How does news events influence the price of equity, bond, US Dollar and Gold? You can learn from this simulation game:
http://www.tankinlian.com/trader/trader.html
Play the game at:
http://www.tankinlian.com/trader
Thursday, August 28, 2008
Save for a child's education
Hi Mr Tan,
Reading your blog has been a daily thing to do for me. Thank you for all the advice, interesting info. on places you visit, hot topics and jokes.
My only insurance for my only son (9 years old) is a Life insurance for 150k. As I do not have an education plan for him, I am considering to buy the NTUC PayMyUni insurance for him. The quote is 50k for 15 years, premium at $348 monthly plus 2 riders on hospital benefit and waiver of premium based on my life.
I would like to have your advice if this is a good savings for my son's education cos the premium is quite high monthly.
Maturity return
Projected at 3.75%: $71,440
Projected at 5.25%: $81,692
REPLY
The return from the above education policy is fair. It is not great, but is not bad. If you buy this policy, you should commit for the full term of 15 years.
If you invest $348 monthly to earn 5% per annum (not guaranteed) in a low cost investment fund, you will get a total of $92,300.
Read this FAQ:
http://www.tankinlian.com/faq/education.html
Reading your blog has been a daily thing to do for me. Thank you for all the advice, interesting info. on places you visit, hot topics and jokes.
My only insurance for my only son (9 years old) is a Life insurance for 150k. As I do not have an education plan for him, I am considering to buy the NTUC PayMyUni insurance for him. The quote is 50k for 15 years, premium at $348 monthly plus 2 riders on hospital benefit and waiver of premium based on my life.
I would like to have your advice if this is a good savings for my son's education cos the premium is quite high monthly.
Maturity return
Projected at 3.75%: $71,440
Projected at 5.25%: $81,692
REPLY
The return from the above education policy is fair. It is not great, but is not bad. If you buy this policy, you should commit for the full term of 15 years.
If you invest $348 monthly to earn 5% per annum (not guaranteed) in a low cost investment fund, you will get a total of $92,300.
Read this FAQ:
http://www.tankinlian.com/faq/education.html
Understanding Twisting and Churning
http://ezinearticles.com/?Life-Insurance-Fraud---Understanding-Churning-And-Twisting&id=782681
There are two types of life insurance fraud carried out by unscrupulous agents you should be aware of. The two closely related types of insurance scams are known as churning and twisting.
How do those agents carry them out and what do you do if you're a victim? Make sure you know these before you get scammed!
The fraudulent practice of making an insured drain one life insurance policy in other to fund another new policy is called churning. Important information about the full consequence of their action is dishonestly withheld by the agent involved.
Closely related to this is twisting. In twisting the policy holder is tricked to drain funds to buy another policy from another life insurance carrier. Run; don't walk if an agent promises you a new policy that will give you more coverage without increasing your premium. It's a scam so beware!
It's only when they get bills for new premiums that victims find out that something really was wrong. For some it could take up to two years before they find out.
Now is there anything you can do if you've been so scammed? But can a person get more coverage without increasing their premium?
For those who've been scammed there's help and for those who want more for less, there's a way. For those who've been ripped off, you can get help from your state's department of insurance or its equivalent. (In Singapore, you can complain to the Monetary Authority of Singapore).
Just a visit their website and you'll find resources that will help you. You can also call if you prefer that. Many reputable insurance companies will quickly compensate you once it's established that you were a victim of such fraud. You just have to contact their main office directly and not a branch.
There are two types of life insurance fraud carried out by unscrupulous agents you should be aware of. The two closely related types of insurance scams are known as churning and twisting.
How do those agents carry them out and what do you do if you're a victim? Make sure you know these before you get scammed!
The fraudulent practice of making an insured drain one life insurance policy in other to fund another new policy is called churning. Important information about the full consequence of their action is dishonestly withheld by the agent involved.
Closely related to this is twisting. In twisting the policy holder is tricked to drain funds to buy another policy from another life insurance carrier. Run; don't walk if an agent promises you a new policy that will give you more coverage without increasing your premium. It's a scam so beware!
It's only when they get bills for new premiums that victims find out that something really was wrong. For some it could take up to two years before they find out.
Now is there anything you can do if you've been so scammed? But can a person get more coverage without increasing their premium?
For those who've been scammed there's help and for those who want more for less, there's a way. For those who've been ripped off, you can get help from your state's department of insurance or its equivalent. (In Singapore, you can complain to the Monetary Authority of Singapore).
Just a visit their website and you'll find resources that will help you. You can also call if you prefer that. Many reputable insurance companies will quickly compensate you once it's established that you were a victim of such fraud. You just have to contact their main office directly and not a branch.
