Friday, February 29, 2008

Assumption - Complacent - Self Centred

I just came back from my reservist and during this period, I had read about Jemaah Islamiyah detainee Mas Selamat Kastari who had escaped from the Detainee Centre. Though not many people read my blog, I like to put a photo of him to remind my readers how he looks like. Do note that he walks with a limp too.

I was worried when I saw the article and I got more worried when I watched Channel NewsAsia when the jounalists interviewed the public.

I am not that worried about the harm that Mas Selamat Kastari will do to Singapore, I am more worried about the complancency and assumptions that these Singaporeans made. I am not sure if these interviewers were selected by the press themselves.

All of them seems to place 100% confidence that our Singapore Police is able to catch him. None of them questioned the inadequancy of the prison security. Why? Is it due to our long track record of effiency?

I remember reading Lee Kuan Yew's memoir about how much confidence Singaporeans had for their superior White Colonial Leaders when the Japanese invaded Singapore and Malaya in December 1941. Many expected their colonial leaders to be strong and mighty. They were complacent and seems to place the same 100% confidence.

I am not questioning our leaders or the system if they are truly strong and mighty. I questioning Singaporeans ability to think beyond the surface. They always assumed that everything be alright, well taken care of, jobs will always be there, Life will be good and peaceful. Our government is the best and efficient. Such assumption leads of Complacency.

When such things happen, they become self-centred. They focus on their own well being than looking wider on what is happening around them. They no longer are bothered about new policies that shape the future of the Country. They assumed that they are not part of the people who can contribute. They don't think deep enough on how to make Singapore a better place.

If the future of Singapore are run by this generation of self-centred characters who are currently more more interested in the Edison Chan saga. I'm very worried what the future of our next generation. This generation is truly untested.

Sunday, February 24, 2008

On Reservist for 1 week

I will be on reservist for a week starting from Monday. Will not be blogging.
Will be excited to start posting again.

Good luck guys...

Don't go Fortune Telling !!!

I went to "Yi Wen Fang" at Simei Eastpoint to see my fortune few days ago. It don't usually believe in such thing but when we are worried about our future and don't know what God to pray, I feel that its no harm just to go and listen to the "Shi Fu".

This "Shi Fu" was featured in many newspaper and appeared on Channel U before. Her name is "Xu Yi Ting". She used my name and "Ba Zhi" (Birthdate and time) and used several methods to predict my destiny.

Our meeting took 15 minutes and what she said sunk my mood and heart. Following are some extract:

1) I am destined to slog harder than most people for my whole life. Every cent earned is very tough.
2) My fortune with money is bad. I will lose a lot of money in investments and my income are always unstable. I have a "Po Cai Min"
3) I have a lot of "Xiao Ren" and no "Gui Ren"
4) Even when there are "Gui Ren" around me, they will not realise my presence
5) The "Xiao Ren" will make you go astray and make you a poorer man

1) When my career looks ok, somethings will happen to make it go out of course. It is seldom stable.
2) I may have a lawsuit in 2010. Tell me to be careful.
3) I talk too much and it will invite trouble.
4) My career especially in 2008 will be extremely shaky

Marriage and Children:
1) If my wife is a Singaporean, I'll end up in divorce.
2) If I have chance to have Kids. It will be at age 34 and 35.

1) My lung and Kidney is no good
2) Not to eat sweet stuffs and I must never smoke
3) Do not eat Chicken and Seafood, especially those with shells.

She told me that fortune can be improved if I get their crystals necklace and put it on me daily. I can also considering changing the fengshui in my house and even changing my name.

Days after the Fortune Telling
My mood was terrible and life seems so depressed after the session. I can't sleep well for few nights thinking what she says seems to hold some truth especially with my career. I lost confidence about myself. I was very tempted to engage her services which doesn't comes cheap but eventually hold back. I start analysing.

1) Why should I believe that destiny is determined by Birthdate and name? If its true, why do twins have such different lives.
2) If I follow my set of properly diversified portfolio of investment, how will I lose money? If I lose money, that means a lot of people will lose money with me also.
3) My fortune telling only cost me $41. She may be telling me the negative things about me so that I can engage her service and buy their things which in the region of several hundreds.

