Monday, January 31, 2011
FISCA Talk on Structured Products
Paula Tan, an expert on structured products, is giving a talk on 19 February 2011. You can read an outline of the talk and register for the talk at www.fisca.sg/events
Sunday, January 30, 2011
Avoid financial advisers
A foreigner, working in Singapore, approached me for advice. He bought a Vista plan from a financial planner two years ago, and was shocked to learn now about the high monthly charge of 5% of the premium that is deducted from the account. He never knew that he was buying a life insurance policy with a high upfront charge, which came into effect after 18 months. He was told that it is a regular saving investment product.
The financial adviser had assured him, a few times, that the charge was only 0.7% after 18 months. The adviser had told a deliberate lie to him, to get him to put in a large sum of savings, more than $3,000 a month. I asked him to check about the surrender charge, which I suspect will take away most of the accumulated premiums - if the policy is terminated now.
It is bad for an insurance company to design such a policy that is confusing to the consumer, and for the financial adviser to tell a deliberate lie to get the consumer to put in a large part of his savings. This amounts to cheating, but how can the consumer prove it? He must have signed the forms without proper understanding.
I advised him to write to the newspaper but he is worried that his colleagues and employer will get to know of his predicament.
My advice to consumers - avoid all financial advisers and insurance agents. Do not buy any investment or life insurance product from a person who approaches you. You will never know if you can become the next victim of this type of financial product.
My message to MAS - is this the kind of financial hub that you wish to build for Singapore? Do you wish to sit back and allow these types of practices to continue?
Tan Kin Lian
The financial adviser had assured him, a few times, that the charge was only 0.7% after 18 months. The adviser had told a deliberate lie to him, to get him to put in a large sum of savings, more than $3,000 a month. I asked him to check about the surrender charge, which I suspect will take away most of the accumulated premiums - if the policy is terminated now.
It is bad for an insurance company to design such a policy that is confusing to the consumer, and for the financial adviser to tell a deliberate lie to get the consumer to put in a large part of his savings. This amounts to cheating, but how can the consumer prove it? He must have signed the forms without proper understanding.
I advised him to write to the newspaper but he is worried that his colleagues and employer will get to know of his predicament.
My advice to consumers - avoid all financial advisers and insurance agents. Do not buy any investment or life insurance product from a person who approaches you. You will never know if you can become the next victim of this type of financial product.
My message to MAS - is this the kind of financial hub that you wish to build for Singapore? Do you wish to sit back and allow these types of practices to continue?
Tan Kin Lian
Big loss on ILP
Dear Mr Tan,
Here is my two cents worth for investment linked products. My wife, being a naive person, bought an insurance/investment plan from a bank after she asked about how to earn a decent return on her hard earned money but was sweet-talked by a financial planner to sign up for the plan. Once the plan was signed, the financial planner did not call her for the next five years and she faithfully contributed $500 a month.
After investing over $38,000 over 6 years, she was told that the current value was only $26,000, giving a loss of 31% (no counting inflation). After selling the policy, agents have a hands off approach.
I do believe that most people are better off investing in an STI ETF or some blue chip share which gets dividends. I do hope that other investors do learn from our mistakes and not be CONNED into buying investment linked products from agents who think of nothing but earning a quick buck from naive people like my wife. My pain is your gain!
*Kindly take note that most insurance agents do not have a basic salary or a very low basic salary thus they would sell products which would give them the most commission as just to meet the client, they would have to pay for dinner, transport, parking etc thus selling low commission products such as term insurance would not make sense to them. PUT YOURSELF IN THEIR SHOES, WOULD YOU BE SELLING TERM INSURANCE TO EARN A MEASLY COMMISSION? (Food for thought)
My comment
It is best for consumers to avoid all financial advisers and insurance agents. They have to earn commission by selling this type of bad product to you.
Here is my two cents worth for investment linked products. My wife, being a naive person, bought an insurance/investment plan from a bank after she asked about how to earn a decent return on her hard earned money but was sweet-talked by a financial planner to sign up for the plan. Once the plan was signed, the financial planner did not call her for the next five years and she faithfully contributed $500 a month.
After investing over $38,000 over 6 years, she was told that the current value was only $26,000, giving a loss of 31% (no counting inflation). After selling the policy, agents have a hands off approach.
I do believe that most people are better off investing in an STI ETF or some blue chip share which gets dividends. I do hope that other investors do learn from our mistakes and not be CONNED into buying investment linked products from agents who think of nothing but earning a quick buck from naive people like my wife. My pain is your gain!
*Kindly take note that most insurance agents do not have a basic salary or a very low basic salary thus they would sell products which would give them the most commission as just to meet the client, they would have to pay for dinner, transport, parking etc thus selling low commission products such as term insurance would not make sense to them. PUT YOURSELF IN THEIR SHOES, WOULD YOU BE SELLING TERM INSURANCE TO EARN A MEASLY COMMISSION? (Food for thought)
My comment
It is best for consumers to avoid all financial advisers and insurance agents. They have to earn commission by selling this type of bad product to you.
North South Expressway
I wrote this letter to the Straits Times to suggest how the $7-8 billion for the North South Expressway could be better spent. The ST did not publish my letter. http://tankinlian.com/admin/file.aspx?id=382
Saturday, January 29, 2011
Logic Challenge (2)
Here is a more challenging (complex) level of puzzles:
http://tankinlian.com/admin/file.aspx?id=380
Give them to your visitors to try during the Lunar New Year. But make sure you try first!
http://tankinlian.com/admin/file.aspx?id=380
Give them to your visitors to try during the Lunar New Year. But make sure you try first!
Logic Challenge
Try this logic challenge during the lunar new year. Get your visitors to compete in the challenge - but make sure that you try it first!
Singapore's national debt is high
Dear Mr. Tan
Please refer to http://www.economist.com/content/global_debt_clock Looking at the above site, USA, Canada, Western Europe, Japan and SINGAPORE seems to be having serious national debt problem. Is Singapore is worst than USA since debt per person for Sgp is $41.7k while USA is $25.8k. Do educate, thanks.
REPLY
I am not familiar with this topic. I will post your question and ask other people to comment.
Please refer to http://www.economist.com/content/global_debt_clock Looking at the above site, USA, Canada, Western Europe, Japan and SINGAPORE seems to be having serious national debt problem. Is Singapore is worst than USA since debt per person for Sgp is $41.7k while USA is $25.8k. Do educate, thanks.
REPLY
I am not familiar with this topic. I will post your question and ask other people to comment.
Family Life 1.1 is now in beta mode
The game can now be played at:
http://projects.easyapps.sg/fl/
It can be quite fun. Try it. Here is the description of the game:
http://tankinlian.com/admin/file.aspx?id=335
A video will be prepared soon.
http://projects.easyapps.sg/fl/
It can be quite fun. Try it. Here is the description of the game:
http://tankinlian.com/admin/file.aspx?id=335
A video will be prepared soon.
Friday, January 28, 2011
A bad investment product
The investment-linked policy is probably one of the worst type of investment that is sold to a consumer in Singapore. Here are the reasons:
Many investment linked polices have a reduction of yield of 4% p.a. If the investment earn 6%, the net yield to the consumer is 2%. This is a poor yield for locking up the money for 25 years. It is not sufficient to cover inflation. It is a very poor yield, considering that the consumers takes all of the investment risk. I wonder why the regulator allow consumers to be given such a bad deal on their long term savings.
At least whole life and endowment policies provide some guarantee for the policyholder, in return for the low yield.
If you can find an investment linked policy that takes away less than 1% per annum for the management fee, and invest 100% of the premium from the first month (i.e. the premium is not used to pay commission and other distribution cost), then the investment linked policy is acceptable. So far, there is no such policy in the market. The best choice is to invest in the STI exchange traded fund, available in SGX.
Tan Kin Lian
- The consumer takes the investment risks, without any commensurate return
- The consumer is locked into the policy due to the excessive upfront charge
- The insurance company levies a high fee to manage the investments
- The insurance company is not good at investing the funds (generally)
Many investment linked polices have a reduction of yield of 4% p.a. If the investment earn 6%, the net yield to the consumer is 2%. This is a poor yield for locking up the money for 25 years. It is not sufficient to cover inflation. It is a very poor yield, considering that the consumers takes all of the investment risk. I wonder why the regulator allow consumers to be given such a bad deal on their long term savings.
At least whole life and endowment policies provide some guarantee for the policyholder, in return for the low yield.
If you can find an investment linked policy that takes away less than 1% per annum for the management fee, and invest 100% of the premium from the first month (i.e. the premium is not used to pay commission and other distribution cost), then the investment linked policy is acceptable. So far, there is no such policy in the market. The best choice is to invest in the STI exchange traded fund, available in SGX.
Tan Kin Lian
US Financial Crisis Inquiry Commission
Here is the report of the inquiry commission set up by the US government to look into the causes of the financial crisis of 2008.
http://www.bbc.co.uk/news/business-12297002
It concluded that the crisis was caused by a number of factors:
http://www.bbc.co.uk/news/business-12297002
It concluded that the crisis was caused by a number of factors:
- Failures in financial regulation, including the Federal Reserve's failure "to stem the tide of toxic mortgages"
- A breakdown in corporate governance that led to "reckless" actions and excessive risk taking by financial institutions
- Households taking on too much debt
- A lack of understanding of the financial system on the part of policymakers
- Fundamental breaches in accountability and ethics "at all levels".
My comments
It is frank and direct to the point - no hiding of the truth.Thursday, January 27, 2011
Sample financial plans
Here are the sample financial plans for:
Age 25
Age 35
Age 60
The reflect the financial situation of people at various stages of their life. You can view the financial plans to understand the approach and request for a projection for your own situation in this website, http://projects.easyapps.sg/life21d/Planning.aspx
Even those who approach retirement need a financial strategy on how to invest their retirement savings to get a good yield. The sample projections show the importance of:
Age 25
Age 35
Age 60
The reflect the financial situation of people at various stages of their life. You can view the financial plans to understand the approach and request for a projection for your own situation in this website, http://projects.easyapps.sg/life21d/Planning.aspx
Even those who approach retirement need a financial strategy on how to invest their retirement savings to get a good yield. The sample projections show the importance of:
- Adjusting the capital sum and monthly income at retirement for the effect of inflation
- Getting a yield at least 2% higher than inflation
- Avoid buying the bad financial products that gives a low yield or have high risks.
Tan Kin Lian
Unethical practice by insurance agents
Hi
I recently came across a practice by some agents which i find rather uncomfortable. But there is nothing much I can do about it so I hope you can raise some awareness about this so as to prevent more people from falling victim.
The scenario is as follow: Agent/financial advisor went back to all his/her existing/orphan clients with an regular ILP plan and told them about a new plan which is a similar ILP(change in version/name) and advise them that they can get more coverage with the same regular premium. client took up the plan without realising that the first ILP will be going into non forfieture.
After 2 years, the client can terminate his first ILP and get back a sum of money.
This is very unethical as the client as the client could have avoid unnecessary charges by maintaining the initial plan instead of getting the new ILP.
Agent/FA gets away with the commsion, production as non forfieture is not considered as replacement for some Insurance company.
