I wish to give some advice for young people, especially those who have just started work.
You should budget your monthly earnings for the following:
> repayment of study or other loan committed previously
> contribute towards the household expenses (if you are staying with your parents)
> your monthly expenses for travel, meals and clothes (be frugal)
> put aside 15% of your earnings as savings
If there is a balance, you can use it for travel, entertainment or other luxury.
Most importantly - set aside 15% for your savings. You may need to draw down on your savings if you lose your job, or you change your job, or you need cash to meet an emergency. Keep the savings in flexible form.
Avoid investing in a life insurance policy, as the savings are locked up and inflexible. If you need protection, buy term insurance.
Avoid borrowing on your credit card. The interest charges is very high. It can cost you a lot of money.
Read this FAQ:
http://www.tankinlian.com/faq/fptips.html
Wednesday, November 12, 2008
Reuters: Financial crisis politically awakens Singapore investors
Fri Nov 7, 2008 6:01am EST
By Melanie Lee
SINGAPORE (Reuters) - Cancer patient Lim Qing Si was one of thousands of hard-working Singaporeans who lost their savings in the financial crisis, especially when Lehman Brothers collapsed and its secured products became virtually worthless.
"All this money is my husband and my retirement savings," said Lim, a 54-year-old retiree, who must now scramble together what's left of her savings to pay for cancer treatment after a malignant tumor was found in her leg.
In all, nearly 10,000 people in Singapore stand to lose over S$500 million ($338 million) due to the collapse of Lehman Brothers Holdings Inc, the central bank says.
The incident left many financially scarred but politically awakened in a city-state where protests are rare and street gatherings of five or more people require a permit.
Lim and others have taken advantage of a recent government move to create a forum for public protest, a "Speakers Corner," modeled on the Hyde Park bastion of free speech.
Since the financial crisis struck, hundreds of ordinary working-class people who have lost money have gathered each Saturday to air their grievances and call on the government to help recoup their losses.
"I hope the authorities, who are supposed to protect ordinary people, should be much more proactive," said Tan Kin Lian, the protest organizer and a former chief executive of a large Singapore insurer.
Following the weekly protests, the central bank said it would investigate alleged mis-selling of Lehman-linked products, such as DBS Group's "High Note 5" and Lehman Brothers mini-bonds sold by banks across the island state.
Singapore's biggest bank, the DBS Group, was among the banks that sold Lehman products to its customers, many of whom were simple, working-class people looking for safe investments for their retirement savings in a country without state pensions.
DBS has said it will pay up to S$80 million to compensate some investors. Maybank also said it has identified mini-bond investors for compensation, while smaller financial institution Hong Leong Finance said it will buy back Lehman-linked mini-bonds from elderly and less-educated customers.
These offers may ease public pressure, but the discontent Singaporeans feel has shaken their faith in a government that espoused a pro-investment culture, analysts said.
Singapore, which has been ruled by one party, the Peoples' Action Party, since its independence in 1965, has always been a promoter of investment, encouraging foreign firms to invest in the country and its compliant citizens to invest in their future by putting their savings in financial products.
Eugene Tan, a law lecturer at Singapore Management University, said the fiasco "puts the government's credibility at risk" and the government had to be seen to do more.
"The Lehman bonds incident affected a very vulnerable segment of Singapore's population," said Tan.
The involvement of the largest bank DBS "made the issue very germane and very alive," Tan added. DBS is partly owned by Temasek Holdings, which is a government linked company.
GOVERNMENT STEPS IN
While the country's marginalized opposition parties hope to take inspiration from neighboring Malaysia, where a resurgent opposition says it can win power after slashing the government's majority in March elections, analysts said the chance this incident will snowball into a larger political rift is slim.
The turnout at the Lehman protests is a far cry from previous protests led by political opposition party leaders, such as a demonstration of about 20 people in March against rising prices, for which 19 people have been charged for illegal assembly.
"There is this very sharp contrast. When you have someone trying to draw Singaporeans attention to the politics of human rights, people are generally apathetic," said Alan Chong, political scientist at the National University of Singapore.
