Saturday, October 31, 2009
Observation by David Cherbronnier
David Cherbonnier has made some insightful comments about what is needed to put things right in Singapore. Read his comments here.
Dependent adults - victims or spoiled brats?
Read this article.
And here is my view. They are the results of the failed capitalism and false prosperity (build on asset bubbles) of the past two decades.
Asset prices went up too high. The current generation is affluent. But the next generation cannot afford these prices. And their earnings will be low - due to globalisation, international competition and other reasons. So, they have to depend on the generosity of their parents.
They are not spoiled brats. They are placed in an unfair world. This is largely the fault of the previous generation.
And here is my view. They are the results of the failed capitalism and false prosperity (build on asset bubbles) of the past two decades.
Asset prices went up too high. The current generation is affluent. But the next generation cannot afford these prices. And their earnings will be low - due to globalisation, international competition and other reasons. So, they have to depend on the generosity of their parents.
They are not spoiled brats. They are placed in an unfair world. This is largely the fault of the previous generation.
Need to put things right in Singapore
Senior Minister Goh Chok Tong paid a visit to his ancestral village in China. An astute observer commented that the visit was intended to show that Singapore is a nation of immigrants and that the local people should welcome the new immigrants from China, India and other countries.
My late father came to Singapore from China 70 years ago. I also visited my ancestral village 20 years ago. I understand the sentiment.
I now have many friends who are recent immigrants into Singapore. I support and welcome their decision to make their future and home in Singapore.
But, I have to say these words on behalf of the local Singaporeans who appeared to be resentful of the competition for jobs, homes and space from new immigrants.
There are many things that need to be put right in Singapore. We are seeing the consequences of many decades of the policy of the current Government. They include:
a) A declining birth rate causing by the insecurity and unsatisfactory quality of life in Singapore
b) The burden of National Service faced by male Singaporeans, including competing for jobs
c) The loss of trust in our commercial and government institutions
d) An unjust society; the small people being treated unfairly
e) The loss of pride in being Singaporeans
Some of these issues have been voiced by many people, including me, over the past years. We need to address them and put things right, so that there is greater unity and cohesion among the people of Singapore. If we are confident and strong as a people, we will be able to welcome the new immigrants and help to integrate them into our Singapore society.
Tan Kin Lian
NOTE TO COMMENTORS.
If you wish to give your honest views, please sign off your comment will your real name - so that it carries more weight.
My late father came to Singapore from China 70 years ago. I also visited my ancestral village 20 years ago. I understand the sentiment.
I now have many friends who are recent immigrants into Singapore. I support and welcome their decision to make their future and home in Singapore.
But, I have to say these words on behalf of the local Singaporeans who appeared to be resentful of the competition for jobs, homes and space from new immigrants.
There are many things that need to be put right in Singapore. We are seeing the consequences of many decades of the policy of the current Government. They include:
a) A declining birth rate causing by the insecurity and unsatisfactory quality of life in Singapore
b) The burden of National Service faced by male Singaporeans, including competing for jobs
c) The loss of trust in our commercial and government institutions
d) An unjust society; the small people being treated unfairly
e) The loss of pride in being Singaporeans
Some of these issues have been voiced by many people, including me, over the past years. We need to address them and put things right, so that there is greater unity and cohesion among the people of Singapore. If we are confident and strong as a people, we will be able to welcome the new immigrants and help to integrate them into our Singapore society.
Tan Kin Lian
NOTE TO COMMENTORS.
If you wish to give your honest views, please sign off your comment will your real name - so that it carries more weight.
SCMP:SFC seeks to regulate minibonds
31 Oct 2009
A major regulatory loophole exposed by the Lehman Brothers minibond fiasco is to be plugged under a Securities and Futures Commission proposal that will require all structured products sold to the public to be regulated by it.
Although the SFC is responsible for authorising all mutual fund products, it does not cover structured products such as the minibonds issued or guaranteed by Lehman.
After Lehman's collapse last year, these products became worthless, sparking more than 21,000 investor complaints to the SFC and the Hong Kong Monetary Authority.
Minibonds are not corporate bonds, but risky credit-linked notes that were not subject to SFC regulation because under the law, structured products such as minibonds are classed as debentures and fall under the Companies Ordinance.
The SFC yesterday proposed to plug the loophole by changing the law to transfer the regulation of public offerings of structured products in the form of debentures from the Companies Ordinance to the Securities and Futures Ordinance.
So, unless an exemption applies, unlisted structured products, their offering documents and marketing materials will have to be authorised under the SFO before being offered to the public.
"This will allow the SFC greater flexibility to regulate public offers of unlisted structured products by setting out appropriate standards in the new code on unlisted structured products," the SFC said.
The consultation will last two months.
Legislator Chim Pui-chung, who represents the financial services sector, said it was a move in the right direction. "After this proposed law change, the SFC will have the power to regulate these products. This is a good first step but it cannot solve all the problems," he said.
"The SFC will also need to set tough disclosure standards to require investment banks issuing structured products to disclose all the risks to investors.
"All salespeople must also behave themselves by not mis-selling the products. Otherwise, it still may not prevent a repetition of the minibond fiasco."
A major regulatory loophole exposed by the Lehman Brothers minibond fiasco is to be plugged under a Securities and Futures Commission proposal that will require all structured products sold to the public to be regulated by it.
Although the SFC is responsible for authorising all mutual fund products, it does not cover structured products such as the minibonds issued or guaranteed by Lehman.
After Lehman's collapse last year, these products became worthless, sparking more than 21,000 investor complaints to the SFC and the Hong Kong Monetary Authority.
Minibonds are not corporate bonds, but risky credit-linked notes that were not subject to SFC regulation because under the law, structured products such as minibonds are classed as debentures and fall under the Companies Ordinance.
The SFC yesterday proposed to plug the loophole by changing the law to transfer the regulation of public offerings of structured products in the form of debentures from the Companies Ordinance to the Securities and Futures Ordinance.
So, unless an exemption applies, unlisted structured products, their offering documents and marketing materials will have to be authorised under the SFO before being offered to the public.
"This will allow the SFC greater flexibility to regulate public offers of unlisted structured products by setting out appropriate standards in the new code on unlisted structured products," the SFC said.
The consultation will last two months.
Legislator Chim Pui-chung, who represents the financial services sector, said it was a move in the right direction. "After this proposed law change, the SFC will have the power to regulate these products. This is a good first step but it cannot solve all the problems," he said.
"The SFC will also need to set tough disclosure standards to require investment banks issuing structured products to disclose all the risks to investors.
"All salespeople must also behave themselves by not mis-selling the products. Otherwise, it still may not prevent a repetition of the minibond fiasco."
Benefit illustration - samples
Here are samples of the benefit illustrations, with an explanation on how to read them. In all cases, the effect of deduction are too high and do not give good value to the consumer.
Friday, October 30, 2009
Investing in a Life Annuity
Here is a chapter from my book entitled "TKL Financial Planning". I hope that you find it useful.
Lawmakers attack bank overdraft fees
Read this article.
Banks in Singapore also have the bad practice of overcharging fees for various services. These fees are much higher than their actual cost of providing the services. They are exorbitant and are intended to reap obscene profits for the banks.
Rechargeable torchlight as gift
I gave the rechargeable torchlight to a friend. He liked it and ordered 10 pieces to be given as gifts to his friends.
Someone came to buy 5 pieces from my office. He came back the following day to buy another 5 more. The rechargeable torchlight sells for $6.50 compared to $27.20 for a branded torchlight with similar functions.
Someone came to buy 5 pieces from my office. He came back the following day to buy another 5 more. The rechargeable torchlight sells for $6.50 compared to $27.20 for a branded torchlight with similar functions.
Underlying problems of capitalism
The economic growth achieved during the past six months of 2009 is unsustainable. The underlying problems of capitalism needs to be solved before the world can see a revival of growth and prosperity. These problems are:
a) wide gap in income
b) insufficient employment opportunities
c) cheating
The wide inequality in come means that a few people are super rich while the majority are poor and struggling to get by. The poor families cannot consume goods or services, which are necessary for economic growth. The super wealthy can flout their wealth, but their actual consumption is limited.
Insufficient job opportunities leads to uncertainty and insecurity. They force more families to increase their savings and have fewer children, in case they lose their jobs. Many people work harder to keep their jobs, leading to fewer jobs for the unemployed.
There is rampant cheating, especially in the financial products. Bad products that rip off consumers are being sold under the regime of "caveat emptor". Many are unregulated investment products, which are actually scams created to cheat people of their money using deception and false promises. Even regulated products are sold using deceptive means, and are used to hide exorbitant charges to enrich the issuer and the marketeers.
If the underlying ills of the capitalist system are not addressed, the global economy cannot have a sustained recovery. As individual countries struggle to take care of their people, they will increase the suffering inflicted on other countries. This could lead to economic and military conflicts.
The measures to address these economic ills include:
a) Fairer distribution of income through minimum wage and high taxation of the super rich
b) Fairer distribution of work by imposing a cap on the working hours, so that more jobs can be created for the unemployed and school leavers
c) Stronger regulation to prevent cheating of consumers and to encourage honest business practices.
d) Return to some measure of protectionism, to reduce the harmful effects of globalization and international competition.
We have to say goodbye to the bad capitalism of the past two decades, and to the excessive greed and dishonesty that thrived during this period, before we can see a better economic and social world. We also have to return to religion.
Tan Kin Lian
a) wide gap in income
b) insufficient employment opportunities
c) cheating
The wide inequality in come means that a few people are super rich while the majority are poor and struggling to get by. The poor families cannot consume goods or services, which are necessary for economic growth. The super wealthy can flout their wealth, but their actual consumption is limited.
Insufficient job opportunities leads to uncertainty and insecurity. They force more families to increase their savings and have fewer children, in case they lose their jobs. Many people work harder to keep their jobs, leading to fewer jobs for the unemployed.
There is rampant cheating, especially in the financial products. Bad products that rip off consumers are being sold under the regime of "caveat emptor". Many are unregulated investment products, which are actually scams created to cheat people of their money using deception and false promises. Even regulated products are sold using deceptive means, and are used to hide exorbitant charges to enrich the issuer and the marketeers.
If the underlying ills of the capitalist system are not addressed, the global economy cannot have a sustained recovery. As individual countries struggle to take care of their people, they will increase the suffering inflicted on other countries. This could lead to economic and military conflicts.
The measures to address these economic ills include:
a) Fairer distribution of income through minimum wage and high taxation of the super rich
b) Fairer distribution of work by imposing a cap on the working hours, so that more jobs can be created for the unemployed and school leavers
c) Stronger regulation to prevent cheating of consumers and to encourage honest business practices.
d) Return to some measure of protectionism, to reduce the harmful effects of globalization and international competition.
We have to say goodbye to the bad capitalism of the past two decades, and to the excessive greed and dishonesty that thrived during this period, before we can see a better economic and social world. We also have to return to religion.
Tan Kin Lian
Big investors grow wary of hedge funds
Clients are worried about liquidity, lock-up periods and fees, according to this article.
Market Economy with Church
Read this article about the behavior of the market economy in China. It also applies to Singapore.
Reserved parking in HDB estates
Are the reserved parking for season tickets apply for the whole day or from 7 pm to 7 am? Please give your reply here.
Thursday, October 29, 2009
Not allowed to withdraw the investment
Dear Mr. Tan,
An investor who is now unemployed and in her late 50s has put a large amount of her life savings on an investment which "pays on yearly basis" with a land banking company X. On maturity, she wanted to cash out part of her investment but was told by X that she must renew all into the 6 months investment. When she insisted that she want to take out some, she was scolded by X's director, that she was a fool.
Upon hearing this from her, I am very angry about this company. I could not understand why they treat their customers like that. If we put our money in banks fixed deposits or any regulated investment products, nobody can stop us from renewing or surrendering our investment upon maturity because it's our money.
REPLY
Please ask the investor to lodge a complaint with the Commercial Affairs Department. I believe that there is a law to prevent companies from taking deposits on interest, unless it is licensed as a financial institution.
An investor who is now unemployed and in her late 50s has put a large amount of her life savings on an investment which "pays on yearly basis" with a land banking company X. On maturity, she wanted to cash out part of her investment but was told by X that she must renew all into the 6 months investment. When she insisted that she want to take out some, she was scolded by X's director, that she was a fool.
Upon hearing this from her, I am very angry about this company. I could not understand why they treat their customers like that. If we put our money in banks fixed deposits or any regulated investment products, nobody can stop us from renewing or surrendering our investment upon maturity because it's our money.
REPLY
Please ask the investor to lodge a complaint with the Commercial Affairs Department. I believe that there is a law to prevent companies from taking deposits on interest, unless it is licensed as a financial institution.
