Avoid investing in too many funds

Investors should avoid investing in too many funds. This article in the FISCA website explains why:
http://easyapps.sg/assn/Org/Information.aspx?id=5

Yielding to panic

Interest rate around the world are at a record low rate. An article posted in FISCA website explains the historical significance. http://easyapps.sg/assn/Org/Information.aspx?id=5

Mis-understanding on the terms of a life insurance policy

A mother bought an AIA Guardian Basic policy for each of her three children in 1992. She was told, or led to understand, that each policy would mature when her child reached 21 years old. After 20 years, she was shocked to learn that the actual maturity date for each child was on they reach aged 101.

She could not remember what had happened. She did sign the papers in 1992 but did not make any change to the policy. She remembered that during the financial crisis, she might have blindly signed some papers provided by the insurance company. Her son asked me for my views.

REPLY

From your description, it seemed that your mother had bought a whole life policy for each of the children.  If you do not wish to pay the premium, you can ask for the policy to be made paid-up for a reduced sum assured, or to be terminated for a cash value.

I do not have any comment about any possible misunderstanding between your mother and the agent on the duration of the policy. It is quite risky for consumers to commit to a long term contract, such as a life insurance policy, without proper understanding of the terms of the contract, relying only on the vague explanation of the agent.

You should write to the insurance comapny to ask if the policy was issued on these terms, or had been changed during the past 20 years. It is quite likely that the policy was kept at the original terms, and that your mother had misunderstood the maturity date.  The agent might have told her that she can stop paying the premium at age 21, by using the accumulated bonus to fund future premiums. But, as the bonus was cut during the financial crisis, the accumulated premium was not able to fund the future premium.

Losing the competitive edge

Singapore has now dropped to fourth position. At one time, we were the top or number 2. More worrisome is the "high cost of living" which impact the people more. We fared very badly.
http://www.todayonline.com/Singapore/EDC120531-0000086/Is-Spore-losing-its-edge

Praise for Prof Lim, query for NTUC

  

... why the NTUC, a union that is supposed to represent Singapore workers,

did not take a more proactive approach to bargain for better wages

and help improve the plight of poor Singaporean workers

until Prof Lim stepped in.

http://www.straitstimes.com/STForum/OnlineStory/STIStory_805130.html

Population of Istanbul

I asked the guide who met me at the airport - what is the population of Istanbul? She said 20 to 25 million! This was a surprise to me, because I thought that it was 2 million. I asked the hotel bell-boy and he said 17 million. It could be more.

I checked Wikipedia and found that it was 13.4 million. Link. I think that the bell-boy is right as most cities usually have more people that officially reported. So, it is 2 1/2 times the population of Singapore! And the downtown looks charming as most buildings are not very high.

Istanbul has water on most sides. It lies between the Black Sea and the Sea of Marmara, which joins the Aegean Sea and the Mediterranean Sea. The Bhosphorus Straits cuts through Istanbul, separating the European side from the Asian side.

Here is a charming picture of Istanbul.

Disappointing Turkish Airlines

My travel agent booked me on Turkish Airlines to Istanbul because Singapore Airlines did not have flights on my days of travel.

On boarding the plane, I saw the chef dressed in white. It reminded me about the advertisement on television about how good the cuisine was. The food that actually came was disappointing, i.e. not better than most other airlines. Maybe the advertised cuisine was for the first class passengers - and I was travelling on economy!

At the airport, most passengers, including business class, had to wait nearly one hour for the bags to arrive on the carousal. One business class passenger asked for the station manager and complained - "I paid more for business class as I wanted my bag to arrive in 5 minutes. I have waited for 40 minutes already". Sorry, he had to wait another 20 minutes for his bags.

He was quite angry that the crew and the passengers on group travel had their bags much earlier. So, it seemed that Turkish Airlines is still sorting out on their service processes!

No need for immigtation cards at Istanbul Airport

I am now in Istanbul. This is my first visit to Turkey.

At the airport, I did not have to fill in any immigration, custom or tourist card. It was easy to clear through the passport control.

This is the fourth time that I had this pleasant experience of "no cards". My first was in Dubai, followed by Europe, Malaysia and now Turkey.

I hope that Singapore will catch up and do away with the unnecessary cards. Can someone pass this message to ICA or the Tourism Board?

Hope for a new beginning

Prime Minister Lee Hsien Loong said

he respected the choice of the Hougang voters

and asked all Singaporeans to work together as one people

to achieve what is best for Singapore.

I urge Mr Lee to take the first step

and get the People's Association to appoint the elected MP

as the adviser to the grassroots organisations.

This would be a clear demonstration of the sincerity of his statement

and would signal to the people of Singapore that there is truly a new beginning.

Tan Kin Lian

http://www.straitstimes.com/STForum/OnlineStory/STIStory_804579.html

Praise for Mr. Desmond Choo

27 May 2012

Editor, Forum Page
Straits Times

While many people would have congratulated Mr. Png Eng Huat for his
convincing and resounding victory in the Hougang by-election, I wish to congratulate
the defeated candidate, Mr. Desmond Choo, for his admirable character and
performance during the campaign.

He had:

1. Made a commendable effort and "worn his socks out" in reaching out to the voters, young and old
2. Refrained from engaging in any personal attack on his opponent
3. Pledged to continue to serve Hougang residents,even if defeated
4. Agreed to cooperate with the elected Member of Parliament for the good of Hougang residents.

Prime Minister Lee said that he respected the choice of the
voters of Hougang and asked all Singaporeans to work together as one
people to achieve what is best for Singapore.

I urge the PM Lee to take the first step and get the People's Association to
appoint the elected MP as the adviser to the grassroots organizations. This would a
clear demonstration of the sincerity of his statement and would signal to the
people of Singapore that there is truly a new beginning to bring unity and reconciliation
to a people long divided by negative politics.

