Sunday, March 30, 2008

Why Medical Insurance Premium Go Up only?

It is of no surprise to me that the premium of medical insurance kept going up over the years. We are aware that Medical Inflation hit something like 6.8% over the past 1 year.

I had 3 experiences recently that make me feel that people abuse their insurances especially for those holding the "As Charged" plan with a full complimentary rider to cover the deductible and co-insurance.

Experience 1 - Under an as-charged plan with full complement rider + Hospital Benefit
* Client went for a surgery to remove a tumour near her fallopian tube at Raffles Hospital. She told me that she will be discharged after 3 days.
* When I kept in touch with her to see how shes doing, she informed me that she had stayed an extra day when doctors told her that she is okay to be discharged.
* I asked her why she want to stay that extra day, she told me "Their service is good and since my Insurance pay for it, I might as well stay an extra day and let them make sure that I'm fully ok.'

Experience 2 - Under a Personal Accident policy with $3,000 medical expenses benefit
* Client had a knock on her head and she happens to get a flu and fever the next day.
* She went to a GP to seek treatment for Flu and fever and informed doctor on the knock.
* Doctor is unsure if there is co-relation between the knock and fever and told her to go checkup if fever still persist or if she feels dizzy.
* 3 days after the knock, fever subsided and client have no further symptoms to show that the problem is serious but she still wants to go to a Private Hospital, instead of a Government structured hospital to check if she is okay.
* I asked her why she wants to go Private Hospital, she told me "My Insurance Cover upto $3,000, right? Private hospital don't need to wait and queue."

Experience 3 - Under an as-charged plan with full complement rider + Hospital Benefit
* Client was involved in a minor accident and hurt her leg. She was given outpatient and was discharged shortly.
* After 1 week, she claims that her leg was still painful and went back to SGH. Doctors gave her painkillers and told her that there don't seems to be a problem.
* She was not convinced and went to Gleneagle Hospital after referral from her GP for check-up. * She called me and I told her that such treatments was not claimable especially that she is not warded.
* She called me few hours later and informed me that she was warded a day for observation pending various scanning results.
* When I asked her if her condition is so serious that she need to be hospitalised.
She told me "If I'm warded, my insurance and hospital benefit will cover? If not, no pay right?"
* I nearly fainted... Just keep my fingers crossed as I await claim result.

BTW, btw... The 3 above experiences I mentioned above are all ladies. They indeed know how to calculate and make full claim out of their medical insurance.

Is it such a big loss???

I went finexis(one of the FA firm) at Parkview Square to visit an ex-colleague few days ago. I saw a group of young advisers rushing to submit their CPF investment cases. I get to know that some of them had not even went home the previous night because they need to prepare all the forms.

Many advisers have been pushing very hard to convince people invest their initial $20k from Ordinary and Special Account last week. The Advisers had convinced them to such as if they can never invest again.

Is it true that these people are missing big time if they fail to beat the deadline? To me, its not really a big deal even you choose not to invest now. Why?

Lets analyse an example
Mr Tan earning $3k/mth with 1 mth AWS and 1.5mth bonus per year.
Mr Tan will be able to accumulate $20k in his OA in 2 yrs.

Mr Tan choose to invest the $20k from his Ordinary Account now
* Assuming his investment gained 5%p.a over 2yrs, his $20k will grow to $22,050 (Not Guaranteed)
* Assuming his investment loss is 5%p.a over 2yrs, his $20k will shrink to $18,050

Mr Tan choose not to invest the $20k from his Ordinary Account now
* OA interest is 3.5%p.a, his $20k, in 2 yrs will grow to $21,425 (Guaranteed)

Let us calculate his opportunity cost for not investing?
* Opportunity cost basis investment returns of 5%p.a ==> $22,050 - $21,425 = $625
* Bear in mind. the 5% is not guaranteed. What if the fund dropped 5%p.a over next 2 yrs?
His loss will be $18,050 - $$21,425 = -$3,375

To cut the story short...
Our $20k will be locked. Its a matter of time. The opportunity cost is 18 mths($4.5k salary) to 40 mths($2k salary), not considering AWS and bonus. To me, its good to invest if we are looking long term, but, logically its not really such a big loss even you choose not to invest now. The $20k can still be invested very soon anyway.

Thursday, March 27, 2008

How much Critical Illnesses Cover???

I asked this question to many financial practitioners since I joined the industry 5 years ago. Most of them gave me different figures, like 10 times your annual income, as much as you can afford, or even a fixed amount like $200k, $300k seemingly plucked from the sky. I also couldn't find the answer in any Financial textbooks.

