Read the letter.
My comment.
This criticism is not confined to one insurer. Many insurers have cut their bonus during a difficult time but are rather slow in restoring their bonus when the market recovered. This is unfair to policyholders, especially those whose policies have matured while the bonus are still not restored.
I agree with the call to MAS to investigate if the insurers have been fair in their treatment of the policyholders.
To avoid this type of unfair treatment, the public should invest in a low cost investment fund, which is transparent and give a better yield, over the long term. This is explained in my book, Practical Guide on Financial Planning.
Wednesday, May 19, 2010
Life insurance companies
This article explains that life insurance company works for shareholders and not for customers.
My comment
In the past, most life insurance companies are mutual companies (including cooperatives) that work for the interest of customers. In recent years, most of these companies have become de-mutualised or have started to think about maximising profits. It is dangerous to entrust your long term savings to these companies, especially if they have the discretion to pay a lower rate of bonus to customers.
It is better to invest in a low cost investment fund, which is within your control. This is explained in my book on financial planning.
My comment
In the past, most life insurance companies are mutual companies (including cooperatives) that work for the interest of customers. In recent years, most of these companies have become de-mutualised or have started to think about maximising profits. It is dangerous to entrust your long term savings to these companies, especially if they have the discretion to pay a lower rate of bonus to customers.
It is better to invest in a low cost investment fund, which is within your control. This is explained in my book on financial planning.
Tuesday, May 18, 2010
Intelligence Quiz online
Try the updated version of the Intelligence Quiz online.
You can also play it on the smart phone by browsing the internet using this link projects.easyapps.sg/eiq. There is a bug when you click on "Answer" but this will be corrected soon.
You can learn the technique to play this puzzle from my book available here.
Give your views of this online game in this survey.
Tip for solving Intelligence Quiz.
1. Look for clues that indicate a fixed house, e.g. first house, second house, last house.
2. Look for clues that is related to an item that has already been identified.
3. Look for clues that exactly fit into the empty slots.
4. By following these steps, you can solve the Intelligence Quiz.
You can also play it on the smart phone by browsing the internet using this link projects.easyapps.sg/eiq. There is a bug when you click on "Answer" but this will be corrected soon.
You can learn the technique to play this puzzle from my book available here.
Give your views of this online game in this survey.
Tip for solving Intelligence Quiz.
1. Look for clues that indicate a fixed house, e.g. first house, second house, last house.
2. Look for clues that is related to an item that has already been identified.
3. Look for clues that exactly fit into the empty slots.
4. By following these steps, you can solve the Intelligence Quiz.
Portal on scams
Hi TKL,
Many Singaporeans I know, are always in the pursuit of material wealth and at times being complacement, only to realise later that they are victims of scams. How nice if we could have a similar portal like this, all under one roof:
http://www.scamwatch.gov.au/content/index.phtml/tag/InvestmentSeminarsRealEstateScams
LN
Many Singaporeans I know, are always in the pursuit of material wealth and at times being complacement, only to realise later that they are victims of scams. How nice if we could have a similar portal like this, all under one roof:
http://www.scamwatch.gov.au/content/index.phtml/tag/InvestmentSeminarsRealEstateScams
LN
Starhub Call Center
I called Starhub at their call center to enquire about Open Net, the new national broadband. Here is my experience.
I am quite surprised that the call is answered quick quickly (after going through 3 minutes of navigating through their system) and the staff is quite knowledgeable. So, apart from the automated messages (which is quite frustrating and time wasting), the service is quite good. In the past, I have to wait a long time to be answered by a person, but on this occasion, it was quite fast.
Many large organisations require customers to suffer the hassle of navigating through their automated system, so this is not unique to Starhub.
I am quite surprised that the call is answered quick quickly (after going through 3 minutes of navigating through their system) and the staff is quite knowledgeable. So, apart from the automated messages (which is quite frustrating and time wasting), the service is quite good. In the past, I have to wait a long time to be answered by a person, but on this occasion, it was quite fast.
Many large organisations require customers to suffer the hassle of navigating through their automated system, so this is not unique to Starhub.
Poor customer service (HP)
Here is another example of poor customer service. Most big organisations have a bad call center that makes life difficult for customers through the bad use of techbology.
Courage and dare to change
I have heard these phrases used on many occasions, "be careful" and "don't down the slippery slope". They usually come out from people who are extremely cautious and do not wish to change the status quo. This attitude reflects the mindset of many Singaporeans.
I wish to quote the words of Dr. Goh Keng Swee in his last speech to Parliament in 1984.
Quote
Prudence does not mean that one must always take counsel of one's fears. In the course of our political struggles, we learnt tht in a desperate situation timidity leads to disaster. Safety can be won only by daring."
Unquote
I wish to quote the words of Dr. Goh Keng Swee in his last speech to Parliament in 1984.
Quote
Prudence does not mean that one must always take counsel of one's fears. In the course of our political struggles, we learnt tht in a desperate situation timidity leads to disaster. Safety can be won only by daring."
Unquote
Tips with your money
Here are 10 important tips.
My tips on insurance and finance can be found in Practical Guide on Financial Planning.
My tips on insurance and finance can be found in Practical Guide on Financial Planning.
Medical expenses of parents
Dear Mr. Tan,
Thank you for your many insightful postings, I believe many people benefit from your blog.
My parents, who are current in their mid-sixties, are working class people, who worked hard to bring up my siblings and I. They don't have much savings, nor much in their medisave accounts. I don't believe their included under Eldershield.
Is there a good way to plan for their future medical needs? Based on some earlier posts on your blog, insurance for the elderly seems to be expensive. They'd probably exclude coverage on what my parents really need coverage on (my dad has a history of hypertension, so I believe all heart conditions are excluded?).
So far, I can only think of setting aside a lumpsum of cash in FD, as an emergency fund. However, being of limited means, I am not sure how much to set aside as well. I've taken a look at the MOH medical bills, and wonder which bills to take into consideration. I suppose I should also need to take into consideration my medisave savings, since they can be used for my parents.
REPLY
You can top up the Medisave account of your parents and enjoy some tax relief. Your parents can use the Medisave to buy Medishield or pay their medical bills out of Medisave, if they are not insured.
Most importantly, they should go to a subsidised ward if they fall ill, as the cost is much lower than a non-subsidised ward or private hospital. The medical care in the subsidised ward is of quite acceptable standard.
I hope that they can stay in good health and do not require hospitalisation.
Thank you for your many insightful postings, I believe many people benefit from your blog.
My parents, who are current in their mid-sixties, are working class people, who worked hard to bring up my siblings and I. They don't have much savings, nor much in their medisave accounts. I don't believe their included under Eldershield.
Is there a good way to plan for their future medical needs? Based on some earlier posts on your blog, insurance for the elderly seems to be expensive. They'd probably exclude coverage on what my parents really need coverage on (my dad has a history of hypertension, so I believe all heart conditions are excluded?).
So far, I can only think of setting aside a lumpsum of cash in FD, as an emergency fund. However, being of limited means, I am not sure how much to set aside as well. I've taken a look at the MOH medical bills, and wonder which bills to take into consideration. I suppose I should also need to take into consideration my medisave savings, since they can be used for my parents.
REPLY
You can top up the Medisave account of your parents and enjoy some tax relief. Your parents can use the Medisave to buy Medishield or pay their medical bills out of Medisave, if they are not insured.
Most importantly, they should go to a subsidised ward if they fall ill, as the cost is much lower than a non-subsidised ward or private hospital. The medical care in the subsidised ward is of quite acceptable standard.
I hope that they can stay in good health and do not require hospitalisation.
Monday, May 17, 2010
Unfair practice of used car dealer
Dear Mr. Tan
I signed a purchase agreement to buy a used vehicle from a large used car dealer whic his a subsidiary of a large motor distributor.
They were unable to attain a loan approval for the vehicle I have purchased. I wanted to to pay in cash but they refuse to complete the deal. No where in the agreement does it that states that there must be a successful loan for the purchase agreement to be valid. I have also paid a $500 deposit.
As they are so big, they don't even need to be under the CASETRUST-SVTA accreditation. In addition, CASE says that they can mediate and if the dealer does not honour the deal, there is nothing CASE can do about it.
Should a consumer back out from a deal, the dealer would sue the the buyer. However, when the dealer refuses to complete the deal, they get away with it. I have spent much time and effort going through many different cars, it doesn't feel good to be taken advantage of.
This is akin to a new car dealer that sells you a "GUARANTEED COE" new car, and just walks away when COE rises.
The dealer knows that a helpless consumer will not pursue their rights if they are being bullied as it costs too much money and time. They are a big company and have the financial clout and legal personnel to corner the consumer into submission.
Hopefully, you can get highlight this on your website and help prevent other consumers from being cornered and bullied by a large MNC.
JS
I signed a purchase agreement to buy a used vehicle from a large used car dealer whic his a subsidiary of a large motor distributor.
They were unable to attain a loan approval for the vehicle I have purchased. I wanted to to pay in cash but they refuse to complete the deal. No where in the agreement does it that states that there must be a successful loan for the purchase agreement to be valid. I have also paid a $500 deposit.
As they are so big, they don't even need to be under the CASETRUST-SVTA accreditation. In addition, CASE says that they can mediate and if the dealer does not honour the deal, there is nothing CASE can do about it.
Should a consumer back out from a deal, the dealer would sue the the buyer. However, when the dealer refuses to complete the deal, they get away with it. I have spent much time and effort going through many different cars, it doesn't feel good to be taken advantage of.
This is akin to a new car dealer that sells you a "GUARANTEED COE" new car, and just walks away when COE rises.
The dealer knows that a helpless consumer will not pursue their rights if they are being bullied as it costs too much money and time. They are a big company and have the financial clout and legal personnel to corner the consumer into submission.
Hopefully, you can get highlight this on your website and help prevent other consumers from being cornered and bullied by a large MNC.
JS
Bad Customer Service (CISCO)
I bought a Flip videocam which was highly recommended on the user reviews. The videocam was easy to use and satisfactory. Unfortunately, it stopped working after two weeks.
I called the manufacturer CISCO on its warranty. I had a difficult time. Here is my experience:
a. It was difficult to communicate with the call center (which was outsourced overseas)
b. Much time was spent to spell out the details for the call center staff to record into their system.
c. I was asked later to detailed form on another website.
d. There was some fault in the computer system that garbled up the details.
e. When I appeared at their agent to get a replacement videocam, the staff was quite rude and unhelpful.
I do not know why a high-tech company like CISCO make it so troublesome to the customer to have a replacement of a faulty product. The technology is supposed to make life easier for the customer, but it actually made life more difficult by passing the hassle of the paperwork to the customer.
Compare it with the "old fashion" way. If I buy a product from a retail store and it is faulty, I bring it to the retail store. They will check the date of purchase and confirm that it is faulty and replace it. They will do the paper work later and does not involve the customer in this hassle.
Tan Kin Lian
I called the manufacturer CISCO on its warranty. I had a difficult time. Here is my experience:
a. It was difficult to communicate with the call center (which was outsourced overseas)
b. Much time was spent to spell out the details for the call center staff to record into their system.
c. I was asked later to detailed form on another website.
d. There was some fault in the computer system that garbled up the details.
e. When I appeared at their agent to get a replacement videocam, the staff was quite rude and unhelpful.
I do not know why a high-tech company like CISCO make it so troublesome to the customer to have a replacement of a faulty product. The technology is supposed to make life easier for the customer, but it actually made life more difficult by passing the hassle of the paperwork to the customer.
Compare it with the "old fashion" way. If I buy a product from a retail store and it is faulty, I bring it to the retail store. They will check the date of purchase and confirm that it is faulty and replace it. They will do the paper work later and does not involve the customer in this hassle.
Tan Kin Lian
Implementing I.T. systems
Comment posted in my blog.
Dear Mr Tan,
I have been involved in implementing IT Projects in the private sector since I started working 20 years ago. I am an Accountant by profession. I have gone thru implementing many kinds of IT systems. I find implementing the simple ones have the best chances of success.
IT systems have come a long way since then. Modern IT systems is able to cater to a lot of requirements. What is critical to the success of implementing IT systems is there must be a Project Manager handling the implementation full time. He must have enough experience implementing IT Projects and he must have approval to hire resources.
The Directors and the employees have an unrealistic expectation in implementing IT systems. They want the system to be able to do everything without lifting a finger because its a million dollar system. This is in turn compounded by the IT Consultants promising almost everything can be done without managing customers expectation. The IT Consultants charge their fees by project. So they will allocate a number of man hours to the project. If the project runs into difficulties, the IT Consultants will charge additional fees.
Another critical factor to the success of the project is the employees themselves. The question is are they willing to change their working habits and spent time to learn new skills to adapt to the system while also doing their job?
Thirdly, IT systems should be implemented by phases SLOWLY. This is so that the person working on the system has time to adapt to it. Implementing every thing at once brings the risk of multi-million dollar failure.
This is because there is huge resistance to change on the part of employees.
The consultancy firms will be happy that the hospitals want to implement all at once bec it will bring them huge revenues. They of course hope that their clients will succeed in implementing the system as it will bring them recognition.
No one wants to hire and pay mature workers who have hands on experience adequately and who can get the job done well. Instead CEO's nowadays say pay the consultants WELL. IT Consultants are skilled in "Consulting and IT work". Not in actually implementing the system.
What is actually needed is a person in the Co. who understands IT, its strength and limitations, who understands the company employees and culture, what they can or cannot do and assist them and have adequate experience in implementing IT projects and have hands on experience utilising IT.
Dear Mr Tan,
I have been involved in implementing IT Projects in the private sector since I started working 20 years ago. I am an Accountant by profession. I have gone thru implementing many kinds of IT systems. I find implementing the simple ones have the best chances of success.
