Saturday, March 02, 2019

How to get a good return with low risk

Many people look for a good return with low risk. As they are not familiar with investing, they rely on a financial adviser. But that is usually a bad approach.


The financial adviser has to earn a living. They give their advice and earn a commission on the financial product that is sold to the retail investor. The commission and the profit margin of the financial institution reduces the yield of the investor.

Worse, the financial product may instead by risky. The investor could lose a large part of the investment.

Here are some recent examples:

a) The retail investors in the preference shares and perpetual securities could stand to lose nearly 90% of their investment in what was perceived to be a safe investment in a national strategic asset (i.e. desalination plant).

b) Many retail investors bought dual currency investments recommended by bank officers. Some have lost all of their investment - due to leverage, i.e. borrowing money to increase the investment.

What can retail investors invest in safely?

I suggest the following:

a) Buy government bonds and be prepared to accept a yield of around 2%
b) Keep the money in the CPF special account and earn 4% (but the money is locked up for retirement)
c) Invest in the index fund for the long term - and do not worry about the market fluctuation. The risk is reduced through diversification.

To understand more about investing in the index fund, join FISCA as a member and attend the talk on financial planning.

Tan Kin Lian

Adopt a flexible approach towards negotiating the water agreement

I suggest that Singapore should adopt a flexible approach towards negotiating the water agreement.

Friday, March 01, 2019

Why I strongly advocate that GST be abolished

I have advocated on several occasions that GST should be abolished in Singapore. Some people think that I am being "populist". They also think that it is not possible for the government to abandon this revenue source.

Let me explain my thought process.

WOTC - CPF withdrawal

I asked this question in the Wisdom of the Crowd:

Which change do you prefer for the CPF withdrawal..

Here are the responses: (42 Votes)
45 % - Allow withdrawal at 55 without any condition.
40 % - Allow savings to be kept from age 55 on 1, 2 or 3 year term at an attractive interest rate.
10 % - Allow withdrawal at 55 subject to mandatory financial counselling.
5 % - Keep the current CPF rules and allow withdrawal from 65 or 70 years.

See the pie chart at:

WOTC - Separate form for Merdeka package

I asked this question in the Wisdom of the Crowd:

Should a separate fund be created to meet the future cost of the Merdeka package?

Here are the responses: (38 Votes)
45 % - We are creating too many special funds that are difficult to manage.
29 % - There is the risk that scams will be created to target these special funds
16 % - It is better for the social programs to be met from the annual revenue, rather than pre-funded.
11 % - It is a good approach to ensure that the future cost is pre-funded.

See the pie chart at:

Thursday, February 28, 2019

Treating foreign workers in A class

I read a letter in the Straits Times that an employer was quoted a fee of $15,000 to $18,000 to send a foreign maid for surgery that was expected for 5 days. This was probably the rate being charged in A class ward.

I find it ridiculous for the foreigner worker to be sent to A class ward for treatment at the employer's expense when a local worker is probably treated in C class.

Unwanted calls appear to have dropped

The number of reports to this website (Do Not Call register) has dropped in recent weeks.

It could be due to less marketing calls being made now. I have personally received many calls before, and have not received any calls in recent weeks.

Perhaps the companies engaged third parties to make the marketing calls decided not to go slow.

Maybe, the calls are still being made, but the recipients are not reporting them, as before.

Anyway, if you receive an unwanted marketing call, remember to report here:

Budget 2019 - National Defence

Here are my views about budget 2019 on national defense. National defense is important for Singapore. We should put adequate resources on national defense but not excessive resources at the expense of other social and economic needs.

Do you agree?

WOTC - Cost of health care

I asked this question in the Wisdom of the Crowd:

How can we deal with the high cost of health care?

Here are the responses: (40 Votes)
68 % - The govt should set prices for various treatments that are paid under Medisave and Medishield.
25 % - The govt should build more capacity to increase the supply of health care treatment. 
5 % - Create more funds to provide subsidies .
3 % - Provide more cash top-ups to Medisave and Medishield accounts.

