Dear Mr Tan,
One of my very close friend has seek to me on lending him $5000. I have agreed to help him on this. but i have not pass him the money yet. even though he is a very close friend of mine, i still do have a concern on if i can get back my money as i have experience lending someone money and unable to collect it back.
Is IOU a proper documentation to ensure if i can get back my money if anything goes wrong ? If IOU can be used, what kind of format would I have to draft out ? Is there any other proper documentation that I can use to ensure i can take back my money ?
REPLY
Here are my views:
1. If possible, avoid lending money to a friend.
2. If you have to lend money, be prepared that it will not be returned
3. Have a document (e.g. IOU) to acknowledge that the money has been passed. Write down details of the repayment.
4. Ask for monthly payment of interets or interest plus principal. This ensures the discipline of repaying back the money.
5. Here is another alternative. Ask your friend to borrow the money from a cooperative society, with you acting as guarantor. If the borrower does not pay, you will have to pay as guarantor. But the lender will try to collect from the borrower first. This is still risky to you, but you do not have the hassle of chasing for repayment.
Wednesday, July 7, 2010
SingTel Website
I was given a mobile number in Malaysia with the number 60 107 xxx xxxx. I could not get through. I checked the Singtel website to find a number that I could call for assistance.
The "Contact Us" page in the website was not helpful. I searched the home page and clicked on a few other pages but got lost. Finally, I decided to call 100. The staff told me that I had to called 104 for assistance on International Call.
I had to pay $0.60 to get help. Singtel seemed to be keen to charge customers and earn revenue, rather than to help their customer. The staff told me how to call the number by dialing 02 and dropping the 0. Wow!!
I told her that I spent 15 minutes browsing the website, but could not get this type of information. She said that I had to go the website (http://www.singtel.com.sg/) and clicked on "large enterprise", "business", "voice and telephony", and so on. It seemed to require at least 6 page access. I gave up.
It would have been easier if the Singtel website provides their help pages that can be accessed by searching for the title, such as "Telephone call to Malaysia" or "International Telephone Call". This search is similar to the Google search, except that it is restricted to inforamtion from the corporate website. All the relevant information can be placed in one or a few pages in PDF.
The complicated website (or what someone called the "spiderweb") is not unique to Singtel. It is common with most large organisations, including government agencies. They must be designed by consultants, who make it their business to give complicated, rather than simple solutoins. This makes life stressful and a hassle for the public.
Please share your experience on using the website of large corporations here.
Tan Kin Lian
The "Contact Us" page in the website was not helpful. I searched the home page and clicked on a few other pages but got lost. Finally, I decided to call 100. The staff told me that I had to called 104 for assistance on International Call.
I had to pay $0.60 to get help. Singtel seemed to be keen to charge customers and earn revenue, rather than to help their customer. The staff told me how to call the number by dialing 02 and dropping the 0. Wow!!
I told her that I spent 15 minutes browsing the website, but could not get this type of information. She said that I had to go the website (http://www.singtel.com.sg/) and clicked on "large enterprise", "business", "voice and telephony", and so on. It seemed to require at least 6 page access. I gave up.
It would have been easier if the Singtel website provides their help pages that can be accessed by searching for the title, such as "Telephone call to Malaysia" or "International Telephone Call". This search is similar to the Google search, except that it is restricted to inforamtion from the corporate website. All the relevant information can be placed in one or a few pages in PDF.
The complicated website (or what someone called the "spiderweb") is not unique to Singtel. It is common with most large organisations, including government agencies. They must be designed by consultants, who make it their business to give complicated, rather than simple solutoins. This makes life stressful and a hassle for the public.
Please share your experience on using the website of large corporations here.
Tan Kin Lian
Promotion on my books
Nine titles of my book are available on promotion now. For a limited period only. Visit www.easysearch.sg/ishop.
A different view
I have given my views on insurance and investments in a series of FAQs. You can assess them by clicking the FAQ label on the right frame of this blog.
The FAQs reflect my view. If you disagree with my view and wish to present an alternative view, you can send an e-mail to me. You have to state your name, contact e-mail and your view. I will put your your view, if it is balanced, fair and does not contain insult or personal attack.
If you wish to point out any mistakes in my FAQ or to suggest points to be clarified or to contribute additional points, you can also send an e-mail to me.
Tan Kin Lian
Email: kinlian@gmail.com
The FAQs reflect my view. If you disagree with my view and wish to present an alternative view, you can send an e-mail to me. You have to state your name, contact e-mail and your view. I will put your your view, if it is balanced, fair and does not contain insult or personal attack.
If you wish to point out any mistakes in my FAQ or to suggest points to be clarified or to contribute additional points, you can also send an e-mail to me.
Tan Kin Lian
Email: kinlian@gmail.com
Decentralising of risks
The massive 7 hour failure of the ATM system of DBS on 5 July 2010 highlight the danger of concentration of risk and "too big to fail".
Is there an alternative approach? Do we need to have fewer and larger banks to compete internationally? Is it beneficial for banks to get bigger?
Here are the negative impacts of the consolidation of banks in recent years:
Is there an alternative? America had a system of community banks that are connected by national banks. Perhaps, this is the answer. We should encourage a large number of community banks to serve the retail customers on basic banking services. They can be linked a few national banks who handle the commercial banking, foreign exchange, international trade and other services.