Wednesday, October 28, 2009
Purchase from my office
If you are interested to buy the rechargeable torchlight (5 pieces or more), you can get a discount of $1 per piece (i.e. you pay $5.50 instead of $6.50). You also get a discount of $1 for any of my books, provided that the order is for 5 books or more, of the same or different titles (i.e you pay $6.90 instead of $7.90). You can buy them from my office shown here. Open weekdays from 9 am to 6 pm.
A customer who bought 6 pieces of the torchlight came back today to buy another 5 pieces. He also bought 10 pieces of the Shape Quiz ($1.50 per piece) to give to children.
To make it worthwhile for a trip to my office, you should take orders for your family and friends. Ask someone who has a car to collect the torchlight or books from my office.
Fair value for investors
Dear Mr. Tan,
What return is considered as fair value for investors? Is it 3%, 4% or 5%?
REPLY
It depends on the following:
a) What are the underlying assets? How risky?
b) What are the charges taken away by the fund manager and distributor?
c) Do you get the residual gain?
The best type of investment is a low cost unit trust or exchange traded fund (ETF). You enjoy low charges (usually less than 0.5% p.a.) and the benefit of diversification. This is likely to give you a return, over 20 years or longer, of 5% per annum or more, but is not guaranteed.
A poor investment is a participating life insurance policy, due to the following:
a) High charges taken away for distribution, mortality and expenses, usually 3% per annum
b) You may not get the full residual gain as some part of it may be kept from you due to "smoothing of bonus".
Another poor investment is a structured product, where most of the charges are not transparent and the yield to the investor depends on chance (i.e. gambling) and is likely to be low, especially for a guaranteed product.
Tan Kin Lian
What return is considered as fair value for investors? Is it 3%, 4% or 5%?
REPLY
It depends on the following:
a) What are the underlying assets? How risky?
b) What are the charges taken away by the fund manager and distributor?
c) Do you get the residual gain?
The best type of investment is a low cost unit trust or exchange traded fund (ETF). You enjoy low charges (usually less than 0.5% p.a.) and the benefit of diversification. This is likely to give you a return, over 20 years or longer, of 5% per annum or more, but is not guaranteed.
A poor investment is a participating life insurance policy, due to the following:
a) High charges taken away for distribution, mortality and expenses, usually 3% per annum
b) You may not get the full residual gain as some part of it may be kept from you due to "smoothing of bonus".
Another poor investment is a structured product, where most of the charges are not transparent and the yield to the investor depends on chance (i.e. gambling) and is likely to be low, especially for a guaranteed product.
Tan Kin Lian
Quiz Books
Mr Tan:
I was sad when Sunday New Paper stopped the game....about the house,sports, person, etc...I enjoyed figuring it out every Sunday and looked forward to Sunday morning when I receive my newspapers. Can you please let me have the title of the game book and where can I purchase it?
REPLY
www.easysearch.sg (Internet shop)
Intelligence Quiz Vol 1, 2 $7.90 each
I was sad when Sunday New Paper stopped the game....about the house,sports, person, etc...I enjoyed figuring it out every Sunday and looked forward to Sunday morning when I receive my newspapers. Can you please let me have the title of the game book and where can I purchase it?
REPLY
www.easysearch.sg (Internet shop)
Intelligence Quiz Vol 1, 2 $7.90 each
Hub and spoke system for public transport
Read my views here. I hope that the Land Transport Authority is planning along the lines that is suggested here.
Benefit illustration for a Cash Back Policy
A reader asked me to use an actual case of a cash-back policy. If you have bought this policy, please fax the benefit illustration to 6405 3100.
Tuesday, October 27, 2009
Insurance for poly and university students
Dear Mr. Tan,
I read your view that it is not necessary for a poly student to buy insurance for saving. My friend, who is an agent, told me that I should save early and pay a lower premium. He said that if I do not save, I will spend away the money. Who should I listen to?
REPLY
As you are not working to earn a regular income, you should avoid making any commitment to make fixed saving in an insurance policy. You should save your money in a flexible saving account which can be withdrawn at any time, without any penalty, to meet emergency needs.
A life insurance policy is the worst type of saving plan for a student or any person with irregular income. Up to two years of your savings is taken away from you as "distribution cost". This is your earned earned savings, which you earn from part time work or from the allowance given by your parent. Why should you give it away to the insurance agent or company as distribution cost?
Many students find it a burden to continue the fixed commitment and give up their insurance policy, leading to the forfeiture of their savings.
It is wrong for the insurance agent to sell a fixed saving plan to a student who does not have a regular income. The agent is only thinking of earning the commission from the sale - without thinking about the financial burden that is being given to the student.
I read your view that it is not necessary for a poly student to buy insurance for saving. My friend, who is an agent, told me that I should save early and pay a lower premium. He said that if I do not save, I will spend away the money. Who should I listen to?
REPLY
As you are not working to earn a regular income, you should avoid making any commitment to make fixed saving in an insurance policy. You should save your money in a flexible saving account which can be withdrawn at any time, without any penalty, to meet emergency needs.
A life insurance policy is the worst type of saving plan for a student or any person with irregular income. Up to two years of your savings is taken away from you as "distribution cost". This is your earned earned savings, which you earn from part time work or from the allowance given by your parent. Why should you give it away to the insurance agent or company as distribution cost?
Many students find it a burden to continue the fixed commitment and give up their insurance policy, leading to the forfeiture of their savings.
It is wrong for the insurance agent to sell a fixed saving plan to a student who does not have a regular income. The agent is only thinking of earning the commission from the sale - without thinking about the financial burden that is being given to the student.
My comment applies to university undergraduates as well.
Tan Kin Lian
Tan Kin Lian
Cash back insurance policy
I wish to explain why a cash back insurance policy gives a poor yield to the consumer.
A cash back policy combined a basic policy with an annual refund feature. Let us take a hypothetical case. The basic policy is a whole life policy with an annual premium of $5,000 and a yield at the end of 25 years of 2% per annum. The cash back feature adds an additional premium of $1,000 and pays $950 a year from the 2nd year (i.e. no payment for the first year). The cash back feature reduces the yield to 1.8% per annum.
The agent tells the customer that he is getting a cash back every year (after the first year) and makes it look like a more attractive policy. But the agent does not explain that the yield has reduced or the effect of deduction has increased with the cash back feature.
The agent earns commission on the increased premium of $6,000 (including the premium paid for the cash back feature). If the distribution cost is 200%, the customer will be paying $12,000 in distribution cost, including the cost attributable to the cash back feature.
It does not make sense for the customer to pay a higher premium for the cash back feature and get back less than the increased premium. But the consumer does not know about this structure of the policy. The agent tells the consumer that this is an "innovative policy".
Tan Kin Lian
A cash back policy combined a basic policy with an annual refund feature. Let us take a hypothetical case. The basic policy is a whole life policy with an annual premium of $5,000 and a yield at the end of 25 years of 2% per annum. The cash back feature adds an additional premium of $1,000 and pays $950 a year from the 2nd year (i.e. no payment for the first year). The cash back feature reduces the yield to 1.8% per annum.
The agent tells the customer that he is getting a cash back every year (after the first year) and makes it look like a more attractive policy. But the agent does not explain that the yield has reduced or the effect of deduction has increased with the cash back feature.
The agent earns commission on the increased premium of $6,000 (including the premium paid for the cash back feature). If the distribution cost is 200%, the customer will be paying $12,000 in distribution cost, including the cost attributable to the cash back feature.
It does not make sense for the customer to pay a higher premium for the cash back feature and get back less than the increased premium. But the consumer does not know about this structure of the policy. The agent tells the consumer that this is an "innovative policy".
Tan Kin Lian
When cancer disappears
Some cancers do not need to be treated. They can stop growing and disappear, according to this article.
Monday, October 26, 2009
Break-even point for old NTUC policies
Dear Mr. Tan,
When you were in charge of NTUC, did your products have a breakeven point of 5 years?
REPLY
If my memory was correct, most of the products have a break-even point of 5 to 8 years. They also provide a good yield to the customer, after 20 years, i.e. 5% or higher. So, most customers who bought the NTUC policies in the early days obtained a good deal. The high yield was possible due to low distribution cost, and a high rate of bonus distribution.
Advice on stock selection and timing
Dear Mr Tan,
In the investement section of yday's Sunday Times, CIMB research recommended Parkway Life Reits as heath care assets is seen as one of the most stable asset classes and this reits stands out as one of the few heath-care reits that can amalgamate such assets.
I am thinking of liquidating my Comfortdelgro shares (with some profit) and invest into Parkway Life Reits as it seems to pay higher dividends. What is your opinion on this ?
REPLY
I am not able to advise on stock selection and timing. Wish you all the best in your decision.
In the investement section of yday's Sunday Times, CIMB research recommended Parkway Life Reits as heath care assets is seen as one of the most stable asset classes and this reits stands out as one of the few heath-care reits that can amalgamate such assets.
I am thinking of liquidating my Comfortdelgro shares (with some profit) and invest into Parkway Life Reits as it seems to pay higher dividends. What is your opinion on this ?
REPLY
I am not able to advise on stock selection and timing. Wish you all the best in your decision.
Breakeven point
Dear Mr. Tan,
What is an acceptable break-even point for a life insurance policy? I have a policy that breaks even after 20 years, i.e. the cash value is more than the premiums paid. Is this acceptable?
REPLY
If you are saving your money, the break-even point should be 0 years. This is what you get when you put your money in a bank account. You can withdraw it at any time without penalty.
If you invest in a unit trust with a front end load of 2% (or less), you can break even within 1 year (provided that the stock-market gives a positive return.
A life insurance policy takes many years to break even due to the high commission paid to the insurance agent. If the distribution cost is 50% of the annual premium, it should take 5 years to break even. If it is 100%, it should take 7 years to break even.
I consider a distribution cost of 50% to be rather high, but may be acceptable. Your life insurance policy should take 5 years to break even. If it takes longer than 5 years, it is not good for consumers. There are better ways to invest your money.
Tan Kin Lian
NOTE
What is an acceptable break-even point for a life insurance policy? I have a policy that breaks even after 20 years, i.e. the cash value is more than the premiums paid. Is this acceptable?
REPLY
If you are saving your money, the break-even point should be 0 years. This is what you get when you put your money in a bank account. You can withdraw it at any time without penalty.
If you invest in a unit trust with a front end load of 2% (or less), you can break even within 1 year (provided that the stock-market gives a positive return.
A life insurance policy takes many years to break even due to the high commission paid to the insurance agent. If the distribution cost is 50% of the annual premium, it should take 5 years to break even. If it is 100%, it should take 7 years to break even.
I consider a distribution cost of 50% to be rather high, but may be acceptable. Your life insurance policy should take 5 years to break even. If it takes longer than 5 years, it is not good for consumers. There are better ways to invest your money.
However, if the life insurance policy is able to give an attractive yield, compared to other types of investments, you may accept a higher break-even point of 7 years.
Tan Kin Lian
NOTE
The break-even point is the number of years required for the surrender value of the policy to reach the total amount of premiums paid.
Why do bankers make so much money?
Read this article. It did not mention the following - "they create toxic products to sell to their clients".
Bend reality and become dishonest
QUOTE
We MUST recognise that when we get into situations where our personal benefits (mostly financial) stand in opposition to our moral standards, we are able to "bend" reality, see the world in terms compatible with our selfish interest, and become dishonest.
We MUST recognise that when we get into situations where our personal benefits (mostly financial) stand in opposition to our moral standards, we are able to "bend" reality, see the world in terms compatible with our selfish interest, and become dishonest.
Dan Ariely, author of Predictably Irrational
Sunday, October 25, 2009
Inadequate parking spaces for visitors in HDB estates
Do you experience difficulty in finding parking space as a visitor and see many spaces reserved for residents that are unused? Read my views here. If you agree with my views, please write a follow up letter to Today paper.
Enjoy $1 discount on my books
I publish the following books that sells for $7.90 each at the bookstores:
Intelligence Quiz Vol 1, 2
Sudoku Vol 1, 2
Shape Quiz
You can buy them at a discount of $1 per book (i.e. $6.90) if you buy 5 books or more (of same or different titles) from my office (open Monday to Friday, 9 am to 6 pm).
You can collect orders from your family and friend and buy them together on one trip. Ask a friend to drive to my office and collect it from there. You save on postage and enjoy a discount.
Intelligence Quiz Vol 1, 2
Sudoku Vol 1, 2
Shape Quiz
You can buy them at a discount of $1 per book (i.e. $6.90) if you buy 5 books or more (of same or different titles) from my office (open Monday to Friday, 9 am to 6 pm).
You can collect orders from your family and friend and buy them together on one trip. Ask a friend to drive to my office and collect it from there. You save on postage and enjoy a discount.
