Saturday, August 15, 2015

Financial projection adjusted for inflation

You can carry out a projection of your savings at the time of retirement (at 55, 60, 65 or 70) with the effect of inflation removed. The savings will represent the real value of money today.

Is this a scam?

is this a scam company?
I don't know. But I want to share how you should approach an investment in the company.
Do not just believe the sweet talk about the prospects of agarwood and pay a lot of money to buy the trees. You will be disappointed.

Pulse of the Citizen

Which political party do you support and which do you dislike the most? Share you views here:

Friday, August 14, 2015

Free e-books on financial literacy

There are two free e-books available for your download
1) Financial Planning by Tan Kin Lian - powerpoint of the talk
2) Test of financial awareness - how much do you know of the basic knowledge?

Strengthen your child's vocabulary

This webpage helps you to find all the possible words of a specified length from the given letters ,.It is good for playing the game "4 PICS, 1 WORD". It is also good for strengthening your vocabulary or your child's vocabulary.

Guess the PAP share of total vote in 2015/16

Submit your guess of the PAP share of vote in the forthcoming general election. You will stand the chance of wining a cash prize of $500.

History of the CPF Minimum Sum Scheme

Minister for Health Howe Yoon Chong chaired a ministerial committee to study into the Problems of the Aged. The committee submitted a report in 1984 recommending that the withdrawal age for CPF savings be raised from 55 to 60 years. This caused an uproar among the public. The proposal was shelved.

A few years later, the Acting Minister for Labor Lee Yock Suan introduced the concept of the Minimum Sum Scheme in Parliament. The amount was initially set at $30,000. It was approved by Parliament and was generally well accepted by the public. Most people reaching age 55 could have some balance that could be withdrawn after setting aside the minimum sum.

As the years go by, the CPF members faced these following daunting issues:

1) The HDB flat prices continue to increase significantly compared to prices in the early 1980s. After paying the high prices, many CPF members have little savings left at 55.

2) The minimum sum was increased every year and has now reached $160,000 in 2015.  This is clearly an excessive sum.

You can read more details of the history of this scheme in this article.

Over the last 30 years, the minimum sum scheme had clearly been badly managed by the government. This has led to a big gap in trust between the people and the government.  How can the government be so much out of touch with the ground?

Insuring the future price of agarwood

My friend called me. He wanted to seek my consultancy to design an insurance scheme for investors in agarwood.

Me - sorry, I am not able to provide this consultancy. The knowledge is outside of me.

Friend - but you can just telephone your insurance contacts and work out a scheme with them.

Me - sorry, I have lost most of these contacts.

Really, it is impossible to find an insurer who will carry the risk. The main risk is the price of the agarwood. When the investor buys the agarwood saplings, they receive projections that may be unrealistic. This type of price risk is impossible to insure.

Business has been tough

My friend telephoned me after two years. He was in the property line. Business has been very bad.
He also had another sideline to provide services to oil exploration companies. Business had also been very bad. Many companies have ceased operations.
He has now moved into other services, such as providing workers for home cleaning.
This is the economy outside of the iron rice bowl provided by the government to the civil servants and the GLC employees.

Thursday, August 13, 2015

One person's view about the resignation of Lui Tuck Yew

Posted in Tan Chuan-Jin  Facebook Page.

"Dear Mr Tan,
 I am not for or against LTY and I will comment on his resignation objectively. As in all work base scenarios, if your area of responsibility fails then you take the blame for it whether it is justified or not is another story to be debated on another day. 

Similar to the role of a CEO of a company, if the company make repeated losses or declining profits year after year, the shareholders and the Board will ask the CEO to leave, regardless of whether the problems are of his creation or not, but he is paid to resolve the issues on hand. This is just like the CEO of Standard Chartered Bank of which I am certain Temasek has a hand in the removal of the CEO. In Standard Chartered Bank's case, the Chairman also steps down, while in our present situation, rightly or wrongly the Chairman (prime minister) is not stepping down! 

Coming back to LTY, the many online vitriol is really terrible and the manner it is written is extremely rude and unacceptable. But that itself cannot take away the validity of the content of these on line comments. 

If you are affected time and time again by the break down of the trains, repeated delays and the crazily crowded buses day in and day out, will you not be angry with the situation as your life and quality of life is impacted negatively? It is just like the car you drive that fails to start up often when you need to go somewhere or the gear that fails to engage when you need to. How would you feel?