If there is a serious computer hiccup in a community bank, it will only affect their customers, and not a large segment of the population. This is an example of decentralising the risks.
Tan Kin Lian
Is there an alternative approach? Do we need to have fewer and larger banks to compete internationally? Is it beneficial for banks to get bigger?
Here are the negative impacts of the consolidation of banks in recent years:
- concentration of risks
- overcharging of fees for banking services, i.e abuse of pricing power
- selling of bad structured products to earn commission
- impact of massive IT failure on cash withdrawals, i.e. the DBS event
Is there an alternative? America had a system of community banks that are connected by national banks. Perhaps, this is the answer. We should encourage a large number of community banks to serve the retail customers on basic banking services. They can be linked a few national banks who handle the commercial banking, foreign exchange, international trade and other services.
If there is a serious computer hiccup in a community bank, it will only affect their customers, and not a large segment of the population. This is an example of decentralising the risks.
Tan Kin Lian
FAQ - Financial planning for a retiree
I wish to give some tips on financial planning and insurance for a retiree, or a person approaching retirement. Read this article.
Effect of deduction
Hi Mr Tan,
I started to read your blog recently and realised that I might be ripped off. Please see attached policy I brought 3 years ago. Am I right to say the effects of deduction is 51%? What your advice? Terminate after I can break even say after 4-5 years?
RW
REPLY
The effect of deduction at the end of 30 years is 35% compuated as follows:
To decide whether to continue or cancel the policy is a difficult question. Read my FAQ on "existing insurance policy" in my blog. Or read my book, Practical Guide on Financial Planning, available at www.easysearch.sg/ishop
I started to read your blog recently and realised that I might be ripped off. Please see attached policy I brought 3 years ago. Am I right to say the effects of deduction is 51%? What your advice? Terminate after I can break even say after 4-5 years?
RW
REPLY
The effect of deduction at the end of 30 years is 35% compuated as follows:
- Total cash value (including non guaranteed): $53935 65%
- Effect of deduction $29132 35%
- Accumulated premium $83067 100%
To decide whether to continue or cancel the policy is a difficult question. Read my FAQ on "existing insurance policy" in my blog. Or read my book, Practical Guide on Financial Planning, available at www.easysearch.sg/ishop
Critical Illness claim
Dear Mr Tan,
I'm a middle age man who had a heart bypass operation more than 3 months ago and had incurred quite a large medical bill. Fortunately, I have always believed in the importance of insurance and had bought numerous policies for critical illness over the past 18 years.
Is it a normal practice for insurance companies to assess claims of hospitalisation and various critical illness policies jointly, withholding all payments until they have done the necessary checks with my numerous doctors. Moreover, it's more than 3 months and I haven't had any indication from the company on how I could be compensated.
It is really frustrating because they seemed to be taking their "own sweet time" in assessing my claims. First, by sending various medical questionnaires to doctors who had attended to me during my surgery/ hospitalisation, followed by my GP and now to my other specialists. What is more frustrating is that the company continues to bill me promptly for my monthly payments, including for the critical illness policies that I'm claiming against.
Would appreciate your kind advice on whether the time frame and procedure used by the company are norms when claims are involved. Thank you in advance.
REPLY
It is wrong for them to keep you in the dark for three months. They should communicate with you more actively. You can write a letter of complaint to the service quality manager and insist that they should give you a reply soon. If they do not, you can lodge a complaint with MAS for the poor quality of service and bad response.
OBSERVATION
Many policyholders have encountered difficulty and delay in submitting claims for critical illness. It is better to take only a modest amount of critical illness insurance and have personal savings, rather than pay a high premium for critical illness cover where you may face difficulty and uncertaintly in getting approval of the claim (for borderline cases).
This is explained in my book, Practical Guide on Financial Planning.
I'm a middle age man who had a heart bypass operation more than 3 months ago and had incurred quite a large medical bill. Fortunately, I have always believed in the importance of insurance and had bought numerous policies for critical illness over the past 18 years.
Is it a normal practice for insurance companies to assess claims of hospitalisation and various critical illness policies jointly, withholding all payments until they have done the necessary checks with my numerous doctors. Moreover, it's more than 3 months and I haven't had any indication from the company on how I could be compensated.
It is really frustrating because they seemed to be taking their "own sweet time" in assessing my claims. First, by sending various medical questionnaires to doctors who had attended to me during my surgery/ hospitalisation, followed by my GP and now to my other specialists. What is more frustrating is that the company continues to bill me promptly for my monthly payments, including for the critical illness policies that I'm claiming against.
Would appreciate your kind advice on whether the time frame and procedure used by the company are norms when claims are involved. Thank you in advance.
REPLY
It is wrong for them to keep you in the dark for three months. They should communicate with you more actively. You can write a letter of complaint to the service quality manager and insist that they should give you a reply soon. If they do not, you can lodge a complaint with MAS for the poor quality of service and bad response.
OBSERVATION
Many policyholders have encountered difficulty and delay in submitting claims for critical illness. It is better to take only a modest amount of critical illness insurance and have personal savings, rather than pay a high premium for critical illness cover where you may face difficulty and uncertaintly in getting approval of the claim (for borderline cases).
This is explained in my book, Practical Guide on Financial Planning.
World Cup - the octopus
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