Saturday, October 16, 2010

Third party motor insurance

If your car is more than 5 years old, you may find it beneficial to insure it under a third party insurance policy and save 30% to 50% of the premium.

Read this FAQ

Time to buy a property?

This articles gives 5 reasons to buy a property now:

But, you should ask the people in Japan (20 years of stagnating property prices) and America (housing prices will continue to slump for at least 3 to 5 years) to know that property is NOT an appreciating asset.

Drop in sale of private properties

THE cooling measures are leaving their mark on the property market - and the latest developer sales data for the month of September seems to underline that.

After the cooling measures were announced on Aug 30, the number of private homes sold by developers fell 27.6 per cent month on month to 911 units in September. BT's analysis also showed that at least 60 units were returned to developers in September, compared with nearly 30 units in August.

Read after 6 pm

Taking a bus - SG Bus Timing

I had to take a bus from the stop outside NTUC Income Center to Cricket Club. I find the signs at the bus stop quite confusing. I went up the first bus that is heading the right direction. It turned out to be the wrong bus. I stopped outside Clifford Pier. It was a long walk to the Cricket Club. This is the confusing state of the bus services in Singapore.

I found an application in my Android phone called SG Bus Timing. It has a useful feature that allow you to locate a bus stop along a road. I searched for Bras Basah and located the stop at NTUC Income Center. I also searched for Connaught Drive and located a stop near it. The matching numbers were 131 and 167. The application also show the time of arrival of the next bus.

The useful feature of this application is the ease of locating the nearest bus stop along a road and the bus services that use this stop.

Tan Kin Lian

Friday, October 15, 2010

Excessive charges

Are you angry at the excessive charges levied by corporations for incidental services? Do you feel; that they holding the consumers to ransom? Read this article.

Take part in this survey.

Here are some consumer views on the excessive charges made by corporations.

Google Driverless Car

I am fascinated with the Google project to develop a driver-less car. It uses technology to drive the car and is safer than being driven by a person. I believe that there is big potential for this driver-less car to be used like a taxi.

Imagine, You use a mobile phone to book for a driver-less car nearby. It comes to your location. You enter the place you want to go. It brings you there. The car is then available to be used by another commuter.

Read more about this project.

Watch this video

Google observes the law on road driving.

Banks banned from selling credit insurance

Read this article

The banks are banned from selling the credit insurance on the grounds that they are offering an over-priced product that is unfair to consumers. The ban is to ensure that the consumer can get products at the best market rate by shopping around.

When will this type of protection come to consumers in Singapore?

Gmail and multiple inboxes

I use Gmail to receive and send out my e-mail. I have two other mailboxes under SMU (where I teach as an adjunct professor) and in my corporate website ( In the past, I often forget to log into the other inboxes to retrieve my e-mail.

Recently, I configured Gmail to retrieve my e-mails from these other inboxes. It was quite easy. Now, all my e-mails are retrieved from the three inboxes automatically. I am able to respond to all e-mails promptly. For those who are still logging to multiple inboxes, you should consider this approach.

Some people told me that they maintain a separate inbox to receive their junk mail. But they have the risk of over-looking to reply to genuine e-mails sent to these mailboxes. I prefer to retrieve all my e-mails daily and to delete the junk mails. GMail has a way of identifying most of these junk mail and transfer them to the spam box.

Tan Kin Lian

Currency linked investments - AVOID

I received an e-mail from my bank about this investment. I wish to advise investors to avoid all types of currency linked investments. Please read my FAQ on currency linked investments in (search for Dual Currency Investment).


Currency Linked Investment


* Only applicable to the following AUD currency pairs: AUD-SGD, AUD-USD and AUD-NZD for 2-week and 1-month tenors. 8.8% p.a. is based on an AUD-USD currency pair with 2-week tenor.

This is valid from now till 22 October 2010. To find out more, please contact your Treasures Relationship Manager or 

Ask Mr. Tan

I have written my articles and FAQs about insurance and investments and posted them in the "Ask Mr. Tan" section of my website ( You can click on the tab "Ask Mr. Tan" on the right panel of this blog to go into this section. You can search for an article using a keyword, e.g. "benefit illustration" and see the articles that have this keyword in the title or description.

Do search for these articles and read them, for your own future well-being. Do not waste your hard earned savings on bad financial products, including life insurance products that take away too much of your savings.