LTY may be a victim of the circumstances that is not of his making but it is certainly the creation of the PAP government as a whole since the early 2000s and of which GCT and LHL have a lot to be responsible for. 

The sunshine immigration policy is really the root cause of all the transport problems in Singapore. As the sitting Prime Minister had said, the government is a collective body and not made up of an individual, then why is the relevant governmental ministers not stepping down too, including the past prime minister who still refuses to vacate his parliamentary seat, so as to take collective responsibility for the many problems (besides transport) that had arisen over the years? 

This question begs for an answer. If we do not resolve the ever increasing foreign contingent of workers who later turn PR and new citizens, the many problems we have in Singapore will never be resolved. Singapore should have at least achieved a zero foreign worker population growth since 2011 and not slower growth. 

We have yet to learn our lesson and is still in denial mode with regards to the root causes of many multi faceted problems this nation faces presently."

This bad business culture has to change

I received a telephone call from a Miss S who works for a video production company. She explained that they have been engaged by Channel News Asia to produce a documentary on the Lehman Brothers crisis.

S - Mr. Tan, I understand that you were actively involved in helping the investors to get back their money?
TKL - Yes
S - Can I asked you a few questions about the matter?

The conversation over the telephone took half an hour. She did not understand the background initially, but after I answered her questions, she became more familiar with the subject.

S - Mr. Tan, are you able to get some of the investors to talk to us for the video?
TKL - I had asked them earlier on a similar request by your colleague but all of them declined.
S - Why?
TKL - They do not want people to know that they had made the bad investment. Perhaps if you pay them $5,000 or $10,000, they might change their mind.

S - Mr. Tan. Can we invite you to speak over the video and be recorded?
TKL - Are you getting a fee from CNA for the video?
S - (Hesitation). Yes.
TKL - Will you donate a small portion of the fee to my Financial Services Association for my time and contribution?

S - We normally do not pay our interviewee.
TKL - But you do get a fat fee from your client for your work, don't you?
S - OK. Let me check with my boss and see if we can pay you.

This is what makes me really fed up about the business culture in Singapore. They earn a fat fee and expect other people to contribute their time and expertise for free.

They follow the bad practice of the government agencies - pay nothing for local speakers, pay ten of thousand dollars for overseas speakers, and millions for global consultants.

Why you should not buy regular premium ILP

This comment is posted in my blog by "Anonymous"

If consumers want to know how they are being ripped off there is one article written by Yahoo about why you shouldn't be buying ILPs , especially regular ILPs.

Daily, many unwary consumers are being ripped off buying ILPs which being touted as better than whole life or endowment. 

Well, nothing is good when the insurance agents say they are good. Be contrarian . What is bad for agents is good for you, believe me you.

Use experts to take bold decisions

Mr. Tan,
I saw that you have given several suggestions on how to reduce the queue in the LTA office.
Did you notice that the people questioning you were probably the civil servants in LTA or other agencies. They are trying to fish out your ideas. They will claim credit for the solutions and will probably not acknowledge your contributions.

I am aware about this behavior. It has been happening for a decade or two.
However, this approach (of fishing for ideas) has produced bad results in the past for the following reasons:

1. The civil servants dare not implement the bold ideas, as they might not work, and they may get into trouble.
2. They will only implement the safe ideas, but usually these ideas do not solve the root of the problem.

If they approach the relevant experts directly, the minister might take the risk to implement a bold idea. If it does not work, it is all right for the minister to say that the idea came from an "experienced expert" but it was worth a try. It is only by trying that we can learn to find the correct solution.

My suggested approach of using people with the practical expertise and experience is likely to produce much better results than the current system of governance (including taking people's ideas without acknowledging them).

Consultancy services

Here are a list of consultancy services available to consumers and small businesses.
If you wish to be registered as a consultant, you can send an email to
If you wish to use any of the services, you can submit a request to the consultant through the website.

Advisory panel to advice the minister

PM Lee is really short of capable people to be in his cabinet. He has to change his style of governance. My suggestions are:

1)  Appoint an advisory panel for each minister. This comprised of experienced people, e.g. retired civil servants and business leaders with in-depth knowledge of the issues to be addressed.

