Saturday, June 13, 2015

Does NETS staff read their own terms and conditions?

I received this reply from NETS regarding my request for a refund of the deposit of $5 on a faulty card. 
Dear Sir/Madam

Thank you for your e-mail dated 13 June 2015
We are sorry to learn of your experience.
However, we would like to reiterate that all NETS CashCard comes with a card cost of $5.00 which is non-refundable.
Replacement of faulty NETS CashCard will only be given if it’s faulty upon first purchase.
You may refer to the terms and conditions governing the use of the NETS CashCard on our website at

If you wish to speak to us or require further assistance, please call our NETS Customer Service Hotline at6274 1212 (24/7). Kindly quote your enquiry/request reference number: 756968. Our Customer Relations Officers will be glad to assist you.
Yours sincerely
Claira Lim
Customer Relations Officer
NETS Contact Centre
When I read the terms and conditions, it stated clearly that the customer is entitled to a refund if the card is faulty. I could not find any condition that stated that it is refundable only "if it is faulty upon first purchase". The terms indicate that it is refundable due to normal wear and tear and is not caused by the fault of the card holder.

LKY said Singaporeans are economic digits

Hi Mr. Tan,
I read your remarks that you respected Mr. LKY for what he did for Singapore. Have you considered the harm that he had done? He considered Singaporeans to be economic "digits" and not as people. His policies are framed to treat Singaporeans without recognizing their human rights. This is probably the reason for the selfish and uncultured behavior of many Singaporeans, e.g. joining long queues for "freebies".
Do you agree with his methods, and do you still respect him considering the negative aspects of his policies

I do not like his treatment of Singaporeans as economic "digits" and the bad consequences that it had produced.
On the other hand, he did look into the real problems of the people, and found effective measures to rectify them. The results have been positive. They were much better than the leaders that followed him.
On balance, I still respect Mr. LKY for the good that he has done for Singapore, after deducting the negative aspects.

Amos Yee is recognized by Amnesty International as a Prisoner of Conscience

Kenneth Jeyaretnam has fought for Amos Yee to be recognized as a Prisoner of Conscience and he has succeeded. Amnesty International will be issuing a statement soon. Read KJ's article here.

Amnesty International said that Amos Yee's video does not constitute incitement and should not have led to criminal charges.

Dear Kenneth,
Well, the IS has considered it and judge that he is indeed a POC by Amnesty’s definition. What he said falls under the kind of edgy and sharp expression of opinions that may annoy or insult, but it was peacefully said and doesn’t fall under the definition of incitement etc and is not grounds for criminalization. WE will speak out and expect to issue a statement ahead of the 23 June court hearing.

Friday, June 12, 2015

High speed rail between Singapore and Kuala Lumpur

Here are some interesting facts about the high speed rail between Singapore and Kuala Lumpur. It is expected to be ready by 2022. Financing of this project is likely to be a challenge and its economic viability is uncertain, judging by the experience of similar projects in other countries. Read this article.

I hope that they can bring down the cost of the project. The contractors from China are able to bring down the cost by 50% compared to the Japanese proposal. This could make the project more feasible. 

Long queue for $50 transport voucher

I continue to be amazed at the unproductive work that is being created to distribute a small amount of incentive. This seems to be the trademark of the LHL government. A lot of time must be wasted in queuing for a small amount of incentive and to administer the distribution of the incentive.
it would have been much better to give seniors free ride for a few months.

Make a realistic financial projection

Hi Mr. Tan
A financial planner did a projection for me for the next 40 years. The trouble is, I see big figures, such as several million dollars by the time that I retire. But these figures are not meaningful, because of inflation. By that time, how much is $1 million worth? During my grandpas' time, he could buy a house of $15,000. Today,it cost $1.5 million. Is there any financial planning tool  that can show meaningful figures?

To carry out a meaningful projection, you need to take care of:
1). Remove the effect of inflation
2)  Use realistic projection of the rate of return. (Some planners assume a yield of 10% or 15%, but this is not realistic).

I recommend this financial planning tool that handle both of the above points. You can read (?) for an explanation of the parameters that you have to provide. You get a clear explanation of how to read the projection. Click here

Thursday, June 11, 2015

A new FISCA member shares his views about the talks organized by FISCA

A new FISCA member share his experience of attending the FISCA talks
I knew FISCA sometime last year when I was hunting around looking for advice on how to manage my money.
During this time, I had also been approached by many insurance agents (many whom were friends), who offered to manage my money for me. I had heard of many people getting ripped off by insurance companies and therefore, I was not ready to trust any insurance agent just yet. My family themselves were also victims of insurance policies which gave poor returns.
I went for many investment seminars as well. Most of the organisers in the seminars promised high returns, but could not back up their claims with any proper evidence.
This was when I stumbled upon FISCA through Mr Tan's Facebook page. Mr Tan writes a lot about financial matters which I felt were very useful.
A. Talk on Financial Planning
3. I find the talks very informative.The speakers were very sincere in wanting to educate the public on financial matters. They also do not boost about their accomplishments or sell overpriced courses, unlike many other financial educators out there. No NLP techniques used also. The audience is always given time to ask questions or think about issues.
4. Yes, I recommend more young people to attend the talks, especially once they have started working. With the proper financial education we can stop young people from being ripped off by investment scams or insurance companies.

