Wednesday, March 17, 2010
Video on the Shape Quiz
Here is a video to explain the Shape Quiz. It is fun, challenging and develops creativity. The mini-pak can be purchased for $2 at i-Shop. It is also a suitable gift for children and older people, including seniors.
A reader's view - importance of financial planning
Financial planning should form a very important part of anyone's journey through life. Unfortunately, it is not taught in most school's curriculum and perhaps due to other immediate priorities, many people could ignore financial problems are on the horizon until those problems are right in their face. I only got interested in financial planning after going through some difficult times in my early years as a youth when my father's business failed.
I am now a 39year old accountant and have benefited from careful financial planning from early years. My investment portfolio has grown steadily through the years and I am now looking into the future with more confidence despite all the financial turmoil (although it could have been better, but it is ok. Must not be greedy lah!).
Have just bought 3 copies of your Practical Guide To Financial Planning to be given to my younger brothers. As it is at a good price, I do not want to save money by buying one copy and pass it around. I prefer they read the guide and have a copy with them for easy reference when they want to refresh their learnin. Spend $12, the returns will be many thousand times later. How's that for ROI? I hope they will do better than me from getting financial advice at an earlier age (they are late 20s to mid-30s). Be educated, be empowered.
I am now a 39year old accountant and have benefited from careful financial planning from early years. My investment portfolio has grown steadily through the years and I am now looking into the future with more confidence despite all the financial turmoil (although it could have been better, but it is ok. Must not be greedy lah!).
Have just bought 3 copies of your Practical Guide To Financial Planning to be given to my younger brothers. As it is at a good price, I do not want to save money by buying one copy and pass it around. I prefer they read the guide and have a copy with them for easy reference when they want to refresh their learnin. Spend $12, the returns will be many thousand times later. How's that for ROI? I hope they will do better than me from getting financial advice at an earlier age (they are late 20s to mid-30s). Be educated, be empowered.
Why do you visit my blog?
My blog receives an average of 2,400 unique visitors every day. Someone asked me what is the secret to write a blog that is actively visited?
I do not know the answer. So, I like to ask the frequent visitors to give their reasons. How often do you visit my blog and what do you look for?
I do not know the answer. So, I like to ask the frequent visitors to give their reasons. How often do you visit my blog and what do you look for?
Spend $12 and save a lot of money
Many young people are sold a life insurance policy soon after they start work. Based on the benefit illustrations that I have seen on the policies that they bought, most of them lose over $5,000 in distribution cost and over $100,000 in deduction from their accumulated savings. This is a lot of money and will make them poorer when they need the money for retirement.
They can avoid this large financial loss by being educated. It cost them only $12 to buy my book, Practical Guide on Financial Planning. But, to really benefit from the simple tips in my books, they have to spend time to read the book (but it is quite easy and simple to read). They should also attend my talks which are organised by FISCA and the National Library.
If you have bought my book already, do tell your friends to buy it also. Do a good deed to your friend. Better still, buy the book and present it as a gift to your friend. You can help them to save a lot of money too!
They can avoid this large financial loss by being educated. It cost them only $12 to buy my book, Practical Guide on Financial Planning. But, to really benefit from the simple tips in my books, they have to spend time to read the book (but it is quite easy and simple to read). They should also attend my talks which are organised by FISCA and the National Library.
If you have bought my book already, do tell your friends to buy it also. Do a good deed to your friend. Better still, buy the book and present it as a gift to your friend. You can help them to save a lot of money too!
Do not accept a poor deal
Dear Mr Tan,
Thank you for your good advice; I have learnt much from your blog and your Practical Guide on Financial Planning. It is really useful! Now I have a small but decent portfolio of ETFs and individual company stocks.
When I graduated, I was not savvy enough and bought 2 policies. Based on your book, I have analysed them as follows:
Policy 1 shows effect of deduction contributing very high, about 27.8% in year 25 of policy, but drops drastically to only 3.4% during maturity in year 28 of policy. Sounds too good to be true? What is the loophole?.
Policy 2 (ILP) shows a ridiculous low projected return. I would be better off just buying term insurance.
However, I remember you mentioned that distribution costs are mostly incurred in first 2 years. Since we have paid them, should as well continue. Is this still the best way to go?
REPLY
Thank you for your good advice; I have learnt much from your blog and your Practical Guide on Financial Planning. It is really useful! Now I have a small but decent portfolio of ETFs and individual company stocks.
When I graduated, I was not savvy enough and bought 2 policies. Based on your book, I have analysed them as follows:
Policy 1 shows effect of deduction contributing very high, about 27.8% in year 25 of policy, but drops drastically to only 3.4% during maturity in year 28 of policy. Sounds too good to be true? What is the loophole?.
Policy 2 (ILP) shows a ridiculous low projected return. I would be better off just buying term insurance.
However, I remember you mentioned that distribution costs are mostly incurred in first 2 years. Since we have paid them, should as well continue. Is this still the best way to go?
REPLY
For Policy 1, a large part of the projected value at maturity on year 28 is non-guaranteed. It is difficult for the policyholder to be sure that this non-guaranteed portion will be paid, especially if it shows a big jump compared to the non-guaranteed value in the earlier years. If the company give some reason at that time to be unable to pay the non-guaranteed value, or to pay less, what can you do?
