Wednesday, March 3, 2010
New Asia Republic
I introduce you to a new website, New Asia Republic. Visit it. There is a link on the right panel. I have written an article on taxation here.
Puzzleman
REVISED LINK:
Here are some interesting puzzles for you and your family. Download the PDF and print it out. You can do the puzzles in your free time. You can also pass them to your family members and friends. They can test their problem solving skills.
Many people were surprised that it was possible to make 100 shapes from the 4 plastic pieces. Many of the shapes are challenging and could not be done easily. When they learned the solution, there were surprised that it was simple and ingenuous. They also learn to have a flexible mind and see "out of the box". The Shape Quiz book is available at $6 and the mini-pak at $2. Each comes with 4 plastic pieces in a zip lock bag.
Click here
Here are some interesting puzzles for you and your family. Download the PDF and print it out. You can do the puzzles in your free time. You can also pass them to your family members and friends. They can test their problem solving skills.
Many people were surprised that it was possible to make 100 shapes from the 4 plastic pieces. Many of the shapes are challenging and could not be done easily. When they learned the solution, there were surprised that it was simple and ingenuous. They also learn to have a flexible mind and see "out of the box". The Shape Quiz book is available at $6 and the mini-pak at $2. Each comes with 4 plastic pieces in a zip lock bag.
Click here
Increasing productivity in Singapore
There is now a strategic thrust to improve productivity in Singapore, to become less dependent on low cost foreign workers. Some people are sceptical. They say that this slogan is nice to say, but difficult to achieve. In some respect, they are right. The productivity campaign was first launched in Singapore three decades ago. Why has it not made much progress during this time?
I want to give a honest view, although some people may not like to hear it. We have a culture in Singapore of saying nice things, but not addressing the root of the problem. This is why we were not able to improve the birth rate, in spite of top level priority and massive effort expended for more than two decades. Improving productivity is another challenge that has not been overcome.
What is the root of the problem? We tend to take a theoretically approach towards solving our problems. We can say nice things and adopt strategies crafted by consultants, who do not really know the problem. Their solutions come from the text books, but are not practical. Some people say that this is the price to pay for letting scholars run the country.
We need to look at the root of the problem, before we can understand and find lasting solution. To improve productivity, we have to overcome the risk adverse mindset of Singaporeans.
Many people feel safe in keeping the status quo and are quite good in identifying reasons to keep the status quo. They will not make a change, unless the decision is made by someone at the top. Singaporeans are generally good at identify problems, including imaginary problems, rather than implementing change and improvements .
Singapore is also a wasteful society. We spend a lot of money on technology and management consultants, instead of implementing simple and practical improvements. Many people do not want to take the responsibility, so they pass the buck to the consultants, who take the big fees and also do not find any solution.
Can this mindset be changed? Yes, it can. The best way is to require a change to be done and to give a small budget for the change. You will be surprised how resourceful people can be, if they have limited budget and the responsible to solve the problem. i.e. no excuse accepted.
Tan Kin Lian
I want to give a honest view, although some people may not like to hear it. We have a culture in Singapore of saying nice things, but not addressing the root of the problem. This is why we were not able to improve the birth rate, in spite of top level priority and massive effort expended for more than two decades. Improving productivity is another challenge that has not been overcome.
What is the root of the problem? We tend to take a theoretically approach towards solving our problems. We can say nice things and adopt strategies crafted by consultants, who do not really know the problem. Their solutions come from the text books, but are not practical. Some people say that this is the price to pay for letting scholars run the country.
We need to look at the root of the problem, before we can understand and find lasting solution. To improve productivity, we have to overcome the risk adverse mindset of Singaporeans.
Many people feel safe in keeping the status quo and are quite good in identifying reasons to keep the status quo. They will not make a change, unless the decision is made by someone at the top. Singaporeans are generally good at identify problems, including imaginary problems, rather than implementing change and improvements .
Singapore is also a wasteful society. We spend a lot of money on technology and management consultants, instead of implementing simple and practical improvements. Many people do not want to take the responsibility, so they pass the buck to the consultants, who take the big fees and also do not find any solution.
Can this mindset be changed? Yes, it can. The best way is to require a change to be done and to give a small budget for the change. You will be surprised how resourceful people can be, if they have limited budget and the responsible to solve the problem. i.e. no excuse accepted.
Tan Kin Lian
Tuesday, March 2, 2010
Financial planning - reaching out to young people
Hi Mr. Tan,
I have your book "Practical Guide on Financial Planning". I find the stories and experiences of other people to be most beneficial. Because of my past experience e.g. Minibond, insurance, capital gurranteed products, I am able to appreciate your opinions and suggestions.
If I were an undergrad or secondary student, I would not be interested to read. This is a problem as financial education should not be learned from trial and error of a new worker. It should be taught in schools before they start drawing their first cheque.
Banks and FIs will continue to attract, promote, market products based on margin, profit or commission. The new workers continue to be bombard with the theme "credit is good for you" while "live within your means" is ignored by most people.
REPLY
I find that many undergraduates are also interested in financial planning. When I talk to them, they also find my views to be useful. They realised the importance of knowing what are good products to buy and bad products to avoid. I intend to hold many talks for young people so that they can benefit from my suggestions as well.
I have your book "Practical Guide on Financial Planning". I find the stories and experiences of other people to be most beneficial. Because of my past experience e.g. Minibond, insurance, capital gurranteed products, I am able to appreciate your opinions and suggestions.
If I were an undergrad or secondary student, I would not be interested to read. This is a problem as financial education should not be learned from trial and error of a new worker. It should be taught in schools before they start drawing their first cheque.