I guess you have better resources to educate the client or to engage the relavent department to put a stop to this. Hope to clear the bad name of insurance.
REPLY
It is very sad that insurance agents are acting unethically and the insurance company and the regulator are not taking action to stop the abuse. This type of case is quite rampant. It is easy to catch the financial adviser who engage in this abuse, if the regulator is willing to take the trouble.
I recently came across a practice by some agents which i find rather uncomfortable. But there is nothing much I can do about it so I hope you can raise some awareness about this so as to prevent more people from falling victim.
The scenario is as follow: Agent/financial advisor went back to all his/her existing/orphan clients with an regular ILP plan and told them about a new plan which is a similar ILP(change in version/name) and advise them that they can get more coverage with the same regular premium. client took up the plan without realising that the first ILP will be going into non forfieture.
After 2 years, the client can terminate his first ILP and get back a sum of money.
This is very unethical as the client as the client could have avoid unnecessary charges by maintaining the initial plan instead of getting the new ILP.
Agent/FA gets away with the commsion, production as non forfieture is not considered as replacement for some Insurance company.
I guess you have better resources to educate the client or to engage the relavent department to put a stop to this. Hope to clear the bad name of insurance.
REPLY
It is very sad that insurance agents are acting unethically and the insurance company and the regulator are not taking action to stop the abuse. This type of case is quite rampant. It is easy to catch the financial adviser who engage in this abuse, if the regulator is willing to take the trouble.
Big professional liability risk
Financial advisers are not aware that they face a big professional liability risk. They are selling large life insurance policies to high net worth individuals, without explaining the distribution cost (more than $100,000) or the effect of deduction (more than $500,000).
When the customer learns about these huge charges at a later date, they are likely to engage a lawyer to sue the financial advisers for negligence. It will be easy for the lawyer to prove that the financial adviser had failed to give proper advice, or worse still, had deliberately withheld relevant information or misled the customer. The damages could be large and the legal fees will add to the damage. One strong argument is that the financial adviser had breached the code of ethics and professionalism.
The financial adviser will not be able to hide behind the excuse that "they are disclosed in the benefit illustration". It is the duty of the financial adviser to explain these key points to the customer, so that the customer can make an informed decision. The failure to provide the proper explanation will be taken against the financial adviser - who has a fiduciary duty. The insurance company can get away by saying, "we rely on the financial adviser to give proper advice to the client" but it will be difficulty for the financial adviser to escape the liability.
It is likely that some lawyers may take the case for the consumer on a special understanding, similar to a contingency fee arrangement. When this type of arrangement is made, it is likely that many cases will be taken up. Financial advisers should be careful about their role, or they can be easily bankrupted by a few of these legal suits. The days of lax supervision and non-accountability may be over.
Tan Kin Lian
When the customer learns about these huge charges at a later date, they are likely to engage a lawyer to sue the financial advisers for negligence. It will be easy for the lawyer to prove that the financial adviser had failed to give proper advice, or worse still, had deliberately withheld relevant information or misled the customer. The damages could be large and the legal fees will add to the damage. One strong argument is that the financial adviser had breached the code of ethics and professionalism.
The financial adviser will not be able to hide behind the excuse that "they are disclosed in the benefit illustration". It is the duty of the financial adviser to explain these key points to the customer, so that the customer can make an informed decision. The failure to provide the proper explanation will be taken against the financial adviser - who has a fiduciary duty. The insurance company can get away by saying, "we rely on the financial adviser to give proper advice to the client" but it will be difficulty for the financial adviser to escape the liability.
It is likely that some lawyers may take the case for the consumer on a special understanding, similar to a contingency fee arrangement. When this type of arrangement is made, it is likely that many cases will be taken up. Financial advisers should be careful about their role, or they can be easily bankrupted by a few of these legal suits. The days of lax supervision and non-accountability may be over.
Tan Kin Lian
Unfair conversion rate
Dear Mr. Tan,
I am a customer of a bank and responded to their RMB timed deposit promotion, which pays an interest slightly above norm. The bank converted my existing savings in SGD into RMB at their "internal exchange rate" at 36 pips above market rate and did not get my prior approval to the conversion or provided any documentation of the transaction. Is this transaction fair to the consumer and is this valid?
REPLY
It is not fair for the bank to convert your money at their exchange rate without getting your agreement to the rate. Here are the steps that you can take:
1. You can write a letter of complaint to the CEO of the bank giving your account of what has happened and why you felt that you were not fairly treated, i.e. if you were told about the conversion rate, you would not have placed the deposit. You can ask them to reduce the spread from 36 pips to say 10 pips or whatever you consider to be a fair rate.
2. If you do not get a satisfactory reply, you can lodge a complaint with FIDREC. See www.fidrec.com.sg for the process. You can also pay $50 to FISCA (www.fisca.sg) for someone to help you to write the complaint.
3. You can also consider writing a letter to the newspaper.
I am a customer of a bank and responded to their RMB timed deposit promotion, which pays an interest slightly above norm. The bank converted my existing savings in SGD into RMB at their "internal exchange rate" at 36 pips above market rate and did not get my prior approval to the conversion or provided any documentation of the transaction. Is this transaction fair to the consumer and is this valid?
REPLY
It is not fair for the bank to convert your money at their exchange rate without getting your agreement to the rate. Here are the steps that you can take:
1. You can write a letter of complaint to the CEO of the bank giving your account of what has happened and why you felt that you were not fairly treated, i.e. if you were told about the conversion rate, you would not have placed the deposit. You can ask them to reduce the spread from 36 pips to say 10 pips or whatever you consider to be a fair rate.
2. If you do not get a satisfactory reply, you can lodge a complaint with FIDREC. See www.fidrec.com.sg for the process. You can also pay $50 to FISCA (www.fisca.sg) for someone to help you to write the complaint.
3. You can also consider writing a letter to the newspaper.
Single Premium Heritage Plan
Dear Mr Tan
I will like to ask you on your opinion on Single Premium Heritage plan from Manulife Financial. Please advise if it a good plan for investment.
REPLY
I find the policy to be quite complicated and not easy for me to understand. My advice to you is never to buy a policy that you do not understand, especially when you are putting in a large single premium.
It is the job of the agent to explain the policy to you. As the agent can earn a big commission by selling the policy to you, you should be wary that the agent may not tell you the full picture, so you should not invest your money until you are completely satisfied and has verified the details.
I saw that the distribution cost (i.e money taken from you) is more than $100,000 and the effect of deduction could be more than $1 million. Are you sure you want to give away so much money?
I will like to ask you on your opinion on Single Premium Heritage plan from Manulife Financial. Please advise if it a good plan for investment.
REPLY
I find the policy to be quite complicated and not easy for me to understand. My advice to you is never to buy a policy that you do not understand, especially when you are putting in a large single premium.
It is the job of the agent to explain the policy to you. As the agent can earn a big commission by selling the policy to you, you should be wary that the agent may not tell you the full picture, so you should not invest your money until you are completely satisfied and has verified the details.
I saw that the distribution cost (i.e money taken from you) is more than $100,000 and the effect of deduction could be more than $1 million. Are you sure you want to give away so much money?
Wednesday, January 26, 2011
Beautiful scenes of Switzerland
Here are some beautiful scenes of Switzerland [Mike Hansford]
http://tankinlian.com/admin/file.aspx?id=378
http://tankinlian.com/admin/file.aspx?id=378
40% discount on books
Enjoy 40% discount on the 5 book bundle and other discounts at www.tankinlian.com/ishop. You can buy the bundle and share with your friends or present them as a gift.
Bundle of 5 books
http://projects.easyapps.sg/iShop/public/common/File.aspx?file=57
Practical Guide on Financial Planning (enjoy 33% discount)
http://projects.easyapps.sg/iShop/public/common/File.aspx?file=62
Lunar New Year Gift
http://tankinlian.blogspot.com/2011/01/lunar-new-year-gift.html
Bundle of 5 books
http://projects.easyapps.sg/iShop/public/common/File.aspx?file=57
Practical Guide on Financial Planning (enjoy 33% discount)
http://projects.easyapps.sg/iShop/public/common/File.aspx?file=62
Lunar New Year Gift
http://tankinlian.blogspot.com/2011/01/lunar-new-year-gift.html
Plan for retirement at age 65
Mr Tan,
What are your views on the raised retirement age? This would mean that an adult who joined the workforce at 25, has 40 years working. Does it change any traditional assumption that you make when planning, considering the assumption has always been 25 years?
REPLY
In my financial planning tool, I advise people to plan for retiring at age 65. If they start work at 25, they have a working career of 40 years. They have to be prepared to be out of work for a few years during this period, due to voluntary or involuntary termination of employment. They can plan for a few years of further education, if their finances are adequate.
I advise people to buy term insurance for 25 years only, say from age 25 to 50 years. When they reach age 50, they should have adequate savings in the event of premature death or illness. By that time, their children are likely to have grown up. The financial planning tool can be found here. This financial plan is explained here.
What are your views on the raised retirement age? This would mean that an adult who joined the workforce at 25, has 40 years working. Does it change any traditional assumption that you make when planning, considering the assumption has always been 25 years?
REPLY
In my financial planning tool, I advise people to plan for retiring at age 65. If they start work at 25, they have a working career of 40 years. They have to be prepared to be out of work for a few years during this period, due to voluntary or involuntary termination of employment. They can plan for a few years of further education, if their finances are adequate.
I advise people to buy term insurance for 25 years only, say from age 25 to 50 years. When they reach age 50, they should have adequate savings in the event of premature death or illness. By that time, their children are likely to have grown up. The financial planning tool can be found here. This financial plan is explained here.
Poor yield on Vivo-life
A consumer showed me the benefit illustration for a Vivo-life. He found that the deduction at the end of 25 years appeared to meet my benchmark of 20%. The deduction was 20% based on a gross yield of 3.75% and 32% at the gross yield of 5.25%.
I was surprised at the difference between the two deduction figures of 20% and 32%. The difference is too wide and does not make sense. It suggest to me that there is something wrong with the system of allocation of bonus to produce such wide results. I asked him to get the insurance company to confirm the figures. I am quite worried that as insurance companies introduce complicated and exotic tables of bonus rates, they may end up with mistakes that are quite unfair to certain groups of policyholders. I hope that MAS is paying attention to this feedback.
For the particular policy, the premium was paid for only 5 years. It is not appropriate to use my benchmark which is based on premiums being paid for 25 years. For the Vivo-policy, the calculation should be based on the premium period of 5 years. here are the figures:
I was shocked that the cash value at the end of the premium payment period is lower than the total premiums. This gives a negative yield. The total deduction is excessive, as shown by the above table.
It does not make sense for a consumer to be paying $59,680 in premium for 5 years to get a cash value of only $53,349. The consumer loses $6,331 for 5 years. The cost of the insurance cover for 5 years should be probably be $500 (in total) and not $6,300. It is such a bad deal for the consumer!
Tan Kin Lian
I was surprised at the difference between the two deduction figures of 20% and 32%. The difference is too wide and does not make sense. It suggest to me that there is something wrong with the system of allocation of bonus to produce such wide results. I asked him to get the insurance company to confirm the figures. I am quite worried that as insurance companies introduce complicated and exotic tables of bonus rates, they may end up with mistakes that are quite unfair to certain groups of policyholders. I hope that MAS is paying attention to this feedback.
