Saturday, October 23, 2010

Gold - view from Warren Buffett

I paraphrased here : "if you take all the gold that has been mined and sell them at current price, you can buy all the farmland in US, plus 10 Exxon Mobil, and still have $1 trillion change. Which one has better long term value?"

Conversation with a Japanese insurance executive

I found a few interesting trends in japan that is likely to be followed in Singapore.

Transparency in insurance

SM Goh calls on insurance industry
to keep insurance protection affordable...Mr Goh said studies have suggested that Singaporeans are under-insured.
He added that the MAS would help consumers make informed decisions when buying insurance.
It will do so by working with the industry
to enhance transparency in disclosing what insurance products like a Whole Life Plan contain.

Regulation of Real Estate Agents

Only 6,600 applications in
as CEA comes into effect
The new statutory board set up to regulate real estate agents,
the Council for Estate Agencies (CEA), came into effect Friday.
Real estate agencies have until midnight on Friday to submit a list of their agents.
... there are about 30,000 agents in Singapore.

Large telephone bills

There are two letters from consumers about the large telephone bills that they received for services that they did not subscribe to, or for services that young children may incur without being aware about it. It shows the bad state of affairs in Singapore when businesses increase their profits without regard to the interest and fair treatment of consumers.
General Election Portal

Saving and inflation

A consumer that invest the savings in a life insurance policy should take account of future inflation and aim for a yield that is higher than inflation.  They should not just aim for a return of the premium, as the inflation would have reduced the value of the savings by up to 75%.

Ask Mr. Tan

Crowded in Bali

I spent 3 days in Bali. It was hot, humid and uncomfortable.
I visited Ubud on a tour yesterday. The roads were congested. I spent 6 hours on the bus travelling a short distance to Ubud and back, in slow moving traffic. It was a huge traffic jam.
My first visit to Bali was 25 years ago. It was enchanting. There were virtually no cars on the road. It was easy and fun to move around.
Bali is now too crowded.

Election buzz is in the air

Elder statesman Lee Kuan Yew may not, for the first time in 51 years,
take part in a general election - if one is called in the next six months as widely expected.
General Election Portal

Thursday, October 21, 2010


Hi Mr Tan
My husband and I were recently approached by an agent to buy this policy - we are in our mid 30s and the agent suggested that we get covered for $160,000 and pay the premium of $350 monthly for the next 28 years. (She wanted us to pay the premium annually but we didn't see the sense of that, except that she gets to enjoy her commission quicker.) 

She had initially also wanted us to sign up for $350,000 coverage with premiums paid till we are 84 but the premiums are far too high for us to afford for such a long period of time. 

We hope you can help shed some light on whether this policy is worth buying. Reason why I'm asking is because my husband recently gave me your book on financial planning and you warned against buying whole life insurance. Before I ring the agent to stop the policy, I just wanted to make sure that we are making the right decision.

In the product summary, it states that Vivolife is a participating regular premium whole life plan that covers death, total and permanent disability, and dread policies. Vivolife combines the best of insurance coverage and long term financial planning. Vivolife is ideal for those seeking high insurance coverage and the benefit of regular savings.

We would really appreciate if you could help us, and we will pass this information onto our friends who are also planning for their retirement and children's education.


Get the benefit illustration and calculate the two indicators show in in this FAQ:

I have seen a previous benefit illustration which showed that the policy provides a poor yield. But it is better that you compute it from the benefit illustration. You can send th benefit illustration for me to confirm your calculation.

Investing in REITS

What is REITS
and how to get monthly dividend payments from it

Caught in between

How is S'pore impacted as China fights inflation and US battles deflation?

Need for a multi-party system

Singapore citizens should ask a few questions about their role in Singapore. Read
General Election Portal

More disclosure to come on finance advisers

Bank customers will soon be able to find out professional details about their respective relationship managers or sales representatives on a Monetary Authority of Singapore (MAS) register as part of a move to improve disclosure.

