Friday, December 02, 2016

Learn about annuities

Some time in the future, you are likely to ask the question, "Should I invest in an annuity"?

You can learn about the three types of annuities from watching this short and educational video.

Here is the direct link

Wisdom of the Crowd website

I create the Wisdom of the Crowd website to allow Singaporeans to vote on relevant issues.

Here are the issues that need your vote now.

We need more votes to get more credible results. Please help to achieve this goal.

Here are the results of the issues that have closed recent. You can see how Singaporeans feel about these issues.

Thursday, December 01, 2016

I remember the transport minister

I am reminded of the transport minister, Khaw BW, on two occasions today.

At the bus stop in the morning, I checked the app for the arrival time of bus 163. It said 12 minutes. I must have just missed the earlier bus.

No. The next bus arrived in 2 minutes. It probably had a faulty GPS tracker and could not be located by the app. This fault has probably been undetected for several years.

I took the bus in the late evening. It was dark. I could not see the bus stops along the way. I went to the exit area to watch the bus stop being displayed on the fare meter.

I went there too early and had to wait for a few stops before arriving at my destination.

I am disappointed that the minister does not pay attention to fix this issue. Can a civil servant monitoring my blog pass this message to the transport minister?

If Donald Trump were the prime minister, he would have told the transport minister - "You are fired".

Beware of the Effect of Deduction

A policyholder invest $10,000 a year in an investment linked policy. The benefit illustration showed following projected values at age 65 (after 40 years) based on a projected yield of 8%.

Non-guaranteed surrender value $1,060,000
Effect of deduction                      $1,792,000

The "effect of deduction" is the difference between the accumulated premiums and the surrender value.

What does this mean? It means that the accumulated premiums is $2,852,000. It means that the policyholder could get $2,852,000 by investing the same annual premium of $10,000 a year on his own.

Find out more here:

Applying for a job

The economy is slow. Employers are not increasing their workforce. There are many job seekers but only a few job vacancies.

Employers are still posting job vacancies. However, job seekers suspect that they are not genuine postings. In some cases, the jobs are fictitious and are posted by employment agents to collect resumes of potential candidates.

The job seekers find it to be a waste of their time. They have given up applying for these jobs.

The real employers are also discouraged. When they put up a posting, they get many applications from candidates who are discouraged and are not really trying hard to get the job.

What is the solution? How can a job seeker find out if the posting is genuine or fake? How can employers find out if the job seeker is really interested or just trying his or her luck?

Unusual arrangements

Aun Sung Suu Kyi is the State Counsellor of Myanmar. My friend explained the powers of this office.

Under the Myanmar constitition, which was drafted by the military junta in power, ASSK is bared from holding the office of President because her children are non-citizens. This provision was drafted primarily to exclude her from this office.

Her political party won a landslide victory and had overwhelming control of Parliament. They could not change the constitition because it required 75% vote of Parliament and 25% of the seats are reserved for the military. In effect, the MPs appointed by the military is able to block any change to the constitution.

In Myanmar, the President is appointed by Parliament. ASSK party decide on the President but she is barred from holding this office according to the constitution.

The ruling party passed a new Act of Parliament to set up the office of State Counsellor. They gave this office more power than that held by the President in the constitution. This turns out to be an embarrassment to the military. It is a way to recognize that ASSK is the real power in Myanmar.

In some aspects, our constitution in Singapore on the Elected President has some similarity to the unusual arrangement in Myanmar.

Our Elected President has to refer to the Council of Presidential Advisers on some of its important decisions. The real power could lie with the Council, rather than the "Elected" President.

There is also the arrangement for our Elected President to be "reserved" for a certain minority group. This is our way of barring certain people from contesting the election.

Danger of the upfront bonus

If an agent sells you an investment linked policy that provides an attractive upfront bonus, you must avoid it. Many people have bought the policy for the bonus but did not realize that they have to pay back for this bonus in the additional charges under the policy. To make matters worse, even their own savings can be at risk, if they do not carry out the policy for 25 years or longer.

This is explained here:

Wednesday, November 30, 2016

National Service needs to be reviewed

A taxi driver has 3 sons who have served national service. They are all not married. The eldest is over 30 years old.

He said that in Taiwan the compulsory military service is only 1 year.

I checked Google and found that Taiwan intends to stop military conscription and move to an all volunteer army. This change was supposed to be implemented in 2014 but had been delayed. After that, all males will spend only 4 months in boot camp for military training. That is all.

Taiwan faced the threat of involuntary "unification" with China. Yet, they considered that one year of compulsory military service is sufficient.

