National health insurance

Should a country introduce a national health insurance system, and which approach works best?
http://tankinlian.com/admin/file.aspx?id=622

Buying insurance online

A project team in NUS Business School asked my views about the possibility of buying insurance online and the need for reinsurance. http://tankinlian.com/admin/file.aspx?id=621

Make a claim on your health insurance

Here are some tips on how you to make a claim on your health insurance policy and avoid the nasty surprise to find that you cannot get reimbursed for a significant part of your hospital bill .

http://tankinlian.com/admin/file.aspx?id=620&PK=ac28a9809d2d102f8459bccabf61a61c

Stock options lead to uncertain economy

For a long time, I disliked stock options for the harm that it can cause to the economy and the bad impact of greed. Now, here is an article that support this view.

http://management.fortune.cnn.com/2012/01/30/ceo-pay-us-economy/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Prepare for increase in fees in open car parks

Printed in TODAY paper, 31 January 2012

MR PAUL Chan said in his letter "Park funds in the right car park" (Jan 25) that "residents would prefer to use an open car park, where it is cheaper, more convenient and vehicles are easily accessible".

The Housing and Development Board is able to charge S$65 a month for these lots probably because it does not factor in the full cost of land. Otherwise, the parking fee would probably increase by two to four times.

With limited land, there is no choice but to build multi-storey car parks, including mechanised options. 

We also have to prepare for the day when the fee for open car parks are higher than for multi-storey car parks, due to the convenience for residents.

It would be painful for car owners to pay more for parking, having first incurred a high cost to buy the car.

One approach is for parking to be subsidised in some way (as the Government does have the Certificate of Entitlement revenue) and done holistically across all types of car parks.

A longer-term solution is to improve public transport, especially feeder services to train stations and bus interchanges, and to improve taxi services as an attractive alternative to private cars.


Tan Kin Lian

Poor taxi service

http://blog.omy.sg/hollyjean/2012/01/27/cheated-by-vulgar-transcab-driver/

Cost of health insurance

Are you aware about the high cost of health insurance? The premium to cover age 1 to 75 years, including interest of 4% on the premium, can accumulate to $280,000. Do you expect your medical bill to cost more than this? Is it prudent to spend so much on your health insurance? This staggering figure does not include the cost beyond age 75 - which will escalate steeply. Most people will live beyond 75 years - make sure you still have Medisave savings to last for many more years.
You can download the article here (but you have to provide your email address).
http://tankinlian.com/admin/file.aspx?id=619&PK=5708b80a9b96102f8459bccabf61a61c

FISCA members can read this article directly in www.fisca.sg.

How to deal with rising health care cost

Many people have asked for my advice on how to get the appropriate health insurance to cover their medical expenses when the are old.  I wish to set out in these few pages, the advice that I have consistently given to them. Be ready for some surprise! You need to provide your e-mail address to access the tips. 
http://tankinlian.com/admin/file.aspx?id=618&PK=7d9f51969b72102f8459bccabf61a61c

Alternatively you can login to the FISCA website, www.fisca.sg

How to deal with a scandal

Lucky Tan gives some suggestions on how to deal with a scandal
http://www.google.com/reader/view/#stream/user%2F08003848054417725788%2Fstate%2Fcom.google%2Freading-list

A gloomy forecast for the next decade

Here is a gloomy forecast for the next decade http://www.todayonline.com/World/EDC120129-0000007/Fallout-from-financial-meltdown-could-last-a-decade,-says-Dr-Doom

And some words of advice for the future

Calling for a major change in policy priorities, Dr Roubini said: "We have to shift our investment from things that are less productive like the financial sector and housing and real estate to things that are more productive like our people, our human capital, our structure, our technology, our innovation."

I agree that we need to move from the non-productive to the productive sectors of the economy.

Be an entrepreneur

Here is an option for a young person who is starting work, or a mid career person who wish to find new challenges. http://tankinlian.com/admin/file.aspx?id=616

Give fair wages and decent working conditions

If is difficult for a reputable manufacturer to get workers to accept depressed wages and inferior working conditions. They found a way to achieve this goal and boost their profits - go for outsourcing and contract work. Let the contractor handle this difficult matter.  http://tech.fortune.cnn.com/2012/01/27/tim-cook-blasts-the-new-york-times-report-on-apples-chinese-ipad-factories/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

It is not good for society, if the weaker sectors of our society continue to be exploited. It will lead to a higher wage gap and a poorer quality of life for the majority of the citizens.

Here are measures that a good government in any country can adopt:

• Set a minimum wage and specific the standard terms and conditions of work
• Set a good example in outsourcing their work and accept the contractors based on quality of service, rather than the lowest bid. It is possible for the government to know what the cost of the service should be. Use a transparent system to award the contract.

Give a prompt reply

I make it a point to give a prompt reply to any question that is addressed to me personally, i.e. not part of a spam mail.

I received an email on behalf of a project group of students in SMU asking for explanation about the dual currency investment. I gave a reply immediately to two questions and also enclose my FAQ on this subject. The recipient must have been surprised at the prompt reply. She replied, "Thank you very much".

I reply with what I know. Even if I do not have the ready answer, it is quite easy for me to search for it in my website or in the Internet, using Google. If I do not have the answer to some questions, I will still give a reply to the questions that I know. A partial reply is better than no reply.

I want to encourage people to give a prompt reply, instead of ignoring an e-mail that is sent personally. My comment also apply to our ministers. Although they are busy, they do have an army of assistants who can give a proper reply, not just an insincere acknowledgement or worse - ignore it entirely! Our leaders need to set a good example in courtesy and the proper behavior.

