Saturday, March 13, 2010

Best places in the world to bring up kids

Australia ranked first. Singapore is second. Survey of expatriates. Read this article.

Terminate a Revosave policy

Hi Mr Tan,
I need you advice. I have a friend who bought Reovsave last November. She paid the premium in full for the year. I am thinking if it is better to terminate the plan and do investment for the rest of 25 years. What do you think?

Ask her to send the benefit illustration for me to talk a look. But, it could be quite complicated to analyse. I will try and see what the "effect of deduction" is for this policy.

Maybe, one way of looking at this question is to see the distribution cost. If the premium paid is less than the distribution cost, it would be better to terminate the policy and save on the balance of the distribution cost.

Promotion at i-Shop

The Shape Quiz mini-pak (worth $2) will be given for each $10 of purchase from i-Shop. Applies to all items in i-Shop, including books and rechargeable torchlights.

Click here to view the available books and place your order.

How little he knows the world

Well, it seems that Republicans are going all in on the idea that a big reason we have high unemployment is that unemployment benefits reduce the incentive to seek work. Aside from the sheer cruelty, it’s really bad economics, but whatever. And I found myself remembering a passage near the beginning of The Treasure of the Sierra Madre:

Anyone who is willing to work and is serious about it will certainly find a job. Only you must not go to the man who tells you this, for he has no job to offer and doesn’t know anyone who knows of a vacancy. This is exactly the reason why he gives you such generous advice, out of brotherly love, and to demonstrate how little he knows the world.

Paul Krugman, New York Times

Issues relating to productivity

To be productive means to be able to produce more units of output in a given time, i.e. to reduce the cost of producing each unit. One can produce more by working faster, but this is likely to result in mistakes and poorer quality. It usually means to find a better way to produce the goods, while maintaining the quality of the product.

The best way to reduce cost is to eliminate waste, which adds to the total cost of productivity. There are many activities that are wasteful and costly and do not add to the value of the products, such as impractical compliance with safety, health and security. While these functions are important, they have to be examined carefully in terms of cost and usefulness, and are not to be complied blindly. Many activities in Singapore have this hidden burden of compliance, which adds to the cost of production.

If the goods are to be produced using a new method, we must be prepared to make a change. Many people are not willing to take the responsibility to make a change in Singapore. They prefer the safety of sticking to the old ways. This tendency to play safe is a negative trait of Singapore and is likely to impede our progress towards productivity.

I am not advocating that we go to the other extreme to abandon safety, health, security or to take short cuts in our production. I am asking that we must have an open mind to examine these issues. If we continue to be risk adverse, and to play safe, we will not be able to achieve th quantum leap in productivity.

Here are my views about improving productivity in Singapore.

Tan Kin Lian

Pay TV operators to carry contents of third parties

The Media Development Authority has announced that they will require pay TV operators to carry the contents of third parties, but this will only apply to future contents.

This is a good move, but does not go far enough. The biggest damage is going to occur in respect of existing content, specifically the English Premier League. Over the next few months, many households will have to go through the expensive exercise of switching their platform (from Starhub to Singtel) or installing a new set of cables. It is wasteful and inconvenient.

Singtel is likely to face serious resource issues in meeting the heavy demand and also in addressing the technical issues of connectivity and customer experience. Already, they faced glitches. This is bound to increase significantly.

MDA or the acting minister for information, communication and the arts should take the bold step of mandating that this requirement apply to existing contents as well, to take effect from (say) 1 June 2010. It will be doing a favor for Singtel. They will be able to reach out to a wider audience of viewers and earn additional subscriptions to meet their heavy payment for the EPL content.

Starhub has earlier announced that they will carry the EPL content for free on its cable platform.  Singtel should take up this offer, in the interest of Singapore (i.e. to reduce waste). I congratulate Starhub for its gesture in the interest of the public (although some people say that it is done for commercial reason).

MDA has announced that a new generation set top box will be provided in the future. Any advantage that Singtel can earn by forcing consumers to move to its Mio platform will be temporary and will probably be yield sufficient commercial advantage (but I could be wrong).

