Comment posted in my blog (edited):
It is hard to compete with "foreign talents" when Singapore men have to do National Service for two years and will be called up each year for reservist training.
The Government expects Singapore males to be supermen - tie their hands behind their back, add weight on their legs and ask them to compete with "foreign talents".
What kind of Government treat its citizens as slaves - give them no choice and no rights. Now, the Government ask "foreign talents" to be new citizens - no need for National Service until the second generation. When it is time for the second generation to do National Service, they will leave Singapore.
Singapore has NO FUTURE.
Saturday, September 12, 2009
Survey
Click on the Survey label on the right and take part in the surveys (relevant to you) in this blog
Personal experience with Shield plans
I invite the public to share your experience with the Shield plans, i.e. Medishield run by CPF and the private Shield run by the insurance companies.
Any comments about:
a) premium rates?
b) underwriting requirements?
c) claim settlement?
d) customer service?
Please state your positive and negative experiences here.
Too many cars, insufficient parking spaces
We face this problem in Singapore. Do you agree? Here is a long term solution.
Obama warns against scare tactics over health care
Read this article.
The health insurers in USA made huge profits, but the premiums keep escalating at an uncontrolled rate, and the quality of health care is below average. This is the evil of greed in a capitalist society that seek to maximize profit without caring for the welfare of the ordinary people.
In Obama's plan, he will make it illegal for health insurers to stop or restrict the coverage when someone falls sick. They will also be required to place a cap on the co-payments.
Historic speech by Ted Kennedy
Watch this historic speech by Ted Kennedy. Sadly, Senator Kennedy passed away recently.
QUOTE:
New hope ... for a just and fair prosperity, for the many and not for the few.
QUOTE:
New hope ... for a just and fair prosperity, for the many and not for the few.
Five myths on the Minibonds
Here are 5 myths that the banks and security firms want the public to believe. I urge the public, who are not aware about the struggle of the investors, to read about the injustice that has been done.
Many people got the mistaken impression that the Singapore authority has helped many investors to get fair compensation. This is the impression given by the headlines in the mainstream papers. But this impression does not represent the true situation.
Think again. Out of over $500 million that has been invested, the total amount of compensation was only $107 million. Just about 20% was compensated. This is far short of the compensation offered in Hong Kong and Taiwan.
Are we an honest society?
Many people got the mistaken impression that the Singapore authority has helped many investors to get fair compensation. This is the impression given by the headlines in the mainstream papers. But this impression does not represent the true situation.
Think again. Out of over $500 million that has been invested, the total amount of compensation was only $107 million. Just about 20% was compensated. This is far short of the compensation offered in Hong Kong and Taiwan.
Are we an honest society?
Website for Minibond Investors Action Group
Visit this website to know the progress of the legal action by the Minibond Investors Action Group.
Medishield should cover congential illness
Here is an article written by Gerald Giam.
I agree with his views. We need a mindset change in our Ministry of Health and the Government. Instead of the current commercial approach, they should think of a national, social approach - which is the role of the Government.
Lifetime cost of health insurance
The following table shows the cost of Shield insurance from age 25 to 85:
It will cost the insured a total of $18,018 to pay for the premium for Medishield from age 25 to 85 (assuming that the premium does not increase due to inflation). To insure for class A, the cost increases to $47,821. The difference is nearly $30,000.
In both cases, the patient has to pay the deductible and 10% of the excess (i.e. the co-insurance). The co-payments that has to be borne by patient is expected to be an additional 50% of the cost of premium.
If you wish to be treated under class A in restructured hospital, you must be prepared to set aside $72,000 in a lifetime. If you are treated in a subsidised ward B2, your lifetime cost is $27,000.
For the majority of people, it is better to be insured under Medishield, as it covers the cost of treatment in a subsidised B2 ward. You can save a lot of money in insurance premiums, which can add to your retirement savings.
Most people are likely to be hospitalised not more than 2 times before age 65. At the time of hospitalisation, the can still decide on being warded in B2 or be upgraded to a higher ward. If they are upgraded, they can pay the difference from their savings.