Pawn and money lending shops

I was at Ang Mo Kio Central looking for a photocopy shop. I was surprised to see so many pawn shops and money lending shops in the vicinity of AMK Hub. It seemed that every other shop is in this trade. Have we became so obsessed with money?

Dilbert and pay of political leaders

http://dilbert.com/strips/comic/1989-11-20/

Investigation for corrupt practices

I wonder if Singaporeans are over-reacting to the corruption charges against the former SCDF and CNB chiefs. We have not got the details about the misdeeds that they are being investigated.

I read that this may involve a woman executive of an IT firm. If this is the main factor, I would not consider it to be a corrupt practice that merit the level of attention. I have read of similar cases involving top executives in America and even a former President of the United States. In those cases, there were dealt with by the media and public opinion and not a corruption agency.

Let us wait for the actual facts to surface, and not speculated on this matter - which might be unfair to the affected parties. This is one aspect of the culture in Singapore that should be changed.

Reduce the compliance cost of GST

Singapore has become more costly than Hong Kong for many products that are manufactured in China and other countries. GST adds 7% to the cost of buying a product in Singapore (and Hong Kong has no GST) but imposes an additional cost due to compliance. Here is a way to reduce the compliance cost and make Singapore businesses more competitive.
http://tankinlian.com/admin/file.aspx?id=617

Tax hikes

We need tax hikes to solve the deficit problems in the advanced countries. The governments have to pay unemployment and other benefits, to avoid extreme hardship on those who lose their jobs due to factors beyond their control. These payments have to be funded by those who can afford, so the taxes have to be increased. While it is necessary for governments to control their expenditures, it is also necessary to give the governments adequate resources to do their work.
http://www.cnbc.com//id/46127466

Failure of deregulation

The story of Freddie Mac and Fannie Mae shows the failure of deregulation. Under a deregulated environment, the sub-prime mortgages were created recklessly, and this caused the sound institutions to be sucked into the mess. http://money.cnn.com/2012/01/24/news/economy/freddie_mac/index.htm?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

We are experiencing our own problems of deregulation in Singapore. It is time to recognize the difference between good and bad regulation. Unfortunately, our regulators does not have this expertise, as they are brought up in a sheltered environment. The latest measure to protect consumers against bad financial products is an example of a bad regulation - as it does not address the real issue and make matters worse.

Misleading advertisements

The consumer watchdog in Australia is taken legal action against a budget airline for misleading advertisements about their fares.
http://www.todayonline.com/World/Worldinbrief/EDC120125-0000040/Australias-consumer-watchdog-sues-AirAsia-over-ads

Misleading advertisements of a worse nature, are rampant in Singapore. We need to address this issue as well.

Charges on Medisave withdrawal

Here is an example of wasteful and unnecessary charges being added to the high cost of living.  http://www.todayonline.com/Voices/EDC120125-0000006/Extra-charges-on-Medisave-withdrawals-should-be-waived

Mechanized car parks

Read this letter: http://www.todayonline.com/Voices/EDC120125-0000034/Park-funds-in-the-right-car-park?

Mr. Paul Chan argues that it is more convenient and cheaper to park in the open car park. However, he did not take into account the cost of the land that is used in this way. If the land is priced at the market rate, the cost of the open car park will be several times of the mechanized car park.

It is costly to own a car and to find the parking space for a car. This is inevitable. What is needed is better public transport, feeder services and cheaper taxis. Buying a car is not the solution. Do not expect cheap car park space.

Driving children to school

Here is another bad example of the lifestyle in Singapore.
http://www.todayonline.com/Voices/EDC120125-0000056/Parents-should-be-discouraged-from-driving-children-to-school

Parents want to send their children to "good schools" and that require long travelling distances. The public transport is bad, so parents have to drive their children to school - wasting two hours of time and adding congestion on the road.

If we do not recognize the inefficiency in our system, our economic performance and quality of life must surely drop.

The world needs 600 million new jobs

http://www.todayonline.com/World/EDC120125-0000054/World-needs-600-million-new-jobs-in-next-decade

The world needs 600 million new jobs over the next decade. How can these jobs be created? Here are my views on  this global challenge:

• Global competition results in income disparity
• Stagnant wage for most people destroy their spending power for products and services
• The reduced spending destroys economic growth and jobs

While globalization has been destroying demand and jobs for over two decades, its impact was temporarily hidden by the real estate and stock market bubbles, which created non-productive jobs in the financial sector to replace the destroyed jobs, until the bursting of these bubbles.

To create new jobs, the following steps have to be taken:

• Reduce the wage disparity by introducing minimum wage and high taxes for extremely high incomes
• Reduce the working hours, so that more people can be employed to share the available work
• Introduce measures to restrict outsourcing and the inflow of foreign labor 

I am referring to the global situation and not specifically to Singapore. However, Singapore will also face the same impacts. While Singapore now benefits from globalization, it is at the expense of other countries, and is not good for the long term growth of the global economy.

AFTER NOTE:

Even the Republican candidates are willing to raise the minimum wage, as they recognize the realities of the bad economic situation. http://management.fortune.cnn.com/2012/01/24/a-new-day-for-the-minimum-wage/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Treat indexed ETF differently

I have written a letter to the Straits Times in  my capacity as President of the FISCA (Financial Services Consumer Association, www.fisca,sg) to ask MAS to treat the indexed ETF differently (from other ETFs based on derivatives) and allow consumers to make online purchase without getting investment advice. I hope that they publish the letter. If not, I will publish the letter here here on Saturday.