I'm not surprised that most people out there do not know their Insurance numbers because the practitioners themselves seems confused and passed down all sort of numbers to their clients.

I have my way to calculation, not adopted by any financial books but generally very well accepted by my clients. They felt that the approach is simple and make a lot of sense. Let me show you below:

1) The Permanent Needs (Approximately $50k to $100k)
* The Permanent needs for critical illnesses are the needs of the insured regardless of age when they are down with Critical Illnesses. They include:

a) Alternative Medicine
A person down with Critical Illness may not just seek treatment from hospital. They may want to seek extra treatment like Chinese Medicine, Detoxification programs, Extra Tonic, etc
b) Rising Medical Expenses
A Medical Insurance may have their leakages. Eg, Consultation fees, Ambulance Fees, Drugs on trial not covered, etc
c) Misc Expenses
There could be other extra expenses incurred during the process of treatment. Eg, The need to engage a domestic worker, frequent transporation to/fro hospital over a period of 3 to 5 years.

2) Temporary Needs (Approximately 3 to 5 times annual Income)
* This expense will come in need when this person is
a) working,
b) independent or
c) someone is dependent on his/her income.
* This Temporary needs will last till the person retire because the person is no longer working and logically, he need not replace his loss of income. This person is also presumed to have saved adequately for retirement.
* Some high income earners may prefer to apply a percentage of their income to better illustrate needs because they know that they will forgo part of their luxuries in event of contracting the Critical Illnesses.

Term or Life policy?
A lot of people can argue with me for this recommedation. Term or Life Policy?

a) For the Permament Insurance Needs, I'll recommend Life Insurance or Term with pure Critical Illness Whole Life cover.
* Nothing wrong using Term insurance if the person is ready to set aside a sinking provision to self-insure the permanent needs into old age. But make sure the person really do it and not just get term insurance and not doing anything about setting aside the permanent insurance coverage.
b) For the Temporary Needs, I'll recommend Term Insurance
* The reason is simple. The needs is temporary, don't need to use Life Insurance. The extra cash you have is better invested for other purposes such as retirement or Children Education fundings, etc

The above figures are approximated and needs of each individual is unique.
The true numbers can only be derived after a proper fact finding analysis.

Monday, March 24, 2008

The Credit Crunch de-mystified in 2 minutes

Every other day, we are seeing reports on the US Subprime problem. The reports frequently occupy the whole page in the Straits Times or Business Times. Lazy readers like you and me are put off by these reports. Are you guys still confused what is happening???

I try to summaries for busy people like you using my 10 points approach.

1) The Junk Bond idea
* The sub-prime concept arise from the junk bond concept.
* Junk Bonds are Bonds issued by companies with poor credit ratings. They have to issue bonds with a higher coupons than other companies to attract investors.
* The sub-prime follows this concept. Sub-prime are loans taken by people with lower credit capabilities. They have to pay a higher interest than others in order to be accepted for the loan.

2) The low interest Rate Environment
* From 2001 to 2004, the discount rate ramain low to help US economy get off from the 911 and bubble. Many people started taking loan due to the low interest. Its cheap money anyway.

3) Housing Price will always rise
* The Americans thought that the economy will always be bright and housing price will keep going up. So, they borrow more cheap money to buy more properties. They stopped savings altogether.

4) Lenders start to share Risk into the Financial market
* Financial Institutions took in more loans and start packaging these Sub-prime mortgages together with other mortgages into innovative investible securities like Asset backed Securities and Collatoral Debts Obligations, etc. to reduce their risk.

5) How these securities became popular?
* These lenders get Bonds insurers to insure these securities and make them as desirable as AAA ratings. Other Banks, Insurance Companies and Financial Institutions round the world buy into these securities since it looks so safe.
* They even use these securites as collatoral against other loans with each other.

6) The American dream dashed
* Federal Discount rate start going up followed by Mortgage interest.
* The economy slow down followed by housing prices that came down.
* Prices of house plunged to prices below the loan that they took.

7) Subprime borrowers stop paying
* Subprime borrowers either cannot pay their loan or refuse to pay their loan.
* Due to falling housing prices, their loan became higher than the price of their house. It does not make sense for them to continue paying the loan.

