Tuesday, November 3, 2009
Help small business hire again
The key to economic recovery is employment and creating new jobs, especially by small business.
TKL Financial Planning
Someone asked about buying the TKL Financial Planning book. It will be ready by January 2010. It may be available early in PDF copy at the internet shop (projects.easyapps.sg/ishop). You can get a free copy of draft 6a of this book (90 pages) here.
I am selling some PDF versions of my intelligence quiz and sudoku books. They can also be found at the internet shop. The price is $4 per volume (compared to $7.90 for the printed book).
I am selling some PDF versions of my intelligence quiz and sudoku books. They can also be found at the internet shop. The price is $4 per volume (compared to $7.90 for the printed book).
Monday, November 2, 2009
Patient voices and insurance
Even with insurance, you may not be adequately covered. Read this article.
Term Insurance for 25 years
Here are some tips for buying term insurance:
a) Buy a term insurance for 25 years. You need insurance protection for this period. After this period, you do not need life insurance protection any more, as your children would have grown up and can take care of their own financial needs.
b) Even if your children still depends on you financially, you would have accumulated sufficient savings during the 25 years (provided that you invest in the right products that give you a fair return).
c) Buy a term insurance to cover 5 to 7 years of your earnings. If your earnings is $40,000 a year, you will need $250,000 (say).
d) If you wish to reduce the premium, you can choose a decreasing term insurance (where the sum assured reduces yearly over 25 years). Alternatively, you can buy an income benefit that pays 50% of your earnings over the remaining years.
You can read these examples in my book TKL Financial Planning.
To recap: at the end of 25 years, you do not need any life insurance cover. If you still have a housing loan, you can cover it separately under a mortgage insurance policy. Do not allow an agent to frighten you into buying a whole life policy, with the argument that you will not have any cover after the term insurance expires.
Tan Kin Lian
a) Buy a term insurance for 25 years. You need insurance protection for this period. After this period, you do not need life insurance protection any more, as your children would have grown up and can take care of their own financial needs.
b) Even if your children still depends on you financially, you would have accumulated sufficient savings during the 25 years (provided that you invest in the right products that give you a fair return).
c) Buy a term insurance to cover 5 to 7 years of your earnings. If your earnings is $40,000 a year, you will need $250,000 (say).
d) If you wish to reduce the premium, you can choose a decreasing term insurance (where the sum assured reduces yearly over 25 years). Alternatively, you can buy an income benefit that pays 50% of your earnings over the remaining years.
You can read these examples in my book TKL Financial Planning.
To recap: at the end of 25 years, you do not need any life insurance cover. If you still have a housing loan, you can cover it separately under a mortgage insurance policy. Do not allow an agent to frighten you into buying a whole life policy, with the argument that you will not have any cover after the term insurance expires.
Tan Kin Lian
Exchange traded fund (ETF)
There are many exchange traded funds (ETF) that are being marketed in SGX. The advantages of an ETF are:
a) It is a fund comprising of many underlying shares, i.e. provide diversification
b) It is invested to mirror a market index
c) The management fees are low
d) It can be traded at any time through the exchange
A good example of a ETF is the StateStreet Tracker fund, which is listed as STI ETF. It has an annual management fee of only 0.3%.
The annual fee for ETFs ranges from 0.2% to 1% depending on the fund manager. The ETF that are invested in China or India are likely to have higher fee.
If you buy a ETF, you pay a brokerage of around 0.3% plus GST and other charges. It can amount to 0.4%.
The annual management fee of a ETF is lower than an actively managed unit trust. For the unit trust, the manager will try to outperform the market. But, according to independent studies, most active fund managers had not been able to outperform the market, in spite of their higher fees. It is better to invest in a passively managed fund that mirrors the market, i.e. an indexed fund or ETF.
Tan Kin Lian
a) It is a fund comprising of many underlying shares, i.e. provide diversification
b) It is invested to mirror a market index
c) The management fees are low
d) It can be traded at any time through the exchange
A good example of a ETF is the StateStreet Tracker fund, which is listed as STI ETF. It has an annual management fee of only 0.3%.
The annual fee for ETFs ranges from 0.2% to 1% depending on the fund manager. The ETF that are invested in China or India are likely to have higher fee.
If you buy a ETF, you pay a brokerage of around 0.3% plus GST and other charges. It can amount to 0.4%.
The annual management fee of a ETF is lower than an actively managed unit trust. For the unit trust, the manager will try to outperform the market. But, according to independent studies, most active fund managers had not been able to outperform the market, in spite of their higher fees. It is better to invest in a passively managed fund that mirrors the market, i.e. an indexed fund or ETF.
Tan Kin Lian
Freedom of the press
A new law is being passed to protect journalists about the confidentiality of their sources.
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