"Singapore's political culture tends toward pragmatism -- this is largely a material pragmatism," Chong said.
The government, which relies on domestic stability to help attract foreign direct investment and to develop high-value sectors such as financial services and biomedical engineering, has told the banks to resolve the matter fairly.
"Where there has been mis-selling, it has to be put right," Singapore's Prime Minister Lee Hsien Loong was quoted as saying in the Straits Times newspaper.
However, not everyone is satisfied by the response and the protests will continue, according to Tan's blog: tankinlian.blogspot.com
"Singaporeans are being treated like sheep," said Jojobeach, the online monikor of someone who posted comments on local discussion forum sgforums.com.
By Melanie Lee
SINGAPORE (Reuters) - Cancer patient Lim Qing Si was one of thousands of hard-working Singaporeans who lost their savings in the financial crisis, especially when Lehman Brothers collapsed and its secured products became virtually worthless.
"All this money is my husband and my retirement savings," said Lim, a 54-year-old retiree, who must now scramble together what's left of her savings to pay for cancer treatment after a malignant tumor was found in her leg.
In all, nearly 10,000 people in Singapore stand to lose over S$500 million ($338 million) due to the collapse of Lehman Brothers Holdings Inc, the central bank says.
The incident left many financially scarred but politically awakened in a city-state where protests are rare and street gatherings of five or more people require a permit.
Lim and others have taken advantage of a recent government move to create a forum for public protest, a "Speakers Corner," modeled on the Hyde Park bastion of free speech.
Since the financial crisis struck, hundreds of ordinary working-class people who have lost money have gathered each Saturday to air their grievances and call on the government to help recoup their losses.
"I hope the authorities, who are supposed to protect ordinary people, should be much more proactive," said Tan Kin Lian, the protest organizer and a former chief executive of a large Singapore insurer.
Following the weekly protests, the central bank said it would investigate alleged mis-selling of Lehman-linked products, such as DBS Group's "High Note 5" and Lehman Brothers mini-bonds sold by banks across the island state.
Singapore's biggest bank, the DBS Group, was among the banks that sold Lehman products to its customers, many of whom were simple, working-class people looking for safe investments for their retirement savings in a country without state pensions.
DBS has said it will pay up to S$80 million to compensate some investors. Maybank also said it has identified mini-bond investors for compensation, while smaller financial institution Hong Leong Finance said it will buy back Lehman-linked mini-bonds from elderly and less-educated customers.
These offers may ease public pressure, but the discontent Singaporeans feel has shaken their faith in a government that espoused a pro-investment culture, analysts said.
Singapore, which has been ruled by one party, the Peoples' Action Party, since its independence in 1965, has always been a promoter of investment, encouraging foreign firms to invest in the country and its compliant citizens to invest in their future by putting their savings in financial products.
Eugene Tan, a law lecturer at Singapore Management University, said the fiasco "puts the government's credibility at risk" and the government had to be seen to do more.
"The Lehman bonds incident affected a very vulnerable segment of Singapore's population," said Tan.
The involvement of the largest bank DBS "made the issue very germane and very alive," Tan added. DBS is partly owned by Temasek Holdings, which is a government linked company.
GOVERNMENT STEPS IN
While the country's marginalized opposition parties hope to take inspiration from neighboring Malaysia, where a resurgent opposition says it can win power after slashing the government's majority in March elections, analysts said the chance this incident will snowball into a larger political rift is slim.
The turnout at the Lehman protests is a far cry from previous protests led by political opposition party leaders, such as a demonstration of about 20 people in March against rising prices, for which 19 people have been charged for illegal assembly.
"There is this very sharp contrast. When you have someone trying to draw Singaporeans attention to the politics of human rights, people are generally apathetic," said Alan Chong, political scientist at the National University of Singapore.
"Singapore's political culture tends toward pragmatism -- this is largely a material pragmatism," Chong said.
The government, which relies on domestic stability to help attract foreign direct investment and to develop high-value sectors such as financial services and biomedical engineering, has told the banks to resolve the matter fairly.
