Saturday, February 02, 2013

I sent this letter to the Straits Times, but they declined to publish it.

28 January 2013

Forum Page
Straits Times

I understand that our election regulations allow any of the candidates to request for a recount if the 
difference between the candidate with the most votes and that for any other candidate is two percent or less
than the total number of votes cast. 

The results of the Punggol East by-election held on 26 January was earlier scheduled to be announced
by 10 pm. but was delayed due presumably to a recount. I had, therefore, expected to results to be quite close, 
with a margin of less than two percent between the top two contestants.

I was surprised that the margin was more than 10 percent. 

I like to ask the Election Department, if there was indeed a recount, and the reason why it was allowed, 
in infringement of the election regulation? If there was no recount, why did the results take so long to be 

Tan Kin Lian 

Get a better return on your CPF savings

Someone asked me to write about CPF.

He said,
"Most of CPF goes to ordinary account- buying government bonds and the return is 2.5%. i think this is terrible policy. Long term retirement savings should be partly invested in the stock market. ST index went up 20% this year and we stuck with 2.5% on the ordinary account.
Not everyone has high salary to save privately beyond what we get in CPF. Many people will not have enough to retire. this disaster is waiting to happen."

Here are my comments:

1. Most people use all of their ordinary account to pay for their HDB flat or private housing.

2. Those who do not use their ordinary account for housing has the option to invest their money under the CPF Investment Scheme into any of the approved investment scheme. They do not need to keep the money to earn 2.5% interest.

3. I recommend that they invest in the STI ETF (exchange traded fund) .This ETF earned a return of nearly 20% in 2012. Those who wish to know how to make this investment should attend the Talk on investments, organised by FISCA (

6.9 million population is a worst case scenario

The Prime Minister and Minister of National Development has now said that the 6.9 million population is a "worst case scenario" and is used for planning purposes. 

Normally, in planning purposes, one does not just put out one scenario, especially when it is the worst case scenario and is not described as such. 

There is also the risk that the tail will wag the dog. Having planned the infrastructure and public services to meet this scenario, a future Government is not likely to see these facilities being wasted, and will increase immigration to take up the vacant facilities.

It is possible to build according to our actual needs, but this has to be carefully managed.

It is better to set a lower population target (say 5.5 million) and allow the population to increase due to birth. For the next few years, we need to sort out the current problem of congestion on the road, pubic transport, hospital, schools, housing and other pubic services.

I would have preferred the Prime Minister to say, "We issued the White Paper to get the reaction of the public. The message is quite clear, that the people does not wish to have a congested place. We will ask the planners to rework out the scenario for a smaller population".

That would be more honest, isn't it?

Friday, February 01, 2013

Coping with high property prices

Many young people find property prices, including HDB flats to be too expensive. Here are some suggestions on how they can cope. 

1. Rent a room first. Choose a location close to where you and your spouse work. The saving in travelling cost and time can be significant. Many people are willing to rent out a room to a newly married couple with no children. 

2. Stay with your parents, if they have a spare room. They may welcome grandchildren, and can help to take care of them. Remember to pay them a rental also.

3. While renting a room, you can keep your savings in the CPF to earn interest at 2.5% per annum or invest them in a low cost index fund (such as the STI ETF) to earn a higher return. Build up the savings towards the down-payment for the property that you buy later.

4. Wait for the property price to drop, before you buy your home. In a property slum, the prices can drop from 30% to 50%. A slump can come once every 10 years or so. Be patient. The drop is likely to be more severe with condos and less with HDB flats.

5. Some people expect the next slump to be in 2015, when interest rate spikes up globally and there is a large supply of new units. I tend to agree.

6. Buy a property within 5 years of your family income and pay off the loan within 25 years (or shorter). Choose one that is smaller or located in a new town to fit your budget. Do not take the maximum repayment that you can afford now, as you have to allow for an increase of interest rate in the future.

I hope that these tips are useful to you.

Thursday, January 31, 2013

Medical Insurance for a child

Someone asked, "What type of medical insurance should I take for my child?"

The answer is - CPF Medishield. The premium for a child is only $33 a year. If you want to take a private Shield for treatment in non-subsidised wards, do not pay more than $70 a year.

You do not need to buy any rider to cover the deductible. You can pay the deductible from your Medisave account. It may cost up to $1,500 per year, but you only need to incur in once in many years.

The premium that you pay for the rider over the years is likely to be more than the amount claim - this is how the insurance company and the agent make their profit and commission.