Huge profits of life insurance companies

Someone who worked inside a large life insurance company operating in many Asian countries told me, "Mr. Tan, do you know how much profits a life insurance company makes in each of the various countries? It is a lot of money. So many tens or hundred of millions each year. This is why they can afford to pay so much upfront money to tie up with banks to sell their insurance policies, or to buy over other life insurance companies! ". He also told me that Singapore is one of the more profitable countries for the insurance company!

I am aware that the life insurance companies are very profitable, because they take away so much of the future savings of the policyholders - while the regulators are asleep.

Just imagine! If the accumulated savings for a policyholder is $500,000 and $200,000 is taken away from this policyholder, especially in an investment-linked policy (just look for the "effect of deduction" in the benefit illustration) and you will know how profitable the insurance company can be. If the insurance company sell 100,000 policies, the profit from these policies (including the portion shared with the agents) would amount to $2,000,000.00 over 25 or 35 years. Remember, the profits of the insurance company comes from the policyholders who became that much poorer by putting a blind trust in their brand name!

Learn about the benefit illustration here:
Participating policy
Invesment linked policy

If you want to learn a better way to safeguard your own financial feature, read my book on financial planning. It could save you up to $200,000 over a lifetime!

Tan Kin Lian

Half truths about Life Insurance (3)

Agents use half truths to get their friends to buy a life insurance policy. Here are some of the half truths that they give.

For a long time, I thought that it was the agent who learned how to mislead their friends. After talking to many undergraduates, I now suspect that they (the undergraduate who sell the policies) were not aware about the truth of life insurance. They were taught to tell the half truths by their agency managers. They (the new agent) thought that they were giving good advice to their friends, but they did not realize that the actual truths was quite far away from what they were saying.

I hope that the new agents will read my book on financial planning or attend my talk. Then, they can decide if they still wish to sell the policies that take away so much money from their friend's future savings. If they do not wish to harm their friend's future, the agent should consider taking another occupation.

Tan Kin Lian

Preparing for the General Election

Read this portal for up-to-date information about the  preparations for the general election and the issues that will be raised.
Singapore General Election Portal

Donate to philantrophy

A senior accountant in Indonesia asked me this question, "Mr. Tan, why does Mr. Lee wish to continue to draw a big salary in Singapore? Does he need the money? Surely his family is already well off?". I was not able to answer this question. That was before I learned that Warren Buffett had pledged to donate his wealth to philantrophy. Maybe, Mr. Lee will do the same?

Thursday, October 14, 2010

How to produce billionaires

It is easy to produce billionaires. Singapore has shown how it can be done easily. Read this secret!

Direct link to article.

Client sues private banker

For years, two relationship managers assured a client that his investment portfolio was doing well and that he had a balance of around $8 million in his account. In fact, the net value of the investment account stood at only $252,652 on Aug 12 this year.

The rest had been frittered away by the relationship managers at Societe Generale Bank & Trust in Singapore because of alleged unauthorised forex trades, according to a lawsuit filed at the Singapore High Court yesterday. To cover up the losses, they fed the client with bogus statements, the lawsuit claimed.

Read this article after 6 pm at the website:,4574,408394,00.html?

General Election Issues

There will be many issues to be raised at the general election that is expected to be held within the next few months. You can read about these issues from the Singapore General Election portal. It contains a selection of blogs and articles taken from the Internet that are relevant to the political environment in Singapore. Do visit this portal regularly and bookmark it for easy access.

Is insurance good or bad?

 A lady asked me this question. It seems to be a naive question, but it does reflect the level of knowledge of many consumers in Singapore who are not able to get information to form their own opinion and have to rely on advice of other people. Read my answer here.

Wednesday, October 13, 2010

FISCA Talk on Financial Planning

I gave a talk to some students on financial planning. I showed them examples of benefit illustrations of life insurance policies that took away 40% or more of the accumulated premiums. They were shocked. They never thought that it was possible for so much of their savings to be taken away. They also assumed that the life insurance company had to offer the best terms through market competition. In reality, some life insurance companies were not ashamed to take away a lot of the savings because the consumer was not aware about it.

Usually, the insurance policies are sold by newly appointed agents who approached their classmates. These new agents were not even aware that they were causing a big financial loss to their friend by selling them a bad product. When they know about it a year later, the agents are likely to give up this job.