I hope that MDA and the acting minister will take the bold step now, instead of waiting for the damage to be done.

Tan Kin Lian

Puzzles for school holidays

Try to occupy your children with these puzzles during the school holidays. It is fun and challenges their creativity. The puzzles are FREE. Click here.

A MLM scheme

Hi Mr Tan,

I came across a few website that claims that a person can earn thousands of dollars in a few month by just working from home. Somehow I managed to find a website that is Singapore based that claimed to do that. The website shows a lot of success stories, comments by Singaporeans and also proof of payment etc. Out of curiosity, I went to try out the offer. The website offer a few packages ranging from Free account to SGD$250 a year. I signed up for the SGD$100 2 years package as it seems to be the popular package for starters.

Basically how this thing works is that when you sign up under a specific person, the person will earn commission. The higher the package the referral signed up with, the higher commission they will earn. After which, the person start sending email on tips to get more people sign up i.e. through advertising, words of mouth etc. I tried online advertising and somehow manage to get quite a number of users sign up under me. Most of them sign up the free package (which I suppose will take a lot of years to earn and also I won't earn any commission for that) and also somehow I got 3 person who sign up paid package under me. 

During that period of time, users under this program need to reach SGD$100 in order to cash out. Once, I reach SGD$100+, I requested for cash out as I'm afraid that this might not last long. It took quite long for the cash out to process but they did pay me. Although my package still left with 1 more + year. I have stop participate in this program though my account still active. The reason is because I just wanted to know more about how this things work and also I have already got back my money (though I earn a few dollars). Most importantly, I'm afraid that this program might cause some people like students who are not working and fork out their savings. They might lose their money if they cannot find people to sign up under them or they may even pester their friend to sign up under them resulting in lose friendship (see the link below on Push MLM and lose a friend). Moreover, I don't think this kind of program will last long and the person who earn the most is the creator of this program.

I am just wondering what kind of scheme is this called and is this legal? I do have friends who are in MLM who sell health products that also requires to fork out money for products and additional money for training. When they approach me to attend a talk, I will try to avoid. Friendship starts to become drift apart because of this. I frequent read newspaper also found out there are advertisement on "Earn millions dollar a month/year" by attending their seminar to learn more. I never attend such seminar before so I wonder is this similar to one of the above-mentioned story?

It would be glad if you could share your views on the above-mentioned story, Ponzi Scheme, MLM, newspaper ads and related stuff.

Best Regards


The package that I signed up under (she is the one I keep contact with and I believe she has a lot of people sign up under her)

Push MLM and lose a friend                                   

Friday, March 12, 2010

Land banking - more investors caught

An investor called me. She invested a large sum of money in a land banking project with the promise of 12.5% interest on maturity at the end of 6 months. On maturity, the company did not honor the promise to pay back the investment. They asked her to extend the investment by another 6 months.

She visited a section in Hardware zone and was horrified to learn that many other investors was caught in a similar situation. She refused to extend the investment but the company has not paid back her money, in spite of her repeated requests.

The investor said that she was deceived because the land banking company had a Singapore Quality class awarded by Spring Singapore. She thought that this classification indicate that the company can be trusted to honor its promise.

The land banking company is conducting more road shows and investment talks, and more investors would be caught in this type of investment.

Many investors had already complained to the Commercial Affairs Departments of similar investments during the past year. Apparently, the CAD had not acted on these complaints. During this time, more people are being caught in similar dubious investments. It seems that a few million dollars of investments are being collected each month.

I am really at a loss on how to help these investors who were deceived by these investments. I hope that the newspapers will write a story about it. It should be a crime for the company to take deposits with the promise to return the money with interest, when they do not have a banking licence. How can the Authority stand by and allow such operations to continue?

Tan Kin Lian

Investing in companies

Jack Bogle was the founder of the Vanguard Investment Group -  one of the two largest fund managers in America. Vanguard also pioneered the concept of the indexed funds - funds which are invested to mirror the stock market index, such as the S&P index and carry very low expense ratios.