Amazing Numbers
Amazing Numbers is a game that amazes many people. You ask your friend to choose a number and you can find out the number by showing him or her just a few cards.
I have arranged these cards in a single sheet of paper that you can print and cut them out. You can use them to amaze your friends. Interested? Click here.
I have arranged these cards in a single sheet of paper that you can print and cut them out. You can use them to amaze your friends. Interested? Click here.
Build up 6 to 12 months of savings
Hi Mr Tan,
I have read the draft 5a of your Financial Planning book. It is a great read and contains many practical financial tips.
Would it be better for young people to clear off their debts (e.g. study loans, wedding loans, renovation loans, car loans) before embarking on an investment plan?
Most young people are short-sighted and do not see the benefit of saving 6-12 months of their salary. Recently, I have attended a course which covered personal finance. The trainer said that it is beneficial to have savings to fall back on as you can treat it as a interest free loan instead of borrowing from the banks.
Considering how much the banks are charging for the loans, I realised that having money at hand to handle personal emergencies is very important indeed.
Would you agree that for a HDB housing loan, it would be better to borrow to the max(30 years) as Mr Larry Haverkamp has suggested in his articles. What are your opinions for a bank housing loan as a comparison? Do you agree that housing loan is probably the only loan that we should not draw down on even if we have the means to do so?
REPLY
I agree that it is better to pay off the loan, if they carry a higher interest rate than the yield on low risk investment (say 3%). As HDB loan is 2.6%, it is better to take the max loan from HDB and invest to earn more than 2.6%. I agree that a housing loan is probably the only loan that you should have in your lifetime.
I have read the draft 5a of your Financial Planning book. It is a great read and contains many practical financial tips.
Would it be better for young people to clear off their debts (e.g. study loans, wedding loans, renovation loans, car loans) before embarking on an investment plan?
Most young people are short-sighted and do not see the benefit of saving 6-12 months of their salary. Recently, I have attended a course which covered personal finance. The trainer said that it is beneficial to have savings to fall back on as you can treat it as a interest free loan instead of borrowing from the banks.
Considering how much the banks are charging for the loans, I realised that having money at hand to handle personal emergencies is very important indeed.
Would you agree that for a HDB housing loan, it would be better to borrow to the max(30 years) as Mr Larry Haverkamp has suggested in his articles. What are your opinions for a bank housing loan as a comparison? Do you agree that housing loan is probably the only loan that we should not draw down on even if we have the means to do so?
REPLY
I agree that it is better to pay off the loan, if they carry a higher interest rate than the yield on low risk investment (say 3%). As HDB loan is 2.6%, it is better to take the max loan from HDB and invest to earn more than 2.6%. I agree that a housing loan is probably the only loan that you should have in your lifetime.
A heavy burden to pay insurance premiums
A poly student told me that he has to $300 a month on this insurance premium. His friend sold him two policies recently, and advised him that he pays a lower premium at a younger age.
The poly student receives a monthly allowance of $600 from his father. Half of this allowance goes to pay the premium. He is finding it to be a burden, but he does not wish to cancel the policies and lose the premiums that were paid.
It is bad advice for his friend to sell him these two policies when he has not yet started to work. His friend was greedy to earn his commission and meet his sales target, and left a burden to the poly student.
Saturday, October 24, 2009
Belgian prosecutor wants Citibank to repay 'duped' savers
Read this report. The public prosecutors in other countries are more active in protecting the interest of consumers. I hope that our authority can also be more active.
Effect of Deduction
The benefit illustration for a life insurance policy (i.e. whole life, endowment, critical illness) shows the projected surrender values based on an interest rate of 3.75% and 5.25%. The average of 4.5% represents, in my view, a fairly realistic projection of the future yield on the investment of a well diversified life insurance fund based on current economic conditions.
If you are getting this type of yield, it is important that the amount taken away from your savings should be modest, and not excessive. In my view, a reduction in yield (to cover the mortality and expenses) of 1.5% is acceptable, giving you a net yield of 3%. If you buy riders to cover other risks, the premiums are charged separately and do not affect the calculation for the basic policy.
I find that most benefit illustrations show a higher reduction in yield, due to high commission and high profit margin for the insurance company. The product is bad for consumers and should be avoided.
The reduction in yield is not shown in the benefit illustration. However, you can compute it by looking at two figures that are shown, namely the "effect of deduction" and the "value of accumulated premiums".
Based on the benchmark of 1.5% reduction in yield, the "effect of deduction" should not exceed the following percentage of the "value of accumulated premiums".
| Premium | Maximum |
| 10 years | 8% |
| 15 years | 11.8% |
| 20 years | 15.6% |
| 25 years | 19.4% |
For example, if you pay $X a year in premium and the value of premium after 20 years is $100,000, the "effect of deduction" should not exceed 15.6%,or $15.600. I have seen many examples where the effect of deduction could be twice of the fair amount, giving a poor yield to the policyholder.
Tip: If the "effect of deduction" is less than the above benchmark, the policy gives you a good value. If it exceeds the above benchmark by a small amount (say 5%), it is still acceptable. But do not accept any product where the "effect of deduction" is more higher. If you are earning so little (due to the low interest environment), do not allow the insurance company or the agent to take so much away from you.
Personal attack
There is one person who finds all opportunities to attack me personally. This person posts anonymously and will find fault and pass cynical remarks on most of my views. I have blocked his views, so he goes to other blogs to attack me. I suspect that this person has been paid to do this type of dirty work.
Ask the insurer to provide an explanation
Dear Mr Tan,
Recently I received my renewed incomeshield with the attachment of Endorsement E0901 stated that with effect from the renewal date, the following new definitions shall replace and supersede the existing definitions by the same name appearing in the "definitions" section of the policy.
Can you comments over all those definitions? How are they different from the previous definitions? Any 'small prints' that we should be aware of & take exception? I think those who are in this scheme received the same endorsement.
REPLY
I suggest that you write to NTUC Income and ask them for an explanation of the effect of the change in definition. It is their duty to provide a satisfactory explanation to you. If you have received the explanation, you can send them to me for a second opinion.
Recently I received my renewed incomeshield with the attachment of Endorsement E0901 stated that with effect from the renewal date, the following new definitions shall replace and supersede the existing definitions by the same name appearing in the "definitions" section of the policy.
Can you comments over all those definitions? How are they different from the previous definitions? Any 'small prints' that we should be aware of & take exception? I think those who are in this scheme received the same endorsement.
REPLY
I suggest that you write to NTUC Income and ask them for an explanation of the effect of the change in definition. It is their duty to provide a satisfactory explanation to you. If you have received the explanation, you can send them to me for a second opinion.
Friday, October 23, 2009
Mandating health insurance
This article explains the need to pass a law to require every person to be insured, use of community rated premiums and guaranteed issue, i.e. no medical underwriting. This approach is adopted by several countries, e.g. Australia, Germany.
Price chart of land in UK
Dear Mr TanI notice that many Singaporeans seem to fail to grasp the problem with land banking. The argument is always that land increase in price and since you own the land you cannot lose.
I have created this chart to explain my case. This is based on real land banking company data. I used a starting plot price of 10,000 UKP in 2006 converted into S$.
The green belt land value is based on land registry data in 2006 The value with planning permission is based on a land banking company estimate of 250% returns adjust by the recent fall in property prices.
I have adjust all prices using both currency and the recent boom and bust in the UK property market. I have made an assupmtion of 5% per annum increase in the value of land from 2011 forward.
Since there are no recorded successes with UK land banking plots I cannot see how any company can make claims for expercted, estimated or anticipated returns on this investment.
You will note according to this graph that in real terms land banking plots have got cheaper since 2006 as the UK currency declined in value. However many land banking companies have increased their UK pound price of their plots so that they still get the same number of Singapore dollars. As an example X increased their plot price from 5600 Pounds to 8000 Pounds in 2008.
I have adjust all prices using both currency and the recent boom and bust in the UK property market. I have made an assupmtion of 5% per annum increase in the value of land from 2011 forward.
Since there are no recorded successes with UK land banking plots I cannot see how any company can make claims for expercted, estimated or anticipated returns on this investment.
You will note according to this graph that in real terms land banking plots have got cheaper since 2006 as the UK currency declined in value. However many land banking companies have increased their UK pound price of their plots so that they still get the same number of Singapore dollars. As an example X increased their plot price from 5600 Pounds to 8000 Pounds in 2008.
Rechargeable Torchlight with Locator Lamp
My friend saw this torchlight being sold at the airport for $27.50 (inclusive of GST).It has two important features:
a) rechargeable
b) a locator light to locate the torchlight in the dark
With a torchlight, it is easy to move about the flat or house in the dark - without switching on the main lights. This will be handly in an emergency or power failure.
I have imported a torchlight with these two features and will be selling it for $6.50. Interested buyers can buy them from my office in Ang Mo Kio. This is specially useful for NS men or civil defence personnel.
I will be looking for distributors who are interested to sell the low cost torchlight. Send email to kinlian@gmail.com.
Guarantee against losses
Back to the old days of guaranteed products. Before investing in these products, make sure that the charges are low and you can get a reasonable yield. Read here.
Thursday, October 22, 2009
Spread in betting games
What are the spreads in some of the common betting games, such as 4D, Toto, Big Sweep, horse racing, football betting?
Here are the ways to find out:
a) 4D, Big Sweep. Assume that the operator sell all of the tickets. How much money is collected? How much money is paid out, adding up all the prizes of all the winning tickets. This represents the odds. I believe that the total payout is about 60% to 75% of the total bets. The balance goes towards expenses (e.g. salaries, printing, office, sales commission), taxes (i.e. paid to the Government) and profit to the operator.
b) Toto, horse racing, football betting. You are not able to calculate the bets and prizes from the structure of the betting game as there are some variables that cannot be directly calculated. Here, you can look at the accounts and find out the total amount that is collected from the bets and the total paid out as prizes to the winners.
Which game is best for betting? It depends on whether you are a real gambler (in which case, you choose a game with the highest payout ratio, such as roulette or poker), or whether you are a fun gambler (in which case, you choose a game that you enjoyed most, such as horse racing or football betting).
Tip: Always bet with money that you can afford to lose. Treat it as another form of entertainment. If you can spend $500 on a holiday, and you enjoy spending this amount on a betting game, go and bet - but make sure that the money can give you the enjoyment for a few hours or a day (and not in just a few minutes).
Tan Kin Lian
Here are the ways to find out:
a) 4D, Big Sweep. Assume that the operator sell all of the tickets. How much money is collected? How much money is paid out, adding up all the prizes of all the winning tickets. This represents the odds. I believe that the total payout is about 60% to 75% of the total bets. The balance goes towards expenses (e.g. salaries, printing, office, sales commission), taxes (i.e. paid to the Government) and profit to the operator.
b) Toto, horse racing, football betting. You are not able to calculate the bets and prizes from the structure of the betting game as there are some variables that cannot be directly calculated. Here, you can look at the accounts and find out the total amount that is collected from the bets and the total paid out as prizes to the winners.
Which game is best for betting? It depends on whether you are a real gambler (in which case, you choose a game with the highest payout ratio, such as roulette or poker), or whether you are a fun gambler (in which case, you choose a game that you enjoyed most, such as horse racing or football betting).
Tip: Always bet with money that you can afford to lose. Treat it as another form of entertainment. If you can spend $500 on a holiday, and you enjoy spending this amount on a betting game, go and bet - but make sure that the money can give you the enjoyment for a few hours or a day (and not in just a few minutes).
Tan Kin Lian
Fax the Benefit Illustration
Hi Mr Tan,
I have heard very good words about you and I really hope that you can spare some time to advise me on an investment issue.
I have just started working for a while so I can be considered as someone who can take high risk. I bought funds on my own and I want to get a savings plan as to diversify my money.
I came across this Savings Investment Plan by X.
Premium: $1,800/annum
Benefit Illustration based on 9% investment return: On the 11th year, should earn around 13k profit on top of accumulated premium.
Break even is expected between 7 to 9 years.
Although it is non-guaranteed, the agent said that the market prices just keep going up, and stocks prices also, so it is definitely a gain in long term of around 10-20 years.
Agent advised me to take out the earnings and capital on the 11th year (eg, when the prices are good), and keep remaining 1K to continue the plan and go another cycle.
I came around another savings endowment plan which gives a lot lower rate, eg. 11K profit after 15 years.
The Savings Investment Plan is Non-guaranteed at all and depends on the unit's bid prices and economy.
I am quite interested in the projected returns but I worry that it might not even give me enough to break even since it is entirely Non-guaranteed. I have heard some people say that some companies can don't give you any non-guaranteed amount and that will be a disaster.