If you buy a Private Shield plan, about 30% of the premium is taken away to pay the marketing and administrative expenses (i.e. $15,000 under plan A). You pay this cost without any increase in benefit.
The above figures are based on the current cost and ignore the time value of money. If inflation and investment yield is taken into account, the difference will be much more than $30,000.
Tip: Enjoy the government subsidy under B2 ward. Insure for Basic Medishield and pay a lower premium. Save $30,000 over a lifetime.
Age Medishield Private Shield
Ward A
25 to 65 $5,755 $12,870
65 to 85 $12,263 $34,951
Total $18,018 $47,821
It will cost the insured a total of $18,018 to pay for the premium for Medishield from age 25 to 85 (assuming that the premium does not increase due to inflation). To insure for class A, the cost increases to $47,821. The difference is nearly $30,000.
In both cases, the patient has to pay the deductible and 10% of the excess (i.e. the co-insurance). The co-payments that has to be borne by patient is expected to be an additional 50% of the cost of premium.
If you wish to be treated under class A in restructured hospital, you must be prepared to set aside $72,000 in a lifetime. If you are treated in a subsidised ward B2, your lifetime cost is $27,000.
For the majority of people, it is better to be insured under Medishield, as it covers the cost of treatment in a subsidised B2 ward. You can save a lot of money in insurance premiums, which can add to your retirement savings.
Most people are likely to be hospitalised not more than 2 times before age 65. At the time of hospitalisation, the can still decide on being warded in B2 or be upgraded to a higher ward. If they are upgraded, they can pay the difference from their savings.
If you buy a Private Shield plan, about 30% of the premium is taken away to pay the marketing and administrative expenses (i.e. $15,000 under plan A). You pay this cost without any increase in benefit.
The above figures are based on the current cost and ignore the time value of money. If inflation and investment yield is taken into account, the difference will be much more than $30,000.
Tip: Enjoy the government subsidy under B2 ward. Insure for Basic Medishield and pay a lower premium. Save $30,000 over a lifetime.
Financial Planning (2) - What are your future needs?
Your savings are required to meet your future financial needs, of which the most important are:
a) to provide an income after retirement
b) for your children's education
c) for unexpected events, such as unemployment, disability, medical expenses
The amount of savings that you have to set aside from your monthly income will depend on how much money is needed for the future. What kind of lifestyle do you plan for the future? What is the future cost of educating your child?
You have a range of choices. If you want to have more money for retirement, you have to save more and spend less now. You should have a balanced approach. You need to enjoy some luxuries now, while you are young, instead of keeping most of the money to spend when you are old (and weak).
Educating a child can be very expensive at a good overseas university. You may want to give the best for your child, but is this a sensible way to spend the money? Will the investment in an expensive education give a good return? Will this money be taken away from your own retirement fund?
I suggest that you should adopt a practical approach. You can set aside 10% to 15% of your earnings for your future needs. If you want to sacrifice for your child's education, you can increase the savings to 20%.
Your total savings can go into a fund that can be used for the various future needs. Try to keep as much flexibility as possible. When the time comes, you can decide on how much you can afford to spend on educating your child, and how much should be set aside for your retirement.
You can buy insurance to cover some of the risks, such as medical expenses, temporary disability and premature death. As insurance cost money, you should find a suitable policy that gives you the adequate cover at a reasonable cost. Do not pay too much for your insurance, as it will take away from your savings for other purposes.
There is no commercial insurance available for unemployment. You have to take care of this risk on your own. It can be achieved by having adequate savings. If you are unemployed for a few months, you can draw down on your savings, but you should restore the savings as early as possible, when you get back a new source of regular income.
a) to provide an income after retirement
b) for your children's education
c) for unexpected events, such as unemployment, disability, medical expenses
The amount of savings that you have to set aside from your monthly income will depend on how much money is needed for the future. What kind of lifestyle do you plan for the future? What is the future cost of educating your child?
You have a range of choices. If you want to have more money for retirement, you have to save more and spend less now. You should have a balanced approach. You need to enjoy some luxuries now, while you are young, instead of keeping most of the money to spend when you are old (and weak).