He explained the difference between investing in stocks and investing in companies. The stock investor takes a short term view and trades on the price of the stocks. The investor in companies takes a long term view and looks at the profits earned and dividends distributed by the companies, and is not bothered with the daily price movement of the stocks.

It is difficult for an investor to pick the right companies to invest in. Jack Bogle advise them to invest in the indexed fund, which is invested in a large number of companies that represent the economy. For example, the S&P Index contains the top 500 companies in America that has operations around the world.

The Vanguard S&P funds have an expense ratio of about 0.3%. This is very low compared to an expense ratio of 2%t o 3% charged by many actively managed funds, including the unit trusts available in Singapore.

It may be difficult to find a fund that charges as low as Vanguard. But it is acceptable to invest in a fund with an expense ratio of 0.5% (such as the STI ETF). Here is the accumulated amount from investing $500 a month over 30 years:

Net yield of 5.5% (i.e. 6% - 0.5%), total of $459,517
Net yield of 3.5% (i.e 6% - 2.5%), total of $320,577

You give away 29% of your accumulated savings of $459,517 to get a reduced amount of $320,577 when you invest in a fund that has an expense ratio of 2% higher.

When you invest in companies, you should not bother about any the temporary y fluctuation in the share prices. Although the dividend may be cut during an economic recession, it will be restored when the economy recovers. You only need to make sure that your investments are well diversified, i.e. the fund is invested in many companies, so that any failure of a single company will have a small impact on the fund.

Tan Kin Lian

A tale of two neighboring countries

My friend lived in Canada and the United States. Although these two countries are similar in many aspects, they are quite different in their economic philosophy.

The Canadians pay higher taxes but are able to enjoy many social services provided free or highly subsidized by the state, such as health care, education and security. The Americans pay lower taxes but have to pay more for their private health care and also to take care of their security.

Although America claims to have lower taxes, they are not collecting sufficient tax to pay for their medicare, social security and unemployment benefits. This has resulted in their large budget. deficit.

Americans dislike the word "socialist". In Canada, socialism is considered to be desirable. He finds the Canadian system to be better for the people.

Tan Kin Lian

Interest charge on installment payment

I saw the following advertisements in the newspaper:

Acer netbook, cash price $599, weekly installment of $5.47 over 48 months
Toshiba notebook, cash price $939, weekly installment of $8.58 over 48 months

In both cases, the installment payment plan charges an interest rate of 0.7% per week, or 36% per annum. By paying cash, the consumer will save on interest rate of 36%.  The total amount payable over 4 years represent an additional 90% of the cash price.

If the consumer pays in cash, he would be able to get two netbooks or notebooks for the same amount payable.

Note: you can calculate the interest rate in this type of transaction by using the Excel function called Rate.

Tan Kin Lian

Thursday, March 11, 2010

Singapore Savings Account Rates

Dear Mr. Tan,

I read your post,asking for readers to post bank interest rate.
Below is a website updated now and then about interest rate at different bank:

Yours sincerely,
Wei En

Survey: e-filing of income tax

Give your views in this survey.

Financial crisis in Ireland and USA

This article shows the key causes of the financial crisis in Ireland and USA. Read it, I get the feeling that the same factors apply to Singapore.

Decreasing Term Assurance

It is difficult to buy Decreasing Term Assurance in Singapore, as many life insurance companies are not keen to offer this product. I hope that this situation will change and some companies may sieze this market opportunity.

Let me explain the concept of Decreasing Term Assurance. Suppose you earn $4,000 a month and you need to set aside $2,000 for the upkeep of the family. You should choose a Term of 25 years, so that your youngest child will be independent at the end of that period. You will need a sum assured of $2,000 X 12 X 25 = $600,000. As each year passes, you need a lower cover, as the period of dependency reduces by one year. Your sum assured can reduce by $24,000 a year.

I assume that you have bought insurance to cover the mortgage of your home, so the home will be fully paid in the event of premature death. The $2,000 a month is adequate to cover the needs of the family.