You do not need to take critical illness insurance for your child, as the cost of treatment is covered by the Shield plan. Do not have duplicated coverage - it is not worth spending the money.

Here is the Medishield premium for various ages:

How does a life insurance company make profit?

Someone asked me, "How does a life insurance company make money after giving away high commission to the sales people?"

The simple answer is - by taking away a large part of the return that should go to the policyholder; leaving a poor return to the policyholder.

Take the example of a person who saves $6000 each year over 30 years. The total savings is $180,000. If the savings are invested to earn a yield of 5% per annum, the total accumulated amount would be $400,000. The investment gain is $220,000.

Now guess how much of the gain is given to the consumer? Typically, the consumer gets $80,000 and the insurance company takes away $140,000 to pay commission and other expenses and keep the rest as its profits.

A fair amount to be taken away to provide the insurance cover and the administrative services should be $60,000 and not $140,000. If the consumer decides to buy term insurance to provide the cover, the cost should be only $15,000.

Most consumers are not aware that they are offered a financial product that provides a poor return (about 2.5% per annum); as a large part of the potential gain is taken away as expenses and profit.

To learn how to make a better plan for your finances, attend the talks organised by FISCA ( Your future and your family's future depends on your taking this important step.

Consumer consulting - book a slot

Do you face any of the issues covered here?

You can book a slot for consumer consulting here:

Loyalty to Singapore

A few people ask me to write about the meaning of "loyalty to Singapore". 

Loyalty means that if the country calls on you, you are willing to come forward to serve the country. At times of war, it means the willingness to give your life to protect the sovereignty of the country. It also means that you are willing to speak out the good values and beliefs of the country. 

You should also be willing to lose financially, so that the country can benefit more than the sacrifice. This includes the payment of fair share of tax needed to run the country.

For the people to have loyalty to a country, there must be good values and beliefs shared by all the people. If there are doubts as to what the country means to the citizens, the doubts have to be cleared. People must know what they are fighting for.

The citizens have to be treated fairly and given a say in the future of the country. Loyalty is a two way street.

Does migration from Singapore mean disloyalty to Singapore. I do not think so. If a person migrates and takes up citizenship in another country, but is willing to answer the call to serve Singapore in times of emergency, that person clearly retains loyalty to Singapore.

Most countries are quite open minded about their migrating citizens and will welcome them back, if they wish to return. We have to adopt the same open-minded approach. 

Singapore's wealth funds

A few people have asked me to explain how GIC and Temasek are being funded. Some of them think that their CPF savings are tied to the performance of these companies. 

I must first declare that I am not really an expert in this area. You can take my comments as coming from a person who has been following the news over the years with some financial knowledge.

Temasek took over the shares of government linked companies that were previously held by the Ministry of Finance. These companies were set up by the Government during the early years of our development. The initial cost was low, but the companies have grown manifold over the decades. They include the telephone, power, transport and other utilities that have since been privatized.

If Temasek had continued on this model, they would have assets and no liability and would be very safe.

However, in recent years, Temasek had borrowed money by issuing bonds in the international market. This has increased risk for Temasek, but i think the scale is quite small.

While we read about some bad investments be Temasek causing billions of dollar in losses, we should also look at the good investments that made billions of dollar in gains. We should also look at the results over many years, instead of a single year.

Over a period of years, the results have been satisfactory.

GIC invests the budget surplus and foreign reserves of Singapore. They are required to invest outside Singapore. So far, their investment performance has been satisfactory, and follow the global benchmarks.

When there is a global crisis, the results of GIC will be impacted, but the performance should improve with a global recovery.

Some analysts, especially from independent sources and the social media, have published findings to show that the performance of these two companies have been mediocre, and not outstanding to justify the extremely high salaries and fees that were being paid. I agree with these sentiments.

Most of the CPF savings are invested in government bonds and are used for building HDB flats and national development. The CPF savings are safe. There is sufficient money to pay the monthly sums to those above 60 years.

The government chose to pay the minimum sum in monthly installments over a lifetime, in spite of the unhappiness of the general public. I agree with this decision, although there are valid arguments for flexibility in allowing early withdrawals under certain circumstances. I do not support the lack of flexibility.

I look forward to read other contributions.

Population White Paper - TKL views

I will now write to give my views on the Population White Paper and on the target of 6.9 million people by 2030. 

1. Singapore is already too crowded based on our current population of 5.1 million. Look at our MRT stations, trains and shopping malls next to these stations. - teeming with people. Already life is quite stressful in these crowded conditions; it will get worse. 

