Saturday, June 20, 2015

Is it safe to leave deposit with foreign based banks?

Mat Alamak
Is it less safe, as compared to a local bank, to put even a fixed deposit in a foreign based bank here, eg one from Malaysia? Some of these banks are giving very attractive interest rates, even upfront whole interest payment some more. Whereas the local banks are paying comparatively much lower rates even for fixed deposit, and this can make a big difference in interest (even up to 4 figures) for those with big deposit sums.
If the bank is licensed in Singapore, the depositor enjoys the same protection as local banks for a sum of up to $50,000. If you have more than this sum, you can place them in deposits of $50,000 in each bank, to enjoy the full protection. Read this FAQ for more detail.
The foreign banks are able to pay higher interest rates because they do not have a deposit base of low cost funds provided by their depositors.

Civil servants who do not take responsibility

A member sent a motion for discussion at the AGM of the Consumer Association of Singapore (CASE). He forwarded a copy to me.

He had raised the issue of the non-licensing of private schools for more than 10 years. He felt that it should be the duty of the Ministry of Education to licensed these schools and ensure that they kept to minimum standards.

In his motion, he mentioned the names of several MOE officials that refused to reply to his communication over the years. They ignored him.

This seems to be the pattern of our civil service nowadays - do not take responsibility, and refused to give a reply.Why has our civil service, under PM Lee, deteriorated to such a deplorable state?

Vivolife 180 - is it a good policy?

Hi Mr. Tan,

May I please seek your opinion - I am 28 years old and am planning to buy Vivolife 180 and pay an annual premium of $5,919 over 5 years only to get a coverage of $100,000 for death, total permanent disability, and 30 critical illnesses. NTUC tops up the coverage to $180,000 until the age of 69. I have attached the benefit illustration.

Do you think this is an attractive whole life policy?

I am not so keen on term life insurance. I also prefer finishing paying the premium of my life insurance over a short period (in this case 5 years). Hence I am considering this policy. I intend to invest my other assets in other investment forms to generate yields (Equities, bonds, etc.).

My reply is given in the attached PDF.

Perverse use of "sub judice"

Kenneth Jeyaretnam explains the concept of "sub judice" and points out that the Attorney General had used it "preversely". Read his article here.

Unnecessary and wasteful activities to "calibrate" subsidies

All the unnecessary work and trouble, just because somebody wants to "calibrate" the subsidy according to household income and type of housing. The actual amount is quite small but the cost of the work is probably a lot.
When will Singapore get rid of these wasteful activities and focus on reducing cost for the people?

Friday, June 19, 2015

Life insurance agents are poorly trained - from the horse's mouth

Hi Mr Tan,
I saw your post on Facebook regarding insurance agent being poorly trained. I absolutely agree with your post. Being an agent myself, I notice several things thought doing agent and product training.

They are,
1) We are taught  that by selling some of the products, we are helping people to diversify their portfolio and hedged against inflation , ie ILP and  Savings Plan
2) Most of the product training only covers the good part and not the disadvantages. We are taught , the policies are for long term.
3)We are taught, we are the guardian angel as we are helping people. This is true, if we sell term policies.
4) We have KPI and sales target to meet, which to me contradicts point 3.

Thank You

(name removed).

Thursday, June 18, 2015

Weak property market

Property developers in China had gone through a difficult time. They had high inventory of unsold houses and are now offering big discounts to sell their new properties. Will property developers in Singapore face the same pressure over the next few years?

Host countries usually win more gold medals

The Jakarta Post showed the number of gold medals won by Indonesian during the recent SEA Games. They won 45 gold medals at the 2015 games in Singapore. But in 2011, when the SEA games were held in Palembang, Indonesia they won over 200 gold medals.
It seems that the host country usually wins more gold medals than usual. I was told that the host country could decide on the games to be played, and they chose the games where they are expected to do well.

Convert cleared land as parks

When Jokowi was governor of Jakarta, he cleared the squatters living around Pluit Reservoir in a North Jakarta. The cleared areas were converted into parks and sports play ground for use by the public. He chose not to sell the land for development which could bring a lot of money for the Jakarta government. That was a wise decision. It avoided demands from the cleared squatters for compensation.
The new governor Ahok developed six islands through reclamation in the sea off Jakarta. That brought in the funds for the city.

Company drivers

Many companies in Jakarta employ drivers for their company cars and for the managers. The salary of a driver is around $300. This is 10% of the cost of a manager.
The manager does not have to worry about driving in the congested roads in Jakarta or in finding a parking space. This is the job of the driver.
The drivers are able to find employment. They usually earn more due to overtime and tips.
It works as a win-win arrangement.

