Should the Singapore Government spend more on welfare?
Read my views in:
http://theonlinecitizen.com/2008/05/the-anorexic-state/#comments
Sunday, May 18, 2008
Cost of travelling - taxi and car
The petrol consumption on my Toyota Camry is 24 cents per kilometer. If I travel by taxi, the fare is 60 cents p kilometer (off-peak) and 80 cents (peak hours). So, taxi cost 3 to 4 times of driving. In both cases, I have to pay the ERP charges. I save on parking charges when I take a taxi.
Conclusion? Take the MRT!
Conclusion? Take the MRT!
Advice backed by proper research
A person by the name of "June" attacked me in http://www.theonlinecitizen.com/. "She" said that the views posted by Mr. Tan Kin Lian in his blog and website are not backed by proper research.
It is easy for "June" to discredit me, while under the cloak of anonymity. I do not know if "she" is a real person and what is her background.
I invite my visitors to read the FAQs posted here:
www.tankinlian.com/faq
You can take my advice, if they are relevant to you. You can ignore them, if they are not relevant or not backed by "proper research".
You can judge if the financial adviser is making a recommendation that is backed by "proper research" or "selective research" and is beneficial to you. Be sure that you understand the adviser. If the adviser does not explain clearly to you, do not trust the adviser.
Ask the simple and relevant questions, including those set out in this FAQ:
http://www.tankinlian.com/faq/right.html
It is easy for "June" to discredit me, while under the cloak of anonymity. I do not know if "she" is a real person and what is her background.
I invite my visitors to read the FAQs posted here:
www.tankinlian.com/faq
You can take my advice, if they are relevant to you. You can ignore them, if they are not relevant or not backed by "proper research".
You can judge if the financial adviser is making a recommendation that is backed by "proper research" or "selective research" and is beneficial to you. Be sure that you understand the adviser. If the adviser does not explain clearly to you, do not trust the adviser.
Ask the simple and relevant questions, including those set out in this FAQ:
http://www.tankinlian.com/faq/right.html
Understanding the Benefit Illustration
Someone posted a comment in http://www.theonlinecitizen.com/ as follows,
"Mr. Tan suggested that the public should look at the Effect of Deduction and Distribution Cost" in the Benefit Illustration. What is the point of these information, when consumers do not understand what they mean?"
I agree with this comment.
The regulator required the financial institution to disclose these key information. The financial institutions found a way to provide these information buried in 10 pages or more, of other details. The consumers are lost.
The financial advisers have the responsibility to explain the relevant points to the consumer. I suspect that they will skip these sensitive areas. Even if the consumer ask, the adviser could find a way to confuse the consumer and side-track this issue.
I suggest that the regulaor should carry out a survey (say with 50 consumers who have recently bought a life insurance product) and ask the following questions:
1. Have you been told about the Effect of Deduction and the Distribution Cost?
2. Did the adviser explain these terms to you clearly, before you buy the product?
3. Now that you are aware about these items, do you feel that you have made the correct decision in buying the product?
"Mr. Tan suggested that the public should look at the Effect of Deduction and Distribution Cost" in the Benefit Illustration. What is the point of these information, when consumers do not understand what they mean?"
I agree with this comment.
The regulator required the financial institution to disclose these key information. The financial institutions found a way to provide these information buried in 10 pages or more, of other details. The consumers are lost.
The financial advisers have the responsibility to explain the relevant points to the consumer. I suspect that they will skip these sensitive areas. Even if the consumer ask, the adviser could find a way to confuse the consumer and side-track this issue.
I suggest that the regulaor should carry out a survey (say with 50 consumers who have recently bought a life insurance product) and ask the following questions:
1. Have you been told about the Effect of Deduction and the Distribution Cost?
2. Did the adviser explain these terms to you clearly, before you buy the product?
3. Now that you are aware about these items, do you feel that you have made the correct decision in buying the product?
Wasteful way to make a payment
An organisation wanted to pay me $400 to give a talk. I asked them to credit the payment directly into my bank account.
This is what actually happened.
1. I was asked to send a signed invoice by mail. They do not accept an invoice by e-mail.
2. I had to provide a photocopy of my bank statement for them to verify my bank account.
3. Three weeks later, they send a cheque to me by mail (in spite of verifying my bank account).
4. I have to mail the cheque to my bank to credit the payment.
The practice of this organisation is quite common in Singapore. They have still not woke up to the new world. They are still stuck to the old bureaucratic way of making payment by cheque.
My friend in China was surprised at our outdated practice in Singapore. Cheques are almost unheard of in China. All payments are made through bank transfer.
Wake up, Singapore. The world has changed. Why are we still using outmoded and expensive methods to make a simple payment?
I hope that people reading my blog will give the following suggestions to their bosses. You can take this suggestion as your own, and earn some merits:
1. Organisations can make payments directly to bank accounts
2. Banks can encourage and educate their business clients to adopt this new method
3. MAS and IDA can encourage the business community to adopt the more efficient methods.
This is what actually happened.
1. I was asked to send a signed invoice by mail. They do not accept an invoice by e-mail.
2. I had to provide a photocopy of my bank statement for them to verify my bank account.
3. Three weeks later, they send a cheque to me by mail (in spite of verifying my bank account).
4. I have to mail the cheque to my bank to credit the payment.
The practice of this organisation is quite common in Singapore. They have still not woke up to the new world. They are still stuck to the old bureaucratic way of making payment by cheque.
My friend in China was surprised at our outdated practice in Singapore. Cheques are almost unheard of in China. All payments are made through bank transfer.
Wake up, Singapore. The world has changed. Why are we still using outmoded and expensive methods to make a simple payment?
