Tan Kin Lian's Blog

Rountable on social and political issues

2009-11-04T23:08:00.003+08:00

I had a roundtable discussion with three young people about social and political issues in Singapore. We started with different perspectives and managed to find common ground on the following issues:

a) Educate people about the values of honesty, fairness and public service
b) Tell consumers about their rights under the Consumer Protection and Fair Trading Act and the Unfair Contracts Act
c) The slogan "cheaper, better and faster" is not good and not fair for workers
d) Media to reflect honest and diverse views
e) The standard of business ethics in Singapore is rather bad
f) Singaporeans need to improve our social behavior

Congested roads and lost productivity

2009-11-04T15:19:00.003+08:00

The traffic situation in many roads in Singapore has become as bad as Jakarta or Kuala Lumpur. Read my views here.

Insuring your risks

2009-11-04T08:00:00.002+08:00

Here is a chapter from my book - TKL Financial Planning. It covers the risks that should be insured with low cost insurance, i.e. not tied to any savings plan.

Health care system in Taiwan

2009-11-04T06:35:00.002+08:00

Taiwan studied the health care system of 6 countries (including Singapore) and decided to adopt the single payor system in Canada. Their system has proved to be quite successful. Read this report.

Bubble in property market

2009-11-03T21:47:00.001+08:00

Singapore homebuyers leave blank cheques with brokers.

Help small business hire again

2009-11-03T18:21:00.001+08:00

The key to economic recovery is employment and creating new jobs, especially by small business.

TKL Financial Planning

2009-11-03T16:41:00.008+08:00

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).

Patient voices and insurance

2009-11-03T15:39:00.002+08:00

Even with insurance, you may not be adequately covered. Read this article.

Term Insurance for 25 years

2009-11-03T14:28:00.003+08:00

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

Exchange traded fund (ETF)

2009-11-03T14:05:00.002+08:00

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

Freedom of the press

2009-11-03T13:19:00.002+08:00

A new law is being passed to protect journalists about the confidentiality of their sources.

Rainmakers in Wall Street

2009-11-03T07:11:00.001+08:00

Who are the rain makers? Why are they paid so much? Read this article.

Democracy as practiced in China

2009-11-03T07:08:00.003+08:00

Read some views here.

Singapore's public transport lags behind Hong Kong

2009-11-03T06:49:00.001+08:00

Read this letter.

Investing in Life Insurance

2009-11-03T06:37:00.002+08:00

Here is a chapter from my book entitled TKL Financial Planning. It covers the key points to look for when you want to invest in a life insurance policy. You have to check the effect of deduction, distribution cost and break-even point to look for a policy that gives you a fairly satisfactory return. Most policies in the market give a poor return to policyholders.

Too big to fail

2009-11-02T19:40:00.006+08:00

During the global financial crisis, the regulators discovered the danger of having banks that are too big to fail. The collapse of a large bank would cause other financial institutions to fail, leading to a total collapse of the entire financial system. This is described as "systemic risk".

If this is so dangerous, why did the regulators allowed and encouraged the consolidation of banks in the first place? Even in Singapore, the local banks were forced to merge to become bigger banks.

If I remember the reasoning at that time, it was argued that large banks would be financially stronger and would be able to compete more effectively with other large banks to lower cost for consumers.

But this did not turn out to be the case. The consolidation of banks actually reduced competition and allowed banks to run a cartel to increase banking fees. The large investment banks, provided funds for mergers, acquisations and caused the asset bubble to grow. They made billions of dollars of profits in these "good years".

The lessons are now learnt, but rather late and at great cost to the world economy. The asset bubble grew to be so inflated that it had to find its correct level. This caused the near collapse of the financial institutions. Being "too big to fail", the banks had to be bailed out by the governments.

Going forward, what is a better approach? Smaller banks? More banks?

Tan Kin Lian

Start a Financial Plan

2009-11-02T10:51:00.001+08:00

Here is another chapter from my book - TKL Financial Planning. It gives advice on starting a financial plan.

Loyalty and National Service

2009-11-02T10:27:00.005+08:00

There are many "loyal" Singaporeans who support the need for National Service. I do not know if they have sons that are about to enter full time NS and have to compete with new citizens for jobs later.

I am also loyal to Singapore and support National Service. But I like it to be done in a manner that is fair to our male citizens. Read my letter to the Straits Times that was not published.

I also wish to ask our "loyal" Singaporeans to read this article by Seah Cheang Nee.

Better, faster and more

2009-11-02T09:26:00.005+08:00

Someone asked my views about the slogan "cheaper, better and faster" to ensure that the workers in Singapore will continue to have jobs in the competitive global environment.

My first thought was, "this is an innovative slogan". However, on further analysis, I am worried about this slogan. If our workers can be cheaper, better and faster, surely this will lead to more profits. Will the workers have any share in this profit? But the slogan said that the workers will be "cheaper", i.e. earn less.

I think that the slogan should be "better, faster and more". "More" means that the workers can earn more by helping to produce the increased profits when they are "better and faster".

I also believe that there should be a balance between "working harder" and "have a better quality of life". There is no point in working too hard at the expense of health and family.

Tan Kin Lian

Fourth generation leaders

2009-11-02T09:23:00.005+08:00

I am disappointed to read that the Prime Minister is searching for a fourth generation team to lead Singapore into the future. Surely the people of Singapore should have a say in this matter?

I think that it is better for a team to be honestly tested in the real life situation and be accepted by the people, rather than to be selected by the current leaders.

The system adopted in many democratic countries offer a better choice of leaders, and a better bond between the leaders and the people.

On a positive note, I am encouraged by the statements of the Prime Minister addressing the concern of the people about the high cost of HDB flats and the high cost of living. I hope that this will be followed some change of policy in these two important aspects of our life.

Tan Kin Lian

Gender of a computer

2009-11-02T08:00:00.000+08:00

Read this story.

Improve the last mile in public transport

2009-11-02T07:32:00.002+08:00

A short version of this letter was printed in the Straits Times.

Super Sudoku

2009-11-02T05:22:00.004+08:00

I have created many very difficult puzzles, which I am naming as Super Sudoku. They are meant for the Sudoku experts. Each puzzle will take an expert more than 30 minutes to solve manually, without the aim of automated solvers.

Here are samples of these puzzles. Take my challenge and see if you can solve them within 30 minutes.

If you like these puzzles, you can order the PDF copy of my books at only $4 per volume. Each book contains 128 puzzles. You can buy a complete set of 4 volumes at $12 only. You will be given the PDF copy and will be allowed to print one copy only.

Observation by David Cherbronnier

2009-11-01T12:15:00.002+08:00

David Cherbonnier has made some insightful comments about what is needed to put things right in Singapore. Read his comments here.

Dependent adults - victims or spoiled brats?

2009-11-01T08:38:00.003+08:00

Read this article.

And here is my view. They are the results of the failed capitalism and false prosperity (build on asset bubbles) of the past two decades.

Asset prices went up too high. The current generation is affluent. But the next generation cannot afford these prices. And their earnings will be low - due to globalisation, international competition and other reasons. So, they have to depend on the generosity of their parents.

They are not spoiled brats. They are placed in an unfair world. This is largely the fault of the previous generation.