IT systems have come a long way since then. Modern IT systems is able to cater to a lot of requirements. What is critical to the success of implementing IT systems is there must be a Project Manager handling the implementation full time. He must have enough experience implementing IT Projects and he must have approval to hire resources.
The Directors and the employees have an unrealistic expectation in implementing IT systems. They want the system to be able to do everything without lifting a finger because its a million dollar system. This is in turn compounded by the IT Consultants promising almost everything can be done without managing customers expectation. The IT Consultants charge their fees by project. So they will allocate a number of man hours to the project. If the project runs into difficulties, the IT Consultants will charge additional fees.
Another critical factor to the success of the project is the employees themselves. The question is are they willing to change their working habits and spent time to learn new skills to adapt to the system while also doing their job?
Thirdly, IT systems should be implemented by phases SLOWLY. This is so that the person working on the system has time to adapt to it. Implementing every thing at once brings the risk of multi-million dollar failure.
This is because there is huge resistance to change on the part of employees.
The consultancy firms will be happy that the hospitals want to implement all at once bec it will bring them huge revenues. They of course hope that their clients will succeed in implementing the system as it will bring them recognition.
No one wants to hire and pay mature workers who have hands on experience adequately and who can get the job done well. Instead CEO's nowadays say pay the consultants WELL. IT Consultants are skilled in "Consulting and IT work". Not in actually implementing the system.
What is actually needed is a person in the Co. who understands IT, its strength and limitations, who understands the company employees and culture, what they can or cannot do and assist them and have adequate experience in implementing IT projects and have hands on experience utilising IT.
Customer Service at Call Centers
I will be using my videocam to record my experience in calling the call center of big organisations, such as the government agencies, banks, telcos, insurance companies and airlines. Each video will be for up to 5 minutes. I will upload the video showing my personal experience - which hopefully will be good, but could show the negative aspects.
I hope that these videos will be educational and will encourage the big organisations to make changes to their call centers to improve the customer experience.
Please share the call centers that you wish me to try, giving me the name and the telephone number.
Tan Kin Lian
I hope that these videos will be educational and will encourage the big organisations to make changes to their call centers to improve the customer experience.
Please share the call centers that you wish me to try, giving me the name and the telephone number.
Tan Kin Lian
Investing in land abroad
Read this letter.
My comment
When several people lodge complaints with the authority that they have been misled into purchasing these investments through misrepresentations of the facts, the authority should investigate if there were intent to to defraud the public. The authority should also report the results of the investigation, even if no conclusive evidence could be found about the alleged misrepresentations. This would at least warn the public about the dangers of investing in these products.
This type of actions were taken in Malaysia and the UK leading to the closing down of the companies involved in the fraudulent activities and the prosecution of the perpetuators in court.
My comment
When several people lodge complaints with the authority that they have been misled into purchasing these investments through misrepresentations of the facts, the authority should investigate if there were intent to to defraud the public. The authority should also report the results of the investigation, even if no conclusive evidence could be found about the alleged misrepresentations. This would at least warn the public about the dangers of investing in these products.
This type of actions were taken in Malaysia and the UK leading to the closing down of the companies involved in the fraudulent activities and the prosecution of the perpetuators in court.
Taxi surcharges
Read this letter about taxi surcharges, which is getting out of hand.
My comment
It is better to raise the taxi fare and to remove all surcharges, such as the peak hour and location surcharges. All taxis plying the road should charge a standard taxi fare while premium taxi services (which charge a different fare, should be called by telephone or other means.
My comment
It is better to raise the taxi fare and to remove all surcharges, such as the peak hour and location surcharges. All taxis plying the road should charge a standard taxi fare while premium taxi services (which charge a different fare, should be called by telephone or other means.
Excessive charge to repair a damage
Comment posted in my survey.
My car ran into the parking barrier. Upon inspection only the arm was damaged. We both agreed to it and took photos respectively. The car park management later sent me a letter asking for 1,571 SGD payment to repair the barrier arm. The break down was like this:
• Labour to attend to ACCIDENT Case by the contractor $ 150.00
• 3M Magnetic Barrier Arm only $ 650.00
• Barrier arm Aluminium Bracket $ 80.00
• Delivery and installation charges $ 250.00
• Admin Charges 30% $ 339.00
7% GST $ 102.83
Total: $ 1,571.83
I disputed all the charges levied, especially the 30% admin charge that made no sense at all. I replied them saying i would take responsibility for the accident. But only on reasonable grounds. That barrier arm is simple to install (held on by 4 nuts and bolts), and the market price for it is only around 300 SGD (unbranded).
I advised them to file a claim with the Singapore Courts, and we will appear in court, state our cases and let the judge decide. That was March. I am still waiting to hear from them.
My comment
It is a sad episode when the company wanted to make a profit from an unfortunate event. It would be a nice gesture for them to charge only the direct cost and not seek to recover the labour and admin charges.
My car ran into the parking barrier. Upon inspection only the arm was damaged. We both agreed to it and took photos respectively. The car park management later sent me a letter asking for 1,571 SGD payment to repair the barrier arm. The break down was like this:
• Labour to attend to ACCIDENT Case by the contractor $ 150.00
• 3M Magnetic Barrier Arm only $ 650.00
• Barrier arm Aluminium Bracket $ 80.00
• Delivery and installation charges $ 250.00
• Admin Charges 30% $ 339.00
7% GST $ 102.83
Total: $ 1,571.83
I disputed all the charges levied, especially the 30% admin charge that made no sense at all. I replied them saying i would take responsibility for the accident. But only on reasonable grounds. That barrier arm is simple to install (held on by 4 nuts and bolts), and the market price for it is only around 300 SGD (unbranded).
I advised them to file a claim with the Singapore Courts, and we will appear in court, state our cases and let the judge decide. That was March. I am still waiting to hear from them.
My comment
It is a sad episode when the company wanted to make a profit from an unfortunate event. It would be a nice gesture for them to charge only the direct cost and not seek to recover the labour and admin charges.
Sunday, May 16, 2010
Dr. Goh Keng Swee's immense contribution to Singapore
Many people are aware about the immense contribution that Dr. Goh Keng Swee had made to improve the life of millions of people in Singapore. He was the architect of our economy strategy that transformed Singapore from a developing country to a thriving developed economy. His strategy to attract the multinatinal companies into Singapore laid the foundation for our economic growth. The same strategy is now emulated by many other countries that desired to grow their economy.
There is another aspect of his contribution tht may not be well known. Dr. Goh was the keynote speaker at the historic seminar on the modernisation of the labour movement in 1969. He laid out a convincing case for the labour movement to set up coooperatives to take care of the needs of Singapore, in life insurance, savings and other economic ventures.
This strategy led to the formation of NTUC Income in 1970. Dr. Goh was the chairman of the board of trustees of NTUC Income for nearly 10 years and provided the guidance and advice for NTUC Income to establish a foothold in a challenging market environment. Without his guidance, it may not be possible for NTUC Income to be what it is today.
Later, the labour movement set up a consumer cooperative (i.e. NTUC Fairprice) and a taxi cooperative (which has since been privatised). The lives of many people are improved by the the contribution of the insurance, supermarket and other coopertives.
I heard stories about the frugal habits of Dr. Goh. He does not believe in wasting money unnecessarily. In his last speech in Parliament in 1984, according to the Straits Times report (quoting Prime Minister Lee), Dr. Goh said about the importance of "public service". I hope that Dr. Goh's message about "public service" can be rekindled.
Tan Kin Lian
Read this report in the Straits Times.
There is another aspect of his contribution tht may not be well known. Dr. Goh was the keynote speaker at the historic seminar on the modernisation of the labour movement in 1969. He laid out a convincing case for the labour movement to set up coooperatives to take care of the needs of Singapore, in life insurance, savings and other economic ventures.
This strategy led to the formation of NTUC Income in 1970. Dr. Goh was the chairman of the board of trustees of NTUC Income for nearly 10 years and provided the guidance and advice for NTUC Income to establish a foothold in a challenging market environment. Without his guidance, it may not be possible for NTUC Income to be what it is today.
Later, the labour movement set up a consumer cooperative (i.e. NTUC Fairprice) and a taxi cooperative (which has since been privatised). The lives of many people are improved by the the contribution of the insurance, supermarket and other coopertives.
I heard stories about the frugal habits of Dr. Goh. He does not believe in wasting money unnecessarily. In his last speech in Parliament in 1984, according to the Straits Times report (quoting Prime Minister Lee), Dr. Goh said about the importance of "public service". I hope that Dr. Goh's message about "public service" can be rekindled.
Tan Kin Lian
Read this report in the Straits Times.
Case study - think out of the box
Case Study.
My friend told me this case. Mr. X is a retiree widower (i.e his wife has passed away). He applied for a 2 room HDB flat with his daughter to form a family unit.
The daughter now wants to get married and apply for a larger flat. Mr. X wishes to live independently. The HDB wants to take back the flat as Mr. X is not able to form a family unit.
They asked him to sell his flat (which cost him $30,000 after grant) and apply for a studio apartment costing $80,000. Mr. X does not have the money to top up. He appealed many times to HDB to remain in his flat, but was declined. Mr. X is still fighting for permission to keep his flat.
What would you do to help Mr. X ,without changing the HDB rules on the family unit? Give your answer here. A prize will be given for an innovative answer.
My friend told me this case. Mr. X is a retiree widower (i.e his wife has passed away). He applied for a 2 room HDB flat with his daughter to form a family unit.
The daughter now wants to get married and apply for a larger flat. Mr. X wishes to live independently. The HDB wants to take back the flat as Mr. X is not able to form a family unit.
They asked him to sell his flat (which cost him $30,000 after grant) and apply for a studio apartment costing $80,000. Mr. X does not have the money to top up. He appealed many times to HDB to remain in his flat, but was declined. Mr. X is still fighting for permission to keep his flat.
What would you do to help Mr. X ,without changing the HDB rules on the family unit? Give your answer here. A prize will be given for an innovative answer.
Expensive computerisation projects
A knowledgeable insider told me that a few hospitals in Singapore each spent tens of million dollars to computerised their operations, after engaging big name consultancy firms. They abandoned their projects due to difficulty in implementation and wrote off their investments. It was very wasteful, and probably explains why hospital bills are expensive.
He said that this type of practice of paying a lot of money to consultants for computerisation projects happen in many government agencies as well.
I am not able to verify this information. I hope to get get confirmation from people who work in these places and are able to share their information.
Tan Kin Lian
He said that this type of practice of paying a lot of money to consultants for computerisation projects happen in many government agencies as well.
I am not able to verify this information. I hope to get get confirmation from people who work in these places and are able to share their information.
Tan Kin Lian
Workload of teachers
Read this letter.
My comment
The workload of teachers can be reduced by employing more non-teachers for the support duties. There are many unemployed people who would love to have the opportunity for these support duties. I hope that the government will be willing to spend some money to create the employment and reduce the workload of teachers.
My comment
The workload of teachers can be reduced by employing more non-teachers for the support duties. There are many unemployed people who would love to have the opportunity for these support duties. I hope that the government will be willing to spend some money to create the employment and reduce the workload of teachers.
Claim for repairs to vehicle
Here are the results of the survey.
Dear Sir,
I would like your advice about a traffic accident involving my car colliding with a taxi. Both cars were at a traffic stop wainting for the light to turn green. When the light turn green, the taxi in front of me started to move but braked suddenly after a few feet. Because of the proxiity of the cars, a collision occured but the force of the collision was mild.
The taxi driver of the taxi and I both came out and inspected our cars but found no damage to both cars. The taxi driver and I both agreed that there were no damages to both cars as the force of the collison were mild.
The taxi claimed that he stopped the car suddenly to avoid a collision with a lorry but the taxi was making a U turn while the lorry was making a right turn at Alecandra road. However I did not see the lorry. From the traffic junction I found that it was not possible for the lorry to collide with the taxi as alleged.
As both cars were not damaged, I was surprised that the taxi send an invoice of the repairs to the taxi costing over $2000. to my insurance company. The officer of my insurance company said that the taxi has been repaired. Who allowed the taxi to be repaired whe there was no damage as a result of the acxcident?
F
REPLY
You can tell the insurance company to reject the claim from the taxi as the damages were not caused by you. However, the taxi driver will get his lawyer to sue you directly. You must be prepared to get your lawyer to reject their claim and to fight the case in court, if they issue you a summons.
Dear Sir,
I would like your advice about a traffic accident involving my car colliding with a taxi. Both cars were at a traffic stop wainting for the light to turn green. When the light turn green, the taxi in front of me started to move but braked suddenly after a few feet. Because of the proxiity of the cars, a collision occured but the force of the collision was mild.
The taxi driver of the taxi and I both came out and inspected our cars but found no damage to both cars. The taxi driver and I both agreed that there were no damages to both cars as the force of the collison were mild.
The taxi claimed that he stopped the car suddenly to avoid a collision with a lorry but the taxi was making a U turn while the lorry was making a right turn at Alecandra road. However I did not see the lorry. From the traffic junction I found that it was not possible for the lorry to collide with the taxi as alleged.
As both cars were not damaged, I was surprised that the taxi send an invoice of the repairs to the taxi costing over $2000. to my insurance company. The officer of my insurance company said that the taxi has been repaired. Who allowed the taxi to be repaired whe there was no damage as a result of the acxcident?
F
REPLY
You can tell the insurance company to reject the claim from the taxi as the damages were not caused by you. However, the taxi driver will get his lawyer to sue you directly. You must be prepared to get your lawyer to reject their claim and to fight the case in court, if they issue you a summons.