I hope that people reading my blog will give the following suggestions to their bosses. You can take this suggestion as your own, and earn some merits:
1. Organisations can make payments directly to bank accounts
2. Banks can encourage and educate their business clients to adopt this new method
3. MAS and IDA can encourage the business community to adopt the more efficient methods.
Financial advice for a young person
Hi Mr Tan,
Your website has certainly been extremely important in my understanding of today's financial products and situation.
I have just graduated and will be starting work soon. I carried out some research on how I should diversify my savings into investment and insurance. Through your guidance, I decided to do them separately.
A financial adviser tried to promote the following product:
Riders attached with this plan:
1) Disability Linked
2) Waiver of Contribution (TPD or Critical Illness)
3) Critical Illness link benefit
For all 3 riders: Sum assured is $150,000. Regular Contribution: $250 and about $22 being contributed to payment of insurance
Bid offer spread: 5%
Top up Minimum S$500, at no additional charge
Partial withdrawal allowed (minimum of S$250 per withdrawal)
Unit allocation (as percentage of premiums paid)
Year 1: 13%
Year 2: 40%
Year 3: 45%
Year 4 to 6: 100%
Year 7 to 9: 103%
Year 10 onwards: 105%
Is this investment-linked plan advantageous to me? I have my doubts over the low percentage of premium going into the investments.
Secondly, at my age, what kind of insurance should I actually consider? Is it all right to purchase term insurance.
Thirdly, I have considered embarking on a monthly investment plan on unit trusts with the intention of starting my investments early, not trying to time the market and at the same time accumulating my savings for future investments. I would like to seek your advice on whether this is feasible.
REPLY
Do not invest in this high cost product. 200% of your annual premium is taken away during the first three years.
Read this FAQ:
http://www.tankinlian.com/faq/ilp.html
This product appears to give you allocation of 105% from year 10. After discounting the spread of 5%, you are actually investing at the net asset value. A honest adviser will tell you the truth. A dishonest adviser will mislead you into thinking that you are getting 5% more.
Here is my suggestion for investing your monthly savings:
http://www.tankinlian.com/faq/savings.html
http://www.tankinlian.com/faq/savings.html
Your website has certainly been extremely important in my understanding of today's financial products and situation.
I have just graduated and will be starting work soon. I carried out some research on how I should diversify my savings into investment and insurance. Through your guidance, I decided to do them separately.
A financial adviser tried to promote the following product:
Riders attached with this plan:
1) Disability Linked
2) Waiver of Contribution (TPD or Critical Illness)
3) Critical Illness link benefit
For all 3 riders: Sum assured is $150,000. Regular Contribution: $250 and about $22 being contributed to payment of insurance
Bid offer spread: 5%
Top up Minimum S$500, at no additional charge
Partial withdrawal allowed (minimum of S$250 per withdrawal)
Unit allocation (as percentage of premiums paid)
Year 1: 13%
Year 2: 40%
Year 3: 45%
Year 4 to 6: 100%
Year 7 to 9: 103%
Year 10 onwards: 105%
Is this investment-linked plan advantageous to me? I have my doubts over the low percentage of premium going into the investments.
Secondly, at my age, what kind of insurance should I actually consider? Is it all right to purchase term insurance.
Thirdly, I have considered embarking on a monthly investment plan on unit trusts with the intention of starting my investments early, not trying to time the market and at the same time accumulating my savings for future investments. I would like to seek your advice on whether this is feasible.
REPLY
Do not invest in this high cost product. 200% of your annual premium is taken away during the first three years.
Read this FAQ:
http://www.tankinlian.com/faq/ilp.html
This product appears to give you allocation of 105% from year 10. After discounting the spread of 5%, you are actually investing at the net asset value. A honest adviser will tell you the truth. A dishonest adviser will mislead you into thinking that you are getting 5% more.
Here is my suggestion for investing your monthly savings:
http://www.tankinlian.com/faq/savings.html
http://www.tankinlian.com/faq/savings.html
Existing Life Insurance Policies
A commentor agreed that it is better to "Buy Term and invest the Difference". He asked, "What should the policyholder do, with the high cost life insurance policies purchased in the past?" Many people are caught in this situation.
My advice is given in these FAQs. Read them:
http://www.tankinlian.com/faq/existinglife.html
http://www.tankinlian.com/faq/benchmark.html
Generally, I advise people to keep the existing policies, as they have already incurred the high front-end charges. But, if the continuing charges remain too high, they should terminate the policies and invest differently.
For younger people, I strongly advise them to follow the advice given in this FAQ:
http://www.tankinlian.com/faq/savings.html
After you have read and understood the FAQ, it is all right for you to talk to a financial or insurance adviser. The adviser will be able to help you to find a low cost option. Some of the advisers do look after the interests of their clients. You can help them to help you, by being educated about the options available to you.
My advice is given in these FAQs. Read them:
http://www.tankinlian.com/faq/existinglife.html
http://www.tankinlian.com/faq/benchmark.html
Generally, I advise people to keep the existing policies, as they have already incurred the high front-end charges. But, if the continuing charges remain too high, they should terminate the policies and invest differently.
For younger people, I strongly advise them to follow the advice given in this FAQ:
http://www.tankinlian.com/faq/savings.html
After you have read and understood the FAQ, it is all right for you to talk to a financial or insurance adviser. The adviser will be able to help you to find a low cost option. Some of the advisers do look after the interests of their clients. You can help them to help you, by being educated about the options available to you.
Petrol Consumption - Toyota Camry
During the past 11 days, my Toyota Camry travelled 473 km, consuming 52.91 litres, or 8.9 km per litre. The price is $2.136 per litre. The petrol consumption is 24 cents per kilometer - consistent with my previous record. I spent $107 for 11 days. My petrol consumption is almost $300 per month. It is high.
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