Saturday, January 15, 2011

Tunisia and Singapore

SGEP has a story about the overthrow of the government in Tunisia and the President Ben Ali had fled the country. This development has significance to Singapore.

I visited Tunisia on two occasions in recent years. I asked my host about the government. They had one party in power for more than 20 years and the same President in charge. They had regular elections. The ruling power has strong links to the trade union movement, the grassroots organisations and many other institutions in the country. The similarity between the structure of government of Tunisia and Singapore struck me at that time.

I asked my host how do the people feel about the President? It was a mixed feeling. He was a strong leader and is quite well respected. But there was a hint that it was also accompanied by some kind of fear and unease. Does this sound similar?

I thought that President Ben Ali and the ruling party had control over the military, the police and the power in the country. So, it was a surprise that he had fled the country. Read this article.

Tan Kin Lian

More news and pictures about Tunisia.
Election in Tunisia
Atmosphere of represssion

M V Land does not use e-mail

I sent a fax to the directors of M V Land to complain that their management officer does not answer telephone or reply to e-mails. Three days later, the projector manager replied to me by fax. He claimed that they checked their web database and could not trace my e-mail. I asked him for the correct e-mail address that I should use in the future. He checked and replied to me, "Sorry, we do not have an e-mail address. It is better for me to communicate with them by fax."

They did give an e-mail address to my staff who asked for it earlier. It seemed that nobody in M V Land bothered to check the e-mail. If they do not use e-mail, how can they handle so many customers who have to go through them to sort out the requirements imposed by them, such as getting a renovation permit?  No wonder their customers (i.e. purchasers of their property) had such a difficult time with them.

Tan Kin Lian

Minimum wage and loss of jobs

I am baffled by the argument put forward by NTUC trade union leaders and their MPs that a minimum wage will cause the low income workers to lose their jobs. I find their reasoning to be convoluted and  ridiculous. When the low wage workers lose their jobs, who is going to do the cleaning job and other manual tasks?

If the union leaders are really concerned about protecting jobs, they should press the government to stop the inflow of unskilled foreign workers. The manual work has to be done, and business will have to pay a decent wage to local workers to do these work.

There is the argument that a minimum wage will create a black market using illegal foreign workers to do the work at the expense of local workers. I do not agree. It is easy to prevent such abuse in a small place like Singapore. If the authority is serious, employers will not dare to flout the rules.

Some people said that local workers are unwilling to do the manual work. This is also not true. The local workers, especially the elderly poor, are now doing these work now, but are not getting a decent wage. If the wage is increased and the job is made more dignified, more people will do the work.

Some people fear that a minimum wage will increase the cost of living. This is only partly true. Wage is only one factor. A bigger component are the salaries paid to top managers, high rental on properties and profits to shareholders. A higher wage bill will put pressure on the other components and will not raise the consumer prices by the same extent.

There is also the uncertainty. The MPs argued that nobody knows what will happen when a minimum wage is introduced. I also find this reasoning to be baffling.They only need to look at the experience of other countries. The minimum wage policy is not perfect, but it usually does more good than harm. That is why nearly all countries in the world adopt it. Only in Singapore, do we have capable leaders who think in a convoluted way.

Tan Kin Lian

Work for less than $4 an hour

Mark Woon wrote in the Straits Times that fast food outlets, like McDonalds, pay students less than $4 an hour. At this rate, the students have to work many hours to earn enough to  pay for their meals. Some students do not have allowance from their parents and depend on part time work to earn money to meet the high cost of living in Singapore.

I continue to be baffled by the reluctance of our policy makers and trade union leaders to impose a minimum wage in Singapore. I am sure that the businesses can afford a minimum wage of $6 an hour. While this increase their business cost, they should reduce the high salaries paid to their top managers and reject the exorbitant rentals on their business premises.

It is a question of finding the right balance. By exploiting workers (including students) with low wages, the bigger portion of the earnings are taken away by other parties.

