Saturday, December 18, 2010

BEST Business Game

Practice and develop the skill of pricing, marketing and stocking - the essential skills to run a profitable business by trying this game. Click on Video to see a demo of how the game is played and the strategy to follow. There are several games every hour, covering several industries. Each game should take 1 hour to complete.

Use Excel to calculate yield

I gave a talk on "Insuring your Financial Security" under FISCA. If you invest in a life insurance policy, you should aim for a yield of at least 3.5% per annum over a period of 25 years. You can calculate the yield using Excel. It is explained in this FAQ.

Invest in an indexed fund

In the past, the lay person does not know how to invest in shares or which shares to choose. A good choice is to invest in a life insurance policy and let the insurance company manage the investments.

The option of investing in a life insurance policy is no longer attractive for consumers, due to the high deduction may by the insurance company to cover its expenses and profit. Many life insurance companies take away 50% of the accumulated savings from the consumer, leaving a poor yield. For example, the insurance company can earn a yield of 5% but they give only 2% to the consumer. The difference of 3% is a lot of money.

Consumers now have the choice of investing in an indexed fund that takes away 0.3% per annum. If the indexed fund earns 5%, the net yield to the consumer is 4.7%. The consumer can buy the insurance protection through a 25 year term insurance policy and pay a small premium, which is less than 10% of the premium for a whole life or investment linked policy.

After factoring all the cost for the term insurance, the fee of the indexed fund and other expenses, the consumer is able to keep 85% of the accumulated savings, instead of 50% provided by a life insurance policy.

If the accumulated saving is $500,000, the consumer can keep $425,000 (after deducting 15%) instead of $250,000 (after deducting 50%). the difference is more than $150,000.

This concept is explained in several FAQs stored in my website, Read this FAQs and learn how to invest in the indexed fund. You can also attend the educational talks organised by FISCA (see or buy my book, Practical Guide on Financial Planning.

My message is very important for young people, especially the graduates who are starting work for the first time. Many insurance agents will be seeing you to tell you about investing in a life insurance policy. If you take their advice, you will likely be losing $150,000 or more, during your lifetime. Act now, before it is too late.

Tan Kin Lian

Role of social insurance

Most countries have a universal health insurance system that is provided by the state or through the private sector on conditions that are regulated by the state. It allows the population to have the basic level of health care at an affordable cost. Most developed countries, with the exception of America, have this kind of arrangement.

America has a private health care system. It produced high cost and leaves a significant portion of the population to be uninsured.

Singapore used to have a good and affordable health care system. In recent years, we are adopting some of the bad practices of America. There are now complaints that parents cannot buy insurance through Medisheld or the private alternatives for children with some congenital conditions.

Our problem is caused by the misconception that the private sector is more efficient in the use of resources. This is only partly true, but it has to be balanced with the negative aspects  of the pursuit of profit at the expense of other consideration, and the high cost of marketing and administration.

Some services, such as health care and education, are better handled under a social insurance scheme, rather than by the private sector. See the explanation in this article.

Tan Kin Lian

Friday, December 17, 2010

GPS Navigation System

I wish to look for a GPS navigation system in my car. I have a Packard Bell system, but it has been giving trouble lately. So, I am looking for a different system. Any recommendation of a good system that is easy to use and give good directions?

Tourist attractions

I have added some tourist attractions in Learning Tips. It can be viewed through the internet or on a Windows Phone.

Renovating an industrial premise [2]

I had a difficult time to find a contractor to renovate my industrial premise. Most of them quoted over $70,000 to renovate and furnish a premise of 1,600 s.f, of which only 1,300 sf need to be furnished.

I finally decided to scale down the work and managed to appoint a contractor at a more affordable cost. It still cost a lot of money, including the fee of $3,500 payable for "fire safety".  I sent my feedback to the Pro-Enterprise Panel, but they have still not acknowledged it after a few days.

Over the past few days, I have to signed many forms to different agencies. It seems to be quite complicated and time consuming to fill up these forms.

It is a hassle to apply to open an account for utilities. The form asked me to state the KVA of the power supply. I am not an engineer, so I do not know how to provide this information. My staff called the hotline of Power Supply and was told to get the KVA from the developer. The call to the developer's office was answered by someone who does not know the KVA. They will get someone to call back. I bet they will forget about calling back, which is quite typical of the standard of customer service in Singapore.

The form also asked for the date of incorporation of my company. I do not understand why this information is needed by Power Supply. So, I have to call my company secretary to find out this information.

Singapore has bred many people who are insensitive to the hassle and expenses cause to other people through their requirements. Some of these cost are imposed directly (through the fees that have to be paid), and some are borne indirectly (through the wasted time and work).

I shall write to the Pro-Enterprise Panel again. I do not expect them to acknowledge my feedback, but I will still write.

Tan Kin Lian

Who pays for the cost of medical report?

I wish to advice consumers who have to get a medical report to support an insurance application or claim. You can ask the insurance company to pay for the medical report in the case of an application.