Tan Kin Lian

Published in St Times Online
http://www.straitstimes.com/STForum/OnlineStory/STIStory_804579.html

Student should not buy life insurance too early

I have often advised students to avoid buying a life insurance policy, until after they get married. This is to avoid tying up their savings to get a poor return. The policy take away too much of their accumulated premium. Here is a typical example showing that too much is taken away.
http://tankinlian.com/FramePDF.aspx?ID=655

Moving towards a democratic society

Contribution from Richard Koh

At the WP's post by-election press conference, the WP Chief surprisingly assailed the mainstream media for being bias during the by-election to help the ruling party to smear the character of the WP's candidate, Mr Png Eng Huat.  The Chief Editor of ZB (Lianhe Zaobao), on 28 May 2012, denied and accused the WP Chief for being irresponsible to make the mainstream media as a target for shooting.  The WP Chief has responded to the accusation today.  

On 23 May 2012, whilst the ST clearly gave the headline that "WP faces allegations of dishonesty" at the crucial time in relation to the Png's NMP event,  Mr Teo Chee Hian, DPM, however clarified that he was questioning only, instead of allegation.  

Upon the tussle between WP and ZB,  let's put aside whatever the arguments they have, and see the following pictures that were snapped by bloggers at Hougang for the by-election rallies held bWP.  Can Singaporeans see this type of true pictures in the mainstream media during the Hougang by-election?  

May 27 2012 (from Diary of Singaporean Mind)          

May 21, 2012 (from Sgpolitics.net)  

The above pictures are better than thousand words.  The mainstream media must be neutral and unbiased in reporting news about all political parties involved in the election.  All parties should be put on equal footing for competition.  This is one of the main feature of a democratic society.  

To move our democracy a step forward, the WP should challenge ZB for conducting an independent public survey to seek the opinion from the public whether the mainstream media have faithfully performed their duties on this matter.  The contents of the survey must be agreed upon between the both parties involved and the result of the survey be made public.  Has ZB the guts and courages to accept this challenge if it is raised by the WP ?

Richard Koh

Questionable funds

I have been puzzled at why many consumers seemed to be making large losses on their investment-linked policies. The underlying funds appear to be performing much worse than the markets. Here are the possible reasons that consumers should be aware of.
http://easyapps.sg/assn/Org/Staff1/Frame.aspx?FID=589&id=5

No one in charge

There is no one in charge. Our leaders are failing us.
http://www.todayonline.com/CommentaryandAnalysis/Commentary/EDC120529-0000009/When-no-ones-in-charge

Although this article refers to the US situation, in my view, it also applies to Singapore.

Land banking

Someone asked me to share this blog about an investment in land banking that has gone sour. There is a video about the investors in Malaysia that have gathered to lodge a complaint with the authorities. It seemed that most of the investors are from Singapore. I hope that consumers will study the materials and watch the videos here and avoid similar investments in the future. http://edgeworthscam.com/

Uncommon set-top box

It is rather sad that our three telcos cannot find a common set-top box for the convenience of consumers.
http://www.todayonline.com/Singapore/EDC120528-0000098/No-common-featured-set-up-box-in-the-works,-for-now

Facebook Illusion

This article explains the collapse of Facebook shares and the illusion about the potentials of the digital economy.

It also mentioned, in passing, that the belief in appreciation in housing prices in the US was also an illusion that had must be a lesson for property investors in Singapore.
. 

Do you hear the people sing

I dedicate this song to the brave hearts in Hougang. who knows what is right and what is just.
http://www.youtube.com/watch?v=lYizXBQ5EQA

Convincing win in Hougang By-election

I congratulate Png Eng Huat for his convincing win in the Hougang by-election. He had worked hard and served the people of Hougang for more than five years. I also congratulate the voters of Hougang for their courage in voting for what is right, for what is fair and for democracy in Singapore.

I hope that this convincing win will give a strong message to the PAP Government that they have to change their policies, and tackle the root of the problems. Tweaking the old policies is not enough. Article.


They also have to respect the voters, not only in Hougang but all over Singapore. Article.

Read my past blog on this matter here:
http://tankinlian.blogspot.com/search?q=hougang

FISCA - Financial Services Consumer Association

FISCA was set up to educate consumers about financial planning and investments. It is very important for young people to join FISCA and learn about these important matters, before they put their savings into the bad investment products that give them a poor return. After joining FISCA for a membership fee of only $36, they can attend two talks for free (value at $60) and enjoy discounts on other talks. More importantly, they can save   a lot of money (could be more than $100,000) by avoiding bad investments.

More information about FISCA can be found here: www.fisca.sg. They can join FISCA by clicking on "Register". The talks organized by FISCA are shown under "Events". They can read articles posted in the website under "Information". Special research are available only to members (after login).

Do you know that you can earn a dividend yield of more than 5% on several blue chip stocks and REITS? They are posted in the FISCA website (for members only). These investments beat the 0.25% interest paid on fixed deposits. You do not have to worry if the share price comes down for these stocks, as you can keep them and continue to receive the dividends. The share price will eventually recover. 

Mis-reporting on a charity event

Dear Mr. Tan
Below is interesting article u might want to post in your blog,
Police Report No. A/20120523/2006 | **快乐天使**Happy Angel** - http://happyangelclub.wordpress.com/2012/05/24/police-report-no-a201205232006-2/

Fair value of a stock

Investors who wish to buy stocks at IPO should take a lesson from the recent IPO of Facebook. If the stock is over-priced, it is likely to fall, and to fall badly. Read my article in FISCA website, www.fisca.sg (available only to members).