Hong Kong bans upfront commision

Hong Kong banned the payment of indemnity commission on life insurance policies from the start of 2015.

Indemnity commission are high upfront commission paid during the first few years, and are considered as advanced payment of commission for premiums paid in subsequent years. The regulators banned indemnity commission as it has led to the mis-selling of life insurance policies by agents who were motivated by the high commission.

The background and reason for this ban are explained in this article. After the ban came into force, the sale of ILAS (investment linked life assurance) had dropped by 50% since the start of this year.

Singapore has the same practice of paying high upfront commission on the sale of investment-linked and traditional life insurance policies. However, the regulators still allow high commission or indemnity commissions to be paid on these policies. The incidence of mis-selling is just as bad in Singapore.

A misleading headline?

Did the Straits Times mislead the public about the United Nations Awards? The headline seems to give sole credit to Singapore when Thailand share the same award and Singapore did not win in the other categories.…/the-straits-times-mislead-r…/

Wednesday, June 10, 2015

Visit this website and read what the author writes about the ILAS (investment linked assurance scheme) in Hong Kong. The ILAS is similar to the ILP (investment linked policies that are sold in Singapore.
The author is direct in criticizing the insurance companies for creating these products to "rip off" consumers by charging high fees at the start of the policy, and not telling the consumers about them. When the consumers find out, it is too late, A large part of their savings had been taken away.
He also criticized the regulators (i.e. Office of the Insurance Commissioner and the Securities and Futures Commission) for neglecting their duty to protect consumers from these bad products.
His criticisms apply to the practice in Singapore as well.

GST continues to be troublesome

For a long time, I have considered that GST to be a "nonsense tax". It is creating so much trouble for many people. Even today, when it has been implemented for more than two decades, there are still confusion and argument about what why it should be charged on certain items, and what is the amount that it is to be based on.
Read this letter in the Straits Times

We should recognize that it is a troublesome tax, and find other ways to get the revenue that is needed.

Here are my suggestions on how to replace GST with a better source of income for the government.
Read this article

Make the best use of your time

It is important to make the best use of our time.

When I was the top man in a large company, I had a driver for my company car. The company was not financially strong during its earlier days, so I used a 7 year old car.

But, I employed a driver (paid by the company) to drive me. The driver can worry about driving the car and finding a parking space, while I can sit back and do some thinking and planning. While not driving the car, the driver worked in the mail room.

Now that I have retired, I prefer to take a bus, rather than drive. I am able to do some thinking or read the news in my tablet while I wait for the bus or on the journey. Although the bus journey takes a longer time, the time was not wasted because I could put it into productive use. This is how I could get many ideas to be developed.

As travelling is time consuming, I avoid travelling to meet people. There are other ways to communicate with business associates, e.g. by e-mail and by telephone. There will be opportunities to socialize, e.g. to go to sports or business events.

This is my suggestion to young people. If you can do some errand for your boss, e.g. to make coffee or clean the office, you should volunteer to do the work, even though it does not fit into your job description. If you can save 1 hour of your boss time, that time is more valuable than your own time. So, you are trading your 1 hour, which is less valuable, for 1 hour of your boss; time which is more valuable. You are making better use of your time.

Some people may think that it is demeaning to be running errands for the boss. But it should be seen as a good strategy to trade up the value of your time.

I also encourage people to find a job that is near their home. This is to reduce the travelling time. If the job is far away from their home, they should consider moving their home to be near their workplace.

Tuesday, June 09, 2015

New agent or marketing staff was not properly trained

Consumers blame the insurance agent for not giving them the full facts about the life insurance policy sold to them. They believed that the agent deliberately hid the facts from them, as they wanted to earn a high commission for selling the policy.

Some agents told me that they were new in the field, and were not aware about the poor surrender values or the risk of investing in some funds. Their trainers did not tell them the full facts. Otherwise, they would not have sold the policies to their family members and friends.

The same challenge applies to marketing staff of banks who sold the structured products to their customers and family members. They were not aware of the risks of the structured products, which were complicated. These risks were not adequately covered and explained to them during their training.

If you have been an agent or marketing staff, and have encountered this problem of not being properly trained on the products, and you are willing to share your experience on a confidential basis, send an email to

Jardine Smith - Eaton Bray, UK

Hi Mr Tan,
I have just paid a 10% deposit to Jardine Smith International on a UK land somewhere in Eaton Bray. Kindly share your experience whether it is a good idea to invest in the scheme.
Everything seems to be order, they have a trustee registered with SSM Malaysia authorities.

Please send details of your documents to me.
Scan into PDF and forward to me.
After that, you can call me at 66599611 to discuss it.