For an insurance claim, you can add the cost of the medical report as part of the claim and get the insurance company to pay for it, i.e. to reimburse you. This is a legitimate claim expense and should be borne by the insurance company.

If the insurance company expect you to bear this expense, you can lodge a complaint with FIDREC as a dispute. If it is stated in the insurance policy as a contract term, you can lodge a complaint to CASE (Consumer Association of Singapore) that this is an unfair contract term. If I am not mistaken, CASE has a role in the administration of this Act. Alternatively, you can send your policy wordings to me, and I will try to help you to file the complaint.

Tan Kin Lian

Financial planning for a child

Many parents think that they should buy life insurance as a financial plan for a child. This is a bad idea. It is an idea that is planted to them by an insurance agent who wants to earn commission to sell any insurance policy. So, buying insurance for a child, e.g. to fund for university education, is one of these ideas.

It is better for the parent to invest the savings in one pool, to be used for a variety of purposes (one of which is education expenses). It is important that the savings should be invested in a flexible form and should produce a fairly attractive yield. Most life insurance policies in the market fail on both scores - i.e. they are inflexible and provide a poor yield.

Read this FAQ about financial planning for a child.

Read this FAQ about personal risk management for young people.It is more important that they have adequate savings for emergencies and their retirement. If they have more than enough savings, they can use some of this pool of savings for the tertiary education of a child, but it should not be at the expense of the other needs.

Tan Kin Lian

Financial planning for retirees

Many retirees have a sum of savings and are need advice on how to manage these savings. They can buy a Life Annuity, but they don't like the idea of losing their capital on early death. They think that they need life insurance, which is not suitable for retirees, except to pay for the funeral expenses. They cannot get proper advice from insurance agents (or financial advisers) as they only keen to sell unsuitable life insurance policies to earn a commission.

The best way for a retiree to manage the savings is to invest in an indexed fund and to draw down the amount that is required each month. This is explained in this FAQ. The retiree can get more information from my book, Practical Guide on Financial Planning or by attending the educational talks conducted by FISCA.

By spending some time and money to be educated, the retiree can save a lot of money by avoiding the wrong financial products that give them a poor yield or can cause them to lose their capital (remember the Lehman saga)?

There are several articles about investments and financial planning that you can read in Just type some keyword and you can get the articles that cover the topic. All articles are quite short, and contain the useful information for the lay person. They are quite easy to understand.

Tan Kin Lian

Keep your existing Living policy

Dear Mr Tan,
I am reviewing my existing policies: Living, Incomeshield and Ideal Plan, I have been unemployed for more than one year and found it difficult to get a new job as I am now in my fifties.

I was advised not terminate my Living Policy. I am considering whether I should buy a term policy (which you have recommended) since it would be cheaper and I could get a larger sum insured. However, will it cover my existing conditions of fibroids? 
Will this condition affect my Living policy since it was discovered after the policy was issued?

My advice of buying a term insurance policy applies mainly for young people - so that they can invest their savings in a low cost investment fund.

Looking at your circumstance, i.e. age and medical condition, it is best that you keep the existing Living policy, rather than switch to a term insurance policy, as you will have difficulty with getting term insurance now.

Your fibroid condition was discovered several years after you took your Living policy, so you will not have any problem with the coverage under the Living policy due to this condition. You can read my FAQ on "Indisputability".

I suppose that your children are now quite old, so there may not be any need for you to increase your life insurance coverage.

After the Event Insurance

Dear Mr Tan
While doctors and hospitals can buy insurance to cover malpractice suits, there is no similar plan on the patient side to provide the financial muscle to mount a suit. As a result only the well-heeled can afford to challenge the hospitals.

Also, the medical profession is well protected by the Bolam test that "established that there is no breach of duty of care so long as the doctor acted in accordance with a responsible body of medical opinion."

Just wondering whether an insurance programme, perhaps called The Patient Protection Insurance, can be set up along the lines of travel insurance. Just as a traveller would buy travel insurance before taking a trip, a patient going for surgery could pay a fixed sum upfront. With thousands undergoing surgery every year, a sizable war chest can be built up to provide for seasoned lawyers and independent expert medical witnesses (from abroad for obvious reasons), to sue for damages should an operation go awry.

With this facility, affected patients will at the very least have access to topflight legal advice on the merits of proceeding with a case instead of simply accepting a hospital's explanation with resignation.


My Reply

There is already such an insurance, called "after the event insurance". You can read the website of Lockton Insurance Brokers to learn more about it.

High insurance charge on ILP

Hi Mr. Tan,
My mother has Pru-Link insurance and has paid for nearly 10 years. She is over 60 now. When she bought the policy, she was told that she only needed to pay 10 years. I looked at her policy now and realized that her insurance charge is half of the monthly premium and there is not much left in the investment account. And I found out that my mother cannot stop the premium as there is not much investment value to cover the insurance charge for long.

My question is:
1. Should I stop the insurance now, as the charge is too high?
2. If I continue the insurance, does it means that I need to give more money every month for protection?

My reply
Please bring your documents and see me in my office. I will discuss the options with you.