I really regret going for this fortune telling session and I urge you guys not to go for one. It had affected me negatively and now I must keep telling myself to get out of these thoughts and be myself.

Friday, February 22, 2008

Singapore Budget 2008 & your CPF

Our 2008 Budget Report was released by our Finance Minister Tharman Shanmugaratnam on 15th Feb. There was issues relating to Individuals and Businesses. The 2 major issues closely related to Individuals are the Tax/Duties as well as initiative linked to CPF.

I like to share with you those that are linked to our CPF.
(Summarised from

1) Life Bonus
* CPF Life was earlier announced as the new CPF retirement scheme for those with more than $40,000 in the CPF Minimum Sum at age 55.
* This Life Bonus is an "Ang Bao" for those aged 46 to 50 this year, with annual income less than $54,000 and Annual Value of house of less than $11,000 ,who enrol into the Life Scheme.
* The payout amount varies for different age, income and housing size.
* If you are part of the above I described, find out how much you can get. (Max $4,000 / Min $660)

2) CPF Minimum Sum Topping up Scheme
Individuals can claim tax relief up to $7,000 for cash top-ups by themselves or their employers to their own Minimum Sum and cash top-ups to siblings, spouses, parents and grandparents’ Minimum Sums, regardless of the age of the recipients.

3) Growth Dividend
* Growth Dividends will be given to all adult Singaporeans, to be paid out in two instalments in April and October this year.
* The amount varies for different Age, Annual Income, Annual Value of house and whether serving NS. (Max $700 / Min $100)

4) Top for for CPF Medisave Account
The Government will top up the Medisave accounts of all those aged 51 and above this year. (Max $450 / Min $150)

5) Tax Relief for Voluntary Contribution to Medisave Account
Individuals will now be able to claim tax relief for voluntary contributions that they make specifically to their own Medisave Account up to a cap of ($26,393 less mandatory contributions) per year of assessment

6) New arrangement for SRS (Supplementary Retirement Scheme)
a) Employers are now allowed to directly contribute to the SRS on behalf of their employees.
b) Age limit on contributions to the SRS will be removed

Above are just teasers, for details, look into the CPF website.

Thursday, February 21, 2008

Surf the Financial Wave - How Rising Property Affect you

I am from the Bedok CC YEC (Youths Executive Committee) and we had organised a Policy Forum this Saturday. I'm part of the organising committee and we had lined up a series of statistics and sharing with regards to Financial Planning and Effects of Rising Property Prices.

Beside Mr Lee Yi Shyan Minister of Trade and Industry, we had also invited Mr Chia Ngiang Hong, General Manager of City Developments Ltd as well as Mr Yap Chin Beng, Director of Estate Administration and Property Dept. More details below:

Surf the Financial Wave: How rising property prices affect you
Saturday, 23 Feb 2008 1pm,
Victoria Theatre level 3

Our 3 panelist including Mr Lee Yi Shyan, minister of state for ministry of trade and industry will be there to field questions about how rising prices affect financial planning and how you can own your home.

There will also be a lucky draw where you stand to win 3D2N free and easy package to Bangkok, includes airfare and accommodation. The afternoon will end with a tea reception where you can mingle and interact with panellists.

You may call 6442 5317 (Bedok CC Office, Ms Alicia) to register with us.

Monday, February 18, 2008

Can we really retire comfortably? (4)

The last barrier I like to share about is the "Inadequacy of Financial Planners in Singapore".

Insurance and Investment products are distributed mainly by 3 channels: Tied Agencies, Bancassurance and Independent Financial Advisers with Tied agencies and Bancassurance as the current major players.
So what are the problems?

1) All 3 channels are very Sales Oriented
* No commission = No Salary
* The process becomes "Transactional" and advisors have to close more sales to hit their quotas.
* To get a sales done quick, no proper fact-finding is conducted and plan may not be suitable for the customer
* Under the Tied agency and Bank channel, there are no benefits to ensure that their customers are on track to their investment objectives.