FISCA AGM, 26 May 2012

About 20 members attended the Annual General Meeting. Before the meeting, Wilfred Ling gave a talk on the Consumer Knowledge Assessment that is required by consumers to invest in Special Investment Products.

There was an active discussion on how to expand the activities of FISCA, recruit more members and encourage more members to attend the educational talks.

Air bags in cars

There is a call for air bags to be made a standard feature in all cars. I wonder if we are chasing the wrong solution? Article.

I have driven a car for many years and have not seen any incident where the air bag has been triggered. Recently, I was involved in a moderate collision and the air bag did not activate. When my car was repaired, I was told that the air bags had been replaced at a great cost. I am puzzled why the air bags did not activate at the time of the accident.

If you have seen an air bag being activated in Singapore and had saved lives and injury, please share your story here.

Illegal fund raising

In China, the punishment for illegal fund-raising is severe. A tycoon raised money promising a high rate of return and was sentenced to life imprisonment. Article.

We have several similar incidents in Singapore, where high returns are being promoted. It may be possible that the promoters are operating a ponzi scheme, where the investments of the latter investors are being used to pay the high return promised to earlier investors. All ponzi schemes will fail, and will cause big financial losses to the unsuspecting investors.

It appears that no government agency is investigating some of these operations, in spite of complaints being made. The complainant is usually asked to report to another agency, which in turns points to another agency. This type of behavior appears to be quite common in Singapore.

I am writing this blog, so that the Government will be aware about the danger of allowing these possible ponzi schemes from growing too big. At least, they should make an investigation, so that the perpetuaters know that they are possibly breaking the law.

Politician or civil servant

Dear Mr. Tan

I understand you are keeping a close eye on the BE in Hougang.

 

I find it a little strange and wonder whether you can clear my doubt or share your view on this. Our DPM is a civil servant. He is also the Minister in charge of the Civil Service of Singapore including the Election Department. For him to openly endorse and campaign for a candidate and party even if it is permissable, does not seem good or right. There will no doubt be a clear conflict of interest issue to grapple with. This is a not a GE (whereby Parliament is dissolved) but a BE. And in this case he seem to be campaigning and working harder than the candidate.

What is your view?

REPLY

He is a politician and not a civil servant. He is the minister (political appointment) in charge of the civil service.

Unethical electioneering practices

It is so sad to see our leaders display examples of bad behavior that will destroy the fabric of Singapore
http://singaporemind.blogspot.com/2012/05/unethical-electioneering-practices-must.html

Unfair allegation of dishonesty

Will Hougang voters be fooled by this unfair allegation of dishonesty?
http://singaporemind.blogspot.com/2012/05/another-election-another-round-of.html


Will out leaders and media continue to set a bad example by distorting the truth?

10 worst bits of advice

Hi Tan,

We would love to share with you an article that we just posted on our own blog! “10 WORST BITS OF ADVICE THAT BOOMERS GAVE US” is linked below and could be a fun way to share this announcement with your readers.(http://www.onlinecolleges.net/2012/05/22/10-worst-bits-of-advice-that-boomers-gave-us/)

It has been a sincere pleasure to read your great content.

               

Sincerely,

Jasmine Hall

Currency trading is like gambling

20 May 2012
Editor, Forum Page
Straits Times

Some educated people who lost their jobs want to trade in currencies to make
a living. They have heard stories from friends who claimed to have made money
through trading.

They should realize that currency trading is like gambling and that they can
make a profit or a loss. Like gambling in a casino, it is likely that they will
lose money in the long run.

Some have paid fees of $3,000 to attend a 3 day training course, in the hope
of learning the techniques to trade profitably. A few people that I knew had
attended these expensive courses and were disappointed that the techniques
did not work and they have lost their capital. The experts in forex trading
have told me that it is not possible for a novice to learn the
trading techniques through a training course.

 A friend who had attended such a course told me that that he could learn
more reliable techniques from the free online courses.

For people who insist on giving forex trading a try, I suggest that they enrol and
open a demo account in an online trading platform, learn the techniques from the
online courses and try trading with the demo account for three months.

If they found that they are able to trade profitably at the end of three months,
they can then convert to a live account and trade with real money.

Most of them will probably find that trading is stressful and difficult,
and it is more likely that they will make a loss on trading.

If they wish to find a better way to invest their savings to produce a decent income
over the long term, they should attend the educational talk conducted by
consumer based organisations, such as the Financial Services
Consumer Association (www.fisca.sg).

Tan Kin Lian
President
Financial Services Consumer Association

How to evaluate a life insurance policy

This article shows how you can evaluate a life insurance policy, by taking a few relevant figures from the benefit illustration.
http://tankinlian.com/FramePDF.aspx?ID=652

If you want a better way to invest your savings, read this article.
http://tankinlian.com/FramePDF.aspx?ID=643

Risk of trading forex

Cheaper and better to learn
forex trading online -
but it's still hard

http://www.straitstimes.com/STForum/Story/STIStory_801780.html

Tan Kin Lian
President, Financial Services
Consumer Association

Facebook IPO - and how its price fared

Facebook was issued to the public at $38 per share, represents a PE ratio of 100 times. It went up to $42 (10% gain) but closed at near the IPO price. The following trading day, it dropped to $34 (drop of 10%) and opened lower on the third day. Read tis report.

What is happening to the price of Facebook?

At 100 X of earnings, Facebook was clearly over-priced. Apple Computers trade at only 10 X of earnings. On this benchmark, Facebook should be $4 and not $38!

Why did Facebook get issued at such a high price? It is the work of the investment bankers and underwriters. They set a high price and tried to prop up the share at that price. They could not prop up the shares for long, so they started to unload them. Watch the share come down to $20 (my guess)!