The greedy agent only wanted to make a fat commission and does not care about selling an unsuitable policy and the anguish that is being left with the policyholder and the family.

Thursday, December 16, 2010

Capsule hotel in Japan

You can rent a capsule in Japan at a cheap rate. It seems to be quite comfortable. Maybe Singapore can adopt it one day. [Mike Hansford]

Beauty of the night

Interesting night scenes of cities around the world [Mike Hansford]

Credit card for those above 60

Why do banks refused to issue credit card for those above age 60?  I guess it must be a mindless ruling from MAS - designed by young officers who live in their ivory towers. SGEP

Concept about aging

C H Yak met an old man on his visit to Nanjing. He posted this message:

A Response to "Making Life Easier for The Elderly". MM Lee at the old age of 87, said this during a recent constituency event; "If I'm fit, I'm prepared to stand. But whether I stand or not, that's up to the Prime Minister". Asked if he was feeling up to it, Mr Lee chuckled and would only say: 'It's for you to judge.' [ Source : Straits Times, 14 Nov 2010 ] SM Goh announced that the Government is carrying out a 5-year study in Marine Parade to assess the implications and needs of an ageing community. He said the elderly are a special group, and Singapore need more young people to engage older Singaporeans to help them grow old graciously ... but "in a cost effective way". [Source : Today, 13 Dec 2010] During my recent trip to Nanjing, I met this interesting old man ( an octogenarian ),......[]

Read his message at SGEP. Here is an idea that is different from MM Lee.

Color printer

I wish to have recommendation on a good color printer to buy, where the price is reasonable for the printer, and the consummables are not expensive.

Wednesday, December 15, 2010

Download of Window Phone Apps

Videos of these apps are available here:

The downloads during the past two weeks:
Entrepreneur - 61
4D Simulator - 34
Toto Luck 20
One in a Million 17
Total 132

By country
USA - 54
Germany 19
UK 17
France 6
HK 5
Spore 4

The downloads are better than I expected, but mostly from USA, Germany and UK. Singapore is still slow - only 4 downloads.

Web App - Learning Tips

Watch this video

Mobile App - Learning Tips

You can watch this video to find out about Learning Tips which will soon be available on Windows Phone (and later on other mobile platforms):

Preventing dementia

Learn the tips to prevent dementia here.
This is important for elderly people.
You can also view the other tips.
You can also download the tips to a Windows Phone soon. It will also be available on other platforms in a few weeks time, e,g. Apple phone, etc.

OKI Color Printer C3300

I have an OKI color printer. I need the refill for two colors - magneta and cyan.
I have to order the refill (powder) from OKI. It is expensive and takes a long time to come.
I am willing to try the power from other sources. Any suggestion on compatible powder that I can use?

For my next color printer, I will buy one that has a more available source of supply of the power or ink. Any suggestion?

Be educated about insurance

Here are tips for consumers to be educated about insurance

Be educated about insurance

I meet with this situation a few times each week. The consumer send an e-mail to me, through my website, asking for my views about the life insurance policies that are being sold to them by an agent.

From the nature of the enquiry, I conclude that the consumer:
a) does not understand the product
b) did not read the benefit illustration
c) did not read the FAQ in my website or my financial planning book.

The consumer wanted me to spend time to analyse the policies that have been offered to them. I usually give this reply to the consumer:

a) read my FAQ and financial planning book
b) it is the duty of the agent to explain the product clearly to you, as the agent is earning a few thousand dollars in commission when you buy the product.
c) do not buy any financial product that is not clear to you - as you can give away a few hundred thousand dollars of your accumulated savings.
d) be wary of insurance agents and their half truths.

I advise consumers to make the effort to be educated through reading my FAQs, my financial planning book and attending the educational talks organised by FISCA. Do not rely on advice from other people, as some of them are untrustworthy and can cheat you. I do not have the time to analyse so many complicated policy plans that are introduced by the life insurance companies and their creative, highly paid experts.

Get ready to buy and read my new book, "Get value from your life insurance policy" which will be launched in January 2011.

Tan Kin Lian

Taxi fares in Kuala Lumpur - two tiers

I took a taxi from a hotel. The fares start at M$6. The journey cost M$14. I flagged a taxi from the road for teh return journey. The fare started at M$3. The return journey cost M$7. On both occasions, it was easy to get a taxi - no hassle (but it was on a Saturday afternoon).

I learned that there were two taxi fare system in Kuala Lumpur - the hotel taxis and the ordinary taxis. The taxis were marked clearly. A commuter can decide to go for the higher or the cheaper fare.  This is similar to the choice of economy or business class fares on an airline. It is transparent and give choice to the commuters.

I find the fare systems in Singapore to be too complicated. Perhaps, we should adopt  a system similar to Kuala Lumpur. Let us learn from our neighbor some of the time!

I wrote to the Straits Times Forum about suggestions to improve our taxi service. The letter was not published. I have posted it here.