2) The panel members will give advise to the minister using their practical knowledge and experience to supplement the scholars who are now advising the minister. (These scholars lack the practical knowledge and experience).

3) Being retired, the panel members do not have any vested interest to protect, including their jobs, and are able to think out of the box and take bold decisions.

PM Lee has to act fast, to stop Singapore going down the slippery slope. Things are now very bad!

This suggestion is also suitable for a new government from the alternative parties that maybe formed after the general election. It is a good way to rope in the capable people to help to run the country. It should be better than the current people who now comprise the LHL cabinet.

Conflicted remuneration

When a life insurance agent or financial adviser sells you a financial product, the agent or adviser receives a handsome commission and is likely to be motivated by the commission. The buyer pays for the commission, but is not aware about it and does not know the amount (which may come as a shock to the buyer at a later date).
This is called "conflicted remuneration". It has been a big problem in the UK and Australia. Australia is still struggling with this issue. You can read and understand what the issue is, from this article by a consumer advocacy group.

Wednesday, August 12, 2015

A misleading advertisement

The company you headed previously is now mis-leading the public that it can give a return of more than 5% for their endowment and whole life by using the past returns WHICH A VERY LARGE PART OF IT IS DURING YOUR TIME,i.e,. BEFORE THE BONUS CUT AND LOW EXPENSE PERIOD.

Although the advert caries a tiny microscopic disclaimer it does not absolve the company of the intention to mislead the public that their products will return such rates of return. Did you know over the last 5 years their average return is about 5%, the lowest of the industry. Strange, right? for a cooperative.

The cooperative value is now lacking and the only 'cooperative principle'still existing is both the company and the agents are cooperating to mislead the customers.MAS should investigate and stop this unethical practice.

I remember MAS requires disclaimers to be in certain font size so that old folks without reading glasses can still see and definitely not the microscopic size. MAS, do your job.

I hope that the new management and the board of directors is aware of your observation.

Long queuing time at Land Transport Authority

My friend, who is a car dealer, told me that she spent half an afternoon queuing up at the Land Transport Office to make a transfer. She asked - why does LTA not employ more staff, so that the people do not have to wait so long? A few foreigners in the queue were extremely angry - the Singaporeans did not complain.

Here are my observations.

1) Our government agencies are short sighted. They wanted to reduce their cost, e.g. by employing less staff, but they pass the added cost to the public, who have to waste a lot of time in the queue.

2) Singaporeans love to queue - the longer the better. After all, they are paid by the employers, so they don't mind.

3) However, my friend is self employed, so she felt the wasted time to be stressful and eats into her ability to do more business and earn more to meet her high operating expenses.

We do have a short sighted government or leaders who do not know what is going on. Our feedback system is bad.

It is quite ironic. I saw a sign at the back of the bus - Land Transport Authority - we keep the world moving. My thought - They can't be the world moving when they are making people spend  a few hours in the LTA queue!

Feedback on service organizations

I have added a few more organizations to track the service quality - Restructured Hospital, Polychinic and Direct Asia.

You can view the latest feedback here:

You can also submit your feedback and win a book prize.

Investors are being ripped off

This article in a British newspaper explained how British expats are being ripped off when they buy financial products outside of the UK. The sales are made in Hong Kong, Singapore and other countries.

But it is not just the expats are being ripped off. The locals in these countries are also being ripped off by the predatory products.

It is time for MAS to wake up.

How to improve the return on your savings

If you had bought a life insurance policy in the past and now realized that it is giving you a poor return, you can find some tips in this book on what to do with the policy:

Election fever is building up!

The Jubilee weekend is over. More people are now paying attention to the forthcoming general election.

One sign - they are submitting their entries to this contest.

The number of entries increased by 30% in just one day!

SDP's proposals on CPF Reform

Here are some excellent policy proposals from the Singapore Democratic Party. They are feasible and should be implemented. Vote them in.

Tuesday, August 11, 2015

14 day Free Look Period

Dear Mr Tan,
I seek your help and expertise as a veteran in the insurance industry, and would be very grateful for any insight you can offer.

I am a lawyer and I am dealing with a dispute concerning a life insurance policy. My client is a foreigner and is based overseas. He signed up for the policy while on a business trip in Singapore last year. The insurance company forwarded to my client's home address (via normal mail) a copy of the - the quotation, financial analysis reports and the GIRO application form

Thereafter, my client says that he did not receive the Policy Schedule and Booklet from the insurance company. He confirms that his family did not receive the documents either. 