2. We do not need a big economy to create sufficient jobs for our people. For each size of population, we need perhaps 70% to be working in the domestic sector, i.e. education, health care, housing, safety, law and order, and the other 30% in the export sectors. Our competitive export sectors, e.g. airlines, tourism, high tech manufacturing, education, financial services, trading, etc, can provide these jobs.

3. We have some economic activities that create jobs of questionable value, i.e. selling of properties and financial products, speculation in shares , COE and casinos and money lending (look at the number of pawn shops). We do not need so many people to be involved in these activities - which may be harmful for the future. If some of these people are deployed towards the other sectors of the economy, there is no need for a larger population.

4. We have to get rid of the wasteful activities in our economy; they create jobs but do not improve the quality of life. I refer to the people involved in GST accounting (my favorite grouse), in bureaucratic inefficiency (e.g. payments by cheques, submitting returns to complicated government websites), disruptions of town councils management, and the excessive time spent in National Service (most countries have reduced to one year).

5. We can allow some immigration of quality workers (i.e. those needed by our economy) and families who are willing to immigrate and make a home in Singapore, and to serve National Service and other obligations like the local born. We can accept them for a short term, but they have to make up their mind beyond the initial period.

6. Our population will grow, but much more slowly and consistent with our ability to provide the infrastructure and public services. For the time being, we should keep the population steady until the overcrowding and lack of infrastructure is sorted out.

Wednesday, January 30, 2013

Best places for Singaporean to migrate to

Several people have asked me to comment on the best country for Singaporeans to migrate to. 

My top choice is Australia, followed by New Zealand and Canada. They are English speaking countries and easy for Singaporeans to adapt to. They also have a high quality of life and a good work-life balance, and a good climate.

My brother migrated to Australia 15 years ago. I have seen how he adapted to the new lifestyle and how his two children grew up in their new environment. They love their new home.

I have also met many local born Australians. They are considerate, helpful, positive and broad minded people. This is a general observation; there are certainly exceptions.

The Australians have a term "fair-go". They believe in treating people fairly and helping others to succeed.

Taxes in Australia are high, but most people do not mind, as they have a high minimum wage, high wages and good welfare benefits. Net of tax, they have enough to live a comfortable life with good work-life balance.

I believe that high taxes is good, if the taxes are used to provide the health care, education, short term unemployment benefits and other public services. Most people need these services, which can be provided more economically by the state, using the principle of collective purchasing of the services.

I am sure that it is not all rosy in Australia. It should be possible for someone to bring up some parts of the life in Australia that is wrong. There is no perfect system that suits everyone. But, generally, I find the Australian system to be a good model; a good balance between capitalism and community.

For young Singaporeans who have a chance to migrate to Australia, I would say, "Take it". You have a high chance of making it there.

For those who stay back in Singapore, I would say, "Singapore is not too bad either". We can do well here, also.

It would be better, if our government change some of its policies to follow the good examples in Australia, such as more social welfare and welfare of workers. In spite of the obvious differences (i.e. large country with natural resources and small country with no natural resources), many good practices in governance can be applied to all countries.

Don't ask me how to get permission to migrate to Australia. Ask their embassy, or ask Singaporeans who have migrated there to give you some tips.

I welcome views on this topic, especially from Singaporeans who have migrated on the balance between the good and bad points of Australia.

Population White Paper - Lucky Tan's views

A few people have asked for my views about the Population White Paper. I will give them later.

Meanwhile, I like to ask you to read this article from Lucky Tan. Lucky is usually quite factual and objective in stating his views. He did a thorough research and write with strong reasons.

I recommend you to read his views and analysis and also to read the other articles in his website, "A Diary of a Singapore Mind". He has a strong following.

Consultancy on submission of claims

Many consumers had their claims rejected for reasons that they felt to be unfair, e.g. alleged non-disclosure, unclear exclusions and other factors.

They lodged complaints to FIDREC, MAS and their MP. It got nowhere. They did not receive any reply or get directed to go somewhere else.

Often, the consumer failed to write a proper report to submit their claim for a review. If you encounter this difficulty, it is best that you get assistance to write a proper claim report.

Read this:

Singapore Conversation

A wrap-up session
involving more than 100 grassroots leaders
will be held tomorrow.
Lim Swee Say and Heng Swee Keat will be attending the event.
From next month to March,
the PA and grassroots organisations plan to organise more sessions
with the aim of engaging some 1,000 residents.