US taxpayers bear the loss

Read this story about the burden that will be shouldered by the US tax payers over the losses that are suffered by Fannie Mae and Freddie Mac: http://www.cnbc.com//id/46106075

Here is the background to this state of affairs:

• The real estate market in the US was a bubble for one or two decades before it finally burst in 2008
• During this period, large profits were made by developers, real estate agents, mortgage bankers and other people connected with the trade
• The home owners were enticed to pay high and unsustainable prices for the property
• The purchases were funded by mortgage banks and insured with Fannie Mae, Freddie Mac and other insurers
• Bad financial products such as sub-prime mortgages and collateralized debt obligations (CDOs) were created to fund these unsustainable prices

With the bursting of the bubble, the drop in real estate prices have to be shouldered by the home owners, the mortgage banks and the insurance agencies. A significant part of the losses are now taken over by the taxpayers.

A lesson to be learned - if the real estate prices are allowed to appreciate to an unsustainable level, it will have to burst one day and bring big damages to the economy and the people. Several countries have gone through this phase. Other countries, including Singapore, will have to follow. There is no escape from the inevitable.

Be an Entrepreneur

Here is a way for someone to start a new business as an entrepreneur and achieve a greater chance of success and without the need for a large capital. You only need to have an idea, the passion and the willingness to slog it out.


Read this
http://tankinlian.com/admin/file.aspx?id=616

PM Lee speech for Lunar New Year

PM Lee encourages Singaporeans to have more babies. The comments from netizens are overwhelming negative. It is so sad that Singapore has now reached this negative state. PM Lee has a difficult time to reverse the situation. It has gone too far down the road.
http://sg.news.yahoo.com/pm-lee-encourages-s%E2%80%99poreans-to-have-more-%E2%80%98dragon-babies%E2%80%99-this-year.html

This is an interesting example of a democratic political process that works. Mitt Romney, the leading Republican candidate for the US Presidential Election has a high income background, as the former head of a management consulting firm. He lost the South Carolina primary election to Newt Gingrich due to his unwillingness to show his tax returns. He is now putting it right to tell the American people about his financial affairs.

http://www.todayonline.com/World/EDC120123-0000019/Stung-by-defeat,-Romney-ready-to-right-tax-mistake

This lesson is also applicable in Singapore.

Salaries of ministers

I share my views about salaries for ministers. I find the basic salary to be acceptable, but the concept of a high rate of bonus based on performance is bad. Many Singaporeans are not aware that the concept of "pay for performance" has its negative impacts, especially in the public sector,  and how it has developed a bad culture in Singapore.
http://tankinlian.com/admin/file.aspx?id=615

Invest in gold bar

I share this story of how a retired school teacher was almost cheated of a large sum of money by investing in gold bars at an inflated price. This type of scam is being applied to other products, such as industrial oil.


For FISCA members only:
http://easyapps.sg/assn/Org/Information.aspx?id=5

For non-members (you have to provide your email address to retrieve the article)
http://tankinlian.com/admin/file.aspx?id=614&PK=bb278df596b1102f8459bccabf61a61c

FISCA articles

There are several articles reserved for FISCA members only. Some articles can be read by the public. These articles are shown here:
http://easyapps.sg/assn/Org/Information.aspx?id=5

Members can click on the "Login" tab and enter the email address and password to read the articles that are reserved for members.

Invest in overseas properties

What are the pitfalls to avoid? Is there a safe way to invest in overseas properties to enjoy the capital appreciation when the economy develops? Read this article (for FISCA members only): http://easyapps.sg/assn/Org/Information.aspx?id=5

Non-members of FISCA can read the article here (after submitting your email address).

To all readers of my blog

Law to combat online piracy

There are two proposals to pass a law against online piracy in the USA. They are known by the acronym SOPA and PIPA. Someone asked me for my views on these proposed legislation - especially if a similar legislation is being considered in Singapore.

I prefer to let this matter be handled by the experts. I understand that Google has taken a stand against certain key provision of the proposed law, such as blocking certain websites. So, I have no comments.

If anyone wish to express a view about this legislation, and if it is good or bad for consumers in Singapore, they can post their comments here.

Cost of mobile data

I bought a prepaid data card in Jakarta for $15. It allowed me to download 1G of data over 30 days. As I stay for 3 days, my cost is $5 a day. On my return to Jakarta 40 days later, I found that the data card could still be used, i.e. the 30 day limit did not apply. So, the data card of $15 could be used for 6 days or $2.50 a day.

The mobile operators in Singapore charge $14 or $20 for each day of "roaming" data access in Jakarta. Their charges are too high.

I have found that it is much cheaper to buy a prepaid data plan at the destination, rather than use the roaming service. I hope that the mobile operators review their charges to be competitive. 

ST Forum - Develop a complementary system

An edited version of this letter was published in Straits Times on 19 January 2012

The two train breakdowns in December was a surprise to Singaporeans, because they were totally unexpected, not only to commuters but to the train operator.

My friend had just experienced a train delay of one hour during his holiday in the UK. He said that train breakdowns and delays in the advanced countries are quite common and are taken in their stride.

While we can do our best in carrying out proper maintenance of the train system, we have to accept the fact that there will be more frequent disruption in services in the future due to the age of the system and to the over-load on the train system.

I urge the Land Transport Authority to take urgent steps to develop a complementary service to reduce the over-reliance on the current train service. A possible approach is: 

• Allow express bus services to be operated between the bus interchanges which are already located next to the train stations
• These express services bring passengers between the bus interchanges and do not pick up passengers along the route
• They will increase the capacity during the peak hours and reduce the over-crowding on the trains
• It will be easy to add more buses quickly in the event of a train breakdown
• It allows commuters to become familiar with an alternative service
• The express bus services can be operated by the train operators or by private bus companies.