For the particular policy, the premium was paid for only 5 years. It is not appropriate to use my benchmark which is based on premiums being paid for 25 years. For the Vivo-policy, the calculation should be based on the premium period of 5 years. here are the figures:
A Prem | Years | CV | Gross yld | Net Yld | Deduction |
11936 | 5 | 53349 | 3.75% | -5.61% | 9.36% |
11936 | 5 | 53349 | 5.25% | -5.61% | 10.86% |
It does not make sense for a consumer to be paying $59,680 in premium for 5 years to get a cash value of only $53,349. The consumer loses $6,331 for 5 years. The cost of the insurance cover for 5 years should be probably be $500 (in total) and not $6,300. It is such a bad deal for the consumer!
Act with honor and integrity
I find it despicable for a corporation to impose a charge on an unsuspecting consumer and to waive the charge when the consumer finds out and make a protest. The corporation is behaving like a crook, without honor and integrity.
I was in Suntec Mall. A young man approached me to get me to subscribe for a credit card. He showed me a free gift. The annual fee is waived for the first year.
I asked, "What is the annual fee after the first year? ". He replied "aah, uuh, aah ...... $190". I walked away. He said "nobody pays the renewal fee. If you call the bank, they will waive it". I know that the bank will waive the annual fee for consumers who knows about it and who have the clout. They hope to make the fee on the unsuspecting consumers who did not notice the charge or do not have the clout. I find this practice to be despicable, just like stealing. I refused to take the credit card.
I am writing with this strong language, knowing that some of my blog visitors are from the banks and are involved in this despicable practice. I hope that they agree with me, and will pass this message to their management. I also know that people from MAS read my blog. I hope that they will pass the message to their management also, so that they can take steps to get our banks and corporations to be more honorable in their dealings - and stop behaving like crooks.
Tan Kin Lian
I was in Suntec Mall. A young man approached me to get me to subscribe for a credit card. He showed me a free gift. The annual fee is waived for the first year.
I asked, "What is the annual fee after the first year? ". He replied "aah, uuh, aah ...... $190". I walked away. He said "nobody pays the renewal fee. If you call the bank, they will waive it". I know that the bank will waive the annual fee for consumers who knows about it and who have the clout. They hope to make the fee on the unsuspecting consumers who did not notice the charge or do not have the clout. I find this practice to be despicable, just like stealing. I refused to take the credit card.
I am writing with this strong language, knowing that some of my blog visitors are from the banks and are involved in this despicable practice. I hope that they agree with me, and will pass this message to their management. I also know that people from MAS read my blog. I hope that they will pass the message to their management also, so that they can take steps to get our banks and corporations to be more honorable in their dealings - and stop behaving like crooks.
Tan Kin Lian
Deposits with M V Land
This developer ask the owners to pay deposits before giving a permit to start renovation work or to move in the furniture. They may not have the legal right to impose these requirements. It is like asking for a ransom. Read this letter that I wrote to the directors of M V Land. I have to fax the letter to them, because they do not read e-mails sent to their company, even though they give out the e-mail address:
http://tankinlian.com/admin/file.aspx?id=377
http://tankinlian.com/admin/file.aspx?id=377
Tuesday, January 25, 2011
SingTel services to Tan Kin Lian & Associates
To Duty Manager, SingTel
Dear
My office is now in Ang Mo Kio Industrial Park 2A. I used two telephone lines (6555 5762 and another number) and have internet connection provided by SingTel. I am relocating my office to Midview City in 24 Sin Ming Lane #02-107.
My staff told me that SingTel will be charging the following fees to me:
I wish to remind you that you are already getting subscription for the basic service. I hope that this is already sufficient to give you a profit without levying additional charges that are excessive.
Tan Kin Lian
Dear
My office is now in Ang Mo Kio Industrial Park 2A. I used two telephone lines (6555 5762 and another number) and have internet connection provided by SingTel. I am relocating my office to Midview City in 24 Sin Ming Lane #02-107.
My staff told me that SingTel will be charging the following fees to me:
- Current charges for two lines is $80 per three months
- One time relocation charges for two lines is $60 + $10 for registration for retention service
- One time internet connect $60
- Subsequent charges per three months are $80 (2 lines) and $48 (2 lines) for retention charges (retaining same tel numbers)
I wish to remind you that you are already getting subscription for the basic service. I hope that this is already sufficient to give you a profit without levying additional charges that are excessive.
Tan Kin Lian
How to buy Term Insurance
Hi Mr tan, is
Is there any group insurance that I can look into beside the SAF Group Insurance, because I am not eligible to join them.
REPLY
If you are a SAFRA member or a Public Servant, you can try NTUC Income. If not, you can buy the a term insurance here: http://tankinlian.com/Admin/File.aspx?id=56
Is there any group insurance that I can look into beside the SAF Group Insurance, because I am not eligible to join them.
REPLY
If you are a SAFRA member or a Public Servant, you can try NTUC Income. If not, you can buy the a term insurance here: http://tankinlian.com/Admin/File.aspx?id=56
Lion City 1957
Singapore in the old days, where life was enjoyable and not stressful.
http://www.youtube.com/watch?v=nw7toyYrqjs&feature=player_embedded
http://www.youtube.com/watch?v=nw7toyYrqjs&feature=player_embedded
Sale of insurance over the telephone
Hi Mr. Tan,
A couple of days ago, my elderly mother received a call from AA (automobile association) promoting some personal accident insurance. I always believed that consumers should only get insurance that fits our requirements and needs, but the lady on the phone was just trying very hard to sell the insurance. I feel that it is not the right thing to do because:
1) My mom does already have a personal accident insurance when she did not really needed it.
2) The marketing person was highlighting the benefits, but did not talk about the fine prints
3) Consumer are not able to read the terms and condition for insurance sales over the telephone.
My mom has been paying for an insurance bought from a marketeer over the telephone and was charged monthly on her credit card. This is misleading and not fair to consumers who are not street-wise. Can anything be done to protect or educate the general public?
REPLY
I find it bad for insurance to be sold over the telephone. I am also against marketeers calling me on my mobile phone as they are intruding on my privacy and interrupting what I was doing. I will find some way to bring this matter up for public attention. I am quite angry that our government leaders and MPs do not seem to care about these types of issues.
A couple of days ago, my elderly mother received a call from AA (automobile association) promoting some personal accident insurance. I always believed that consumers should only get insurance that fits our requirements and needs, but the lady on the phone was just trying very hard to sell the insurance. I feel that it is not the right thing to do because:
1) My mom does already have a personal accident insurance when she did not really needed it.
2) The marketing person was highlighting the benefits, but did not talk about the fine prints
3) Consumer are not able to read the terms and condition for insurance sales over the telephone.
My mom has been paying for an insurance bought from a marketeer over the telephone and was charged monthly on her credit card. This is misleading and not fair to consumers who are not street-wise. Can anything be done to protect or educate the general public?
REPLY
I find it bad for insurance to be sold over the telephone. I am also against marketeers calling me on my mobile phone as they are intruding on my privacy and interrupting what I was doing. I will find some way to bring this matter up for public attention. I am quite angry that our government leaders and MPs do not seem to care about these types of issues.
Most capitalist country
My friend from Sweden, who had worked in Singapore for a few years previously, came back for a short visit. He was surprised at the high cost of living here. He said that milk powder in Cold Storage cost 4 times the price in Sweden. Most of the other items here are more expensive than Sweden.
He also said that Singapore has become the most capitalist country. I asked him to explain this statement. He saw two 20 year old condominiums in Holland being torn down to build new condominiums that are higher and smaller. While this can bring profit to the developer, it is wasteful to tear down a building that is still relatively new and replace it with smaller apartments in taller buildings. This must reduce the quality of the living space, for the sake of short term profit.
I agreed with this view. I have always been against the practice of tearing down relatively new buildings.
Tan Kin Lian
He also said that Singapore has become the most capitalist country. I asked him to explain this statement. He saw two 20 year old condominiums in Holland being torn down to build new condominiums that are higher and smaller. While this can bring profit to the developer, it is wasteful to tear down a building that is still relatively new and replace it with smaller apartments in taller buildings. This must reduce the quality of the living space, for the sake of short term profit.
I agreed with this view. I have always been against the practice of tearing down relatively new buildings.
Tan Kin Lian
Monday, January 24, 2011
Lunar New Year Gift
My friend invited me for a grand dinner at his home. I gave him a few sets of my books as gift for him to give to the children that visits him on Lunar New Year. His wife remarked that it is innovative and better than the traditional ang pows.
Try this new and innovative way here.
http://projects.easyapps.sg/iShop/public/common/File.aspx?file=57
Lunar New Year offer
Enjoy 50% discount on Tangram and Shape Quiz books when you buy 5 copies or more at my office ($3 each after discount, pay by cash)
www.tankinlian.com/contact.aspx
Try this new and innovative way here.
http://projects.easyapps.sg/iShop/public/common/File.aspx?file=57
Lunar New Year offer
Enjoy 50% discount on Tangram and Shape Quiz books when you buy 5 copies or more at my office ($3 each after discount, pay by cash)
www.tankinlian.com/contact.aspx
BEST - business simulation game
I wish to introduce you to the BEST business simulation game.
You can click here: http://easyapps.sg/besta/
Watch the video to learn how to play the game.
It develops your skill in running a business and is suitable for undergrads studying business and management.
It is free and fun. You can win a prize in the contests every night.
Tan Kin Lian
You can click here: http://easyapps.sg/besta/
Watch the video to learn how to play the game.
It develops your skill in running a business and is suitable for undergrads studying business and management.
It is free and fun. You can win a prize in the contests every night.
Tan Kin Lian
Excessive charges by SingTel
I am moving my office. Singtel wants to charge me $120 to move 2 telephone lines and 1 internet line. Actually, they are not moving any line. They are just changing their computer records. Why do they have to charge so much? I am writing to the manager of Singtel to get a written explanation.
They also want to charge me an additional $40 every quarter to retain my number. Why is this necessary? Are they incurring additional cost to retain the number? Are just finding an excuse to charge their customers to boost their profit? I am asking them for a written explanation.
I search their website for a statement on corporate social responsibility. I could not find any statement. The search button returned "no document found". At least Singtel is honest in declaring that they do not believe in corporate social responsibility - so they can charge their customer anyhow without feeling guilty about it.
Tan Kin Lian
They also want to charge me an additional $40 every quarter to retain my number. Why is this necessary? Are they incurring additional cost to retain the number? Are just finding an excuse to charge their customers to boost their profit? I am asking them for a written explanation.
I search their website for a statement on corporate social responsibility. I could not find any statement. The search button returned "no document found". At least Singtel is honest in declaring that they do not believe in corporate social responsibility - so they can charge their customer anyhow without feeling guilty about it.
Tan Kin Lian
Bad experience with M V Land
I continue to have bad experience with M V Land. They want me to pay them a deposit of $2,000 to allow me to move my furniture into the building. If I refuse to pay, they will stop my people to move in the furniture. This is highway robbery and holding people to ransom.