Hougang by-election - importance of the vote

It is important for the Government policies to be changed, rather than for the MP to find piecemeal solutions to the problems caused by these policies. http://singaporemind.blogspot.com/2012/05/you-dont-have-to-tell-hougang-how-to.html

Act against car racing

17 May 2012

Editor, Forum Page
Straits Times

The recent fatal accident involving the Ferrari car and taxi at Bugis was caused
by speeding and reckless driving.

I call on the Police and Land Transport Authority to increase enforcement against
speeding and car racing. I recall that several complaints were made about
car racing in the early mornings, but no action was taken.

Many drivers may not be aware about the speed limit on our roads. The
One Motoring website stated that, unless otherwise indicated,
the speed limit on our roads is 50 km. This may not be widely known, as it is
quite common to see many vehicles be driven at a faster speed on our roads.

I suggest that more publicity should be given on the speed limit, especially as
many foreigners are now allowed to drive on our Singapore roads.

There should also be exhortation on the need for defensive driving. Even if
a vehicle has the right of way, a prudent driver should be ready to stop a vehicle
in time to prevent a collision.

Many drivers are impatient and in a rush. They are unwilling to give way to a
vehicle in front that signals an intent to change lane.

Singapore is a small place and our roads are getting more congested. There is
no need for cars to be driven at a fast speed.

Tan Kin Lian

Lessons from college dropouts

Dear Tan,

 We have recently published an article that deals with “Business Lessons”, so we thought you might want to share it with your readers. It's called “9 Business Lessons From The World's Top College Dropouts”, and you can find it here: http://www.top10onlineuniversities.org/9-business-lessons-from-the-worlds-top-college-dropouts.html

Thanks for your time!

Importance of compound interest

If you regard "compound interest" to be just mathematics and theory and you do not like mathematics, you may be giving away a lot of money, say $200,000, without realizing it. So, please, for your own sake, pay attention to this article, and read it a few times, and talk to someone who can explain it to you. And take the right steps now to secure you own financial future!

Democracy

This is how democracy is supposed to work. Link.

Who spoke these words?

"If you believe in democracy, you must believe in it unconditionally. If you believe that men should be free, then, they should have the right of free association, of free speech, of free publication. Then, no law should permit those democratic processes to be set at nought, and no excuse, whether of security, inconvenience to traffic, or inconvenience to police officers, should allow a government to be deterred from doing what it knows to be right, and what is must know to be right."

Perpetual bonds

A long term investor should not worry unduly about a possible fall in the market value of the bonds, so long as the return is higher than the rate of inflation. However, they should look at the credit risk and apply the principle of diversification. Link

Professional services for FISCA members

FISCA (Financial Services Consumer Association) wishes to list down some lawyers and property agents who are interested to provide the following services to our members - writing a standard will, get the grant of letter of administration, prepare a tenancy agreement and handover of occupancy.

If you are interested to provide this service, visit FISCA in the Corporate Portal and provide details in the online form. 

Lease document for tenancy

FISCA has contacted a few property agents who are willing to assist owners to prepare the lease document and handover checks for owners who rent out the property directly to tenants. The property agents charge a fee of $500. FISCA members can find the particulars of these agents at the website, www.fisca.sg (require login by members).

TKL Blog in Chinese

TKL Blog in Bahasa

CPF Life - a small "participating" feature

Dear Mr Tan, 
I am a student and I am researching on annuities in Singapore. It appears to me that the CPF LIFE plan is a combination of various features from different types of annuities. I would like to know, in your opinion, is the annuity portion of the CPF LIFE plan more like (A) a variable annuity but the underlying asset is a portfolio of Special Singapore Government Securities and its return is quite stable so its benefit payouts are quite stable too, or is it (B) more like a participating annuity but there is no explicit guaranteed minimum benefit, but there is a guaranteed minimum of 2.5% rate of return from the underlying asset? 

REPLY
CPF Life fits more closely to (A) as the underlying assets are government securities that give a yield of 4% per annum. There is some "participating" feature, as the mortality experience of the annuitants will affect the eventual payout, e.g. if people live longer than the actuarial estimate, the payout may be reduced in the future, or if they live shorter, the payout may be increased. However, the decision on adjusting the payout depends on CPF Life and is not transparent to the annuitants.

Making a health insurance claim

Here are some tips on how to make your health insurance claims, and avoid nasty surprises and rejection.
Link

ST inverview with Yeoh Lam Keong

Dear Mr. Tan

I enjoyed the ST interview of Yeah Lam Keong, written by Susan Leong. Usually I don't read articles from SPH journalists, as they are too pro-Govt, but the headline caught my attention, and as I read, tears welled up my eyes. What Mr. Yeoh said reflect precisely what I have been thinking about the state of situation here in our beloved country.

American economist Roubini once said about China's leaders handling of the Chinese economy, "The path of least resistance is to go forward", as by stopping what the Chinese Govt has been doing would lead to a collapse of this Asian Giant's economy, and that is catastrophic, and will lead to social chaos. 

Roubini's description of China also applies to Singapore. Our leaders have also lost their way, and they can't stop what they have been doing, so they resort to tweaks here and there to try to plug holes appearing fast in the economy. And the future is scary. The new leaders seem to be very shortsighted, no planning ahead and seem to be frozen at a standstill position. One word to describe them, incompetency,as compared to the old guards who are no longer around.

Simply, there is no real talents among the pool of PAP leaders, and lamentably, the real talents are not joining the Govt, as they know they would not get to be heard and made much contributions. All the Govt is concerned about is holding on to power at all costs, and get themselves rewarded highly, so pump in foreigners to prop up the GDP growth, their rewards being GDP linked, and in the process stepping on a large segment of the citizens, leaving them poor and demoralized.