If you buy insurance for $600,000 at age 30 for 25 years, and you wish to sum assured to remain level, you have to pay an annual premium (estimated) of $1,000. If you buy a Decreasing Term, the annual premium will reduce to $400 (or therabouts). By passing less on the premium, you can have more savings in a low cost fund for your future retirement.

Tan Kin Lian

Benefit Illustration of new plans

Dear all,

Below are the benefit illustration and policy summary for the 4 newer products since 2008 for ntuc income. They are all based on 30 yr-old male customer. Do note that all figures are projected and "hope for the best", unless stated unequivocally as Guaranteed.

Vivolife $100K sum assured & pay for 20yrs

Revosave $50K sum assured & pay for 25yrs

Sail $50K single premium & tenor of 30yrs

Vivolink regular ILP $500/mth


Disability income insurance

A reader sent to me a brochure about a disability income insurance called PaySecure. It shows an example for a person aged 30 insuring for $3,000 a month payable on disability (excluding the first 90 day) until age 55. The monthly premium is about 1% of the insured sum, i.e. about $30. The premium rate is not guaranteed and may be adjusted based on future experience.

The features of this plan looks quite satisfactory, but it is better for the consumer to get a benefit illustration of this plan specific to your age and personal circumstances. You can send the benefit illustration to me.

The consumer should also ask the insurance company to provide the loss ratio (i.e. the ratio of claims paid to the premiums received). If the loss ratio is 60% to 70%, the insurance is fairly priced. This method is explained in my book, Practical Guide on Financial Planning. If the insurance company refuses to provide this information, you should not buy the product as you may be unfairly charged.

Interest rate on bank deposits

Can you share information on the interest rate that you earn on savings account, save-as-you-earn account and fixed deposit of the banks. Show the following:

1. type of account
2. duration (for fixed deposit)
3. bank
4. amount invested
5. interest rate
6. any special condition, e.g. special terms for preferred customer

Wednesday, March 10, 2010

Yield on life insurance policies

A consumer sent me the benefit illustration for three plans. I have calculated the yield to be as follows:

in yield
Growth - single premuim
5 yrs

Growth Link (AIM) - single premium
30 yrs
Revosave - monthly premium
15 yrs

The return on the growth plan is fairly  satisfactory.  The return for the other two plans are not attractive, considering the duration of investment. The are based on a projected yield of 5.25%. If the actual yield is lower, the yield on the policy will be lower than illustrated.

If you are investing for 10 years or longer, you should aim to get at least 4% per annum.

Tan Kin Lian

Shuttle service to Liang Court

I drove to Novotel Hotel in Liang Court to attend a conference. I paid a total of $9.50 in ERP charges at 2 gantry points along the CTE and 1 gantry point to enter CBD.

I was quite surprised that the parking fee for 3 hours at Liang Court was quite modest at $1 per hour. I also learned that Liang Court provides a shuttle service to Clarke Quay station. If I knew about the shuttle service, I would have avoided driving.

Improve productivity in Singapore`

Here are my views on how to improve productivity in Singapore.

Share your views on how to improve productivity in Singapore.

Benefit Illustration - distribution cost and effect of deduction

A consumer ask my advice on a new product that is being sold to her. It is a life insurance policy with the benefit paid in installments over a period of years (similar to a life annuity). She sent a 15 page benefit illustration on this product to me. She was confused with the explanation by the financial consultant.

I find it difficult to understand the product based on the benefit illustration. There are a lot of information, including items that are not related to the product itself. The additional information gives opportunity to the financial consultant to mislead the consumer when she explains the product.

The distribution cost was $14,000 and there is a statement "please note that the distribution cost is not an additional cost to you, it has already been allowed for in calculating the premium". I find this statement to be misleading - it is a cost paid by the consumer and is a lot of money for financial advice that is confusing and detrimental for the consumer.

 I found the "effect of deduction" after 30 years to be horrendous. Based on projected investment yield of 5.25%, the accumulated premium amounts to $840,000, effect of deduction is shown as $611,000 (73%) and the amount payable to the consumer is $231,000 (23%).