Tan Kin Lian

Friday, January 14, 2011

Krisflyer - another complexity

I recceived a statement from SIA showing that I have x Krisflyer miles and y Elite miles. I searched their website for the difference between these two types of miles, but I could not find it. I search for the telephone number to call, and I could not find it. This is another example of the complexity that we have to deal with. There was only one past occasion that I redeemed my air miles (previously, I allowed them to expire) and I had a lot of trouble navigating their complex website. I still have trouble now, and need to call their hotline for assistance.

SME Services

This portal allows a SME to handle its accounting, payroll and corporate documents.

Investing for the Long Term

This article shows that when you start and when you finish is also important:

There is a statement: After 60 or 70 years, returns are relatively stable, but this time frame is longer than the relevant horizon for many retirement plans. Actually, this is the real time horizon for a person who starts saving at age 25 and dies at age 85 (i.e. a period of 60 years). There is no need for the investor to cash out of the market at retirement, as the investor needs only to withdraw a monthly sum to meet living expenses.

ACRA - Secretarial

Does ACRA require a qualified person to be the company secretary? Can any of the directors or staff, without any secretarial qualification, take the duty of secretary for fulfilling ACRA requirements?

Book- Get Value from your Life Insurance

Here is the new cover for my book on Life Insurance. I am using cartoon for the cover and the same characters to illustrate the key messages

Financial Planning statement for a 25 year old

This financial planning statement has been prepared for a 25 year old. It is suitable for a graduate who has just started work. You can use this sample statement to learn how to interpret the figures and the impact of different investment yields and inflation on your future income. You can go to this website to prepare a similar statement based on your personal circumstances.

Buying car insurance online

Dear Mr Tan
My car insurance was due for renewal and my current underwriter quoted $1267. I went to NTUC Insurance and they quoted $1461 (seems they are not the cheapest as I thought). By chance, I saw a banner ad for AVIVA on Yahoo!SG and got an online quick quote for $1047, which is a saving not to be sneezed at. A little googling throws up both good and bad points, but I decided to sign up with them. Right or wrong decision, only time will tell.

My comment
It is easy to get an online quote from Aviva (www.aviva) or Direct Asia ( for your car insurance. They can usually give you significant savings. If not, you only wasted a few minutes, but you got a good benchmark to compare against your current insurer.

Cool the property market

Further measures have been announced.

Mobile roaming fees

The fees for voice and text will be lowered.  But no news on data roaming.

Unregulated investment products

My book, Practical Guide on Financial Planning has a chapter on the unregulated investment products, such as wine investments, land banking and ponzi schemes. These investments are unregulated by the authority. The seller promises high yields, which are not legally binding. Many people have fallen prey to these scams and lost a lot of money in the past one or two years, after my book was published. Many people are still falling prey to these scams. They are also buying life insurance policies that give them a poor yield, even though these cases are explained in my book.

I advise you to buy the book and read it over two times, to get an understanding of what to look out for, and what to avoid. It can save you many thousand dollars and a lot of heartache.

You can enjoy a 40% discount on this book here.

Tan Kin Lian

Quality of Life

Singapore has a high per capita income but that is not reflected in a high quality of life for the people.

Thursday, January 13, 2011

Supremehealth and Total Shield

Dear Mr Tan,
I met an agent from Great eastern who introduced their health insurance plan (Supremehealth). It seemed to have many advantages compared to the other plans.

Do you ecommend to go for private hospital compared to the government hospital? I have not stayed in the hospital before, and do not know their treatment, facilities, doctors and others.

Is there a need to buy Total shield on top of Supremehealth? What about the riders to include my wife and children?

Go to this webpage

Type in "Medishield:" and click on Search.
Read the FAQs

Register of Electors

Ready for inspection:

Talk by Jacques Attali

“We are not yet out of crisis” said Dr Jacques Attali, French professor, writer, economist and public intellectual 

The fundamental cause of the global economic crisis is the absence of a ‘global rule of law’ to control the global financial market, according to Dr Jacques Attali, President of PlaNet Finance, an international non-profit organisation that promotes microfinance in some 80 countries.  
“The global crisis is the result of global demand for public and private debt,” he said, adding that “The excess of debt has created a lack of trust.” 