What do you think about non-guaranteed amounts and how often do you see companies do that? Do you think that it is safe for me to take up this Savings Investment? Or should I just take up a savings endowment plan since I can invest on my own and earn more profits?
REPLY
Please fax the Benefit Illustration for this policy to me at 64053100.
You should ask the agent to explain the following matters to you:
I have heard very good words about you and I really hope that you can spare some time to advise me on an investment issue.
I have just started working for a while so I can be considered as someone who can take high risk. I bought funds on my own and I want to get a savings plan as to diversify my money.
I came across this Savings Investment Plan by X.
Premium: $1,800/annum
Benefit Illustration based on 9% investment return: On the 11th year, should earn around 13k profit on top of accumulated premium.
Break even is expected between 7 to 9 years.
Although it is non-guaranteed, the agent said that the market prices just keep going up, and stocks prices also, so it is definitely a gain in long term of around 10-20 years.
Agent advised me to take out the earnings and capital on the 11th year (eg, when the prices are good), and keep remaining 1K to continue the plan and go another cycle.
I came around another savings endowment plan which gives a lot lower rate, eg. 11K profit after 15 years.
The Savings Investment Plan is Non-guaranteed at all and depends on the unit's bid prices and economy.
I am quite interested in the projected returns but I worry that it might not even give me enough to break even since it is entirely Non-guaranteed. I have heard some people say that some companies can don't give you any non-guaranteed amount and that will be a disaster.
What do you think about non-guaranteed amounts and how often do you see companies do that? Do you think that it is safe for me to take up this Savings Investment? Or should I just take up a savings endowment plan since I can invest on my own and earn more profits?
REPLY
Please fax the Benefit Illustration for this policy to me at 64053100.
1) How much is the distribution cost? This is the amount taken away from your savings to pay commission to the agent and other expenses. It should be not more than 50% of the annual premium.
2) What is the "effect of reduction" compared to the accumulated premium (at 5% and 9%) at the end of 25 years. This effect of deduction should not be more than 15% (to give good value to the customer).
Poor customer service in Financial Firms
This report was published in the Business Times two years ago. It is still relevant today. Consumers should avoid investing their savings in financial products that give a poor yield (due to the high commission paid to agents) and get poor customer service.
FISCA Research
A few new investment products have been introduced. Are they good or bad for consumers? What are the risks and charges?
FISCA has got its experts to do an evaluation of these products. The evaluation report will be published in the FISCA internal website, which is accessible only by members through a member login.
If you are interested to access the research, you have to be a member. The annual subscription is $36. You can join through www.fisca.sg
You will enjoy other useful benefits by being a FISCA member. Most importantly, you can attend the training courses and be educated about financial planning.
Tan Kin Lian
Difficult to make timing decisions
Sir,
I am an avid follower of your blog. It has been a source of enlightment that exposed the misleading practice that has been rampant especially in the last decade.
Currently I am in my mid twenty with stable income of a typical young graduates. I have saved approximately $10,000 so far. I am determinded to invest it wisely.
You has been highlighting the benefits of STI ETF which is now my choice due to its diversification and low charges. However recently the price has been rather high on 2600 - 2700 band. I am not sure whether I should buy it now OR wait for the price to go down?
REPLY
It is difficult to make timing decisions. I am not an expert on this matter.
For my personal investments, I have decided to sell some of my shares, as I expect that the Singapore and global economy has still not solved the underlying problems. I have decided to keep some of my spare money in cash.
Wish you all the best.
I am an avid follower of your blog. It has been a source of enlightment that exposed the misleading practice that has been rampant especially in the last decade.
Currently I am in my mid twenty with stable income of a typical young graduates. I have saved approximately $10,000 so far. I am determinded to invest it wisely.
You has been highlighting the benefits of STI ETF which is now my choice due to its diversification and low charges. However recently the price has been rather high on 2600 - 2700 band. I am not sure whether I should buy it now OR wait for the price to go down?
REPLY
It is difficult to make timing decisions. I am not an expert on this matter.
For my personal investments, I have decided to sell some of my shares, as I expect that the Singapore and global economy has still not solved the underlying problems. I have decided to keep some of my spare money in cash.
Wish you all the best.
Wednesday, October 21, 2009
Don’t Pay More For Your Insurance - Go For Online Insurance Quotes
Everything has gone online nowadays which you can find over the internet. There is much useless stuff available online that many people find for free to be worthless over the internet. Online insurance quotes are also available for free and many people believe that they are also useless but actually they are the exceptions to rest of the stuff online. There are many reasons that set them apart from much other useless stuff available online.
There are so many insurance companies such as Campbellsolberg, an American insurance company, Lombard insurance company, and prudential insurance company that want you to insure with them. It is very costly for them to get good prospects. So online insurance quotes gives them an easy and convenient way to give quotes to their customers. It is beneficial for both you and the company. Company saves a lot of money and you get the best quotes without much of besets.
Online insurance quotes are also very useful as they allow you to compare different quotes from different companies in just about 2 to 3 minutes and help you choose the best one to make savings. This would have been a lot of time consuming task if done otherwise as you will have to collect quotes from different companies and then compare them manually. Campbellsolberg provides its customers with this facility to make their tasks easier. Not only it provides the online quotes but also offers the best price in the market for any type of insurance that you want to avail.
It’s also very convenient as you can get home insurance quotes online as well as many other insurance quotes such as auto insurance quotes and disability insurance quotes just right from your bedroom.
Don’t just pay more like a fool. Choose the best insurance that suits your pocket. You can get insurance quotes and related information at http://www.campbellsolberg.com/.
There are so many insurance companies such as Campbellsolberg, an American insurance company, Lombard insurance company, and prudential insurance company that want you to insure with them. It is very costly for them to get good prospects. So online insurance quotes gives them an easy and convenient way to give quotes to their customers. It is beneficial for both you and the company. Company saves a lot of money and you get the best quotes without much of besets.
Online insurance quotes are also very useful as they allow you to compare different quotes from different companies in just about 2 to 3 minutes and help you choose the best one to make savings. This would have been a lot of time consuming task if done otherwise as you will have to collect quotes from different companies and then compare them manually. Campbellsolberg provides its customers with this facility to make their tasks easier. Not only it provides the online quotes but also offers the best price in the market for any type of insurance that you want to avail.
It’s also very convenient as you can get home insurance quotes online as well as many other insurance quotes such as auto insurance quotes and disability insurance quotes just right from your bedroom.
Don’t just pay more like a fool. Choose the best insurance that suits your pocket. You can get insurance quotes and related information at http://www.campbellsolberg.com/.
Minibond suit in Singapore let by Conrad Campos
22 Oct 2009
SINGAPORE — One of the three defendants in the second class action suit related to botched structured notes has filed its defence against allegations of negligent and fraudulent misrepresentation. The structured notes in question are one of the Minibond Series linked to collapsed United States investment bank Lehman Brothers.
Lehman Brothers Singapore, which was named as the arranger of the now-defunct Minibond Series 2 in a suit backed by 165 investors, refuted claims that the investors were misled by the statements in advertisements, base prospectus and pricing sheets of the notes.
The company is represented by Senior Counsel Andre Yeap and Mr Danny Ong from Rajah & Tann.
The other two defendants are Minibond Ltd, the issuer of the investment, and ABN Amro, one of the nine distributors of the product. They are represented by Shook Lin & Bok and Allen & Gledhill, respectively. The latter is expected to file its defence in about two weeks.
One point of contention in this case is the issue of risks faced by the Minibond investors. Earlier, the plaintiffs alleged that the defendants have perpetuated a “false and misleading” impression that the product’s “primary risk” is with the credit standing of seven companies known as the reference entities (REs).
The reference entities included names like DBS Bank, Standard Chartered Bank and SingTel and these companies form the first layer of the credit-default swaps embedded in the product. This means that the occurrence of default or bankruptcy in any of these seven companies could result in a “credit event” which can potentially cause the Minibonds to become worthless.
However, the plaintiffs — represented by their lawyer Conrad Campos and Company — alleged that the seven REs are, in fact, a “ruse” to induce investors to invest in the Minibonds. The true risk of the product lies with the second layer of underlying securities, made up of collateralised debt obligations, of which there was inadequate disclosure, they claimed.
In its 58-page defence filed on Oct 2, Lehman Singapore maintained that the credit risks related to the REs were indeed the “primary risks” borne by the investors.
In fact, Lehman Singapore claimed that the default or bankruptcy risk of the REs is “at all material times” higher than that of the underlying securities.
If there were indeed misleading representations, Lehman Singapore said that there are documents which had been signed by the plaintiffs which stated that investments were made based on their own independent judgment and appraisal of risks.
Lehman Singapore also alleged that the plaintiffs were negligent on their part such that they contributed partly or wholly to any losses incurred. In response, the plaintiffs said in their filed reply last Friday that returns from Minibond Series 2 were derived from the underlying securities. They also added that this substantiates their claims that these securities carry more risks compared to the seven REs.
As for Lehman Singapore’s point on signed warranties, the plaintiffs countered that the prospectus for the underlying securities was created only after the offer period for the sale of Minibond Series 2 had closed.
Hence, the plaintiffs said that it is “devoid of good faith, common sense and commercial reality” to expect Singapore retail investors to conduct their own investigation and analysis of the underlying securities.
SINGAPORE — One of the three defendants in the second class action suit related to botched structured notes has filed its defence against allegations of negligent and fraudulent misrepresentation. The structured notes in question are one of the Minibond Series linked to collapsed United States investment bank Lehman Brothers.
Lehman Brothers Singapore, which was named as the arranger of the now-defunct Minibond Series 2 in a suit backed by 165 investors, refuted claims that the investors were misled by the statements in advertisements, base prospectus and pricing sheets of the notes.
The company is represented by Senior Counsel Andre Yeap and Mr Danny Ong from Rajah & Tann.
The other two defendants are Minibond Ltd, the issuer of the investment, and ABN Amro, one of the nine distributors of the product. They are represented by Shook Lin & Bok and Allen & Gledhill, respectively. The latter is expected to file its defence in about two weeks.
One point of contention in this case is the issue of risks faced by the Minibond investors. Earlier, the plaintiffs alleged that the defendants have perpetuated a “false and misleading” impression that the product’s “primary risk” is with the credit standing of seven companies known as the reference entities (REs).
The reference entities included names like DBS Bank, Standard Chartered Bank and SingTel and these companies form the first layer of the credit-default swaps embedded in the product. This means that the occurrence of default or bankruptcy in any of these seven companies could result in a “credit event” which can potentially cause the Minibonds to become worthless.
However, the plaintiffs — represented by their lawyer Conrad Campos and Company — alleged that the seven REs are, in fact, a “ruse” to induce investors to invest in the Minibonds. The true risk of the product lies with the second layer of underlying securities, made up of collateralised debt obligations, of which there was inadequate disclosure, they claimed.
In its 58-page defence filed on Oct 2, Lehman Singapore maintained that the credit risks related to the REs were indeed the “primary risks” borne by the investors.
In fact, Lehman Singapore claimed that the default or bankruptcy risk of the REs is “at all material times” higher than that of the underlying securities.
If there were indeed misleading representations, Lehman Singapore said that there are documents which had been signed by the plaintiffs which stated that investments were made based on their own independent judgment and appraisal of risks.
Lehman Singapore also alleged that the plaintiffs were negligent on their part such that they contributed partly or wholly to any losses incurred. In response, the plaintiffs said in their filed reply last Friday that returns from Minibond Series 2 were derived from the underlying securities. They also added that this substantiates their claims that these securities carry more risks compared to the seven REs.
As for Lehman Singapore’s point on signed warranties, the plaintiffs countered that the prospectus for the underlying securities was created only after the offer period for the sale of Minibond Series 2 had closed.
Hence, the plaintiffs said that it is “devoid of good faith, common sense and commercial reality” to expect Singapore retail investors to conduct their own investigation and analysis of the underlying securities.
Big swings in currency values
I saw a currency chart of the Euro against the USD. The Euro was at USD1.55 in July 2008. It dropped 20% to USD 1.25 in November (i.e. 4 months). Over the past 11 months, it increased by 20% (on its lower base) to USD 1.50 in October 2009.
Lesson: currency values can swing by 20% within a few months. It is highly volatile and risky.
TKL Financial Planning (draft 5a)
My friend in Jakarta downloaded a copy of my Financial Planning book (draft 5a). He printed it, cut into A5 size and bound the book. It came out quite handy and easy to read. He found it to be useful and practical.
You can download a copy of the book (for free) here. Please give your feedback here. I encourage you to join FISCA as a member and attend their workshops and seminars based on this book.
You can download a copy of the book (for free) here. Please give your feedback here. I encourage you to join FISCA as a member and attend their workshops and seminars based on this book.