Educating a child can be very expensive at a good overseas university. You may want to give the best for your child, but is this a sensible way to spend the money? Will the investment in an expensive education give a good return? Will this money be taken away from your own retirement fund?
I suggest that you should adopt a practical approach. You can set aside 10% to 15% of your earnings for your future needs. If you want to sacrifice for your child's education, you can increase the savings to 20%.
Your total savings can go into a fund that can be used for the various future needs. Try to keep as much flexibility as possible. When the time comes, you can decide on how much you can afford to spend on educating your child, and how much should be set aside for your retirement.
You can buy insurance to cover some of the risks, such as medical expenses, temporary disability and premature death. As insurance cost money, you should find a suitable policy that gives you the adequate cover at a reasonable cost. Do not pay too much for your insurance, as it will take away from your savings for other purposes.
There is no commercial insurance available for unemployment. You have to take care of this risk on your own. It can be achieved by having adequate savings. If you are unemployed for a few months, you can draw down on your savings, but you should restore the savings as early as possible, when you get back a new source of regular income.
Tan Kin Lian
Financial Planning (1) - How much to save?
The first step in financial planning is to decide on the proportion of the current income that should be saved for the future. The answer is "as much as possible".
Some people are frugal. They spend only to meet the essential expenses and save the remainder of their earnings for the future. They are willing to forgo their current spending and enjoyment - no vacations, search for cheap offers and bargains, take public transport, find inexpensive eating places.
There are many opportunities to leave frugally and still enjoy the pleasures of life. The parks and public spaces are free. Activities and courses in community and sport centers are affordable. Walking is free and good for the body.
As a rule of thumb, you should save 10% to 15% of your earnings and keep it for future needs. After meeting your essential expenses and savings, you can still have a balance for the discretionary spending, such as vacations, branded goods, tuition, entertainment or the pleasures that do cost money.
It is very important to avoid getting into debt, including borrowing on credit cards, that charges a high interest burden. It is already difficult to earn money and set aside savings, yet some people have to pay interest that takes away 10% or more of their earnings!
Do not invest in a property that requires more than 40% of your earnings to service the monthly repayment. Do not buy a car that needs more than 20% of your earnings to meet the monthly repayment. You have other options that should be explored. If you take these loans, you must make sure that your job is secure, as the monthly repayments can be a heavy burden when you are out of a job.
If your spouse is also working, which is now quite common, the above rules should be applied on the combined income.
To recap: as a rule of thumb, save 10% to 15% of your earnings. When you are clear about your financial goals for the future, you can adjust the amount that you need to save.
Some people are frugal. They spend only to meet the essential expenses and save the remainder of their earnings for the future. They are willing to forgo their current spending and enjoyment - no vacations, search for cheap offers and bargains, take public transport, find inexpensive eating places.
There are many opportunities to leave frugally and still enjoy the pleasures of life. The parks and public spaces are free. Activities and courses in community and sport centers are affordable. Walking is free and good for the body.
As a rule of thumb, you should save 10% to 15% of your earnings and keep it for future needs. After meeting your essential expenses and savings, you can still have a balance for the discretionary spending, such as vacations, branded goods, tuition, entertainment or the pleasures that do cost money.
It is very important to avoid getting into debt, including borrowing on credit cards, that charges a high interest burden. It is already difficult to earn money and set aside savings, yet some people have to pay interest that takes away 10% or more of their earnings!
Do not invest in a property that requires more than 40% of your earnings to service the monthly repayment. Do not buy a car that needs more than 20% of your earnings to meet the monthly repayment. You have other options that should be explored. If you take these loans, you must make sure that your job is secure, as the monthly repayments can be a heavy burden when you are out of a job.
If your spouse is also working, which is now quite common, the above rules should be applied on the combined income.
To recap: as a rule of thumb, save 10% to 15% of your earnings. When you are clear about your financial goals for the future, you can adjust the amount that you need to save.
Tan Kin Lian
Live within your means
Mr. Tan,
Just to share from my personal experience, as a young working adult with a very young family.
