consider a minimum wage so that the wages of our worker do not continue to stagnate due to outsourcing to contractors who can employ foreign workers at lower cost. There is also a need to set a certain level of retrenchment benefit for all workers, including managers, to protect them against being replaced for reasons that are not related to bad performance.
Tan Kin Lian
I refer to the letter entitled “Less than 3% of private firms cut older worker’s wages” (ST 20 May) sent in jointly by the Singapore National Employer’s Federation, Ministry of Manpower and the National Trades Union Congress.
Employers in Singapore have the flexibility to terminate an older worker for a variety of reasons, including restructuring and outsourcing. This has been practiced quite often in the private and public sectors. There is little need for them to keep workers until age 60 to have their wages reduced under the Retirement Age Act. This probably account for the low percentage of employers exercising this wage cut.
I cite the case of a friend who has worked for 11 years in regional business development for a local insurance company. He was rated as a good performer by the previous management. Recently, with a change of top management, he was asked to leave and was offered a compensation of only 3 months of salary.
He asked for my assistance on how to make an appeal to the Ministry of Manpower, as he still has a family and an sick elderly mother to support.
I hope that our tripartite partners will recognise this type of difficulty faced by many Singaporeans. The current employment practices offer little protection to workers, especially those at the older wages, when the top management outsource the work to contractors to reduce their cost or replace senior people with their own buddies.
It is time for Singapore to consider a minimum wage so that the wages of our worker do not continue to stagnate due to outsourcing to contractors who can employ foreign workers at lower cost. There is also a need to set a certain level of retrenchment benefit for all workers, including managers, to protect them against being replaced for reasons that are not related to bad performance.
Tan Kin Lian
Ponzi Scheme
Here is an article to explain how the ponzi scheme started.
My comment
A ponzi scheme usually offer an attractive return. The operator take the money from the investors to pay back the earlier investors. As long as the ponzi scheme continues to grow exponentially in size, the operator is able to carry on. During this time, the operator continues to siphon off the money. When the new money stops coming in, the ponzi collapses.
My comment
A ponzi scheme usually offer an attractive return. The operator take the money from the investors to pay back the earlier investors. As long as the ponzi scheme continues to grow exponentially in size, the operator is able to carry on. During this time, the operator continues to siphon off the money. When the new money stops coming in, the ponzi collapses.
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