Singapore continues to require two years of compulsory military service. Including waiting time, the males are disrupted three years of their working career. They also have to spend one month each year on continuing training.

Many NS men said that they have little to do during their second year in full time NS. They just waste their time waiting to be discharged, or have to prepare for National Day Parade.

To make matters worse, our males have to compete with foreigners who do not have this obligation. It is like asking our males to compete with foreigners with their hands tied behind their back. The males in Taiwan do not have this kind of competition.

When will our government realize that this policy needs to be changed?

Ordinary people's views on the current issues

What do ordinary people think about the issues that affect our lives? You can see the results here:

A word of caution. If there are less than 25 votes, the results are lopsided. If there are more than 25 votes, or better still more than 50 votes, the results are quite reliable.

To get more reliable results on your issues, you have to play your part. You should also submit your vote on these issues. It is easy to give your vote. Just click on this link or on the "Vote" tab.

Educate yourself on financial matters

I have put in much effort to explain complex financial contracts, such as an annuity or insurance product, in simple terms. Some people do not want to watch the videos or to read the article. They just want an answer to their question, "Is it good or bad"?

This reflects a lazy attitude. They are likely to be scammed. If they make the effort to watch the video or read the article and are still not sure, they should attend a talk.

Due to their laziness, many of them get scammed and lose a few thousand dollars, or more. It is sad, but this happens to many people.

Here are my videos and articles:

Payout under CPF Life

I have obtained some quotations on CPF Life. It shows the payout rate for a person at age 65 under the standard and basic plans, and for a male and female. This payout rate is useful to judge the annuity that you can buy from the market using your non-CPF savings.

If the "private annuity" offers a payout that is similar or better than CPF Life, then it is "worth buying". If it offers a lower payout, it may still be worth buying, if the difference is small. The reason is that the CPF annuity gives a payout that is based on a yield of 4%, but the private annuity is likely to give a slightly lower yield.

However, if the difference in payout is more than 10%, it is better to invest your savings in other types of investments, such as an index fund (ETF).

Investing in an annuity

I have often been asked if it is good to invest in an annuity. There are three types of annuities. This is explained in my video that is available here:

I have also given a tip on how you can source for the best annuity plan that is available in the market and how you can judge if this plan is "worth buying".

Strong action by Indonesia Central Bank

This incident happened a few years ago in Jakarta. A private banker working for a foreign bank forged the signature of the client and withdraw his money without his consent. She was doing it for a few years. Finally, she was caught.

The Indonesia Central Bank suspended the licence of the foreign bank on wealth management for two years. The bank was not allowed to take any new private banking clients during the period of suspension.

My friend told this incident to me. My remark "The central bank is fierce". I wonder if the MAS in Singapore would take similar action against a bank if the private banker forged the signature of the client over an extended period and the forgery was not detected by the bank?

Ties with China

The foreign minister, Vivian Balakrishnan, is quoted as saying "We will not let one event affect the ties with China".

Somehow, this statement does not sound right. It is usually used when both parties are equal in stature or from a bigger party to a smaller one. It is not used by the party that is smaller in stature. This statement smacks of arrogance.

A better statement will be, "We will meet to clear the misunderstanding". 

Tuesday, November 29, 2016

Results of the voting are now available

The results of the voting on 5 issues are already available:

a) Is the government or parents responsible for the paper chase?
b) Do the people support the Internal Security Act?
c) Will Chan Chun Sing be a good future prime minister?
d) Has Dr Tan Cheng Bok been unfairly excluded from the presidential election?
e) Does the reserved election help to preserve racial harmony.

View the results at

Monday, November 28, 2016

Avoid a policy that gives you a high upfront bonus

Many people bought an investment linked policy that offers an attractive upfront bonus.

They were attracted by the bonus, which was sold to them by the agent, but did not pay attention to the high surrender charge. Most of them regretted their decision and had to lose a large part of their savings or to continue the plan over 10 to 20 years to get a poor return.

This is the feature of the Vista policy sold 5 years ago. Now, there are other policies that have similar features, such as the Pulsar policy that is being sold now.

Get more information from:

Singaporeans are generally optimistic about Donald Trump

It may surprise you that the ordinary people in Singapore are quite optimistic about Donald Trump being the next president of America. This is reflected in the results of several voting issues concerning Donald Trump before and after his election. You can view the results here.

Results on three issues are ready for viewing

The results of the voting on three issues are now ready.

a) Chan Chun Sing as a future prime minister
b) The changes on the Elected President is targeted at Dr. Tan Cheng Bok
c) Is there a need to reserve the election for a Malay candidate?