Tan Kin Lian

ST Online Forum - Encourage car pooling and taxi sharing

Published in ST Online Forum on 18 January 2012

To tackle the congestion on our roads, the Ministry of Transport is developing a new expressway and adding more lanes, flyovers and underpasses to existing roads. 

Infrastructure development takes years to be completed and, in the meantime, the construction work aggravates the current situation.

There is another option to deal with this situation - encourage car pooling, car sharing and taxi sharing. If two people share a taxi or pool in a car, there will be less need for some many vehicles on our road.

When Mr. Mah Bow Tan was the minister in charge of transport, he actively promoted these concepts. At that time, the ministry clarified that car owners were allowed to collect a payment for car pooling as defrayal of expenses, and the insurance cover would not be compromised. His ministry also actively promoted taxi sharing. I am not sure if the current minister holds these views.

With the widespread use of smart phones with GPS location services, it is now possible to use technology to match people who are interested to share a taxi or to car pool. 

It will be useful for the minister to re-confirm his stand on these issues, so that car pooling and taxi sharing can be actively promoted as another option to solve our problem of traffic congestion.

Tan Kin Lian

Electronic pickpocket

Be careful of this type of identity theft.
http://www.wreg.com/videobeta/?watchId=8ba6f8fc-90a2-4711-90ea-1884ec348310

Are equity linked investments good for consumers?

Find out what are these investments, how they work and if they are good for consumers. This is available at the FISCA website, www.fisca.sg, and available only to members after they have logged in. Click here.

Salaries of Ministers

I read the news report about the basic salaries of the different levels of political office, from ministers to parliament secretaries. They are quite modest and acceptable to me, and perhaps to most Singaporeans.

It is the high rate of bonus that brings the salaries to a high level. This bonus is supposed to be "pay for performance". I do not like this concept. At a senior level, office holders (in the public or private sectors) should not be motivated by greed. They should do their best out of honour and the privilege to serve the people.

When this principle is realized, we will have a better society, which can give a better life for all. When political leaders are motivated by greed or personal wealth, we have a bad society. There is still time to change for the better. Remove the performance based bonus!

Encourage travelling by bus

I wish to develop a mobile app to encourage commuters to travel by bus. While there are many apps already available, I wish to develop a new app that is easier to use. I need the following data and will appreciate advice on how they can be retrieved for free or at a modest cost:

• GPS location and number of all bus stops in Singapore
• Numbers of the bus services stopping at each bus stop
• Arrival time of the next bus for each service and bus stop (this need access to the servers of the bus operators)

If you have any information on the above, please write to kinlian@tankinlian.com. Thank you.

A positive and negative approach

Whenever a suggestion is brought up to make a change, there is a tendency for people to point out what is wrong, and what they do not agree. In many cases, the negative views are not based on actual experience, but is on hypothetical reasoning. This is a negative mindset but is quite common in Singapore.

A positive mindset looks at what is right about the suggestion and a willingness to give it a try. If the actual experience shows some negative consequences, they can be fixed at that time. This is what makes for change and entrepreneurship.

For Singapore to be willing to change and to be entrepreneurial, we need a positive mindset. It is a big challenge to change from a negative mindset, which is ingrained in our culture and education system (remember the term "kiasu"?). But, the process of change starts with the realization of our present situation and a desire to work towards a better situation.

Share your views.

SGX and China Sky

SGX has withdrawn its legal suit against China Sky and is now negotiated a settlement out of court. See this report: http://www.todayonline.com/Business/EDC120117-0000058/SGX-drops-suit-against-China-Sky
I hope that the terms of the settlement be publicized to be a reference for future cases of this type.

Many areas of the law in Singapore are not clear, due to a small number of cases that are tried in court. If more cases are tried and decided in court, the judge will be able to give a view on what is right, what is wrong, what is reasonable, what is unreasonable. This will help to strengthen the understanding of values in our society.

The lack of clarity instill fear in Singaporeans. Recently, I met a young man, who graduated from university, that was so fearful of using a  non-artistic image in the website for fear of infringing the copyright. It was a general image that could not be identified to an owner. He heard that someone had gone to jail for infringing the copyright, and he did not want to take this risk.

I find many Singaporeans to be too fearful and will not take any risk if there is some unclarity or uncertainty. This is why entrepreneurs are so rare in Singapore. And it can be traced to our climate of fear.

  

Promote car pooling and taxi sharing

One option to tackle the congestion on the road is to promote car pooling and taxi sharing. With smart phones and GPS location services, it is now possible to identify people who wish to car pool or share a taxi. For car pooling, the Government should clarify that the collection of a fee to defray the expenses is not considered as operating a taxi service. This will encourage more people to car pool. Do you agree?

Today Paper: The priorities for SMRT

Letter from Tan Kin Lian in Today Paper


In the search for its new chief executive, I urge SMRT Corporation's board of directors to find a person who understands and is able to realise these immediate and long-term goals:

- Ensure the smooth running of its current operations

- Use technology to improve communication with commuters in the stations and outside

- Improve the current system of receiving and resolving customer feedback and issues

- Achieve a balance between its commercial goals and providing a comfortable, affordable public transport service

- Develop a complementary system to its rail operations and reduce the impact caused by any unexpected failure

The first three priorities can be implemented immediately, while the last two may take longer, but their importance has to be recognised.

