The new Prime Minister of Australia is against a large population growth. Read this article.
My observation
If Australia with its large size and a population of only 22 million complains about over-crowding, what is the situation in Singapore?
Tuesday, June 29, 2010
Low birth rate
An edited version of this letter was published in Straits Times Online on 29 June 2010
A Straits Times editorial entitled "A case of try and try again" (28 June 2010) reported on the many failed attempts to arrest the declining birth rate in Singapore. The current average of 1.22 children per woman of child bearing age is far below the replacement level of 2.07, and must place our birth rate as among the lowest in the world.
This worrying fact was noted by the Government almost 25 years ago and several rounds of incentives have been introduced, with great publicity and fanfare, but all of them have failed miserably. We refused to recognise the real reasons for the failure and instead said that this is a trend faced by other countries. If this is the case, why should Singapore fare worst than others?
Singapore's low birth rate is the outcome of our social and economic policies of the past decades, which has resulted in high cost of living, low security of employment, low wages, wide disparity of income, high cost of housing, a stressed education system and so on.
The measures to increase the population through immigration will have their negative impacts. Worse, it will not solve the underlying problems, as the immigrants will face the same difficulties as the local born citizens, and they have more opportunity (and less deterrence) to move to other countries at a convenient time in the future.
I hope that we will be prepared to face reality, address the underlying issues, and be prepared to try new measures that were not tried before in Singapore (but have proven successful in other countries).
Tan Kin Lian
A Straits Times editorial entitled "A case of try and try again" (28 June 2010) reported on the many failed attempts to arrest the declining birth rate in Singapore. The current average of 1.22 children per woman of child bearing age is far below the replacement level of 2.07, and must place our birth rate as among the lowest in the world.
This worrying fact was noted by the Government almost 25 years ago and several rounds of incentives have been introduced, with great publicity and fanfare, but all of them have failed miserably. We refused to recognise the real reasons for the failure and instead said that this is a trend faced by other countries. If this is the case, why should Singapore fare worst than others?
Singapore's low birth rate is the outcome of our social and economic policies of the past decades, which has resulted in high cost of living, low security of employment, low wages, wide disparity of income, high cost of housing, a stressed education system and so on.
The measures to increase the population through immigration will have their negative impacts. Worse, it will not solve the underlying problems, as the immigrants will face the same difficulties as the local born citizens, and they have more opportunity (and less deterrence) to move to other countries at a convenient time in the future.
I hope that we will be prepared to face reality, address the underlying issues, and be prepared to try new measures that were not tried before in Singapore (but have proven successful in other countries).
Tan Kin Lian
Structured deposit
My friend brought back a brochure of a structured deposit offered by a big local bank. It contains about 10 pages of explanation. It offered an interst rate of around 1.5% per annum and require the investment to be locked up for a few years.,
I advised her not to invest in this type of structured deposit. Why should a consumer have to read some many pages of conditions that are written by the bank through their lawyer? Surely, there must be some catch somewhere?
It is better for the consumer to take the risk and invest in a low cost investment fund. The risk can be reduced by following the principles set out in Practical Guide on Financial Planning.
If the consumer finds the market to tbe too high now, or that the economic situation is uncertain, it is better to keep the money in a savigns account (earn 0.125% per annum) and wait for a better time to invest in the fund. There is no point to lock up the monty for a few years and earn just 1% per annum (and still be subject to conditions that is not so transparent to the consumer).
Tan Kin Lian
I advised her not to invest in this type of structured deposit. Why should a consumer have to read some many pages of conditions that are written by the bank through their lawyer? Surely, there must be some catch somewhere?
It is better for the consumer to take the risk and invest in a low cost investment fund. The risk can be reduced by following the principles set out in Practical Guide on Financial Planning.
If the consumer finds the market to tbe too high now, or that the economic situation is uncertain, it is better to keep the money in a savigns account (earn 0.125% per annum) and wait for a better time to invest in the fund. There is no point to lock up the monty for a few years and earn just 1% per annum (and still be subject to conditions that is not so transparent to the consumer).
Tan Kin Lian
Monday, June 28, 2010
Survey - Ministers
On popular request, I am carrying out this survey (now closed) for you to rate how well our ministers are doing their jobs.
Update
Here are the survey results based on 100 replies.
Update
Here are the survey results based on 100 replies.
Soft infrastructure
Dubai leads the way.
My observation.
When I visit Dubai, I do not have to fill in any immigration or customs form. They checked my passport and let me through. Dubai is the only country that have done away with the unnecessary forms asking for information (for tourist statistics and other reasons) that they do not really need. In many countries, they make you fill up a few detailed forms, but nobody bother to pay any attention.