8) The problem spread
* Subprime borrowers don't pay. The Lenders get into problem. The problem are passed to those who purchased the securities which they packaged. The problem are further passed to those who accepted these securities as collatorals.
* The bonds insurers further worsen the problem as they lose their credibility. Other bonds they insured got into problem due to their reduced credit ratings.

9) Financial System crumpled.
* The whole system became wary of the problem and refuse to lend each other money. The money became tight in the economy and affected normal businesses.

10) The problem passed down to the people
* Businesses and household are affected by fear of recession.
* People are worried of the economy. They reduce spendings. Coupled with other problems like Inflation and falling US Dollar and rising oil prices, the US economy is indeed in big problem.

Saturday, March 22, 2008

The Easter Bunny

Good Friday and Easter Day are very important Days where Christians around the world. The Holy Friday commemorates the crucifixion and death of Jesus Christ at Calvary and Easter is to celebrate the resurrection of Jesus, which Christians believe occurred on the third day after his crucifixion around AD 33.
Since its origins, it has been a time of celebration and feasting. Today it is commercially important, seeing wide sales of greeting cards and confectionery such as chocolate Easter eggs and marshmallow bunnies. As a bunny lover, I specifically like to take this chance to share the origin of Easter Bunny with you and to showcase my 2 Rabbits.


About the Easter Bunny

In pagan times, the "Easter hare" was no ordinary animal, but a sacred companion of the old goddess of spring, Eastre. Hares and rabbits were considered sacred to Eastre because they are notoriously fertile animals and they served as symbols of the new life during the Spring season.

Over time, the symbolism changed. Instead of the Easter rabbit symbolizing fertility, the rabbit also symbolize an innocent, vulnerable creature that can be sacrificed, similar to the lamb.

The Easter bunny we know today was influenced by German traditions dating back to the 1500s. German children believed that the Oschter Haws (a magical rabbit) would leave them a nest of colored eggs at Eastertime if they were good. The children would build their nest in a secluded place in the home, the barn or the garden. Boys would use their caps and girls their bonnets to make the nests . The use of elaborate Easter baskets come later as the tradition of the Easter bunny spread throughout the country.

Pennsylvania Dutch settlers brought this tradition to America in the 1700s. The first edible Easter bunnies, made primarily of pastry and sugar, were produced in Germany, during the early 1800s.

The above are myth passed down generations though stories told during each Easter Day. We should not see Easter as a celebration of spring when we forgot the more important event which is the celebration of the crucifixion and resurrection of Christ.


About my Bunny
My First bunny, "Lovely" had brought a lot of joy for me when introduced into my family. She is nearly 2 years old, very intelligent and will always wait for me at the fridge for treats whenever I open it.
My Second Bunny is a Mini-Lop called "Melody". She is the relief of all my stress whenever I reached home feeling down and frustrated. Very lovable and huggable. She will allow me to pet her continously till my hands tire.
If you like to have some tips on how to keep rabbits as pet, you may drop me an email too.

Thursday, March 20, 2008


I met a prospect during a cold calling session few months back. I had contacted him several times and he finally agreed to meet me for a policy and investment review.
We arranged to meet at a coffee joint in a shopping centre and I informed him to bring along his policy, investment and CPF statement.

I got myself fully equipped with my self-introduction file, Fact Finding Forms, presentation kits, white papers, Internet access, etc. All ready for a proper and professional meeting.

He arrived 15 minutes late empty handed. Our conversation started as follows:

Adrian: Hi Mr XXX, thanks for taking your time......(Trying to break the ice and know him better)
Prospect: (Sitting backward) OK. Tell me what you have!

Adrian: Before we start the discussion, can I first get you a coffee?
Prospect: Don't need. Just tell me what you have!

Adrian: Before showing what we have, why not allow me to do some planning for you to show you what is suitable? (taking out my Fact Finding Form)
Prospect: Oh no. (Looks disturbed by the papers) Just tell me what you have!

Adrian: (keeping back the form after seeing him irritated) Maybe you can tell me what you want.
Prospect: I don't know what I want. I'm here to see what you have!

Adrian: When people meet us, they go for Protection, Savings or Investment. What are you looking for?
Prospect: Ok. Tell me about Savings and Investment

Adrian: Savings or Investment. Are you looking for Lumpsum or Regular?
Prospect: Anything. Just tell me what you have!
(I look at him. His BMI is probably 35 and above; I'm not going to recommend any insurance related stuffs. Decided to show him about investment.)

Adrian: Let me show you the 2 ways to invest. Lumpsum or Dollar-cost Averaging.....
Prospect: I not interested in all these concepts. Just tell me what investment can give me the most money?