Puzzles to train your mind
Here are some testimonials on the use of the shape quiz and tangram to train the mind:
1. My son (age 13) often play tangram and shape quiz puzzle. Sometime, when he met quite difficult question while he doing his homework (for example : Math), he solved by "Out of box" way, but his answer is correct. I think this puzzle train his mind to find solution.
2. This shape-puzzles is more than just an engaging game. It actually helps tapping into your inner thinking cause in your pursuit to solve the problems, it pushes you to look at things from different angle
3. Fun puzzles that are suitable for a wide age range.
4. This shape-puzzles is more than just an engaging game. It actually helps tapping into your inner thinking cause in your pursuit to solve the problems, it pushes you to look at things from different angle
Order Online.
1. My son (age 13) often play tangram and shape quiz puzzle. Sometime, when he met quite difficult question while he doing his homework (for example : Math), he solved by "Out of box" way, but his answer is correct. I think this puzzle train his mind to find solution.
2. This shape-puzzles is more than just an engaging game. It actually helps tapping into your inner thinking cause in your pursuit to solve the problems, it pushes you to look at things from different angle
3. Fun puzzles that are suitable for a wide age range.
4. This shape-puzzles is more than just an engaging game. It actually helps tapping into your inner thinking cause in your pursuit to solve the problems, it pushes you to look at things from different angle
Order Online.
Case study - lower insurance premium
This is a case study. You are insured with an insurance company that has been operating fairly efficiently and has been providing satisfactory service. It incurs the following expenses and charges a premium of $1,000:
average claim per policy $550
expenses $200
commission to agents $150
profit margin $100
premium $1,000
Another insurance company offers you a lower premium of $900 but if the lower premium is due to any of the following factors:
a) they are more efficient in handling their claims
b) they are likely to be more difficult in paying claims due to inadequate premium
c) they may offer a lower quality of service
d) they are keen to gain market share and don't mind making a loss
Here are the results of the survey.
average claim per policy $550
expenses $200
commission to agents $150
profit margin $100
premium $1,000
Another insurance company offers you a lower premium of $900 but if the lower premium is due to any of the following factors:
a) they are more efficient in handling their claims
b) they are likely to be more difficult in paying claims due to inadequate premium
c) they may offer a lower quality of service
d) they are keen to gain market share and don't mind making a loss
Here are the results of the survey.
Saturday, May 15, 2010
Countdown to 2 million visitors
The total visitors to my blog has just passed 1,900,000. I expect the count to reach 2 million by end of June 2010. By that time, my blog will be 40 months old. The average visitorship for this period is 1,700 visitors a day. The daily average has now reached 2,600 visitors.
Credit card charges
Hi Kin Lian,
I would like to share what I found out about this. Credit card companies charge an administrative fee of 1.25% onwards to card users for transactions in non SGD currencies. Maybank charges 1.25% as does RBS. I think the rate charged by Citibank and DBS are 1.5%. This is on top of the 1% charged by VISA/ Mastercard.
So let's say I buy something online in USD, and the exchange rate determined by VISA for the posted date is USD 1 = SGD 1.40. The charge I receive will be 2.25% on top of that.
Now, if I buy in a non USD currency say GBP, the GBP charge will be converted to USD first, then USD to SGD so resulting in an extremely unfavourable rate.
There's not much transparency regarding this and I obtained this information after I questioned my bank about it. Hoping you can help educate the public especially your blog readers on this. Thanks.
CC
REPLY
I am not able to verify this fact. Can other readers share you experience?
I would like to share what I found out about this. Credit card companies charge an administrative fee of 1.25% onwards to card users for transactions in non SGD currencies. Maybank charges 1.25% as does RBS. I think the rate charged by Citibank and DBS are 1.5%. This is on top of the 1% charged by VISA/ Mastercard.
So let's say I buy something online in USD, and the exchange rate determined by VISA for the posted date is USD 1 = SGD 1.40. The charge I receive will be 2.25% on top of that.
Now, if I buy in a non USD currency say GBP, the GBP charge will be converted to USD first, then USD to SGD so resulting in an extremely unfavourable rate.
There's not much transparency regarding this and I obtained this information after I questioned my bank about it. Hoping you can help educate the public especially your blog readers on this. Thanks.
CC
REPLY
I am not able to verify this fact. Can other readers share you experience?
Fraudulent accident claim - aggravated damages
It is fraudulent for a motorist to submit a claim for repair to a vehicle where the damages have been aggravated or created after the accident. For example, if the orginal damage is a scratch and the repairs are for a major dent, the claimant is committing a fraud, i.e. cheating.
Many vehicle owners may not be aware that they are a party to this fraud. They leave the car to their workshop and sign an authority for the workshop to make a claim on their behalf. Some workshop, that specialises in inflating the claim, will aggravated the damage or inflict additional damages to the vehicle, and will take a photograph of the damages, to submit to the insurance company.
The insurance claim officer may not investigate the claim and will accept the claim as submitted. They are unwilling to challenge the claim, even if they were asked by the policyholders.
This fraud has been rampant for several decades. Large sums are being paid for the inflated claims. This results in higher premiums being charged for motor insurance.
Many people have lodged reports to the Police on this fraudulent activities in past years. If the Police is serious about investigate the complaints and bring the culprits to court, this fraud can be contained. I hope that this action can be taken, to reduce the cost of motor insurance in Singapore.
Tan Kin Lian
Many vehicle owners may not be aware that they are a party to this fraud. They leave the car to their workshop and sign an authority for the workshop to make a claim on their behalf. Some workshop, that specialises in inflating the claim, will aggravated the damage or inflict additional damages to the vehicle, and will take a photograph of the damages, to submit to the insurance company.
The insurance claim officer may not investigate the claim and will accept the claim as submitted. They are unwilling to challenge the claim, even if they were asked by the policyholders.
This fraud has been rampant for several decades. Large sums are being paid for the inflated claims. This results in higher premiums being charged for motor insurance.
Many people have lodged reports to the Police on this fraudulent activities in past years. If the Police is serious about investigate the complaints and bring the culprits to court, this fraud can be contained. I hope that this action can be taken, to reduce the cost of motor insurance in Singapore.
Tan Kin Lian
Dilemma on language
Read this article by Seah Cheang Nee.
My comments
I prefer the allow the student to choose a second language, which may not be their mother tongue. Those who find Chinese difficult to learn can choose Malay or another language.
My comments
I prefer the allow the student to choose a second language, which may not be their mother tongue. Those who find Chinese difficult to learn can choose Malay or another language.
Friday, May 14, 2010
Withdrawal of Foreign Currency Deposit
Dear Mr. Tan,
I had a foreign currency account in NZ dollars with X Bank. On 16/04/10, I went to the X Bank to withdraw the foreign currency time deposit account. I was attended to by a Relationship Manager Ms Y. I had specifically asked her to quote how much would I get back in Sing dollars should I wish to withdraw the foreign currency account. She did some calculations and said the amount was $31,326.07. She did not at any time informed me that the amount she quoted was in NZ dollars. I assumed that the amount quoted was in Sing dollars. I did a quick mental calculation and I would gain $1,326.07 over my original investment of S$30,000. I then agreed to the withdrawal.
I was then asked to sign a foreign currency withdrawal form. Upon signing, I noticed that amount of $31,326.07 was not written on the form. She said the amount quoted was only an indicative price and therefore cannot be written down. I trusted her and X Bank wholeheartedly. That was my biggest mistake.
True enough, I was shocked to receive only $30,257.85 when I went back to X Bank to collect the cashier order on 22/04/10. I approached Ms Y for the shortfall of $1,068.22. She said that the amount she quoted on 16/04/10 was in NZ dollars and after conversion to Sing dollars, would be $30,257.85. I remembered vividly that she did not at any time on 16/04/10 informed me that the amount quoted was in NZ dollars. She insisted that she did. It was her words against my words. She then showed me a document with the word NZD written in blue beside the amount of $31,326.07. I told her that the word NZD was not written in my presence on 16/04/10. If it was written in my presence, I would have realised that the amount she quoted to me was in NZ dollars. My natural instinct would ask what would that amount be in Sing dollars.
I was naturally not happy and requested to see her Manager. The Manager listened to my explanation attentively. However, he insisted that Ms Y was absolutely correct to give the quote in NZ dollars. He further explained that it was the Bank's practice to quote their clients in the currency they invested in and not in Sing dollars. I re-emphasised to him that I specially told Ms Y that I wanted the money back in Sing dollars. I would have assumed that the amount she quoted was in Sing dollars. Moreover, she wrote the amount on a piece of paper as $31,326.07 without the NZD in front of the quoted amount. I therefore assumed that the amount quoted was in Sing dollars. On hind sight, I should have asked to make 100% sure. He could not help or advise me further. I left the bank with a heavy heart having lost $1,068.22.
I was inexperienced and had learnt a lesson, albeit any expensive one for a retired person . It would be my first and last time that I would do foreign currency investment. It was a case of poor communication or rather miscommunication. I requested the Bank Manager to advise all their Relationship Managers to inform their clients clearly on which currency the amount was quoted, especially to elderly clients who are not so financial savvy. The exchange rate would make a big difference.
I just want to share this unpleasant experience with your readers. Please remember to ask the Relationship Manager clearly on which currency the amount was quoted.
FL
I had a foreign currency account in NZ dollars with X Bank. On 16/04/10, I went to the X Bank to withdraw the foreign currency time deposit account. I was attended to by a Relationship Manager Ms Y. I had specifically asked her to quote how much would I get back in Sing dollars should I wish to withdraw the foreign currency account. She did some calculations and said the amount was $31,326.07. She did not at any time informed me that the amount she quoted was in NZ dollars. I assumed that the amount quoted was in Sing dollars. I did a quick mental calculation and I would gain $1,326.07 over my original investment of S$30,000. I then agreed to the withdrawal.
I was then asked to sign a foreign currency withdrawal form. Upon signing, I noticed that amount of $31,326.07 was not written on the form. She said the amount quoted was only an indicative price and therefore cannot be written down. I trusted her and X Bank wholeheartedly. That was my biggest mistake.
True enough, I was shocked to receive only $30,257.85 when I went back to X Bank to collect the cashier order on 22/04/10. I approached Ms Y for the shortfall of $1,068.22. She said that the amount she quoted on 16/04/10 was in NZ dollars and after conversion to Sing dollars, would be $30,257.85. I remembered vividly that she did not at any time on 16/04/10 informed me that the amount quoted was in NZ dollars. She insisted that she did. It was her words against my words. She then showed me a document with the word NZD written in blue beside the amount of $31,326.07. I told her that the word NZD was not written in my presence on 16/04/10. If it was written in my presence, I would have realised that the amount she quoted to me was in NZ dollars. My natural instinct would ask what would that amount be in Sing dollars.
I was naturally not happy and requested to see her Manager. The Manager listened to my explanation attentively. However, he insisted that Ms Y was absolutely correct to give the quote in NZ dollars. He further explained that it was the Bank's practice to quote their clients in the currency they invested in and not in Sing dollars. I re-emphasised to him that I specially told Ms Y that I wanted the money back in Sing dollars. I would have assumed that the amount she quoted was in Sing dollars. Moreover, she wrote the amount on a piece of paper as $31,326.07 without the NZD in front of the quoted amount. I therefore assumed that the amount quoted was in Sing dollars. On hind sight, I should have asked to make 100% sure. He could not help or advise me further. I left the bank with a heavy heart having lost $1,068.22.
I was inexperienced and had learnt a lesson, albeit any expensive one for a retired person . It would be my first and last time that I would do foreign currency investment. It was a case of poor communication or rather miscommunication. I requested the Bank Manager to advise all their Relationship Managers to inform their clients clearly on which currency the amount was quoted, especially to elderly clients who are not so financial savvy. The exchange rate would make a big difference.
I just want to share this unpleasant experience with your readers. Please remember to ask the Relationship Manager clearly on which currency the amount was quoted.
FL
Legal action for overcharging of fees
Read this report of a class action in Australia.
My comment
I hope that the banks are fairer in the charges that they levy on customers, and that the regulator will take the lead to get the banks to be reasonable in their charges.
My comment
I hope that the banks are fairer in the charges that they levy on customers, and that the regulator will take the lead to get the banks to be reasonable in their charges.
Investigation of US banks by New York AG
Read this article.
My comment.
This investigation has relevance to the investors of the Mini-bond, Pinnacle notes and Jubilee notes. If the banks had acted fraudulently in getting the rating agencies to give a misleading rating, there is the possibility of recovering the loss in US courts.
I respect the AG of New Yrok. At the time that the alleged wrongdoings were happening, people were not aware. When they now know the facts, with the benefit of hindsight, they are willing to take the banks to court and let the court decide if there were any wrongdoing. The banks are likely to agree to some form of settlement and to make some compensation to the parties that were wronged.
I hope that our authority in Singapore will also consider similar action on behalf of the small investors that were hurt by these wrong doings.
My comment.
This investigation has relevance to the investors of the Mini-bond, Pinnacle notes and Jubilee notes. If the banks had acted fraudulently in getting the rating agencies to give a misleading rating, there is the possibility of recovering the loss in US courts.
I respect the AG of New Yrok. At the time that the alleged wrongdoings were happening, people were not aware. When they now know the facts, with the benefit of hindsight, they are willing to take the banks to court and let the court decide if there were any wrongdoing. The banks are likely to agree to some form of settlement and to make some compensation to the parties that were wronged.
I hope that our authority in Singapore will also consider similar action on behalf of the small investors that were hurt by these wrong doings.
Dr. Goh Keng Swee
Dr. Goh Keng Swee has passed away after a long period of illness. He was the architect of Singapore's economic success. He was also the founder of NTUC Income.
