Friday, August 03, 2012

Facebook is now $20

When Facebook went IPO at $38 on a PE ratio of 100 times, I felt that it was too high. A proper PE ratio would have been 25 times. So, the correct price should be $10 and not $38. Well, the price has now come down ot $20 and will probably reach $10 in due course.

It is strange that the highly paid fund managers were buying the share at $40 and above. And they are supposed to be the experts in the financial world!

Legal profession in Singapore

There is a need for lawyers to do pro-bono work on human rights issues.

Here is an article from Alex Au

Congratulations to Feng Tianwei

I congratulate Feng Tianwei for winning the bronze medal for Singapore at the London Olympics.

Low Fertility Rate

Here is an article from Lucky Tan about our low fertility rate

My own view is that the low fertility rate is caused by several government policies implemented over the past 25 years, starting from the excessive demand on our male citizens doing National Service. The government ignored several calls from me to address this issue. The problem became worse over the years due to high price of HDB flats and the cost of living.

Thursday, August 02, 2012

Google Maps in Phnom Penh

This is my fifth visit to Phnom Penh, Cambodia. It is my most successful trip. I became familiar with the landmarks in the city.

I was surprised to find that Google Map appeared on my iPad without any data connection. There must be some feature of this app where the digital maps are remembered. The blue dot showed my current location.

I was driven to several parts of the city for my business meetings, lunch and dinner. I was able to find out the part of the city that I was in, and also the roads that were passed by along the way. Suddenly, all the places that I visited in my past trips fall into place.

I was able to access the Google Maps using the wifi in the hotel. These maps are then remembered in my iPad when I went outside of the hotel. This is a wonderful feature, and make it more enjoyable to visit a city.

Raffles Hotel Le Royal, Phnom Penh

I stayed at the Raffles Hotel Le Royal at Phnom Penh. It is the venue of the "Life Insurance Awareness Seminar" organised by the Government with the support of the two life insurance companies that were given licence. 

The hotel is part of the Raffles Hotel group. It is a nice hotel, comparable to the Raffles Hotel in Singapore. The room rate is one third of the rate charged in Singapore. 

Gold investment - another ponzi scheme?

Dear Mr Tan

I received a call from company X telemarketeer inviting me to attend
their Gold seminar and that they are regulated by MAS.   I am required
to attend a 1 hour talk afterwhich I will be given a $400 voucher
which needs minumum purchase of $1000 for redemption.  (Crazy)

Attended the seminar, very impressive as Company has Top 100 SME
AWARDS, pictures of political and influential people with the boss
which indirectly shows endorsement and write-up by media.

It seems the company is trading in gold and the GST on this trading will
be waived in October.  They said that Singapore planning to be GOLD HUB 

and that is why so many endorsement.

Processes:  You buy 1kg gold for $91,000.  You have to put in a deposit of
$2000 on the order and pay in full ti complete the contract. On full payment, you are 

given a gold bar.  From the 1st month, 2nd month and 3rd
month you will be given 1.7% ie $1,500 every month.  After the 3rd
month you can extend and being paid again for the next 3 months.  This
can be renewed quarterly.

If you return the Gold bar to them they will pay you back your
$91,000.  The price of the Gold Bar is @ 20% higher than market price
and that is why they are able to pay the 1.7%.

It is very strange, investment amount is huge ie $91,000 or more,
attracting retirees and those with money.""

This is similar to other schemes. In effect, you are giving away $18,000 (i.e. the 
difference between your investment of $91,000 and the actual value of the gold) 
to receive $1,500 a month. While this look like an attractive investment, you do not
have any security for the ïnvested sum"pf $19,000 and the company could fold up at
any time. They are able to pay you the monthly return of $1,500 so long as they get
more people investing than withdrawals, and they are cash flow positive. 

This is likely to be a ponzi scheme, where the investments made by the subsequent
investors are used to pay the earlier investors. Like any ponzi scheme, it has a high
risk of being fold up.

Wednesday, August 01, 2012

Impractical I. T. Security

Here is a comment posted in my blog. I agree with the view expressed.

Management of many companies just delegate the management of IT security to the young programmers, who have no understanding of the challenges of an aging population. They think that everybody is like them, able to see small fonts, remember complicated passwords, able to press this and press that in record short time. They only succeed in locking out the genuine owner but not the dedicated robber so they make it increasingly complicated when it is unnecessary when there are simple solutions practiced in other countries. 

Security of online accounts

28 July 2012 

Editor, Voices
Today Paper

I refer to the report "Singaporeans putting their online accounts at risk" in Today 

It quoted a survey by an IT solutions company Assurity Trusted Solutions that many users do 
not adopt security measures, such as changing their passwords at regular intervals.
I wish to give my views about IT security, so that the website administrators and regulators do not go
overboard in addressing this issue:

  • Many online accounts, especially those used for social networking,
    do not contain critical information
  • It is not practical to ask users to change their passwords at regular intervals, as they have to
    several dozen online accounts 
  • For transactions that have financial or legal impact, it is sufficient to use a second factor
    authentication, or to ask the user to enter a second password.
There is still the risk of unauthorized hacking into online accounts that do not have a high level of 
security. It is better to clarify that hacking is a criminal activity, similar to a burglar entering
into a private residence.  Many hackers may not be aware that they could be charged for this crime.