Monday, June 08, 2015

How I was conned into losing $2,500 in an investment linked policy

Hi Mr Tan,

I wish to share my experiences of how I lose SGD 2.5k on my investment link plan - which I have terminated in a year. The reason for the termination is not due to the affordability but to the actual realisation that the policy is different from what was told by my agent. Even though I had been very careful with the benefit illustration and being educated in the finance area, I still entered into this trap by my agent who is also my friend.

After six months of working after graduation, I supported my friend by agreeing to listen to his insurance sales talk. He explained to me the needs of insurance, which I agreed that is important. More details of the ILP (investment link plan) are being illustrated and it sounds good. I was disinterested after he showed me the benefit illustration (BI) because the BI did not take account into the inflation. Breaking even after 12 years without taking into consideration of inflation is not ideal - much less the returns after 40 years.

The second meeting, he showed me the fund fact sheet which has a return of about 13%. He explains to me that the fund manager has changed and the fund will continue to perform very well. The 4% to 8% on the BI is very conservative and I have a good 7% spread from the average of 6% return from the BI. That's where I say, well since the 7% spread will be sufficient to cover my doubt on the inflation, I accepted.

On the day I received the policy booklet, I glance through the summary page noting that my fund value is about $500. I assumed $2300 went into protection.

After a few months, another friend sold me hospital plans. The premium are surprising cheap at 300/year and this raised concerns over my ILP which I have been paying at 2800 per year. Then I took out my ILP booklet and read through with a lot of questions raised, particularly about the missing dollars. In total, I read through at least five times, cross referencing terms which I don't understand and compared every tables in the booklet.

That is where I understood perfectly what I am actually buying with many points I am not aware of in the first place and they are,
1) Allocation
2) Actual returns on fund spread sheet does not equal to your actual returns
3) Effects of deductions

Then I ask my agent to show me where every dollars and cents go. This took him many months and he is unable to give me an answer. It was until I decided to visit AXA customer service, which they have brilliant service, and they tell me I can log in online to see the transactions. In short, I know exactly how the transaction works and the surrender value shown on the BI is the value I should look at instead.

After which, I spent months researching on term insurance and manage to do a full based calculation of return projection. That's where I decided I should not continue my plan and pay more to the allocation cost. the surrender value is $250+, a loss of $2550 excluding a $260+ insurance charges if I were to buy a term plan.

That's the experience of my first ILP, a painful learning experience. I take it as a positive lesson and now I am proud to say I am fully aware of how savings-investments should be.

Penalty on early surrender of a life insurance policy

A few people have told me that they bought a life insurance policy from an agent at a "road show".

The agent told them that it is a savings plan, but did not tell them that the policy is a long term contact and they would suffer a large loss in their savings when the policy is terminated or surrendered during the first few years. They were shocked that it would take more than 10 or 15 years for the policy to "break even".

Some young agents were probably not aware about this feature, or they were trained not to tell the prospective policyholders about it, as the policyholders would avoid buying the policy.

Most policyholders were sought my advice were quite clear in stating that they were not told about the loss on surrender, but they felt shy that they did not read the benefit illustration which stated this fact. They wished that they had been more careful before signing on the dotted line.

I wonder if these policyholders who now cry foul are the majority or just a small minority? If you were told about the surrender loss and bought the policy willingly, then you are properly advised. If this was not told to you at the point of sale, then the agent had not been fair to the customer.

Share your experience.

Clarity in our laws

Kenneth Jeyaretnam writes about the need to have clear rules not only on LBGT issues (i.e. homosexual issues) but on many other aspects of governance in Singapore. To achieve greater clarity, there is a need for our law makers to debate laws that are submitted to be passed in parliament. I find the quality of debate in our parliament to be unsatisfactory. I express the wish that this shortcoming be addressed.

Sunday, June 07, 2015

Should elderly people continue to work or to retire?

Some ministers said that it is a good idea for elderly people to continue to work, rather than to idle at home or at the void decks of their HDB flats. By working, they can stay healthier and live longer.

This statement ignores the experience in other countries where the retirees had more options to live their life. For example,

a) In Hong Kong and China, many retirees spend their mornings in yumcha restaurants or exercising in the parks or in other social activities.
b) In the western countries, many retirees are able to do volunteer work or be actively engaged in some hobbies or social activities.

In these countries, the retirees receive a modest pension that is sufficient for them to live on. Some have personal savings that can give them a fairly good lifestyle.

It is quite sad that many of the elderly in Singapore do not have personal savings (as they receive inadequate wages when they were young) and they do not receive a state pension when they are old. They have to continue to work to earn a small income to live on. Many of them have to do heavy physical work, such as cleaning and in security work.

Many other elderly people, especially those who are not well educated, do not have any alternative lifestyle or hobby to live on. After retirement, they do not know how to spend their time, apart from idling or watching television.

Although these are some associations that cater to the needs of retirees, they do not seem to reach out to many people. We need to develop more options for the retirees.

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