Wednesday, June 17, 2015

Salary of Prime Minister

Dear Mr tan 
I am a Singaporean this year 24, i am not happy with prime minister salary. Something must be wrong, Japan is richest than singapore, the prime minster is Shinzo Abe. Japan population rate is 127 million and Singapore population rate is 5.4 million

Japan prime minister salary is around usd 30,000 per month ( 127 million population ) Singapore prime minister salary is around usd183,000 person ( 5.4 million population )

I have a question 
1) Are Singaporean are going to pay more tax for the prime minister salary because japan have 127 million population and Singapore have 5.4 million?
2) Why there the cleaner job is usd 3000? than sSngaporean cleaner job is usd1000?

1) The tax that Singaporeans have to pay is not affected by the salary of the prime minister. The prime minister gets $2 million a year. As there are 5.5 million people in Singapore, the cost to each taxpayer is less than $1 a year. But if we add the total cost of the government, and include the salaries of the ministers, members of parliament and the top civil servants, then the cost to the taxpayer could be more of a burden - but still not that serious. 

2)  Many countries (not only Japan) pay their manual workers quite well. Singapore pay our manual workers quite poorly. We should pay more.

Handling corruption in China

I heard this story about Robert Kuok who was the "sugar king" and the founder of the Shangri-la Hotel Group. He was among the first entrepreneurs to venture into China in the very early days .
I asked a friend who worked for RK. How did RK handle the rampant corruption in China at that time? Did he have to give bribes?

He told me this story. RK developed a golf course in Guangzhou. During the development, his manager had to get a licence from the provincial officer. The official asked his manager, "How many free golf course membership will you give to me in return for my signature?".
His manager approached RK who instructed him "You tell the provincial official that I can give him the free golf club memberships, but will he dare to accept them?".
The provincial official checked with his friends and learned that RK knew the top government officials in Beijing. He came back with his signature on the licence and dared not accept any bribes.
I was not able to verify if this story is true, but it was nice to hear it, all the same!

Tuesday, June 16, 2015

Situation in Indonesia is worsening

The situation in Indonesia is getting to be quite bad. The economy has been weak for several months. The popularity of President Joko Widodo had dropped significantly since he took office 8 months ago. The headlines in the Jakarta Post today says "Exports continue to weaken".
When I arrived at the immigration desk yesterday, the office asked me for my purpose. I replied "consultancy". He then said softly, "kopi kopi". I replied "no". So, he stamped my passport. This was the first time in six years that I encountered such a request.
I recalled that there was a large sign two years ago at the immigration desk "The giver and receiver of a bribe will be prosecuted". This sign has since disappeared.

How to avoid a big mistake in investing your money

Each year, over 10,000 school leavers make a big financial mistake by investing in the wrong life insurance policy which locked up their savings in a poor yielding investment for 30 years. One of them share his experience here:…/this-new-fisca-member-wish…
If you wish to avoid this mistake, you should attend this talk now. Do not delay and fall into the same trap that many fell into every year.

Monday, June 15, 2015

Legislators in Hong Kong speak up for consumers

The legislators in Hong Kong are quite active in speaking for consumers who were misled into investing in bad insurance policies that cause them to lose a lot of their savings due to the upfront fees.
They spent the time to understand the problem and were able to speak up with a good knowledge of the issue.
We need our legislators in Singapore to be full time legislators who can also understand the many issues facing the people.
Read about what the legislators say in their legislative council, which is the equivalent of our Parliament in Singapore. Click here to read the article.

A personal story from a new FISCA member

This new FISCA member wishes to share his personal experience.

1. How I knew FISCA

I get to know about FISCA through a shared post in Facebook about insurance and investment. Before I get to now about FISCA, I have been doing a lot of homework in researching a bad investment link plan (ILP) which I have bought. Back then, I was not confident about terminating my ILP as I would face an immediate loss of thousands. My research did point out I should terminate the plan as I would face a potential 200k+ loss after 40 years but taking a decision to take the immediate loss was not a easy one, afterall it was my hard earned money.

On that particular Facebook post, the recommendation hit exactly to where my research has pointed. That is where I knew I must attend this talk. Most would say insurance is a necessity but who would stand out to say some of the insurance products are just out there to ripe you off. Till date, I still face questions from my friends on why are those products are not recommended. They are surprised by my explanation and gladly, they are convinced.

2.  Talks I have attended in

I have attended one of Mr Tan's talk on on Financial Planning at the cost of $30 and I strongly recommend all individuals to attend this talk.

3.  Why I recommend you to attend this talk

1) You should managed your own financials instead of being lead by financial adviser.  
2) Low cost at $30, compared to the thousands I lost - If only I attended this talk a year earlier.
3) The speakers are very sincere and the purpose of the talk is purely on educating the public.
4) Prevent yourself to be a victim like me.

I have seen many young working adults wouldn't mind spending hundreds of dollars a month in insurance products (protection + savings). The problem is that they do not have a full knowledge of how what these products actually are and they will eventually pay >100k until they are old. It will be like a drug where it is difficult to get out of this plan due to the losses and you have to continue paying the premium. Thanks to Mr Tan, I got myself out of this and started my own savings plan. This will be much simpler than you would think.