They probably feel that they need the deposit in case I cause damage to the building by moving their furniture. But they owe me $60,000 in renovation subsidy which they have paid to me. So, why do they need me to pay this $2,000 deposit? They are causing a lot of unnecessary work for themselves and for their customers. The arrogance of this developer is beyond belief. They act like the government.
Tan Kin Lian
They probably feel that they need the deposit in case I cause damage to the building by moving their furniture. But they owe me $60,000 in renovation subsidy which they have paid to me. So, why do they need me to pay this $2,000 deposit? They are causing a lot of unnecessary work for themselves and for their customers. The arrogance of this developer is beyond belief. They act like the government.
Tan Kin Lian
Sunday, January 23, 2011
Poor yield from Vivo-life policy
Dear Mr. Tan
I got a quote for a Vivolife policy from an agent. I did my calculation. Apparently, the effect of deduction on the 25th yr is far from your benchmark. I also calculated the actual yield of return which is roughly 2%.
I wondered whether is the current market now offers this kind of policy to me? As in most of the company offering roughly the same amount of deductions as well, hence offering even lower yield of return?
REPLY
I have looked at the benefit illustraiton. As this policy requires the premium to be paid for 15 years, it is better to calculate the yield at the end of 15 years. The situation is worse than what you have calculated.
Taking the cash value at the end of 15 years, I found the yield to be between 0.2% to 1.1% The reduction in yield is 3.6% to 4.1% from the gross yield. My benchmark for the reduction in yield, to cover the cost of insurance and the investment service, is 1.5% for all durations. The deduction from the Vivo-life policy is far too high.
Is is better for you to invest in a low cost investment fund, such as an indexed fund or exchange traded fund, as explained in my book on financial planning. If you need insurance, you can buy insurance under the SAF group insurance scheme. Do not invest into any life insurance policy that provides a poor return.
I got a quote for a Vivolife policy from an agent. I did my calculation. Apparently, the effect of deduction on the 25th yr is far from your benchmark. I also calculated the actual yield of return which is roughly 2%.
I wondered whether is the current market now offers this kind of policy to me? As in most of the company offering roughly the same amount of deductions as well, hence offering even lower yield of return?
REPLY
I have looked at the benefit illustraiton. As this policy requires the premium to be paid for 15 years, it is better to calculate the yield at the end of 15 years. The situation is worse than what you have calculated.
Taking the cash value at the end of 15 years, I found the yield to be between 0.2% to 1.1% The reduction in yield is 3.6% to 4.1% from the gross yield. My benchmark for the reduction in yield, to cover the cost of insurance and the investment service, is 1.5% for all durations. The deduction from the Vivo-life policy is far too high.
Is is better for you to invest in a low cost investment fund, such as an indexed fund or exchange traded fund, as explained in my book on financial planning. If you need insurance, you can buy insurance under the SAF group insurance scheme. Do not invest into any life insurance policy that provides a poor return.
Guaranteed Life Annuity
Dear Mr. Tan
I am 50 years old. I do not invest in shares and keep my money in the bank to earn a low rate of interest. An agent has told me about the guaranteed life annuity from NTUC. The agent said that it gives a return of 3 – 5% per annum and I can terminate the annuity anytime and get the principal back plus interest. If you retire early U can also start the annuity payment early. Appreciate your advice.
REPLY
Please ask them to give you the benefit illustration. You can send it to me.
You should also buy my book on financial planning, to learn about better choices. See this brochure. http://projects.easyapps.sg/iShop/public/common/File.aspx?file=43
I am 50 years old. I do not invest in shares and keep my money in the bank to earn a low rate of interest. An agent has told me about the guaranteed life annuity from NTUC. The agent said that it gives a return of 3 – 5% per annum and I can terminate the annuity anytime and get the principal back plus interest. If you retire early U can also start the annuity payment early. Appreciate your advice.
REPLY
Please ask them to give you the benefit illustration. You can send it to me.
You should also buy my book on financial planning, to learn about better choices. See this brochure. http://projects.easyapps.sg/iShop/public/common/File.aspx?file=43
Potential fraud
I have been receiving this message regularly. I believe that it comes from a crook.
Dear Account User,
Due to anonymous registration of our email service,there would be removal of all unused Gmail Accounts.You will have to confirm if your E-mail is still active by filling out your login info below after clicking the reply button, or your account will be suspended within 24 hours for security reasons.
Customer ID:
Pas word:
Country/Region:
Note: This email is only for Account owner.
Thank you for using Gmail !
Them Gmail Team
Due to anonymous registration of our email service,there would be removal of all unused Gmail Accounts.You will have to confirm if your E-mail is still active by filling out your login info below after clicking the reply button, or your account will be suspended within 24 hours for security reasons.
Customer ID:
Pas word:
Country/Region:
Note: This email is only for Account owner.
Thank you for using Gmail !
Them Gmail Team
North South Expressway
The Government is spending $7 to $8 billion on the North South Expressway. This is a lot of money. The money is better spent to improve the feeder services, e.g. to bring commuters from their homes to the MRT station or bus terminal with a shorter waiting and journey time and capping the cost at the current level.
If the feeder service is improved, like in Hong Kong, many people will prefer to take public transport to work, rather than drive their cars. If 30% in the current cars are taken off the road, there will be no need to expand the road network and expressway for the next 10 years or more. It will be a better solution over the long term, and is environmentally sustainable.
Tan Kin Lain
If the feeder service is improved, like in Hong Kong, many people will prefer to take public transport to work, rather than drive their cars. If 30% in the current cars are taken off the road, there will be no need to expand the road network and expressway for the next 10 years or more. It will be a better solution over the long term, and is environmentally sustainable.
Tan Kin Lain
Saturday, January 22, 2011
Why are insurance agents wealthy?
All around the world, insurance agents have thrived on the ignorance of consumers. They used the risk of premature death to get consumers to part with a large part of their savings to be invested to get a poor yield. The consumers are not aware that they can buy term insurance to cover the premature death for 7% of their savings and invest the 93% to get an attractive long term yield. Buy putting their savings with the insurance company, they stand to lose 40% of their savings.
The difference of 33% make the insurance agent a top income earner and give a lot of profit to the life insurance company - but make the ignorant consumer that much poorer.
The insurance agents are trained to tell all types of stories to get consumers to part with their savings in a low yield policy, such as insuring the child, protection against critical illness and health. The consumers are not aware that they are paying far too much for the insurance, and that they can buy the insurance at much lower cost, if they buy a pure term or critical illness rider (covering a short term). Most consumers need insurance fo 25 years only, as their accumulated savings will be more than sufficient to provide for their financial needs, without insurance.
By insuring for the whole of life, the consumer becomes poor for life. My remarks apply to whole life or investment linked policies that take away 40% of the accumulated savings over a 25 year period. It does not apply to a life insurance policy that takes away 20%, which is a fair rate to give away for the insurance cover and the investment service. If you can find an insurance policy that takes away 20% after 25 years, it is all right to buy that insurance policy.
My new book, "Get Value on your Life Insurance" shows how much is taken away from you - based on the popular life insurance policies sold in the market today. Most of them vary from 35% to 50%, which is far too high. If you have bought a life insurance policy, you will probably find it mentioned in a case study in this book. The book will be available on 15 Febuary 2011 (tentative).
Read my book on financial planning for guidance on how you can buy term insurance and invest the savings on your won - if you cannot find a life insurance policy that takes away less than 20% over 25 years.
Tan Kin Lian
The difference of 33% make the insurance agent a top income earner and give a lot of profit to the life insurance company - but make the ignorant consumer that much poorer.
The insurance agents are trained to tell all types of stories to get consumers to part with their savings in a low yield policy, such as insuring the child, protection against critical illness and health. The consumers are not aware that they are paying far too much for the insurance, and that they can buy the insurance at much lower cost, if they buy a pure term or critical illness rider (covering a short term). Most consumers need insurance fo 25 years only, as their accumulated savings will be more than sufficient to provide for their financial needs, without insurance.
By insuring for the whole of life, the consumer becomes poor for life. My remarks apply to whole life or investment linked policies that take away 40% of the accumulated savings over a 25 year period. It does not apply to a life insurance policy that takes away 20%, which is a fair rate to give away for the insurance cover and the investment service. If you can find an insurance policy that takes away 20% after 25 years, it is all right to buy that insurance policy.
My new book, "Get Value on your Life Insurance" shows how much is taken away from you - based on the popular life insurance policies sold in the market today. Most of them vary from 35% to 50%, which is far too high. If you have bought a life insurance policy, you will probably find it mentioned in a case study in this book. The book will be available on 15 Febuary 2011 (tentative).
Read my book on financial planning for guidance on how you can buy term insurance and invest the savings on your won - if you cannot find a life insurance policy that takes away less than 20% over 25 years.
Tan Kin Lian
Low yield on Endowment policy
A consumer is unhappy about the low yield on a 20 year endowment policy that has matured. The insurance company did not revised the bonus rates during 2010, although the financial market has recovered. He asked for my views. Here is my reply:
Dear
I believe that this yield of 2.96% on your policy is probably what is paid for similar policies offered by several other companies during the same period. It may be slightly on the low side, but is not significantly lower. The only exception is NTUC Income that offers a yield that is probably between 4% to 5% for the same period.
You are unhappy that there has not been a revision of bonus rate for the past year. I am not aware if other companies have increased their bonus rate for the same period. I suspect that most of them still keep to the same bonus rate.
It will be difficult for you to get the insurance company to increase its bonus rate or for an external party, such as CASE, to make them do so.
Tan Kin Lian
Dear
I believe that this yield of 2.96% on your policy is probably what is paid for similar policies offered by several other companies during the same period. It may be slightly on the low side, but is not significantly lower. The only exception is NTUC Income that offers a yield that is probably between 4% to 5% for the same period.
You are unhappy that there has not been a revision of bonus rate for the past year. I am not aware if other companies have increased their bonus rate for the same period. I suspect that most of them still keep to the same bonus rate.
It will be difficult for you to get the insurance company to increase its bonus rate or for an external party, such as CASE, to make them do so.
Tan Kin Lian
Practical Guide on Financial Planning - discount
This book is available at a discount of 33%
http://projects.easyapps.sg/iShop/public/common/File.aspx?file=43
http://projects.easyapps.sg/iShop/public/common/File.aspx?file=43
Demystifying child insurance plans
http://in.reuters.com/article/idINIndia-54272820110120
This article, posted in Reuters, explain why child insurance policies are not good for the child or the parent, but is good mainly for the distributor (i.e. the agent who earns a big commission).
A better way to save for the child's future is explained in my book, Practical Guide on Financial Planning. The parent should save in a low cost investment fund, i.e. an indexed fund or exchange traded fund.
This article, posted in Reuters, explain why child insurance policies are not good for the child or the parent, but is good mainly for the distributor (i.e. the agent who earns a big commission).
A better way to save for the child's future is explained in my book, Practical Guide on Financial Planning. The parent should save in a low cost investment fund, i.e. an indexed fund or exchange traded fund.