"Where there has been mis-selling, it has to be put right," Singapore's Prime Minister Lee Hsien Loong was quoted as saying in the Straits Times newspaper.
However, not everyone is satisfied by the response and the protests will continue, according to Tan's blog: tankinlian.blogspot.com
"Singaporeans are being treated like sheep," said Jojobeach, the online monikor of someone who posted comments on local discussion forum sgforums.com.
Hear the voices of High Note 2 investors
Posted at request of LK and HNIGHN2WG
After attended the dialogue with DBS, we cannot accept the ‘case by case’ investigation recommended by DBS. A petition consists of 83 investors is on the way.
In order to beef up our case against DBS for Non-Disclosure of Material Fact & Misrepresentation/Mis-Selling, we are conducting a survey/questionnaire to identify trends/selling patterns of different RMs, branches, etc to make it easier for us to argue our case.
More people mean more muscles to engage DBS!
We urge other High Notes 2 investors who are not aware of this petition, please come down to Mr Tan Kin Lian speak at Hong Lim Park (next to Clarke Quay MRT station) this Sat 15th Nov, from 5.00~7.00pm evening to join us in this petition.
We can also meet & discuss on our follow-up action.
LK
On behalf of HNIGHN2WG
After attended the dialogue with DBS, we cannot accept the ‘case by case’ investigation recommended by DBS. A petition consists of 83 investors is on the way.
In order to beef up our case against DBS for Non-Disclosure of Material Fact & Misrepresentation/Mis-Selling, we are conducting a survey/questionnaire to identify trends/selling patterns of different RMs, branches, etc to make it easier for us to argue our case.
More people mean more muscles to engage DBS!
We urge other High Notes 2 investors who are not aware of this petition, please come down to Mr Tan Kin Lian speak at Hong Lim Park (next to Clarke Quay MRT station) this Sat 15th Nov, from 5.00~7.00pm evening to join us in this petition.
We can also meet & discuss on our follow-up action.
LK
On behalf of HNIGHN2WG
Unexpected surge - 700,000 visitors to my blog
Two months ago, I projected that my blog will reach 500,000 visitors by the magic date of 11-11-2008. I did not forsee the crisis with the credit linked notes - which caused an unexpected surge in visitors to my blog. This magic date passed yesterday. The visitorships passed 700,000 (40% more than 500,000) today. This is just for historical record.
Trustees act to terminate the swaps
http://www.mas.gov.sg/news_room/press_releases/2008/Actions_Taken_to_Protect_Interests_of_Noteholders_of_the_Lehman_Minibond_Notes_Programme.html
IN A move to protect Lehman Minibond investors, the trustee HSBC Institutional Trust Services has taken action to terminate the swaps for series 1 to 8 notes in the programme, said the Monetary Authority of Singapore (MAS) on Wednesday.
'This removes the risk of credit events in the underlying securities and helps to preserve the value of the underlying collateral,' said MAS in a statement.
'This action is not necessary for series 9 and 10 as the underlying securities for these notes are corporate bonds and have no swaps.'
MAS said it has been informed of the steps taken by HSBC 'in view of the current market conditions'.
The statement said the trustee has appointed three partners from PricewaterhouseCoopers
Singapore (PwC) as receivers for series 5 to 8 which have defaulted since the relevant coupon payments were not made by the due dates.
The other series would also default if the relevant coupon payments are not received by the due dates and the relevant grace periods have lapsed.
The trustee would then appoint the three PwC partners as receivers for these series.
The receivers' role is to take control of the assets of these notes and to work closely with the trustee towards a solution which is in the best interests of noteholders, said MAS.
The trustee and the receivers have assured MAS that they have not ruled out any restructuring proposals received from interested parties and that these will be explored for all series of the notes.
To provide noteholders with an independent opinion on the options that best serve their interests, MAS has appointed Deloitte & Touche Corporate Finance Pte Ltd (DTCF) as an independent financial adviser on the Lehman Minibond notes programme.
MAS cautioned that restructuring the Minibond notes programme is a complex exercise which entails the agreement of several parties and resolution of challenging legal issues.