Even Singapore require tourist to complete a form to keep statistics that are not really necessary.
My observation.
When I visit Dubai, I do not have to fill in any immigration or customs form. They checked my passport and let me through. Dubai is the only country that have done away with the unnecessary forms asking for information (for tourist statistics and other reasons) that they do not really need. In many countries, they make you fill up a few detailed forms, but nobody bother to pay any attention.
Even Singapore require tourist to complete a form to keep statistics that are not really necessary.
Slur on our reputation
Singapore is getting a bad reputation at international circles.
I watch a CNBC program where a financial expert was being interviewed on the new financial regulation measures that are being introduced in the US Congress. He has a vested interested to continue the old practice as it allows his firm to get more business and make more money. He reply was that, if the new bill is passed, the US banks will move their operations overseas, for example, "Singapore". He mentioned only Singapore and did not mention Hong Kong or other financial centers.
This gives the impression that Singapore is ready to attract the international banks to continue their risky and shady business, that has caused the collapse of the global financial system.
The financial business that is being attracted to Singapore may create jobs for the bank employees and wealth managers. But it came at a heavy price for the local people. With the liberal environment, the banks have been selling risky structured products to many consumers, who have lost large sums of money.
I wish to ask our leaders. Is it worthwhile to develop the financial center in this way, i.e. the slur on our reputation and the loss suffered by ordinary folks?
Tan Kin Lian
I watch a CNBC program where a financial expert was being interviewed on the new financial regulation measures that are being introduced in the US Congress. He has a vested interested to continue the old practice as it allows his firm to get more business and make more money. He reply was that, if the new bill is passed, the US banks will move their operations overseas, for example, "Singapore". He mentioned only Singapore and did not mention Hong Kong or other financial centers.
This gives the impression that Singapore is ready to attract the international banks to continue their risky and shady business, that has caused the collapse of the global financial system.
The financial business that is being attracted to Singapore may create jobs for the bank employees and wealth managers. But it came at a heavy price for the local people. With the liberal environment, the banks have been selling risky structured products to many consumers, who have lost large sums of money.
I wish to ask our leaders. Is it worthwhile to develop the financial center in this way, i.e. the slur on our reputation and the loss suffered by ordinary folks?
Tan Kin Lian
Low cost insurance
This is an invitation to the insurance agents who read my blog.
If you know of any insurance company that offers individual term, critical illness or personal accident cover that is close to the benchmark for the SAF group insurance scheme (and I allow a margin of 30% higher), you can send details to me for posting in my blog. I will also include your contact e-mail and mobile phone, and recommend the consumers to approach you.
UPDATE
Two persons have responded to my request. I need a table to be produced showing the premium rate for certain ages (every 5 years) and durations (every 5 years up to 25 years). If I find the rate to be within 30% of the SAF group rates, I will post the rates and the contact of the financial adviser, and recommend the consumders to approach them.
Please quote a sum assured of $300,000 for term insurance and $100,000 for critical illness cover and the insurance company that offers these rates.
If you know of any insurance company that offers individual term, critical illness or personal accident cover that is close to the benchmark for the SAF group insurance scheme (and I allow a margin of 30% higher), you can send details to me for posting in my blog. I will also include your contact e-mail and mobile phone, and recommend the consumers to approach you.
UPDATE
Two persons have responded to my request. I need a table to be produced showing the premium rate for certain ages (every 5 years) and durations (every 5 years up to 25 years). If I find the rate to be within 30% of the SAF group rates, I will post the rates and the contact of the financial adviser, and recommend the consumders to approach them.
Please quote a sum assured of $300,000 for term insurance and $100,000 for critical illness cover and the insurance company that offers these rates.
High cost of medical care
Some insurance agents will tell you stories about people they know, who have to incur high cost of medical care for critical illness. They did not tell you about the frequency of these expensive cases, and they tend to exaggerate the amount that is involved. I know of many people who are treated for early stage cancer and have recovered, and they do not have to spend too much on medical bills.
If you look at the number of these high bill cases, you will find that they are much less frequent than deaths through traffic and other accidents.
It is more important to have adequate life insurance, for 5 to 10 years of earnings, that can be purchased through affordable term insurance. You can insure under the group insurance offered to SAF, SAFRA, public officers and trade union members. The cost of insurance is low, as shown in this benchmark.
For insurance against cost of medical care, you are already covered by your employer. You only need to take up Basic Medishield (as you may need it if you are no longer working).