Easysearch Portal
I have developed many useful applications. They can be found in this portal, www.easysearch.sg. When you have some free time, do try these applications. You can also see many of the mobile applications that I have developed from www.tankinlian.com. Click on the link for the mobile and web applications on the front page.
Guidance on your Financial Planning
Some readers asked me to recommend a financial planner to guide them on their financial planning. I know a financial planner who charges a fee of $200 per hour for that advice. Most consumers find that to be too expensive.
There is another way that you can get the guidance for $50. You can carry out the preliminary work by generating your personal financial plan using this tool and consult one of the experts listed in this FAQ.
By educating yourself with this financial plan, you can avoid wasting a few thousand dollars buying a bad insurance policy offered to you by an agent. This message is most important for young people who have just started work, as you will be targeted by many insurance agents.
There is another way that you can get the guidance for $50. You can carry out the preliminary work by generating your personal financial plan using this tool and consult one of the experts listed in this FAQ.
By educating yourself with this financial plan, you can avoid wasting a few thousand dollars buying a bad insurance policy offered to you by an agent. This message is most important for young people who have just started work, as you will be targeted by many insurance agents.
Social and political issues
SGEP now has a good summary of the social and political issues affecting Singapore. It is taken from the blogs, local and international media. Do visit it daily to keep abreast. There is a further summary in an editorial which is written every few days - with special effort put in by the co-editor C H Yak.
Can a Malaysian resident be insured under Private Shield?
Dear Mr. Tan,
I worked in Singapore for more than 20 years as a permanent resident. After my retirement, I returned to Malaysia as the cost of living is lower. I have been insured under Enhanced Incomeshield from NTUC Income for many years and has continued to pay the annual premium after I retired. I wish to keep this insurance for the rest of my life, as I intend to use the medical facilities in Singapore in the future.
There is a chance that my permanent residency in Singapore will not be extended. If this happens, can I continue to be insured under Enhanced Incomeshield? Is there a condition that it is only available to people living in Singapore?
REPLY
If you pay the premium and it is accepted, you have the right to make a claim under the policy. There is no restriction on residency. The only restriction that I am aware of is that the hospital treatment must be in Singapore (and this appears to be your intention anyway). I understand that under some circumstances, you may be able to claim for hospitalistion outside Singapore, but I am not clear about what the situation is.
It is best that you read the policy condition with a fine comb and let me know if you find any wording that may be cast doubt on the extent of the cover. If you find the wording, you can send them to me for my interpretation.
I will also try to get information from other sources and will let you know if there are some problems that I am now not aware of.
I worked in Singapore for more than 20 years as a permanent resident. After my retirement, I returned to Malaysia as the cost of living is lower. I have been insured under Enhanced Incomeshield from NTUC Income for many years and has continued to pay the annual premium after I retired. I wish to keep this insurance for the rest of my life, as I intend to use the medical facilities in Singapore in the future.
There is a chance that my permanent residency in Singapore will not be extended. If this happens, can I continue to be insured under Enhanced Incomeshield? Is there a condition that it is only available to people living in Singapore?
REPLY
If you pay the premium and it is accepted, you have the right to make a claim under the policy. There is no restriction on residency. The only restriction that I am aware of is that the hospital treatment must be in Singapore (and this appears to be your intention anyway). I understand that under some circumstances, you may be able to claim for hospitalistion outside Singapore, but I am not clear about what the situation is.
It is best that you read the policy condition with a fine comb and let me know if you find any wording that may be cast doubt on the extent of the cover. If you find the wording, you can send them to me for my interpretation.
I will also try to get information from other sources and will let you know if there are some problems that I am now not aware of.
Friday, January 21, 2011
Financial planning - sample at age 35
If you are 35 years old, you are likely to have just started a family. Are you having a good financial plan to take care of your family and your own savings needs for retirement? It is still not too late for you can make a review of your financial situation and change your plan for the future.
Here is a sample financial plan for a person at age 35. You can study it and understand the importance of getting a good yield on your investment (i.e. at least 4% p.a., compared to 2% p.a.). You should also study the yield that you are getting on your life insurance policy, especially if it represents the major portion of your personal savings. You should also see the monthly income that can be generated from your savings, AFTER adjusting for inflation.
You can do your own financial plan, using your past and monthly savings, and see how much you can have at retirement.
Here is a sample financial plan for a person at age 35. You can study it and understand the importance of getting a good yield on your investment (i.e. at least 4% p.a., compared to 2% p.a.). You should also study the yield that you are getting on your life insurance policy, especially if it represents the major portion of your personal savings. You should also see the monthly income that can be generated from your savings, AFTER adjusting for inflation.
You can do your own financial plan, using your past and monthly savings, and see how much you can have at retirement.
Low procreation - failure of Singapore leaders
http://thestar.com.my/news/story.asp?file=/2011/1/22/focus/7841290&sec=focus
Low procreation is a real threat in Singapore with the footloose and fancy-free young reluctant to sacrifice their comfortable way of life and leisure time to bring up the next generation.
TWO eye-catching headlines this past week read: “One million residents – or one in three – are single” and “Fertility rate sank to lowest in history”.
They may sound alarming but are just an update of Singapore’s long-term demographic plight, which appears to be deteriorating sharply despite a strong economic surge.
Low procreation is a real threat in Singapore with the footloose and fancy-free young reluctant to sacrifice their comfortable way of life and leisure time to bring up the next generation.
TWO eye-catching headlines this past week read: “One million residents – or one in three – are single” and “Fertility rate sank to lowest in history”.
They may sound alarming but are just an update of Singapore’s long-term demographic plight, which appears to be deteriorating sharply despite a strong economic surge.
Take care of your customer
I used a server at a data center operated by a company called Skydio two years ago. Their service was excellent and their charges were reasonable. Skydio was bought over by another company X a few months ago.
I had a difficult time with X. Due to the inexperience of their staff, I encountered several problems. On each occasion, their staff were focused on pushing the responsibility to the customer, rather than solving the problem, and tell the customer about the additional fee to rectify the problem. When asked, the staff were not aware about the fees. In most cases, the fees are rather high. I consider that they are holding the customer to ransom, as the server is critical for the operation.
Recently, I transferred my domain name from a previous hosting company to X. I only wanted to reduce the hassle of managing my domain names at several places. What should have been a simple operation turned out to be a nightmare. The staff of X did not handle the transfer completely. It resulted in my website being down for 2 days and my mail server down for 5 days. During this time, I had to call their support center and sales staff on more than 1 dozen occasions. They did not reply to several calls or e-mails. When we got through, their staff kept saying that there would be additional charge for each service.
I finally agreed to pay a ransom price of $54 to update 3 records to rectify the problem. This is additional cost that I would not have to pay if I had remained with the previous provider.
Many companies in Singapore are focused on increasing their revenue at the expense of the customer. This is why the cost of doing business is so high in Singapore. I wonder if some of these companies give hassle to the customer on purpose, so that they have the opportunity to levy additional fees. The culture of fleecing the customer or the public seemed to be quite prevalent in Singapore.
It is a simple matter for me to change the service provider at the end of the contract or even to incur the additional cost of early termination. But I wanted to share this experience, so that our leaders are aware about how bad things have become in Singapore over the past decade.
Tan Kin Lian
I had a difficult time with X. Due to the inexperience of their staff, I encountered several problems. On each occasion, their staff were focused on pushing the responsibility to the customer, rather than solving the problem, and tell the customer about the additional fee to rectify the problem. When asked, the staff were not aware about the fees. In most cases, the fees are rather high. I consider that they are holding the customer to ransom, as the server is critical for the operation.
Recently, I transferred my domain name from a previous hosting company to X. I only wanted to reduce the hassle of managing my domain names at several places. What should have been a simple operation turned out to be a nightmare. The staff of X did not handle the transfer completely. It resulted in my website being down for 2 days and my mail server down for 5 days. During this time, I had to call their support center and sales staff on more than 1 dozen occasions. They did not reply to several calls or e-mails. When we got through, their staff kept saying that there would be additional charge for each service.
I finally agreed to pay a ransom price of $54 to update 3 records to rectify the problem. This is additional cost that I would not have to pay if I had remained with the previous provider.
Many companies in Singapore are focused on increasing their revenue at the expense of the customer. This is why the cost of doing business is so high in Singapore. I wonder if some of these companies give hassle to the customer on purpose, so that they have the opportunity to levy additional fees. The culture of fleecing the customer or the public seemed to be quite prevalent in Singapore.
It is a simple matter for me to change the service provider at the end of the contract or even to incur the additional cost of early termination. But I wanted to share this experience, so that our leaders are aware about how bad things have become in Singapore over the past decade.
Tan Kin Lian
Should lawyers be held accountable?
Dear Mr. Tan,
In recent years, many consumers have been cheated on land banking plots, gold bars, spas and other scams. Most of these scams involve legal documents that were drafted by big name law firms in Singapore and were created to help the creators of these scams to avoid prosecution. Surely, the lawyers know that they are abetting their clients to cheat the public?
When the scams finally failed, the culprits have absconded with the money and could not be found. However, the law firms that were involved with these crooks are still around. Can these law firms be charged for abetting the crime? Should the government authority take action?
REPLY
Yes, it is the duty of the Government to stop crime and protect the general public from being cheated. The lawyers who were involved should be held accountable to explain their action. The Law Society should also act against these law firms, so that the public can have respect for lawyers as people with honor and integrity and use their legal training in the interest of justice. They should not be acting for crooks to cheat the public.
In recent years, many consumers have been cheated on land banking plots, gold bars, spas and other scams. Most of these scams involve legal documents that were drafted by big name law firms in Singapore and were created to help the creators of these scams to avoid prosecution. Surely, the lawyers know that they are abetting their clients to cheat the public?
When the scams finally failed, the culprits have absconded with the money and could not be found. However, the law firms that were involved with these crooks are still around. Can these law firms be charged for abetting the crime? Should the government authority take action?
REPLY
Yes, it is the duty of the Government to stop crime and protect the general public from being cheated. The lawyers who were involved should be held accountable to explain their action. The Law Society should also act against these law firms, so that the public can have respect for lawyers as people with honor and integrity and use their legal training in the interest of justice. They should not be acting for crooks to cheat the public.
Harassed over an old case
A consumer received a letter from a lawyer acting for a motor workshop for a motor accident that occurred more than 6 years ago. The consumer was not clear about the validity of the case and sought my advice.
I advised the consumer to take the following steps:
I advised the consumer to take the following steps:
- Ask the lawyer to state the facts of the claim clearly in writing
- To ask them to confirm that they have a valid case
- To ask them for explanation on the delay in submitting the claim
- To send the letter to me.
It seemed that lawyers can be acting in a manner to harass the public. It is quite sad that a consumer can be saddled with this type of situation in Singapore and if they get legal advice, they can be charged an unexpected large bill. They do not seem to be any agency that the consumer can turn to for help and advice.
What has Singapore become? A place for professionals and crooks to go around to make money at the expense of the general public?
Tan Kin Lian
Read a PDF at TKL website
The TKL website is built as a PDF centric website. It uses PDF to contain information. Most of the PDF are created from Microsoft Word and can have attractive layout and images stored in a single document.