Tan Kin Lian

Happiness and wealth

There is an article in the international media that happiness does not increase with the wealth of a country. This article has relevance to Singapore. SGEP

Taxi service in Singapore

The taxi service has deteriorated in recent years. It is now costly and the quality of service is unsatisfactory. Here are some suggestions to improve the taxi service.

Talk by Dr. Jacques Attali (13 January 2011)

One reader of my blog decided to attend the talk by Dr. Jacques Attali (more details here). He sent this message to me. 

Dear Mr. Tan

I'm educated in the field of technology and economy, politics and finance are all very foreign subject to me, Singapore had been my "sky" till I started to travel due to job requirement.

A few things Singapore need to improve:

1) Political system need to be opened up further. Singapore's future looks glim if we continue to live in a state of "virtual democracy".

2) Public education need to be enhanced further in the area of politics, finance and economy. The goal is not to train everyone to be an expert but to expose the people to what they don't know. Otherwise they'll forever be in the state of "don't know what they don't know". For example, I've never been exposed to socialism till I start reading your blog. Previously I've always thought there's only democracy and communism. I'm reading more on socialism but have not formed my conviction.

3) Due to my belief and profession, I've always believed that globalization is inevitable and no point resisting it, just be ready for it.

4) I'm not interested to run in politics but always interested to cast my vote responsibly that's why Singapore's media frustrated me greatly. 

5) The global recovery from the crisis is faked, US is trying to inflate themselves out of debt despite Tim and Obama denying it. What they've done is just temporary prop up the US economy so that there won't be major, immediate social unrest. Give as many investor as possible a time to exit. The subprime issue (root) that's been causing the pain is still not solved yet.    

FISCA financial planning talk

There were many young people, including couples, who attended by financial planning talk on 4 December. Most of them found the talk to be useful.

Some were shocked to learn that the life insurance policy, which required them to save a large part of their earnings each month, gave a poor yield. They also learned that they can get a much better return by buying term insurance for 25 years and investing their savings in a low cost investment fund, such as the STI exchange traded fund that can be bought through the Singapore Exchange.

A few attendees told me that they will be recommending their friends to attend the talk, as it will benefit them as well. A couple said that they have asked their nephew and niece to attend my next talk.

Those who are interested to learn about investing in ETF and REITS can attend another FISCA talk. The details can be found here. The talk was previously called "Invest for the Long Term". The new title is "Invest in shares, REITs and ETFs" but it is essentially the same talk. This talk is sponsored by SGX, so the cost is only $10.

Tan Kin Lian

FISCA insurance talk

I will be giving an exercise at the end of the talk. It will help you to learn the topics better. The exercise will be simple and some questions can be answered by applying common sense. You can try this exercise. If you like what is the questions and find them to be useful to improve your understanding, you can register now for the talk, which will be held at 2 pm this Saturday.

WikiLeaks and Negative Views

WikiLeaks reviewed the negative views that were purported to be conveyed by senior Singapore diplomats about some of our neighbors. This has caused Malaysia to lodge a protest and has temporarily soured relations.

The trouble is that the leaks revealed the negative views. It would be quite different if the leaks revealed the positive views that were expressed about some of our neighbors, such as the the positive qualities of their leaders and the  progress that they are making to solve their problems.

Two decades ago, Mr. Lee Kuan Yew said a few positive views about President Suharto's leadership. This was followed by a long period of extremely warm relations between the two countries. Some foreign observers had commented on the negative aspects of the Suharto regime, but it does not really matter. It has its positive aspects as well - which is more important.

Our leaders and Singaporeans in general have to learn how to look at the positive side, and to express positive views of other people. We have to learn to see "what is right" and not focus too much on "what is wrong". If we have to point out what is wrong, it can be done in an objective manner, without attributing any negative qualities to specific people. We do not need to be judgemental.

I hope that future leaks can help to build relations with our neighbors.

Tan Kin Lian

Tuesday, December 14, 2010

Test your knowledge of insurance

Do you want to test your knowledge of insurance? Try this test.
If you find it difficult, you should attend the FISCA talk on insurance ( or your can read this powerpoint.

Capitalist system and its safeguards

Singapore adopts the capitalist, free market system that prevails in America. However, the American system has the following safeguards for consumers:

  • If retail investors bring up a case against a financial institution and loses their case, they do not have to bear the legal cost of the other party.
  • Some lawyers in America are willing to bring up the case on behalf of the retail investors on a "success fee" basis. The lawyer will bear all the expenses and will only charge their fees and expenses on the successful outcome 
  • If there is sufficient merit, the attorney general will take up the case on behalf the retail investors, rather than leave it to them to fight the financial institution on their own. The attorney general is the lawyer for the people, as well as the lawyer for the government.
If Singapore had the same safeguards, the retail investors of the DBS High Notes would not have to suffer the outcome that they faced yesterday, when their case was rejected by the High Court judge and face the prospect of paying large legal fees, in addition to losing their invested principal.

Tan Kin Lian


Court case on DBS High Notes - legal fees

In passing the judgement on the DBS High Notes case, the judge indicated that he will be giving a ruling on cost at a later date. This ruling will determine how much of the legal cost incurred by DBS will have to be paid by the investors.