It would also need noteholders' approval.
'These steps will take time. The receivers would also have to take into account the risks to noteholders, including the continued credit and market risk to the underlying collateral,' said MAS.
'Hence, whether a viable restructuring proposal will materialise depends on several factors which are not within the control of the trustee and the receivers.'
MAS added that it understands that noteholders are anxious to know what they should do and what to expect next.
'At the moment, there is no action required on their part. MAS and the trustee will continue to keep noteholders updated on all developments including any options for them to consider,' it advised.
'MAS has asked the trustee to work towards providing noteholders with an update on whether restructuring is still a viable option by the end of the month at the latest.'
Mr Heng Swee Keat, Managing Director, MAS, said: 'MAS has been in close consultation with the trustee and receivers.'
'We believe that these are reasonable and appropriate steps for the trustee to take to protect the interests of noteholders given current market conditions.'
He added that the appointment of the independent financial adviser is also an important step to ensure that noteholders' interests are served'.
Mr Heng added: 'Our work on other fronts, on the formal inquiries and in seeing to the serious and impartial process of handling investors' complaints, is progressing. We will provide updates at the relevant juncture.'
IN A move to protect Lehman Minibond investors, the trustee HSBC Institutional Trust Services has taken action to terminate the swaps for series 1 to 8 notes in the programme, said the Monetary Authority of Singapore (MAS) on Wednesday.
'This removes the risk of credit events in the underlying securities and helps to preserve the value of the underlying collateral,' said MAS in a statement.
'This action is not necessary for series 9 and 10 as the underlying securities for these notes are corporate bonds and have no swaps.'
MAS said it has been informed of the steps taken by HSBC 'in view of the current market conditions'.
The statement said the trustee has appointed three partners from PricewaterhouseCoopers
Singapore (PwC) as receivers for series 5 to 8 which have defaulted since the relevant coupon payments were not made by the due dates.
The other series would also default if the relevant coupon payments are not received by the due dates and the relevant grace periods have lapsed.
The trustee would then appoint the three PwC partners as receivers for these series.
The receivers' role is to take control of the assets of these notes and to work closely with the trustee towards a solution which is in the best interests of noteholders, said MAS.
The trustee and the receivers have assured MAS that they have not ruled out any restructuring proposals received from interested parties and that these will be explored for all series of the notes.
To provide noteholders with an independent opinion on the options that best serve their interests, MAS has appointed Deloitte & Touche Corporate Finance Pte Ltd (DTCF) as an independent financial adviser on the Lehman Minibond notes programme.
MAS cautioned that restructuring the Minibond notes programme is a complex exercise which entails the agreement of several parties and resolution of challenging legal issues.
It would also need noteholders' approval.
'These steps will take time. The receivers would also have to take into account the risks to noteholders, including the continued credit and market risk to the underlying collateral,' said MAS.
'Hence, whether a viable restructuring proposal will materialise depends on several factors which are not within the control of the trustee and the receivers.'
MAS added that it understands that noteholders are anxious to know what they should do and what to expect next.
'At the moment, there is no action required on their part. MAS and the trustee will continue to keep noteholders updated on all developments including any options for them to consider,' it advised.
'MAS has asked the trustee to work towards providing noteholders with an update on whether restructuring is still a viable option by the end of the month at the latest.'
Mr Heng Swee Keat, Managing Director, MAS, said: 'MAS has been in close consultation with the trustee and receivers.'
'We believe that these are reasonable and appropriate steps for the trustee to take to protect the interests of noteholders given current market conditions.'
He added that the appointment of the independent financial adviser is also an important step to ensure that noteholders' interests are served'.
Mr Heng added: 'Our work on other fronts, on the formal inquiries and in seeing to the serious and impartial process of handling investors' complaints, is progressing. We will provide updates at the relevant juncture.'