See the pie chart at:

WOTC - 3M system

I asked this question in the Wisdom of the Crowd:

What are your views about our 3M system - Medisave, Medishield, Medifund

Here are the responses: (44 Votes)
45 % - It is too complicated for patients and health care providers
43 % - It is a broken system.
9 % - It has led to escalation of health care cost.
2 % - It is a good system that has served us well.

See the pie chart at:

Wednesday, February 27, 2019

Why charge $100 for medical report?

Recently, two incidents shocked me after my domestic helper was admitted to Changi General Hospital for surgery.

First, upon admission, I was quoted an estimated charge of $15,000 to $18,000 for a five-day stay in a Class C ward.

Review security at educational institutions

Someone said:

The recent fight that broke out at the Institute of Technical Education (ITE) College West and involved a dangerous weapon (Girl arrested for attacking another girl with dangerous weapon at ITE College West, Feb 22) is the latest in a series of safety lapses at our educational institutions.

It follows the murder of an ITE director at the ITE College Central campus in 2018, the scuffle involving students in a Temasek Polytechnic lecture theatre in 2018, the fight between 20 ITE students near a construction site in 2016, and the slashing attack at ITE College West in 2015.

The Ministry of Education urgently needs to review the safety measures in place to protect lives in our educational institutions.

Promote democracy through the social media

I saw an article in the Economist that describe the new govt in Cuba using social media actively. The article said that this is a good step but it is better to have democracy.

I have this perspective.

Promote democracy through the social media

I saw an article in the Economist that describe the new govt in Cuba using social media actively.

The article said that this is a good step but it is better to have democracy.

I have this perspective.

It is a good step to have active communication through social media.

It allows the people to share information and to hold the govt accountable. It also improves transparency and reduces corruption.

However, there is a negative side to social media. It can also be manipulated with "fake news" or "disinformation".

People with money and resources could pay other people to use the social media for disinformation.

What can be done to promote the good use of social media and to prevent the abuse?

The first step must be to register an authenticated account. We should stop the use of unauthenticated accounts.

When a person speaks in public, he has to use his real identity. We should also expect the same standard with the social media.

There are people with a genuine grievance that needs to be aired out. He does not wish to reveal his identity. For example - a whistle blower.

We have to allow the people with genuine grievances or valuable information to reveal them. This can be done by providing a channel where they can provide the information and still keep their identity secret.

If there is an avenue for genuine grievances to be provided without fear of retribution, the social media should be used to air opinion by authenticated people who should use their real identity. It will stop the abuse of social media to spread lies and misinformation.

The spreading of misinformation is not only done by anti-establishment people. The establishment in many countries also engage in this activity. It is sometimes described as "propaganda".

A good way to promote democracy is to allow information to be shared in a responsible manner. It will improve transparency and accountability.

I like to see an avenue for people to register and authenticate a real identity and to give their views. I see the steps taken in Cuba to be a helpful step.

Tan Kin Lian

Huawei and US govt

Bloomberg: Cybersecurity. Huawei Trolls U.S. on Spy Claims With a Jab at Snowden…/u-s-huawei-wage-war-of-words-at…

Earlier in the day, Huawei’s rotating Chairman Guo Ping delivered what might have been his boldest defense yet to U.S. accusations that the Shenzhen-based company’s products could be used for espionage. The U.S. had “no evidence, nothing” to back those claims, Ping told a a packed main auditorium.

Ping even went on the offensive, pointing to a U.S. federal law that compels U.S. tech companies to provide law enforcement officials with requested data stored on servers -- even if they’re located on foreign soil.

“Prism, prism on the wall, who is the most trustworthy of them all?" Ping asked, drawing laughter and scattered applause. “It is a very important question and if you don’t answer that, you can go and ask Edward Snowden.”

Snowden, a former National Security Agency subcontractor, leaked documents revealing the NSA’s use of U.S.-made telecom equipment for spying.

Carriers including Deutsche Telekom AG, Telefonica SA and Vodafone Group Plc have used Huawei’s equipment for years and they’re about to spend billions of dollars on building fifth-generation wireless networks. So at MWC Barcelona, phone executives are trying to speak with one voice, warning that they need access to several suppliers and that banning Huawei risks delaying 5G in the region.