Further, he does not know if his agent/the insurance company failed to issue the Policy documents; or if the Policy documents were misplaced during posting. In any event, my client is now thinking of rescinding the Policy.

- What is the legal position with regard to the Policy, as the 'Free Look Period' was never triggered?
- How can my client rescind the Policy?

Thank you so much.

The ruling on the free look period is stated in the website of the Life Insurance Association.

Specifically, it said:
14-day free look period
All insurance companies grant a "14-day free look period". It starts from the date of receipt of your policy document. During this period, you should review your policy to see if it meets your needs. If you decide not to keep it, give the company written notice of cancellation and the company will terminate your policy and provide the appropriate refund.
You may be charged for medical examination expenses and, if you had bought an investment-linked plan, you may suffer investment loss if the unit price has fallen.
I should imagine that it is the duty of the insurance company to prove that they have delivered the policy to the policyholder. The insurance company should have some record that the policy document was delivered, so that the 14 day free look period can start. They should usually send it by registered post or alternatively, if the agent was supposed to have delivered the policy document, the agent should get a signed acknowledgment from the policyholder.

The insurance company can claim that it is the duty of the policyholder to notify the insurance company if they have not received the policy document. If the policyholder was paying the monthly premium, he should have inquired about the policy document that never arrived. I hope that your client can give a good explanation why he or she did not bring up this matter earlier.

How should the new transport minister handle this hot seat?

Dear Mr. Tan
The Ministry of Transport is a hot seat for any minister. Do you think that PM Lee will be able to find another minister to replace Mr. Lui Tuck Yew who will be resigning at the next general election? What are the key tasks that the new minister should carry out to win the confidence of the public?

The replacement has to be an experienced and senior minister, such as Khaw Boon Wan, Teo Chee Hean or Ng Eng Hen. There is nothing much that the new minister can do to solve the problem of train breakdown due to the overload and to the poor conditions of the tracks and signals.

The strategy should be to get the support and understanding of the commuters. The following measures can be taken.

a) If there is a train breakdown, all the affected commuters should be credited with $5 into their fare card. This allows them to take a bus, taxi or alternative transport. At least, they are compensated directly for the inconvenience. This will be a heavy financial cost to SMRT, but the commuters might feel "sorry" for SMRT to have to give out these payments.

b) When there is a breakdown, the taxis and private buses should be alerted to provide the alternative transports at the affected stations. They can be informed through the mass media and internet. The travelling public can also be notified.

c) It is important to improve the bus information system, so that more commuters will know how to take buses, instead of relying mainly on the trains. This will help to spread some of the load from the train to the buses. Many commuters do not know how to take buses because the bus routes are confusing. This has to be streamlined.

These are my ideas. Perhaps you can give your views on what needs to be done.

A bad call center

I had a bad experience with the call center of Direct Asia. They must have one of the worst system. They force the customers to listen to many irrelevant messages. And there are more.
I share my experience here:
Do you also have experience with good or poor service? You can share your experience and win a book prize also.

Master of Life on Meaningful Living

Dr. Tommy Wong wishes to invite you to this event
The book is available online at the Pearl Shop

Impact of swing of votes

If there is a 5% swing of votes from the PAP, the alternative parties will win 13 seats. This can be estimated from the "Swing of Votes article in

Monday, August 10, 2015

Guess the PAP share of the vote

I expect more people to be participating in this contest as the date of the general election draw near. I have removed the average percentage, as most people are entering around the average.

Submit your entry early, so that you have a priority when your entry is the correct one.

Latest scoreboard

The scoreboard for the political parties has changed quite a bit. Guess which party is now at the top of the scoreboard, and which is at the bottom?

How to choose your motor insurance policy

This graphic is a good way to illustrate the different types of coverage under a motor insurance policy. You need to know how the covers differ from one another, but more importantly, how the premiums differ among the covers.

The premium is for my 9 year old Datsun Cefiro insured with Direct Asia after a 20% no claim discount.

Comprehensive - $958 covers damage to my own car (but is subject to an "excess"), loss due to fire and theft and damage and injury caused to third parties due to my fault.