If you wish to buy critical illness cover, you can opt for the SAF critical illness cover for $100,000 at a premium of only $10 a month (available through SAF). This insurance is valid up to age 45. You can discontinue it after 45 (to avoid paying 4 times of the premium). By that time, you should have sufficient savings.
If you are not able to get this cover, it is all right to go without it, as the bill is covered by your employer or the Basic Medishield.
Do not waste your money on expensive medical insurance or private Shield plan or critical illness cover, especially the plan that is recommended by most insurance agents. The money can be invested to earn an accumulated sum for your retirement or other future needs.
For your savings, it is best to invest in a low cost investment fund. This is explained in Practical Guide on Financial Planning. Youc an also attend the monthly talk by FISCA on financial planning.
Tan Kin Lian
If you look at the number of these high bill cases, you will find that they are much less frequent than deaths through traffic and other accidents.
It is more important to have adequate life insurance, for 5 to 10 years of earnings, that can be purchased through affordable term insurance. You can insure under the group insurance offered to SAF, SAFRA, public officers and trade union members. The cost of insurance is low, as shown in this benchmark.
For insurance against cost of medical care, you are already covered by your employer. You only need to take up Basic Medishield (as you may need it if you are no longer working).
If you wish to buy critical illness cover, you can opt for the SAF critical illness cover for $100,000 at a premium of only $10 a month (available through SAF). This insurance is valid up to age 45. You can discontinue it after 45 (to avoid paying 4 times of the premium). By that time, you should have sufficient savings.
If you are not able to get this cover, it is all right to go without it, as the bill is covered by your employer or the Basic Medishield.
Do not waste your money on expensive medical insurance or private Shield plan or critical illness cover, especially the plan that is recommended by most insurance agents. The money can be invested to earn an accumulated sum for your retirement or other future needs.
For your savings, it is best to invest in a low cost investment fund. This is explained in Practical Guide on Financial Planning. Youc an also attend the monthly talk by FISCA on financial planning.
Tan Kin Lian
Sunday, June 27, 2010
Investing in SGX
I am looking for a person who is experienced in investing in the stocks, REITS and ETF of SGX. I like to arrange a 3 hour course for members of FISCA. If you are interested to give this talk, please send an e-mail to kinlian@gmail.com.
The topics should include:
1. How to open an account.
2. How are the shares kept in CDP
3. What are REITS
4. What are ETFs
5. How to identify and select the blue chip stocks
6. Difference between long term investing and short term trading.
7. What are the charges for transacting and keeping shares
8. What to do with rights and bonus issues
The topics should include:
1. How to open an account.
2. How are the shares kept in CDP
3. What are REITS
4. What are ETFs
5. How to identify and select the blue chip stocks
6. Difference between long term investing and short term trading.
7. What are the charges for transacting and keeping shares
8. What to do with rights and bonus issues
Yield on life policies
Here are some examples of the poor yield on life assurance policies:
http://tankinlian.blogspot.com/search?q=poor+return
http://tankinlian.blogspot.com/search?q=poor+return
Economic stimulus or austerity
The US implemented economic stimulus to deal with the economic crisis. UK and Germany decided to implement austerity measures to cut down their deficits. These countries have top economic advisers. Why does one country decided to adopt stimulus while two others decided to take the opposite measures?
Economics is an imperfect science. Expert economists have two views. They said, "one the one hand, we have to do this. On the other hand, we have to do that". Some government leaders are so tired of this type of talk that they are now looking for economic experts with one hand (just a joke!).
What is the correct action? Nobody knows. Each person, economic expert or non-expert, can have his view. I prefer the US approach. I do not see how the economy can get better if more people are unemployed due to austerity measures.
Economics is an imperfect science. Expert economists have two views. They said, "one the one hand, we have to do this. On the other hand, we have to do that". Some government leaders are so tired of this type of talk that they are now looking for economic experts with one hand (just a joke!).
What is the correct action? Nobody knows. Each person, economic expert or non-expert, can have his view. I prefer the US approach. I do not see how the economy can get better if more people are unemployed due to austerity measures.
SAF group insurance (term and critical illness)
Many consumers have difficulty in getting an attractive rate for term insurance and critical illness cover. Some insurance agents quote a high premium rate for term insurance (more than 5 times of the actual cost) and then try to convince the customer to buy a high cost policy which pays an attractive commission to the agent. The high cost policy includes the investment-linked plan (ILP) and the limited payment policy (i.e. covers whole of life with premium payable for 20 years).
