Saturday, August 28, 2010

Mio TV


My friend has a Mio TV. He found it to be rather unsatisfactory. It took a long time to get started. He also has a Starhub cable TV, which was quite easy to use.

He said that he needed two set top boxes (for Mio and Starhub) and two separate TVs (as it s not possible for his TV to receive signals from both set top boxes.

I wonder what is the experience of other Mio TV users? Is it convenient to use? Is t fast to get started?

Gambling on credit [3]

Hi Mr Tan, 
With regards giving credit, what are your views for the following: 
i) Margin trading (shares and forex) where you are actually using leverage which is the same as speculating with money that is on credit 
ii) Speculating in property (Down payment of 20%, but you are betting on the increase of the other 80% of the property price, which is the credit given to you by the bank) for those yet to TOP new property. 
iii) Credit cards - Borrowing twice your salary or getting a loan using cashline / unsecured credit. We can do that and gamble the amount away as well. Banks give credit for people in need of funds or to speculate in stock market. The only reason banks do their credit assessment and proper due dilligence is that they are worried the customers cannot pay and they will incur credit lossses after the customers lose money in stock market. Finally, it appears that the $26 million person probably can afford to pay, otherwise the casino will not give credit anyway. 

1) Speculating on margin is not the same as gambling on credit. The speculator has to put up the margin and if the price moves to the extent of the margin, the position is closed by the stockbroker - due to lack of margin.
ii) A person should buy a property for own occupation and to within 5 years of the income, so that the repayment of the mortgage loan is not a burden. It is bad to borrow 80% to speculate in a property, hoping for the price to move up and to sell it at a profit. This is dangerous speculation and should be avoided.
iii) Borrowing on credit card should also be avoided, as the interest burden is too high, i.e. 2% a month or 24% per annum.
If the gambler has to bring cash to gamble, he would not have brough t $26 million to gamble. The danger is to gamble on credit, as it could be unlimited. This can happen to any family. Imagine a member of your family come home and said that he or she owed a large sum of money to the casino - representing all the savings of your family!

Survey: Gambling on credit

Here is the letter printed in the Straits Times.

The results of the survey can be found here. (search for "Gambling on credit")

Govern a society

Read this letter.

My view
It is the duty of the Government to govern. They cannot let the problem of society be "left to the market" or to "personal responsibility". This is why laws are passed to prevent vandalism and crime. If marketing flyers are a nuisance, it should be stopped. If gambling on credit is a serious problem, it should also be stopped. It is easy for people to fall into a trap and lose a fortune that will bankrupt their family - all within a day or just a few hours.

For those people who say that people should be personally responsible and that the Government has no role here, just wait for the day when a member of your family comes home, and cries that he or she owes $100,000 or more to the casino. You will then know the real danger of gambling on credit and how easy it is for anyone to fall into the trap.

Gambling on credit

Invest in Exchange Traded Fund

Many consumers have asked me to provide information on the ETFs that are available for a long term investor.
I have written a FAQ to explain the exchange traded funds available in SGX that are invested in Singapore equities. Go to (search for "Exchange Traded Fund" or view "Latest").

Friday, August 27, 2010

Legacy system of banks

Read this letter.

Short term investment

Hi Mr Tan, 
What is the best (low risk) investment instrument to use if I have 100k and I need the money in 6 months time? I do not want to leave it in my savings account as the interest rate is very low. I was introduce into dual currency investment by my bank. What's your take on it?

For short term invstment, you have to accept the low interest rate offered by the banks. You can place it on fixed deposit to earn more than saving account.  In my case, my short term cash is kept in an auto-save account which earns a low interest rate.

You should avoid all types of dual currency investments. Read the FAQ in my website, Look for "Ask Mr. Tan" and search for "Dual Currency".

Use of CPF for education

This report shows the default rate on these loans.

Group Representation Constituencies

Read this report about the system and history of GRCs in Singapore.

$1.3 billion sports complex

Read this report.

