You can get a financial plan from this link.
You can get an explanation for the projection here. If you do not understand the projection, you can consult on e of the two experts listed in the FAQ. They will give an explanation of the key figures in the projection. If you understand the figures, you will be able to make a better decision on how to manage your own financial future.
Wednesday, January 19, 2011
Remembering Dr. Goh Keng Swee
Dr. Goh Keng Swee was the deputy Prime Minister in the 1970s. He was the person responsible for building up the economic and social foundation that contributed to the success and vibrancy of Singapore today.
I know Dr. Goh personally and wish to point out his great qualities:
It is quite sad that many or our leaders today are willing to pay a lot of money in engaging consultants or paying for expensive infrastructure, so that they do not have to decide and take responsibility for their decision. The big expenses, whether by the state or the commercial enterprises, must surely be reflected in the higher prices that are paid by consumers, adding to the huge increase in the cost of living. I wish that Dr. Goh is still around to stop these wasteful expenditures.
Tan Kin Lian
I know Dr. Goh personally and wish to point out his great qualities:
- He is frugal and does not waste money
- He uses his common sense and do not rely on advice of consultants and bankers
The bankers wanted Singapore to open up its economy and internationalize the Singapore dollar. Dr. Goh knew the risk of allowing these bankers to have their way. They could play the currency and destroy an economy. Dr. Goh would also not spend tens of millions of dollars in paying consultants to advice on decisions that can be made by common sense. He is frugal anyway.
It is quite sad that many or our leaders today are willing to pay a lot of money in engaging consultants or paying for expensive infrastructure, so that they do not have to decide and take responsibility for their decision. The big expenses, whether by the state or the commercial enterprises, must surely be reflected in the higher prices that are paid by consumers, adding to the huge increase in the cost of living. I wish that Dr. Goh is still around to stop these wasteful expenditures.
Tan Kin Lian
Highway construction
My friend from Europe told me this story. The head of the ministry of works of an European country attended a prestigious US business program and met his counterpart from an African country.
One day, the African was invited to visit the home of his European counterpart. It was a grand and impressive house. The African asked the European friend how he could afford such an expensive house. The friend pointed out to the newly build highway not far away from the home and said "Do you see the new highway? It takes only a small portion of the budget to pay for this house".
The following year, the European visited the African country and was invited to the home of his African friend. It was a palace, much grander and more expensive than his home in Europe. He asked the African how he could afford it.
The African said, "Can you see the highway out there?". The European looked out and said, "But there is no highway. I only see jungle". The African pointed to his palace and said, "Well, it's here".
Tan Kin Lian
One day, the African was invited to visit the home of his European counterpart. It was a grand and impressive house. The African asked the European friend how he could afford such an expensive house. The friend pointed out to the newly build highway not far away from the home and said "Do you see the new highway? It takes only a small portion of the budget to pay for this house".
The following year, the European visited the African country and was invited to the home of his African friend. It was a palace, much grander and more expensive than his home in Europe. He asked the African how he could afford it.
The African said, "Can you see the highway out there?". The European looked out and said, "But there is no highway. I only see jungle". The African pointed to his palace and said, "Well, it's here".
Tan Kin Lian
North South Expressway
The Government has announced the plan to build the North South Expressway. It will cost $7 to $8 billion and will be ready by 2020.
I believe that an elevated expressway will be less costly and take a shorter time to build .Many cities have adopted the elevated rather than the underground approach. Are we spending too much money, when there is a cheaper option?
12 years ago, I wrote to the Minister of Transport to propose a second level for the Central Expressway. He replied that it would be difficult to build the access roads to the elevated expressway. I may not be a road engineer, but I believe that it can be done. It would be easier, quicker, less costly and more practical to have a second level CTE.
Unfortunately, this type of decisions are taken by the policy makers and the planners, without much discussion with the people who have to pay for it (through our taxes and cost of living) and to use it daily.
Tan Kin Lian
I believe that an elevated expressway will be less costly and take a shorter time to build .Many cities have adopted the elevated rather than the underground approach. Are we spending too much money, when there is a cheaper option?
12 years ago, I wrote to the Minister of Transport to propose a second level for the Central Expressway. He replied that it would be difficult to build the access roads to the elevated expressway. I may not be a road engineer, but I believe that it can be done. It would be easier, quicker, less costly and more practical to have a second level CTE.
Unfortunately, this type of decisions are taken by the policy makers and the planners, without much discussion with the people who have to pay for it (through our taxes and cost of living) and to use it daily.
Tan Kin Lian
A good life insurance policy
I have often been asked, "is this a good life insurance policy?"
If this policy is being sold to you by an agent, you can be 90% sure that it is a bad policy. The agent (who can also have a title such as financial adviser or consultant) is likely to offer you a policy that requires you to pay a big monthly premium and gives you a poor yield. But the agent will sound impressive, as he or she has been specially trained in marketing and telling (exaggerating) the benefits of the policy.
Here is a simple test: if the policy provides pure protection (i.e against death or critical illness), ask the agent to get you a comparison of the premium rates charged by other insurance policies on similar policies. You should pay an annual premium of not more than $500. If the agent is not willing to provide this service, or does not give a fair or clear comparison of the comparable products, DO NOT TRUST THE AGENT!