Consumers can refer to the SAF group insurance policy (term insruance and critical illness cover) to get a benchmark for the premium rate for these covers. You can refer to the documents uploaded here: http://www.easysearch.sg/Links.aspx?CatID=11
If you are eligible, you can join the SAF group insurance scheme. For example, you pay a monthly premium of $38.40 to get term insurance up to age 65 of $300,000. You pay $10 a month to get critical illness cover for $100,000 up to age 45. (You do not need to insure more than $100,000 or beyond age 45).
If you are not eligible, you can use the premium rate as the benchmark for what you need to pay for your individual cover. You may have to pay a higher rate, but it should be within 30% of the SAF rate. If it is higher, the policy is too expensive and should be avoided.
Tan Kin Lian
Read Practical Guide on Financial Planning
Consumers can refer to the SAF group insurance policy (term insruance and critical illness cover) to get a benchmark for the premium rate for these covers. You can refer to the documents uploaded here: http://www.easysearch.sg/Links.aspx?CatID=11
If you are eligible, you can join the SAF group insurance scheme. For example, you pay a monthly premium of $38.40 to get term insurance up to age 65 of $300,000. You pay $10 a month to get critical illness cover for $100,000 up to age 45. (You do not need to insure more than $100,000 or beyond age 45).
If you are not eligible, you can use the premium rate as the benchmark for what you need to pay for your individual cover. You may have to pay a higher rate, but it should be within 30% of the SAF rate. If it is higher, the policy is too expensive and should be avoided.
Tan Kin Lian
Read Practical Guide on Financial Planning
Locked into a poor policy
A consumer showed me the benefit illustration of a 21 year anticipated endowment policy taken 18 years ago for a large life insurance company. She paid $2,000 a year, comprising of $1,500 for the basic policy and $500 for the critial illness rider.
The projected maturity value in 3 years time is $25,000. The premiums paid for 21 years is $42,000, comprising of $31,500 for the basic policy and $10,500 for the rider.
I found the premium for the critcal illness rider (which does not provide any return) to be too expensive for the small amount of cover. The return on the main policy is negative, and is lower than the total premiums that was paid.
The consumer asked if she should stop the policy now, as the return is negative. The cash value for 18 years of premium is so poor, that she had no choice but to continue the policy.
This large insurance company must have sold more than 100,000 policies of this plan (just my guess). The policyholders had no choice but to accept the negative return for 20 years of savings.
It is very sad that the consumers in Singapore have to suffer this type of treatment. They were financially unsavvy and trusted the insurance agents. However, these agents sold them a bad product, which was made worse by the cut in bonus rates and the reduction in the interest that is credited on the installment payments.
Consumers should avoid most types of life insurance products that give a poor yield on their savings. They should buy term insurance and save in a low cost investment fund, such as the STI ETF available on the Singapore Exchange.
Read my book, Practical Guide on Financial Planning.
The projected maturity value in 3 years time is $25,000. The premiums paid for 21 years is $42,000, comprising of $31,500 for the basic policy and $10,500 for the rider.
I found the premium for the critcal illness rider (which does not provide any return) to be too expensive for the small amount of cover. The return on the main policy is negative, and is lower than the total premiums that was paid.
The consumer asked if she should stop the policy now, as the return is negative. The cash value for 18 years of premium is so poor, that she had no choice but to continue the policy.
This large insurance company must have sold more than 100,000 policies of this plan (just my guess). The policyholders had no choice but to accept the negative return for 20 years of savings.
It is very sad that the consumers in Singapore have to suffer this type of treatment. They were financially unsavvy and trusted the insurance agents. However, these agents sold them a bad product, which was made worse by the cut in bonus rates and the reduction in the interest that is credited on the installment payments.
Consumers should avoid most types of life insurance products that give a poor yield on their savings. They should buy term insurance and save in a low cost investment fund, such as the STI ETF available on the Singapore Exchange.
Read my book, Practical Guide on Financial Planning.
Winner of Quiz 6-1
10 correct entries (i.e. Henry) were received. The winner, selected by a draw conducted by the computer software, was Kuan Say Yong (Sxxxx3771). Congratulations.
Please send an e-mail to kinlian@gmail.com giving your mobile number Ifor verification) and address. The prize (Intelligence Quiz Vol 3) will be sent to you.
This intelligence quiz requires some skill. You can get the tips from the book. Quiz 6-2 is now open for you to try your skill and luck.
Please send an e-mail to kinlian@gmail.com giving your mobile number Ifor verification) and address. The prize (Intelligence Quiz Vol 3) will be sent to you.
This intelligence quiz requires some skill. You can get the tips from the book. Quiz 6-2 is now open for you to try your skill and luck.