SCMP:Approval ratings of finance chiefs drop
http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=M9PLL02UTS62&linkid=a2ab012b-27ad-4bc4-8fa5-6dae21f8a038&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
12 Nov 2008
Financial Secretary John Tsang Chun-wah and Secretary for Financial Services and the Treasury Chan Ka-keung, key officials handling policies relating to the financial meltdown and the Lehman Brothers minibonds saga, have both suffered significant falls in their approval ratings. In the latest University of Hong Kong survey on the popularity of top government officials Professor Chan’s approval rate fell by 8 percentage points last week, down from 33 per cent early last month, the most significant drop in approval ratings when compared with the other 11 ministers. Mr Tsang’s approval rating dropped by 5 percentage points, down from 41per cent early last month.
12 Nov 2008
Financial Secretary John Tsang Chun-wah and Secretary for Financial Services and the Treasury Chan Ka-keung, key officials handling policies relating to the financial meltdown and the Lehman Brothers minibonds saga, have both suffered significant falls in their approval ratings. In the latest University of Hong Kong survey on the popularity of top government officials Professor Chan’s approval rate fell by 8 percentage points last week, down from 33 per cent early last month, the most significant drop in approval ratings when compared with the other 11 ministers. Mr Tsang’s approval rating dropped by 5 percentage points, down from 41per cent early last month.
Rebuttal to "invest with your eyes open"
Dear Mr. Tan
Thank you for your invitation and organizing the petition.
In case you are addressing the audience and making rebuttal to the statement by our leader on the remarks “with their eyes open” I would like to point out that if an investor is prepared to take such a risk, i.e. to lose their entire principal sum they would opt for so many other investment that pay much higher then 5%. I myself has been led to believe that my only risk is not getting the coupon if the said companies is in default.
J
REPLY
It will be more effective if you write directly to the government leader who made the remark, or write to the newspaper who reported this remark.
Thank you for your invitation and organizing the petition.
In case you are addressing the audience and making rebuttal to the statement by our leader on the remarks “with their eyes open” I would like to point out that if an investor is prepared to take such a risk, i.e. to lose their entire principal sum they would opt for so many other investment that pay much higher then 5%. I myself has been led to believe that my only risk is not getting the coupon if the said companies is in default.
J
REPLY
It will be more effective if you write directly to the government leader who made the remark, or write to the newspaper who reported this remark.
SCMP:Legco probe best hope for minibond mess
http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=F7GHF78RW806&linkid=7d193dd3-7937-410d-8020-6bc03178e4f0&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
12 Nov 2008
Chris Yeung is the Post’s editor-at-large. chris.yeung@scmp.com
Two days ago, before the scheduled Legislative Council vote today on whether to invoke special powers to investigate the Lehman Brothers minibonds saga, local banks mounted a counter-lobbying drive. In full-page newspaper advertisements on Monday, they stressed their commitment to “offering practical, transparent and fair solutions” to address the difficulties faced by more than 40,000 Hong Kong investors affected by Lehman’s demise.
It did not mention the Legco vote, but the writing is on the wall: the last thing they want is to be summoned to the legislature to give evidence on the Lehman case.
Also on Monday, finance functional constituency legislator David Li Kwok-po urged members to vote down the motion. He warned that, if it were passed, it would allow Legco to exercise “unlimited” powers over banks. It would set a bad precedent and might undermine the status of Hong Kong as an international financial centre, he added.
Banks, he said, would also have to stretch their resources for the Legco hearings at the expense of handling the buy-back efforts.
Privately, senior government officials have cautioned that a Legco inquiry would “put banks on public trial”.
If an inquiry goes ahead, banks might put the buy-back process on hold, according to one official. Banks fear they would be under pressure at the public hearings to divulge details of their business strategies and practices, the official said.
In view of the quasi-judicial nature of an independent inquiry and the style of Legco politics, their fears may be justified.
There is no denying that such an inquiry would further complicate matters and raise more uncertainties about the minibonds row. It may create tension that is not conducive to mediation and arbitration.
But, while the arguments against an inquiry carry some weight, the case for an investigation should not be dismissed lightly.
From a broader perspective, a full Legco probe could arguably help the banking industry, whose image has been tarnished by allegations of fraud, at worst, and misselling, at best, over the sale of Lehmanrelated products.