What kind of financial product takes away 73% of the accumulated savings from you and leave you with only 27%? I do not know if these figures have been calculated correctly, but they appear in the benefit illustration.

I have advised that the "effect of deduction" should not exceed 20% for most types of long term products. I complained when the ratio is 40%. Now I have seen a ratio of 73% for this product. It is tantamount to daylight robbery and cheating of unwary consumers.

Perhaps the Monetary Authority of Singapore should contact me so I can ask the consumer to send the  benefit illustration for their study. This type of product should not be allowed to be sold to consumers, as they are clearly unfair. Perhaps the benefit illustration should be changed, so that it contains information that is clearly understood by the consumer, without giving opportunity for the financial consultant to mislead the consumer through verbal explanation.

Tan Kin Lian

Tuesday, March 09, 2010


Read the views by Dr. Wong Wee Nam.

Possible double dip recession in USA

Watch this video giving the views of Robert Schiller.

Personal budget

I need some real life examples from Singaporeans who are able to save at least 15% of their earnings, in addition to contributing to CPF: Please send your details to

1. Your monthly income
2. Contribution to parents
3. Essential personal expenses - e.g. travel, food, clothes
4. Repayment of loans - type and amount
5. Monthly savings
6. Balance available for holidays and other discretionary items


1. Your monthly income incluidng spouse 
2. Number of children
3. Essential personal expenses - e.g. travel, food, clothes, mobilephone
4. Repayment of loans - type and amount, e.g. house, car
5. Household expenses
6. Car or transport expenses
7. Expenses of children
8. Monthly savings
9. Balance available for holidays and other discretionary items

Cost of owning a car

I need your assistance to give some real life examples of the cost of owning a car. Please send your case study to me at

1. Cost of buying your car - new/ used?
2. Initial payment
3. Loan taken, repayment period, interest, monthly payment
4. Cost of petrol per month
5. Cost of insurance (yearly)
6. Cost of parking, ERP per month (on average)
7. Cost of repairs

Advertising and impact on policy bonus

When a business spends a lot of money to advertise its products or improve its corporate image, the money comes from the shareholders. They hope to attract more customers and earn the profit to cover the advertising cost.

The situation is different when it comes to large advertising by life insurance companies. The marketing expenses comes from the existing policyholders. The large amount that is spent will have a big impact on the bonuses that the policyholders can expect to receive on their savings. The more that is spent, the lower is the bonus.

In recent years, many life insurance companies have reduced their bonus rates significantly, but they continue to spend a lot of money on their advertisements. If the insurance company is truly looking after the interest of its policyholders, they should be increasing the bonus rates, rather than spending money on advertisements and marketing that do not benefit the existing policyholders.

If you find that you insurance company has big advertisements, you should ask this question. Are they spending my money? Is this affecting my policy bonus? Can I continue to trust this insurance company to look after my interest?

I have decided to terminate most of my life insurance policies, as I do not like the large sums that are being spent on advertising, marketing and image building (at the expense of existing policyholders) and the lower rates of bonuses that are now being given to the policyholders.

Tan Kin Lian

Monday, March 08, 2010

Difficulty in submitting Income Tax statements

I just submitted my income tax statement to IRAS through e-filing. Like in previous years, I had a difficult time. The technology used is good for IRAS  but is troublesome for the tax payer.

Here are my difficulties:

a) I received consultancy income from two sources and I do not know if the client is auto-filing my income. To find out, I had to search through a long PDF document. Rather than search this document, I prefer to enter the amount myself. But the form does not allow me to state the name of the client. If they enter the amount separately through auto-filing, I would have to pay tax twice on the same source.

b) There are a few places where I missed a entire section because IRAS hide the details under a button, e.g. rental income and relief. I was reminded by the IRAS prompt, but why hide them in the first place?

c) After entering the details of my tax returns, I click on one button my mistake (as it was not clear) and found, to my horror, that all my entries were deleted. I had to painfully enter all the fields again.

d) I managed to get to the submission form on my second attempt. I found, to my surprise, that the claim for life insurance premium was not shown. I was quite sure that I had entered the figures. I search the form twice and managed to find a button called "Amend".  After several clicks and doing my best to avoid any mistake, I managed to get to the life insurance form. I found that my earlier entry was recorded - but why did IRAS mislead me with a blank amount in the final submission form?