Tan Kin Lian

Singapore Flags at Cactus Crescent

One third of the houses at Cactus Crecent, where I live, are now displaying the Singapore flag for National Day. I wonder if they read my earlier blog (where I said that few houses are displaying the flag) or it is just that National Day is now approaching. 

Tuesday, July 31, 2012

Consumer Guide to Insurance

The slides have been updated to include more topic. The talk will 
become more interesting. Read the slides now and enrol for the talk.

Did you buy the right life insurance policy? What do you terminate
a bad policy and take a loss now? 
You can find the answer to these questions at the FISCA
educational talk - Consumer Guide to Insurance.

Here are the slides for the talk

You can register for this talk here:

Review the CPF minimum sum scheme

27 July 2012 (not published)

Editor, Forum Page
Straits Times


When the CPF Minimum Sum Scheme was introduced about 25 years ago,  it was kept at a 
modest level. Many members were able to take out a meaningful portion of their CPF savings on 
reaching age 55, sum after setting aside the required sum for the future.

Over the years, the minimum sum had increased significantly. Many members are not able to 
take out any CPF savings on reaching age 55. The lower income members looked forward to getting 
some of the savings for a long awaited vacation or to pay off some debts.

When told that the minimum sum is needed to provide for their future, they argued that
their immediate cash needs are more pressing. After all, it is their own 
money and they should be allowed to decide on their priorities.

I suggest that the strong views of these people be considered. Perhaps they should be allowed
to withdraw up to 30% of their accumulated savings on the recommendation of an approved 
financial planner  who  has gone through a financial needs analysis with the applicant.

Tan Kin Lian

Nostalgia - looking back 20 years

It seems that life was better two decades ago.

Provide better health care

Lucky Tan gave his view on providing better health care for the people. I agree with his philosophy and approach.

Investment Performance of GIC

Read my view on the investment performance of GIC (Singapore's wealth fund) in

An excessive sentence

I do not wish to show any disrespect to the court or to the judge or be accused of "scandalizing the court", but I feel compelled to express an honest personal opinion, without any ill intent.

I find the sentence of 12 weeks jail meted out to Mr. Howard Shaw to be excessive (article here). He has given his reason for his mistake (in engaging in sex with an under-aged girl). He should have been given the benefit of the doubt, unless there are strong evidence to the contrary.

I hope that he will be successful in his appeal and the jail sentence should be squashed. I do not wish to condone the wrong doing, but I strongly feel that the punishment must befit the crime and that, under the circumstances, the sentence had been excessive.

I write this blog to express my empathy to Mr. Howard Shaw and his family in their time of distress, and to wish them all the best for the future.

Monday, July 30, 2012

Hobbies for retirees

Hi Kin,

Just writing to say how much I enjoy reading your site. We at recently published an article, 8 Perfect Hobbies for Retirees”, that we think is tailor-made for your readers. Here’s the link: (

If you agree, it’s our hope that you’d be willing to pass it to your readers. Whatever you do, keep up the great work! We’re big fans.

Mediacorp ME Club

Well done to Mediacorp for this creative idea of setting up a club, called the ME Club. It is excellent execution and to give a reward for their loyal fans. Wish them all the best!

Leadership must be a conversation

I like this article in Today paper.

I hope that our leaders are reading it. In case they forget, the conversation must be with the ordinary people and not with just one man.

Invest in gold

Should you invest a certain portion of your portfolio in gold? My view is "yes". Read my comments in

Posting in
I agree with the recommendation of this analyst to invest 10% to 30% in gold, as a hedge against the possible turmoil in the financial market. As the price of gold is 15% below its recent peak (US$1,900), it is quite a safe entry point

Review the COE bidding system

28 July 2012 

Editor, Voices
Today Paper

I agree with the decision of the Land Transport Authoirty (LTA)
to take taxis off the bidding system for the Certificate of Entitlement (COE).

This bidding system which was introduced to control the growth of the 
vehicle population has also produced erratic and undesirable results.It has 
also given opportunity for speculators, mainly car dealers, to profit at 
the expense of consumers.

Several attempts were made over the years to tweak the system to
address the undesirable outcomes. It is time to look into the underlying flaws 
of the system and to look for a better alternative.

I suggest the following approach:
  • The COE prices should be fixed by the LTA taking into
    account the supply and demand
  • If the demand for the COE exceed the supply, the COEs will be
    allotted by ballot.
  • To prevent speculation, any transfer of COE within one year
    should be subject to payment of a fee
Let us have responsible people make the judgement on the appropriate COE 
price, rather than leave this matter to the vagrancy of the market and

Tan Kin Lian

Read this view by Chua Chin Leng

Please in my backyard (PIMBY)

How to get the community to accept public facilities in their backyard. Use better communication!,-hello-PIMBY

MyRetirement Policy

Dear Sir,

I wish to seek your advice on the MyRetirement policy by Aviva being sold in DBS. My wife and i are actively searching for places to grow our nest egg in order to retire comfortably. We were enticed into the DBS branch at IMM and it seem a deal too good to be true.