Watch out for these scams
Edited from an article in:
http://www.guardian.co.uk/money/2008/aug/23/scamsandfraud.consumeraffairs1
Lesson: Land banking is listed as item #8
1. Phoney jobs
This is usually an "advance fee" fraud where you wire money in the expectation you will get a job, usually one offering substantial money for "part-time work from home". The money transmission may be called a "test". Fraudsters often use the names of legitimate companies and "guarantee" earnings.
2. Racing tipsters
There are many legitimate services trying to predict winners. But there are many scams - danger signals include claims of huge past gains (it's easy to copy the list of winners from yesterday's paper), schemes that "beat the bookies" and "guaranteed tax-free earnings". Others sell software which, they say, will produce winners.
3. Car scams
Why would anyone offer you 30% to 50% more than market price for your car? Because they are scamming you. One version is to give you a phoney "banker's draft" and take your car away. You can't usually claim on your insurance.
4. Spanish lotteries
Millions of letters and emails go out, telling recipients they have won in legitimate lotteries. But those who get the letters can't win as they have never bought a ticket.
That does not stop otherwise sensible people losing their heads - and money. One reader filled in a questionnaire and was soon told he had won a large sum of money in the lottery. He sent money to cover "transfer costs". Then he was told "it was blocked by the Spanish government".
5. Phoney psychics
The only thing these people predict correctly is that vulnerable people will send them cash in response to mail shots which contain a mix of menace - you could die or fall ill if you don't respond - and reassurance such as "you'll be safe and will win on the lottery" if you send off the money for this. These are usually sent by post - often targeted at elderly people whose details are sold and resold.
6. Mail-order brides
This is really sad. Scamsters look for lonely people - usually men - and offer them love on the internet or by post. The "beautiful" women, who often claim to be Eastern European or Asian, don't exist: what victims see are pictures copied from entertainment, fashion or celebrity magazines.
Once smitten, men are asked to send their lovers money for air tickets, cash for "the family" or even amounts to pay off old boyfriends. To keep them interested, the targets may be sent sexy pictures or intimate clothing items. Victims are strung along until they realise they have been stung - or until they run out of money.
6. Boiler rooms
Persuasive salesmen cold call investors and try to persuade them to buy shares or commodities on the promise that "they will double or treble your investment in three to six months".
The sales pitch may have a pinch of truth, but what is on offer is phoney. Investors are often shuttled between "analysts" and "senior analysts" but these titles are meaningless.
The shares are usually in companies that don't exist, while those bets on currency exchange rates or heating oil are never made - often the boiler room tells victims they have quick gains, to encourage them to invest even more.
7. The Nigerian scam
When the "widow" of a former Nigerian dictator emails to ask your help in getting access to the millions that happens to be locked in a bank account, most treat it as a joke. Using various names, this scam has been around for at least 30 years. While the dictator was real, and the fact that those in corrupt regimes stashed away money in offshore banks is not disputed, the widow is a total phoney - as is the promised bank account.
8. Land banking
Here you are persuaded to pay a large sum of money for a tenth of an acre in a field - on the promise the land will soon receive planning permission and soar in value. So far, no land banking site has ever gained the building go-ahead.
Most land sold in this way is green belt or zoned for agricultural use only. But land bankers seize on every government statement about the need for more homes to stress that this means that it is certain that the site they are selling will soon be covered in houses - like almost all scams, this relies on an element of truth.
9. Ostrich farms
Ostrich farms exploited victims who believed that the commodity would profit from rarity. But the same ostrich was sold over and over - and the expected market for ostrich meat never happened. Equally, champagne and scotch firms are quite capable of expanding output ahead of an event such as the millennium. Those who bought champagne at top prices found they had very non-vintage fizz - if anything at all.
http://www.guardian.co.uk/money/2008/aug/23/scamsandfraud.consumeraffairs1
Lesson: Land banking is listed as item #8
1. Phoney jobs
This is usually an "advance fee" fraud where you wire money in the expectation you will get a job, usually one offering substantial money for "part-time work from home". The money transmission may be called a "test". Fraudsters often use the names of legitimate companies and "guarantee" earnings.
2. Racing tipsters
There are many legitimate services trying to predict winners. But there are many scams - danger signals include claims of huge past gains (it's easy to copy the list of winners from yesterday's paper), schemes that "beat the bookies" and "guaranteed tax-free earnings". Others sell software which, they say, will produce winners.
3. Car scams
Why would anyone offer you 30% to 50% more than market price for your car? Because they are scamming you. One version is to give you a phoney "banker's draft" and take your car away. You can't usually claim on your insurance.
4. Spanish lotteries
Millions of letters and emails go out, telling recipients they have won in legitimate lotteries. But those who get the letters can't win as they have never bought a ticket.
That does not stop otherwise sensible people losing their heads - and money. One reader filled in a questionnaire and was soon told he had won a large sum of money in the lottery. He sent money to cover "transfer costs". Then he was told "it was blocked by the Spanish government".