WOTC - Views about Merdeka Generation Package

I asked this question in the Wisdom of the Crowd:

What are your views about the Merdeka Generation package?

Here are the responses: (47 Votes)
45 % - It is better for the government to control the health care cost, rather than allow it to keep increasing.
40 % - I prefer the government to provide the same benefit for every person 65 years or older, rather than have different benefits for different generations.
15 % - It cost $8 billion but the citizens get so little. 
0 % - It is a good package of benefits. 

See the pie chart at:

WOTC - Views about Budget 2019

I asked this question in the Wisdom of the Crowd:

What are your views about Budget 2019

Here are the responses: (51 Votes)
51 % - It is a way to buy votes for the next general election.
47 % - It does not address the key challenges facing the economy and the livelihood of the people.
2 % - It addresses the concerns of the citizens.
0 % - It is a good budget.

See the pie chart at:

Budget 2019 - health care

I gave the following suggestions on how to control our health care cost in my response to Budget 2019.

Tuesday, February 26, 2019

CPF policies should be simple and logical

Someone said:
I totally agree with Dr Ho Ting Fei's suggestions (Make full CPF payout by age 70, Feb 23).

The Central Provident Fund's (CPF) rules and policies should be simple and logical, instead of being complicated, confusing and potentially contentious.

If savings can be withdrawn from the Ordinary Account at the age of 55, then the same spirit should apply for the Retirement Sum, in that members should be able to withdraw it at the retirement age of 62.

What is the rationale for starting payouts at the ages of 65 to 70, when the minimum retirement age is 62?

Singapore must make its own decision on Huawei

As a former telecommunications executive, I find it interesting that the United States is encouraging its allies to ban Huawei products (Britain 'against' full ban on Huawei despite US urging, Feb 19).

Given Singapore's Smart Nation ambitions, we must show our independence in terms of assessment and evaluation of policies in the field of technology.

Budget 2019 - possible to abolish GST

I searched the MOF website for details of the revenue and expenses for Budget 2019.
I found many colorful charts and figures showing how the government is taking care of the needs of various groups of people. Here is an example.

I searched for the actual figures on the revenue and expenses. I wanted to see if it is possible to abolish GST and still present a healthy financial statement.

Here is the answer.

WOTC - Tax system

I asked this question in the Wisdom of the Crowd:

Which tax system do you prefer?

Here are the responses: (47 Votes)
70 % - High income tax earners pay more tax and get the same benefits for all citizens
21 % - Low income tax and means tested subsidies for low income earners.
6 % - Lower income tax and higher GST.
2 % - Low income tax and high income earners pay more for public services.

See the pie chart at:

WOTC - Budget 2019

I asked this question in the Wisdom of the Crowd:

What do you expect from Budget 2019?

Here are the responses: (50 Votes)
38 % - Our real economic and social problems will not be addressed
36 % - More giveaway to buy votes for the next general election.
26 % - Measures to reduce the cost of living.
0 % - Measures to improve productivity.

See the pie chart at:

WOTC - Electronic health record

I asked this question in the Wisdom of the Crowd:

Are you worried about unauthorized access to your electronic health record? 

Here are the responses: (47 Votes)
51 % - I like to receive a SMS alert whenever my medical record is being accessed.
28 % - I am not worried as the information is not sensitive.
19 % - I like sensitive data to be stored offline. 
2 % - I trust that the govt will be able to keep the record secure and free from hackers.

See the pie chart at:

Monday, February 25, 2019

Health care providers are winners in Budget 2019

Bloomberg identified the health care providers as winners from Budget 2019.

Health-care Providers
Heng’s budget announced a slew of support measures for Singaporeans as they age, including a plan to make it more affordable for citizens to visit clinics in their neighborhood. The government expects to pay out more than S$200 million a year in Community Health Assist Scheme subsidies and will increase health-care spending by more than 10 percent, compared with revised estimates for 2018.

Companies that could benefit from the positive sentiment in the sector include listed providers Raffles Medical Group Ltd., Thomson Medical Group Ltd. and OUE Lippo Healthcare Ltd.

Have a ribbon in the passport

Over the years, I realised that one of the time consuming process for immigration at checkpoint was when the officer need to flip through the passport to look for the entry immigration stamp of bearing the latest date.