Third party fire and theft - $766 covers loss due to fire and theft and damage and injury caused to third parties due to my fault, but does not cover damage to my own car.

Third party only $690 covers damage and injury caused to third parties due to my fault, but does not cover loss due to fire and theft and damage to my own car.

Under the comprehensive cover, there is the choice of the value plan, the value plus plan and the flexible plan, which covers different groups of drivers and vary the premium accordingly.

Which type of cover will I buy? I will choose the third party only - value plus plan. It will cover my family members as well.

Lesson - your decision must be based on the difference in covers and the premium charged. You need to get the full detail to make an informed decision.


My view of Mah Bow Tan

Many people do not like Mah Bow Tan for the reasons given here.

I also don't like his management of the HDB policy when he was the national development minister.

But, I like to say a few words in support of him.

1) When he was in government, he acted decisively and most of the time, his actions were for the good of Singapore.

2)  He did well as communications minister, including the introduction of the ERP and COE. While they were painful to the pocket, they did make the traffic flow smoothly.

3) A few years ago, after I left NTUC, I had a rare lunch at Singapore Cricket Club. He saw me, and walked over to talk to me. He was humble and won my friendship. (Not like the haughty ministers and top civil servants today, who do not even reply to my emails! ).

General election 2015/16

Here are some additional information for the forthcoming general election
Guess the PAP's share of votes and win a prize of $500

Is Amos Yee a genius?

Some people were surprised that I described Amos Yee to be a "genius". They find him and his use of vulgar language to be distasteful and clearly disliked him.

There is a difference between being a genius and behaving well.

Amos Yee is a genius because he is able to think independently of what is right or wrong and to have opinions of his own. His intellect surpasses most of the people that I know, including the "talents" that occupy our parliament and government.

I do not support his behavior but also do not wish to pass judgment on it.

In some respect, I was like Amos Yee when I was 16 years old. I acted in a way that was unexpected according to the norms of other people.

 Although I was among the top 10 students in Singapore in the Senior Cambridge examination (the precursor to the Oxford GCE O level examination), I quit school to come out to work.

My principal, Mr Eugene Jesudason, called me to this office and asked me to reconsider my decision. The school could offer me a bursary to meet my financial expenses. I could also apply for a scholarship.

I explained that I needed to earn a salary to contribute to my family income. He accepted my reason and was kind enough to call his friend, who was the top man in Great Eastern Life to offer me the starting position of a clerk. It was helpful to me.

I was the "smartest" among the clerks in the office at that time. but earned the same starting salary of $180 a month. The executives, where were graduates earned $300 a month.

I hope that this gives you a different perspective to look at Amos Yee. Here is his latest "genius" video.

CECA - what are the benefits to outweigh the costs?

Mr. Tan
I heard that Singapore signed a CECA agreement with India and that has resulted in many Indian nationals working in Singapore and have displaced our local PMETs, especially in the IT and banking fields.
What is CECA and how has Singapore benefited from this agreement? I do not see many Singaporeans working in India.

CECA is the Comprehensive Economic Cooperation Agreement. Details can be found here.

I also do not know how Singapore benefits from this agreement.

Someone pointed out that the agreement allowed Temasek Holdings and GIC to invest more freely in India. So, the benefit accrues to these wealth funds, but at the expense of Singaporeans who face stronger competition for jobs and an over crowded island.

If this is the case, then the CECA (and other similar agreements) is bad for Singapore. We do not really need to give TH and GIC more market access to make profits, and to pay humongous salaries to their top management. Someone pointed out that TH paid more than $8 billion a year in "administrative expenses". I find this figure to be shocking!

My conclusion - there are many things that are hidden from the public. These issues should be more actively debated in Parliament. We do need a change, and to have more independent minded people to be elected into Parliament.

Be broad minded

I find some people to be quite narrow minded. If I make a remark that I dislike white, they will interpret my statement that I prefer black and will find extreme examples of why black is bad and attack me on that point.

Some will even make attack me personally. These are not just IB members, but people with an extreme narrow mind.

They will also make judgment of people based on their narrow mindedness and lack of sufficient information.

I observed this behavior among my younger colleagues some 25 years ago. I advised them to be more broad minded. Actually, I told them to have "a wider perspective" and avoid being "judgmental".

The problem persists today. It must be the outcome of our education system.

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