IRAS should realise the stress and trouble their technology is giving to the tax payer. As we submit the form only once a year, we should not be expected to learn the technical features of e-filing.  IRAS seems to forget that the taxpayer has other responsibilities, such as keeping records of all items of income and payments, and it is unfair for IRAS to add the hassle of e-filing on the tax payer.

Tan Kin Lian

Mortgage Protector from Aviva

Dear Mr Tan
I would appreciate if you can review the above insurance plan for me. (Attached are two benefit illustrations for the Morgage Protector plans from Aviva).

I compared the monthly premium with the benchmark premium (for decreasing term insurance) shown in my book, Practical Guide on Practical Insurance. I find the premium rate charged for Aviva for the Mortgage Protector policy to be reasonable.

However, if I were in your shoes, I would probably buy the Mortgage Protector only, without the Critical Illness Accelerator, as the additional premium of 80% does not seem to be worth paying.

You can buy my book here.

Appreciation to Minister Mah Bow Tan

William Tay
'National Development Minister Mah Bow Tan's remarkable story about his childhood years is a lesson for the younger generation. Despite his humble beginnings, he was able to uplift himself to become a government minister. This is testimony to our system of meritocracy which has enabled talented young people from humble backgrounds to rise up and serve the nation.'
Low Lee Siang
I AM a 58-year-old Singaporean who shed tears on reading last Saturday's article, 'Mah's own upgrading story', in which National Development Minister Mah Bow Tan recounted his difficult childhood years growing up in various housing types. Today, I live in an HDB maisonette. Thank you, Singapore.

Replacing a whole life policy

When an insurance agent approaches you to tell you that a new policy is better and advise you to give up an existing policy to convert into the new policy, the insurance agent is 99% likely to be cheating you. Do not believe the agent.

Ask the agent to give you a benefit illustration and send it to me at I will point out on where the agent has been misleading you, and how much you would lose in your savings by taking this type of advice. It can cost you a few thousand dollars.

One common practice is to replace a whole life policy by a policy with premium paid for 20 years or shorter. The customer does not know that he has to incur a hefty upfront cost  a second time. The premium for the shorter period is much higher than a whole life policy. Further more, the existing whole life policy has an option to covert into a paid up policy at any time, i.e. the policyholder retain the flexibility to stop the policy at any time (but the agent does not explain this option to you).

If you are buying a new policy, you can decide on whether to buy pay a lower premium for a lifetime, or a higher premium for a shorter period. (Frankly, both options are not good for consumers, due to the high upfront cost). But, you should NEVER stop an existing whole policy policy to move into a new policy, as you will be incurring a large cost for the second time.

Tan Kin Lian

Regulating business practice of banks

The US Congress debated the charges and practices of banks relating to credit cards and mortgages. The lofty chamber decided that the banks were acting in a predatory manner (i.e. cheating on the consumers) and decided to pass regulations to forbid some of these practices and to ensure fair treatment of consumers. In the land of free market, the legislators decided that they have to go into the nitty gritty of bank practices, instead of letting the free market sort out these problems.

Lesson - free markets ideas can go too far and result in unfair, predatory practices.

Excessive bank charges

2 March 2010
Forum Page
Straits Times

I refer to the letter from Vincent Chan entitled “Why impose hefty credit car surcharge?” (ST 2 March 2010).

I wish to quote two other examples of hefty charges by banks in Singapore:
a. Recently, I made a payment of USD 1,810 to a factory in China. The bank charge amounted to 53 USD was deducted from the payment. The factory in China, which had earlier agreed to bear the bank charge, complained that the charge was too high.
b. I received a letter from my bank stating that the administration fee for a late payment on credit card is $50. This is in addition to the interest rate of 2% per month that they charge on the rollover balance.