It will be honorable for DBS to bear its own legal cost entirely and to ask the judge not to pass the cost to the investors. After all, the investors had lost a lot of their savings by investing in the High Notes that were created by DBS and marketed by DBS. If DBS does not make this request, I hope that the judge will decide that each party should bear its own cost, in the light of the circumstances.

Tan Kin Lian

Dispute on interest rate with NTUC Thrift

Dear Mr. Tan,
I was Ntuc thrift member for some years till recently, Thrift sent letter to me to cease all my accounts as they recently did a clean up and flagged that I was no longer a member. As my 2-yr FD matures in 2012, they agreed to pay on the interest rate for the invested period at the interest rate for tenor 9 month. Is this fair? Should they pay at the original interest rate despite reduce tenor? 

They should allow you to continue the 2 year tenure and pay you the agreed rate. If they wish to terminate earlier, they have to discuss with you on what is a fair rate - which should be the same interest rate but pro-rated for a shorter period.
Tan Kin Lian

Who can I get help for Thrift to honour the original FD? MAS? I have already asked Thrift on the following occassions:
1) I spoke with head of operations
2) Appealed to CEO during follow up call
3) Copied my appeal to MCYS 
I sought help from MCYS but as there is no contractual issue so there's nothing they can do. 

If the people in charge don't care, there is nothing much that I can do.Sorry.
Tan Kin Lian

Can I go to MAS?

You can go to MAS or the Prime Minister, but they probably don't care also.
Tan Kin Lian

Life insurance policies sold to elderly, illiterate person

I spent one hour talking to an angry person. His mother was sold 2 life insurance policies 15 years ago by an agent (a family friend) who told her a pack of lies. They had approached the insurance company a few years ago, but the matter was not resolved. He sought my help to advise him on what he could do now.

Honestly, his grounds are weak. It was 15 years ago. It was the word of one person (his mother) against another person (the agent). To make matters worse, the agent could not be located.

He felt that it was most unjust. He related on why the life insurance policies were sold to his mother, who was illiterate and unsavvy. He asked for my views, as the ex-head of a life insurance company, on what the problem was - that caused this type of unpleasant situation. Was it due to the fact that the insurance agent were not paid a salary and had to earn a commission by telling lies?

I tried to answer his questions, but he appeared to be not listening. I told him that it was unfair for him to now place the burden on to me. I did not cause this situation, and had no power to address it. It is easy for the people in charge, such as the MAS or the member of parliament, to close their eyes and ears to the problem. Maybe, I should also do the same?

Tan Kin Lian

Message from Spa Victim

Dear Mr. Tan,

Thank you for helping to raise awareness. I am encouraged by your efforts to fight for justice for consumers and the common man.

In respect to the recent case where hundreds of millions of dollars are lost when True Spa and Subtle Senses stopped operations, below are 2 links for your readers' attention.

1. Here is the link to the newspaper report. This is an update on the case about True Spa and Subtle Senses.

2. There are about 20,000 consumers. We need to get as many people to come together as possible to go after the owners of True Spa who started this mess.

Here is the link to the facebook group - Victims of True Spa Subtle Senses!/home.php?sk=group_170620749615018&ap=1

Many thanks for your time.

Spa Victim

Democracy rating

Singapore has climbed 9 rungs in the democracy rating, according to the Economist Intelligence Unit. Do you agree with the findings? SGEP

Ape Snap Dining Vouchers

Are you paying for hefty dining bill with clientsDo you lack of ideas for corporate gifts or employee benefit?|Are you overwhelmed by the exorbitant charges for meals?
Now ApeSnapDining is representing over 20 restaurants to provide dining voucher at 20% discount. These cash vouchers are available for use every day to minimize expenditure on dining, employee benefits and corporate gifts. Please do not hesitate to grab vouchers on our website  and catch up with us on facebook!/pages/ApeSnap-Dining/165429836829430
Note from Tan Kin Lian
I am helping my former student in SMU in marketing these vouchers in her first job after graduation. Please support her.

Wealth accumulator and Flexi Life

A consumer asked me about the wealth accumulator plan that I mentioned two years ago. When will it be ready?

This plan is now evolved into the Flexi-Life plan that is found in this website:

I will be writiing a book on Life Insurance - which will describe this plan as a solution for a person to manage the personal finance. I hope that some insurance companies will be interested to introduce this type of plan. I will also be looking for investors to set up a new insurance company to work on this business model.

Data roaming charges

There is a need to cap the data roaming charges and also for the mobile operators to negotiate an agreement to set the charges at a reasonable level, for the sake of their subscribers.

Fire safety regulations need to be practical

On 4 Nov 2009, Mr. Leong Jun Wei died from a fall on his wedding night. While intoxicated, he wondered into the fire escape staircase and could not get out. The doors were locked due to the fire safety regulations. He tried to climb out through a window and fell to his death. His bride, Kerin Pei, took her life a few months later, as she could not bear the grief and loneliness.