According to MAS, 'This will provide consumers with more info on their reps, and enhance market discipline.' Serial job-hoppers, for instance, will be exposed as customers will be able to see the number of times that the manager of representative has changed employers in the past three years.

Under the new Representative Notification Framework (RNF), all financial representatives who provide financial advisory or capital market services will be listed on a public register. The RNF, which will be launched on Nov 26, replaces the existing licensing system for financial institutions that exempts banks and insurers.

Currently, only representatives of holders of capital market service licences and licensed financial advisers are issued hardcopy licences.

Read the full report in this website after 6 pm:,4574,409300,00.html?

Avoid insurance agents that tell lies or misleads

Some insurance agents tell lies to sell their life insurance policies. They tell the clients that they can earn 9% per annum when they invest in an investment linked policy. The 9% is not an expected yield but is just used for illustration. It is too optimistic under the current economic environment. Even if it is achieved, the real return, after deduction of the charges, is below 4% per annum. This is explained here:

Consumers should be careful about the misleading or untruthful statements made by some insurance agents. Other agents, while not deliberately lying, will avoid telling the real facts to the consumers, i.e. that a large proportion of their accumulated savings is taken away to make excessive profits for insurance companies and large commission for the agents. The consumer could have bought the protection under a 5 years term insurance policy or critical illness policy (expiring before age 55) at a much lower cost.

FISCA Talks - Nov & Dec 2010

Register early for these two talks organised by FISCA

a) Invest for the Long Term ($10 only - after sponsorship by SGX)
b) Financial Planning - A Practical Guide

Wednesday, October 20, 2010

Property bubble and Japan

Read what happened to Japan when the property bubble burst. Singapore should avoid the same risk.

“The U.S., the U.K., Spain, Ireland, they all are going through what Japan went through a decade or so ago,” said Richard Koo, chief economist at Nomura Securities who recently wrote a book about Japan’s lessons for the world. “Millions of individuals and companies see their balance sheets going underwater, so they are using their cash to pay down debt instead of borrowing and spending.”

Will Singapore be next?

Conversation with a Financial Planner

I have the following conversion with someone who is considering to be a financial planner. Here are the issues involved in this decision.

Tuesday, October 19, 2010

Rechargeable Torchlight (with Locator Lamp)

An innovative product - get ready for a power failure!
Read this brochure.
Promotion now available at iShop at $20 for 4 pieces or $5 per piece. .

A similar torchlight, under a good brand name, sell for $27.50 at the airport shop.

The next financial crisis

Football Fund

Hello Mr Tan
There is a company called London Nominees which is offering something called the Football Fund. If you look at the website it mentions famus footabllers and famous clubs and infers that you will be investing in very high margin transactions such as football merchandising and player transfers. However it is very unspecific and there is no clear indication of what the investment is in.
London Nominees is based in the virgin islands and is completely unregulated. They seem to be picking up some press and TV coverage in Singapore.  I would like to warn against this investment but really have no proof. 


SMU Financial Literacy and Retirement Seminar

Dear Kin Lian,

SMU is organizing a conference on financial literacy on 12 Nov 2010. The conference is open to the public and is free. I would like to invite you to this conference to help enhance financial literacy in Singapore. Please feel free to circulate this conference flyer to invite your friends to register for this conference.

Note: Please register early to get a place at the conference!

Income Inequality

There is an excellent article about the harmful effects of income inequality. It has relevance to Singapore. Read General Election Portal.

Conversation with a Lady Accountant

Read this conversation with a lady accountant. It addresses the issues about critical illness, life insurance and savings in a low cost investment fund.

Medical insurance

Get the right medical insurance policy. Look for the key facts to make your decision on the right selection. Read the FAQs (search for "Shield") in Ask Mr. Tan.

Preparations for the General Election

Follow the preparations for the General Election by the various political parties and the political issues - Singapore General Election Portal.