Banks and FIs will continue to attract, promote, market products based on margin, profit or commission. The new workers continue to be bombard with the theme "credit is good for you" while "live within your means" is ignored by most people.
REPLY
I find that many undergraduates are also interested in financial planning. When I talk to them, they also find my views to be useful. They realised the importance of knowing what are good products to buy and bad products to avoid. I intend to hold many talks for young people so that they can benefit from my suggestions as well.
AIA and Prudential
Dear Mr. Tan
Does the purchase of AIA by Prudential result in less choice for consumers?
REPLY
Most insurance companies offer different products which are difficult for consumers to compare. Nearly all of them have charges and give a poor return to consumers. The reduction in yield is about 3% in most cases. This could reduce the payout on maturity by more than 40%. If your premium can accumulate to $500,000 over the next 30 years, the insurance policy pays you only $300,000 - with 40% being taken away.
Consumers have a choice to invest in a low cost investment fund, such as the STI ETF available on the SGX. It offers diversification and an attractive return over the long term (by averaging out the good and bad years of the market). They can buy term insurance, decreasing term insurance or personal accident insurance to cover the risk of premature death.
This is explained in my book, Practical Guide on Financial Planning ($12). It is available in most bookstores or can be purchased from my Internet Shop. It comes with a free Shape Quiz minipack (worth $2).
Does the purchase of AIA by Prudential result in less choice for consumers?
REPLY
Most insurance companies offer different products which are difficult for consumers to compare. Nearly all of them have charges and give a poor return to consumers. The reduction in yield is about 3% in most cases. This could reduce the payout on maturity by more than 40%. If your premium can accumulate to $500,000 over the next 30 years, the insurance policy pays you only $300,000 - with 40% being taken away.
Consumers have a choice to invest in a low cost investment fund, such as the STI ETF available on the SGX. It offers diversification and an attractive return over the long term (by averaging out the good and bad years of the market). They can buy term insurance, decreasing term insurance or personal accident insurance to cover the risk of premature death.
This is explained in my book, Practical Guide on Financial Planning ($12). It is available in most bookstores or can be purchased from my Internet Shop. It comes with a free Shape Quiz minipack (worth $2).
Work near your home
There are many advantages of working near your home. You reduce the travelling cost, which can be quite expensive. You reduce the travelling time and have more time to spend with your family and neighbors and have a community life.
We have to changes our recruitment practices to make this possible. We should make it easier for people to search for a job near their homes. Advertisements for jobs should state their location of their workplaces. HR managers should give preference to people who live near the place of work. It is an advantage to the business as well, as these workers are likely to stay longer with the employer.
For most jobs, it should be possible to find a suitable candidate who lives near the place of work. We only need to improve our ability to search for these workers, or for the workers to search for these jobs.
Businesses should also be encouraged to set up their workplaces near the residential estates. This will allow them to tap into a pool of suitable workers in that estate.
Reducing commuting and traffic congestion will also promote a green environment.
Tan Kin Lian
We have to changes our recruitment practices to make this possible. We should make it easier for people to search for a job near their homes. Advertisements for jobs should state their location of their workplaces. HR managers should give preference to people who live near the place of work. It is an advantage to the business as well, as these workers are likely to stay longer with the employer.
For most jobs, it should be possible to find a suitable candidate who lives near the place of work. We only need to improve our ability to search for these workers, or for the workers to search for these jobs.
Businesses should also be encouraged to set up their workplaces near the residential estates. This will allow them to tap into a pool of suitable workers in that estate.
Reducing commuting and traffic congestion will also promote a green environment.
Tan Kin Lian
Home ownership
There is a general belief that owners will take care of their home better than tenants. This was the reasons given to promote home ownership.
This may be true to some extent. But, it should not be exaggerated. The care that is given to the home and environment depends not so much on ownership, but on the behavior of the person. A higher income person is likely to take care of the home better than a person struggling to make a living at a low income.
Most people in Switzerland rent, rather than own their homes. I believe that they do take care of the property as well as home owners. This is just a belief, as I do not have the chance to verify it.
The poor people who lives in slums in some countries cannot afford to take care of their own living, so they are not likely to take care of their homes either.
I believe that it is better to treat home owners and renters equally, rather than to promote home ownership on a wrong belief that it leads to a better society. If more people rent their homes, they will be able to move closer to their place of work and reduce the travelling time and expense. This will reduce traffic congestion and improve quality of life.
Some people will argue that it is not possible for everyone to live near their place of work. I agree. We only need to have (say) 30% to live near their place of work to reduce traffic congestion by 30% - which is a lot.
The next step is to abolish the stamp duty and legal fees for selling a home. This will reduce a financial obstacle and encourage some home owners to move closer to their place of work.
Tan Kin Lian
This may be true to some extent. But, it should not be exaggerated. The care that is given to the home and environment depends not so much on ownership, but on the behavior of the person. A higher income person is likely to take care of the home better than a person struggling to make a living at a low income.
Most people in Switzerland rent, rather than own their homes. I believe that they do take care of the property as well as home owners. This is just a belief, as I do not have the chance to verify it.
The poor people who lives in slums in some countries cannot afford to take care of their own living, so they are not likely to take care of their homes either.
I believe that it is better to treat home owners and renters equally, rather than to promote home ownership on a wrong belief that it leads to a better society. If more people rent their homes, they will be able to move closer to their place of work and reduce the travelling time and expense. This will reduce traffic congestion and improve quality of life.
Some people will argue that it is not possible for everyone to live near their place of work. I agree. We only need to have (say) 30% to live near their place of work to reduce traffic congestion by 30% - which is a lot.
The next step is to abolish the stamp duty and legal fees for selling a home. This will reduce a financial obstacle and encourage some home owners to move closer to their place of work.
Tan Kin Lian
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