Easy Ads - prototype

The prototype of the Easy Ads application is now being developed. You can view the partial development here. It is intended to allow the public to post their advertisements and for customers to search for the advertisements. I hope that it can replace the flyers that are being distributed now through mail boxes - most of which are being thrown away without a second look! The advertisements will be free until end 2010.


Read this BBC report.

My view
It is better to have a lower pace of economic growth, and rely less on foreign workers.

Enjoy 40% discount on books

Enjoy 40% discount on a bundle of  books - FOR A LIMITED PERIOD ONLY

Order here:

High dividend yields

I have posted a FAQ showing blue chip shares with high dividend yields. This shares have low risk for the long term investor and provides an attractive yield.

Go to and search for "high dividend yield" or see the Latest tab.

Thursday, August 26, 2010

Minimum wage in Malaysia

Read this article.

My view
I am in favor of a minimum wage in Singapore. We should pay more for our services and labor. When other people can earn a decent wage, they will have more money to spend, which is good for other types of businesses.

If we pay more for our services, we will have less money to spend on houses and cars. The prices of these items will not escalate out of proportion. We will have a more balanced economy. People will have more money to spend on art, culture and sports, instead of expecting freebies to be given by the government.

We will not have the uncertain situation that was experienced with the ticket sales for the Youth Olympic Games, F1 and many other events.

5 book bundle

I have received the first order for this 5 book bundle - which offers an attractive 40% discount. If you already have one or two of the books, you can pass it as a gift to a friend, or sell it away. As you earn an attractive discount, you will still be paying less for the other books. Order here.

Invest in Government Bonds

I have written a FAQ on how to invest in Government bonds, and the advantages and pitfalls, and how a future change in interest rate will affect the price of the bonds. Go to  and click on Latest.

Wednesday, August 25, 2010

Bright Tangram

This app will be released soon in Apple app store. It is a more challenging version of tangram.

FIDREC Adjudication process

I carried out a survey on the FIDREC adjudication process a few months ago. Less than 5 people responded. I was not able to post any results.

Easy Tangram

This Apple app will be released soon.

Term insurance, payable to 100 years

Dear Mr Tan,
I've been following your blog and understood your point is there's no need to insure myself beyond 65yrs old, since there's not much income to be insured against. My agent sent me this benefit illustration when I asked for a $1M term life coverage to 100 years old. 

I'm currently 34, assuming I die at 100 yrs old, I'll have to pay premiums for (66 x 3,940 = $260,040) That's the maximum premium payable. But my coverage will be $1,000,000, and I can't imagine I'll live beyond 100 years old. Even our statistics shows, men's expectancy is only up to 79years old. So a payout is almost guaranteed.
Isn't this too good to be true? Apart from the fact that I won't get to use this $1M, it'll be a pot of money for my loved ones. How does the insurance companies make money from these?
Based on your calculation (and I can see no fault in it), the policy does look attractive. The possible catch is:
a) There is no cash value. If you discontinue the policy at any time in the future, you will lose the excess premiums that have been paid (i.e the difference between insuring up to age 65 and 100).
b) There is the risk that you may overlook to pay the premium and the policy is cancelled. The insurance company may refuse to reinstate your policy even if you opt to pay back the arrears in premium. I do not know what are your reinstatement rights
c) If you live beyond age 100, you will lose all of the premiums that you have paid.

Based on SAF group insurance, you only need to pay $1,540 a year for $1 million of cover up to age 65.

Interest rate and bonds

Read this article.

When interest rate goes up in the future, the value of the bonds will fall. The fall will be highest for the long dated bonds, i.e. those that mature many years down the road.

For example, if you buy a bond that gives a yield of 3% for 10 years, and the interest rate increases to 4%, the bonds will fall in value by about 8%. However, you do not need to realize this loss. You can keep the bond until maturity, receive your yield of 3% and the par value at that time. If you bought the bond at higher than the par value,you will suffer a small loss as only the par value is returned.

Abuse by credit card companies

Read this article.