On the matter of a complementary system, SMRT should run express bus services between the bus interchanges next to its train stations. These buses should not pick up passengers enroute.


This could complement the trains, especially during peak hours, allowing commuters to be familiar with this service. More buses could be deployed during emergencies and train breakdowns.

I give my best wishes to the board and the new CEO in the challenging task of remoulding SMRT to reattain the service standards that Singaporeans had long been proud of until now.

Tan Kin Lian

Proposed security measure for ATM withdrawal

A few people have given their views about the potential drawbacks of this proposal. http://tankinlian.blogspot.com/2012/01/suggestion-to-enhance-security-for-atm.html

I wish to ask for some views on the positive aspects of this proposal, compared to existing systems of authentication or non-authentication (apart from the 6 digit PIN).

In making an internet banking transfer or credit card payment, I receive a PIN through SMS and has to enter the PIN within a short time to authenticate the transaction. I find this method, which is commonly used, to be more troublesome. I would prefer to use my mobile phone to call a specific number to make the authentication, i.e. a pro-active authentication, rather than a reactive one.

What are your views?

Parking spaces, congestion and taxi service

Do we have too many or too few parking spaces in the CBD? There is disagreement on this issue. Read this article. http://www.todayonline.com/Commentary/EDC120116-0000003/The-CBD-has-too-many-parking-spaces

Two points are not in dispute:

• Our roads are too crowded in the CBD
• The taxi service is poor, i.e. costly, unavailable at busy times

These points are connected. If we have an efficient and affordable taxi service or some form of local transport, there is no need for so many people to drive into the CBD, and no need for more parking spaces.

What is a local transport service? It is my description of a service involving small buses and taxis that ply within a town or the CBD. As they do not travel outside of their zone of operation, the licensing requirement can be relaxed. They can pay a daily fee and be exempted from ERP and other charges. 

If we tackle the problem of local transport. we will have the framework to solve the larger issue of transport in Singapore. I hope that the Ministry of Transport will seriously consider this suggestion - to improve local transport.

A suggestion to enhance security for ATM withdrawal

DBS Bank experienced unauthorized withdrawal from their customer accounts through the ATM machines. They are now looking for a way to enhance the security measures.

I wish to suggest the following method, which does not involve any change to the current magnetic strip card. I suggest that the ATM machine should ask the customer to use his registered mobile phone to dial a certain number of the bank. The bank will retrieve the mobile number, using caller ID, to "activate" the withdrawal.

For the crook to take out money, the crook needs to have the mobile phone as well. This will be a hindrance to the crook.

Currently, DBS sends a SMS to the customer and ask the customer to enter a PIN from the SMS to confirm the account. My suggested method is more practical and less costly (i.e. does not use SMS) and can also be used for internet banking.

Do you agree with my approach? Can you see any flaws or weakness?

Security of ATM machines

DBS Bank suffered several unauthorized withdrawals from their customer accounts. They are now introducing additional measures to enhance security.

It is important to have adequate security, but we have to distinguish between good and bad security measures. A good security measure is effective and does not increase the cost significantly or make it inconvenient for customers. A bad measure does the opposite.

The culture in Singapore is "security at all cost" to plan for "the worst case scenario". It is the culture in Singapore to over-react and take excessive measures to "enhance security". This is called our "kiasu" and "kiasi" syndromes. I have seen many examples of bad measures that are costly, and ineffective.  The trouble is - all of these measures keep on adding up, and making life quite complicated and stressful.

If you were in charge of implementing the good measures to enhance the security of ATM machines in a bank, what would you do?

Investing in a franchise

Hi Mr Tan,
I was wondering if you have heard of the Snap-Print franchise. I am a greenhorn to the world of business and am considering to start my first investment with Snap-Print to learn the ropes of starting a business.

Snap-Print is a printing company that does prints on apparels, digital and offset and large format prints like banners, backdrops, etc. They are offering a franchise for small home business start ups. This is how the franchise works. I will register a company with ARCA. Next, I will source the deals on my own and quote my own price based on negotiations. Snap-Print will offer me a partner price for the printing. The amount I quote to the client minus the partner price given by Snap-Print would be my profit.

Snap-Print is offering the franchise for 9k. They are providing me some support like the relevant product training, sales and marketing techniques and printing business operations. Do you think this opportunity is good for someone like me who is new to business and want to start learning business by doing?

REPLY BY TAN KIN LIAN
I do not know about the business model and the prospects for Snap-Print or the reliability of the franchiser.

I can only give a few words of general advice, before you spend $9,000 in paying the franchise fee.

1. Do not spend money on any business idea that is not clear to you.
2. Some people make money from the franchisee and give a business model that may not work (I am not referring to Snap-Print).
3. It is not easy to start a business - as you have to take care of many issues, such as marketing, finances, recruiting people, collecting debts. Be aware of all these challenges, before you plunge into a business.
4. It is best to help a friend to run an existing business, so that you are aware of the business issues, before you start a business on your own. It is better to be prepared.
5. I have seen many people lost a lot of money on franchises, not only the franchise fee but the follow-on investments. So, do your study carefully first.

How investors lost money on dual currency investments

Many risk averse investors were not aware that they were taking much higher risk in investing in dual currency investments - compared to shares and foreign currencies - and were not given the higher yield for the risk. Here are three real stories of how people fared in this type of investment.


This article is reserved for FISCA members only. You can view the article at the Information tab of the FISCA website. There are articles in the website that can be viewed by the public, i.e. non-members.


The FISCA website can be accessed directly at  www.fisca.sg. Click on the tabs to access the different functions in the website.