Taxi surcharges
Read this letter in the Straits Times Forum
My comment
I agree with the writer that we should simplify our system of taxi charges, and avoid the peak hour and location surcharges. It is better to have a standard flat fare applicable to all taxis. The mileage charge can be higher than the current fares to provide sufficient income for the taxi drivers.
The government can also reduce the charges levied for taxis so that the taxi fares can be lower across the board. If more people take taxis instead of their private cars, it will reduce the pressure on parking space.
My comment
I agree with the writer that we should simplify our system of taxi charges, and avoid the peak hour and location surcharges. It is better to have a standard flat fare applicable to all taxis. The mileage charge can be higher than the current fares to provide sufficient income for the taxi drivers.
The government can also reduce the charges levied for taxis so that the taxi fares can be lower across the board. If more people take taxis instead of their private cars, it will reduce the pressure on parking space.
Mother Tongue Language
Did the government make these commitments?
My view.
The purpose of education is to teach students to be literate, numerate, able to communicate and have social skills and values. A second language is useful. The approach towards any subject, including the second language, should be flexible and be changed according to future needs.
My view.
The purpose of education is to teach students to be literate, numerate, able to communicate and have social skills and values. A second language is useful. The approach towards any subject, including the second language, should be flexible and be changed according to future needs.
Thursday, May 13, 2010
Why is life a struggle?
Extract from Tommy Wong's book, "Wisdom on How to Live Life"
Tom: I was told that life is a struggle.
Guru: Life is only a struggle because the world operates on the basis of competition rather than cooperation.
Tom: Can you elaborate?
Guru: You see like you and I, if we take a walk on the basis of cooperation, then we’ll walk at a pace that both of us are comfortable with. We can then also enjoy the scenery on the way.
Tom: Enjoy life.
Guru: So who is the winner?
Tom: We’re both winners.
Guru: But if we take the walk on the basis of competition, then we’ll walk as fast as we can. Both of us will find the walk a struggle and there’s no chance to enjoy the scenery.
Tom: Life becomes a struggle.
Guru: So who is the winner?
Tom: There’s no winner, we’re both losers.
Guru: Exactly, in the world of competitions, even winners are actually losers. That’s why the world is full of losers.
Tom: And that includes the rich and powerful?
Guru: And that includes the rich and powerful!
Tommy Wong's book can be ordered online here. The price is cheaper than ordering through Amazon.
Tom: I was told that life is a struggle.
Guru: Life is only a struggle because the world operates on the basis of competition rather than cooperation.
Tom: Can you elaborate?
Guru: You see like you and I, if we take a walk on the basis of cooperation, then we’ll walk at a pace that both of us are comfortable with. We can then also enjoy the scenery on the way.
Tom: Enjoy life.
Guru: So who is the winner?
Tom: We’re both winners.
Guru: But if we take the walk on the basis of competition, then we’ll walk as fast as we can. Both of us will find the walk a struggle and there’s no chance to enjoy the scenery.
Tom: Life becomes a struggle.
Guru: So who is the winner?
Tom: There’s no winner, we’re both losers.
Guru: Exactly, in the world of competitions, even winners are actually losers. That’s why the world is full of losers.
Tom: And that includes the rich and powerful?
Guru: And that includes the rich and powerful!
Tommy Wong's book can be ordered online here. The price is cheaper than ordering through Amazon.
Aviva Car Insurance
The website is http://www.avivia.com.sg/
It is quite easy to get a quote. I found that the quote for my car insurance is $1,015. My existing insurer charges $761. So, Aviva is more expensive. My daughter also checked and found that in her case, Aviva is more expensive than the existing insurer.
I like other readers to check their premium based on your existing cover. You can post the details of the premium (existing compraed to Aviva) here.
It is quite easy to get a quote. I found that the quote for my car insurance is $1,015. My existing insurer charges $761. So, Aviva is more expensive. My daughter also checked and found that in her case, Aviva is more expensive than the existing insurer.
I like other readers to check their premium based on your existing cover. You can post the details of the premium (existing compraed to Aviva) here.
Freedom, fairness and responsibility
A new government has taken office in the UK. It is a coalition government formed by the Conservative and the Liberal Democratic party. The new Prime Minister David Cameron said, "It will be an administration based on three key principles - freedom, fairness and responsibility".
I am heartened by these key principles and hope that Singapore will also aspire towards them. Here are some changes that have to be done in Singapore:
1. Freedom: allow people to express their views freely, without being sued for damages when they give any honest, negative opinion.
2. Fairness: reduce the wide disparity in income and ensure that people can seek justice, even if they do not have the money to engage lawyers
3. Responsibilty: take action to correct any flaws, instead of pushing the responsibility from one agency to another.
Tan Kin Lian
I am heartened by these key principles and hope that Singapore will also aspire towards them. Here are some changes that have to be done in Singapore:
1. Freedom: allow people to express their views freely, without being sued for damages when they give any honest, negative opinion.
2. Fairness: reduce the wide disparity in income and ensure that people can seek justice, even if they do not have the money to engage lawyers
3. Responsibilty: take action to correct any flaws, instead of pushing the responsibility from one agency to another.
Tan Kin Lian
Property bubble?
Read this article.
My view.
All bubbles will burst one day. What goes up must come down. Any investment, including property, can go up to an unrealistic high price, but cannot stay there forever. It can only be sustained at a level that is affordable to the buyers, i.e. relative to the average national income.
Like Singapore, Dubai also had limited land. It created a property bubble that has now collapsed. Singapore will not be exempted.
There is one key difference in Singapore, and that is the role of the HDB and the CPF. The savings in the CPF had been used not only to service the mortgage payment but also to prop up the property market (by taking second priority to bank mortgage). HDB had been tolerant in allowing unemployed owners to delay payment of their mortgage installments.
In the case of Singapore, I expect that the property market will not collapse, but will remain dormant for many years. It will not show the kind of appreciation that had happened in the past. The return on property, as an investment, will be low.
Someone sent me this link:
http://www.coverville500.com/real-estates/the-next-dubai-real-estate-property-bubble-mike-maloney-of-gold-and-silver-inc
My view.
All bubbles will burst one day. What goes up must come down. Any investment, including property, can go up to an unrealistic high price, but cannot stay there forever. It can only be sustained at a level that is affordable to the buyers, i.e. relative to the average national income.
Like Singapore, Dubai also had limited land. It created a property bubble that has now collapsed. Singapore will not be exempted.
There is one key difference in Singapore, and that is the role of the HDB and the CPF. The savings in the CPF had been used not only to service the mortgage payment but also to prop up the property market (by taking second priority to bank mortgage). HDB had been tolerant in allowing unemployed owners to delay payment of their mortgage installments.
In the case of Singapore, I expect that the property market will not collapse, but will remain dormant for many years. It will not show the kind of appreciation that had happened in the past. The return on property, as an investment, will be low.
Someone sent me this link:
http://www.coverville500.com/real-estates/the-next-dubai-real-estate-property-bubble-mike-maloney-of-gold-and-silver-inc
Wednesday, May 12, 2010
Feedback on Business Simulation Game
Click here for more details of the Business Simulation Game (BEST)
AA: it's a fun and interesting game, and we can learn about business planning from playing it.
HMW: I noticed there are a few parameters, namely unit price, capacity, expenditure on marketing. I tried a premium pricing strategy, i.e. high price for high margin, and correspondingly putting a higher marketing expenditure and reducing capacity. The performance was dismal. Incurred big losses.
JA: Best Global is not only fun and interactive, it also allow us to develop good practical business sense. Some strategies, which I personally found quite useful.
a. Set the right price that generates sufficient margin to cover our overheads + some modest profit. Excessive price undercutting may gain us market share but at the expense of our overall profitability.
b. Over investment in infrastructure and over recruitment (capacity) is expensive. Manage our expense well.
c. Understand the market. If the market is not doing so well (i.e. in the red), we may wish to consider reducing our market share by increasing our price and reducing our capacity.
AG: Good and very user friendly.The guide is very informative and useful. Overall the interface is much better than what we had previously. I also see new elements like capacity, market share and profitability which makes it more interesting.
Read the Player Guide here:
AA: it's a fun and interesting game, and we can learn about business planning from playing it.
HMW: I noticed there are a few parameters, namely unit price, capacity, expenditure on marketing. I tried a premium pricing strategy, i.e. high price for high margin, and correspondingly putting a higher marketing expenditure and reducing capacity. The performance was dismal. Incurred big losses.
JA: Best Global is not only fun and interactive, it also allow us to develop good practical business sense. Some strategies, which I personally found quite useful.
a. Set the right price that generates sufficient margin to cover our overheads + some modest profit. Excessive price undercutting may gain us market share but at the expense of our overall profitability.
b. Over investment in infrastructure and over recruitment (capacity) is expensive. Manage our expense well.
c. Understand the market. If the market is not doing so well (i.e. in the red), we may wish to consider reducing our market share by increasing our price and reducing our capacity.
AG: Good and very user friendly.The guide is very informative and useful. Overall the interface is much better than what we had previously. I also see new elements like capacity, market share and profitability which makes it more interesting.
Read the Player Guide here:
Building wealth
Mortgage on your home
This article explains how to pay off your mortage early. - but after you have built up an emergency fund and have set aside money for your children's education.
My comment
It is more important to avoid getting a large mortgage in the first place. You should buy a property within 5 years of your annual income, and pay it within 25 years with a monthly repayment of less than 25% of your income. This is explained in my book on financial planning.
My comment
It is more important to avoid getting a large mortgage in the first place. You should buy a property within 5 years of your annual income, and pay it within 25 years with a monthly repayment of less than 25% of your income. This is explained in my book on financial planning.
Mother Tongue Language
There is much controversy over the issue of the mother tongue language. I do not have my personal view about whether the weightage should remain the same or be reduced.
I wish to express my concerns on two issues:
a) Some people hold strong views that the weightage should be maintained while others felt strongly that it should be reduced. I am concerned about the manner in which the views were expressed, without regard for the views of other people who may be in different circumstances.
b) There seem to be a loss of trust in the government leaders to find the right balance that takes into account the diverse views of the people. I believe that they have the responsibility to seek the right policy which accommodates the views and needs as many people as possible.
I believe that it is possible to encourage students to learn a second language, without forcing them to do it through the "weightage" in the PSLE.
Tan Kin Lian
I wish to express my concerns on two issues:
a) Some people hold strong views that the weightage should be maintained while others felt strongly that it should be reduced. I am concerned about the manner in which the views were expressed, without regard for the views of other people who may be in different circumstances.
b) There seem to be a loss of trust in the government leaders to find the right balance that takes into account the diverse views of the people. I believe that they have the responsibility to seek the right policy which accommodates the views and needs as many people as possible.
I believe that it is possible to encourage students to learn a second language, without forcing them to do it through the "weightage" in the PSLE.
Tan Kin Lian
Signs at MRT stations
The most important signs at a train station are the "Platform No" and the "Way Out" signs. In most train stations in other cities, these signs are large, standardised and are easily seen. At our MRT stations, these signs are small and non-standardised. We have signs that show "Exit" and other signs that show "Way Out".
I hope that our signs can be standardised and displayed in large signs at a prominent place. This will be helpful to visitors and tourists, who are not familiar with our MRT system.
I hope that our signs can be standardised and displayed in large signs at a prominent place. This will be helpful to visitors and tourists, who are not familiar with our MRT system.
Education system in Singapore
Read this article by Ng E-Jay.
My comments
I prefer an education system that teaches our young to be literate, numerate, know how to communicate, interact and have values. They should not be required to compete for top positions in class - which teaches them to be selfish.
My comments
I prefer an education system that teaches our young to be literate, numerate, know how to communicate, interact and have values. They should not be required to compete for top positions in class - which teaches them to be selfish.
Tuesday, May 11, 2010
Security at Suntec City
I visited an office in Suntec City. They asked to scan my NRIC but as it was lost, I gave them another card with the bar code. They gave me a visitor pass, just to get through the barrier.
I do not know the purpose of recording all visitors to the offices. There must be several hundred thousand visitors to Suntec Mall every day. They are not recorded. So, what is the purpose of knowing who visits the office? How does it enhance the security of the office? If there is a bomb, it is likely to occur among the visitors to the mall.
I do not know the purpose of recording all visitors to the offices. There must be several hundred thousand visitors to Suntec Mall every day. They are not recorded. So, what is the purpose of knowing who visits the office? How does it enhance the security of the office? If there is a bomb, it is likely to occur among the visitors to the mall.
Avoid being overcharged
This article explains about the legal but dishonest ways that you can be overcharged.
My comment
There are many similar cases in Singapore. As companies wish to maximise their profits, they are now using unethical means. Share your views here.
My comment
There are many similar cases in Singapore. As companies wish to maximise their profits, they are now using unethical means. Share your views here.
Focus of TKL blog
The focus of this blog, as stated in the header, is "insurance, finance and current affairs in Singapore". I wish to cover all three topics to be best of my ability. I appreciate the contribution of readers who direct me to other blog postings that are relevant to my blog.
My blog is aimed at the 2,500 daily visitors who find it to be useful and relevant to them.
Some people disagree with the views posted in my blog. They are welcomed to give your views, but should avoid engaging in personal or malicious attacks. If they do not like the focus of my blog, they do not need to visit this blog. (Note: I continue to get malicious attacks regularly from two persons, and have blocked their comments).
Tan Kin Lian
My blog is aimed at the 2,500 daily visitors who find it to be useful and relevant to them.
Some people disagree with the views posted in my blog. They are welcomed to give your views, but should avoid engaging in personal or malicious attacks. If they do not like the focus of my blog, they do not need to visit this blog. (Note: I continue to get malicious attacks regularly from two persons, and have blocked their comments).