Writing a will
Dear Sir
Would you also kindly touch on the issue of writing a will? Is it a must to have a will in a family? Isn't it a norm that if something say happen to me, everything will goes to my spouse and kids?
There's a link provided by one of my friends and I am not sure if it's applicable to most of us here in Singapore - http://www.singaporelawraffles.com/will.htm
Maybe you can provide the general viewers of your blog some insights into writing a will.
REPLY
For a person who dies without a will, the estate will be distributed according to the Intestate Law. If the person has a wife and children, one half will be distributed to the surviving spouse and the other half to the children. However, the actual rules are described in this law.
If a person wants to distribute his (or her) estate in a different manner, he has to write a will. A simple will can be written by any person (without a lawyer) and signed by two witnesses who are not beneficiaries or connected to the will. The will has to be kept in a safe place that can be discovered on death.
A person can write a will and change it at any time. It is a good practice to review the will every few years.
Here is my personal tip. Keep enough money for your own use, such as buying a lifetime annuity, and distribute some of your assets to your children earlier, so that they can make better use of the assets. Do not keep too much to be distributed on death.
Tan Kin Lian
Would you also kindly touch on the issue of writing a will? Is it a must to have a will in a family? Isn't it a norm that if something say happen to me, everything will goes to my spouse and kids?
There's a link provided by one of my friends and I am not sure if it's applicable to most of us here in Singapore - http://www.singaporelawraffles.com/will.htm
Maybe you can provide the general viewers of your blog some insights into writing a will.
REPLY
For a person who dies without a will, the estate will be distributed according to the Intestate Law. If the person has a wife and children, one half will be distributed to the surviving spouse and the other half to the children. However, the actual rules are described in this law.
If a person wants to distribute his (or her) estate in a different manner, he has to write a will. A simple will can be written by any person (without a lawyer) and signed by two witnesses who are not beneficiaries or connected to the will. The will has to be kept in a safe place that can be discovered on death.
A person can write a will and change it at any time. It is a good practice to review the will every few years.
Here is my personal tip. Keep enough money for your own use, such as buying a lifetime annuity, and distribute some of your assets to your children earlier, so that they can make better use of the assets. Do not keep too much to be distributed on death.
Tan Kin Lian
Betting - getting the right payout
Gambling is a game of chance. It is fun. Many people enjoy it. A common type of gambling is a bet.
When you bet on an outcome with a friend, you have the choice of taking either side of the bet. You do not have to incur any expense. What one person gains is the loss of the other person.
When you place a bet with a betting house, you have to incur a spread. For example, you may lose $100 when you win the bet but only win $90 when you lose the bet. The spread in this case is 10%. The betting house needs the spread to cover its expenses and to make a profit.
The betting house is ready to take you bet at any time, but the odds may change according to the time that you placed your bet.
When you place a bet on a sporting game, there is the risk that the party that collects the bets may bribe the player towards an outcome that is profitable to that party. This is called "fixing the game" and is a crime. You have to be careful about betting on a game that can be fixed. In that case, you will get less than your fair payout.
When you bet on certain type of games in a casino, you can calculate the actual odds of winning or losing the bet, based on the physical characteristics. For example, the chance of drawing an ace in a pack of cards is 1 in 13. The chance of getting the right number on the roll of a dice is 1 in 6. The chance of picking the right number in a rouletter is 1 in 38 (i.e. 36 numbers plus 0 and 00).
You can pick on any outcome, but the reward for getting it right will be based on the actual odds, less an expense margin.
For example, in roulette, you will win $35 for each $1 that you have bet although the chance of losing is 1 in 37. If there are equal bets on the 36 numbers, the casino will break even on 36 out of 38 cases and win all the entire bets on 2 out of 38 cases. The spread is nearly 5%. This is used to cover the expenses of running the casino and producing a profit.
Note: you should avoid bets where the payout is not fair to the better, or where the spread is higher than the entertainment value.
Tan Kin Lian
When you bet on an outcome with a friend, you have the choice of taking either side of the bet. You do not have to incur any expense. What one person gains is the loss of the other person.
When you place a bet with a betting house, you have to incur a spread. For example, you may lose $100 when you win the bet but only win $90 when you lose the bet. The spread in this case is 10%. The betting house needs the spread to cover its expenses and to make a profit.
The betting house is ready to take you bet at any time, but the odds may change according to the time that you placed your bet.
When you place a bet on a sporting game, there is the risk that the party that collects the bets may bribe the player towards an outcome that is profitable to that party. This is called "fixing the game" and is a crime. You have to be careful about betting on a game that can be fixed. In that case, you will get less than your fair payout.
When you bet on certain type of games in a casino, you can calculate the actual odds of winning or losing the bet, based on the physical characteristics. For example, the chance of drawing an ace in a pack of cards is 1 in 13. The chance of getting the right number on the roll of a dice is 1 in 6. The chance of picking the right number in a rouletter is 1 in 38 (i.e. 36 numbers plus 0 and 00).
You can pick on any outcome, but the reward for getting it right will be based on the actual odds, less an expense margin.
For example, in roulette, you will win $35 for each $1 that you have bet although the chance of losing is 1 in 37. If there are equal bets on the 36 numbers, the casino will break even on 36 out of 38 cases and win all the entire bets on 2 out of 38 cases. The spread is nearly 5%. This is used to cover the expenses of running the casino and producing a profit.
Note: you should avoid bets where the payout is not fair to the better, or where the spread is higher than the entertainment value.
Tan Kin Lian
Automated gates - a waste of money
Are the automated gates used to check passports a waste of money? Read here.
Tuesday, October 20, 2009
Reduce taxi fares
Here is my suggestion to reduce the taxi fares - reduced wasted time and travelling by making better use of taxi calling.
A counter staff who said "yes"
I had an unusual encounter with a staff who said "yes" at the check-in counter. It is typical of Singaporeans to say "no". Read the story here.
Gambling and investing
Gambling is a game of chance. You bet a sum of money on a future outcome. You hope that it happens and you win the bet. If it does not happen, you lose the bet.
You can gamble on a game of roulette that has the number 1 to 36. You choose a number and place a bet. If the number appears on the next role, you win a price of 35 times of your bet. If it does not appear, you lose your bet.
You can also gamble on a 4 digit number or the numbers that will appear in Toto. You can also gamble on the Big Sweep and hope that win a large prize if your ticket number is drawn.
When you "invest" in a stock or foreign currency, you are also gambling that the price of the stock or currency will go up and give you a profit. If it goes down and you are not able to hold the position (e.g. if you are on borrowed money), you will have to sell the stock or currency and take a loss. You are actually gambling (or speculating - to use a nice word) on the price of the stock or share.
If you choose a good stock and is prepared to keep it for a long time to earn a share of the future profits, and you do not bother about the price of the stock, you can be considered as "investing" in the stock.
When you gamble, and this includes speculating in financial products, you have to make sure that you are getting a fair payout for your risk of loss. If you have a 1 in 6 chance of winning (and 5 in 6 chance of losing) in a game of dice, you should get a payout of 5 times for winning.
You should avoid structured products where the chance of winning is not transparent to you. You are likely to be given a lower payout than is justified by the risk that you are taking.
I shall write more about calculating the odds (or chance of winning) in a later article.
Tan Kin Lian
You can gamble on a game of roulette that has the number 1 to 36. You choose a number and place a bet. If the number appears on the next role, you win a price of 35 times of your bet. If it does not appear, you lose your bet.
You can also gamble on a 4 digit number or the numbers that will appear in Toto. You can also gamble on the Big Sweep and hope that win a large prize if your ticket number is drawn.
When you "invest" in a stock or foreign currency, you are also gambling that the price of the stock or currency will go up and give you a profit. If it goes down and you are not able to hold the position (e.g. if you are on borrowed money), you will have to sell the stock or currency and take a loss. You are actually gambling (or speculating - to use a nice word) on the price of the stock or share.
If you choose a good stock and is prepared to keep it for a long time to earn a share of the future profits, and you do not bother about the price of the stock, you can be considered as "investing" in the stock.
When you gamble, and this includes speculating in financial products, you have to make sure that you are getting a fair payout for your risk of loss. If you have a 1 in 6 chance of winning (and 5 in 6 chance of losing) in a game of dice, you should get a payout of 5 times for winning.
You should avoid structured products where the chance of winning is not transparent to you. You are likely to be given a lower payout than is justified by the risk that you are taking.
I shall write more about calculating the odds (or chance of winning) in a later article.
Tan Kin Lian
Continue working to stay in good health
It is better to continue working after the normal retirement age, either in a full or part time job, preferably in a familiar job, according to this report.
A poor deal for consumers on single premium policies
Published in Straits Times Online on 20 October 2009
Recently, I was shown the benefit illustrations for two single premium policies sold by two different insurance companies.
I was surprised to find in both cases that the surrender value on the first year is less than 75% of the single premium and that it would take 8 years or longer for the surrender value to reach the breakeven point, i.e. exceed the amount that has been invested.
Although these policies pay a death benefit that is higher than single premium in the event of death, the cost of this protection should be relatively small and should not require such a large amount to be deducted.
There could be extreme situation where a high surrender penalty is justified, such as a sharp increase in interest rate, but in normal circumstances, this type of penalty and high charges are unfair to consumers.
In both cases, the policyholders were not aware about the implication of locking up a large sum of money for long periods on an investment that gives a rather poor yield. They did not get the proper explanation from the insurance adviser and sought my assistance.
The Monetary Authority of Singapore has asked the board and senior management of financial institutions to be responsible for achieving “fair dealing outcomes” for their customers.
I hope that the MAS would ask the insurance companies that issue this type of product to explain how the product could be considered as being fair to their customers.
Tan Kin Lian
Recently, I was shown the benefit illustrations for two single premium policies sold by two different insurance companies.
I was surprised to find in both cases that the surrender value on the first year is less than 75% of the single premium and that it would take 8 years or longer for the surrender value to reach the breakeven point, i.e. exceed the amount that has been invested.
Although these policies pay a death benefit that is higher than single premium in the event of death, the cost of this protection should be relatively small and should not require such a large amount to be deducted.
There could be extreme situation where a high surrender penalty is justified, such as a sharp increase in interest rate, but in normal circumstances, this type of penalty and high charges are unfair to consumers.
In both cases, the policyholders were not aware about the implication of locking up a large sum of money for long periods on an investment that gives a rather poor yield. They did not get the proper explanation from the insurance adviser and sought my assistance.
The Monetary Authority of Singapore has asked the board and senior management of financial institutions to be responsible for achieving “fair dealing outcomes” for their customers.
I hope that the MAS would ask the insurance companies that issue this type of product to explain how the product could be considered as being fair to their customers.
Tan Kin Lian
Monday, October 19, 2009
Sudoku - Very Difficult Puzzles
Sunday, October 18, 2009
Wider duty of a lawyer
My friend, who is now attempting the final part of his training to be a lawyer, made this statement, "The duty of a lawyer is to protect the best interest of his client".
I asked him if the lawyer has a duty to uphold the integrity of the legal process. For example, is it all right for a lawyer to act for the client in the following actions?
a) writing a prospectus that is confusing to the public?
b) arranging an investment scheme that defrauds the public?
c) intimidating the public with defamatory action without sufficient grounds?
d) helping the client to draft untrue statements?
I asked him if the lawyer has a duty to uphold the integrity of the legal process. For example, is it all right for a lawyer to act for the client in the following actions?
a) writing a prospectus that is confusing to the public?
b) arranging an investment scheme that defrauds the public?
c) intimidating the public with defamatory action without sufficient grounds?
d) helping the client to draft untrue statements?
e) drafting legal contracts that are unfair to the customers (i.e. possible contravention of the fair trading act)?
My friend found it difficult to answer my questions. The law is not clear on these matters. There are insufficient case history to rely on.
I will be asking the Law Society on these ethical questions. I hope that they can provide some guidance to their members who are practicing lawyers.
Tan Kin Lian
My friend found it difficult to answer my questions. The law is not clear on these matters. There are insufficient case history to rely on.
I will be asking the Law Society on these ethical questions. I hope that they can provide some guidance to their members who are practicing lawyers.
Tan Kin Lian
Capital Protected Product - sold in 2002
A customer invested $25,000 in the structured product sold by a local bank in early 2002. After waiting for 5 years, the customer received a return of $25,528. The gain is $528 (i.e 2.1% for 5 years, or 0.4% per year).
The formula used to compute this return is:
(a) 5% for 5 years or
(b) 45% of the smallest absolute performance of 1 stock out of 15 selected stocks.
Among the 15 selected stocks, at least 1 of them showed an absolute loss for the 5 years. So, formula (b) produced nothing.
The investor gets 5% for 5 years under formula (a), but after deducting the sales charge, the net return is only 2.1% for 5 years.