It would also allow the Monetary Authority and the Securities and Futures Commission, as well as the relevant policy bureau, to give detailed accounts of their respective roles and responsibilities.
Doing so would help set out a full picture for the affected investors and the general public so they could judge who, if anyone, should take the blame. More importantly, the investigation process would help identify faults in the regulatory system and make recommendations for improvement.
With their reputations at stake, there is no reason to believe banks would deliberately stall resolving this dispute because of a Legco inquiry.
Now that independent experts are tasked with assessing the value of the products, investors should feel assured that the findings would not be affected.
In view of the demise of Lehman and the plunge in the value of its investment products, a considerable number of the 40,000plus affected investors might not get what they want from the buy- back exercise. A feeling of injustice may prevail. If left unattended, their grievances could turn to anger and feelings of betrayal.
Undoubtedly, an early settlement between banks and investors is important. But, as the row has already damaged the authority and credibility of political and financial institutions, failing to seek a solution through a fair and open inquiry would be unjust.
The media and the public should ensure that Legco’s investigative powers do not go unchecked, to minimise any unintended consequences – such as probing too deeply into the operation of banks, or damaging business confidence.
12 Nov 2008
Chris Yeung is the Post’s editor-at-large. chris.yeung@scmp.com
Two days ago, before the scheduled Legislative Council vote today on whether to invoke special powers to investigate the Lehman Brothers minibonds saga, local banks mounted a counter-lobbying drive. In full-page newspaper advertisements on Monday, they stressed their commitment to “offering practical, transparent and fair solutions” to address the difficulties faced by more than 40,000 Hong Kong investors affected by Lehman’s demise.
It did not mention the Legco vote, but the writing is on the wall: the last thing they want is to be summoned to the legislature to give evidence on the Lehman case.
Also on Monday, finance functional constituency legislator David Li Kwok-po urged members to vote down the motion. He warned that, if it were passed, it would allow Legco to exercise “unlimited” powers over banks. It would set a bad precedent and might undermine the status of Hong Kong as an international financial centre, he added.
Banks, he said, would also have to stretch their resources for the Legco hearings at the expense of handling the buy-back efforts.
Privately, senior government officials have cautioned that a Legco inquiry would “put banks on public trial”.
If an inquiry goes ahead, banks might put the buy-back process on hold, according to one official. Banks fear they would be under pressure at the public hearings to divulge details of their business strategies and practices, the official said.
In view of the quasi-judicial nature of an independent inquiry and the style of Legco politics, their fears may be justified.
There is no denying that such an inquiry would further complicate matters and raise more uncertainties about the minibonds row. It may create tension that is not conducive to mediation and arbitration.
But, while the arguments against an inquiry carry some weight, the case for an investigation should not be dismissed lightly.
From a broader perspective, a full Legco probe could arguably help the banking industry, whose image has been tarnished by allegations of fraud, at worst, and misselling, at best, over the sale of Lehmanrelated products.
It would also allow the Monetary Authority and the Securities and Futures Commission, as well as the relevant policy bureau, to give detailed accounts of their respective roles and responsibilities.
Doing so would help set out a full picture for the affected investors and the general public so they could judge who, if anyone, should take the blame. More importantly, the investigation process would help identify faults in the regulatory system and make recommendations for improvement.
With their reputations at stake, there is no reason to believe banks would deliberately stall resolving this dispute because of a Legco inquiry.
Now that independent experts are tasked with assessing the value of the products, investors should feel assured that the findings would not be affected.
In view of the demise of Lehman and the plunge in the value of its investment products, a considerable number of the 40,000plus affected investors might not get what they want from the buy- back exercise. A feeling of injustice may prevail. If left unattended, their grievances could turn to anger and feelings of betrayal.
Undoubtedly, an early settlement between banks and investors is important. But, as the row has already damaged the authority and credibility of political and financial institutions, failing to seek a solution through a fair and open inquiry would be unjust.
The media and the public should ensure that Legco’s investigative powers do not go unchecked, to minimise any unintended consequences – such as probing too deeply into the operation of banks, or damaging business confidence.
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