Based on the advice of good friends, my wife and I planned our finances based on one of our incomes only, in case either one of us becomes incapacitated, or decides not to work.
We started our marriage with a combined annual income of about 80K. If we based it 5 times our annual income, we could have gotten a property of $400K. Instead, we got a 4-room flat at about $200K.
As our family members increased after a few years, we sold off our 4-room flat. Then, our combined annual income was about $200k. Once again, instead of getting a $1m property, we opted for a $500K property.
With our proportionately low financial commitment, we were able to live worry free financially. In fact, as a couple, we hope to be able to pay off the mortgage soon, with a view that my wife can stay at home to be a fulltime stay home mum.
While I am sure that different families have different financial circumstances, and that our financial circumstances are a lot fortunate than many people, I believe "living within your means" is a hardly a virtue nowdays as people are encouraged to live beyond their means, be it getting a too big/fast/flashy a car, rolling credit card debts, too big a mortgage etc.
Mr Tan, just as a suggestion to your posting about financial planning, perhaps you may want to encourage your (numerous and growing) readers to live within their means. Thanks for your hard work!
Just to share from my personal experience, as a young working adult with a very young family.
Based on the advice of good friends, my wife and I planned our finances based on one of our incomes only, in case either one of us becomes incapacitated, or decides not to work.
We started our marriage with a combined annual income of about 80K. If we based it 5 times our annual income, we could have gotten a property of $400K. Instead, we got a 4-room flat at about $200K.
As our family members increased after a few years, we sold off our 4-room flat. Then, our combined annual income was about $200k. Once again, instead of getting a $1m property, we opted for a $500K property.
With our proportionately low financial commitment, we were able to live worry free financially. In fact, as a couple, we hope to be able to pay off the mortgage soon, with a view that my wife can stay at home to be a fulltime stay home mum.
While I am sure that different families have different financial circumstances, and that our financial circumstances are a lot fortunate than many people, I believe "living within your means" is a hardly a virtue nowdays as people are encouraged to live beyond their means, be it getting a too big/fast/flashy a car, rolling credit card debts, too big a mortgage etc.
Mr Tan, just as a suggestion to your posting about financial planning, perhaps you may want to encourage your (numerous and growing) readers to live within their means. Thanks for your hard work!
Courage to fight for what is right
SCMP: SFC enforcer still waiting for new contract
2 Sep 2009
As head of the financial regulator's enforcement division, Mark Steward has for the past three years been the driving force behind a crackdown against those involved in illicit deals.
But with less than two weeks left on his contract, there is a deal of his own that remains in doubt. The Securities and Futures Commission executive director is still waiting to find out whether the government will give him a new term.
Last week, Steward raised concerns about his future by revealing he was still in negotiations with the government over a new contract. His current one ends on September 24, and his work visa is also due to expire.
"There is an issue of principle which needs to be ironed out. It is not about money," he said after making a speech at a Hong Kong Securities Institute function on September 3.
His comments, first reported in Ming Pao, have fuelled speculation that the government is under pressure to either replace or clip the wings of the man who is widely credited with the adoption of a hardline approach by the SFC against those who breach market rules.
Steward has recently been at the forefront of a series of high-profile cases. These include a string of insider dealing convictions and jail terms, a legal challenge that scuppered PCCW's privatisation plan on grounds of vote-rigging, and the striking of a deal with banks to get money back for investors in Lehman Brothers minibonds.
Some brokers say Steward may have been too aggressive in his pursuit of market miscreants, leading to complaints about his crusading style. Others say the contract negotiations are over pay, with some suggesting he wants a pay rise. One broker said he had heard that Steward wanted an increase of 25 per cent. Contacted last night, Steward said this suggestion was "completely false".
A spokesman from the Financial Services and the Treasury Bureau said it would not comment on individual appointments. All executive directors of the SFC need to be appointed by the financial secretary.
Steward was praised this week by SFC chief executive Martin Wheatley, who described him as a man with "ability and creative ideas" who had found new ways of using the regulators' powers under the law to crack down on offenders. The latest example was the conviction on Thursday of former Morgan Stanley Asia managing director Du Jun for insider dealing involving HK$87 million.