During these 5 years, the return from the 15 stocks is probably 30% or more. The customer gets 2.1%. If the customer had invested directly in the 15 stocks and taken the risk, the return would have been very attractive.
What is the logic of formula (b)? I cannot understand its logic. It seems to me, that it is designed to take advantage of the naive customers.
I cannot understand how the regulators can allow the unsavvy customers from buying into this type of product.
Tan Kin Lian
The formula used to compute this return is:
(a) 5% for 5 years or
(b) 45% of the smallest absolute performance of 1 stock out of 15 selected stocks.
Among the 15 selected stocks, at least 1 of them showed an absolute loss for the 5 years. So, formula (b) produced nothing.
The investor gets 5% for 5 years under formula (a), but after deducting the sales charge, the net return is only 2.1% for 5 years.
During these 5 years, the return from the 15 stocks is probably 30% or more. The customer gets 2.1%. If the customer had invested directly in the 15 stocks and taken the risk, the return would have been very attractive.
What is the logic of formula (b)? I cannot understand its logic. It seems to me, that it is designed to take advantage of the naive customers.
I cannot understand how the regulators can allow the unsavvy customers from buying into this type of product.
Tan Kin Lian
How the product works
| The bank invest about 85% of the money in a low risk bond that will give 100% of the capital guaranteed at the end of 5 years. It uses the remaining 15% for its marketing, purchase an option to give the 45% payout and for its profits. I have no clue how much is the option money, but it is likely to be less than 5%. At least 10% of the invested sum is wasted in expenses and profit for the bank. The chance of striking formula (b) is probably less than 5% anyway. |
RED Portal (20)
Click on the label "RED Portal" on the right to get a list of all the articles on the Real Estate Data. Do your research of the property market before you decide to buy, sell or rent any private property.
Public Forum on CPF Life
Venue: Park Mall, Meeting Room level 13 (opposite Dholby Ghaut MRT)
Date: 24 Oct 09 (Sat)
Time: 230 - 530 pm
Interested participants may register at clubs.ntu.edu.sg/rms
RED Portal (19) - Latest Transctions
How is the property market moving?
The RED Portal has a new feature. It shows the latest 100 transactions compared with the benchmark price (BMP). It gives an idea on the trend of prices in recent transactions for specific projects.
The transaction date shows the lodging of the caveat which can be between 1 to 3 months from the actual date of the initial negotiation.
Latest transactions.
The RED Portal has a new feature. It shows the latest 100 transactions compared with the benchmark price (BMP). It gives an idea on the trend of prices in recent transactions for specific projects.
The transaction date shows the lodging of the caveat which can be between 1 to 3 months from the actual date of the initial negotiation.
Latest transactions.
Saturday, October 17, 2009
Benefit Illustration for a Life Insurance Policy
If you have bought a life insurance policy within the last two years and you wish to me give you an analysis, you can send it by fax to me at 64053100.
Guaranteed products
Some people like to have guaranteed products. They may not realise that these products are "guaranteed to lose".
Suppose you buy a product that is guaranteed to give you a yield of 5% over 20 years. Is this a good product?
If there is high inflation in the future, the value of your investment will drop. You are locked into a product with a low yield, compared to the market rates. The issuer of the product makes a big profit.
If interest rate drops to near zero, like in Japan for many years, will you benefit by getting the guaranteed 5%? Maybe not. If the issuer is not able to meet its obligation, they will declare bankrupcy. You lose again.
Do not buy a guaranteed product unless it is backed by a financially strong institution. Do not buy a "guaranteed product" which may be "guaranteed to lose".
This is why I prefer to buy an exchange traded fund of equities and keep it for the long term. It has liquidity, transparency and diversification. It does not provide any guarantee, but is likely to give a better yield than any guaranteed product.
Note on Exchange Traded Fund (ETF)
There are several ETF available in the Singapore Exchange. The most well known is the STI ETF which is intended to track the performance of the Straits Times Index. It offers diversification into several large stocks and has low annual fee of 0.3%. You have to ask your stockbroker about the ETF or attend a briefing organised by SGX.
Suppose you buy a product that is guaranteed to give you a yield of 5% over 20 years. Is this a good product?
If there is high inflation in the future, the value of your investment will drop. You are locked into a product with a low yield, compared to the market rates. The issuer of the product makes a big profit.
If interest rate drops to near zero, like in Japan for many years, will you benefit by getting the guaranteed 5%? Maybe not. If the issuer is not able to meet its obligation, they will declare bankrupcy. You lose again.
Do not buy a guaranteed product unless it is backed by a financially strong institution. Do not buy a "guaranteed product" which may be "guaranteed to lose".
This is why I prefer to buy an exchange traded fund of equities and keep it for the long term. It has liquidity, transparency and diversification. It does not provide any guarantee, but is likely to give a better yield than any guaranteed product.
Note on Exchange Traded Fund (ETF)
There are several ETF available in the Singapore Exchange. The most well known is the STI ETF which is intended to track the performance of the Straits Times Index. It offers diversification into several large stocks and has low annual fee of 0.3%. You have to ask your stockbroker about the ETF or attend a briefing organised by SGX.
Postive views about CPF Life
I believe that CPF Life is good for the people. Here are my reasons:
a)It is operated as a mutual scheme. The future payment will reflect the investment yield and mortality experience.
b) The administrative expense is low
c) Most people (except the affluent) will receive a bonus when they join the scheme
d) The interest rate credited to the investments is higher than the market rates.
e) CPF or the Government will not make any profit from the scheme.
Members who buy CPF Life is getting a good deal, much better than any life annuity that can be offered by an insurance company. The view held by some people, that the Government is trying to make money from CPF Life is unfounded.
The non-guaranteed nature of the monthly payout will work better for the members. If there is high inflation in the future, it is likely that a higher payount will be made under CPF Life (as inflation is usually accompanied by higher interest rate).
I hope that readers of my blog will listen to my positive views on CPF Life and not be influenced by the negative views and the distrust.
Tan Kin Lian
a)It is operated as a mutual scheme. The future payment will reflect the investment yield and mortality experience.
b) The administrative expense is low
c) Most people (except the affluent) will receive a bonus when they join the scheme
d) The interest rate credited to the investments is higher than the market rates.
e) CPF or the Government will not make any profit from the scheme.
Members who buy CPF Life is getting a good deal, much better than any life annuity that can be offered by an insurance company. The view held by some people, that the Government is trying to make money from CPF Life is unfounded.
The non-guaranteed nature of the monthly payout will work better for the members. If there is high inflation in the future, it is likely that a higher payount will be made under CPF Life (as inflation is usually accompanied by higher interest rate).
I hope that readers of my blog will listen to my positive views on CPF Life and not be influenced by the negative views and the distrust.
Tan Kin Lian
Difference of views
Mr. Tan,
You seem to block opinion that differs from yours. Don't you allow other people to post their differing views
REPLY
I have to block comments that are potentially defamatory. I suspect that some people may get their own people to put ananymous comments to attack themselves, and then get a lawyer to give me trouble. This is dishonest, but is possible.
There are comments that attack my views. If you wish your comments to be accepted, you have to show respect for my views and be courteous. Do not be abusive or arrogant.
Some people post views for the sake of debating. This causes confusion and is not helpful. My blog is intended to educate people, and is not intended to be a place for academic debate.
Some people want to argue the perceived advantages of their products. Please go to your own company's website to do your marketing.
You seem to block opinion that differs from yours. Don't you allow other people to post their differing views
REPLY
I have to block comments that are potentially defamatory. I suspect that some people may get their own people to put ananymous comments to attack themselves, and then get a lawyer to give me trouble. This is dishonest, but is possible.
There are comments that attack my views. If you wish your comments to be accepted, you have to show respect for my views and be courteous. Do not be abusive or arrogant.
Some people post views for the sake of debating. This causes confusion and is not helpful. My blog is intended to educate people, and is not intended to be a place for academic debate.
Some people want to argue the perceived advantages of their products. Please go to your own company's website to do your marketing.
Finally, those who dislike my views are not required to visit this blog. Goodbye.
Articles in my blog
I post several articles in my blog every day.
A few regular visitors to my blog send articles to me, usually of news clippings from other newspapers on insurance, finance and other issues covered in my blog. If I find them relevant, I post them into my blog with my comments.
Some contributors have a specific purpose. For example, they had bad investments in land banking products and send articles to me to warn others about the bad experience.
Some had a bad opinion about insurance agents. They continue to post comments to attack insurance agents. I find these comments to be unjustified and have blocked many of them.
I write some articles on my own based on my knowledge and research. These articles will usually carry my name.
A few regular visitors to my blog send articles to me, usually of news clippings from other newspapers on insurance, finance and other issues covered in my blog. If I find them relevant, I post them into my blog with my comments.
Some contributors have a specific purpose. For example, they had bad investments in land banking products and send articles to me to warn others about the bad experience.
Some had a bad opinion about insurance agents. They continue to post comments to attack insurance agents. I find these comments to be unjustified and have blocked many of them.
I write some articles on my own based on my knowledge and research. These articles will usually carry my name.
Dislike of CPF Life
I met a retiree. He expressed a strong dislike of CPF Life. He said that the four options are misleading. The Government said that there is a refund to the beneficiary on the death of the annuitant. He argued that if the annuitant lives long enough, there will be no further refund.
I disagree with his reasoning. He should not complain about the available of options or the fact that there is no refund, if the annuitant lives to an advanced age. But, he refuses to listen.
I am quite sad at the distrust of the Government expressed by this person. This distrust seems to be quite widespread. It is not justified in this particular instance about the CPF Life.
Tan Kin Lian
I disagree with his reasoning. He should not complain about the available of options or the fact that there is no refund, if the annuitant lives to an advanced age. But, he refuses to listen.
I am quite sad at the distrust of the Government expressed by this person. This distrust seems to be quite widespread. It is not justified in this particular instance about the CPF Life.
Tan Kin Lian
Wasteful reserving of parking spaces
It is wasteful to reserve parking spaces for season parking in HDB estates as many of the spaces are empty during the day time and visitors had a difficult time to find an empty space to park the car. Read here.
Confusing road names in Singapore
An American, who now lives in Singapore, found the road names to be confusing. Read her views here.
Financial planning - Practical Steps (draft 5a)
Jobs in Life Insurance industry
Mr. Tan,
You have recommended people to buy Term insurance. If everyone takes your advice, will there be enough jobs for the people working in the life insurance industry?
REPLY
Yes. There will be enough jobs - as many as there are now working in the industry. They will be providing a better quality of service to customers in financial planning and insurance. I shall talk about this matter in a separate article.
You have recommended people to buy Term insurance. If everyone takes your advice, will there be enough jobs for the people working in the life insurance industry?
REPLY
Yes. There will be enough jobs - as many as there are now working in the industry. They will be providing a better quality of service to customers in financial planning and insurance. I shall talk about this matter in a separate article.
Friday, October 16, 2009
A confusing ILP product that gave poor yield
A policyholders send to me a benefit illustration of an investment linked policy. I was surprised to find the poor yield given to the policyholder. (Note: I have reduced the figures proportionately to below avoid the identification of the policyholder).
The policyholder pays $1,000 a month. At the end of 20 years, the accumulated premium (at the projected 9%) should have been $668,000. The projected non-guaranteed payout to the policyholder was only $280,000 (42% of $668,000). The effect of deduction was $388,000 (58%). More than half of the accumulated amount was taken away.
Based on the above figures, the actual yield to the policyholder was 1.5%. This is a reduction of 7.5% from the projected yield of 9%. Based on the lower projected yield of 5%, the net yield was 0.8% and the reduction was 4.2%. (I do not understand why the reduction in yield should be so far apart).
I asked the policyholder to call me, and to know what he understood about the product. He appeared to be quite confused about how it worked. He said that the adviser mentioned something about the saving component and the investment component which was not clear to him. He did not understand the effect of deduction.
He complained about the high distribution cost (of $24,000), which was not explained to him at the point of sale. I advised the policyholder to seek the assistance of FISCA (www.fisca.sg) to prepare a letter of complaint.
I cannot understand how such kind of product can be allowed to be sold to the public and how the insurance company can justify that it is offering "fair dealing outcome" to their customers, as required by MAS regulations.
Tan Kin Lian
The policyholder pays $1,000 a month. At the end of 20 years, the accumulated premium (at the projected 9%) should have been $668,000. The projected non-guaranteed payout to the policyholder was only $280,000 (42% of $668,000). The effect of deduction was $388,000 (58%). More than half of the accumulated amount was taken away.
Based on the above figures, the actual yield to the policyholder was 1.5%. This is a reduction of 7.5% from the projected yield of 9%. Based on the lower projected yield of 5%, the net yield was 0.8% and the reduction was 4.2%. (I do not understand why the reduction in yield should be so far apart).