This is an example of a safety regulation that has probably been taken to an impractical limit. Why must the door to the fire escape staircase be kept shut? How many people had ended in the trap faced by Mr. Leong and could not get out? They had been greatly inconvenienced in the interest of "safety" although they did not face the fate of Mr. Leong.

Who weighs the pro and cons of the regulatory measures that are being introduced in the name of "safety"?

Business Times report on the court decision on DBS High Notes

The fallout from the global financial crisis that began two years ago in the United States continues to be felt here, as 213 investors failed in their efforts to recoup the $18 million they lost when their DBS High Notes 5 were devastated by the collapse of Lehman Brothers.

The investors' claim that the notes are void due to an inconsistency in a material portion of the agreement was dismissed

The High Court of Singapore on Friday decided, in a judgment released yesterday, against the 21 investors who brought the action against DBS Bank on behalf of 192 other individuals - the first representative action here after the Lehman collapse.

The investors, represented by Siraj Omar and Dipti Jauhar of Premier Law LLC, were asking the courts to declare the DBS High Notes 5 void at the time that they were issued, and for the bank to repay each of the 21 plaintiffs what they had invested and to bear the costs of the legal proceedings.

But Justice Lee Seiu Kin dismissed their claim, some 10 months after the hearing concluded, and will hear both sides on the issue of costs at another time.

Read the full report in the Business Times website after 6 pm.

Cost of preparing a medical report

A letter was published in the Straits Times Forum page complaining about the high fee charged for a medical report. The Singapore Dental Center replied that the cost of $90 (or thereabouts) represent only a part of their total cost in preparing the report.

I consider the cost of $90 to be excessive. An "angry doc" asked me to state what I felt the fee should be. I replied "$30". Another anonymous doctor said that he would outsource the writing of the report to other doctors for this fee. This argument is not fair, as it will be more difficult for another doctor, who is not attending to the patient, to write the report with the same effort.

A member of the public asked me to justify the $30, which he felt to be too high. A doctor charged only $30 for a consultation. He argued that the cost of writing a report should be lower.

This is the kind of problem that can arise when the regulators decide to leave such matters to the "free market". Actually, there is no free market here - but a monopolistic situation.The doctor who attended to the patient is the only party that has the information to write the medical report. They can charge whatever they want, and justify their fee based on the effort taken to write the report. If they are inefficient, their cost is obviously higher, so they can easily justify a high fee.

We also have to define what constitute the report. My suggestion of $30 is for a routine report that will take the attending doctor 10 minutes to write. I have seen many doctors and it takes this time for them to read their patient card and write down what is the problem with me relating to a specific medical condition. In most cases, this is what is needed to support an insurance claim or application for insurance.

A more detailed and complete medical report covering all of a patient's medical condition would obviously cost much more than $30. But, this is only required for exceptional cases, and is not the norm. There is a low cost way and a high cost way to write a medical report. The consumer would want a low cost, and the doctor would want a high cost. How can this be resolved in the "free market environment" in Singapore?

I hope that our government leaders and regulators will find out what is really happening on the ground and why consumers are complaining about the high cost of living in Singapore. There are countless examples happening every day.

Tan Kin Lian

SDCF and fire safety regulations

I sent this letter to the Pro-Enterprise Panel about the fire safety regulations and why it is imposing a high cost to enterprise for a simple piece of work.

Office renovation and fire regulations

I wrote a letter, which was published in the Straits Times Forum, about the high cost of renovating an office, which included a fee of $3,500 to get an engineer to certify that the renovation met the fire safety regulations in a small premise of 1,600 sf.

Major Gobi of the Singapore Civil Defence Force replied that under the regulation a full submission is not required for renovation that can be classified as "minor alteration and addition". I called Major Gobi to ask for the definition of minor addition and alteration and whether renovation involving the putting up of a false ceiling and relocation of sprinklers would fall under this category. Major Gobi did not know and said that he would arrange for his expert to call me.

I manage to speak to the expert, Major Lim, a week later. He said that I still needed an engineer to certify the works after it has been completed, but it need not be a full submission. This matter was still unclear to me.

In the meantime, due to urgency, I had asked the renovation contractor to proceed with the works, including the payment of the fee of $3,500. The contractor had told me that the building manager would not allow the renovation work to proceed without a signed certificate by the engineer. I had no choice in this matter but to pay the ransom fee.

This lack of clarity has caused me to spend a large professional fees for a simple piece of work.  If senior people in the SCDF could not give an answer on what constitute "minor alteration and addition", how can they expect the public to know? With this type of uncertainty, it is easy for the building manager to insist on requirements to "be safe and sure" but the trouble is that this attitude is causing other people to pay a large sum of money.

The SCDF said that they are in no position to regulate the fees charged by the professional engineer. But they are the party that is responsible to write the regulation in the first place. If they cannot play a role in regulating the fees, how do they expect the end user, who has to renovate the premises, to be in a better position to negotiate the fees in this wonderful "free market environment" in Singapore?

I hope that our government leaders will wake up to the real world and understand why the public is complaining about the high cost of living, the high cost of doing business, and why hapless consumers are being ripped off to pay a lot of money just to get things done.