As I get to know more of these cases, I intensify my effort to educate the consumers. I urge you to attend my  talk on financial planning organised by FISCA. You should also encourage your children (if they are about to start work) to attend the talk, so that they do not make a big mistake by buying the wrong product.

Tan Kin Lian

Increase in premium for Private Shield

The premium for private Shield plan has increased for the past few years. I am not aware about the actual increase. To hide the increase, some insurance changed the benefits provided, so that the policyholders cannot make any comparison.

I thought that the increase is due to higher claims. But, someone from the inside told me that the premiums are being increased to give a higher profit margin to the insurance company. I was surprised! I thought that any increase would have to be approved by the Ministry of Health, and they will check to make sure that the increase are justified (as Medisave money is being used).

For consumers who find the increase to be unjustified, it is better to switch back to basic Medishield. This advice is specially important for older people You can save more than 50% of the premium and also pay a lower deductible when you are treated in hospital. Read this article.

You also avoid the stress of having your claims rejected. Read about "rejected claims" in Do not pay more in premium and still suffer from uncertainty and stress!

Branding and Trust (2)

An agency manager who has worked for two decades in a large international life insurance company told me:

"I know that the products of my company give a poorer yield to my customers compared to other products available in the market. In many cases, the difference can be up to 20% of the projected maturity amount.

However, I am able to sell my products because I can find customers who are not aware about the difference, which happens most of the time. The customers buy my life insurance products because they trust the international brand name of my company.

If the customer knows about the difference, I can still convince some of them to buy from me, because they trust an international name better.

I do lose a small number of cases from customers who know, but there are so many customers who are ignorant or will pay more for the brand name. I ask them - can you be sure that the competitor company will still be around in 30 years time?

It is easy for me to convince the young people, because they can be easily swayed by the big international brand name".

My view
Two years ago, when AIG went bankrupt and had to be bailed out by the US government, several AIA policyholders panicked and asked for my advice. Are their life time savings with AIA safe? I told them that AIA has a separate fund in Singapore and their money is safe.

Lesson: It is important for consumers to avoid paying a high cost for an international brand name because they can also get into trouble. Why are paying more and still not get the peace of mind?

Read this letter sent by a parent to the son:

Read my book on financial planning ( and learn a better way to save for your own future.

Hong Kong Suspends Property From Residency Plan

Bloomberg News
Oct. 13 (Bloomberg) -- Hong Kong’s government will suspend investment property as a criteria to gain residency in the city and will introduce a rent-to-buy housing plan as it tries to cool the property market. Shares in developers tumbled.
The government will temporarily remove real estate from its Capital Investment Entrant Scheme, which was set up to encourage foreigners to invest in the city to gain residency, Chief Executive Donald Tsang said in his annual policy address today.
The government has in the past year announced a series of measures to rein in home prices that have surged almost 50 percent since the beginning of 2009 on the back of record-low mortgage rates and an influx of mainland Chinese buyers. The last round of measures, unveiled on Aug. 13, included raising down-payment requirements on mortgages for luxury and investment properties, and a pledge to increase land supply.
The Hong Kong Property Index, which tracks the city’s seven biggest developers, fell as much as 3.4 percent and was down 2.5 percent at 12:09 p.m., reversing an earlier gain.
The government will also continue to boost land supply and expects 61,000 new units to come onto the market in the next three to four years, Tsang said.

Tuesday, October 12, 2010

US housing crisis

Read this interesting story of the US housing crisis from 2006-08 and the actions taken by the top people in charge in the US government.

Easy to buy, hard to claim

Contributed by DareToAct

Delay, Denied, Defend by Jay M. Feinman.

A book on how insurance companies in the US used tactics to refuse claims. The author said that in 1990s, insurance companies hired consultants to help them redesign claim processes.  It transformed claim departments from customer service centers to profit centers and changed claims adjustors job scope from "assisting customers" to "helping company save money".
The sad state is that consumers do not know enough to know that they have been taken advantage of.  And those who know so do not know how to go about getting their money back.  The most shameful thing of all is that insurance commissioners were busy making sure that the insurance companies have enough reserves set aside to pay for claims but did not do enough to ensure fair treatment of claimants.


Singapore President

Contributed by DareToAct

In 1992, our constitution was amended to provide for an Elected President.  In 1993, the late Mr. Ong Teng Cheong was elected as our first Elected President.  In both 1999 and 2005, current President Nathan became President without the need for election as there were no other worthy candidates.  For the past 18 years, I personally do not feel at all the difference with an Elected President.  Am I the only one with this feeling?