When the user click on "View" to see a PDF, by default it is displayed at the maximum zoom level. I prefer the 75% zoom level. I learned that you can set the default zoom level as follows: Go to Adobe Acrobat > Edit > Preference > Page Layout, and select this zoom level. All future PDFs will be displayed with this default.
When the user click on "View" to see a PDF, by default it is displayed at the maximum zoom level. I prefer the 75% zoom level. I learned that you can set the default zoom level as follows: Go to Adobe Acrobat > Edit > Preference > Page Layout, and select this zoom level. All future PDFs will be displayed with this default.
Scam e-mails
I receive this type of rubbish e-mail several times a day. I hope that the authority of the various countries will one day pass a law to declare this type of activity to be illegal, i.e. an intent to cheat. This will help to reduce the incidence of such activities, even if the authority is not able to catch the culprits.
Your mail ID was given 650,000.00 GBP In our Premier Oil Promo, Send Your
Names
Address
Age
Your mail ID was given 650,000.00 GBP In our Premier Oil Promo, Send Your
Names
Address
Age
Thursday, January 20, 2011
Engage a lawyer
Some consumers receive a shock when they get a bill from a lawyer for the legal or litigation work. The fees are exorbitant and way above what the consumer expected. Here are a few tips on how to avoid this dilemma.
Wednesday, January 19, 2011
Explanation on Financial Planning Projection
You can get a financial plan from this link.
You can get an explanation for the projection here. If you do not understand the projection, you can consult on e of the two experts listed in the FAQ. They will give an explanation of the key figures in the projection. If you understand the figures, you will be able to make a better decision on how to manage your own financial future.
You can get an explanation for the projection here. If you do not understand the projection, you can consult on e of the two experts listed in the FAQ. They will give an explanation of the key figures in the projection. If you understand the figures, you will be able to make a better decision on how to manage your own financial future.
Remembering Dr. Goh Keng Swee
Dr. Goh Keng Swee was the deputy Prime Minister in the 1970s. He was the person responsible for building up the economic and social foundation that contributed to the success and vibrancy of Singapore today.
I know Dr. Goh personally and wish to point out his great qualities:
It is quite sad that many or our leaders today are willing to pay a lot of money in engaging consultants or paying for expensive infrastructure, so that they do not have to decide and take responsibility for their decision. The big expenses, whether by the state or the commercial enterprises, must surely be reflected in the higher prices that are paid by consumers, adding to the huge increase in the cost of living. I wish that Dr. Goh is still around to stop these wasteful expenditures.
Tan Kin Lian
I know Dr. Goh personally and wish to point out his great qualities:
- He is frugal and does not waste money
- He uses his common sense and do not rely on advice of consultants and bankers
The bankers wanted Singapore to open up its economy and internationalize the Singapore dollar. Dr. Goh knew the risk of allowing these bankers to have their way. They could play the currency and destroy an economy. Dr. Goh would also not spend tens of millions of dollars in paying consultants to advice on decisions that can be made by common sense. He is frugal anyway.
It is quite sad that many or our leaders today are willing to pay a lot of money in engaging consultants or paying for expensive infrastructure, so that they do not have to decide and take responsibility for their decision. The big expenses, whether by the state or the commercial enterprises, must surely be reflected in the higher prices that are paid by consumers, adding to the huge increase in the cost of living. I wish that Dr. Goh is still around to stop these wasteful expenditures.
Tan Kin Lian
Highway construction
My friend from Europe told me this story. The head of the ministry of works of an European country attended a prestigious US business program and met his counterpart from an African country.
One day, the African was invited to visit the home of his European counterpart. It was a grand and impressive house. The African asked the European friend how he could afford such an expensive house. The friend pointed out to the newly build highway not far away from the home and said "Do you see the new highway? It takes only a small portion of the budget to pay for this house".
The following year, the European visited the African country and was invited to the home of his African friend. It was a palace, much grander and more expensive than his home in Europe. He asked the African how he could afford it.
The African said, "Can you see the highway out there?". The European looked out and said, "But there is no highway. I only see jungle". The African pointed to his palace and said, "Well, it's here".
Tan Kin Lian
One day, the African was invited to visit the home of his European counterpart. It was a grand and impressive house. The African asked the European friend how he could afford such an expensive house. The friend pointed out to the newly build highway not far away from the home and said "Do you see the new highway? It takes only a small portion of the budget to pay for this house".
The following year, the European visited the African country and was invited to the home of his African friend. It was a palace, much grander and more expensive than his home in Europe. He asked the African how he could afford it.
The African said, "Can you see the highway out there?". The European looked out and said, "But there is no highway. I only see jungle". The African pointed to his palace and said, "Well, it's here".
Tan Kin Lian
North South Expressway
The Government has announced the plan to build the North South Expressway. It will cost $7 to $8 billion and will be ready by 2020.
I believe that an elevated expressway will be less costly and take a shorter time to build .Many cities have adopted the elevated rather than the underground approach. Are we spending too much money, when there is a cheaper option?
12 years ago, I wrote to the Minister of Transport to propose a second level for the Central Expressway. He replied that it would be difficult to build the access roads to the elevated expressway. I may not be a road engineer, but I believe that it can be done. It would be easier, quicker, less costly and more practical to have a second level CTE.
Unfortunately, this type of decisions are taken by the policy makers and the planners, without much discussion with the people who have to pay for it (through our taxes and cost of living) and to use it daily.
Tan Kin Lian
I believe that an elevated expressway will be less costly and take a shorter time to build .Many cities have adopted the elevated rather than the underground approach. Are we spending too much money, when there is a cheaper option?
12 years ago, I wrote to the Minister of Transport to propose a second level for the Central Expressway. He replied that it would be difficult to build the access roads to the elevated expressway. I may not be a road engineer, but I believe that it can be done. It would be easier, quicker, less costly and more practical to have a second level CTE.
Unfortunately, this type of decisions are taken by the policy makers and the planners, without much discussion with the people who have to pay for it (through our taxes and cost of living) and to use it daily.
Tan Kin Lian
A good life insurance policy
I have often been asked, "is this a good life insurance policy?"
If this policy is being sold to you by an agent, you can be 90% sure that it is a bad policy. The agent (who can also have a title such as financial adviser or consultant) is likely to offer you a policy that requires you to pay a big monthly premium and gives you a poor yield. But the agent will sound impressive, as he or she has been specially trained in marketing and telling (exaggerating) the benefits of the policy.
Here is a simple test: if the policy provides pure protection (i.e against death or critical illness), ask the agent to get you a comparison of the premium rates charged by other insurance policies on similar policies. You should pay an annual premium of not more than $500. If the agent is not willing to provide this service, or does not give a fair or clear comparison of the comparable products, DO NOT TRUST THE AGENT!
If the life insurance policy is intended to give you a return on your savings, you should calculate the reduction in yield on the policy. This is the difference between the gross yield used in the projection (which could be 5%, 9%, 5.25% or 3.75%) and the net yield produced by the cash value. If the policy is for a long term, take the cash value at 25 years. If it is for a shorter term, take the cash value at that shorter duration.
You can calculate the net yield using an Excel spreadsheet of financial calculator, as explained in this FAQ. If the reduction in yield is more than 1.5%, YOU MUST REJECT THE POLICY!
You will find, in nearly all cases, the reduction in yield to be much higher. It is typical for the reduction in yield to be 3.5% to 5% per annum. This leaves you with a gain that can hardly keep up with inflation.
Here is an example of how the consumer is usually deprived of a decent yield:
Do not buy a life insurance policy that pays you only $168,00 when the minimum that you should get is $237,000.
Tan Kin Lian
If this policy is being sold to you by an agent, you can be 90% sure that it is a bad policy. The agent (who can also have a title such as financial adviser or consultant) is likely to offer you a policy that requires you to pay a big monthly premium and gives you a poor yield. But the agent will sound impressive, as he or she has been specially trained in marketing and telling (exaggerating) the benefits of the policy.
Here is a simple test: if the policy provides pure protection (i.e against death or critical illness), ask the agent to get you a comparison of the premium rates charged by other insurance policies on similar policies. You should pay an annual premium of not more than $500. If the agent is not willing to provide this service, or does not give a fair or clear comparison of the comparable products, DO NOT TRUST THE AGENT!
If the life insurance policy is intended to give you a return on your savings, you should calculate the reduction in yield on the policy. This is the difference between the gross yield used in the projection (which could be 5%, 9%, 5.25% or 3.75%) and the net yield produced by the cash value. If the policy is for a long term, take the cash value at 25 years. If it is for a shorter term, take the cash value at that shorter duration.
You can calculate the net yield using an Excel spreadsheet of financial calculator, as explained in this FAQ. If the reduction in yield is more than 1.5%, YOU MUST REJECT THE POLICY!
You will find, in nearly all cases, the reduction in yield to be much higher. It is typical for the reduction in yield to be 3.5% to 5% per annum. This leaves you with a gain that can hardly keep up with inflation.
Here is an example of how the consumer is usually deprived of a decent yield:
- If a consumer saves $500 a month over 25 years, the accumulated premium should be $295,000
- If the reduction in yield is 1.5%, the cash value should be $237,000
- If the actual reduction is 4%, the cash value is $168,000
In the above example, your accumulated premium should be $295,000. By giving a cash value of l$168,000, the insurance company is taking away $127,000 from you over 25 years. This is too much to take away. A fair amount for the insurance company to take away (i.e .for the insurance cover and the investment service) is $58,000, leaving you with a cash value of $237,000.
Do not buy a life insurance policy that pays you only $168,00 when the minimum that you should get is $237,000.
Tan Kin Lian
Cancelled credit card
Dear Mr. Tan
My wife cancelled her credit card with Standard Charted Bank in 2006. It happened that there was a $25 credit in her favor. So, for a few years, the bank kept sending monthly statements to her indicating that. She eventually went down a year ago to a Standard Charted Bank branch (Marine Parade) to close her credit card account. The bank sent her a cheque of $25 subsequently. A few months later, she received a new Standard Charted credit card in the mail, unsolicited. She cut up the card immediately. Then, the monthly NIL return statements started to come in monthly.
Today, she received a statement indicating a bill of $480 for the credit card annual fee. She then had to spend 25 minutes waiting and talking to an Standard Chartered Bank operator about the whole incident and asked for the card to be canceled again!
My wife cancelled her credit card with Standard Charted Bank in 2006. It happened that there was a $25 credit in her favor. So, for a few years, the bank kept sending monthly statements to her indicating that. She eventually went down a year ago to a Standard Charted Bank branch (Marine Parade) to close her credit card account. The bank sent her a cheque of $25 subsequently. A few months later, she received a new Standard Charted credit card in the mail, unsolicited. She cut up the card immediately. Then, the monthly NIL return statements started to come in monthly.
Today, she received a statement indicating a bill of $480 for the credit card annual fee. She then had to spend 25 minutes waiting and talking to an Standard Chartered Bank operator about the whole incident and asked for the card to be canceled again!
Prepare your personal financial plan
You can prepare your personal financial plan (it's free) here.
The plan will be sent by e-mail to you.
You should study it carefully.
You can click on the link in the PDF to view the FAQs that can guide you.