Tan Kin Lian
Exchange Traded Funds (ETF)
There are two types of exchange traded fund (ETF).
a) An ETF that is invested in the shares that track the index
b) An ETF that is composed largely of deriviatives and have leverage.
You should invest in type (a), such as the STI ETF managed by StateStreet in SGX. This type of ETF is held by a trustee under the trust law.
You should avoid type (b), as it carries the risk that the issuer of this product may get insolvent, as has happend with Lehman Brothers.
Do not worry about the liquidity of the STI ETF. It is sufficient for ordinary investors, who wish to invest small sums of money for the long term and to withdraw small sums every one or two months for their expenditure. Liquidity is not an issue.
The STI ETF is NOT suitable for speculators who need the liquidity for trading. If you wish to trade, it is better to get a liquid stock.
If you are not sure about the structure of the ETF (i.e whether type a or b), you should ask the stockbroker or just stick to STI ETF (managed by State Street).
Tan Kin Lian
a) An ETF that is invested in the shares that track the index
b) An ETF that is composed largely of deriviatives and have leverage.
You should invest in type (a), such as the STI ETF managed by StateStreet in SGX. This type of ETF is held by a trustee under the trust law.
You should avoid type (b), as it carries the risk that the issuer of this product may get insolvent, as has happend with Lehman Brothers.
Do not worry about the liquidity of the STI ETF. It is sufficient for ordinary investors, who wish to invest small sums of money for the long term and to withdraw small sums every one or two months for their expenditure. Liquidity is not an issue.
The STI ETF is NOT suitable for speculators who need the liquidity for trading. If you wish to trade, it is better to get a liquid stock.
If you are not sure about the structure of the ETF (i.e whether type a or b), you should ask the stockbroker or just stick to STI ETF (managed by State Street).
Tan Kin Lian
Investment Linked Policy
I have often been asked for my views about an investment-linked policy (ILP). It separates the term insurance and investments. Do they provide good value to the consumer?
In most cases, they provide poor value for the following reasons:
a) A large part of the savings for investments is taken away to pay the "distribution cost"
b) The premiums charged for the death benefit and riders are quite high
c) The distribution cost and effect of deduction are usually higher than the traditional policies
d) The projected returns are optimistically and potentially misleading.
e) Many consumers find the benefit illustration to be too complicated to understand.
In most cases, the consumer is better off in buying the death cover and riders in a separate policy and to get competitive quotes from several companies. The best cover is the group term insurance offered by SAF, SAFRA and NTUC. Most people are eligible to participate in these policies.
It is better to invest in a low cost investment fund, such as the STI ETF available on SGX. This is explained in my book on financial planning, which is available here.
Tan Kin Lian
In most cases, they provide poor value for the following reasons:
a) A large part of the savings for investments is taken away to pay the "distribution cost"
b) The premiums charged for the death benefit and riders are quite high
c) The distribution cost and effect of deduction are usually higher than the traditional policies
d) The projected returns are optimistically and potentially misleading.
e) Many consumers find the benefit illustration to be too complicated to understand.
In most cases, the consumer is better off in buying the death cover and riders in a separate policy and to get competitive quotes from several companies. The best cover is the group term insurance offered by SAF, SAFRA and NTUC. Most people are eligible to participate in these policies.
It is better to invest in a low cost investment fund, such as the STI ETF available on SGX. This is explained in my book on financial planning, which is available here.
Tan Kin Lian
Gold and barter
Read this article.
My comment.
I always avoid paying a high price for an investment in high demand or in a bubble, including gold or property. Those who can get out early can make a profit. The other investors have to hold on to the investment for a long time to recover their cost of investment.
My comment.
I always avoid paying a high price for an investment in high demand or in a bubble, including gold or property. Those who can get out early can make a profit. The other investors have to hold on to the investment for a long time to recover their cost of investment.
Monday, May 10, 2010
Bank charges
I have to pay USD100 to Hong Kong. The bank charge $20 for cable charge and $10 for handling fee. Western Union (through the Post Office) also charge $30. This amounts to 20% of the amount to be paid. I asked the supplier to collect by credit card or Paypal. I hope that they agree.
Survey: Puzzles to train your mind
If you have practiced on the shape quiz or tangram, please take part in this survey.
Pricing of HDB flats
Read this article in The Online Citizen.
My comments
I prefer to give an option to the public to buy the HDB flats at cost plus or at market price (less subsidy). Both types are subject to their conditions. This is similar to executive condo (EC) flats that are subject to conditions which are different from private condos.
The option to buy HDB flat at cost plus may suit some young people who looks at the flat as a home, rather than as an investment. They want to pay a lower price to keep down the cost of living.
My comments
I prefer to give an option to the public to buy the HDB flats at cost plus or at market price (less subsidy). Both types are subject to their conditions. This is similar to executive condo (EC) flats that are subject to conditions which are different from private condos.
The option to buy HDB flat at cost plus may suit some young people who looks at the flat as a home, rather than as an investment. They want to pay a lower price to keep down the cost of living.
Visitors' ICs should not be retained
Publised in Straits Times Forum, 10 May 2010
MANY building owners in Singapore require a visitor to exchange his identity card (IC) for a visitor's pass.
The intent is to ensure that he returns the pass. It also serves as a security measure.
However, there is a risk of loss or mis-use of the IC when it is retained in this manner.
As a visitor, I have to take care of many other matters relating to my visit. Standing in a long queue to get back my IC adds to the hassle.
I hope building owners respect the right of people to visit their premises to conduct business. They should not be allowed to retain a visitor's IC.
Tan Kin Lian
MANY building owners in Singapore require a visitor to exchange his identity card (IC) for a visitor's pass.
The intent is to ensure that he returns the pass. It also serves as a security measure.
However, there is a risk of loss or mis-use of the IC when it is retained in this manner.
As a visitor, I have to take care of many other matters relating to my visit. Standing in a long queue to get back my IC adds to the hassle.
I hope building owners respect the right of people to visit their premises to conduct business. They should not be allowed to retain a visitor's IC.
Tan Kin Lian
Amount of Life Insurnace
This article explains the amount of life insruance that you need. In my book on financial planning, I suggest that the amount should be 5 to 10 years of your current income. You can buy a large amount of cover at a low cost by choosing term insurance for 25 years (not longer). If you can get decreasing term insurance, it is even cheaper.
Most people in Singapore can buy cheap term insurance through the SAF, SAFRA, NTUC or Public Officer's scheme.
Tan Kin Lian
Most people in Singapore can buy cheap term insurance through the SAF, SAFRA, NTUC or Public Officer's scheme.
Tan Kin Lian
Commission for life insurance agents
A life insurance agent argued that the agent has to incur high expenses and deserve the commission that is paid. This is only one part of the story, as seen from the perspective of the agent.
The agent should also see this issue from the perspective of their client. The agent has a duty to take care of the interest of the client. This includes recommending a suitable life insurance product that is good for the client. In the case of an investment plan, there is a duty to advice a plan that offers a fair return for the long term savings. In the case of a term insurance policy, the agent has to recommend a policy that charges a fair rate of premium (but does not need to be the lowest).
The problem arises when there is a conflict of interest. Many agents recommend a policy that pays a high commission but this is at the expense of the client (who trusted the agent). The agent is trained to give the marketing reasons to sell the policy, but they are not honest advice.
Some insurance agents behave worse. They approach the client every few years to get the client to stop an existing policy and take up a new "better" product. The agent earns the high commission once again, and the unsuspecting client is being taken "for a ride" and to incur a high cost again. This is how the financial future of many consumers are destroyed by the bad advice given by some unscrupulous agents.
There are some agents that behave ethically and recommend honest products that are good for consumers. The difficulty is for the consumer to tell one agent from another. This is why consumers have to be educated about insurance. My book on financial planning is aimed at achieving this goal. There is a chapter about dealing with financial advisers or insurance agents.
Several countries are now implementing legislation to ban the payment of commission on life insurance products. The agent has to earn a fee to provide financial advice to the consumer. Singapore should follow the same step, to safeguard the financial future of the ordinary people.
Tan Kin Lian
The agent should also see this issue from the perspective of their client. The agent has a duty to take care of the interest of the client. This includes recommending a suitable life insurance product that is good for the client. In the case of an investment plan, there is a duty to advice a plan that offers a fair return for the long term savings. In the case of a term insurance policy, the agent has to recommend a policy that charges a fair rate of premium (but does not need to be the lowest).
The problem arises when there is a conflict of interest. Many agents recommend a policy that pays a high commission but this is at the expense of the client (who trusted the agent). The agent is trained to give the marketing reasons to sell the policy, but they are not honest advice.
Some insurance agents behave worse. They approach the client every few years to get the client to stop an existing policy and take up a new "better" product. The agent earns the high commission once again, and the unsuspecting client is being taken "for a ride" and to incur a high cost again. This is how the financial future of many consumers are destroyed by the bad advice given by some unscrupulous agents.
There are some agents that behave ethically and recommend honest products that are good for consumers. The difficulty is for the consumer to tell one agent from another. This is why consumers have to be educated about insurance. My book on financial planning is aimed at achieving this goal. There is a chapter about dealing with financial advisers or insurance agents.
Several countries are now implementing legislation to ban the payment of commission on life insurance products. The agent has to earn a fee to provide financial advice to the consumer. Singapore should follow the same step, to safeguard the financial future of the ordinary people.
Tan Kin Lian
Sunday, May 09, 2010
Doing things in Singapore
Comment posted in this blog. I invite readers to contribute to this topic.
We should compile a list of difficult and complicated ways to do simple things in Singapore. Here is my initial attempt to get the ball rolling:
1. Taxi fares
2. Buying a car
3. Buying an HDB lease
(legally, your HDB flat belongs to the government. What? You think the government is actually upgrading your flat/estate for free? It's you who is subsiding the estate upgrading since the estate and flat does not belong to you)
4. Our primary school textbooks and exams
5. getting a meaningful job when you are retrenched in your 40's
6. calculating the cost of constructing an HDB flat
7. listing and calculating the value of Singapore assets and reserves so that the Singapore President will know how to protect them
1. Taxi fares
2. Buying a car
3. Buying an HDB lease
(legally, your HDB flat belongs to the government. What? You think the government is actually upgrading your flat/estate for free? It's you who is subsiding the estate upgrading since the estate and flat does not belong to you)
4. Our primary school textbooks and exams
5. getting a meaningful job when you are retrenched in your 40's
6. calculating the cost of constructing an HDB flat
7. listing and calculating the value of Singapore assets and reserves so that the Singapore President will know how to protect them
Life today compared to four years ago
This article by Lucky Tan compares life in Singapore now and four years ago.
Free lance "sales manager"
I searched for a GPS tracker from the Alibaba website and found many suppliers in China. I sent an e-mail to a few suppliers. I received two replies on Sunday from the same person, replying on behalf of two different companies in Shenzhen.
I suspect that this person is a freelance "sales manager" whose role is to reply to inquiries. It seems to be an entrepreneurial approach and also excellent customer service. I hope that companies in Singapore adopt the same approach and employ such "sales managers". It will create job for unemployed people.
I suspect that this person is a freelance "sales manager" whose role is to reply to inquiries. It seems to be an entrepreneurial approach and also excellent customer service. I hope that companies in Singapore adopt the same approach and employ such "sales managers". It will create job for unemployed people.
Taxi surcharges
A taxi driver told me that Marina Bay Sands is outside the CBD and does not attract the surcharge. Taxi drivers are not interested to pick up the passengers there. There is a long queue of people waiting for taxis. To solve this problem, the taxi companies have applied to Land Transport Authority to designate this location as subject to surcharge. The public is not happy, as the surcharge is now being extended to more areas.
We have a confusing system of taxi fares in Singapore. It may be better to follow the practice in other countries where there is a flat fare (which may be higher than the existing fares) and no surcharge for peak hours or certain locations.
A friend from Malaysia told me that he had difficulty in getting a taxi in Singapore. He had visited Singapore before, and it was easier to get a taxi many years ago. I told him that he probably tried to get a taxi during the time before the peak hour surcharge applies. It seems that many taxi drivers will disappear during this period and will reappear at the peak hour.
We have a confusing system of taxi fares in Singapore. It may be better to follow the practice in other countries where there is a flat fare (which may be higher than the existing fares) and no surcharge for peak hours or certain locations.
A friend from Malaysia told me that he had difficulty in getting a taxi in Singapore. He had visited Singapore before, and it was easier to get a taxi many years ago. I told him that he probably tried to get a taxi during the time before the peak hour surcharge applies. It seems that many taxi drivers will disappear during this period and will reappear at the peak hour.
Get Rich Quick Schemes
Hi Mr Tan,
Central Bank of Malaysia (i.e. Bank Negara Malaysia) recently probes an illegal deposit company - "The Gold Label Sdn Bhd" - as stated in this report, 8-May-2010.
There are just too many fraudalent & illegal get-rich-schemes (with empty promises and empty 'guarantees') designed to cheat consumers nowaday. As long as those being cheated stands out and notify the Central Bank or other authorised regulatory agencies, these regulators could conduct checks and investigations protecting the general public.
I believe there is similar authorities in Singapore too.
Philip
My comment
There is a law against illegal deposit taking in Malaysia. I believe that a similar law applies in Singapore. The financial products sold in Singapore that offer a buyback option option with interest at a high rate is a form of deposit taking. It should be regulated by the authority in Singapore.
Central Bank of Malaysia (i.e. Bank Negara Malaysia) recently probes an illegal deposit company - "The Gold Label Sdn Bhd" - as stated in this report, 8-May-2010.
There are just too many fraudalent & illegal get-rich-schemes (with empty promises and empty 'guarantees') designed to cheat consumers nowaday. As long as those being cheated stands out and notify the Central Bank or other authorised regulatory agencies, these regulators could conduct checks and investigations protecting the general public.