FISCA Website

The Financial Services Consumer Association (FISCA) has recruited a few additional volunteers. They will help to provide useful information on the FISCA website. I will also share regular stories about investment scams and bad products, and how people have lost money by investing in bad products on the wrong advice given by the intermediaries (who sold the product).

These stories will be restricted only to FISCA members. The public can see the title and a short explanation, but cannot view the entire article. I encourage FISCA members to visit the website regularly and view the articles. We will automate a weekly e-mail alert.

www.fisca.sg

Voice mail is not useful

Hi Mr. Tan,
I wish to highlight the redundant Voicemail service in mobile phone service. More importantly, it is a waste of the caller's $$$.

Currently, when I call another person's mobile phone and if he does not pick up the call, I will be directed to the Voicemail service within 10s (approximately. Maybe less than that). When this happens, the call will start to 'eat' into my mobile phone service's talk time.

With SMS and whatsapp, this Voicemail service is redundant. I feel that it is put in to 'eat' into callers' talk time.

Subscribers can opt out of this service. However, many are unaware. Even if they are, many don't care because it 'eats' into the caller's talk time, not the subscribers'. If true, this is an unethical practice by mobile service providers to boost profits.

For your views and highlight in your blog.
Mr. Lee

REPLY BY TAN KIN LIAN
I agree with you. I had the same experience. When I get into the caller voicemail, I stopped the call immediately.

As the receiver, I find the voicemail to be impractical to use. So, I opt out of the service.As there is caller ID, it is easy to return a call to those numbers that I recognize.

FISCA - Talks for 2012

For FISCA's planning in 2012, please indicate the talks that are of interest to you.
http://www.surveymonkey.com/s/TKVXB8K

The best way to invest your savings

Sensible tips from Tan Kin Lian
I have often been asked, “What is the best way to invest my savings?” This question becomes more urgent during the past year, when investors have seen an uncertain global economic environment – high unemployment and economic slowdown in the advanced countries and large government debts and the prospect of government default on these debts.

In this article, I give 12 tips on investing in different types of investments - shares, government bonds, gold, property and structured products.  And I also give some advice on what you can do to be educated to make the right decision for your own good. Do not rely on other people who may give you the wrong advice - for their personal gain or through their own ignorance.

http://tankinlian.com/admin/file.aspx?id=612&PK=8a52fc1d8ffb102f84debed2e3f9351e. You have to give your e-mail address to read this tips.

Property in Auckland, New Zealand

Hi Mr Tan,

I came across this article in NZ Herald. I'm not really sure what it is about, but maybe it will be useful for those people who are interested in the said NZ properties being advertised in Singapore.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10778350

Comment: according to the article, the apartment is being offered to Singapore investors, who are not aware about the problems that the New Zealand investors face with the developer.

User Guide for Alert Portal

http://tankinlian.com/admin/file.aspx?id=610

You can try to access the Alert messages (these are test messages) using this link on your mobile browser, www.easyapps.sg/alert/messages.aspx. You can bookmark the browser and use it in the future. The browser screens look quite good, almost like an app. Being a browser, it can be used for most devices right away.

The elderly needs to use taxis

An elderly man called me. He said that elderly people need to use taxis to go to hospital. When he visited the hospital, he found that many elderly people from poor families took taxis to attend medical appointments at the hospital. They were too old or sick to use bus or train, or it might have been too far for them to walk. The increase in taxi fares and surcharges have hit the pockets of these elderly people significantly. This was a point that was overlooked by younger people.

Survey - Alert Portal

Is is useful to have an Alert Portal to be used by many service providers / transport operators to provide alerts to the public and their customers? An example of an Alert Portal can be found her: http://www.easyapps.sg/alert/Messages.aspx

You can take part in this survey. Prizes will be given for participants who made useful suggestions on how to promote this portal. http://www.surveymonkey.com/s/9KYWJ8H

Alert for breakdown in service

In recent weeks, we have experienced the following major breakdown in services:

• Two major breakdown in the N-S line of SMRT train service
• Breakdown in internet service under SingTel
• Unauthorised ATM withdrawals from accounts of DBS bank customers

SMRT promptly introduced a system of giving updates through Twitter. This was a good initiative but the drawback was that few of their commuters had Twitter accounts. SingTel promised to provide updates through the website, but it is usually difficult to access information from a website.

I have developed an Alert system for transport operators and service providers to inform the public and their customers about breakdown in service and to give updates on the restoration of service. This can be viewed through a browser on the mobile phone. A separate app will be developed on the iPhone.

You can test the Alert system using your mobile or laptop by clicking on this link:  http://www.easyapps.sg/alert/Messages.aspx.

Please help me to pass the word around, so that many people become aware of this app and the operators will be keen to use it.

Confusion over the recommendation on government ministers' salaries

I am surprised to read this report about the "confusion" over the recommended pay for the government ministers. http://www.todayonline.com/Singapore/EDC120112-0000108/Ministerial-pay-review-report-misunderstood--Committee

Has our system become so complicated that a keenly anticipated event, like the release of the recommendation of the review committee, could have been mis-reported or mis-understood by the public? 