The legislator for the financial services sector, Chim Pui-chung, said Steward had done a great job so it would be good if he stayed on. "It depends on whether the SFC would fight for a pay rise for him. A pay rise is always an important issue to debate in a contract renewal," Chim said.
Steward's contract is not the only one due to expire. The term of SFC chairman Eddy Fong finishes at the end of this month. Financial Secretary John Tsang Chun-wah has not announced whether he will stay on.
2 Sep 2009
As head of the financial regulator's enforcement division, Mark Steward has for the past three years been the driving force behind a crackdown against those involved in illicit deals.
But with less than two weeks left on his contract, there is a deal of his own that remains in doubt. The Securities and Futures Commission executive director is still waiting to find out whether the government will give him a new term.
Last week, Steward raised concerns about his future by revealing he was still in negotiations with the government over a new contract. His current one ends on September 24, and his work visa is also due to expire.
"There is an issue of principle which needs to be ironed out. It is not about money," he said after making a speech at a Hong Kong Securities Institute function on September 3.
His comments, first reported in Ming Pao, have fuelled speculation that the government is under pressure to either replace or clip the wings of the man who is widely credited with the adoption of a hardline approach by the SFC against those who breach market rules.
Steward has recently been at the forefront of a series of high-profile cases. These include a string of insider dealing convictions and jail terms, a legal challenge that scuppered PCCW's privatisation plan on grounds of vote-rigging, and the striking of a deal with banks to get money back for investors in Lehman Brothers minibonds.
Some brokers say Steward may have been too aggressive in his pursuit of market miscreants, leading to complaints about his crusading style. Others say the contract negotiations are over pay, with some suggesting he wants a pay rise. One broker said he had heard that Steward wanted an increase of 25 per cent. Contacted last night, Steward said this suggestion was "completely false".
A spokesman from the Financial Services and the Treasury Bureau said it would not comment on individual appointments. All executive directors of the SFC need to be appointed by the financial secretary.
Steward was praised this week by SFC chief executive Martin Wheatley, who described him as a man with "ability and creative ideas" who had found new ways of using the regulators' powers under the law to crack down on offenders. The latest example was the conviction on Thursday of former Morgan Stanley Asia managing director Du Jun for insider dealing involving HK$87 million.
The legislator for the financial services sector, Chim Pui-chung, said Steward had done a great job so it would be good if he stayed on. "It depends on whether the SFC would fight for a pay rise for him. A pay rise is always an important issue to debate in a contract renewal," Chim said.
Steward's contract is not the only one due to expire. The term of SFC chairman Eddy Fong finishes at the end of this month. Financial Secretary John Tsang Chun-wah has not announced whether he will stay on.
View from a prudent home buyer
Dear Mr Tan,
Thank you for giving advise to the public and in a selfless manner. I fully agreed with you.
In fact, I had been visiting show flats since Lehman Brother collapse and also talking to banks to survey the ground. My conclusion is, it's scary and if you are not careful, you will get into trouble when things go wrong. Let me explain further, my wife and me are in our 40s, consider to be middle income, all the banks encouraged us to take a loan of around $2M and up to 70 years old.
I really laughed out when those bank advisers work out the numbers for me. Then some showed me a "black" face when I asked them how am I going to earn my present income when I get to 55 or 60 years old even if I like to, to support a high loan repayment every month?
They have no answer for me, some say property price will continue to go up. Ha, what goes up must come down, Newton's Law. Most of these banks are very young people, in their 20s, I wonder if they really know or out to earn high commissions.
My conclusion after this one year of "shopping" is one needs to be prudent, don't expect the banks to do that.
I have not buy any property yet because I see a bubble is forming across Asia. Many people do not understand how much interest they are paying by stretching their loans to maximum years. My experience previously is for the first 5 years or so, 75% of the monthly payment goes into servicing the interest and the balance goes into paying the actual loan.
So a 25 years loan or longer will mean one is paying more than 50% compared to buying with cash. And there's no certainty that one will continue to have a job in this era and property is an illquid investment especially when market crash, there will be few or no buyers when you most need to sell.