My view
Some of the practices of the credit card companies are unconscionable. I respect the right of a business to make a profit, but I do not tolerate practices that border on "cheating the consumers". Two years ago, I received a letter from a credit card company that stated the penalty for a late payment is $50 and that is on top of the 2% interest rate charge per month. I called the credit card company and cancelled the card.

The customer service manager was surprised. This is also practiced by other credit card companies. Furthermore, they will waive the charge if the customer complaints.

What type of nonsense is this? Trying to cheat the customer if the customer overlooks the charge, or is helpless? Why impose an unconscionable charge in the first place?

I hope that consumers will come forward and express their views strongly on these unconscionable and predatory practices. I hope that the Parliament of Singapore will pass similar legislation to stop the credit card companies from fleecing the consumers of Singapore.

Google Search now finds PDF

Dear Mr. Tan

Looks like some of your earlier critics were not quite accurate about PDF search. I ran a search for ‘soho bundle’ and your link surfaced in the results. When I click on the link, the window containing the PDF document appear. Congrats.



File Format: PDF/Adobe Acrobat - View as HTML
12 Aug 2010 ... Do you have an example of an office using the SOHO bundle... The SOHO Bundle that consists of 1 File Server, 5 notebooks and 1 multi- ...

My comment
The PDF format has a big advantage compared to HTML. It allows the document to be downloaded and sent by e-mail to another person. The perceived disadvantage - not searched by Google, is now removed.

I am promoting a new concept of the PDF centric website. My website, has been developed on this technology. It receives 400 visitors daily. I encourage organisations to move to this new style of website and use the Internet to develop your business. Read here.

Inconsiderate marketing people

Some marketing people call my office and ask for me. They want to market their product. Their approach is inconsiderate. They often interrupt me when I am busy doing my work.

These people have my e-mail address and mobile phone. They can send an e-mail or SMS to me. Instead, the call the telephone, without any prior announcement, and try to market their products. For these inconsiderate people, I always tell them that I am not interested, goodbye!

Tan Kin Lian

Unsuitable life insurance policies

Hi Mr Tan,
I came across your blog that you will help to review the life insurance policies. I attached 2 benefit illustrations
for a Vivolife policy and an ILP. My wife and I bought these life insurance about a year ago from a friend working for an financial adviser firm. Is it worthwhile to keep these policies? Both policies have a coverage of $10,000.

The coverage of $10,000 is too low for your needs. These policies are not suitable for protection and offer a poor yield as an investment.

The ILP policy takes away 46% of the value of your accumulated premium at the end of 25 years, i.e. $102,000 out of $220,000). This is far too high. The Vivolife policy takes away 31%, i.e. $36613 out of $116694. This is high, but not as bad as other policy. According to my book, Practical Guide on Financial Planning, the fair deduction should be 20% for 25 years. If I were in your place, I would certainly give up the ILP policy now, but I am not sure about the Vivolife policy.

More important, you should read my book (you can buy the 5 book bundle at a 40% discount) to learn about how to safeguard your own financial future, i.e. buy term insurance and invest your savings in a low cost fund. You should also join FISCA and attend its educational talks.

Insure against unemployment [2]

Can you buy insurance against unemployment? Read here:

New credit card rules in USA

The United States recently imposed a new set of Credit Card rules protecting consumers, making sure big banks are not allowed to take advantage of customers with unfair fees, rate hikes, and a lack of clear information. Some of the key new rules set are (lifted from here)

  • Limits on the size of late fees: Credit card issuers will no longer be allowed to charge you a late payment fee that is larger than your minimum payment. Banks also cannot charge a late fee higher than $25 unless one of your last six payments has been late or if the bank can show that the costs associated with the late payment justify a higher fee.
  • Ban on multiple penalty fees for single violations: You cannot be charged more than one penalty fee for a single violation of your credit card agreement. For example, you cannot be charged both a late fee and a returned payment fee based on a single botched payment.
  • Ban on inactivity fees: Card issuers will no longer be allowed to charge you a fee for failing to use your account enough or for terminating your account. Your account can still be closed for inactivity by your card issuer.
  • More information about why your rate is going up: Since August 2009, card issuers have been required to give 45 days notice before raising your interest rate on future purchases. Now they must notify you of the reason they are imposing a rate hike, such as market conditions or a reduced credit score.