In the advanced Western economies, the debt crisis has revolved primarily around the inability of the private banking sector to respond adequately to the excessive demand for loans. Insolvent banks that have had their liabilities absorbed by the public sector have also caused in turn rising public debts. Elaborating his thoughts on this subject, Dr Attali said that microfinance could be one of the solutions to the global crisis, as it creates employment opportunities while reducing poverty without incurring huge debts.  

An honorary Member of the Council of State of France, Dr Attali was the keynote speaker at the public talk “Is the Global Economy Still in Crisis?” The talk was held on Thursday 13 January at the Ballroom, Raffles Hotel. Referring to the US economy, which is the world’s largest economy, Dr Attali observed that “the economic situation in the US is worse than ever before, especially as the US debt is still 350% of the GDP, and with 650,000 Americans still homeless.” 

Singapore Foreign Minister George Yeo, who was present during the event to introduce Dr Attali, noted that “Taking a long term view towards a common destiny is the mission of the new Eurasia.”

Directors of M V Land

I am looking for the names of all the directors of M V Land (developer of Midview City) and of their parent company. If anyone has the information, please send the list to

Editorial in SGEP

The editorial in SGEP has been updated to summarisz the content in the portal. Visit:

Land banking in the news in Malaysia

Dear Mr Tan,
This is to bring to your attention of this article in the Sun newspaper in Malaysia

Wine investment

Hi Mr. Tan,
A year ago, I made a wine investment with a local company called (name deleted). They told me that I could see good returns after holding the wine for three years. I checked the materials online and learned that many people have been holding the wine and this company has not sold of the wines for them yet.

I went down to their office and told them that I wanted to sell off my wines immediately. They said that I must hold the wine for 3 years. I argued that there was no such terms in their contract. They then said they would help me to sell the wine off. I threaten to bring the matter to CASE but they replied that other investors had already done so, to no avail.

I just can't believe they are operating like a legalized "scam" company. As long as they get their sale done, they don't bother to look after the investor, and would only call to sell more wine with promises of high returns.

They are still giving seminars and talks at Suntec at an investment expo. Many elderly folks are being cheated. hope you would be able to advise me on what I can do.

Many people are caught in this type of situation. You can make a police report, if you feel that they have cheated you. But, I do not know what else you can do.

Gold investment

View posted in my blog:
Hi Sir,
My parents recently invested in this company 'The Gold Label' who promises a return of 1% every month. It has since closed down and a portion of their money has been wiped out. They do have some 'gold bars' as collateral though, but the value of the gold is merely 70% of the actual price they paid for. What is your take regarding Gold instruments then? Is there any way to help regulate such schemes? It seems like a Ponzi scam to me after my parents told me, but it's too late now.

My comments
So sorry to learn that your parents lost money. It is quite sad that people are allowed to operate scheme that was designed to cheat the public. The various government agencies claim that this is not their responsibility. It seems that no agency is responsible to stop this type of fraud, even when it was brought up to their attention.

I have written about this type of fraud a few times in my blog. I also helped an investor to avoid exactly the same kind of investment. But there is only so much that I, as an individual, can do. The government has the responsibility and the resources, and they do not want to act. It is quite sad.

Midview City - a bad experience

I have bad experience with the poor service provided by the management office of Midview City. They do not answer telephone calls or reply to e-mails. Even a fax to their directors remain unanswered. Nobody bother to return a call.

Their poor service has caused me to spend $3,500 (which could be avoided) and waste two months of valuable time to start my renovation. My experience is set out here.

Another owner wrote to tell me that he had experienced good service from the office, but he asked me not to post his e-mail. I wonder why? Several other owners have told me that they had bad experience similar to mine.

My bad experience with Midview City is reflective of the situation in many organisations in Singapore, including our government agencies. The staff are too scared to take initiative and follow the rules set by their directors blindly. They worry about "what can go wrong" rather than "what is fair and right for the customer". They are so busy with paperwork and following rules that they cannot answer telephone or reply to e-mail.

They are scared to be  held "responsible" for what is put down in writing, i.e. e-mail. Even senior people are scared to take responsibility - preferring to push the buck to someone else.