I asked the policyholder to call me, and to know what he understood about the product. He appeared to be quite confused about how it worked. He said that the adviser mentioned something about the saving component and the investment component which was not clear to him. He did not understand the effect of deduction.
He complained about the high distribution cost (of $24,000), which was not explained to him at the point of sale. I advised the policyholder to seek the assistance of FISCA (www.fisca.sg) to prepare a letter of complaint.
I cannot understand how such kind of product can be allowed to be sold to the public and how the insurance company can justify that it is offering "fair dealing outcome" to their customers, as required by MAS regulations.
Tan Kin Lian
Blow the whistle on hidden charges
Here is a letter by Su Kim Teck printed in the Strait Times.
I have written a reply to the Straits Times to address the key points in the letter. In this blog I will only touch on the point why I did not "blow the whistle" earlier on the hidden charges.
First, I wish to point out that this type of personal attack is not necessary for the debate. As the Straits Times found it appropriate to print it, I have to give my reply.
My explanation is:
a) I did raise this issue earlier, but they did not reach the public domain
b) It would not be appropriate for me to criticize the marketing methods of the other insurance companies openly
c) Perhaps NTUC Income was also involved in adopting some of the "market practice" at that time.
When NTUC Income introduced its investment linked policy during my time, it kept its upfront charges to a total of 45% of the annual premium (compared to 160% of most other insurance companies) and made it quite explicit. Another product was introduced that kept the charges to a fixed amount (at a rather modest level).
Tan Kin Lian
I have written a reply to the Straits Times to address the key points in the letter. In this blog I will only touch on the point why I did not "blow the whistle" earlier on the hidden charges.
First, I wish to point out that this type of personal attack is not necessary for the debate. As the Straits Times found it appropriate to print it, I have to give my reply.
My explanation is:
a) I did raise this issue earlier, but they did not reach the public domain
b) It would not be appropriate for me to criticize the marketing methods of the other insurance companies openly
c) Perhaps NTUC Income was also involved in adopting some of the "market practice" at that time.
When NTUC Income introduced its investment linked policy during my time, it kept its upfront charges to a total of 45% of the annual premium (compared to 160% of most other insurance companies) and made it quite explicit. Another product was introduced that kept the charges to a fixed amount (at a rather modest level).
Tan Kin Lian
Trust in the Government
QUOTE
When governments state that certain events have not happened, and yet we have the victims before us to testify that they did, governments lose their and their credibility and authority.
We see before us today governments that lack the real authority that can only come from the support their people give them, and have to make up for that lack by the use of force.
They do not have the support of the people because they are not trusted by their own people. We hear many fine words seeking national unity, cooperation and harmony; yet, almost in the same breath orders are given to military units to shoot civilians, round up civilian protesters many of whom either simply disappear or are subject to inhumane torture.
Governments which govern by the use of force are able to remain in power by the use of force. And there is no going back because force begets force, and the perpetrators of crimes live in fear that they might become victims of their own evil deeds
UNQOTE
Bishop Carlos Felipe Ximenes Belo
Reconciliation Speech of 24/2/99 at St Mary's Cathedral Hall, Sydney, NSW
When governments state that certain events have not happened, and yet we have the victims before us to testify that they did, governments lose their and their credibility and authority.
We see before us today governments that lack the real authority that can only come from the support their people give them, and have to make up for that lack by the use of force.
They do not have the support of the people because they are not trusted by their own people. We hear many fine words seeking national unity, cooperation and harmony; yet, almost in the same breath orders are given to military units to shoot civilians, round up civilian protesters many of whom either simply disappear or are subject to inhumane torture.
Governments which govern by the use of force are able to remain in power by the use of force. And there is no going back because force begets force, and the perpetrators of crimes live in fear that they might become victims of their own evil deeds
UNQOTE
Bishop Carlos Felipe Ximenes Belo
Reconciliation Speech of 24/2/99 at St Mary's Cathedral Hall, Sydney, NSW
Heavy penalty on single premium policy
I have seen the single premium whole life product issued by at least two large life insurance companies.
It is quite unfair for the insurance company to penalise the policyholder by 25% of the single premium on early termination and to take almost 10 years to reach the break-even point. The actual cost of the life insurance protection is quite low. There is no need for this heavy penalty.
I hope that the MAS will consider the fairness of this product. After all, they did ask the top management and board to be responsible for "fair dealing outcomes" for their policyholders.
I cannot stretch my imagination to believe that such terms can be considered to be fair. It may be legal, i.e. written in the contract under "caveat emptor", but it is not fair to impose such terms on unwary customers.
Tan Kin Lian
It is quite unfair for the insurance company to penalise the policyholder by 25% of the single premium on early termination and to take almost 10 years to reach the break-even point. The actual cost of the life insurance protection is quite low. There is no need for this heavy penalty.
I hope that the MAS will consider the fairness of this product. After all, they did ask the top management and board to be responsible for "fair dealing outcomes" for their policyholders.
I cannot stretch my imagination to believe that such terms can be considered to be fair. It may be legal, i.e. written in the contract under "caveat emptor", but it is not fair to impose such terms on unwary customers.
Tan Kin Lian
Illustration for my financial planning book
I need someone to put in some illustration for my financial planning book. I hope to get some voluntary service (which will be acknowledged) but I am also willing to pay a modest fee. Interested? Please send email to kinlian@gmail.com
Avoid defamation
I like to ask commenters to avoid statements that can be considered to be defamatory. Please avoid using specific names against commercial or government entities.
Be positive in your postings. Identify what is right, rather than focus on what is wrong. Avoid putting any person or organisation in a bad light.
Be positive in your postings. Identify what is right, rather than focus on what is wrong. Avoid putting any person or organisation in a bad light.
Bullying
From Wikipedia
Bullying is repeated acts over time that involves a real or perceived imbalance of power with the more powerful child or group attacking those who are less powerful. (U.S. Dept. of Justice, Fact Sheet #FS-200127)
Bullying can be verbal harassment, physical assault, or other more subtle methods of coercion such as manipulation. Bullying can be defined in many different ways.
Although the UK currently has no legal definition of bullying, some US states have laws against it. Bullying is usually done to coerce others by fear or threat. Bullying can be prevented when children are taught social skills to successfully interact with people. This will help them to be productive adults when interacting with bothersome people. Bullying in school and the workplace is also referred to as peer abuse.
In colloquial speech, bullying often describes a form of harassment perpetrated by an abuser who possesses more physical and/or social power and dominance than the victim. The victim of bullying is sometimes referred to as a target. The harassment can be verbal, physical and/or emotional.
Sometimes bullies will pick on people bigger or smaller than their size. Bullies hurt people verbally and physically.
Bullying is repeated acts over time that involves a real or perceived imbalance of power with the more powerful child or group attacking those who are less powerful. (U.S. Dept. of Justice, Fact Sheet #FS-200127)
Bullying can be verbal harassment, physical assault, or other more subtle methods of coercion such as manipulation. Bullying can be defined in many different ways.
Although the UK currently has no legal definition of bullying, some US states have laws against it. Bullying is usually done to coerce others by fear or threat. Bullying can be prevented when children are taught social skills to successfully interact with people. This will help them to be productive adults when interacting with bothersome people. Bullying in school and the workplace is also referred to as peer abuse.
In colloquial speech, bullying often describes a form of harassment perpetrated by an abuser who possesses more physical and/or social power and dominance than the victim. The victim of bullying is sometimes referred to as a target. The harassment can be verbal, physical and/or emotional.
Sometimes bullies will pick on people bigger or smaller than their size. Bullies hurt people verbally and physically.
Article about Profitable Group
Hi Mr. Tan
Why did you withdraw your blog? Are you a coward?
What are you going to do with the defamatory statements in the Profitable Group website that are attacking you personally? Will you sue them?
Did you do any research before you post the article?
REPLY
My blog article was extracted from the Guardian website. Someone, presumably an investor, sent the article to me, requesting for it to be posted. I checked against the link and found that it was posted in the Guardian website.
Several of the statements refer to land banking in general and not specifically to Profitable Group. There were a few statements referring directly to Profitable Group but they looked quite factual to me. So, I posted the article in my blog.
When Profitable Group said that the article contained untruths, I removed it from my blog immediately. I also offered to post any correction that they wish to send to me. In particular, I asked for any correction that they sent to the Guardian article to be sent to me.
It is not a matter of cowardice. It is a matter of being fair. I do not hold any malice towards Profitable Group or any of its directors and do not wish to damage their reputation through any unintended mistake.
I have seen the statements made by Profitable Group in their website that do appear to attack me personally. I do not intend to take legal action against them for these statements. I will let the public make their own judgement about my character. Let the truth prevails. Let the facts speak for themselves.
Tan Kin Lian
Why did you withdraw your blog? Are you a coward?
What are you going to do with the defamatory statements in the Profitable Group website that are attacking you personally? Will you sue them?
Did you do any research before you post the article?
REPLY
My blog article was extracted from the Guardian website. Someone, presumably an investor, sent the article to me, requesting for it to be posted. I checked against the link and found that it was posted in the Guardian website.
Several of the statements refer to land banking in general and not specifically to Profitable Group. There were a few statements referring directly to Profitable Group but they looked quite factual to me. So, I posted the article in my blog.
When Profitable Group said that the article contained untruths, I removed it from my blog immediately. I also offered to post any correction that they wish to send to me. In particular, I asked for any correction that they sent to the Guardian article to be sent to me.
It is not a matter of cowardice. It is a matter of being fair. I do not hold any malice towards Profitable Group or any of its directors and do not wish to damage their reputation through any unintended mistake.
I have seen the statements made by Profitable Group in their website that do appear to attack me personally. I do not intend to take legal action against them for these statements. I will let the public make their own judgement about my character. Let the truth prevails. Let the facts speak for themselves.
Tan Kin Lian
Thursday, October 15, 2009
Benefit Illustration - Single Premium Whole Life policy
A customer sent me a Benefit Illustration for a Single premium Whole Life policy. My analysis is shown here. It shows the key points that you need to see in the Benefit Illustration.
Hi Mr Tan,
Thanks you so much for the detailed analysis. I think a lot of people who bought insurance policy did not look deep into the details and think it through. I think your analysis is very detailed, step by step and easy to understand. I hope more readers can benefit from your experience and make informed decisions on their future financial planning.
Fair treatment to all
I heard that some investors who were active in organising the class action on the credit linked notes had been offered more attractive terms of compensation than other investors in similar situations. They accepted the compensation and discontinued taking the lead in the class action.
I do not have the chance to verify the truth of this statement, as the terms of the settlement are covered under "non disclosure agreements". If this is true, then we have a situation where people are treated differently "for commercial reasons", according to their special position. Is this a new form of corruption?
In some countries, these allegations will be invested by the authority to ensure that there is fair treatment to all affected parties. I hope that our regulators in Singapore will be willing to take this step.
Tan Kin Lian
I do not have the chance to verify the truth of this statement, as the terms of the settlement are covered under "non disclosure agreements". If this is true, then we have a situation where people are treated differently "for commercial reasons", according to their special position. Is this a new form of corruption?
In some countries, these allegations will be invested by the authority to ensure that there is fair treatment to all affected parties. I hope that our regulators in Singapore will be willing to take this step.
Tan Kin Lian
Profitable Group
Here is a news posted by the Profitable Group under the title "Mr. Tan Kin Lian".
The source of my posting is from the Guardian website: Don't bank on this land for making a profit
http://www.guardian.co.uk/money/2009/feb/21/capital-letters
I asked the lawyer of Profitable Group if they had written to the Guardian to correct the untruths. They have not replied to me.
The source of my posting is from the Guardian website: Don't bank on this land for making a profit
http://www.guardian.co.uk/money/2009/feb/21/capital-letters
I asked the lawyer of Profitable Group if they had written to the Guardian to correct the untruths. They have not replied to me.
Here are more information on this subject matter. You can make your own judgement.
Ponzi scheme
Some unregulated investment products promised a high return to the investors. The promoters pay the attractive return to the early investors by using the money invested by the subsequent investors.
The news spread about the attractive return. New investors joined in. The earlier investors rolled over their investments.
This is a classic ponzi scheme. It is being practiced now under various types of products - land plots, oil seeds, wine and other exotic products. As these investments are not regulated, the investors were not aware about the nature of the operations.
All ponzi schemes will collapse, sooner or later. Apart from the loss due to the attractive return paid to the earlier investors, the promoters of a ponzi scheme will siphon off a large part of the invested money. The accounts will be falsified to show a healthy position.
When the company is investigated and closed down, they will set up a new company with a new name, and find a new place to operate.
Singapore is an attractive place fro these promoters, due to the lack of regulatory control, and the gullibility of the small investors.