In both cases, the bank charges are exorbitant relative to the marginal cost of the service that is being provided.
As the banks are already making big profit from the huge interest spread, why are they allowed to make more profit from these exorbitant charges?
After a customer has opened an account, it is difficult for the customer to change to another bank. In any case, nearly all banks seem to be operating a cartel in levying hefty charges to boost their profits.

I wonder if the Monetary Authority of Singapore considers it to be their duty to regulate the banks to treat customers fairly, including the levying of reasonable charges for essential banking services?

Tan Kin Lian

Bank charges - excessive is the word

I WISH to add to Mr Tan Kin Lian's lament about excessive fee charges by banks in his letter last Thursday, 'Banks do it too'.

My company's bank statement says:
- Balance brought forward (overdrawn) $3.61
- Service charge $15
- Overdrawn interest charge $10
Now how many per cent interest is that?

Michael Lim

Prime Minister of China

I have high respect for Wen Jiabao, Prime Minister of China. He is humble and in touch with the ordinary people. He governs a country which is 300 times of Singapore, draws a salary of one-tenth of any Singapore minister and is willing to tackle the challenges of income inequality and asset inflation in China. He does not say that these matters can be left to the market to sort out.  He sets a good example and is a role model for public service.

Tan Kin Lian

Sleeping in Parliament

Read this blog.

Sunday, March 07, 2010

Home ownership and renting

Read this article about the merits of home ownership and renting.

Petition - Employ Singaporeans First

Dear Friends,
Do support my petition to "Employ Singaporeans First" -
Due to the recent high influx of foreigners, many of our own  people are been sidelined  by employers. Many new graduates are also  jobless now as they have to compete with  thousands of foreigners for jobs.
Our people are also not protected by any minimum wage policy here and their salaries have being pressed down by cheaper foreigner imports. Employers are kings now as they have a host of choices now whenever they advertise for positions. Many who apply  for jobs are foreigners.
This petition urges all employers in Singapore to consider employing Singaporeans FIRST despite the slightly higher cost and their older age. If not, we will see ourselves being over-run by foreigners in time to come.
If you support this cause, do sign on the peition so that we can rally together and bring hope to those who are jobless and struggling. Do also spread this cause to your friends for active participation! We need to send the right message out to our government!
Singapore for Singaporeans!
Gilbert Goh

Possible security fraud - Toyota and Countrywide

The US firm Kirby McInerney is investigating possible securities fraud cases against Toyota (TM) involving the decline in its common stock price following recalls related to brake problems, and Countrywide (CFC) involving the sale of certain mortgage backed securities (MBS) issued by it.

If you purchased a large amount of stock in Toyota or MBS issued by Countrywide, then you may wish to contact the firm to find out more.  You may email a partner at the firm Daniel Hume, who I have met, at

Tan Kin Lian

Dementia (also called senility)

Memory loss is a common symptom of dementia. However, memory loss by itself does not mean you have dementia. People with dementia have serious problems with two or more brain functions, such as memory and language.

Many different diseases can cause dementia, including Alzheimer's disease and stroke. Drugs are available to treat some of these diseases. While these drugs cannot cure dementia or repair brain damage, they may improve symptoms or slow down the disease.

Many people say that the best way to prevent dementia is to exercise your mind regularly, with games such as Sudoku or other puzzles. I have written puzzle books, which contain tips on how to solve these puzzles. After you learn the technique, you can go through the puzzles as a form of daily exercise.

You can view free copies of these puzzles here. For our seniors, you should invest time and a few dollar to keep dementia away.

Challenging Sudoku

I have published 2 volumes of my book containing challenging Sudoku puzzles. They are published for the Sudoku experts and have similar level of difficulty as the puzzles published in Weekend Today and in The Sunday Times. I enjoy working on these weekend puzzles - as a test of my mental agility.

I also work on the puzzles in my Sudoku books. If I am alert or lucky, I can complete a puzzle within 5 minutes. Sometimes, I take 10 minutes, if I get stuck. I write down the time taken to solve each puzzle in the book. I am also able to check the solution at the back of the book, although this is usually not necessary.