Tan Kin Lian

Court decision on DBS High Notes

Investors took action against DBS on the High Notes. Their argument was on a mistake in the prospectus that led to inconsistency. DBS lawyers argued that it was an "obvious clerical mistake" and should not be used to void the contract. The court decided in favor of DBS.

I suspect that the legal fees involved in this argument of "an obvious clerical mistake" must amount to several million dollars. It is a great time for lawyers. So much fees are at stake to argue this small issue. Surely, there are larger issues of fairness, justice and responsibility of DBS in creating and issuing the High Notes?

It seems that justice does not count much in Singapore today.What seems more important is the pursuit of profits and economic growth.

Tan Kin Lian

Monday, December 13, 2010

Heart implant at subsidized rate

A part time teacher told me that his teenage daughter had a heart implant recently. She was treated in a subsidized ward. The orignal bill was $10,000 but, after subsidy, the bill was reduced to $5,000. The major portion was paid by Medishield and the remainder by Medisave. The cash outlay was quite small.

He gave this advice on how to get treated as a subsidized patient. The daughter went to a polyclinic and obtained a referral to a private hospital but as a subsidized patient. He wanted to share this tip with other people in a similar situation. If you need medical treatment as a subsidized patient, go to a polyclinic and get a referral.

Timely termination of life insurance policy

A couple attended my financial planning talk two weeks ago. They learnt how to read the benefit illustration and went back to study the policy that they bought recently. They found that the policy gave a poor yield as a large percentage of the accumulated premium was taken away as "effect of deduction". They cancelled the policy during the 14 day cooling off period - so they were able to get a full refund of their premium. They told me that they now know how bad the life insurance policy was. They advised their nephew and niece to register and attend my next talk!

FISCA talk - Insuring your financial security (aka Consumer Guide to Insurance)

The talk will be held this Saturday at 2 pm. More details can be found here:
Register now .....

Tips on preventing dementia

View the tips here:
You can also view the other useful tips on financial planning, investments, insurance.

Book - get value from your life insurance policies

II will be publishing a book entitled "Get Value from your Life Insurance Policy". It shows examples of the policies that the market that give a poor yield to policyholders and should be avoided. The last four chapters of the book tell consumers about  the policy that give good value, but is not available in the market at the present time. I hope that they will be available in the future. Here are chapters 6 to 9 of the book.

HSA warns against pills

The Health Science Authority has warned the public not to consumer this pill. I wish MAS takes the same approach to warn retail investors to avoid toxic financial products. Read SGEP

Stress and high school students

Parents and students in USA are now facing the stress They are following Singapore style.

Invitation from the author of "Wisdom on how to live life"

My dear fellow human beings

How are you today?

Do you find that life is full of uncertainties? Do you wish that your life is full of peace? If this is your wish, I invite you to read the series of books that I’ve written. The title is “Wisdom on How to Live Life”. In this series of books, it offers many concepts that can help you live a peaceful life. Some of the concepts are new. They cannot be found anywhere else. Some of the concepts are conventional wisdom. They have been presented with new insights. While many happenings in our outer world are beyond our control, happenings in our inner world are entirely within our control. It’s up to each of us to adopt concepts so that irrespective of external happenings, we can live in peace. This series of books offers many such concepts – concepts that can transform your life. You can find more information about the books on this website:

May peace be with you!

Your fellow human being,

The books can be ordered here.

Sudoku (Logic9)

Sudoku fans can try this online game. You can change the symbols from number to flowers and test your skill in artistic recognition.

Case study - financial planning for the young

This case study is suitable for most young people to plan for their future. It shows the importance of having a financial plan that is flexible and gives an attractive yield for the future.
Ask Mr. Tan

Benchmark for deduction under a life policy

I used a benchmark of 20% after 25 years to determine if a life insurance policy offers a fair yield to the consumer. This FAQ explains how I obtain this benchmark.

Reforms in Malaysia

Carolyn Hong, Malaysia Bureau Chief of the Straits Times reported the likelihood of snap polls in Malaysia. She said that Malaysia had made progress on several reforms that were introduced after Prime Minister Najib Razak took office. Among the changes were measures to combat crime, reduce government red tape, reduced taxes to attract investors, and political reforms.

When I was in Kuala Lumpur, I also saw a report from a local NGO about the improvement in transparency and  combat corruption. Malaysia is making good progress, which will be good for Singapore as well.

WikiLeaks and George Yeo

Foreign Minister George Yeo said that the WikiLeaks reports on the views expressed by Singapore senior diplomats are taken out of context. They are confidential talk and should not be reported. They are also the impressions of the American diplomats to the remarks made at the cocktails and do not accurately reflect the views of the Singapore diplomats.

I agree with the foreign minster's views and his approach in addressing this matter. I hope that his remarks will be covered in the Australian paper that leaked the reports.

Tan Kin Lian

Make your own decisions

Some consumers sent their benefit illustration to me, asking me if they should buy the policy or if they should continue the policy that they have taken up before. It is better for them to find out the relevant facts and make their own decisions. They can read my book on financial planning, attend the educational talk or read the FAQs in my website. They can decide what is best for themselves.