2) Lack of regulators effort in controlling the quality of advisers.
* Current minimum qualification for advisers is only 4"O" levels passes
* Part-timing is allowed as long as training hours and sales quota are achieved
* No dateline for an adviser to reach any Financial Planning qualification or standards
* If an adviser is not fully committed to his job and not interested to upgrade himself, he may not be in the best position to advice.

3) Fee based distribution structure is under establised
* Fee based structure appeals to the high net worth because the fee is usually only a fraction of their total assets.
* The lower and middle income people cannot accept a fee base structure because they expect the advice to come free. They don't realise that the commission given to the agent is sometimes higher than to pay that small fee.
* There are also no guideline on how much a fee should be charged. There is a lack of benchmark in this aspect. Advisers cannot pluck any figure from the sky and tell the customer to pay for his advice.

To summarise:
a) Bolder steps must be adopted by the Regulators to control the quality of advice.
b) Quality advice can only be given by competent and professional Financial Planners.
c) Advisers must be properly paid for good advice and not due to good salesmanship.

I look forward the era when the unqualified agents are shipped out of the industry and the industry properly regulated. Such environment will ensure that Singaporeans get solid advices that will benefit them.

Saturday, February 16, 2008

Can we really retire comfortably? (3)

The 3rd barrier Singaporeans faced is the misconception of Financial Planning and the Execution of a wrong Financial Plan which they DIY themselves.

A survey by MoneySense in 2006 claims that
- 86% of Singaporeans Save
- 61% keep track of their spendings
- 83% done their financial planning
- 73% considered the risks involved before investing
- 61% monitored their investments
- 86% understood about risk diversification

With my experience, the above sounds too good to be true. Generally,

1) Talking about Singaporeans Mindset in Savings
a) When they save a dollar today, they will spend the same dollar at a later date
b) If that dollar is not totally spent, the savings will land up in 3 places
* Bank to earn 0.25% interest
* Pay premium of many Whole Life Insurances + Endowment Policies
* Accumulate and invest in the stock market
c) Many don't have a proper objective and blueprint when they save. They either put in assets that earns too little returns or lose money in their investments.

2) Talking about Singaporeans claiming having done Financial Planning
a) I doubted so. Maybe an agent simply show a concept and tell him to buy a whole life policy or endowment, he thought a Financial Planning is completed.
b) They thought that having a few insurance policies is Financial Planning
c) They thought that when their budget is stretched and they cannot buy any more insurance, it means that Financial Planning need not be done.
d) The don't even know their retirement and insurance numbers.
e) They simply don't want to see a qualified planner because they cannot differentiate a qualifed planner and pure Sales Insurance Agent who just sell. To them, all of them are just Insurance Agents.

3) Talking about Singaporeans knowing risk diversification and monitored their investment
a) Yes. They monitor their investment. But on a short term basis, probably on their stock market. Its just like watching the teletext for the 4D results every weekend.
b) They monitor their investment and when their investment loses money, they cut loss and sell
c) Yes. They diversified their investments. But in the same market! Eg, China Fund, India Fund, BRIC Fund, Emerging Market Fund all in the same portfolio.
d) Yes. They considered the risk before investment. But they underestimate Risk and overestimate returns.
e) There are systems and guideline in place for investment. Not the haphazard style that most adopted. The investment mindset is not correct.

Thursday, February 14, 2008

Can we really retire comfortably? (2)

The 2nd posting on this topic is with regards to policies that typical Singaporeans have.

I normally do 4 basic financial planning groundwork for a prospect
1) Policies Consolidation (Compile all their existing policies into a specially designed portfolio)
2) Risk Management Planning (Insurance Needs after a fact finding)
3) Retirement Planning (Will also get to know how they save regularly and how they invest their existing assets)
4) Education Planning (for those with kids)

It is not a comprehensive Financial Plan but it can take me up to 5 hours to complete an analysis and followed by a recommendation which nothing is on product.