Singapore has high public debt

Dear Mr Tan,
I have notice that public debt of Singapore economy is at 114,6, it is higher than the US. ref:
There are only a few countries which are higher than us. Malaysia has only half of ours ref

Most countries do not even come close to half of our level of public debt.

I wonder is it a good thing to have high public debt. why are there so few countries which out perform us in this aspect?


My reply here:

My view of Budget 2019

My views on Budget 2019 can be summed up in two words - BORING, DISAPPOINTING.

WOTC - Impact of reservist liability on jobs

I asked this question in the Wisdom of the Crowd:

Does reservist liability make it more difficult for locals to get jobs?

Here are the responses: (51 Votes)
84 % - Employers prefer foreigners who do not have the reservist liability.
12 % - It has a small impact but is negligible.
4 % - It does not have any impact on the prospect of getting a job.
0 % - Employers prefer to employ reservists because they are better trained and disciplined.

See the pie chart at:

WOTC - Errors in calculating CHAS subsidy

I asked this question in the Wisdom of the Crowd:

What are your views about the errors in the CHAS subsidies?

Here are the responses: (52 Votes)
69 % - We are now seeing many errors due to the outsourcing and slack supervision.
27 % - This kind of mistake is likely to occur from time to time due to the difficulty of applying complicated formula.
2 % - It is just a once off mistake. 
2 % - The mistake could be due to wrong data on income and type of housing.

See the pie chart at:

WOTC - Means testing

I asked this question in the Wisdom of the Crowd:

Should we use means test to calculate subsidy for various benefits?

Here are the responses: (57 Votes)
46 % - It is better to lower the cost of living, so there is less need to rely on subsidy.
19 % - The means test rules can be quite arbitrary and quite unfair to some people.
18 % - Yes. More subsidy should be given to low income families.
18 % - it is better to ask the higher income to pay more tax, and let them enjoy the same subsidy as other citizens.

See the pie chart at:

Sunday, February 24, 2019

Water is an existential issue

Often times, I find it difficult to understand Chan Chun Sing.

In the budget debate in March 2017, he said that "water is an existential issue for Singapore". Click here

I do not understand this highfalutin word, but I guess he meant that water is very important for Singapore.

If this is the case, why is the government allowing Hyflux to go insolvent and for control of Hyflux to be taken over by foreign interest?

Are there any other Singapore owned entities that can take over Hyflux and Tuaspring?

Why is the minister keeping quiet over this "existential issue"? Has he forgotten his statement?

What about the losses that will be suffered by 34,000 retail investors who have bought the Hyflux preferential shares and perpetual securities with their hard earned savings?

According to the restructuring plan presented to court, these retail investors will lose 90% of their investments.

Are these investors important to Singapore? Is this also an "existential issue?

I respect Chan Chun Sing for his humble background and his rise to a senior position in government. I want to understand him better and to understand the meaning of his statements.

Do you agree with me? Vote here.

Tan Kin Lian

WOTC - Safety of soldiers

I asked this question in the Wisdom of the Crowd:

PM Lee said that safety of soldiers of utmost seriousness to him.

Here are the responses: (47 Votes)
74 % - Talking only. I don't think he really bothered.
17 % - He cannot demand high standards of NS men and still talk about safety - they are a conflict.
4 % - I believe him. 
4 % - He has demonstrated this concern when he was a SAF general.

See the pie chart at:

WOTC - Outcome of the next general election

I asked this question in the Wisdom of the Crowd:

What do you hope to see as the outcome of the next general election

Here are the responses: (51 Votes)
43 % - The fall of the PAP from govt.
35 % - Non PAP parties to take 20 to 35 seats
14 % - Non PAP parties to take 10 to 20 seats
8 % - The PAP to control more than two thirds of Parliament

See the pie chart at:

WOTC - FTA with EU

I asked this question in the Wisdom of the Crowd:

What are your views about the FTA with the EU?

Here are the responses: (46 Votes)
46 % - I have no idea about how it will impact the people.
30 % - I am worried about its negative consequences.
22 % - It will be good for our business and economy.
2 % - It will help to create jobs.

See the pie chart at:

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