I believe there is similar authorities in Singapore too.
Philip
My comment
There is a law against illegal deposit taking in Malaysia. I believe that a similar law applies in Singapore. The financial products sold in Singapore that offer a buyback option option with interest at a high rate is a form of deposit taking. It should be regulated by the authority in Singapore.
Fragile global financial system
Read this excellent article by Lucky Tan.
My comment
I agree with the reference to high property prices in Singapore that is propped up by debt. Investors who believe that property prices in Singapore will continue to move up due to limited land should reconsider their views.
My comment
I agree with the reference to high property prices in Singapore that is propped up by debt. Investors who believe that property prices in Singapore will continue to move up due to limited land should reconsider their views.
Fair remuneration of agent
At the FISCA talk, I asked the participants what is a fair amount for an agent to earn on selling a life insurance policy with a monthly premium of $500. Should it be $2,000? Most participants felt that this was too high.
The actual amount that is earned by the agent (and the managers) is shown as "distribution cost" in the benefit illustration. It varies from $6,000 to $10,000. The participants were shocked. They did not realise it.
If you wish to buy a life insurance policy, look for the distribution cost and the effect of deduction. These two important points are explained in my book, Practical Guide on Financial Planning. The effect of deduction can amount to $200,000 for a policy of the above size. It is a lot of money that is deducted from your accumulated savings.
Spend $12 and 12 hours to learn about the basics of financial planning by reading the book. Attend the FISCA talk to get a better understading.
The actual amount that is earned by the agent (and the managers) is shown as "distribution cost" in the benefit illustration. It varies from $6,000 to $10,000. The participants were shocked. They did not realise it.
If you wish to buy a life insurance policy, look for the distribution cost and the effect of deduction. These two important points are explained in my book, Practical Guide on Financial Planning. The effect of deduction can amount to $200,000 for a policy of the above size. It is a lot of money that is deducted from your accumulated savings.
Spend $12 and 12 hours to learn about the basics of financial planning by reading the book. Attend the FISCA talk to get a better understading.
FISCA talk on Financial Planning - 8 May 2010
The FISCA talk on financial planning was attended by 60 participants on 8 May. The interaction was excellent.
FISCA will be holding a monthly talk on Financial Planning at the School of Business in SMU. Go to FISCA website to register.
FISCA will be holding a monthly talk on Financial Planning at the School of Business in SMU. Go to FISCA website to register.
Legal agreement
Read this letter about the role of lawyers in drafting unfair legal agreements.
My comment
We need a process to ensure that legal agreements that are imposed on the public for regulat transactions are checked to be fair. I hope that CASE or FISCA can play this role.
My comment
We need a process to ensure that legal agreements that are imposed on the public for regulat transactions are checked to be fair. I hope that CASE or FISCA can play this role.
Saturday, May 08, 2010
Save for children (2)
hi Mr Tan Kin Lian,
I have 2 children, 13 and 15 years old. I intend to buy them a insurance policy. I have read your FAQ. Can you tell me if I will buy endowment policy (saving insurance) from NTUC for my kids, is it good? I intend to spent $100 each for my children. Is there any other policy that you think is suitable to buy, can recommend me. I know very little about insurance.
REPLY
It is better to invest in a low cost investment fund. this is explained in my book, practical guide on financial planning. You can also read the relevant articles in my blog.
I have 2 children, 13 and 15 years old. I intend to buy them a insurance policy. I have read your FAQ. Can you tell me if I will buy endowment policy (saving insurance) from NTUC for my kids, is it good? I intend to spent $100 each for my children. Is there any other policy that you think is suitable to buy, can recommend me. I know very little about insurance.
REPLY
It is better to invest in a low cost investment fund. this is explained in my book, practical guide on financial planning. You can also read the relevant articles in my blog.
Saving money for their children
Many parents want to save money for the future needs of their children, e.g. education. They asked me if a life insurance policy is suitable for this purpose.
In my book on financial planning, I have recommended that the rate of savings be 25% of the earnings (and this 25% include any saving in CPF that is not used for housing). This saving for future needs can be used for emergencies (due to loss of employment or disability), medical expenses, education, and retirement. The savings is best invested in a low cost investment fund (such as the STI ETF) and should be kept flexible. A life insurance policy is rigid and high cost and does not suit this purpose.
Each time that you decide on the use of your long term savings, you have to consider if it is an appropriate use of the money. You should avoid spending too much of the money on education, if it leads to insufficient savings for retirement. Always consider the need to spend this money and if there are other better options that are less costly.
You can buy my book on financial planning online.
In my book on financial planning, I have recommended that the rate of savings be 25% of the earnings (and this 25% include any saving in CPF that is not used for housing). This saving for future needs can be used for emergencies (due to loss of employment or disability), medical expenses, education, and retirement. The savings is best invested in a low cost investment fund (such as the STI ETF) and should be kept flexible. A life insurance policy is rigid and high cost and does not suit this purpose.
Each time that you decide on the use of your long term savings, you have to consider if it is an appropriate use of the money. You should avoid spending too much of the money on education, if it leads to insufficient savings for retirement. Always consider the need to spend this money and if there are other better options that are less costly.
You can buy my book on financial planning online.
Governent debt and quantitative easing
Read this excellent article by Lucky Tan.
My comments
Europe now has to print money, i.e quantitative easing, to buy over the government debts in several countries. This will cause inflation but will lead to greater stability of the markts. It is dangerous to have government deficits funded through short term borrowings.
There are three ways for a government to fund its deficit
a. increase tax
b. print money
c. borrow
Many governments have borrowed money. It is not sustainable, as the burden falls on the future generations. The other two options have now to be considered.
My comments
Europe now has to print money, i.e quantitative easing, to buy over the government debts in several countries. This will cause inflation but will lead to greater stability of the markts. It is dangerous to have government deficits funded through short term borrowings.
There are three ways for a government to fund its deficit
a. increase tax
b. print money
c. borrow
Many governments have borrowed money. It is not sustainable, as the burden falls on the future generations. The other two options have now to be considered.
Friday, May 07, 2010
Greek Debt Crisis
Greece had a big debt caused by a large budget deficit for many years. It was not able to collect sufficient tax revenue to pay for the cost of government. It borrowed on short term bonds to cover the deficit. The lenders are not willing to roll over the debts and to buy new debts.
Many countries are in similar situation. They include the Japan, UK and USA. Will the debt crisis come to these countries? It will - it is just a matter of time.
What is the root of the problem? What is the long term solution?
Many countries are in similar situation. They include the Japan, UK and USA. Will the debt crisis come to these countries? It will - it is just a matter of time.
What is the root of the problem? What is the long term solution?
Top positions in political party
A political party in a certain country has a system for each division to elect a delegate to represent that division. The delegate meet at a national convention to elect the leaders of the party. The people seeking to be leaders have to give money to the delegates to buy their votes. This is called "money politics".
The leaders need to have a lot of money to give to the delegates to win the party elections. They have to earn their money through corrupt means. Althougth the process is democratic, it is tainted by corruption.
The leaders need to have a lot of money to give to the delegates to win the party elections. They have to earn their money through corrupt means. Althougth the process is democratic, it is tainted by corruption.
Case study - responding to a difficult issue
This is a hypothetical case. I wrote it to illustrate the different approaches to respond to a difficult issue at work.
X is in charge of the daily work at the CDP which keeps the records of shareholders of listed companies. An activist shareholder Y wrote to request that a letter be circulated to all shareholders of a listed company Z regarding a corporate issue, volunteering to pay for the printing and postage cost.
What is the typical response of most people in this situation if they were in X's place? What type of response will you give?
Survey results
Here are the survey results based on 29 responses.
Most people are willing to be helpful and positive, if they feel that they have the authority.
X is in charge of the daily work at the CDP which keeps the records of shareholders of listed companies. An activist shareholder Y wrote to request that a letter be circulated to all shareholders of a listed company Z regarding a corporate issue, volunteering to pay for the printing and postage cost.
What is the typical response of most people in this situation if they were in X's place? What type of response will you give?
Survey results
Here are the survey results based on 29 responses.
Most people are willing to be helpful and positive, if they feel that they have the authority.
Insight into stock trading
Read this article
My comment
I consider all trading as gambling. If you want to gamble, it is better to choose a product that has high liquity and low trading cost, such as foreign currency.
If you wish to invest for the long term, choose good stocks or a low cost investment fund and do not bother about the volatility in the market.
My comment
I consider all trading as gambling. If you want to gamble, it is better to choose a product that has high liquity and low trading cost, such as foreign currency.
If you wish to invest for the long term, choose good stocks or a low cost investment fund and do not bother about the volatility in the market.
Capital to Income ratio
This article shows that you need 12 years of your income to be sufficient to retire at age 65, to generate a lifetime income of 80%. I think that this is far too high. You only need to have an income of 40% to live comfortably, so 6 years would be sufficient. During your working life, you only spend 50% of your income, as 25% is saved for the future and 25% is used to pay for your home. When you retire, you will send less, so 40% is more than sufficient. This is explained in my book, Practical Guide on Financial Planning.
Why is the world in such a state?
Extract from Tommy Wong's book, "Wisdom on How to Live your Life"
Tom: Why the world is in such a state?
Guru: The world is like our home. It depends on the people living in it and what they do to it.
Tom: We certainly don’t look after our planet.
Guru: You can say that again.
Tom: We certainly don’t look after our planet.
Guru: Well said. If we don’t look after our home, it’ll be in a mess, right? So why are you surprised that the world is in such a state?
Tom: Because the world is supposed to be looked after by leaders who are clever and smart.
Guru: But what happens if they’re misguided?
Tom: You mean smart people can be misguided?
Guru: Smartness is a double-edge sword. It can heal or kill.
Tom: How can we heal the world?
Guru: By having the right concept.
Tom: What is the right concept?
Guru: We are souls and not bodies.
Tom: Guru Harry, this concept is not new. We’ve been told about this thousands of years ago. So why is the world still in such a mess?
Guru: Because many listen but few practice it.
Tom: You mean such a simple concept can help the world?
Guru: It can bring heaven to Earth.
Tommy Wong
You can order this book online.
Tom: Why the world is in such a state?
Guru: The world is like our home. It depends on the people living in it and what they do to it.
Tom: We certainly don’t look after our planet.
Guru: You can say that again.
Tom: We certainly don’t look after our planet.
Guru: Well said. If we don’t look after our home, it’ll be in a mess, right? So why are you surprised that the world is in such a state?
Tom: Because the world is supposed to be looked after by leaders who are clever and smart.
Guru: But what happens if they’re misguided?
Tom: You mean smart people can be misguided?
Guru: Smartness is a double-edge sword. It can heal or kill.
Tom: How can we heal the world?
Guru: By having the right concept.
Tom: What is the right concept?
Guru: We are souls and not bodies.
Tom: Guru Harry, this concept is not new. We’ve been told about this thousands of years ago. So why is the world still in such a mess?
Guru: Because many listen but few practice it.
Tom: You mean such a simple concept can help the world?
Guru: It can bring heaven to Earth.
Tommy Wong
You can order this book online.
Screening of Laptop
In many airports, the laptop can be kept in the luggage to be screen together through the metal detector. In Singapore airport, the laptop has to be removed from the luggage to be screened separately. This adds one more hassle. Are we creating too much hassle in Singapore?
Some airports require a person to remove the shoes and belt. This is not required in Singapore. So, we do have one less hassle in Changi.
Some airports require a person to remove the shoes and belt. This is not required in Singapore. So, we do have one less hassle in Changi.
Thursday, May 06, 2010
Security check at the airport
I went through the security check at the airport. I had to remove my laptop, mobilephone, keys, coins and pen and produce my boarding pass for checking. After clearing through the metal detector, I had to put back the laptop into the luggage and collect back my other items.
As I was about to leave, the security guard said, "Sir, don't forget your mobile phone". It was kind of him to be observant and to remind me. If not, I would have lost my mobile phone.
I wished that the people in charge would find a better way to reduce the hassle faced by passengers in going through secruity. I believe that it should be possible to find a more effective way, without the hassle - if someone in authority look into this issue.
Tan Kin Lian
As I was about to leave, the security guard said, "Sir, don't forget your mobile phone". It was kind of him to be observant and to remind me. If not, I would have lost my mobile phone.
I wished that the people in charge would find a better way to reduce the hassle faced by passengers in going through secruity. I believe that it should be possible to find a more effective way, without the hassle - if someone in authority look into this issue.
Tan Kin Lian
Wednesday, May 05, 2010
Wisdom on How to Life Life - Tommy Wong
Introduction
Humans being the most intelligent species and having lived on Earth for thousands of years, we are yet nowhere near to a life of peace, love, joy and harmony. This book contains a story of a young man, Tom, who had conversations with two gurus, Dick and Harry. Guru Dick epitomizes someone from a worldly society who emphasized on the importance of money and power. Guru Harry epitomizes someone from a spiritual society who offered an alternative way of living which can lead to peace, love, joy and harmony.
Through the conversations, Tom learnt that (1) why peace is better than happiness as a goal in life, (2) how to be empowered in life, (3) how to achieve freedom in life, (4) how to live with pleasure and without pain, (5) what society should be focused on, (6) what is the objective of education, (7) what are the purposes of life, (8) what are the differences between man-made and divine laws, (9) what are the important spiritual concepts, and (10) how to transform Earth into heaven.
Tommy Wong
Book can be ordered here.