Please do attend Mr Tan's talk. The talk is sincere with lots of takeaways. You can also take it as a educational tool to upgrade yourself and learning how to manage your own financials.


Learn from Apple to make it easy for user

A few years ago, I was given the SingTel internet dongle as part of my subscription to the fiber network in the office.
Initially, I tried to set up the dongle. It was a complicated process and was most discouraging. They provided too many facilities that I did not need, but had to provide to complete the process. Finally, I managed to get it set up, but with a lot of trouble.
Since then, I hardly used the dongle, as Wifi is now widely available. On the few occasions that I used it, I had some trouble or another, in spite of the "seamless connection" that was provided.
Most people used the dongle to connect to the Internet. They would not want to use the added facilities provided by SingTel. It is better to provide a setup of the basic facility, so that the setup is made easy.
For those who need the added facilities, they can go through an "Advanced" tab and learn how to use it.
SingTel should not impose the full facility on users who do not require it. I find the SingTel approach to be quite common in Singapore. Somehow, they make things more complicated than necessary. We should learn to follow Apple - they really know how to make things easy for the user.

A confusing pop-up message

I used the SingTel dongle to connect to the Internet. The process was complicated (in spite of their Seamless Connection) and the response was slow - probably due to some environmental conditions. Finally, I got the "Connect" button. When I clicked on this button, I got a pop-up to say "Connected" with a "Cancel" button.
I was confused. If I clicked on "Cancel", would it cancel my connection that I took some pain to set up? I looked for some other way to remove the pop-up without risking the connection, but there was none. I finally clicked on "Cancel". It removed the pop-up and kept the connection.
SingTel could have given a better message "OK" rather than "Cancel".

Sunday, June 14, 2015

Expensive training courses on investments

Hi Mr, Tan
Here is something I would like to share regarding all those overhyped, overpriced and unregulated financial training courses out there.

'Rich Dad Poor Dad' Robert Kiyosaki Exposed - Part 1 of 3 Investigative Report
'Rich Dad Poor Dad' Robert Kiyosaki Exposed - Part 2 of 3 Investigative Report
'Rich Dad Poor Dad' Robert Kiyosaki Exposed - Part 3 of 3 Investigative Report

In the videos, reporters went undercover by posing as one of the participants in a training programme endorsed by famous financial author, Robert Kiyosaki. It can be seen from the videos that most of the trainers are unqualified people trying to teach harmful information to the public.

Even in Singapore, I see a lot of people falling victim to such seminars and I strongly feel that all these must stop. Most of the trainers conducting these training courses are nothing more than salesmen (I would even go as far as to call them conmen) masquerading as financial gurus. 

The participants getting cheated in these courses come from all walks of life including businessmen, retirees, teachers, engineers, housewives and even school children, so anyone can fall prey to them.


Confusing Terms and Conditions on the use of NETS CashCard

I bought a NETS cash card and it failed within a month. DBS Bank told me that I could get the refund of the deposit of $5 but I had to complete a form.
After submitting the form, NETS replied that the $5 is not refundable. The staff explained that it was refundable only for a faulty card found at the time of the first purchase.

I asked for the terms and conditions and they gave me this link to their website. The terms and conditions confused me and seemed to be overlapping and contradictory. Here are some of the relevant clauses:


8.2 Subject to these Terms, the Cardholder shall be entitled to a refund of the Deposit, if any, and the Stored Value of the NETS CashCard effected pursuant to Clause 8.5 hereof within four years after the Validity Period, PROVIDED THAT if a refund of the Deposit, if any, and the Stored Value of the NETS CashCard is requested or effected more than two years after the Validity Period, NETS shall be entitled:
a) to forfeit the Deposit, if any; and
b) to levy a service charge of S$1.00 per month or such other amount as NETS may determine from time to time, such levy to be deducted monthly from the Stored Value commencing the month after the end of the aforesaid two years until the refund of the Stored Value (less such service charge) of the NETS CashCard or when the Stored Value is fully depleted, whichever is the earlier.

8.3 The Cardholder shall not be entitled to a refund of the Stored Value after the lapse of four years after the Validity Period whereupon the Cardholder shall have no claim whatsoever against NETS and the Approved Banks.

8.7 In the event a NETS CashCard is defective (not through any fault or act of the Cardholder) during its first use for payment for, or a transaction of, NETS CashCard Services, NETS shall replace the defective NETS CashCard with a new NETS CashCard. No replacement shall be made by NETS for any NETS CashCard found to be defective at any second or subsequent use.

I am totally confused. Am I entitled to a refund of the deposit of $5? The NETS staff replied that there is no refund for a faulty card after the first purchase. (She must be reading clause 8.7). But clause 8.2 and 8.3 suggest that I am entitled to a refund.

You should read the entire Terms and Conditions to get the feeling that this is a badly written document that is confusing to consumers. How can the Monetary Authority of Singapore allow NETS to get a license to operate a public financial service based on such Terms and Conditions?

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