Tan Kin Lian

Sample financial plans

You can view the sample financial plans for a person age 25, 35 and 65 here:
You can carry generate a financial plan statement for your own personal situation here:

Convoluted - the Singapore way

Singapore policy makers have a convoluted way of handling issues. For those who are not familiar with this word, it means "Extremely complex and difficult to follow."

 I have mentioned the CPF contribution rate that requires a person to refer to 6 brightly colored booklets of 19 pages each. How about setting the CPF contribution rate at 16%? It does not require many complicated tables.

How about workfare - which is lauded by our MPs as being better than a minimum wage. Here is the convoluted WIS (in case you don't know, it meas Workfare Income Supplement). I hope that our MPs, who love workfare, are able to understand how much is being paid to the low income workers. Why can't the supplement be paid monthly and depend only on the income of the worker for that month?

What about GST Offset Package? Here is the table: The table is simple, but figuring out the category that a person falls under require some research, i.e. the annual value of a house or the assessable income. What's wrong with giving every person a flat $300 or whatever amount?

There are many more of our convulated practices all over the place. Many of us experience them all the time. We give up trying to understand them. Each set of convoluted practices is designed by a large team of highly educated experts who can spend long  hours to produce the complex tables and web calculators. They can spend the time because this is their job. They forget that every citizen has to do his daily work and live his daily life, and do not have the time to figure out the complexities that are created by five, ten or more agencies.

Welcome to convoluted Singapore.
Tan Kin Lian

Rechargeable torchlight - handy for the house

The electricity in my home tripped yesterday. I was able to get my rechargeable torchlight, placed next to my bed, to locate the control box and turn back the switch. I also use the rechargeable torchlight to move around the house in the dark, instead of turning on the main lights. The rechargeable torchlight has a locator lamp that can be turned on at night. It uses rechargeable battery and can save on battery cost. This torchlight is available at $6.50 (discounted price, $5) in


Buy the right life insurance policy

Are you getting a good yield for your savings in your life insurance policy? You can follow the calculation shown in this article.

If you find that it is giving a poor yield, there is nothing much that you can do now, as you have already incurred the upfront cost. If you wish to terminate the policy, you should carry out the calculation here to see what is the yield over the next 5 years.

If you want to know how to plan for your financial future, you should carry out the calculation shown here. You will get a 2 page statement (in PDF) and guidance on how to read the statement. There is reference to several FAQs in my website. You can also consult an expert who can guide you on this matter.

Wednesday, January 12, 2011

Letters to SGEP

Do you have any views to share about the social, economic and political priorities in Singapore? Send your letter to The letter must bear your name and email address, but you can ask for a pseudonym to be used. It must be within 400 words. They will be published in the SGEP portal. Let your voice as a citizen be heard!

Going beyond the limit

I asked my staff to show me the formula for calculating CPF contribution. She passed me 6 brightly colored booklets, each with 19 pages. For someone who is not familiar, it takes a lot of time to understand how to calculate CPF contribution. There is a risk of making a mistake. To avoid this problem, it may be necessary to send someone for half day training in calculating CPF contribution.

Do our policy makers realize that all these complications take up a lot of time of the staff and that salaries are high in Singapore. This is so wasteful. I do not know why things have to be so complicated in Singapore!

Tan Kin Lian

Insurance needs of disabled persons

Disabled persons have a higher need for insurance, but insurance companies are not willing to offer insurance at the standard rates to the disabled persons. The disabled persons may have to rely on personals savings and loss control.

Franchise business proposal

A reader asked for my views on this franchise business proposal. I am  not familiar with the business, but I know of many people who invested in the bubble tea franchise and lost their capital. If you have any inside knowledge of this franchise, please share it.

Franchise fee: 15k (3years)
Royalty fee: 5 - 6 % on sales
Marketing fee -1.5% on sales
The development manager/partner said that the total estimated cost is about 150k to 180k, with a breakdown for legal fees, misc fees, renovation, rental for 3 months, insurance etc.  It is a healthy food franchise. 