Humans being the most intelligent species and having lived on Earth for thousands of years, we are yet nowhere near to a life of peace, love, joy and harmony. This book contains a story of a young man, Tom, who had conversations with two gurus, Dick and Harry. Guru Dick epitomizes someone from a worldly society who emphasized on the importance of money and power. Guru Harry epitomizes someone from a spiritual society who offered an alternative way of living which can lead to peace, love, joy and harmony.
Through the conversations, Tom learnt that (1) why peace is better than happiness as a goal in life, (2) how to be empowered in life, (3) how to achieve freedom in life, (4) how to live with pleasure and without pain, (5) what society should be focused on, (6) what is the objective of education, (7) what are the purposes of life, (8) what are the differences between man-made and divine laws, (9) what are the important spiritual concepts, and (10) how to transform Earth into heaven.
Tommy Wong
Book can be ordered here.
Be positive
I encourage people to have a positive attitude - to focus on what is right, rather than what is wrong. They should also avoid trying to pass judgement on other people, based on their limited knowledge, information, perception or prejudice.
I give my views on changes that will be better for the future of Singapore. I get comments from some people that are negative, cynical or judgemental. They say, "This will never happen", "the government will not agree", "you must be dreaming" and the like. There is no need for them to behave in this manner. If they disagree, they can state their reason. There is no need to be judgemental or to attack another person's views.
I believe that a large number of people supporting a positive change can make an impact. While most of us have been educated to find out what is wrong, it may be better to embark on a journey to find out what is right.
Tan Kin Lian
I give my views on changes that will be better for the future of Singapore. I get comments from some people that are negative, cynical or judgemental. They say, "This will never happen", "the government will not agree", "you must be dreaming" and the like. There is no need for them to behave in this manner. If they disagree, they can state their reason. There is no need to be judgemental or to attack another person's views.
I believe that a large number of people supporting a positive change can make an impact. While most of us have been educated to find out what is wrong, it may be better to embark on a journey to find out what is right.
Tan Kin Lian
Culture and behavior of people
People are shaped by their culture, education and way of life. They develop certain common traits - generous, selfish, open minded, closed minded, positive, negative, courageous, cowardly, honest, deceitful.
Although the traits are quite common to most people in that culture, there will be exceptions. A statement of trait does not mean that it will apply to 100% of people in that culture. If I say that the X (a certain nationality or people) are hardworking, there will certainly be some who are lazy. It is not necessary to say that "most X" are hardworking, as the word "most" is understood.
In Singapore, there ae certain people who will challenge your observation by asking you to prove their point. They wil ask "Do you have statistics to prove that X is hardworking? Did you conduct a survey? What percentage of X are hardworking? Is your survey reliable?"
After a while, most people learn to keep quiet. They have no opinion. They will let other people make a statement and they can then throw the "statistical" challenge.
I open my eyes and make my observation. I see what are the common traits of certain people. I know Singaporeans well and have observed their traits - which are shaped by our education and environment. Some of these traits are positive. Some are negative and should be changed. I will try my best to point them out.
I hope that Singaporeans will develop the open mindedness to see our positive and negative traits, be willing to laugh at ourselves, and have the strength to correct our negative traits.
Serenity prayer.
God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference
http://www.cptryon.org/prayer/special/serenity.html
Tan Kin Lian
Although the traits are quite common to most people in that culture, there will be exceptions. A statement of trait does not mean that it will apply to 100% of people in that culture. If I say that the X (a certain nationality or people) are hardworking, there will certainly be some who are lazy. It is not necessary to say that "most X" are hardworking, as the word "most" is understood.
In Singapore, there ae certain people who will challenge your observation by asking you to prove their point. They wil ask "Do you have statistics to prove that X is hardworking? Did you conduct a survey? What percentage of X are hardworking? Is your survey reliable?"
After a while, most people learn to keep quiet. They have no opinion. They will let other people make a statement and they can then throw the "statistical" challenge.
I open my eyes and make my observation. I see what are the common traits of certain people. I know Singaporeans well and have observed their traits - which are shaped by our education and environment. Some of these traits are positive. Some are negative and should be changed. I will try my best to point them out.
I hope that Singaporeans will develop the open mindedness to see our positive and negative traits, be willing to laugh at ourselves, and have the strength to correct our negative traits.
Serenity prayer.
God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference
http://www.cptryon.org/prayer/special/serenity.html
Tan Kin Lian
Useful feedback from Rex
Hello Kin Lian
I'm a fan of your blog because I think it promulgates the right values for all Singaporeans. I also like you to succeed in what seems to be a crusade of awakening and shaking up an apathetic and sentimental population who continue to tolerate misdoings and injustices in society.
In this regard, I just like to suggest to you that some of your recent posts may only give grounds for critics to discredit you.
Example 1.
You said "Singaporeans are well educated and score high marks in academic subjects. Unfortunately, most are not able to think for themselves...."
It would have been less offensive if you said "quite a few" instead of "most". "Most" means more than 50%. You will surely offend a lot of people because without a proper study, it is not possible for anyone to declare that more than 50% of Singaporeans are not street smart or can think. Your original statement will only fend fire for critics to destroy you.
Example 2.
You said "Singaporeans follow a script blindly and do not think."
Likewise, the overall use of the term SINGAPOREANS is damning on 100% Singaporeans. In my opinion you should have said "Some Singaporeans" because it is more accurate, and better from EQ point of view.
Example 3.
You said "Car drivers in Singapore have a bad habit of using the horn to express their anger. "
Likewise, this statement is too strong. It is a direct implication of every car driver in singapre. In my opinion you should have said "there seems to be quite a few car drivers....blah".
But I assure you my intentions are sincere, I do not wish to see criticisms against a person with a good heart, because of minor slip-ups in linguistic usage. Too many good people have fallen unnecessarily in the current regime because of the very same reason.
rex
REPLY
Thanks for your feedback.
I agree with your points.
I'm a fan of your blog because I think it promulgates the right values for all Singaporeans. I also like you to succeed in what seems to be a crusade of awakening and shaking up an apathetic and sentimental population who continue to tolerate misdoings and injustices in society.
In this regard, I just like to suggest to you that some of your recent posts may only give grounds for critics to discredit you.
Example 1.
You said "Singaporeans are well educated and score high marks in academic subjects. Unfortunately, most are not able to think for themselves...."
It would have been less offensive if you said "quite a few" instead of "most". "Most" means more than 50%. You will surely offend a lot of people because without a proper study, it is not possible for anyone to declare that more than 50% of Singaporeans are not street smart or can think. Your original statement will only fend fire for critics to destroy you.
Example 2.
You said "Singaporeans follow a script blindly and do not think."
Likewise, the overall use of the term SINGAPOREANS is damning on 100% Singaporeans. In my opinion you should have said "Some Singaporeans" because it is more accurate, and better from EQ point of view.
Example 3.
You said "Car drivers in Singapore have a bad habit of using the horn to express their anger. "
Likewise, this statement is too strong. It is a direct implication of every car driver in singapre. In my opinion you should have said "there seems to be quite a few car drivers....blah".
But I assure you my intentions are sincere, I do not wish to see criticisms against a person with a good heart, because of minor slip-ups in linguistic usage. Too many good people have fallen unnecessarily in the current regime because of the very same reason.
rex
REPLY
Thanks for your feedback.
I agree with your points.
Name of company
I called a friend at his office number to confirm our appointment for lunch.
Receptionist, "May I know your name?"
Reply: Tan Kin Lian
Receptionist, "May I know the purpose?"
Reply: I wish to confirm my lunch with him today.
Receptionist, "Which company are you from?"
Reply: "It does not matter which company. I only want to confirm the lunch"
Receptionist, "Ok. I will put you through".
Singaporeans follow a script blindly and do not think. They always have to ask "which company". Does it really matters?
Tan Kin Lian
Receptionist, "May I know your name?"
Reply: Tan Kin Lian
Receptionist, "May I know the purpose?"
Reply: I wish to confirm my lunch with him today.
Receptionist, "Which company are you from?"
Reply: "It does not matter which company. I only want to confirm the lunch"
Receptionist, "Ok. I will put you through".
Singaporeans follow a script blindly and do not think. They always have to ask "which company". Does it really matters?
Tan Kin Lian
Poor customer service at call center
I bought a video cam. It failed after 2 weeks. The manufacturer offered a 1 for 1 exchange. The experience of making the claim was bad.
I called their call center. I recognise the accent of the customer service offixer and confirmed that the call was routed to the Philippines. The officer asked for all types of detailed information about the customer, serial number, nature of problem, etc. The call took almost 15 minutes. Due to the poor telephone connection, the information has to be spelled out several times for recording.
It would have been much easier if the company provided a form on the website where the details can be submitted. The call center should only be used for clarification.
Many large organisations have outsourced its call center to an oversea location to reduce cost. But this has resulted in poor service to its customers. The top managers should call their own call center and find out the experience and difficulty of the customers.
The poor standard of customer service happens in many organisations and occurs all over the world. Most companies do not care about customer service, in spite of their mission statement, as the poor standard of service is now the norm.
However, a company that wish to improve its customer service can stand out. I hope that some companies will try to make a difference and set a positive example.
Tan Kin Lian
I called their call center. I recognise the accent of the customer service offixer and confirmed that the call was routed to the Philippines. The officer asked for all types of detailed information about the customer, serial number, nature of problem, etc. The call took almost 15 minutes. Due to the poor telephone connection, the information has to be spelled out several times for recording.
It would have been much easier if the company provided a form on the website where the details can be submitted. The call center should only be used for clarification.
Many large organisations have outsourced its call center to an oversea location to reduce cost. But this has resulted in poor service to its customers. The top managers should call their own call center and find out the experience and difficulty of the customers.
The poor standard of customer service happens in many organisations and occurs all over the world. Most companies do not care about customer service, in spite of their mission statement, as the poor standard of service is now the norm.
However, a company that wish to improve its customer service can stand out. I hope that some companies will try to make a difference and set a positive example.
Tan Kin Lian
High cost of free seminars
Singaporeans like to get free service, free advice and free seminars. They even ask if the event comes with a free goodie bag.
They should realise that the event cost a lot of money to organise, including the high cost of advertising, rental of the venue and the cost of the speakers. How does the organiser get the revenue to pay this cost?
The answer is obvious. It comes from the products that are sold at the event. The price of these products are marked up to cover the high cost of marketing. If few sales are made, such as in a seminar on land banking time sharing or "special" financial products, the markup has to be increased accordingly. And the markup can be very high!
It is better for the public to pay to attend a seminar on financial planning that is organised by a consumer education body, such as FISCA. You will get impartial and relevant advice that is good for consumers. You will get advice on how to avoid expensive financial products that take away a large part of the accumulated savings.
Before you attend a financial planning seminar, it is better for you to read a book to get background information. Spend $12 and 12 hours to be educated with my book, Practical Guide on Financial Planning. Be educated and avoid paying the high price of ignorance!
Tan Kin Lian
They should realise that the event cost a lot of money to organise, including the high cost of advertising, rental of the venue and the cost of the speakers. How does the organiser get the revenue to pay this cost?
The answer is obvious. It comes from the products that are sold at the event. The price of these products are marked up to cover the high cost of marketing. If few sales are made, such as in a seminar on land banking time sharing or "special" financial products, the markup has to be increased accordingly. And the markup can be very high!
It is better for the public to pay to attend a seminar on financial planning that is organised by a consumer education body, such as FISCA. You will get impartial and relevant advice that is good for consumers. You will get advice on how to avoid expensive financial products that take away a large part of the accumulated savings.
Before you attend a financial planning seminar, it is better for you to read a book to get background information. Spend $12 and 12 hours to be educated with my book, Practical Guide on Financial Planning. Be educated and avoid paying the high price of ignorance!
Tan Kin Lian
Tuesday, May 04, 2010
Tangram Book ($6)
The tangram book ($6) will be available in the major bookstores and the convenience stores by Monday 11 May. It can also be ordered online now.
Ability to think
Singaporeans are well educated and score high marks in academic subjects. Unfortunately, most are not able to think for themselves or are not "street smart". They rely on the advice of other people. They are quite trusting and gullible and may not even know who can or cannot be trusted. They are easily cheated by people with bad intentions.
This is why so many people are misled into investing in the credit linked notes, such as the mini-bonds. They rely on the advice and assurances of the people who sell the products, not knowing that these people are also ignorant and are mostly interested in the commission or meeting the sales quota. Their managers of the distributors trusted the investment banks who created the products and failed to do the due diligence.
The inability to think extend beyond the credit-linked notes. Many people are now being deceived by the empty promises made by the promoters of certain products, such as land banking or promises of buyback of the investments with an attractive rate of interest. The buy back options are written with legal loopholes.
For a long time, Singaporeans have been used to an environment where they do not have to exercise their legal or human rights. They trusted the "safe" environment" in Singapore. However, this environment has changed and is no longer safe. It is easy for crooks to go around cheating people under the environment of "caveat emptor" or "regulate with a light touch".
There is a story about the frog in a pot of water. As the water becomes heated, the frog get used to the temperature and was not aware about the danger, until the frog was finally boiled. I am afraid that there is a similar situation to what is heppening in Singapore today.
It is important for Singaporeans to pay attention to the new environment and be aware that they cannot continue to blindly trust people who have their own self interest. Singaporeans should learn to think for themselves, i.e. gather the facts and make their own judgement. They have to learn about the legal and human rights that they are guaranteed under the constitution of Singapore.
The leaders can take the lead to educate the people about their constitutional and human rights.
Tan Kin Lian
This is why so many people are misled into investing in the credit linked notes, such as the mini-bonds. They rely on the advice and assurances of the people who sell the products, not knowing that these people are also ignorant and are mostly interested in the commission or meeting the sales quota. Their managers of the distributors trusted the investment banks who created the products and failed to do the due diligence.