From my experience, I observed that
a) Singaporeans are buying too many Life Insurances and Endowment Policies
* Life Insurances gives an approximate returns of 2.5% to 3% p.a and Endowment gives an approximate returns of 3.7% to 4.3%.
* Comparing to projected inflation of 2.5%, a life insurance plan barely beats inflation. It should not be viewed as a saving plan.
* I'll only recommend Life Insurance with Critical Illnesses cover up to a small amount of around $50k to $100k. It is to take care of their CI cover into their senior years.
b) They are not investing sufficiently on regular basis
* A properly constructed investment portfolio potentially gives 6% to 8% p.a returns. The only thing different from the traditional plan is the removal of the "Guaranteed" portion.
* Singaporeans are not calculative enough to see the difference between a 2% returns and a 6% returns over a period of say 20 years.
* $5,000/yr x 20 yrs * 2%p.a = $123,916
* $5,000/yr x 20 yrs * 6%p.a = $194,963
* $70,000 / 20 yrs = $3,500/yr

c) There are no proper investment blueprint when it comes to investing their assets
* They buy from everywhere. ILP from an Insurance Company, Unit Trust from Banks and Shares which they don't understand, etc.
* There are no Investment Horizon, Target Returns, Risk control measures, etc

d) Few have term insurances and even fewer make use of Group Term insurances to beef up their cover.
* For this, I'll talk about it in future postings about Insurance advisers.

Wednesday, February 13, 2008

Temporary Notice

I had received many comments. Some contain good points.

However, they also contain insulting remarks that scold agents, insurance company or some particular individuals. Some comments even contain vulgarities.

I am not able to post such comments even with the good points that you have. Hope you can refrain from such remarks.

(This posting will be removed 7 days later)

Tuesday, February 12, 2008

Can we really retire comfortably? (1)

Let me first analyse this Retirement Issue from the CPF perspective in this posting.

Many Singaporeans thought that they can depend on CPF savings for retirement. It is true if the money was not used for anything else, like a single who never purchase a property. However for most, a lot of CPF funds are used before the retirement fund really start accumulating.

I had identified 2 major barriers that restrict Singaporeans saving sufficiently via CPF.

1) High Property Prices and heavy reliance of funds from CPF
* Property Prices in Singapore is high and a major portion of the funds comes from CPF. With current rising property prices, the problem intensified.
* A young couple buying a property have to take a larger loan with probably longer term. A 30 yr old couple with 30 years repayment period means that they stop the repayment only at the age of 60.
* Worst of all, many Singaporeans have a tendency of buying a larger property near their 50s when children are in their teens. It wipe out their CPF and burden themselves with new loan into their 50s.

2) Mis-management of CPF Investments
* Singaporeans are generally lousy investors. When funds come from CPF, they are worst off. Its because they view their money lightly when the funds comes to CPF. They thought they can take higher risk because they feel that they cannot see the money anyway till age 65.
* Statistically, most Singaporeans had make lower returns compared to the 2.5% CPF guaranteed rate. Many of them even made a loss even under current economic boom.
* The problem is that Singaporeans view investment as Gambling. We are living in a world of Toto, 4Ds, soccer betting and now the Casino. They cannot guage the relation between Risk and Returns. They Overestimate Returns, Underestimate Risk.
* Example, we cannot stand the temptation when someone close to us gained 100% on their China Fund, so we blindly follow suit even after the fund rosed 100%. Eventually, the fund probably dropped 50% in the next year. No one knows when the fund will rose that 50% back. Probably 10 years later. (Imagine the interest lost over the 10 years)

Monday, February 11, 2008

Why Singaporeans can't save enough?

Singaporeans are generally great savers

* Many of us contributed 20% of our income and additional 14.5% from the employers into the CPF.
* We purchased a whole buffet of insurance and probably at least 10% of our income.
* We have so many investment choices ranging from Bonds, Stocks, Unit Trust, Structured Products, Endowment Plans, etc
* We have a good cohort of professional Financial Planners where advice is easily available
* Our government spend to much money to educate us
* We have a good disposable income, regular employability and lots of capacity to save.