Wisdom on How to Live Life (Book 2)
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 a second and a third conversation with Guru Harry. These are continuations of their first conversation which is contained in the book "Wisdom on How to Live Life". Guru Harry epitomizes someone from a spiritual society who offers a way of living which can lead to peace, love, joy and harmony.
Through these conversations, Tom learnt that (1) how to find out our interest and mission in life, (2) why meditation is important, (3) what we have left after losing everything, (4) why it is better to believe that people die at a time of their own choosing, (5) what we should do after becoming enlightened, (6) what life is like without a body, (7) which concept of God is more empowering, (8) what is the real power of believing we are divine, (9) why it is important to believe that God and I are one, and (10) why we should transform Earth into heaven.
Tommy Wong
Tommy Wong's books (Vol 1 and 2) can be bought here.
Through these conversations, Tom learnt that (1) how to find out our interest and mission in life, (2) why meditation is important, (3) what we have left after losing everything, (4) why it is better to believe that people die at a time of their own choosing, (5) what we should do after becoming enlightened, (6) what life is like without a body, (7) which concept of God is more empowering, (8) what is the real power of believing we are divine, (9) why it is important to believe that God and I are one, and (10) why we should transform Earth into heaven.
Tommy Wong
Tommy Wong's books (Vol 1 and 2) can be bought here.
Wisdom on How to Live Life
Here are some comments on Amazon website on the book by Dr. Tommy Wong.
Discussion of "Wisdom on How to Live Life" on Amazon
I came across Tommy Wong's books whist carrying out a search on 'spirituality' and am pleased I did. His whole way of writing and explanations are simple and make so much sense. I have read and reviewed books by Eckhart Tolle which I thought were good, but these books by Tommy are much better in my opinion and deserve to be read widely. I hate to use cliche's by these books are definitely lifechangers. I cannot recommend them highly enough. So impressed am I that I will buy any future book if he decides to write more. Are there other people who have read his books and feel the same way?
A. J. Bray
Discussion of "Wisdom on How to Live Life" on Amazon
I came across Tommy Wong's books whist carrying out a search on 'spirituality' and am pleased I did. His whole way of writing and explanations are simple and make so much sense. I have read and reviewed books by Eckhart Tolle which I thought were good, but these books by Tommy are much better in my opinion and deserve to be read widely. I hate to use cliche's by these books are definitely lifechangers. I cannot recommend them highly enough. So impressed am I that I will buy any future book if he decides to write more. Are there other people who have read his books and feel the same way?
A. J. Bray
Financial awareness
Hi Mr Tan,
I am running a small business. I have heard from friends that I should buy unit trust but do not know how to do it and which company to look for. I also heard that foreign currency deposit is butter than insurance as I do not need to commit so long.
A couple of years ago, I had placed some hard earned savings with Sunshine Empire and was very disappointed that I could not get back anything. I was actually angry why the firm could run in Singapore and had so many investors, but I have lost hope in getting back my money.
Can you advise me as to which company can advise me on unit trust and has lower distribution cost? Is placing my savings with Income a wise move? Which investment firm would accept investment under my corporate sole proprietorship account? Is it secure or should I only be satisfied with returns from fixed deposit under corporate account?
REPLY
Please attend the talk on financial planning organised by FISCA (http://www.fisca.sg/). You will be given a copy of the book, Practucal Guide on Financial Planning. It will answer most of your questions. You can also buy the book here, http://www.easysearch.sg/
I am running a small business. I have heard from friends that I should buy unit trust but do not know how to do it and which company to look for. I also heard that foreign currency deposit is butter than insurance as I do not need to commit so long.
A couple of years ago, I had placed some hard earned savings with Sunshine Empire and was very disappointed that I could not get back anything. I was actually angry why the firm could run in Singapore and had so many investors, but I have lost hope in getting back my money.
Can you advise me as to which company can advise me on unit trust and has lower distribution cost? Is placing my savings with Income a wise move? Which investment firm would accept investment under my corporate sole proprietorship account? Is it secure or should I only be satisfied with returns from fixed deposit under corporate account?
REPLY
Please attend the talk on financial planning organised by FISCA (http://www.fisca.sg/). You will be given a copy of the book, Practucal Guide on Financial Planning. It will answer most of your questions. You can also buy the book here, http://www.easysearch.sg/
Corporate E-mails
Here are some tips on the use of corporate e-mails for small and large companies. They allow a company to operate smoothly in spite of changes in staff and to have several staff work together in handling replies to third parties. It can improve the company's productivity significantly and reduce the scope for confusion.
Tan Kin Lian
Tan Kin Lian
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