Our PM is not able to lead Singapore, and yet is steadfastly hanging on. How we wish to have a really competent leader emerging on the political scene, but at the moment there is, lamentably, none. We really fear for the future.

Concluding an excellent article, I hope that our leaders do reflection on what Yeo said, but we know, even if PM Lee knows the situation mentioned here, he is powerless to act, simply he does not know how to  remedy it. So he could only resort to stop gaps and continue to do the same thing all over again.

It's really bleak for Singapore, and our Govt is copycating what the Chinese Govt is doing, leading to stalemate here. As citizens we have to stop dreaming, and the Govt has to stop pepertutaing this dream. but our Govt won't dare to stop.

Note: An extract of the interview can be found here.

Google driverless car

This review of the Google driver-less car is positive. It is performing up to expectation. The writer was disappointed that it may take a few more years before the car can be used on the road, as Google is cautious about making sure that it is entirely safe. Link.

Update on Corporate Portal

Several companies have joined the Corporate Portal during the initial free promotion. Read the benefits of joining this portal and the types of companies that have joined. http://easyapps.sg/corp/Default.aspx

Outlook on shares and properties

I have posted a few articles in the FISCA website (www.fisca.sg) on the outlook for shares and properties. They are educational. Consumers should read and understand the cautious views of the experts.

Xenophobia in Singapore

Dear Mr. Tan


Here's my observation about the recent xenophobia that arose amongst Singaporeans in the wake of the Ferrari-taxi crash tragedy.

Back when I was a little kindergarten student in 1980, I learned that Singapore's population was 2.4 million. In fact, Singapore always had waves of immigration. Of course in the 19th century to mid-20th century, it was our Hokkien, Teochew and Cantonese forefathers from South China who came here to work as coolies. Then when Mainland China opened up, waves of Chinese came in during the 1990s, both professionals (teachers, accountants) and non-skilled workers. There was also a big wave of Hong Kongers who migrated to Singapore before the 1997 handover to China, in addition to constant waves of Malaysians and Indonesians throughout the 1980s, 1990s and 2000s. 


All in all, it took about 25 years for the population to reach 4.2 million (increase of 1.8 million) by 2005. With the country's birth-rate so low, this was also largely the result of immigration...over 25 YEARS.  Xenophobia was unheard of and totally alien to Singaporeans before 2006. I believe the majority of Singaporeans were fine and happy with our "foreign talent" injecting fresh skills, ideas and best practices into our professions and businesses.

THEN from 2006 to 2011, suddenly there is a 1 million increase in population. Suddenly Singapore's population grew from 4.2 million to 5.2 million people in 5 YEARS. NOW, there is xenophobia.

So what happened? 

The old Biblical story of Exodus as depicted in The Ten Commandments movie classic is a case in point. When the Jews left Egypt, theirs weren't a pure Jewish community. A whole lot of Egyptians and slaves from other ethnic groups also left with them, forming a wandering disparate community of 2 million people (as estimated by Biblical scholars based on a census of 603,550 men mentioned in Exodus 38:24-29 – if you include women and children, the community population was likely to number around 2 million). There were plenty of teething problems, with the community rejecting their Jewish roots and wanting to worship a golden calf (maybe due to the influence of pagan beliefs from other ethnicities) in the beginning. OK, we all know what happened when Moses came down the mountain and became enraged at the sight of the notorious golden calf.  Subsequently, this disparate nation of 2 million people had to wander around the wilderness for 40 YEARS before they reached the Promised Land of Israel.

Lesson: It took 40 years for all the different non-Jew ethnicities to integrate with the Jews and become truly one people. There are interpretations that the 40 years in the desert was a punishment for worshiping the golden calf, but God also had a very practical reason. It takes that long to forge one united nation out of this 2 million-strong cauldron of disparate ethnicities.

My take is that 5 years is way too short to expect the 2 million foreigners now living amongst us to integrate and be totally accepted by the people of Singapore.

Letter of Administration for an Estate

Dear Mr. Tan,

I need to apply for a Grant of Letter of Administration for my late father's estate. Do you have any ready access to lawyer who could provide such services at a reasonable fee?

REPLY

You can look for a list of lawyers posted in FISCA website - member only. This article shows their fees for the writing of a standard will. You can ask them to quote the fees for a getting the letter of administration and choose a lawyer who quotes a reasonable fee.

You have to be a member of FISCA to access this document. If you are not a member of FISCA,  you can apply to join FISCA first before accessing this document.

Trading in currencies

Here are some tips on how to learn about trading in currencies. http://tankinlian.com/FramePDF.aspx?ID=647

15 great companies started out differently

Hi Tan,

We would love to share with you an article that we just posted on our own blog! “15 Famous Companies That Started As Something Much Different” (http://www.onlinemba.com/blog/15-famous-companies-that-started-as-something-much-different/) would be an interesting story for your readers to check out and discuss on your blog.

Either way, I hope you continue putting out great content through your blog. It has been a sincere pleasure to read.

Ferrari in Bugis crash - whose fault?

The fatal crash of the Ferrari in Bugis on 12 May 2012 led to 3 fatalities. Most people placed the blame on the driver of the Ferrari, who died in the crash. Video.

I want to point out that our government agencies have also to take a share of the blame. I remember reading several letters in the newspapers from the public complaining about the racing of cars in the early mornings.

One writer went to the Police and was told to refer the complaint to the Land Transport Authority or the National Environment Agency. Apparently, none of these agencies want to take responsibility to deal with the complaint. Link

We have to stop the finger pointing among our agencies. If there is a complaint about a law being broken, e.g. driving beyond the speed limit, any agency should take the complaint and work internally with the relevant agency to deal with the matter. They should not ask the public to go from one agency to another.

Now that three people have died, and needlessly, perhaps the government agencies will wake up and take action. They should also reflect on their past attitude - and be ready to act pro-actively in the future.