Why are we still not saving enough for retirement?
Make no sense?

I'll be putting up a series of postings in the next 1-2 weeks to analyse this problem.
Hope you can leave some short comments here for my reference in the next few postings?

(Pls do not leave any insulting comments, vulgarities or personal attacks on any individual and companies)

Friday, February 8, 2008

Lunar Chinese New Year

First of all, I like to wish all my blog visitors a Very Happy and Blessed "Rat" year. May you and your family stay healthy and wealthy all year round...

Today, I like to share the Origin, Mythology and the 15 days of the Lunar Chinese New Year.
---------------- Origin:
Chinese New Year is the first day of the lunar calendar, so it is also called the Lunar New Year. And it is also referred to as the Spring Festival since it is the beginning of the Spring term.
It was recorded that Chinese started to celebrate Chinese New Year from about 2000 BC, though the celebrations were held on different times under different emperors.

According to legend, in ancient China, the Nián (年) was a man-eating beast from the mountains (in other versions from under the sea), which came out every 12 months somewhere close to winter to prey on humans. The people later believed that the Nian was sensitive to loud noises and the colour red, so they scared it away with explosions, fireworks and the liberal use of the colour red. These customs led to the first New Year celebrations. And people often use the term "Guo Nian"(过年), which may originally mean "passed or survived the Nian". Now everyone loves Guo Nian.

The 15 Days of the Chinese New Year

First day of New Year:
* The first day is for the welcoming of the deities of the heavens and earth and is a time when families visit the oldest and most senior members of their extended family.

Second day of New Year:
* The second day of the Chinese New Year is for married daughters to visit their birth parents.
* Some Chinese pray to their ancestors as well as to all the gods. They are extra kind to dogs and feed them well as it is believed that the second day is the birthday of all dogs.

Fifth day of New Year:
* In northern China, people eat dumplings (饺子) on Fifth day of CNY morning . This is also the birthday of the Chinese god of wealth. * In Taiwan, businesses traditionally re-open on this day, accompanied by firecrackers.

Seventh day of New Year:
* The seventh day, traditionally known as renri (人日), the common man's birthday, the day when everyone grows one year older.

Ninth day of New Year:
* The ninth day of the New Year is a day for Chinese to offer prayers to the Jade Emperor of Heaven (天公) in the Taoist Pantheon. The ninth day is traditionally the birthday of the Jade Emperor.

Fifteen day of New Year:
* The fifteenth day of the new year is celebrated as Yuánxiāo jié (元宵节). Rice dumplings Tangyuan (汤圆), a sweet glutinous rice ball brewed in a soup, is eaten this day.
* Candles are lit outside houses as a way to guide wayward spirits home.
* This day often marks the end of the Chinese New Year festivities.

(extracted from Wikipedia)

Wednesday, February 6, 2008

Transferring your CPF OA monies to SA

Since July 1998, CPF members were allowed to transfer savings from the Ordinary Account (OA) and/or cash to the Special Account (SA). However, the amount in the Special Account cannot exceed the prevailing CPF Minimum Sum after the transfer.
You are eligible to do so if you are below 55 yrs old and your Special Account is less than the prevailing Minimum Sum, currently set at $99,600.

In doing so, you could enjoy the higher interest rate in the SA. With effect from 2008, the balances in the SA will be pegged to the yield of the 10-year Singapore Government Security (10YSGS) plus 1%. To help members adjust to this floating rate, the SA interest rate will be maintained at a floor of 4% for 2008 and 2009.

It will be suitable if
1) You have no intention to get a property or you have reserved enough money for your current mortgage repayment
2) Your investment risk profiling is of very low risk and you have no intention to invest your CPF monies
3) You have reserved enough money for your children education and will not be using the CPF.

Do note that the transfer is not reversible. You may transfer your funds online using your Singpass or download the form the CPF website:

Before you do anything, talk to your Financial Planner with about this.

Tuesday, February 5, 2008

Monday Morning = MC Morning

I happened to pass by Woodlands this morning and saw a very long queue outside a Clinic. Some of them were reading newspaper and some sipping their morning kopi-O from the styrofoam cup. From their posture, they simply don't looks ill to me.