Such never before consumer protection rules should also considered by legislation of other countries and implemented everywhere.

How New Credit Card Rules Help You

Loh Hon Chun

Tuesday, August 24, 2010

Singaporeans and our country

Read this letter from a young Singaporean.

Casino and Rolling Credit

Hi Mr Tan
The following is a short description of how the casinos are using "rolling" credit to encourage gamblers to gamble more. Please post it up if you think it is useful to share with others so that they do not fall into the trap of problem gambling.
CRA implemented rules to try and reduce the incidence of problem gambling.

Unfortunately, these restrictions have been cleverly bypassed.  The main way of doing this is via rolling credit. This is offered to gamblers which the casino has identified as big gamblers based on their gambling patterns recorded in their card.

These big gamblers are advised to make a deposit (e.g. $50,000). After making a deposit, they are given a rolling “commission” based on the amount they play. This commission ranges from 0.5% to 1.0% of the gambled amount.

To earn what seems like “free money”, many big gamblers are enticed to make the deposit. In doing so, they are consistently tempted to gamble with more money than they had originally planned to gamble by drawing down on the deposit.

When the deposit is exhausted, the casino will usually offer to extend credit to allow the gambler to continue gambling. The amount extended will depend on the credit check done by the casino when the initial deposit is made.

Hence beyond operating a casino, the casino is also involved a lucrative money lending business. At this point in time, it is unknown what are the charges the casinos are levying for providing this credit. It is however likely that this makes up a significant portion of the record profits that have recently been reported.


Betting money

I like to share this joke. Hope you enjoy it.
A beggar approached a wealthy person and said "Please let me have $10 for my food. I have not eaten for two days".
The wealthy man replied, "I know you. If you give $10 to you, you will bet it on Toto!".
The beggar glared at the wealthy man and said, "I need your $10 for food. I already have betting money for Toto!".

Insist on cash-only gambling

Give your own views this survey.

Published in Straits Times Online

UNLIKE some Singaporeans, I have supported the building of the two casinos in Singapore. I consider gambling to be a part of life.

Many people gamble on 4-D, Toto, mahjong and on sports events. For most people, the biggest gamble is on the stock markets. They speculate on the movement of stock prices, although they think they are making an investment.

In my view, there is nothing wrong when a person gambles away money that he can afford to lose. If he does not spend the money on a bet, he could have spent the same money on other forms of entertainment.

It is a different matter, however, when a person gambles away money that he cannot afford to lose. I was, therefore, shocked to learn that a person could lose $26 million over three days at a casino. It does not take so much money to cause financial disaster for a family. Many people cannot afford to lose a few thousand dollars that are needed for the expenses of their household.

The real danger is not in gambling with cash, but gambling on credit. The Government should forbid the casino from granting credit to patrons. All gambling should be with cash brought in or wired in advance to an account in the casino. This restriction should be extended to all other licensed gambling outlets. I also urge the Government to pass a law to disallow the operation of loan sharks that lend money for gambling. All such loans should be treated as unlawful and unenforceable.

When the real danger, that is, gambling on credit, is dealt with, I suggest the removal of the levy of $100 that has to be paid by Singapore citizens and permanent residents visiting a casino. Do not deprive Singapore residents of the chance to enjoy the excellent facilities of these two casinos when they are made readily available to tourists from our neighbouring countries and from afar.

Tan Kin Lian

Here is another view by Lucky Tan

For those who think that each person should be responsible for his own behavior, just imagine what would be your feeling, if your spouse or family member come home one day from the casino and told you that he or she had incurred a big debt. It does not have to be $26 million, but it could be half of your net worth! Can you afford to have this happen to your family? It is so easy for any family to be caught in this situation.