Tan Kin Lian
www.tankinlian.blogspot.com

Understand compound interest

Many consumers do not realize the importance of understanding compound interest. This may change their perception! 

http://tankinlian.com/FramePDF.aspx?ID=646

Do you know your motor insurance coverage?

This is an actual case.

Mr. X’s car was hit by a lorry which was reversing from a space in a parking lot. The lorry driver was careless. Mr. X reported the damage to his insurer. The insurer advised him to visit a workshop to make a third party claim.

The workshop contacted the insurer of the other lorry.  After some time, the workshop told Mr. X that the other party was only willing to accept 50% liability for the accident. Mr. X was furious, as he felt strongly that the lorry driver was 100% at fault.

Mr. X wanted to file a complaint with FIDREC, as the assessment was unfair.  

If you were Mr. X, what would you do?

Find out the answer here.

Gold player with "buyback offer"

Dear Mr Tan

Business Times has an article about another gold company. Attached is the link

http://www.btinvest.com.sg/wealth/wealth-planning/new-gold-player-emerges-with-buyback-offer/

TKL Views

In my view, this is similar to taking a deposit with the promise to pay interest and pay back the principal. In this case, the deposit is the difference between the price of the gold and the amount invested. The Monetary Authority of Singapore is responsible to regulate companies that take interest paying deposit. It will be difficult for MAS to deny responsibility if the promoter is not able to meet its buy-back obligation. I hope that MAS will consult the Attorney General and take appropriate action for infringement of the regulation on deposit-taking.

Hougang by-election – my vote

Hougang by-election – my vote

Invest in ETF without passing a test

A stockbroker has told me that it is possible for a consumer to invest in the ETF without having to pass a difficult test administered by SGX. Here is the way that it can be done. Link

Advertising on Facebook

General Motors has decided to stop advertising on Facebook. They are not able to get value for the advertisign dollars spent.
http://money.cnn.com//2012/05/15/autos/gm_facebook/index.htm?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Low interest rate, bubble and risk

The Minister for National Development is worried about investors rushing to buy "shoebox units". Link. The Monetary Authority of Singapore is worried that they are rushing to invest in perpetual bonds. Link.

I hope that our Government realize that the underlying problem is the extremely low interest rate in Singapore. Investors need to get a better return on their money. Retirees cannot afford to live on interest rate of 0.25% per year. If the retiree has $100,000, they only receive $250 A YEAR. Who can live on this type of income?

The low interest rate have forced investors to look at other types of investments, including paying high prices for "shoebox units" in the hope of getting a decent rental return. This high prices, which looked like a bubble,  may not be sustainable.

If the Government is concerned about the financial future of the citizens, it is time for them to review their economic policy that caused interest rate to be so low. While low interest rate is a global phenomena in recent years, the low interest rate in Singapore has been around for a much longer period.

The Government should consider the issue of long term Government bonds that offer a yield to citizens that is higher than the rate of inflation. Some countries have issued bonds that give an interest rate that is higher than inflation. This option should be explored.

Rush into perpetual bonds cause alarm

The MAS is alarmed at the rush into investing in perpetual bonds. They are worried that the investors may not be aware about the risk of investing in these bonds that have no maturity dates. See this report.
http://www.todayonline.com/Business/EDC120515-0000049/Perpetual-bond-rush-causes-alarm-in-Spore

There is no need for MAS to be concerned. The investors are not that naive. They do know that these bonds do not have a maturity date. When they invest in shares, there is no maturity date either. Investing in perpetual bonds is similar to investing in shares, except that the perpetual bonds have a fixed coupon rate, while dividends on shares are not guaranteed and depend on the future profits of the company.

Both face the risk of insolvency of the company, but bond holders face a lower risk compared to shareholders, as they get paid earlier out of the proceeds of an insolvent company.

As many people understand the risk of investing in shares, the risk is much lower when investing in the perpetual bonds issued by the same company.

Perpetual bonds are quite straight forward, unlike the credit-linked securities, such as Mini-Bonds, Pinnacle Notes and other financial products that are based on derivatives  They are many complex financial products that MAS should banned from being sold to retail investors, but perpetual bonds are not within this category.

Investors should, however, be aware that all bonds, whether perpetual or non-perpetual, have a credit risk, i.e. there is the risk that the issuing company may become insolvent and be unable to pay its obligations. Investors should look at the credit rating of the bonds and, if the bonds are not rated, at the credit rating of the issuing company. If both the bond and the issuing company are poorly rated or unrated, the investors should avoid making the investment.

There is also the risk that interest rate will increase and will cause the value of the perpetual bonds to drop. If the long term interest rate increases by 1%, the market price of the perpetual bonds may drop by 20%. This risk affects all types of long term investments, and not just perpetual bonds.

This may not be of concern to the investor, if they are satisfied with the current yield (which is around 5%) and the inflation remains below this level, and they are investing for the long term.

Big banks should be regulated

http://money.cnn.com/video/news/2012/05/14/n-warren-jpmorgan-dimon.cnnmoney/

Financial Tips for consumers

Here are some ways for consumers to get financially savvy and to earn much more on their investments
http://tankinlian.com/admin/file.aspx?id=643

Hougang by-election - my vote

Is this a local election to elect a Member of Parliament to represent a constituency or a mini referendum on the performance of the PAP Government?

In my view, it is both; and more inclined towards the latter.

Local election
Both candidates have good points and deserve the support of the voters.

Desmond Choo of the Peoples’ Action Party has been working hard and “wearing his socks out”. He has also promised to continue to work in the constituency, even if he is not elected in this round.  He does get good media coverage – which is a benefit of contesting under the PAP banner.