It is a "8-pay" endowment policy whereby, we will have to pay monthly or annually a premium for a total of 8 years. After which, we will not have to pay any more and it is this period when we dont pay till our retirement age, 50, 55, 60, 65. It seems the later we claim back our policy, the lessen a premium we pay. 

Our policy was like, we pay monthly 833 for 8 years and we will get a payout of 1,000 monthly for 10years from 50-60, 55-65. there is also a lump sum payout after that.

Can you help to advise if the policy is worth considering? If all these savings and endowments are not useful, can you help to point us to the right investment direction? Many thanks !

You can use an Excel spreadsheet to calculate how much your money will earn for you if you are able to earn a yield of 4% on your investments. You can credit your yearly savings with interest at 4% and draw out the payout yearly based on the illustration giveny by Aviva. If there is still remaining money after the last payout, it means that you can get a better outcome by investing on your own to earn 4%. 

To learn about a better way to invest the money, you can attend the talks given by FISCA,

How to buy TKL books

Hi Mr Tan 

I am a business student from NTU and I am highly interested in purchasing some of the books written by Mr Tan. Unfortunately, the additional $3 handling fee is quite a turn-off. May I know if there would be any opportunities to buy the book directly from a bookshop or from the store? Thank you.

You can come and buy them from my office and save on the handling fee.
My office address and direction can be found at

Loss on life insurance policy

26 July 2012 
Editor, Forum Page
Straits Times
Mr. Neo Chern Siang (ST 24 July) said that policyholders who wish to discontinue their life insurance policies have the option to take a policy loan or to convert to a paid-up policy, instead of surrendering their policy.
These other options generally do not help a policyholder who is financially stressed. The policy loan carries a high interest rate, and can eat away the cash value quite quickly. The paid-up policy generally gives a poor yield on the cash value.
The root of the problem is that a life insurance policy is an unsuitable tool for financial planning in an era where jobs and financial needs are uncertain. If the policyholder cannot pay the regular premium, the policy has to be surrendered at a big financial loss to the consumer.
This financial loss is caused by the high distribution cost that is taken away from the premiums paid by the consumer. This distribution cost can amount to almost two years of the premiums!
Financial advisers and insurance agents are doing a disservice to the young people by asking them to commit to the inflexible saving plan in the form of a life insurance policy that has a large front-end charge to pay for the high cost of distribution. Like Mr. Neo, many of them have to face the hard decision of taking a loss on their hard earned savings.
Even if the policyholders continued the regular savings to the maturity of their policies, they get a poor return on their savings, due to the high charges that were usually not explained to them upfront. When they found out about these charges at a later date, there were already locked into the policy.
A better choice is for the consumer to buy a term insurance policy to provide the protection against premature death and to invest their savings in other forms that can give a higher return that provided by the traditional or unit linked policy.
I hope that the Financial Advisory Industry Review (FAIR review) set up by the Monetary Authority of Singapore will look into this issue of the losses on terminated life insurance policies and find effective ways to address it.
Mr. Tan Kin Lian
Financial Services Consumer Association

Sunday, July 29, 2012

Test on Financial Planning and Insurance

Test your knowledge of financial planning and insurance. See if you know the correct answer to these 10 questions.

Autumn Leaves in French

Sung by Yves Montard.

Sung by Edith Piaf (English and French)

Sung by Petula Clark


C'est une chanson, qui nous ressemble
Toi tu m'aimais et je t'aimais
Nous vivions tous, les deux ensemble
Toi que m'aimais moi qui t'aimais
Mais la vie sépare ceux qui s'aiment
Tout doucement sans faire de bruit
Et la mer efface sur le sable les pas des amants désunis

Translation (Google Translate)

It's a song that we like
You loved me and you I loved you
We all lived, the two together
That you loved me me who loved you
But life separates those who love
Softly without a sound
And the sea erases on the sand the footsteps of separated lovers

Empty seats at Olympic Games

The organizing committee of the London Olympic Games is embarrassed about the empty seats, as the public seats had been sold out early. They suspect that these are seats allocated to sponsors that did not take up the tickets.

This situation is experienced by many organizers of big events. By giving out the batches of tickets to sponsors, there is a high risk that the tickets could be lost or distributed. A better way is to distribute the vouchers to the sponsors, who pass the vouchers electronically to their guests. The guests can use the vouchers to claim the physical tickets.

The chance of the ticket being lost is reduced. If the holder reports a ticket to be lost, a replacement can be given for a fee.

Quality of Life and Fertility

AWARE said that improving fertility requires the quality of life to be improved. I agree with this view.

Forex trading

You can learn forex trading without paying a hefty fee.

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