Tuesday, January 29, 2013

Party in Hougang

Mr. Feed shows a video of the party in Hougang during by-election night

Let the banks fail

Bright Words

Rearrange the letters to form the right word to match the definition. Compete with your friends. Improve your vocabulary by regular practice.

Amazing numbers

Amaze your friends by your ability to "read their mind" and guess the secret number that they have chose.

Moby Pal - light weight, easy to use and fast

Do you like to have an app that helps you to find you car, send a security photo (when you are in an unsafe place) and help you to find someone to share a taxi? It also help you to send a pre-set SMS message to call someone, to get a return call, or when you arrive late. This app is light-weight, easy to use, and fast to run.  It is called Moby Pal.

Invest in an indexed fund

 often get questions on how to invest their savings to get a decent return, as the 0.2% from the bank does not match inflation. My answer is still, "invest in an indexed fund". Read this:

Moby Pal

A app to help you use your mobile phone better.  Allows you to send pre-set SMS messages, find where you park your car, take security photo and share a taxi.

Alternative to elitist thinking

PM Lee said that a good mix is needed for the PAP team. But he lamented that it is difficult to find people who can both connect with the ground and come up with good ideas.

Why does he still persist in elitist thinking? 

We mainly need to elect people who can connect with the ground to understand what are the needs of the people. He can trust the "wisdom of the crowds". 

The ordinary people are not daft. They know that nothing is for free. They are willing to work hard. But they want to be treated fairly, to know that the reward from their hard work should be sufficient to give them a decent standard of life. They should not be stressed by high cost of living and housing.

The elected leaders do not need to be smart enough to find the solutions. They need to be smart enough to get the knowledge of the people with the expertise, experience and passion. This will produce a better outcome. It will also produce the flexibility to make changes, based on actual experience, and not on theory.

If the leader comes up with ideas on his own, they are likely to be bad ideas, and being his idea, the leader will refuse to recognize the failure and will persist in that idea. He will also refuse to allow other ideas to be tried. We have seen this kind of thinking in many of our failed policies.

If PM Lee persist in his elitist approach, he will continue to fail and things will continue to worsen.

Monday, January 28, 2013

Punggol East results

Lucky Tan gives his views about the results in Punggol East

How an alternative government can run Singapore

I wish to give a scenario in the future, where an alternative government is elected to run Singapore. While it create chaos? Will Singapore's future be damaged?

Let me first state that this scenario is not likely to happen in the foreseeable future. But in risk management, it is better to prepare for this scenario. And, if the unexpected happens, we do not need to panic.

Let us look at the example in Hong Kong when the British had over the government in 1997 to Communist China. Did Hong Kong collapsed? It did not. In fact, Hong Kong continued to prosper and to find a better solution for its people.

Let us go back to 1957, when the Peoples Action Party took power in Singapore, with the backing of the left wing faction. The leaders were inexperienced in government at that time. We found the right approach that suits our circumstances then, and made our progress.

The lessons to be learned from both examples are:

a) Keep close to the ground
b) Tackle the problems that affect the people most
c) Do not be afraid to use talents external to your political party

A new government is more likely to abandon the old policies that have failed and to try new policies. The incumbent will continue to stay with the old policies, hoping to "tweak" and "calibrate" to make them work, often without success.

Here is a practical solution for a new government that do not have experienced ministers. They can form an advisory committee for each minister.

The members can be drawn from people who have vast experience in the domain, and do not have any existing vested interest. They could be civil servants, business, political or social leaders who have since retired and now have time to give their counsel.

In America, the President formed a council of economic advisers to advise him on economic matters, and a national security council to advice him on security matters.  This can be a good model for the advisory council for our "inexperienced" minister.

I suggest that this approach can also be adopted by our current government, under the Peoples Action Party. They have to find new ministers all the time. These new ministers are inexperienced in their ministries. They can benefit from the experience and wisdom of the people recruited into the advisory council. This could be a good way for changes to be made.

The advisory council should be permanent, but the members can be changed from time to time. A standing council, rather than an ad-hoc committee, will be able to advice the minister more effectively.

Sunday, January 27, 2013

Puzzles and thinking

Try the puzzles in this worksheet for the talk - Puzzles and Thinking. Send your answer to I will check and reply to you. (No prize, sorry. but you do not need to pay any fee either).

PAP suffers 10.83% swing in Punggol East

Workers Party win by a big margin

History in the making

Here is another view, from a former member of the establishment

Payback time

Here are the views from Mr. Feed and a great video from the heartland of the Workers Party

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