Png Eng Huat of the Workers Party has been working in the grassroots in Hougang for five years. I know of this fact, as he was my former colleague. I know Png to be reliable, helpful and friendly.  He may appear to be “low key” but I watched a video of his speech at the previous general election – and he talked sense!

Whoever wins on 26 May will be a win for Hougang voters.

Mini Referendum
I expect that this by-election will be a mini referendum on the performance of the PAP Government over the year since the 2011 general election.

Positive Points
Here are the positive points that voters can give credit to the Government
1. It carried out a salary review of government ministers and implemented a cut of one third of their previous salaries. Link.
2. It accelerated the building of HDB flats. When completed in a few years time, the new supply is likely to moderate or reduce the cost of HDB flats. Link.
3. It reduced the issue of work passes for foreign workers and declined to renew some existing passes. Link.
4. It invested $1.1 billion to provide more buses for public transport. Link
5. It launched the Financial Advisory Industry Review to look into consumer issues in the finance sector. Link
6. It promised to review the insurance schemes for medical and long term care. Link

These are commendable efforts, although many critics were able to find fault with the pace, extent and direction of these initiatives.

Negative Points
I give demerit points to the Government on the following issues.
1. It refused to amend the Internal Security Act, in spite of a similar act being abolished in Malaysia. Link
2. It delayed the calling of the Hougang by-election unnecessarily, which prompted a resident to take this matter to court. Link
3. It appeared to be rather weak, depending on a few experienced ministers to look after several key ministries and to rely on new ministers that are inexperienced in their portfolios.
4. It refused to recognise the flaws in past policies that caused the bad outcomes, and to make fundamental changes, preferring instead to “tweak” the ineffective policies.

My vote
If I were a voter in Hougang (and I am not), I would place my vote for the Workers Party. It is important to pass a message to the PAP Government that several existing policies need a fundamental review and change. They should also change their style of government and be prepared to listen more to the “common sense” of the people in deciding on the future direction of Singapore.

Tan Kin Lian
www.tankinlian.blogspot.com

A plus for Singapore

Here is a plus for Singapore
http://www.todayonline.com/Commentary/EDC120514-0000008/The-best-place-in-the-world-to-be-creative

SGX Academy

I registered with SGX Academy to take an online course .They have a complicated registration procedure. See this e-mail.

Dear Kin Lian Tan,

Welcome to SGX e-Learning System.

You have successfully registered on SGX e-Learning Application and an Account has been created for you. You can login into the application using following information:

Application URL: https://onlineeducation.sgx.com/specifiedinvestmentproducts/
User ID: user32483

Please use the password sent to you via SMS on your following handphone number:
Hand-phone Number: 65-81685845

The password typically contains 10 characters and ends with a special character. Examples of special character are ~,!, @ and ^.

If you are unable to login to system or have not received your password within 3 hours of your registration, please feel free to contact us at: support@knowledgeplatform.com

Regards,
SGX elearning System Administrator

My reply to SGX

I am not able to login because my mobile phone is being charged and I am not able to retrieve the password sent by SMS. After it is charged, the 3 hours will probably expire.

Why do you have to make it so complicated for the public? This is the password for an online course. It is not the password for transfer of money. It is quite frustrating to go to so much complication and trouble.

Complicated password
I finally managed to login. I am asked to change a password to this complicated structure. This is the type of password that has to be written down on a piece of paper, because it cannot be remembered. It is quite ridiculous.

Password must not be derived from words that are:

1. commonly used or found in the dictionary; or
2. associated with a user's likes and interests known to his or her colleagues or friends.

Passwords must contain at least three of the following criteria:

1. one alphabetic character in small letter;
2. one alphabetic character in capital letter;
3. one numeric character; or
4. one special character
5. Passwords must be difficult to guess. For example, dictionary words, names, number sequence and passwords associated to personal details, such as Identification Card numbers, should not be used.

FISCA Website

There are several useful web pages available only to members.
www.fisca.sg.
Members need to login to view the restricted pages.

Bad experience of investing retirement savings

Mr. Chan T F, a retiree, came to my office to tell me about his bad experience in investing his retirement savings. Based on my encounters with many retirees, this story sounds quite similar, and is not confined on to the bank that Mr. Chan dealt with.

Most retirees are not willing to share their experience, as they were embarrassed or did not keep a proper record of their transactions. In Mr. Chan, he wished to share his story and to advice other retirees to avoid this type of situation that he had encountered.

This video is split into three parts, due to the 10 min limitation on Youtube.
Part 1
Part 2
Part 3

My advice to consumers, especially retirees, is to avoid investing in the complicated investment products sold by the banks. Most of these products have features that are baffling to consumers, and can result in the unexpected outcome experienced by Mr. Chan.

Hawker center to be run by social enterprise

This is a good idea, and should be supported
http://www.todayonline.com/Singapore/EDC120513-0000035/Hawker-centre-to-be-run-by-social-enterprise

Do not over-react

I urge Singaporeans not to over-react to general comments posted by foreigners and not to retaliate in a way that reflects badly on our character.
http://theonlinecitizen.com/2012/05/are-singaporeans-too-easily-offended/

Complicated offer

9 May 2012

Editor, Forum Page
Straits Times


Recently, I contacted Singtel to upgrade the speed of the internet connection in my office. The Singtel sales representative provide the prices for the various speeds and a choice of several free software, hardware, mobile line or mobile broadband. The details of the promotional offers are sketchy.

I do not understand why it is necessary for Singtel to give these complicated offers, which require the business customer to spend time to evaluate the offers, causing a delay in the primary transaction. It would have been much easier, if they had offered a lower price for their internet service.