This scene reminded me of my Army daze where many of my platoon mates regularly report sick whenever there is a tough training that day. I never dare to do it because I know my eyes will betray me when I tell a lie. Think that this is my conscience at work.

This conscience sometimes works against me in my career. Example, if someone look into my eyes and asked me if the investment funds I recommend are the best. I couldn't give a resounding "Yes" or "No" because it is too hard to compare and future returns are never certain. When I sounded uncertain, the trust level goes down. A good saleperson will overcome such question easily and the trust remains.

This is just one of the many traits that makes me unsuitable for a "Sales" position. My parents know me well and they are very against me joining the industry in 2003. My friends were equally surprised with my career switch.
Its 2008 and I'm still in the industry. Can I say that I am not in a Sales Position, thats why I'm surviving?

Monday, February 4, 2008

Job Market Vs Yahoo bid.

The US economy looks dimmer than many expected. US could already be in recession.

Nonfarm payrolls fell to an estimated Negative 17,000 in January. Economists had expected a rise of 80,000 instead. It is an indicator of jobs creation in US. The last time US encounters a job loss is more than 4 1/2 years ago.

Despite such negative report, Wall Street rose nearly 1% on friday Closing. DJIA +92.83 NASDAQ +23.50 S&P 500 +16.87.

The reason? Microsoft put in a bid for Yahoo, and the offer was almost twice the going stock price. Microsoft plans to go head to head with Google, and they need Yahoo in their arsenal.

This news overshadowed the jobs report. Make us wonder if the Market had already factored the recession of the US economy. How interesting...

Sunday, February 3, 2008

A Reminder for Advisers

Someone posted this in my Blog: (I had made some modification)

* Adrian, how many of your clients are rich and can splurge on low return and expensive traditional products.
* When you mentioned the word 'needs' i think you are confused with 'want'.
* Example. client tells you i cannot take risk or i prefer something with saving. The client is actually is expressing a want or a wish or a desire. This is not needs.This is where you make the difference as a planner, an adviser and not an insurance salesman.
* Secondly, client is in no position to know which is better for them. You, their adviser is an expert, should advise which is better for them. Often clients are advising themselves.
* It is sad that agents sell according to the wishes of the clients.
* The problem is agents don't work harder for their client. They just give what the customers want. Worse, most of the clients are poor people who need a lot of help to give the best run for their money so that they can achieve some kind of financial independence.
* Do you know $20 can give a coverage of $500,000? Which is better for the client? How much saving and coverage can you get with $20 for a whole life?

1) Its a good comment to remind advisers to work harder for clients' interest.
2) Planner should build up trust during the Fact-Finding process.
3) We must also be firm during the Recommendation/Implementation process
4) When Clients see your professionalism, they will most likely take your recommedation.
5) When they know that you work for their interest, long-term trust comes about. You can ask for referrals.
6) However, not every client is the same. It is virtually impossible to use the same approach for every individual. Different type of plans might still be used to achieve the needs of the client.

Comments Moderation

I had changed my setting in my blog to moderate new comments.
I spent nearly an hour cleaning up deframatory and uncalled comments today. The deframatory comments are against the company and some specific individuals.

I could have posted another article today if I had not wasted my time finding and deleting these comments.

Thank you for your participation in my blog. I will continue sharing my knowledge with you through layman terms.

Friday, February 1, 2008

Federal Fund Rate cut to 3%

The market expected this 50 basis points cut. The current Rate is 3%. If the cut is a bit lower, investors will be disappointed and will send the Dow sharply down. Fortunately, things went well as expected to avoid a market downturn.

House of Representatives passed a recently proposed stimulus package of tax rebates. US consumer spending showed the weakest growth of only 0.2% in 15 months in December with Americans cautious about the economy. Inflation only rose 0.2% in December and disposable income rose 0.2%.

Recession fear is stronger than a market upside currently. If you are investing for long term, stay invested but look out for opportunity to top-up into your existing portfolio, a bit each time.