The inability to think extend beyond the credit-linked notes. Many people are now being deceived by the empty promises made by the promoters of certain products, such as land banking or promises of buyback of the investments with an attractive rate of interest. The buy back options are written with legal loopholes.
For a long time, Singaporeans have been used to an environment where they do not have to exercise their legal or human rights. They trusted the "safe" environment" in Singapore. However, this environment has changed and is no longer safe. It is easy for crooks to go around cheating people under the environment of "caveat emptor" or "regulate with a light touch".
There is a story about the frog in a pot of water. As the water becomes heated, the frog get used to the temperature and was not aware about the danger, until the frog was finally boiled. I am afraid that there is a similar situation to what is heppening in Singapore today.
It is important for Singaporeans to pay attention to the new environment and be aware that they cannot continue to blindly trust people who have their own self interest. Singaporeans should learn to think for themselves, i.e. gather the facts and make their own judgement. They have to learn about the legal and human rights that they are guaranteed under the constitution of Singapore.
The leaders can take the lead to educate the people about their constitutional and human rights.
Tan Kin Lian
An Accountable Parliament - NSP newsletter
My friend, Goh Meng Seng, is the Secretary General of the National Solidarity Party. Meng Seng helped me in translating my speeches into Chinese at Hong Lim Park.
Meng Seng asked me to send an article for publication in the next issue of his party's newsletter. I decided to use this article. I believe that it is important for the future of Singapore to have an accountable Parliament that reflects the views of the ordinary people of Singapore.
Meng Seng asked me to send an article for publication in the next issue of his party's newsletter. I decided to use this article. I believe that it is important for the future of Singapore to have an accountable Parliament that reflects the views of the ordinary people of Singapore.
Finder's keepers
If someone finds a valuable property, it must be sent to the Police for safe-keeping, so that the owner can claim the item. Read this letter.
The owner can also offer a reward in the Lost and Found portal here. I hope that the Police will search this portal to locate the owner and encourage the owners of lost item to report in this portal.
The owner can also offer a reward in the Lost and Found portal here. I hope that the Police will search this portal to locate the owner and encourage the owners of lost item to report in this portal.
Fake request for financial assistance
During the past month, I received this type of e-mail from two people that I knew. I suspect that they are fraud. Be careful. I hope that the Police will carry out a sting operation and catch the culprit. It is easy for the police to do it, if they are willing to take the trouble.
Hello,
How are you doing? I hope this email reaches you on time, i had a trip to the United Kingdom, but unfortunately for me i got mugged at the park of the hotel,all my cash, credit card and cell-phone were taken away from me. I don't even have a phone where i can be reached right now because of my hotel bill.
Presently my things are been held down by the hotel management due to my inability to pay the hotel bills which i currently owe, they even had to restrict my access to the hotel facilitates until outstanding bills are cleared and i don't have a dime on me again,i had to walk down to the city library in order to send you this email.
I need you to kindly assist me with about $2,780:08 USD so that i can settle the hotel bills and make arrangement to return back home, please let me know how much you can assist me with soonest.
Hello,
How are you doing? I hope this email reaches you on time, i had a trip to the United Kingdom, but unfortunately for me i got mugged at the park of the hotel,all my cash, credit card and cell-phone were taken away from me. I don't even have a phone where i can be reached right now because of my hotel bill.
Presently my things are been held down by the hotel management due to my inability to pay the hotel bills which i currently owe, they even had to restrict my access to the hotel facilitates until outstanding bills are cleared and i don't have a dime on me again,i had to walk down to the city library in order to send you this email.
I need you to kindly assist me with about $2,780:08 USD so that i can settle the hotel bills and make arrangement to return back home, please let me know how much you can assist me with soonest.
Investigate fraudulent practices
The Securities and Exchange Commission is charging Goldman Sachs for fraudulent practices in US courts. A letter published in the Straits Times asked the Monetary Authority of Singapore to take similar action against financial institutions for similar practices in Singapore. MAS has replied that the jurisdiction is different. Another person commented in my blog that fraud is fraud, regardless of jurisdiction.
Someone commented in my blog that such cases are complex and difficult to prove in court. I wish to take issue on this point. Fraudulent practices have to be investigated, if there are reasons to suspect that it has occurred and many hundreds of people are involved as victims. Only the authority (i.e. state or government) has the resources and power to carry out this investigation. The victims do not have the resources and power to take civil action.
After gathering the evidence, the authority has to bring the case in court and convince the judge that there was fraudlent intent. This may be difficult, but one should not shirk this responsibility. In many instances, the charged party may be willing to negotiate a settlement without admission of guilt and to compensate the victims or the state.
I applaud the attorney general of New York State for brining up the case against the financial institutions on the auction rate securities and on financial reinsurance. The financial institutions decided to settle the case out of court and agreed to make suitable compensations. It was not easy for the attorney general to take this task, but he did not find excuses to avoid the respnsibility.
I hope that our authority in Singapore will take the bold step to protect the reputation of Singapore as a safe place for people to invest their money here.
Tan Kin Lian
Someone commented in my blog that such cases are complex and difficult to prove in court. I wish to take issue on this point. Fraudulent practices have to be investigated, if there are reasons to suspect that it has occurred and many hundreds of people are involved as victims. Only the authority (i.e. state or government) has the resources and power to carry out this investigation. The victims do not have the resources and power to take civil action.
After gathering the evidence, the authority has to bring the case in court and convince the judge that there was fraudlent intent. This may be difficult, but one should not shirk this responsibility. In many instances, the charged party may be willing to negotiate a settlement without admission of guilt and to compensate the victims or the state.
I applaud the attorney general of New York State for brining up the case against the financial institutions on the auction rate securities and on financial reinsurance. The financial institutions decided to settle the case out of court and agreed to make suitable compensations. It was not easy for the attorney general to take this task, but he did not find excuses to avoid the respnsibility.
I hope that our authority in Singapore will take the bold step to protect the reputation of Singapore as a safe place for people to invest their money here.
Tan Kin Lian
High yields on matured policies
A life insurance company advertised the high return (over 5% p.a.) on its policies that has matured in recent years. There is a risk that the agents may mis-use this information to sell their current policies. The possible mis-use are:
a) The high yield was obtained during the past three decades under an environment of high interest rate and economic growth. The future economic environment is quite different.
b) The expenses in the past on the old products were much lower than the new products that are being marketed today.
If the agent or consultant tells you about the high yield, but did not tell you the two key factors (shown above), you should distrust the agent for not being transparent and honest.
When you get a benefit illustration from any insurance company, including one that advertised a high return on matured policies, look for the following:
a) Distribution cost as percentage of premium. If it is more than 50%, it is too high.
b) Look for the "effect of deduction" after 20 years or longer. If it is more than 20%, it is too high.
c) See the proportion of the maturity benefit that is "not guaranteed". Avoid policies that "bump up" the "non-guaranteed" bonus at the maturity date to show a high payout. You may not get this bonus, but it will be too late at that time.
You can get more information from my book, Practical Guide on Financial Planning. There is a table that shows the benchmark for the effect of deduction for various years to maturity.
a) The high yield was obtained during the past three decades under an environment of high interest rate and economic growth. The future economic environment is quite different.
b) The expenses in the past on the old products were much lower than the new products that are being marketed today.
If the agent or consultant tells you about the high yield, but did not tell you the two key factors (shown above), you should distrust the agent for not being transparent and honest.
When you get a benefit illustration from any insurance company, including one that advertised a high return on matured policies, look for the following:
a) Distribution cost as percentage of premium. If it is more than 50%, it is too high.
b) Look for the "effect of deduction" after 20 years or longer. If it is more than 20%, it is too high.
c) See the proportion of the maturity benefit that is "not guaranteed". Avoid policies that "bump up" the "non-guaranteed" bonus at the maturity date to show a high payout. You may not get this bonus, but it will be too late at that time.
You can get more information from my book, Practical Guide on Financial Planning. There is a table that shows the benchmark for the effect of deduction for various years to maturity.
Monday, May 03, 2010
Investigation of fraudulent practices
Hi Kin Lian,
The Straits Times Forum publised a letter entitled "Should MAS Act". A week later, the MAS gave a short reply which was off tangent to the key issue. The MAS said that the jurisdications are different.
In the case of the US, the SEC filed charges of malpractices and fraud against Goldman Sach. It was not about breaching regulations of the US jurisdiction, but was about fraudulent practices and non-disclosures. Fraud is fraud regardless of the jurisdiction in question.
Resources and power to investigate and prove these are way above the capabilities any individual or group of individuals possess. Investigations with access to confidential documents can only be done successfully, just like in the US, with the direct involvement of the authorities.
There are circumstantial evidence to warrant investigations in the US. Goldman Sach in its defence was also reported (in ST's May 2) to have alleged that other US investments banks were also doing similar things, not just it alone. That proves the point of how predatorial these banks were back then and operating in packs.
How can MAS totally ignore this course of action of investigation when even countries in Europe may also be following in the US footsteps.
Of course, entities like Morgan Stanley are innocent until proven guilty. But how can they ever be proven guility if MAS refuses to investigate. What's in MAS's minds and agenda is anyone's guess. But it will be a Himalayan task to attempt a private class action suit in the US on transactions booked in Singapore without the sympathetic support and empowerment of local authorities.
The Straits Times Forum publised a letter entitled "Should MAS Act". A week later, the MAS gave a short reply which was off tangent to the key issue. The MAS said that the jurisdications are different.
In the case of the US, the SEC filed charges of malpractices and fraud against Goldman Sach. It was not about breaching regulations of the US jurisdiction, but was about fraudulent practices and non-disclosures. Fraud is fraud regardless of the jurisdiction in question.
Resources and power to investigate and prove these are way above the capabilities any individual or group of individuals possess. Investigations with access to confidential documents can only be done successfully, just like in the US, with the direct involvement of the authorities.
There are circumstantial evidence to warrant investigations in the US. Goldman Sach in its defence was also reported (in ST's May 2) to have alleged that other US investments banks were also doing similar things, not just it alone. That proves the point of how predatorial these banks were back then and operating in packs.
How can MAS totally ignore this course of action of investigation when even countries in Europe may also be following in the US footsteps.
Of course, entities like Morgan Stanley are innocent until proven guilty. But how can they ever be proven guility if MAS refuses to investigate. What's in MAS's minds and agenda is anyone's guess. But it will be a Himalayan task to attempt a private class action suit in the US on transactions booked in Singapore without the sympathetic support and empowerment of local authorities.
Abuse of car horn
In some cities, it is an offense to use the car horn. except in an emergency or to avoid an accident. The abuse of the horn disturbs the tranquility and affects other car drivers and the public. Car drivers in Singapore have a bad habit of using the horn to express their anger. I hope that this is treated as a public nuisance.
Restructuring of bankrupt companies
Large fees are paid to accountants, lawyers and consultants to handle the restructuring of bankrupt companies. They have to be borne by the shareholders who already lost so much value in their investments. Read this report.
My comment
This is clearly excessive, but nobody seems to care. We are in a world of greed and immorality.
My comment
This is clearly excessive, but nobody seems to care. We are in a world of greed and immorality.
Give way on the road
Last Friday, I was driving along the Central Expressway. There were at least five occasions when the vehicle in front of me signalled the intention to cut into my lane. I slowed down and let them passed. It does not matter if they were bad drivers or could have signalled earlier.
Refund of Pinnacle Notes
Two years ago, a finance company sold $40,000 in a Pinnacle Notes to my wife. She brought back the sales brochure and felt convinced that it was a good investment. She believed in the assurances given by the finance company. She was told that many people rushed to buy the product which would be sold out soon.
I saw the wording on the brochure, "You stand to lose all of the amount that you have invested". I read the brochure for more details, but was told that they are explained in the prospectus and other documents (not made available to my wife). I said, "What kind of rubbish is this?".
At that time, I had a distrust of all structured products as my wife had earlier invested in two series of capital guaranteed products and got back just 2% after investing for 5 years (when a safe government bond would have earned ber 15% at that time).
I told my wife to cancel the investment and ask the finance company to return the money to her. She said that it was not possible, as she had been told that the investment cannot be rolled back. I told my wife to tell the finance company that if they did not refund the money, I would fight them on a matter of principle.
My wife got back her $40,000. If not, she would have lost nearly all of her invested money as the notes are now worthless.
Lesson: It is important for Singaporeans to think for themselves and be aware of their legal and human rights.
Tan Kin Lian
I saw the wording on the brochure, "You stand to lose all of the amount that you have invested". I read the brochure for more details, but was told that they are explained in the prospectus and other documents (not made available to my wife). I said, "What kind of rubbish is this?".
At that time, I had a distrust of all structured products as my wife had earlier invested in two series of capital guaranteed products and got back just 2% after investing for 5 years (when a safe government bond would have earned ber 15% at that time).
I told my wife to cancel the investment and ask the finance company to return the money to her. She said that it was not possible, as she had been told that the investment cannot be rolled back. I told my wife to tell the finance company that if they did not refund the money, I would fight them on a matter of principle.
My wife got back her $40,000. If not, she would have lost nearly all of her invested money as the notes are now worthless.
Lesson: It is important for Singaporeans to think for themselves and be aware of their legal and human rights.
Tan Kin Lian
Two sides to a story
Read this article.
My comment
It is better for the government minister to be above the fray and not be defensive about people presenting the other side. By acknowleding that there is another side, the minister will set the environment for a more open society in Singapore. I continue to be hopeful that our leaders have the integrity and intelligence to understand my message.
My comment
It is better for the government minister to be above the fray and not be defensive about people presenting the other side. By acknowleding that there is another side, the minister will set the environment for a more open society in Singapore. I continue to be hopeful that our leaders have the integrity and intelligence to understand my message.
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