You can watch the results at

Make a guess before you see the result. You will know if your judgement follows the "wisdom of the crowd".

Sunday, November 27, 2016

New issues for voting

You can vote on these issues:

a) Vivian Balakrishnan is performing well as Foreign Minister
b) The Singapore economy will recover quickly
c) President Tony Tan's state visit to Japan is useful.

Vote here:

Singaporeans think Hillary Clinton will not be charged

Will Donald Trump appoint a special prosecutor to investigate Hillary Clinton, as he had promised during the campaign. The majority of Singaporeans have voted that he will not pursue this matter. See the breakdown of the result at

When you visit the website, spend a few minutes to vote on the other issues at we need more votes to get more credible results.

ILP policy with attractive initial bonus

Beware of an ILP policy that gives you an attractive initial bonus. Many customers were attracted to the Zurich Vista policy 5 years ago, and they learned about the high surrender penalty later, and their money was locked up.

Recently, a policyholder approached me for help with the AXA Pulsar policy. It looked quite similar to the Vista policy.

Find out more at:

Jetstar may lose a long time customer

Jetstar may lose a long time customer.

I have been travelling to Jakarta on Jetstar for the past 8 years. I am familiar with their website and their self service kiosk. I also use Jetstar when I travel to Kuala Lumpur and Bangkok. Their fares are competitive.

A few days ago, I wanted to book a ticket to Kuala Lumpur. The fare was $310. It seemed very high. It could be due to the December school holiday.

I looked for alternative and finally booked a VIP bus to Kuala Lumpur for less than $70 return. It seemed to be a good option. I will probably travel by bus as the first choice in the future.

Yesterday, I booked a flight to Bangkok. JetStar wanted to charge over $300. I looked for an alternative and found Tiger Air at $220. So, I booked Tiger Air.

I also searched Tiger Air and find that they also provide flights to Jakarta for the same price as JetStar. Their travel times are more convenient. In the future, I might fly Tiger Air to Jakarta.

Previously, I was reluctant to use Tiger Air because their website was "troublesome" for the first time user. Having overcome this initial hurdle, I do not expect similar problem in the future with Tiger Air.

Lesson for Tiger Air - simplify your website. Make it easy for the first time customer. Otherwise, you are chasing them away.

Lesson for JetStar - keep your long time customer. Once you chase them away with steep pricing, they will find an alternative. And you may lose the customer forever!

Nobody bothered to use the CPF calculator?

I used the CPF Life Payout Calculator to calculate the payout for males aged 55, 60 and 65 and for females age 55, 60 and 65. The calculations were produced for age 55 and 65 and crashed for age 60. Clearly, there is something wrong with the calculation for age 60.

Errors can be expected. But the CPF Life Calculator has been put up for more than a year. Does this suggest that nobody used the calculator for age 60 during this time?

If this is the case, it is embarrassing. The government designed a convoluted scheme and nobody bothered to work out the sums. Is it so bad?

CPF Life Payout Calculator crashed

I intended to calculate the monthly payout and bequest for CPF Life using $150,000 of savings for a male age 65, 60, 550 and for females age 65, 60 and 55. This is to allow me to put up a table to explain to the public about how the CPF Life scheme, so they can decide on which plan to select.

I visited the CPF website. I found the CPF Life calculator. I entered the form to calculate the payout and the bequest under the Standard and Basic plans for a male age 65. I clicked on "Calculate".

It took a long time for the CPF website to return the results. I can understand why it took a long time. The calculation was complicated.

I resubmit the form for a male at age 60. It took a long time to calculate. I received a message, "An error occurred while trying to serve your last request. We've noted it down for our technical team to have a look. Correlation ID: cb3c2390-a7bd-4cdc-ad70-c304cd890466".

That is the end of my exercise.

I do not understand why the government (particularly PM Lee HL) needs to design such a complicated scheme that most people cannot understand.

It is so complicated that their online calculate crashed, just to make the second calculation.

Three types of annuities

There are many different types of annuities, just like they are many different types of life insurance policies.

A life annuity is like a life insurance policy in reverse. When you buy a life insurance policy, your may a monthly premium over a number of years to get a lump sum on the maturity date or on death. When you buy a life annuity, you pay a lump sum and receive a monthly annuity payment over a number of years or until death.

There are three main types of annuity plans. This is explained at

What do Singaporeans think about Donald Trump?

After he won the election, Donald Trump has softened many of his campaign promises. The media said that he is "back tracking". But his supporters said that the is practical and needs to implement his goals gradually.

What do Singaporeans think? You will be surprised with the results of their votes. View the surprising result here.

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