I wrote such a long message because I'm very worried for many s'poreans, looking at the recent euphoria and property prices. How many had given a thorough and serious thought about planning for their retirement? I remembered that someone once said that most s'porean are asset rich but cash poor.
I had seen several distress cases happening to my friends and colleagues, when they faced negative equity. The bank either had them to top up the difference or takeover the property which they lost $300K to $500K in 1998. I don't know how many people really think it's possible that the property they bought now can drop more than 30%.
I hope you will be able to educate the Singapore public, the banks will not do that.
Thank you for giving advise to the public and in a selfless manner. I fully agreed with you.
In fact, I had been visiting show flats since Lehman Brother collapse and also talking to banks to survey the ground. My conclusion is, it's scary and if you are not careful, you will get into trouble when things go wrong. Let me explain further, my wife and me are in our 40s, consider to be middle income, all the banks encouraged us to take a loan of around $2M and up to 70 years old.
I really laughed out when those bank advisers work out the numbers for me. Then some showed me a "black" face when I asked them how am I going to earn my present income when I get to 55 or 60 years old even if I like to, to support a high loan repayment every month?
They have no answer for me, some say property price will continue to go up. Ha, what goes up must come down, Newton's Law. Most of these banks are very young people, in their 20s, I wonder if they really know or out to earn high commissions.
My conclusion after this one year of "shopping" is one needs to be prudent, don't expect the banks to do that.
I have not buy any property yet because I see a bubble is forming across Asia. Many people do not understand how much interest they are paying by stretching their loans to maximum years. My experience previously is for the first 5 years or so, 75% of the monthly payment goes into servicing the interest and the balance goes into paying the actual loan.
So a 25 years loan or longer will mean one is paying more than 50% compared to buying with cash. And there's no certainty that one will continue to have a job in this era and property is an illquid investment especially when market crash, there will be few or no buyers when you most need to sell.
I wrote such a long message because I'm very worried for many s'poreans, looking at the recent euphoria and property prices. How many had given a thorough and serious thought about planning for their retirement? I remembered that someone once said that most s'porean are asset rich but cash poor.
I had seen several distress cases happening to my friends and colleagues, when they faced negative equity. The bank either had them to top up the difference or takeover the property which they lost $300K to $500K in 1998. I don't know how many people really think it's possible that the property they bought now can drop more than 30%.
I hope you will be able to educate the Singapore public, the banks will not do that.
Town hall meeting with Geithner
I watch a CNBC broadcast of a town hall meeting with US Treasury Secretary Geithner. He answered many difficult questions posed by the American people regarding the economy, banking crisis and other issues.
I was impressed with the manner in which he answered the questions. More importantly, he was open and accountable. He addressed the questions presented by the TV hosts and the ordinary people.
I reflected. Surely, the MAS or the political leaders could have held a town hall meeting with the investors who signed the several petitions? What makes Singapore so different that they could ignore the petitions or refuse to meet with the people who were misled into losing their life savings. Are the plights of these people not important? Can they be ignored?
Is there accountability among our top leaders and civil servants?
I was impressed with the manner in which he answered the questions. More importantly, he was open and accountable. He addressed the questions presented by the TV hosts and the ordinary people.
I reflected. Surely, the MAS or the political leaders could have held a town hall meeting with the investors who signed the several petitions? What makes Singapore so different that they could ignore the petitions or refuse to meet with the people who were misled into losing their life savings. Are the plights of these people not important? Can they be ignored?
Is there accountability among our top leaders and civil servants?
Sale of UOB Life
Someone asked what will happen to their single premium endowment taken with UOB Life, it the company is sold to a new buyer (as reported in the newspapers).
There is no need to worry. The new company will take over the full liability. It also has to meet the risk based capital requirement, so there is adequate capital to back the liability.
This is just speculation at this time. UOB may not sell its subsidiary. Or there may be no buyer.
There is no need to worry. The new company will take over the full liability. It also has to meet the risk based capital requirement, so there is adequate capital to back the liability.
This is just speculation at this time. UOB may not sell its subsidiary. Or there may be no buyer.
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