My reply
A friend told me that in Singapore, we do meaningless things just for show. He said "wayang". It seems that a top person has an idea and it is implemented. Later, no one dare to ask, "is it still useful"?

GIC IPO - Global Logistics Property

Can someone extract for me the following financial figures for GIC IPO of Global Logics Properties?

Net tangible asset per share
Earnings per share
Change in EPS for the past few years?
Issue price: $1.96 per share

I was told that the prospectus contained over 100 pages, and is quite difficult to read. If this is the case (and I stand corrected), why are retail investors encouraged to subscribe to the IPO through the ATM, based on just blind trust? I don't know if this information was provided in the mainstream media previously. I might have overlooked it.

Tan Kin Lian

Contribution by DareToAct
What i found: data are all Pro Forma
NTA of listed entity is USD 6.2 billion, or USD 1.38 per share, or SGD 1.81 per share (USDSGD=1.31).  At S$1.96 per share, the IPO is about 1.09X book.
EPS for year ending Mar 08, 09, 2010 are +12.79 US cents, -6.4 cents, -3.47 cents. ---> 3 month ending June2010 is +10.87 cents.
I do not think looking at the data has much meaning (not to me at least) as the company has been on the asset accumulation phase from 08 till 2010.  its a different animal every year.
Here are two pages containing the key financial information, extracted from the prospectus of  Global Logistics Property that is now being offered to the public. The full propectus can be obtained from the MAS website.

Reasonable charge for incidental service

Our business corporations are carrying out questionable practices in levying excessive charge for incidental services. They customers have no choice but to pay the ransom. This type of behavior should be checked by the regulators.

Information about shares

This local site not bad...can get results date, ipos, mgmt QnA, AR


Swimming Team at Commonwealth Games

Here are several letters about the disqualification of the swimming team from the Commonwealth Games

Too big to fail?

International bank regulators are planning new rules to govern the big banks. Read (New rules for big banks).

The Sleep Test

Contributed by DareToAct
When looking at an investment, most people think only about the upside. Very few consider the downside.  

Most think about what they can do with the profits (potential). "Upgrade car", "vacation", "kids education!". Seldom they think of whether they can stomach the downside.  And when the market disappoints and mark-to-market losses get bigger, they start to lose sleep and fear begins to build up. Long term investment view suddenly shortens and investors suddenly realize they are more risk averse than they belief themselves to be.  They sell their investments and realize the losses.  

They stay away from investing in the stockmarket until the next bull run, when their friends and families good fortune nudge them back into the market.


Shield claim - change of insurer

Here is a case story of the stress faced by a policyholder after switching a Shield plan to a new insurer. The previous insurer refused to honor the claims arising from an accident that occurred before the switch. I believe that the action of the previous insurer is unjustified and should be reprimanded.

Monday, October 11, 2010


Contributed by Kim
I recalled briefly that PM LHL in his recent National Day 2010 message mentioned something to the effect that the 2 casinos in Singapore are meant for foreigners to spend $$$ and Singaporean should NOT be patronising these to gamble away their hard earn money. I’m sure many concerned Singaporean shared the same sentiment.
In line with the spirit of PM National Day message, parliament should passed a Bill to enact something similar to the Human Organ Transplant Act (HOTA), which will include all Singapore Citizen and Permanent Resident for casino self-exclusion unless they have opted out. Similar to HOTA, Singapore Citizen and Permanent Resident can freely choose to opt-out if they wish to by submitting an official form, witnessed and signed by says 2 immediate family members.

Suggest this new act be called HIPA, (
Human dIgnity Preservation Act). Similar to HOTA, which seeks to preserve human life and dignity and ease the pains, burden and suffering of not just the patient, but also that of their family members and loved ones, the proposed HIPA seeks to preserve basic human dignity thru discouraging casino gambling which can potentially destroy every iota of human dignity as well as wreak havoc and untold pains and suffering on countless families in Singapore. 
From that perspective, HOTA and HIPA are not much different in the spirit of their objective.
- Kim

Restructure the Global Economy - a comment

Here is a comment submitted to my survey.

S'pore's economy is traditionally based on an MNC model. It favours MNCs, while locals who are employed are somehow marginalised as "workers" under a capitalist model. And our GLCs also follow this model. As such we are too subjected to "global" influences. So I agree we need our "own culture" and to set own "priorities" with a certain degree of protectionism, for our workers and also local SMEs. The bringing-in of cheaper FTs and general workers further aggravates the situation. 