Singtel also wanted to check if my earlier contract had expired and if a penalty has to be imposed for the early termination of that contact. I am puzzled at this practice, as I am upgrading to a service that provides a higher revenue to Singtel. Surely, they can just transfer me to the new contract without imposing a penalty on me, or forcing me to wait for the completion of the current contract.

I continued to be puzzled at the convoluted way that business is done in Singapore. It cause a waste a lot of time for customers and also create a lot of unnecessary work for the customer service employees.

I urge Singapore businesses to get rid of the unproductive practices and to focus on the essentials of their business.


Tan Kin Lian

Don't insult Hougang

It will be difficult for PAP to win Hougang, after treating the residents unfairly for two decades. The residents have learned to live with the hardship imposed by the PAP.

http://singaporedesk.blogspot.com/2012/05/dont-insult-hougang.html


A better strategy for the PAP is to treat all people fairly and justly over the next two decades, and to win over the trust that was lost.

Restore the role of engineers

The standard of engineering had dropped in the past two decades, as trained engineers found it more lucrative to be insurance agents, property agents and other jobs in the financial sector. This has resulted in a drop in the standard of maintenance in our MRT system. Read this letter
http://www.todayonline.com/Voices/EDC120512-0000032/The-manpower-factor-in-our-MRT-problems

I suspect that the same factor could be responsible for our flooding problem in Orchard Road. I wonder when will our Government wake up to this long term harm that is being done to our economy and infrastructure.

Rhetoric and culture

Rhetoric means to say something that sounds nice, or, as defined in a Wikipedia article,  "attempt to inform, persuade, or motivate particular audiences in specific situations."

The culture in an organization is driven by an internal set of beliefs and values that guide the action of its employees.

I have seen many organizations express rhetorically about their adherence to "corporate social responsibility". When you look into the actual behavior of the organization, they are greedy and seek to maximize their profits, even at the expense of fair treatment of their customers. The amount that they spent on charity is minuscule, as compared to their profit, but they want to give nice media statements, which are actually hollow.

MOH gives a distracting reply on Eldershield

ElderShield
not the sole means of funding long-term care of seniors

WHILE ElderShield is an integral part
of the funding system for long-term care of the elderly,
it is not the sole means of paying for such care
('ElderShield payout inadequate' by Mr Tan Kin Lian; last Saturday).

Bey Mui Leng (Ms), Director, Corporate Communications
Ministry of Health
http://www.straitstimes.com/STForum/OnlineStory/STIStory_797798.html

Facebook c0-founder now lives in Singapore

http://www.reuters.com/article/2012/05/11/facebook-saverin-idUSL1E8SBCZP20120511

Canadian experience in providing a minimum income to the poor

Dear Mr Tan,


Just saw in your blog that you are observing the new Malaysian minimum wage, especially in relation to the corresponding debate in Sg. 


A friend shared with me something interesting from Canada. 
http://www.dominionpaper.ca/articles/4100#


In the 70s they did an experiment to see what happens if they give a guaranteed income to people. This is different from minimum wage, in this scheme everyone gets an additional amount of money directly that will bring them above the poverty line, if they are below the line, regardless of whether they are working.


Some of the main results are:
1) People continued working, except for new mothers and teenagers. However, new mothers not working brings about the positive effect of more time with children. And teenagers not working brings about the positive effect of higher graduation rates. 
2) Hospitalization decreased significantly. 


Wikipedia article:
http://en.wikipedia.org/wiki/Mincome

Risky systems, dire consequences

Lucky Tan explained that it is risky to take a 6 figure car loan or a 30 year mortgage loan. We have to study what happened in other countries and learn from their experience.
http://singaporemind.blogspot.com/2012/05/risky-systems-dire-consequences.html

Consumers who deserve to be ripped off

I have often been asked to give my views on whether a specific life insurance policy is worth buying. It is quite inconsiderate for consumers to ask this question to me, and I often feel like telling them off.

If they take the trouble to attend the talk on Financial Planning and spend $30 and 3 hours, they will get to know why most of these policies should be avoided, and more importantly, what are the better ways to invest their savings.

A typical example that I have quoted many times is as follows:

If you save $500 a month over 35 years and earn an yield of 2.5% per annum on the life insurance policy, you will get around $300,000 as cash value at the end of the period. If you invest the same money in an exchange traded fund that is invested according to the Straits Times Index, you are likely to get about $500,000.

By investing in the life insurance policy, you will be giving away $200,000. You can get an accident or term insurance policy to cover $300,000 by paying an annual premium of $360 or less. Over 35 years, you will spend only $40,000 (including interest lost), but you can save $200,000.

The consumer should ask the insurance agent to tell them about the distribution cost of the policy. This is shown in the benefit illustration and could be $10,000 or more. This is the money that is taken away from the consumer to pay commission to the agent and other parties in the distribution chain.

 Here is the irony. If the consumer buys the insurance policy from the insurance agent, he (or she) is giving away $10,000 for a bad investment product. The consumer now wants me to spend the time to explain why they should not buy the policy, and experts to get it for free.

Sometimes, I recommended to the consumer to approach a fee-based financial adviser (and I gave a list of people that they can contact). But, in most cases, the consumer does not want to spend $200 or so, to pay the adviser.

Do you think that our consumers deserved to be ripped off, for being lazy and for being ungrateful?

Consumer can attend the talk on financial planning organized by FISCA, and other talks on investments by registering at http://easyapps.sg/assn/Org/Event.aspx?id=5

They can buy my book on financial planning and life insurance at www.tankinlian.com/ishop.

They can get the advice from a fee-based financial adviser here:

http://easyapps.sg/assn/Org/Information.aspx?id=5 (Click on FISCA Assistance category)

They can also give away $200,000 by buying a bad life insurance policy. They do not need to spend $30 (for the talk) or $200 for the fee-based advice.

Tan Kin Lian