You are also given two experts that you can ask to explain the financial plan for you.
http://projects.easyapps.sg/life21d/Planning.aspx
The plan will be sent by e-mail to you.
You should study it carefully.
You can click on the link in the PDF to view the FAQs that can guide you.
You are also given two experts that you can ask to explain the financial plan for you.
http://projects.easyapps.sg/life21d/Planning.aspx
Tuesday, January 18, 2011
What's so free about Singapore?
SGEP had an interesting editorial, entitled "What's so free about Singapore anyway?" The editor talked about several restrictions faced by people in Singapore in their daily lives. I want to give a different meaning to the word "free". In fact, there are so few free things in Singapore that we have to pay for many things .... Remember the phrase, "nothing is for free!".
Gold bar at an inflated value
My friend asked me about investing in gold bars 3 months ago. I advised him to avoid it, as I do not understand how it worked. He had already invested, but did not tell me at that time. He told me today that the company that promoted the label "TGL" did not honor their promise to buy back the gold bar at the invested value and had since ceased operation.
He is now stuck with the gold bar which has depreciated by about 15% in value, compared to his original investment. He had since learned that he had paid for for the gold bar at a price that was higher that its market value. The person who had sold the gold bar to him, being a friend, was also not aware about the inflated price and had also invested a lot of her own money.
I recall another case about a lady who was quite keen to invest in 2 kg of gold bar at $140,000. She sought my advice, I asked her to calculate the value of the gold bar by converting from kg to ounces, apply the world price expressed in USD in ounce and convert to SGD. She found that she would have lost nearly 20% of the invested sum, as the gold bar was priced at an inflated price. She decided not to invest in the gold bar. I must have saved her at least $20,000, by avoiding this bad investment.
I had asked her to make a donation to FISCA in return for my advice, if she found it to be valuable. Perhaps, she felt that my advice was not worth while so she did not make any donation. I am not able to recall who she was.
Tan Kin Lian
Here are my past blogs on investing in gold bars:
http://tankinlian.blogspot.com/search?q=gold+bar
http://tankinlian.com/admin/file.aspx?id=186
He is now stuck with the gold bar which has depreciated by about 15% in value, compared to his original investment. He had since learned that he had paid for for the gold bar at a price that was higher that its market value. The person who had sold the gold bar to him, being a friend, was also not aware about the inflated price and had also invested a lot of her own money.
I recall another case about a lady who was quite keen to invest in 2 kg of gold bar at $140,000. She sought my advice, I asked her to calculate the value of the gold bar by converting from kg to ounces, apply the world price expressed in USD in ounce and convert to SGD. She found that she would have lost nearly 20% of the invested sum, as the gold bar was priced at an inflated price. She decided not to invest in the gold bar. I must have saved her at least $20,000, by avoiding this bad investment.
I had asked her to make a donation to FISCA in return for my advice, if she found it to be valuable. Perhaps, she felt that my advice was not worth while so she did not make any donation. I am not able to recall who she was.
Tan Kin Lian
Here are my past blogs on investing in gold bars:
http://tankinlian.blogspot.com/search?q=gold+bar
http://tankinlian.com/admin/file.aspx?id=186
Let the State subsidise first 2 kids
Published in Straits Times Online Forum
THE total fertility rate in Singapore dropped to 1.16 last year, way below the replacement level of 2.1 ("Fertility figures hit all-time low"; Tuesday).
The decline in fertility rate has been observed for more than two decades. The Government had implemented many measures in past years aimed at increasing the fertility rate, but these have failed.
The Government has now opened its doors to immigration to increase the population and compensate for the low birth rate. While this is necessary in the short term, we need to find a better solution to produce more babies and raise them here.
The key reasons behind the low birth rate, based on public feedback, are the cost and stress of raising children, the long working hours and financial insecurity felt by many families due to the uncertainty of jobs, and the cost of living.
I suggest the following measures to address the concerns:
The system can replace the generous parenthood tax rebates that are now given out. As the previous approach has failed to produce the intended results, we should now try a new approach, in the long-term interest of our country.
Tan Kin Lian
THE total fertility rate in Singapore dropped to 1.16 last year, way below the replacement level of 2.1 ("Fertility figures hit all-time low"; Tuesday).
The decline in fertility rate has been observed for more than two decades. The Government had implemented many measures in past years aimed at increasing the fertility rate, but these have failed.
The Government has now opened its doors to immigration to increase the population and compensate for the low birth rate. While this is necessary in the short term, we need to find a better solution to produce more babies and raise them here.
The key reasons behind the low birth rate, based on public feedback, are the cost and stress of raising children, the long working hours and financial insecurity felt by many families due to the uncertainty of jobs, and the cost of living.
I suggest the following measures to address the concerns:
- Each family, comprising both parents who are Singapore citizens, should be allowed to raise two children with the cost largely borne by the State.
- The cost should include delivery of babies, nursing care, childcare and schooling fees, and medical expenses of the child.
- The mother should be given an adequate allowance if she has to stop working to look after the child, until the child goes to school.
The system can replace the generous parenthood tax rebates that are now given out. As the previous approach has failed to produce the intended results, we should now try a new approach, in the long-term interest of our country.
Tan Kin Lian
Marketing of personal loans by banks
I received two calls on my mobile phone for marketing people of the banks selling their personal loans. I told them that they are not allowed to call my mobile phone for their marketing of their products. It is terrible that the marketing people can disturb the public in this manner. Don't we have some ethics and respect for people's privacy? I don't know why our banks now behave in this despicable manner, and why the authority stand by and allow these type of practices to continue without restraint.
Tan Kin Lian
NOTE
I receive marketing information by e-mail regularly I do not object to this mode of marketing. I can delete off the materials. But, marketing by mobile phone is objectionable and is an invasion of privacy. I hope that our MPs know the difference between what is acceptable and what is not and they have time, within the busy schedule and multiple duties, to do their duty as MPs.
Tan Kin Lian
NOTE
I receive marketing information by e-mail regularly I do not object to this mode of marketing. I can delete off the materials. But, marketing by mobile phone is objectionable and is an invasion of privacy. I hope that our MPs know the difference between what is acceptable and what is not and they have time, within the busy schedule and multiple duties, to do their duty as MPs.
Lower fees for ETF
A price war is cutting expenses to the bone on index-tracking exchange-traded funds and mutual funds. And that suits Harold Evensky fine.
"It's great," said the Coral Gables, Fla., financial adviser, who makes those funds a mainstay in his portfolios. "My clients get the benefit."
For a long time, traditional index funds were the vehicle of choice for cost-conscious investors, but now the ETF marketplace holds the lowest fees and most intense cost competition. Industry giants including Vanguard Group, BlackRock Inc., Charles Schwab Corp. and State Street Corp. are racing to see who can cut expenses the fastest, vying for ...
Trust and integrity
Hi Mr. Tan
Heard about this, but don't know how true is the report. There is a brokerage remiser whose clients defaulted on $1m stock losses, remiser could not pay, so his firm sued him for $2m. The incident happened during the recent financial crisis 2008.
This means the poor remiser has to pay $1m in interests within a span of two years. Owing to lack of consumer protection here in Singapore, this means we have to scrutinize all contracts with a fine comb, at the bottom in small wordings, there may be predatory terms that would bound us unfairly. A warning to all property mortgagees on mortgage loans, with its complicated tructured loans, now we may have to engage lawyers to assess them, better pay to have peace of mind, we don't want to be ridiculed for not going in with eyes open, should something untoward happens. We are living in a world where trust and integrity have gone to the dogs.
My views
I think that interest may take up 10% to 20% but the rest of the money is for paying legal fees. Lawyers can be very, very expensive. The court should impose some cap on the legal fees in such matters. It cannot be "charge as they like".
Heard about this, but don't know how true is the report. There is a brokerage remiser whose clients defaulted on $1m stock losses, remiser could not pay, so his firm sued him for $2m. The incident happened during the recent financial crisis 2008.
This means the poor remiser has to pay $1m in interests within a span of two years. Owing to lack of consumer protection here in Singapore, this means we have to scrutinize all contracts with a fine comb, at the bottom in small wordings, there may be predatory terms that would bound us unfairly. A warning to all property mortgagees on mortgage loans, with its complicated tructured loans, now we may have to engage lawyers to assess them, better pay to have peace of mind, we don't want to be ridiculed for not going in with eyes open, should something untoward happens. We are living in a world where trust and integrity have gone to the dogs.
My views
I think that interest may take up 10% to 20% but the rest of the money is for paying legal fees. Lawyers can be very, very expensive. The court should impose some cap on the legal fees in such matters. It cannot be "charge as they like".
Monday, January 17, 2011
Financial planning at retirement
Most people think that the young people should have a financial plan, as they have a lifetime ahead of them. They may overlook the importance of a financial plan for a person who is approaching retirement. Having accumulated their savings, they now need to know how to invest the savings to get a good return. Is a life annuity the answer?
Here is a sample financial plan prepared for a retiree at age 60. It shows the amount that the retiree can get assuming yields at various rates of interest. You should take the yield at 4% and compare the amount, before adjusting for inflation, with the amount payable by a life annuity. If the life annuity pays an amount that is better than the payout under 4% yield, it should be all right to buy the life annuity. This assumes that the life expectancy of a person at age 65 is about 20 years, which should be quite correct.
You can also use the financial planning tool to calculate the amount that is relevant to your own personal situation.
Tan Kin Lian
Here is a sample financial plan prepared for a retiree at age 60. It shows the amount that the retiree can get assuming yields at various rates of interest. You should take the yield at 4% and compare the amount, before adjusting for inflation, with the amount payable by a life annuity. If the life annuity pays an amount that is better than the payout under 4% yield, it should be all right to buy the life annuity. This assumes that the life expectancy of a person at age 65 is about 20 years, which should be quite correct.
You can also use the financial planning tool to calculate the amount that is relevant to your own personal situation.
Tan Kin Lian
SGEP Editorial
A new editorial will be posted in SGEP later today. It is written by my co-editor, who had put in a lot of work and time to write this excellent summary. It is blunt and direct and focus on the important issues that citizens should consider at the forthcoming general election.
Avoid all types of unregulated investments
Hi, I was approached by a marketing person from X offering the purchase of a plot of 100 sq m land at Romford, London. In your opinion is this a scam and is this X a reliable company?
REPLY
My advice is to avoid all types of unregulated investments, including land banking plots. ALL TYPES!
REPLY
My advice is to avoid all types of unregulated investments, including land banking plots. ALL TYPES!
A broad mind - look for what is right
In the musical "Fiddler on the Roof" two Jews in a village were arguing over a matter and they approached the rabbi to solve the dispute.
The rabbi heard the first Jew and said, "you are right". He then heard the second Jew and said, "you are right". A third Jew, who was observing the event asked the rabbi, "How was it possible for the first Jew to be right and the second Jew to be also right?". The rabbi replied to the third Jew, "you are also right".
The rabbi looked for what is right and not what is wrong. This is called "a positive mindset". Many Singaporeans are not aware that of this approach and only know how to look for "what is wrong".