Pull wool over customers' eyes

Hi Mr. Tan,
I recall your blog post about not trusting financial advisors. Today, I found a publicly posted comment that reinforces your point. This was posted on Today Online, in response to MAS new customer assessment initiative:


"It is very difficult to do business when we are not allowed to pull wool over our customers' eyes. This integrity thing is highly expensive to implement, and is definitely not pro-business. If we can have gambling, I don't see why we can't have opaque sales terms for the investment business. After all, we are such a big business and so vital and central to any economy. We should be allowed to do whatever we want, as long as we deliver on growth. Sometimes, you have to cut down the forests to grow the cabbage, you know." - Jay Yip

Tax on the rich

I have high respect for Warren Buffet - not only for his skill in long term investing, but more importantly for his values and ethics. Warren Buffet said that the rich should pay more taxes and has pledged to donate this wealth to philanthropy (i.e. charity) on his death. He is among the few wealthy people that stood by Barack Obama in the difficult task of changing the governance of the US - a step that is not easy but has to be done. Read this article: http://www.cnbc.com//id/45961945 

Rechargeable torchlights

I received an order from a company for 10 rechargeable torchlights. I have stopped advertising the torchlights, so they must have been bought them before, and now wish to have additional items. Altough the torchlight has been in my stock for 3 years, they are still in good conditions. But, the supplier will not be able to meet new orders - so when my stock runs out, they will not be available. If you are interested, please your order now.

You can order here. Here is a description of the torchlight.

Meeting with Jack Bogle

FIRST POSTED: 21 May 2007 

I met with Jack Bogle during my visit to Vanguard. We have a very interesting discussion.

I presented to Mr Bogle a copy of an article written in The New Paper by Dr Money. He identified his three business heroes to be Jack Bogle, Warren Buffett and Bill Gates. I told Mr Bogle that he was listed as the first hero. He laughed.

Mr Bogle told me that he is now writing a speech to accept an honorary degree that is being conferred by a university. He will be talking about bond funds. Bonds now earn about 5% per annum, but a fund with a high expenses (comprising of sales charge, trading expenses and management fee) can take away as much as half of the yield, giving a net return of around 2% to 3%. He is furious about the poor return given to the end investors.

Mr Bogle told me that there is a requirement by Nasdaq that the terms of the traded product should be fair to the investors. He asked the questions (not his exact words), "Is it fair to give a product that takes away half of the yield? Where is the value to the investor? Does the professionals have a duty to give proper advice? "

I told Mr Bogle that a similar situation exists in Singapore, where structured products are being sold with high expense ratios (which are not disclosed). The end investors get a yield of 1% p.a. or lower after investing for 3 to 5 years.

Web and mobile developers - good response

I am getting good response to my latest ad for web and mobile advertisements - from Singapore citizens and permanent residents. I wonder if it is the start of the year, i.e. no loss of bonus for last year, or a sign of the economic slowdown. 

Wisdom on How to Live Life (Book 2)

From the author, Tommy Wong

Would you like to know:

(1) how to find out our interest and mission in life?

(2) why we should be careful with our thoughts?

(3) why we should not curse?

(4) what type of people is most dangerous?

(5) what is the real problem with attachments?

(6) what is the purpose of pain and suffering?

(7) how to choose a guru?

(8) what prevents us from having divine experiences?

(9) why meditation is important?

This book will be discussed by the Heartlands Book Club of Bukit Batok Public Library on Friday, 27 January 2012 from 5 to 7 pm. Further information can be found here.

The book can be ordered here.

Tommy Wong

Maternity leave for female employees

A young lady, recently married, told me that she had difficulty in getting a job. Employers are reluctant to recruit her as she is likely to have one or two babies and this will impose added cost to the employer to pay the salary during the two months of maternity leave. During the interview, this question was raised, and she did not get the job.

Sometime ago, another person complained to me that she was unfairly dismissed due to performance, when the real reason was that a baby was expected. She did not want to disclose the employer or take the matter to the Ministry.

I wonder if this is a common situation? I can understand that some employers, who are struggling to survive in business, does not want to have the added cost. Even the profitable companies want to avoid this cost, if they could, so that they can increase the bottom line profit. Perhaps, there is some hidden instructions to their HR department.

Please share your experience and views on this issue.

Collector shoe and shoe collector

A collector shoe is not a shoe collector. How humorous.
http://singaporedesk.blogspot.com/2012/01/another-day-another-dollar.html

The real cost of GST

Published in Straits Times Online Forum on 10 January 2012

MY SINGAPOREAN friend who travels regularly to Hong Kong told me that he stopped buying many electrical products from Singapore as he can get them 20 per cent cheaper in the territory.

What accounts for this difference? Singapore imposes a goods and services tax (GST) of 7 per cent, but what about the difference of 13 per cent?

Although commercial rentals have been escalating in Singapore, they have always been high in Hong Kong.

I suspect that the real cost of GST is more than 7 per cent. There is the heavy compliance cost, especially for small businesses, of keeping accounting records of GST input and output, and submitting quarterly returns to the Inland Revenue Authority of Singapore.

There is also the multiplier effect of GST, as small businesses may not be able to get the full benefit of the refund from GST input. The higher cost of living faced by employees as a result of GST has to be reflected in their salaries, leading to a multiplier effect.

Businesses in Singapore also incur the cost and inefficiency of making and receiving most of their payments by cheques. There is also the high cost of complying with many regulations. Even the calculation of monthly Central Provident Fund contributions can be a headache, given the different rates of contribution for different employees.

Another friend, who has experience with manufacturing costs in many countries, told me that manufacturing in Singapore has become rather uncompetitive and can be sustained mainly by tax incentives and concessions given to some multinational companies. This is not a healthy trend for our long-term development.

I hope the Government will take urgent measures to address the underlying obstacles to our competitiveness and the causes behind high business costs.

Tan Kin Lian

Pay fine to URA

I have just received a parking fine for an expired parking coupon. The notice gave the URL to pay fine as www.ura.gov.sg/pf.