For Policy 2, the effect of deduction is more than 50% of the accumulated premium. Although you have already paid the upfront distribution cost, it seems that you will continue to suffer a large loss each year due to the "effect of deduction".
I suggest that you take the following approach:
a) Ask your insurance adviser to explain the above two points to you, and address your concern.
For Policy 2, the effect of deduction is more than 50% of the accumulated premium. Although you have already paid the upfront distribution cost, it seems that you will continue to suffer a large loss each year due to the "effect of deduction".
I suggest that you take the following approach:
a) Ask your insurance adviser to explain the above two points to you, and address your concern.
b) If you do not get a satisfactory explanation, write to the insurance company
c) You may to lodge a complaint to MAS about the type of policy that you have been misled into buying (i.e. you would not have bought these policies if you knew what they really were).
d) Write to the newspaper.
Do not allow people to sell you a bad product, and you have to suffer the uncertainty and poor return for a lifetime.
Do not allow people to sell you a bad product, and you have to suffer the uncertainty and poor return for a lifetime.
Puzzle - find the safe path
From www.ft.com
Two guardians watch over a fork in the road. One path leads to safety, the other to a grisly death. One of the guardian is a knight, meaning that he always tells the truth. The other is a knave, meaning that he always lies, answering “yes” to questions whose correct answer is “no”, and vice versa. You do not know which guardian is a knight and which is a knave. With a single question, how will you find the safe path?
Order books
Two guardians watch over a fork in the road. One path leads to safety, the other to a grisly death. One of the guardian is a knight, meaning that he always tells the truth. The other is a knave, meaning that he always lies, answering “yes” to questions whose correct answer is “no”, and vice versa. You do not know which guardian is a knight and which is a knave. With a single question, how will you find the safe path?
Order books
Credit card points
I called the hotline of my bank to ask how many credit card points is in my account and how much are they worth.
The hotline staff have difficulty in converting the points into the value of the vouchers. She got the value wrong by the factor of 100 times. She told me that my points are worth a lot of dollars, when it really is worth that amount in cents.
If the hotline staff of a bank does not understand the value of a point, how can you expect the ordinary customer to figure out?
Over the years, I have allowed the points on my credit card to expire, as it is really so troublesome to use these points. The customer has to get the voucher, wait for it to arrive in the mail, and make the effort to visit the outlet. The bank also arrange with some outlets to allow instant redemption but finding the customer service desk or a knowledgeable staff may be another hassle.
I suggest that the bank should allow the customer to convert the points into cash, to be added into their account. After all, it is their business to deal with money, rather than with points.
Tan Kin Lian
The hotline staff have difficulty in converting the points into the value of the vouchers. She got the value wrong by the factor of 100 times. She told me that my points are worth a lot of dollars, when it really is worth that amount in cents.
If the hotline staff of a bank does not understand the value of a point, how can you expect the ordinary customer to figure out?
Over the years, I have allowed the points on my credit card to expire, as it is really so troublesome to use these points. The customer has to get the voucher, wait for it to arrive in the mail, and make the effort to visit the outlet. The bank also arrange with some outlets to allow instant redemption but finding the customer service desk or a knowledgeable staff may be another hassle.
I suggest that the bank should allow the customer to convert the points into cash, to be added into their account. After all, it is their business to deal with money, rather than with points.
Tan Kin Lian
Improve a corporate website
Many corporate websites have a lot of information. It is extremely difficult to navigate the website (also called a spider web) to find the right page. Each page contained a lot of information, and usually contains ambiguity which is not easily understood by the general public.
The staff handling inquiries expect the customer to know where to find the webpage and how to understand its contents. The staff usually does not understand that the general public has to deal with many other issues and understanding information from the website is not easy.
A good corporate website provides an easy way for the general public to send an e-mail or call a number to ask a question. The inquiry staff can respond with the answer. The best response is a specific answer to the question, with a link to the webpage for more details.
The corporation should know that their website is really the source of reference for their staff to get the information to send to the public. They cannot expect the public to know how to navigate or understand their spider web.
Tan Kin Lian
The staff handling inquiries expect the customer to know where to find the webpage and how to understand its contents. The staff usually does not understand that the general public has to deal with many other issues and understanding information from the website is not easy.
A good corporate website provides an easy way for the general public to send an e-mail or call a number to ask a question. The inquiry staff can respond with the answer. The best response is a specific answer to the question, with a link to the webpage for more details.
The corporation should know that their website is really the source of reference for their staff to get the information to send to the public. They cannot expect the public to know how to navigate or understand their spider web.
Tan Kin Lian
Video on Financial Education
Dear Mr Tan
The following site is conducting an ongoing series of financial lectures on video. They have added video #40 just last night. Hope you could use them, one video at a time, to educate the public.
http://marketplace.publicradio.org/collections/coll_display.php?coll_id=20216
The following site is conducting an ongoing series of financial lectures on video. They have added video #40 just last night. Hope you could use them, one video at a time, to educate the public.
http://marketplace.publicradio.org/collections/coll_display.php?coll_id=20216
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