If the life insurance policy is intended to give you a return on your savings, you should calculate the reduction in yield on the policy. This is the difference between the gross yield used in the projection (which could be 5%, 9%, 5.25% or 3.75%) and the net yield produced by the cash value. If the policy is for a long term, take the cash value at 25 years. If it is for a shorter term, take the cash value at that shorter duration.
You can calculate the net yield using an Excel spreadsheet of financial calculator, as explained in this FAQ. If the reduction in yield is more than 1.5%, YOU MUST REJECT THE POLICY!
You will find, in nearly all cases, the reduction in yield to be much higher. It is typical for the reduction in yield to be 3.5% to 5% per annum. This leaves you with a gain that can hardly keep up with inflation.
Here is an example of how the consumer is usually deprived of a decent yield:
Do not buy a life insurance policy that pays you only $168,00 when the minimum that you should get is $237,000.
Tan Kin Lian
If this policy is being sold to you by an agent, you can be 90% sure that it is a bad policy. The agent (who can also have a title such as financial adviser or consultant) is likely to offer you a policy that requires you to pay a big monthly premium and gives you a poor yield. But the agent will sound impressive, as he or she has been specially trained in marketing and telling (exaggerating) the benefits of the policy.
Here is a simple test: if the policy provides pure protection (i.e against death or critical illness), ask the agent to get you a comparison of the premium rates charged by other insurance policies on similar policies. You should pay an annual premium of not more than $500. If the agent is not willing to provide this service, or does not give a fair or clear comparison of the comparable products, DO NOT TRUST THE AGENT!
If the life insurance policy is intended to give you a return on your savings, you should calculate the reduction in yield on the policy. This is the difference between the gross yield used in the projection (which could be 5%, 9%, 5.25% or 3.75%) and the net yield produced by the cash value. If the policy is for a long term, take the cash value at 25 years. If it is for a shorter term, take the cash value at that shorter duration.
You can calculate the net yield using an Excel spreadsheet of financial calculator, as explained in this FAQ. If the reduction in yield is more than 1.5%, YOU MUST REJECT THE POLICY!
You will find, in nearly all cases, the reduction in yield to be much higher. It is typical for the reduction in yield to be 3.5% to 5% per annum. This leaves you with a gain that can hardly keep up with inflation.
Here is an example of how the consumer is usually deprived of a decent yield:
- If a consumer saves $500 a month over 25 years, the accumulated premium should be $295,000
- If the reduction in yield is 1.5%, the cash value should be $237,000
- If the actual reduction is 4%, the cash value is $168,000
In the above example, your accumulated premium should be $295,000. By giving a cash value of l$168,000, the insurance company is taking away $127,000 from you over 25 years. This is too much to take away. A fair amount for the insurance company to take away (i.e .for the insurance cover and the investment service) is $58,000, leaving you with a cash value of $237,000.
Do not buy a life insurance policy that pays you only $168,00 when the minimum that you should get is $237,000.
Tan Kin Lian
DUI Insurance | Drink Driving Penalties
DUI laws
With the increased public pressure to deter drunk driving, there are now national DUI laws with which every state must comply. Anyone with a blood alcohol content (BAC) equal to, or above 0.08 percent is considered alcohol-impaired. No one under the age of 21 is allowed to possess or consume alcoholic beverages in any state. Dui consequences will have serious implications for your licence, job and income.
Cancelled credit card
Dear Mr. Tan
My wife cancelled her credit card with Standard Charted Bank in 2006. It happened that there was a $25 credit in her favor. So, for a few years, the bank kept sending monthly statements to her indicating that. She eventually went down a year ago to a Standard Charted Bank branch (Marine Parade) to close her credit card account. The bank sent her a cheque of $25 subsequently. A few months later, she received a new Standard Charted credit card in the mail, unsolicited. She cut up the card immediately. Then, the monthly NIL return statements started to come in monthly.
Today, she received a statement indicating a bill of $480 for the credit card annual fee. She then had to spend 25 minutes waiting and talking to an Standard Chartered Bank operator about the whole incident and asked for the card to be canceled again!
My wife cancelled her credit card with Standard Charted Bank in 2006. It happened that there was a $25 credit in her favor. So, for a few years, the bank kept sending monthly statements to her indicating that. She eventually went down a year ago to a Standard Charted Bank branch (Marine Parade) to close her credit card account. The bank sent her a cheque of $25 subsequently. A few months later, she received a new Standard Charted credit card in the mail, unsolicited. She cut up the card immediately. Then, the monthly NIL return statements started to come in monthly.
Today, she received a statement indicating a bill of $480 for the credit card annual fee. She then had to spend 25 minutes waiting and talking to an Standard Chartered Bank operator about the whole incident and asked for the card to be canceled again!
Prepare your personal financial plan
You can prepare your personal financial plan (it's free) here.
The plan will be sent by e-mail to you.
You should study it carefully.
You can click on the link in the PDF to view the FAQs that can guide you.
You are also given two experts that you can ask to explain the financial plan for you.
http://projects.easyapps.sg/life21d/Planning.aspx
The plan will be sent by e-mail to you.
You should study it carefully.
You can click on the link in the PDF to view the FAQs that can guide you.
You are also given two experts that you can ask to explain the financial plan for you.
http://projects.easyapps.sg/life21d/Planning.aspx
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