Long term pass for baby

Dear Mr Tan,
I have friend that just move to Singapore, and also have baby. However, they face a difficulty in Singapore to get the long term pass for their baby. The imigration officer ICA mention that the baby should go back to home country and can't stay in Singapore more than 3 months, so the parents and baby should move in and out from Singapore every three months.
Do you have any information and idea, how to solve this problem, so parent and baby can together without each 3 month to renew the visiting pass. The parents are foreigners on long term visit pass (LTSPP), but they are keen to become Singaporean Citizen.

If you know how to solve this problem, please send e-mail to

Dr. Jacques Attali's talk

Dr. Jacques Attali's talk will be held tomorrow. Here are past postings in this blog:

My views on "globalisation" are set out here. I believe that it has to return to some form of protection. I wish to hear what Dr. Attali's views are. A few readers of my blog have sent their views to me. They are also attending the talk. I look forward to meeting them, but they have to look for me.

Russia - Landscapes and buildings

Here are some beautiful landscapes and buildings in Russia. Contributed by Mike Hansford.

DBS notes investors appeal court ruling

DBS notes investors appeal court ruling

THE investors who lost millions and their court case
over their investment in DBS High Notes 5
are now appealing against the High Court decision
to dismiss their claim.

BT understands that the 21 investors
who brought the case against DBS Bank
on behalf of 192 other individuals
have made an application to the Court of Appeal.

Singapore Government Bonds

Singapore government bonds will begin trading on the Singapore Exchange (SGXL.SI) by the middle of this year, providing retail investors with a safe but higher-yielding alternative to bank deposits, Finance Minister Tharman Shanmugaratnam said on Monday. 
He said retail investors concerned about the low savings rates can also participate in government bond auctions or buy high-quality corporate bonds that are now traded in smaller lot sizes on the exchange.
Singapore’s annual inflation hit 3.8% in November, the highest since January 2009, and analysts said the rate could accelerate further in the first few months of 2011, prompting the central bank to maintain or further tighten policy.
In contrast, Singapore banks currently pay less than 0.2% per annum on savings deposits.

Yield on life insurance policy

This article explains how to calculate the yield on a life insurance policy and to know if the yield is attractive, acceptable or too low. The reduction in yield should not exceed 1.5%

New ways to mislead consumers

A life insurance company has launched a new product with a new angle. They claim to provide an income to the policyholder during retirement.

I saw a benefit illustration given to a young man at age 30. The life insurance policy has many complicated features that baffle me. The consumer asked for my views. Frankly, it is a waste of my time to analyse these types of products that are designed to distract consumers from the poor yield and to benefit the insurance agents and the insurance companies.

Anyway, I looked at the benefit illustration and found that the cash value at the end of 25 years is less than 60% of the accumulated premiums, i.e. the deduction is more than 40%. The yield is only 1.4%, which is terribly low. The insurance agent distracts the consumer by talking about the monthly income during retirement. The agent pressurized the consumer to decide because the premium rate will increase after the next birthday.

I gave this advice to the consumer:

  • Do not buy any insurance product that you do not understand
  • Do not expect me to waste my time to analyse these complex products
  • Do not buy because the premium rate may increase after your birthday.
  • Avoid insurance agents who earn a large income selling poor life insurance policies to you.
Watch this video

If you wish to know how to manage your financial future, without being conned by a life insurance agent, you can start by trying this financial planning tool. You can also pay $50 to the experts to provide guidance to you on how to understand the statement. Do not waste $5,000 of your premium as commission to the agent who sell you a poor life insurance policy.

Tan Kin Lian

Cover for Life Insurance Book

What is your opinion about the cover for my life insurance book? Is it all right to use a cartoon?
Send your views to

Tuesday, January 11, 2011

The Online Citizen

The popular Online Citizen has been gazetted as a political organisation. Read about the implication of this development in SGEP.

Political website

Hi Mr. Tan
Big news of the day. The Online Citizen now has its arms and legs tied up like the crab. Would your blog be the next target,considering that it is much harder to snare Temasek Review. Worried now, as we are used to your blog daily.

Don't worry. Que sera sera.

High cost and delay

I wrote this letter to the directors of M V Land, the developer of Mid View City. My experience with this company was bad. They provide bad customer service and adopt inflexibility that caused delay and unnecessary expenses to their buyers.