You can order Challenging Sudoku here. You can develop your own skill in solving difficult puzzles through practice. You can also buy this book as a gift to a friend or a relative who is hooked on Sudoku. The pocket book version (suitable to play in the train, bus and plane) is called Logic9.

Affordable housing

What is "affordable housing"? The minister for national development said in Parliament that new HDB flats are still affordable and has produced studies to prove his point. Critics have brought up arguments from the other side to show that HDB flats are expensive for the working people. I shall be writing to give my views of this point within the next few days.

In the meantime, I invite you to share your comments.

Productivity and related issues

Singapore is now embarking on a strategic thrust to improve productivity and reduce reliance on low cost foreign workers. A few people has asked, "What is productivity? How do we measure it?"

In its simplest form, productivity means to do a given quantity of work in less time, or to do more work in a given time. in both cases while maintaining the same quality of work.

We need to go to the next level and define, "If workers are more productive, should they earn more for their time and how much of the gain should go to the worker?". To answer this question, we have to recognize that the productivity comes from all factors of production - labor, capital, entrepreneurship and property. If the labor content is say 50%, then it is fair that 50% of the productivity gain should go to the workers.

We have to address another social question. If the productivity increases 100% and one worker can do the work previously done by two workers, who will provide the work for the displaced worker? The classic answer is "leave it to the free market". The displaced worker can find other suitable jobs in the market.

But this classic answer has proved to be false. During the past decade, the global economy was able to provide a lot of good paying jobs in the financial services sector, especially in creating "innovative" products. These innovative products are used to create bubbles in real estate, stock market, foreign exchange market and in other forms of financial speculation.  The bubbles have deflated during the past two years, causing massive loss of jobs. While  new bubbles can be created in other markets, history has shown that they will eventually lead to disaster. In the meantime, many countries will find it difficult to create new jobs in the real economy. This is why many economists hold the view that the recession in America will take a long time  to recover.

Here is my perspective. Each person needs only a certain amount of goods and services. The global demand will be limited by the population size and the time available to enjoy the goods that have been produced.  If people are working too hard, they do not have the time to enjoy the products, while unemployed people do not have the income to spend on these products. This is why the disparity of income in the past two decades have brought disaster to the global economy.

The answer to higher productivity is straight forward. With improved productivity, we should reduce the hours of work for each working person so that the total demand and necessary work is shared fairly by all available workers.This could mean a 35 or 30 hour week. The incomes do not need to be equal, but the disparity should not be so wide.

Tan Kin Lian

Buying a life annuity for a parent

Dear Mr Tan,
My father is going 58 and has  only $30,000 in his retirement account. I was thinking of helping him to purchase either the NTUC Income Classic Annuity or the Growth Plan.

Since both plans require a SRS account, I thought of buying a Growth Plan for my Dad using his retirement account to earn a get a greater return, by registering with one of the SRS operators and subsequently use this SRS account of $29K to buy Growth Plan.

Can I do that? I am not sure because I understand that there is a so called minimum sum required in RA and RA cannot be used to buy anything except annuity.


The money in the CPF Special Account (or Retirement Account) now earns interest at 4% plus a bonus. The return from the Growth plan is likely to be 3% or less. The agent who made this recommendation is probably giving bad advice, either intentionally or by mistake.

Please ask the agent to give you a benefit illustration for the Growth plan and send it to me at

It is better for you to help your father by topping up his CPF Special Account. You will enjoy tax savings on the contribution and allow him to earn a higher rate of return of 4%. When he reach age 62, it is better for your father to buy the CPF Life, instead of a life annuity from an insurance company.

You can read a chapter on life annuity and CPF Life from my book, Practical Guide on Financial Planning, which can be ordered here:

Robert Kennedy on GDP

Robert Kennedy was assassinated in 1968 while running for nomination as the US President. Someone sent to me the following quotation (which I am not able to verify) from him about GNP:

... Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.

Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.

In our drive to increase the GDP of Singapore, we may be making the same mistake mentioned by Robert Kennedy, that we are degrading the quality of life for the people.

Tan Kin Lian

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