The NTUC and labour union movement is somehow "muted" despite the Govt's selling of tri-partite cooperation. Sectoral differences are wide and exploitation due to non-existent "minimum wage" is valid and true. Even PMETs are marginalised and exploited. 

The traditional MNC models was built based on long-term employment and benefits. While seniority-based wage structure was torn down, nothing is done to promote better wages through performance based wages with PMETs getting cheaper and also disposable, thus threatening the firm's core-competencies. Practices by MNC firms are still distorted. It is "caught-in-between" in strategy with cost cutting measures still emphasied in extreme and then the current hiatus towards "productivity". The alignment in policies is still not clear or well-implemented. The re-structuring is necessary.

As the capitalist model of the world economy fails, we need to be more organic ... and firms must evolve more organically towards what the market wants in order to sustain employment, not what politicians wants to be re-elected.

Survey respondent

Unaffordable housing

One gauge of how depressing these numbers are, he said, is to look at how unaffordable housing has become in some major cities. As a ratio of median home price to median family income, it will take 5.2 years to afford a home in Toronto, 7.1 years in London and 9.3 years in Vancouver.

Mr. Kotkin
Adjunct Fellow
Legatum Institute in London.

My view
In my book on financial planning (, and the educational talk that I give under FISCA (, I recommend that a consumer should buy a property not exceeding 5 years of the family income. I find that some consumers are paying 7 years of family income for their property, which is too high.  This quote from Mr. Kotkin give a similar benchmark on what is an affordable housing.

Cruise ships and sampans

Article contributed by DareToAct

Brokerage company CLSA published in September a 150 page report on Singapore, titled "Passport of Choice, Singapore - A new brand story".  

It is a very bullish report on Singapore as a magnet to foreigners, both individuals and institutions.  Lured by business-friendly environment, especially low taxes, foreign companies and rich individuals are expected to flock to Singapore. Many governments, example US and UK, are likely to tax high income earners more and also find ways to tax business corporations.  These people and institutions are looking for friendly places to go to. Singapore is one such places.  

The Singapore government has been selling this idea to it's people, that letting in foreigners will raise the economic tide and thus lift all boats.  So far, the reaction of some part of Singapore suggests that some boats are being let behind, or the boats felt like they have been left behind.  Will the Singapore government bull-doze through the next phase of foreign-led growth without ceding to the voices of the masses?


Case study - to invest or wait?

Is it a good time now to invest in REITS? Here is my view.

Globalization - benefits and harms

Many people think that globalization has benefited the world. They overlooked the harm and negative impact brought about my globalization. My view is that it has caused more harm than good. There is also an alternative to globalization for the inflow of capital and jobs. My views are in this article.

Rebranding and trust

Read tihs letter from a father to a son, who is starting work. 

Fake insurance policy

Read this story.

If you are investing a large sum of money, do not hand it to an insurance agent. Make the payment directly to the insurance company. The policy may be fake.

Sunday, October 10, 2010

Benefit illustration

There are two formats for the benefit illustration given to the buyer of a life insurance policy:

  • participating policy
  • invsetment-linked policy
Both are difficult for the buyer to understand. They contain several hundred figures. The most important figures are hidden among these many figures and are usually not explained by the insurance agent.

To know what figures to look for and where to find the figures, read the FAQs in my website, Search for "benefit illustration" and look for the FAQs that explain the format of the benefit illustration that you are given.


Rejected claim under Private Shield Plan

Read the case study of a retiree who was badly advised by the insurance agent to upgrade to a Private Shield plan. He went for treatment and chose a private ward, thinking that the Shield plan would cover the higher cost. After incurring $7,000 in medical bills, the claim was rejected as the insurance company said that he did not declare his diabetic condition. He was not aware that he was suffering from diabetes, and his doctor did not advised him to take medication.

If he had gone to B2, the bill for the survey (not connected to diabetes) would have been much lower and would be covered by basic Medishield.

Read the case study in (search for "rejected claim")

Advice: Do not upgrade to Private Shield when you are old. There will be medical conditions that you are not aware of, which will cause the claim to be rejected for non-disclosure.

Read my FAQ on "Medishield and Private Shield" to find out the difference in medical bills, government subsidy, coverage under the Shield plan and the co-payment that has to be paid by you..

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