5. Phoney psychics
The only thing these people predict correctly is that vulnerable people will send them cash in response to mail shots which contain a mix of menace - you could die or fall ill if you don't respond - and reassurance such as "you'll be safe and will win on the lottery" if you send off the money for this. These are usually sent by post - often targeted at elderly people whose details are sold and resold.
6. Mail-order brides
This is really sad. Scamsters look for lonely people - usually men - and offer them love on the internet or by post. The "beautiful" women, who often claim to be Eastern European or Asian, don't exist: what victims see are pictures copied from entertainment, fashion or celebrity magazines.
Once smitten, men are asked to send their lovers money for air tickets, cash for "the family" or even amounts to pay off old boyfriends. To keep them interested, the targets may be sent sexy pictures or intimate clothing items. Victims are strung along until they realise they have been stung - or until they run out of money.
6. Boiler rooms
Persuasive salesmen cold call investors and try to persuade them to buy shares or commodities on the promise that "they will double or treble your investment in three to six months".
The sales pitch may have a pinch of truth, but what is on offer is phoney. Investors are often shuttled between "analysts" and "senior analysts" but these titles are meaningless.
The shares are usually in companies that don't exist, while those bets on currency exchange rates or heating oil are never made - often the boiler room tells victims they have quick gains, to encourage them to invest even more.
7. The Nigerian scam
When the "widow" of a former Nigerian dictator emails to ask your help in getting access to the millions that happens to be locked in a bank account, most treat it as a joke. Using various names, this scam has been around for at least 30 years. While the dictator was real, and the fact that those in corrupt regimes stashed away money in offshore banks is not disputed, the widow is a total phoney - as is the promised bank account.
8. Land banking
Here you are persuaded to pay a large sum of money for a tenth of an acre in a field - on the promise the land will soon receive planning permission and soar in value. So far, no land banking site has ever gained the building go-ahead.
Most land sold in this way is green belt or zoned for agricultural use only. But land bankers seize on every government statement about the need for more homes to stress that this means that it is certain that the site they are selling will soon be covered in houses - like almost all scams, this relies on an element of truth.
9. Ostrich farms
Ostrich farms exploited victims who believed that the commodity would profit from rarity. But the same ostrich was sold over and over - and the expected market for ostrich meat never happened. Equally, champagne and scotch firms are quite capable of expanding output ahead of an event such as the millennium. Those who bought champagne at top prices found they had very non-vintage fizz - if anything at all.
Heavy loss on ILP for first two years
Dear Mr Tan,
In September 2006, I bought an Investment-linked policy for $150,000 death, critical illness, and disability. First 2 years, no investment portion, all the money go to insurance coverage. Just recently I realize ILP is a 'time bomb' after read some article about it.
Now our friend recommanded me to stop the ILP and take the loss of $6000. Should I continue with the ILP, by paying the lowest fee till the market recover? I hope that I can recover back my investment in 5 years time. My friend said if I continue with my monthly savings, I will lose more, compare with the loss of $6000 now.
REPLY
Generally, you suffered the upfront cost during the first two years. After that, the charges are not too heavy. So, if you have already paid for more than two years, it is generally better to continue the ILP.
If you find the insurance cost to be too high, you can reduce the coverage. But, you must compare the charges against a term insurance policy.
These are general remarks. I am not able to give you specific advice on your particular matter.
In September 2006, I bought an Investment-linked policy for $150,000 death, critical illness, and disability. First 2 years, no investment portion, all the money go to insurance coverage. Just recently I realize ILP is a 'time bomb' after read some article about it.
Now our friend recommanded me to stop the ILP and take the loss of $6000. Should I continue with the ILP, by paying the lowest fee till the market recover? I hope that I can recover back my investment in 5 years time. My friend said if I continue with my monthly savings, I will lose more, compare with the loss of $6000 now.
REPLY
Generally, you suffered the upfront cost during the first two years. After that, the charges are not too heavy. So, if you have already paid for more than two years, it is generally better to continue the ILP.
If you find the insurance cost to be too high, you can reduce the coverage. But, you must compare the charges against a term insurance policy.
These are general remarks. I am not able to give you specific advice on your particular matter.
Joke: Cancel the policy on her husband
Steve's barn burned down. Julie, his wife, called the insurance company and said, "We had that barn insured for fifty thousand and I want my money."
"Whoa there, just a minute, Julie, it doesn't work like that. We will assess the value of the building and provide you with a new one of comparable worth." the agent replied.
Julie, after a pause, said, "Well, in that case, I'd like to cancel the policy on my husband."
"Whoa there, just a minute, Julie, it doesn't work like that. We will assess the value of the building and provide you with a new one of comparable worth." the agent replied.
Julie, after a pause, said, "Well, in that case, I'd like to cancel the policy on my husband."
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