The news spread about the attractive return. New investors joined in. The earlier investors rolled over their investments.
This is a classic ponzi scheme. It is being practiced now under various types of products - land plots, oil seeds, wine and other exotic products. As these investments are not regulated, the investors were not aware about the nature of the operations.
All ponzi schemes will collapse, sooner or later. Apart from the loss due to the attractive return paid to the earlier investors, the promoters of a ponzi scheme will siphon off a large part of the invested money. The accounts will be falsified to show a healthy position.
When the company is investigated and closed down, they will set up a new company with a new name, and find a new place to operate.
Singapore is an attractive place fro these promoters, due to the lack of regulatory control, and the gullibility of the small investors.
Investing in unregulated financial products
Be careful about investing in unregulated financial products. Someone, probably an investor who lost money, sent this message to me:
Please look-out for a "tonne" of investors who lost $$$... to company X selling UK & US land. They have been selling Oil Estates program similar to another Oil pods scheme. Now they have diverted to US land leaving the investors in the lurch. Many of the investors still unaware of what hit them...have you heard about them?
This company were under investigation by the Financial Services Authority of the UK under the name Y but they changed their name now to X.
Please look-out for a "tonne" of investors who lost $$$... to company X selling UK & US land. They have been selling Oil Estates program similar to another Oil pods scheme. Now they have diverted to US land leaving the investors in the lurch. Many of the investors still unaware of what hit them...have you heard about them?
This company were under investigation by the Financial Services Authority of the UK under the name Y but they changed their name now to X.
Benefit illustration of life insurance products
I wish to have some benefit illustrations of the life insurance products that are now being sold. I will analyse them, but will not disclose your identity. Please scan and send them to kinlian@gmail.com
Wednesday, October 14, 2009
Truth in advertising
It is illegal to deceive people, even in blogs. Read this article about the law in USA.
Tuesday, October 13, 2009
Personal experience on land banking
If you have made any investment in land banking products in past years, and have made a profit or loss, please share your personal experience. You can write to me at kinlian@gmail.com. I will not quote you by name, unless you wish to be identified.
In your story, please state the representations that were made to you which led to your decision. Indicate if these representations turned out to be true or were misleading, and if you have evidence to support the representations. If the representations were made verbally, you can check with other attendees who heard the same representations and ask them to verify your statement.
If you have made a gain from the investment, please send your story to me too. I like to hear the good and bad angles of land banking.
Tan Kin Lian
In your story, please state the representations that were made to you which led to your decision. Indicate if these representations turned out to be true or were misleading, and if you have evidence to support the representations. If the representations were made verbally, you can check with other attendees who heard the same representations and ask them to verify your statement.
If you have made a gain from the investment, please send your story to me too. I like to hear the good and bad angles of land banking.
Tan Kin Lian
Lawyers should uphold truth and justice
There is a letter printed in a newspaper from a blogger who made a honest opinion about the quality of food in a restaurant. She received a letter from a lawyer acting from the restaurant, asking for the blog to be removed or face the threat of legal action for defamation.
Is it proper for the lawyer to make such a threat? Has the lawyer already established that there were grounds for a defamatory action? Does the lawyer have a duty to advice the client on the difference between an honest opinion and a malicious intent?
If the lawyer does not have valid grounds and make such a threat to frighten the blogger, does it constitute "bullying"? Is it legal? Is the legal profession required by their ethics to uphold truth and justice, and avoid the abuse of the legal process?
I shall be asking the views of the Law Society on this matter. I will see if there is grounds for a complaint to be lodged against the lawyer for unethical behavior.
Tan Kin Lian
Is it proper for the lawyer to make such a threat? Has the lawyer already established that there were grounds for a defamatory action? Does the lawyer have a duty to advice the client on the difference between an honest opinion and a malicious intent?
If the lawyer does not have valid grounds and make such a threat to frighten the blogger, does it constitute "bullying"? Is it legal? Is the legal profession required by their ethics to uphold truth and justice, and avoid the abuse of the legal process?
I shall be asking the views of the Law Society on this matter. I will see if there is grounds for a complaint to be lodged against the lawyer for unethical behavior.
Tan Kin Lian
Wasteful competition
Singapore can give a good case study about wasteful competition. Some examples to be studied are:
a) Multiple set-top boxes to watch different pay TV channels
b) Multiple cash cards for travel and merchants
c) Public transport operated by two large operators
The competition led to duplication and waste. Consumers are inconvenienced. Merchants are not willing to accept the new mode of cashless payments, due to the need to install multiple gadgets. The public transport network is not convenient for consumers, especially the last mile.
There is a case for these functions provided by the state or by a regulated monopoly. Some countries adopt the concept of regulated monopoly, which can work well under proper management.
a) Multiple set-top boxes to watch different pay TV channels
b) Multiple cash cards for travel and merchants
c) Public transport operated by two large operators
The competition led to duplication and waste. Consumers are inconvenienced. Merchants are not willing to accept the new mode of cashless payments, due to the need to install multiple gadgets. The public transport network is not convenient for consumers, especially the last mile.
There is a case for these functions provided by the state or by a regulated monopoly. Some countries adopt the concept of regulated monopoly, which can work well under proper management.
Conversation with a German resident
I had a conversation with a Malaysian who married a German and had raised two children in Germany. She told me the following:
a) Germany now has a 35 hour week.
b) Her boys had to do compulsory military service or community service, but the duration is less than one year.
c) They are paid above minimum wage for the compulsory service. They enjoy it, as they have the chance to learn and travel.
I have not verified the facts. I hope that someone who is familiar with the situation can provide an update.
a) Germany now has a 35 hour week.
b) Her boys had to do compulsory military service or community service, but the duration is less than one year.
c) They are paid above minimum wage for the compulsory service. They enjoy it, as they have the chance to learn and travel.
I have not verified the facts. I hope that someone who is familiar with the situation can provide an update.
Unfair business practices
Have you come across any unfair business practice, e.g. excessive charge, hidden fees, non-transparency, onerous penalty. Give details in this survey.
PayTV to carry all channels
Printed in MyPaper on 13 October
Editor
MyPaper
I refer to the letter entitled “MDA asked for sports package pricing clarity” (MyPaper 12 Oct 09).
I hope that the Media Development Authority (MDA) should address this issue from a broader perspective. It is wasteful and inconvenient for consumers to have two set top boxes and wirings in their home to receive content from two separate PayTV operators.
MDA should the PayTV operator to deliver the content of any provider at a regulated charge for the delivery of the content. The regulator should disallow the PayTV operator to adopt predatory pricing or other restrictions to block out the content of their competitors.
The consumer should be allowed to choose any PayTV operator (i.e. Starhub or SingTel) and have access to all available contents. This will allow competition to work at its best, to reduce cost and increase choice for consumers.
Tan Kin Lian
Editor
MyPaper
I refer to the letter entitled “MDA asked for sports package pricing clarity” (MyPaper 12 Oct 09).
I hope that the Media Development Authority (MDA) should address this issue from a broader perspective. It is wasteful and inconvenient for consumers to have two set top boxes and wirings in their home to receive content from two separate PayTV operators.
MDA should the PayTV operator to deliver the content of any provider at a regulated charge for the delivery of the content. The regulator should disallow the PayTV operator to adopt predatory pricing or other restrictions to block out the content of their competitors.
The consumer should be allowed to choose any PayTV operator (i.e. Starhub or SingTel) and have access to all available contents. This will allow competition to work at its best, to reduce cost and increase choice for consumers.
Tan Kin Lian
Speed and control sensors of an automated car
What is the ideal speed of an automated car? What are its control sensors? Read this blog.
Invest in STI ETF
Last year, my wife asked for my views on the shares to invest in. Previously, she kept her money in fixed deposits, but interest rate had dropped to below 1% for a few years already. The banks sold her a few structured products over the past years that gave a very poor return. e.g. 2% for 5 years, but fortunately her principal was intact.
I advised her to invest in the STI ETF. This is an exchange traded fund that is invested in the component stocks of the ST Index. It is a large, well diversified fund with low cost.
Her friends advised her to invest in some of the hot stocks that have higher liquidity and market interest. Fortunately, she took my advice.
For a while, the STI ETF lost money due to the market collapse earlier this year. I advised her not to worry, as it is a long term investment.
Recently, she told me that the STI ETF had made a large profit for her. The gain must be more than 30% over the past year. This was the best performing share among the few shares that she held.
Some people complained that there is not much liquidity in the STI ETF. For most ordinary investors who are investing for the long term, the liquidity is sufficient. The fund manager will create more units if there is demand.
I advised her to invest in the STI ETF. This is an exchange traded fund that is invested in the component stocks of the ST Index. It is a large, well diversified fund with low cost.
Her friends advised her to invest in some of the hot stocks that have higher liquidity and market interest. Fortunately, she took my advice.
For a while, the STI ETF lost money due to the market collapse earlier this year. I advised her not to worry, as it is a long term investment.
Recently, she told me that the STI ETF had made a large profit for her. The gain must be more than 30% over the past year. This was the best performing share among the few shares that she held.
Some people complained that there is not much liquidity in the STI ETF. For most ordinary investors who are investing for the long term, the liquidity is sufficient. The fund manager will create more units if there is demand.
Views of an unemployed, mature worker
Dear Mr. Tan,
I want to thank you for speaking out for the unemployed people, especially those who are in their middle aged and are unfortunate to be retrenched. I am one of these people. I worked for more than 10 years in a foreign company who decided two years ago, to relocate to China.
It was a big shock to me. I had all along thought that I had a steady job with a large company. But, life is so unpredictable now.
At first, I thought that it would be not difficult for me to find a similar job. After all, I worked hard and had kept up to date with technology. I also had accumulated a wealth of experience that could be applied to other manufacturing companies.
This was not the case. I had difficulty in finding another job, even though I was prepared to take a 50% reduction in salary. Somehow, things do not work out. The human resource managers probably felt that I would not stay long with a big reduction in salary. I never got the chance.
Fortunately, I had some savings, so I am not in debt. But I had to cut down on my expenses drastically, including giving up my car. But, the rejection of my countless applications for a job was difficult to take at first. By now, I got used to being rejected and declined.
It is quite unkind of people to pass remarks that the unemployed are unskilled and not hardworking. This may be true for some people, but it is not true for many others, such as me. When I was younger and during good times, I always had the confidence that I could always have a job, with my skill and education. But not any more.
For people posting unkind remarks, I can only say, "your time will come". Only then will you realise why people like Mr. Tan is asking for employment practices to be changed and for the available work to be shared fairly among the willing workers. There is no point in having people with jobs working long hours, neglecting their families, while other people are unemployed.
Mr. Tan, thank you for suggesting this idea of sharing job opportunities. I hope that the leaders will pay attention to it. It is a good idea.
I want to thank you for speaking out for the unemployed people, especially those who are in their middle aged and are unfortunate to be retrenched. I am one of these people. I worked for more than 10 years in a foreign company who decided two years ago, to relocate to China.
It was a big shock to me. I had all along thought that I had a steady job with a large company. But, life is so unpredictable now.
At first, I thought that it would be not difficult for me to find a similar job. After all, I worked hard and had kept up to date with technology. I also had accumulated a wealth of experience that could be applied to other manufacturing companies.
This was not the case. I had difficulty in finding another job, even though I was prepared to take a 50% reduction in salary. Somehow, things do not work out. The human resource managers probably felt that I would not stay long with a big reduction in salary. I never got the chance.
Fortunately, I had some savings, so I am not in debt. But I had to cut down on my expenses drastically, including giving up my car. But, the rejection of my countless applications for a job was difficult to take at first. By now, I got used to being rejected and declined.
It is quite unkind of people to pass remarks that the unemployed are unskilled and not hardworking. This may be true for some people, but it is not true for many others, such as me. When I was younger and during good times, I always had the confidence that I could always have a job, with my skill and education. But not any more.
For people posting unkind remarks, I can only say, "your time will come". Only then will you realise why people like Mr. Tan is asking for employment practices to be changed and for the available work to be shared fairly among the willing workers. There is no point in having people with jobs working long hours, neglecting their families, while other people are unemployed.
Mr. Tan, thank you for suggesting this idea of sharing job opportunities. I hope that the leaders will pay attention to it. It is a good idea.
Monday, October 12, 2009
Experiences with Land Banking
5 people responded to my survey about their experience with land banking. The results are shown here:
| | When | Amount | Outcome |
| 1 | 2007 | $75,000 | No update from company regarding the investment. |
| 2 | 2008 | $ | Matured but yet to receive the returns |
| 3 | 2004 | $21,000 | Supposed to be 5 yrs investment but now |
| 4 | 2008 | $36,270 | Company rejected my option to surrender the plot back to them. |
| 5 | 2005 | $100,000 | Did not deliver on promises |
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