Three months prior to the completion of the project, I asked them to give me a floor plan of my premises to prepare for the renovation. I had to go through the lawyers. They took a month to reply and refused to give me the drawings, even though it cost them nothing to assist. I don't know what they are scared of! This caused me  to waste a lot of time. It is more than three months after taking possession, and the renovation has not started.

But this is Singapore! Even commercial companies are following the bad example set  by the Government. Scared of taking initiative. Find excuse to say "no". Don't care about the impact on their customers or the public. Plain arrogance.

Tan Kin Lian

Editorial of SGEP

whe editorial of SGEP contains an interesting summary of the articles that are posted in the portal. These articles are extracted from the media and blogs. It gives the readers an interesting summary of the key issues that they have to consider at the General Election of Singapore. Do read SGEP daily.

Who is handicapped?

Here is an interesting story about life.

A terrible place - Singapore

Singapore is a terrible place to do business. I have to pay $3,500 to a professional engineer to certify that the renovation to my office meets "fire safety standards". This is a ransom fee for a simple piece of work, but I paid. My appointed contractor had to get the stamp from the professional engineer and to apply for a permit from the management office (of the developer) before he can start work. After wasting time for more than three weeks, the contractor still cannot start work. Meanwhile, time is running out, as I have to vacate my current office.

Besides paying a big ransom, I have to suffer a long delay. I had written to the Pro-Enterprise Panel on this matter. They replied that they were consuling the relevant department but did not come back with a reply after several weeks. Is this just for show?

Tan Kin Lian

Avoid investment that you do not understand

Dear Sir
My insurance agent has changed line and another agent is in charge of my policies right now. He has been pestering me to stop my endowment policy, to cash out the coupons and to put the monthly premium into a global savings account. At the same time, he encouraged us to leave whatever premiums that I've paid (approx 8 years) in the policy and let the policy run.
1) He claimed the global savings account can generate at least 20% every year
2) he claimed although I am to stop paying the monthly premium, my coverage will be the same and will still continue. I would also be able to draw up some cash at the end of the tenor, ie, 21 years. 
Is he to be trusted? Can I know what is a global savings account and what he claimed in point 2 is true?

My advice is to avoid any investment that you do not understand and never to accept promise of high yield (which is not guaranteed). Read my book on financial planning to learn about why you should avoid these types of products (where a large sum is deducted from your savings to pay commission to the agent) and leave you a poor yield. My book also advice you on how you can invest your savings for the long term to get a good yield.

Author of “Wisdom on How to Live Life” on Radio 938LIVE

Dr. Tommy Wong, author of “Wisdom on How to Live Life”, will be interviewed on the 938LIVE programme “The Living Room” on Wednesday, 12 January 2011 at 10 am. The books are currently on promotion and can be ordered here.

Measures to control internet cheating

Most people receive e-mails regularly from people who are out to scam. They are usually from overseas and purport to have some money in some bank account which can be withdrawn. It happens a few times each day.  The message keeps changing, but follows a pattern.

While most people will ignore these messages, there will be a small percentage, say 1% of 1% that may fall for the trick. And they will be cheated. The government will say that there is nothing that they can do to stop this massive scamming. People should be smarter and avoid these scams.

I do not agree with the approach of the government on this matter (and I am referring to not just the Singapore government but governments in other countries as well). The law should make it clear that cheating and fraud is a crime and that criminals will be prosecuted. It may not be possible for the government to catch the criminals if they are overseas, but I do expect the government to put in some resources to do what is possible.

Here are some possible things that can be done:

  • Trace the location of the sender
  • Have a sting operation to catch the criminal
  • Tell the ISPs to help and spam back to the spammers
These actions do not cost much. It only takes a responsible government who is willing to do their duty and pass a message that scams and frauds are not tolerated.

Tan Kin Lian

Closure of spas in Singapore

Hi Sir,
Thank you for posting updates on your blog for the information of your readers. Wikipedia has now published a page on the Spa closures in Singapore, a topic which prompted fierce online responses in numerous forums and a discussion in the Parliament.