Tan Kin Lian
The rabbi heard the first Jew and said, "you are right". He then heard the second Jew and said, "you are right". A third Jew, who was observing the event asked the rabbi, "How was it possible for the first Jew to be right and the second Jew to be also right?". The rabbi replied to the third Jew, "you are also right".
The rabbi looked for what is right and not what is wrong. This is called "a positive mindset". Many Singaporeans are not aware that of this approach and only know how to look for "what is wrong".
Tan Kin Lian
A narrow mind and judgmental
Many Singaporeans have a peculiar mindset that is probably produced by our environment - narrow minded and judgmental. Let me illustrate it with this example.
I wrote a blog about the unrest in Tunisia. I had visited Tunisia on two occasions and found a great deal of similarity in the political structure of Tunisia and Singapore, which I described in my blog. I was aware that there must also be many differences, but I did not cover them because of my ignorance and my intent to focus on the similarity.
Someone criticized me personally in another blog, arguing that I was "wrong" in judging the situation between Tunisia and Singapore. This person followed a certain mindset:
I wrote a blog about the unrest in Tunisia. I had visited Tunisia on two occasions and found a great deal of similarity in the political structure of Tunisia and Singapore, which I described in my blog. I was aware that there must also be many differences, but I did not cover them because of my ignorance and my intent to focus on the similarity.
Someone criticized me personally in another blog, arguing that I was "wrong" in judging the situation between Tunisia and Singapore. This person followed a certain mindset:
- Interpret what was not there, i.e. that I had implied that the situation was exactly the same in both countries, and attacked the interpretation
- Pass judgement, that I was "wrong"
I like to ask my readers to be broad minded in reading my views. If you have a different perspective, you can express your own views. You do not have to pass judgment on my views, especially when you have not clarified what my views are. Who are you to judge?
Tan Kin Lian
Make tax system simpler for rented-out property
My letter on tax for rented out property is published in the Straits Times
http://www.straitstimes.com/STForum/Story/STIStory_625248.html
http://www.straitstimes.com/STForum/Story/STIStory_625248.html
Financial plan
Prepare a financial plan for your own personal situation. It is suitable for a young person who has recently started work and also a person who is approaching retirement. Learn the difference to your retirement income if you are able to earn a higher yield on your investment and also the impact of inflation. The application is available here, www.easysearch.sg/life21
Sunday, January 16, 2011
Book - Get value from your Life Insurance
Here is the flyer for my book, "Get Value from your Life Insurance". The book is expected to be launched in mid February 2011.
http://tankinlian.com/admin/file.aspx?id=375
http://tankinlian.com/admin/file.aspx?id=375
Neale Donald Walsch and Tommy Wong’s books
If you like Neale Donald Walsch’s books “Conversations with God”, the chances are that you will also like Tommy Wong’s books “Wisdom on How to Live Life” because both sets of books are written in amusing dialogue format and both advocate similar spiritual concepts.
Tommy Wong’s books are currently on promotion and can be ordered here.
Beautiful cloud formation
Watch this beautiful cloud formation in Australia. Contributed by Mike Hansford.
www.tankinlian.com/latest.aspx
www.tankinlian.com/latest.aspx
www.gothere.sg
A few people have recommended the use of www.gothere.sg. I tried it and found it to be very good, perhaps better than Google Maps Singapore. You can enter, for example, "Promenade MRT to Marina Bay Sands" and it shows the map, bus service, travel time and fare.
Distance based fare
I benefited from the new distance based fare on a bus trip from Marina Bay Sands to Stamford Road (to change to the MRT line). In the dark, I got down the bus 2 stops ahead of City Hall MRT. Realising my mistake, I took the next bus for the 2 stops. On alighting the bus, I found that the fare charged by the second bus was $0.00 as the fare for the total distance travelled was already covered by the fare deducted from the first bus.
Although this would appear to be a good idea, I felt that it was unnecessary and wasteful to incur the expenses of changing to the distance based fare. It would have been sufficient to increase the transfer rebate under the old system. The high cost of changing the system must be reflected in the higher fares that commuters have to pay over the long run.
Tan Kin Lian
Although this would appear to be a good idea, I felt that it was unnecessary and wasteful to incur the expenses of changing to the distance based fare. It would have been sufficient to increase the transfer rebate under the old system. The high cost of changing the system must be reflected in the higher fares that commuters have to pay over the long run.
Tan Kin Lian
Countdown timer at pedestrian crossing
The countdown timer at pedestrian crossing is now quite common in Singapore. It is useful in telling the pedestrian the time left before the light change from green to red.
I first saw the countdown timer in China about 20 years ago. I felt that it was a great idea and should be implemented in Singapore. Someone wrote to the newspaper to suggest this timer be installed. I remembered the official reply at that time - it was unnecessary and could be counter-productive. I could not understand the reasoning at that time, but felt that it was typical of the kind of convoluted thinking that was quite common in Singapore.
The official view was quietly changed many years later, and we now see the useful timer in many places.
Tan Kin Lian
I first saw the countdown timer in China about 20 years ago. I felt that it was a great idea and should be implemented in Singapore. Someone wrote to the newspaper to suggest this timer be installed. I remembered the official reply at that time - it was unnecessary and could be counter-productive. I could not understand the reasoning at that time, but felt that it was typical of the kind of convoluted thinking that was quite common in Singapore.
The official view was quietly changed many years later, and we now see the useful timer in many places.
Tan Kin Lian
New tyres at the rear
If you change two new tyres, put the new tyres at the rear of the vehicle and move the old tyres to the front.
Video
Video
Saturday, January 15, 2011
Google Maps Singapore
I had difficulty in using the journey planner from SBS and SMRT. A friend suggested that I use Google Maps. I tried it and the experience is positive. This is what I did:
Tan Kin Lian
- I searched for Google Map Singapore
- I select the destination, i.e. Marina Bay Sands, MICE
- I chose "Direction" and picked the nearly MRT stations, i.e. Promenade and Marina Bay.
- I found that it is better to take the bus from Promenade, as the walking time to the station is 1 min and the journey is 3 mins. I would have to walk 5 mins to the bus stop at Marina Bay stations
Well done to Google. They really know how to provide the best technology and make things simple to the public. Our planners in Singapore should attend Google school.
GOOGLE MAP ON ANDROID
I tried the same approach with my Android phone. It worked in the same way. I now know how to use this app on the mobile phone. It is wonderful.
GOOGLE MAP ON ANDROID
I tried the same approach with my Android phone. It worked in the same way. I now know how to use this app on the mobile phone. It is wonderful.
Tan Kin Lian
4 year SGD Interest Rate Linked Structure Deposit
My wife showed me a brochure of the above structured deposit from a local bank. It comprised of 9 pages of detail. I told her not to invest in any complicated structured product, as she may not be aware of a catch.
The structured deposit offers an interest rate of 1.2%, 1.3%, 1.4% and 1.5% during the 4 years respectively. It gives the bank the option to call back the deposit at any half year period. The investor stands the risk of being locked up with the low yield if interest rate increases and the risk of being redeemed if interest rate drops further. There is no way that the investor can estimate the chance of either event. This structured deposit is not covered by the Government guaranty on deposits. There is a risk of total loss, in the event of failure of the bank. While this is small, the paltry yield does not merit it.
It is better for the investor to buy a government bond which will probably give the same yield with lower risk. It is a neater arrangement.
I hope that our banks and corporations will issue a straight forward corporate bond with a yield that is higher than government bond, and avoid all the complicated structures and options.
Tan Kin Lian
The structured deposit offers an interest rate of 1.2%, 1.3%, 1.4% and 1.5% during the 4 years respectively. It gives the bank the option to call back the deposit at any half year period. The investor stands the risk of being locked up with the low yield if interest rate increases and the risk of being redeemed if interest rate drops further. There is no way that the investor can estimate the chance of either event. This structured deposit is not covered by the Government guaranty on deposits. There is a risk of total loss, in the event of failure of the bank. While this is small, the paltry yield does not merit it.
It is better for the investor to buy a government bond which will probably give the same yield with lower risk. It is a neater arrangement.
I hope that our banks and corporations will issue a straight forward corporate bond with a yield that is higher than government bond, and avoid all the complicated structures and options.
Tan Kin Lian
SAIL policy
Dear Mr. Tan,
I am 55 year old and not working. Is NTUC SAIL plan suitable for me? Thanks
REPLY
I am not familiar with this policy. Here are some negative comments about the policy, but I am not sure if the comments are fair or accurate:
http://tankinlian.blogspot.com/2010/02/get-benefit-illustration.html
I am 55 year old and not working. Is NTUC SAIL plan suitable for me? Thanks
REPLY
I am not familiar with this policy. Here are some negative comments about the policy, but I am not sure if the comments are fair or accurate:
http://tankinlian.blogspot.com/2010/02/get-benefit-illustration.html
Journey planner to Marina Bay Sands
I have to attend a dinner at Marina Bay Sands. I tried to use the journey planner from SBS and SMRT to get to Marina Bay Sands from the Promenade or Marina Bay stations. It was quite a hassle to use these complicated planners. I do not understand why the Land Transport Authority allows these two operates to operate different websites with different structures. Perhaps LTA should build an integrated website and make it easier to use.
Beware of scams
I receive this type of proposal often. They are scams. Sometimes, I get several in a day.
Good day dear Friend,
I am Sir Jonathan Yishai Baruch presently undergoing medical treatment in
doctor's hospital Bahamas. I worked with the British Oil Industry, East
London for over a decade and I was married for fifteen years without a
child. My wife died after a long illness that lasted for two years. I
vowed to use my wealth for the down trodden and the less privileged in the
society, and I am contacting you in regards to my proposition. I am
looking for a God fearing and trustworthy person who I can bequeath the
responsibility of making judicious use of my wealth in helping the down
trodden and under privileged one's in our society and the world at large,
while this will be of immense benefit to such an individual as well.
Unfortunately the doctors here have just confirmed my situation that I
will not live long I have decided to give out my money to the poor. I
deposited the sum of 20,000,000 (Twenty Million Great British Pounds) with
my Bank, this money is still there. This is purely intended to bring
succor to the helpless and as such, a well trusted personality is required
so please, get back to me using my direct contact below if you consider
yourself competent and qualified to fit the above described profile and if
interested to commit your time and resource to this project.
Good day dear Friend,
I am Sir Jonathan Yishai Baruch presently undergoing medical treatment in
doctor's hospital Bahamas. I worked with the British Oil Industry, East
London for over a decade and I was married for fifteen years without a
child. My wife died after a long illness that lasted for two years. I
vowed to use my wealth for the down trodden and the less privileged in the
society, and I am contacting you in regards to my proposition. I am
looking for a God fearing and trustworthy person who I can bequeath the
responsibility of making judicious use of my wealth in helping the down
trodden and under privileged one's in our society and the world at large,
while this will be of immense benefit to such an individual as well.
Unfortunately the doctors here have just confirmed my situation that I
will not live long I have decided to give out my money to the poor. I
deposited the sum of 20,000,000 (Twenty Million Great British Pounds) with
my Bank, this money is still there. This is purely intended to bring
succor to the helpless and as such, a well trusted personality is required
so please, get back to me using my direct contact below if you consider
yourself competent and qualified to fit the above described profile and if
interested to commit your time and resource to this project.
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