Sunday, December 12, 2010

Sydney Morning Herald - Big fat red faces

I wonder why the Sydney Morning Herald wishes to put Singapore in a negative light?

Is it due to the attempt by SGX to take over the ASX - Australian Stock Exchange?

Tranparency International's survey on corruption

There are some negative findings in this survey that is worrying for Singapore:

I don't thnk that our media is corrupt but they are likely to be influenced by their advertising revenue and may not be willing to speak openly against business interest or government stands. Their role becomes less effective due to these constraints.

My view is that the ethics and honesty has deteriorated in recent years due to the focus on maximising profits. The government leaders failed to uphold a high standard, preferring to leave matters "to the market" and this has led to more dishonesty, cheating and over-charging.

Tan Kin Lian

When I was in Kuala Lumpur, there was a report in the Straits Times quoting the president of a local NGO stating that Malaysia had made a signficant improvement in its transparency score over the past year, since the new Prime Minister took over, The effort against corruption is quite effective, as perceived by the general public.

Low ranking under UN human development index

Singapore has a low ranking of 27 among the developed nations in this UN human development index. In spite of a high per capita income and the hard work put in by Singaporeans, who have to work long hours at the expense of raising a family, the ranking is quite low. Something is wrong with our priorities and our system. I think that the focus on elitism and the low priority given to justice and fairness is bad for Singapore.

Tan Kin Lian

MAS and whistle blowing

View by zhummmeng

It has been suggested umpteen times that MAS should have whistle blowing channel for the public or a hot email to tip off the malpractices of insurance agents and the companies.. No use having one in the company.Who dares to report the CEO or a senior manager or an agent to compliance officer who is an employee of the company?

MAS should plant a mole in every financial company. MAS should know in the insurance company the way they comply with the FAA is like a conspiracy to cheat MAS..Eg. the fact find forms, writing the fact find forms, the recommendations, the reasonable basis requirement are all rubbish. 

MAS should check all of them. Not surprised that the fact finds are used as cover up to push products. If there has been true fact find why whole life or endowment or anticipated endowment products are still 'recommended'? No way can these products be recommended if the fact find is real and the products recommended according to reasonable basis. 

Don't trust the insurance companies. They are all in cahoot to cheat the consumers. Have a whistle bowing channel for the public to complain against the insurance agents and the companies.

FIDREC and the consumer

Many people are unhappy with the decisions of FIDREC on the issues referred to them. Read this article:

Please share your views on what can be done to bring up this unhappiness with the authority. Many complaints have been made previously, but they were ignored.

Cash out scam

Here is a new scam. Check your receipt when you leave the cashier counter in a store or supermarket. (I received this through an e-mail).

Yield on Life Insurance Policy

This article explains how to calculate the yield at different durations of a life insurance policy. You can use it to decide on whether to continue or terminate an existing policy.

Tips on Savings and Investments

More tips will be added.
I encourage authors to contribute their tips as well. After the last page, you can add your author page and a link to your website.

Fake $10 note

A fake $10 note is being circulated. Here is an advisory from the police.

Wikileaks and Singapore leaders

Find out how the international and local media cover the Wikileaks of the comments of Singapore leaders on the leaders in the region. Look for the difference in the slant of their coverage.

China - the old and the new


Wuhan to build world's third tallest skyscraper

Bridge linking Hubei, Hunan put into operation

Top 10 beautiful, peaceful towns in China


Investor sue DBS over Lehman bonds

Read this article:

Use Excel formulas

This article explains how to use the formulas in Excel to calculate the yield, future value and other financial calculations.

Ask Mr. Tan

90% tax on banker's bonus

 Irish Finance Minister Brian Lenihan said he would include a 90 percent charge on bankers' bonuses in the budget bill.

Taxi service in Kuala Lumpur

I took a taxi at the hotel in KL Convention Center to Bukit Bintang. It was easy to get a taxi. On the return trip, I flagged down a taxi on the road. It was also easy to get a taxi. The fares are quite affordable, compared to Singapore.

KL International Airport

I visited Kuala Lumpur three days ago. The internal train connecting the terminals was out of operation, so I had to take a shuttle bus. It was quite a hassle.

There was a long queue at the immigration checkpoint. There were insufficient officers clearing the visitors during the holiday season. I had to wait about half an  hour.

The KL International airport was designed to have a central point for immigration and baggage collection, although the planes arrive at different satellite terminals.

Singapore Changi Airport operate on a decentralised system, with separate baggage collection and immigration clearance at each terminal. This allows the work to be decentralised and distributed. I find the arrangement in Change to be better for travellers.

Tan Kin Lian

Medical report fee charged by the Singapore Dental Center

I received an email from the Chief Financial Office of the Singapore Dental Center to point out that their actual cost of preparing the medical report is higher than the amount that they charge for the report. Earlier, I had mis-interpreted their letter (printed in the Straits times) that the cost is lower - suggesting that the center had made a profit on the report.

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