I hope the politicians will address the issue of how come the government or law system in Singapore allows unethical directors of businesses to take advance payments from huge number of people and are continued to be protected by the corporate veil/the concept of the separate legal entity.

Spa Victim

Bursting of the bubble [2]

Dear Mr Tan,
Thanks for your blog and sharing the tips on “How to survive the bursting of the bubble”. It has been helpful in many ways. I agree with you on the bubble. The current property anti-speculation measures has certain overlap with those introduced in 1996. This link  from REDAS shows the significant events and historical property price index of the past from 1960 to 2006.
The Asian Financial Crisis in July 1997 is somewhat triggered by inflow of “hot money” targeted at the currency. Nevertheless, China is preparing to combat the inflow of “hot money” 

However, as much as anti-speculation policies can be introduced, all it takes is just a significant event to trigger any short selling such as when the South Korea went ahead with the military drill despite threats of North Korea

I have currently more than S$100k invested in Singapore and HongKong shares of which the values have appreciated from the time which is bought many years ago. The plan is to slowly sell it probably from Feb 2011 onwards to the period of Singapore general election date and wish to seek your advice on the timing.

I am not able to give timing advice. But in general, it is better to get out of the market when it is high, and not wait for it to go higher. Wish you all the best.

Sunday, January 09, 2011

Benchmark of 20%

A few people have asked how I got the benchmark of 20% for the amount to be deducted at the end of 25 years. This is stated in page 62 of my book on Financial Planning.

I encourage people to buy and read the book a few times to get a better understanding of the subject. They should not expect to be given individual coaching as it is time consuming for the teacher. These difficult questions require an understanding of the principles and the need to make personal judgement - and is not appropriate to be asked as a question.

Tan Kin Lian

Financial Planning Book and Answers

Hi Mr. Tan,
I am an undergraduate who reads your articles with interest as they give me good insights into the basics of financial planning from a relatively unbiased point of view.
You mentioned about distribution costs = 100% of annual premiums and deduction costs = 20% of total premium value as 'benchmarks'. May I ask how did you arrive at these figures? 

I was recommended to a financial advisor. He introduced me to a limited (25yr) whole life insurance which covers 150,000 life and CI rider for $250/month. I rejected it as I have no intention of getting insurance now since it'll eat up too much of my monthly allowance.
 After reading your articles, I was shocked to realize the true meaning of distributive/deduction costs involved. I'd like to clarify the 'figures' you quoted.
you have to find the answers from my book on Financial Planning or the FAQ in my website. I am not able to give individual coaching on these matters.

Life insurance policies and benchmark of 20%

Hi Mr Tan,
You always mention that Benchmark for Deduction should not more than 20% after 25 yrs for life insurance.
Do you mind to tell me which are the insurers that meet this benchmark ?

None of the life insurance policies in the market now meet my benchmark of 20% deduction. It is better for the consumer to buy term insurance and invest your savings in an indexed fund. The long term cost is likely to be less than the 20% deduction. Read my book on financial planning (available at

If consumers reject the existing life insurance products that offer a low yield, the insurance companies will be forced to offer new products that give better value to consumers, i.e. meet the benchmark of 20%. It is possible for them to achieve this goal.

How to survive the bursting of the bubble

The Asian economies are in a bubble. It will have to burst and follow the fate of Japan and America. Here are some tips on how to survive the bursting of the bubble.

Tan Kin Lian

Financial Planning Tool for Fresh Graduates

It is important for a fresh graduate to start financial planning with their first job. They should set aside savings for the future and invest their savings to get a good yield. They should avoid financial products that provide a poor yield. They should also take into account the effect of future inflation on their savings.

Learn about the right approach towards financial planning using the tool created by Prof. Tan Kin Lian in this website,

The expats will rule Singapore

Read this article by Adam Khoo in SGEP

Time for a new formula for property tax?

Attached please find my article published in TODAY newspaper about property tax. Just for your info.
 Mr Tan - feel free to publish this in your blog if you think this is useful. There were a few comments attached to this article. see link below.   
T C Thian
My comment
I agree with the views expressed by the writer. We should not expose owner occupiers from the vagaries of the rental market.

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