Insurance at roadshow

Be careful when you buy a life insurance policy at a roadshow. Read the experience of this person:

Singapore in 1957

Here is an excellent documentary about Singapore in 1957!

Monday, October 18, 2010

Investment scams - gold

There are many clever ways to create an investment scam. Read this article to learn about how a scam can be created from a hot commodity like gold. The best way to spot a scam is when the return looks so safe and attractive. How is this possible? There is always a catch somewhere.

Wisdom on How to Live Life (Book 3)

Humans being the most intelligent species and having lived on Earth for thousands of years, we are yet nowhere near to a life of peace, love, joy and harmony. This book contains a story of a young man, Tom, who had a fourth conversation with Guru Harry. This is a continuation of their first three conversations which are contained in the books “Wisdom on How to Live Life” and “Wisdom on How to Live Life (Book 2)”. Guru Harry epitomizes someone from a spiritual society who offers a way of living which can lead to peace, love, joy and harmony.

Through this fourth conversation, Tom learnt that (1) why we should live our lives according to our wishes, (2) why it is better to have morality than money, (3) why somebody who did ten good deeds is better than another who did one hundred good deeds and one bad deed, (4) what is the negative response we need to prepare for when we do good, (5) why life is getting harder and harder, (6) why it is better to solve problems with spiritual solutions than physical solutions, (7) why there is so much fear on Earth, (8) why it is better to believe that there is no heaven, (9) why masters do not directly bring heaven to Earth, and (10) how to build a loving society.

More information about the book can be found on the website:

The book can be ordered here.

Report on Lehman Brothers

A report prepared by The Lehman-related Securities Research Group (a collaboration between The Alliance of Lehman Brothers Victims in Hong Kong and The Democratic Party of Hong Kong)

Singapore's strong points are now diminishing

Singapore had a few strong points for the past decades - an honest soceity and a clean and safe environment. These points have been eroded in recent years. We now see:

  • stabbing incidents 
  • blatant cheating in the financial sector - land banking, scams, lies in marketing
  • flooding 
  • fires in HDB flats
What is happening?

We have a large increase in population, with many foreign workers living in Singapore. Singapore is getting crowded, adding to stressful living. Some people could not find jobs to make a living, so that have to resort to other means. 

We do not have adequate people in the police force, fire service and other public services. Many people prefer to work for the financial sector which pays well (and they can pay well as they are making huge and unjustified profits from ignorant consumers!)

Is this the future that we want?

Tan Kin Lian

Singapore Democratic Party

The SDP is putting in a lot of effort to prepare for the General Election. Visit their website to see what they are doing.

Temasek Review and Temasek Holdings

Temasek Holdings have written to the founder of Temasek Review to ask him to stop using the name of Temasek.  Read more of this matter in

Sunday, October 17, 2010

Misleading statements

Here are some of the misleading statements used by insurance agents to sell life insurance policies to consumers. These consumers actually give poor values, but the agents were able to mislead the consumers by pointing out to the wrong figures and giving the wrong explanation to the figures. Most consumers were ignorant and easily "taken by a ride". Sometimes, the agent tell a deliberate lie. In some cases, they were new agents and were misled by their agency managers - and they sincerely believed that they were making a good recommendation to their friends.

Investment Tips - Garett Goh

Garett Goh (teacher) shares his personal experience about investing in low cost funds.

Direct link

Invest in Chinese yuan

Dear Sir,
I have an amount around 1.5k. I am currently a tertiary student studying in NUS. Is it advisable to invest in chinese yuan now? How do i invest in such currency? By buying from the bank?

It is not worth the trouble to speculate in the Chinese yuan.
You have to open a bank account in China and transfer money there.
It is not easy and quite costly.
Keep your money in SGD which is one of the strongest currency in the world now.

Read my FAQ about "Invest in Foreign Currency" in
Direct link to FAQ

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