Monday, August 23, 2010

Housing prices

According to this article, housing prices in the future will at best keep up with inflation and will not produce the spectacular return in the past. In the near time, it has to correct downwards, i.e. fall by 20% in the USA. I agree with this analysis and believe that this will also apply to Singapore.

Marketing Flyers

Here are additional letters:

From Institute of Estate Agents

From the public

Here is a future solution:

We have to stop the wasteful activities of printing and distributing so many flyers to people who do not welcome getting them. It is bad for the environment.


I have just created my iGoogle page and stored in my frequently used Google apps. It is excellent.

Insuring the unexpected

In this FAQ, I give some tips on what should be insured and what should be self-insured. You should insure the events that are infrequent and have high financial impact. For the more frequent events with low financial impact, you should pay for them out of personal savings.

Go to and click on Latest or search for "Insuring the unexpected"

SOHO office, IT outsourcing

If you are setting up a small business, you can save on buying hardware and software by getting the SOHO package listed here:

You can also consider getting the I.T outsourcing service for a small fee, and enjoy the ease of mind that your I.T will be taken care of by an expert.

SOHO = small office, home office.

Sunday, August 22, 2010

Stradding buses in Beijing

China has come out with an innovative concept for solving its public transportation problems. Instead of widening roads, building more bridges or subways, it plans to build huge "straddling buses" that allows cars to pass under it, possibly leading to lower costs. Construction will start in Beijing later this year.

News article:
Video of the concept:

Benefit Illustrations - samples

I have complied a FAQ showing the analyses of a few life insurance products, based on the benefit illustrations. Most of these products have high distribution cost and high effect of deductions, leaving a poor yield for the consumer. The products in the market in 2010 are worse that those sold many years ago.

Go to and search for "Benefit Illustration - samples). You can also go to and click on Latest.

Gambling on credit

I accept that gambling is a fact of life. Therefore, I had supported the building of the casinos in Singapore.

We gamble on the stock exchange and speculate in foreign currencies. On a smaller scale, we take bets on Toto, 4D, football matches, sports events and the turf club. For most people, the biggest gamble is in a property, although they like to think that they are "investing for the future".

I only support gambling with what we can afford to lose. I do not support gambling on credit or leverage, which is the worst type of gambling. Hence, I am shocked to learn that a businessman could lose $26 million in the casino - gambling on credit. This should be made a condition of the casino licence - no gambling on credit! Similarly, loans from sharks should also be made illegal.

Tan Kin Lian

Bundle deal - Wisdom on How to Live Life

Enjoy a 10% discount on this bundle of book 1 and 2. Read here. Order now at

How to fight cancer

Here is an interesting talk on how to eat the right food to fight cancer?

Mortality charge

Does an investment-linked policy charge a fair rate for mortality? Do the mortality charge increase when one grows older? How can one avoid paying too much in mortality charge? Read "Investment linked policy" in or click on "Ask Mr. Tan" at the top of the right panel.

Review of Life Insurance Policies

Many readers have asked for my assistance to review the life insurance policies that they now hold. They ask if they should continue or give up their existing policies. Please read this FAQ to get the necessary inforamtion for the review and be prepared to make a donation to FISCA.

Distance based fare - an example

Here is an example of the calculation of the distance based fare - which seem to be quite complicated.

My view
It is a national habit in Singapore to do things in a complicated way and to spend (i.e. waste) tens of millions of dollars on computer systems and consultancy to manage these complexities. The distance-based fare system is the recent example. (So far, nobody has told me how many millions it cost - so difficult to get relevant information in  Singapore). In London, the fares are based on zones, and not calculated in this complicated manner.

FISCA Talk on 21 August 2010

I apologize on behalf of FISCA to the 10 members who turned up at the wrong venue due to the late communication sent by e-mail. For these members, please attend the next talk to be held in one month's time free of charge (if you have already paid for this talk).

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