I went to this website, entered by car number and was shown the webpage below. Payment was quite straight forward. It was helpful of URA to direct me to the direct page with their URL.

If websites are designed properly, they can be helpful to the public. So, credit goes to URA for making it easy to pay a fine with a meaningful URL. I hope that other government agencies will apply their common sense to make life better for the public.

By the way, the last time that I paid a fine for URA was a few years ago. It was quite troublesome to find the right page to pay the fine. So, I suggested that they give the actual page with a ..../payfine. They have now implemented my suggestion, but they did not tell me about it. This is the bad culture in Singapore that has to change.

Online process of Ministry of Manpower

The Ministry of Manpower requires employers to use their online process to apply for work passes. Here is the FAQ on how to use the online process. http://www.mom.gov.sg/MOMDoc/ESubmission_FAQ.pdf

I hope that MOM realize that they are creating a lot of difficulty for employers. A better approach is for employers to submit their requests using a simpler online form, or even on physical forms. MOM should employ data entry staff to handle their complicated backend system, instead of expecting employers to fix their browser, scanners, etc.

MOM may save a few minutes of data entry time of their staff but imposes a large burden on employers. This is just one example of why business cost is so high in Singapore.

Finnish education system - focus on equality

My friend told me that he read an article to compare the difference in the goal of the education system in Finnland and of other countries. Finland decided to focus on "equality" rather than "excellence".

I strongly believe in the approach taken by Finnland. It is important for an education system in school to focus on "equality", i.e. to ensure that the students are educated in the right values and basic skills. The schools should NOT be a place to compete for excellence.

Just imagine what can be achieved with the approach taken in Finnland:

• Our children will enjoy school and their child-hood
• They will grow up with the right values, character and the basic skills to make a living
• They will respect people in all occupations and will be willing to take the service sector jobs
• There will be a smaller wage gap, which means that the cost of living will be lower for everyone
• We will not have to pay high fees to doctors or lawyers.

This system will still allow people to excel, but the competition should in the workplace, AND NOT IN THE SCHOOLS.

Please share your views.

Japan last decades - a surprise!

Analysts have written about Japan's lost decades, after the collapse of the property and stock market bubbles in the early 1990s. The economy was supposed to be in the doldrums.

But some analysts are starting to realize that the so-called lost decades might have been a wrong description. Japan has been doing quite well, economically and socially, during these "lost decades". This is explained in the article here. http://www.todayonline.com/Commentary/EDC120109-0000010/The-myth-of-Japans-failure

This is a good lesson not only for America and Europe, but for Singapore as well. It is possible to have the bursting of the bubbles, and for the underlying economy to do well. The benefit of the burst asset bubbles is that the country will focus on the productive sectors of the economy, and that the top earners are not skimming the economic system to the detriment of the ordinary people in the street. The cost of living can be kept affordable.

It is indeed an important lesson for Singapore - as we are truly suffering from the high cost of living and the high business cost.

The Government has taken an important first step to reduce the pay of the ministers. They should take a similar step to reduce the astronomical pay of the chief executives and top professionals (i.e. lawyers, doctors and accountants). We need a higher tax rate for super millionaires.

Survey results - future elections in Singapore

30 people responded to the survey. Here are what they expect of the future elections in Singapore. The majority expect the President to be voted by the people. I personally think that this will be abolished and that the President will be elected by Parliament.
http://tankinlian.com/admin/file.aspx?id=609

Pay for performance does not work

For the last 20 years, the concept of pay for performance has been the key driving force for the free market system. I have always been skeptical of this concept - as it encourages greed and manipulation. I am glad that there are now evidence to back up my gut instinct. See this report:
http://www.todayonline.com/Commentary/EDC120106-0000003/Stop-tying-pay-to-performance

Financial Planning Tool

You can use this tool for your financial planning (provided by Tan Kin Lian). http://tankinlian.com/admin/file.aspx?id=570

Future election in Singapore

Do you expect the next President to be elected by the people, or will it be changed? Do you expect the GRC system to be discontinued? Take part in this survey. http://www.surveymonkey.com/s/SJTDRTN

Cut in Ministers' Salaries

The Ministers have accepted a 36% cut in their salaries. The cut was higher than what most Singaporeans had expected, based on the survey carried out by me earlier. 76% had expected no cut or a cut of less than 25%. The results of the survey can be found here.

We have to acknowledge that the Government had taken an important first step to address the concerns of the people and that the review committee had done a good job in drawing a fine balance between the difficult conflicting requirements. While the revised salaries are still high by international standards, they are not high by Singapore standards, where chief executives, lawyers and doctors are earning much more.

Our challenge is to reduce the cost of living for the ordinary citizens. Let us focus on this important task, and do not be too distracted by the salaries of our political leaders. Let us give them the support to address the key challenge.

High business cost in Singapore

I read that Nokia has decided to move its Asian headquarters from Singapore to Beijing, citing high operating cost and other reasons. Google choose Kuala Lumpur to be their regional base, instead of Singapore.

A friend, who was in charge of planning for a large multi-national company with wafer fab operations in various countries in Asia told me that it is too costly to manufacture in Singapore. He said that a factory in Singapore that requires spare parts pay 2 to 3 times of the price that a Taiwan factory pays to their local suppliers. Someone, the Singapore suppliers charge too much, even for spare parts that are imported from overseas.

A few people have told me that they can buy electronic products from Hong Kong at a price 20% lower than Singapore.

These are all signs of Singapore becoming too costly for business. I hope that our Ministry of Trade and Industry and Ministry of Finance are aware of these indicators. They are quite worrying.