(I only bring a few leaflet of our diversified investment funds that day and start showing him that few leaflet)
Prospect: Anything else you have other than this?

(Fumbled a bit, totally unexpected behaviour from this prospect.Try to log into my Wireless SG to show him some higher risk investment funds)

Adrian: Please give me a few minutes as I log into the internet.
Prospect: Sorry. I have no time and I thought I can hear what you have. I got to go. I will call you if I am interested to meet you again.

(The meeting ends within 10 minutes)


How I feel after the meeting?

* Felt lucky never get him the coffee. Nearly wasted my money.
* Travelled to the other end of Singapore. Felt lousy as if my time and effort are so cheap
* I am not a sweet-talker. I am not able to build up any rapport and take control of the meeting
* Learnt a few things.
a) I have everything about why we should invest, but I don't have things on what we can invest on hand.
b) Don't presume that clients will treat us like a professional. We must be ready to turn into a salesman when needed.
c) The propect is more domineering than me. He had controlled me in that 10 minutes. I failed to show him that I'm the specialist. You listen to me!

Can anyone else give me pointers on what I can learn from this meeting?

Tuesday, March 18, 2008

Current highest FD rate?

I had extracted the below info from a Fixed Deposit Blog dated 4th March @
The rates should still be relevant though may have changed during last 2 weeks.

So where can we get the best fixed deposit rates under current uncertain market where we wish to accumulate our cash?

Not surprising. Its our Finance Companies offering the higher rates...

Sing Finance
$10k-50k - 1% (12 mths)
$10k-50k - 1.125% (12 mths) - Senior
$50k above- 1.55% (12 mths)
$50k above- 1.675% (12 mths)-Senior

Hong Leong Finance
$20K -50k - 1.02%(12mths)
$50k-100K - 1.51%(12mths)
$100k above - 1.56%(12 months)
$50k above- 1.6 % effective rate(12mths,SeniorRate55)

UCO Bank (formerly United Commercial Bank)
$50k above - 1.50 %(12mths)

Isavvy Savings ONLINE Account*
-$50k-$250k - 1.68%
-$250k- $1m -1.78%

Saturday, March 15, 2008

16 more days. Invest or not to Invest???

You have only 16 more days to invest your initial $20,000 from your CPF Ordinary Account and $20,000 from Special Account.

Coming 1st April, to invest under CPFIS-OA, you will have to set aside $20,000 in your Ordinary Account before the remaining savings in your Ordinary Account can be used for investments. Similarly, to invest under CPFIS-SA, you will have to set aside $20,000 in your Special Account before the remaining savings in your Special Account can be used for investments.

With the amount being locked in, an extra 1% interest will be paid on this initial $60,000 inclusive of $20,000 from Medisave. The extra interest from the OA will go into your Special or Retirement Account to enhance your retirement savings.

Many advisers might be taking this chance to encourage you to invest. So should you or should you not invest???

Ask yourself following question before you decide:

a) What is the short term needs of my Ordinary Account monies? Downpayment for housing? Children Education?
b) Have I left sufficient Liquidity for my mortgage loan in event I sack my boss?
c) Will there be a decrease in my CPF contribution due to job change or age in the near future?
d) Will my investment perform more than 5% if I want to invest my Special Account?
e) The other factors will depend on the 3 principles of Needs, Ability and Willingness.

Most importantly, understand the plan that your adviser recommends and not be pressured by them. Just a few tips for you.
a) Do not take excessive risk as if you're gambling although its your CPF monies
b) Not recommended to invest in a plan such that the returns are not guaranteed and yet only possibly gives you slightly above the CPF guaranteed rate.
c) Not recommended in a plan if the returns are described at (b) and requires you to lock up the monies for long period.

As for myself, I had ensured 12 months liquidity for my mortgage repayment. I had also invested the rest, including my Special Account.

Thursday, March 13, 2008

Not happy with your Financial Institution?

What can you do and who can you turn to for help if you have a problem with a financial product that you have bought or the service standards of a financial institution. There are 3 levels for you to seek help.

Level 1: The Financial Institution where you got the Financial Product

a) Look for the financial institution first as they have easy access to your records. All financial institutions are expected to deal with consumer problems and feedback fairly, promptly and consistently.
b) Speak to the staff who attended to you when you bought the financial product or service. If you do not know the name of the staff, contact the financial institution's Customer Helpline.
c) If this does not help, write a letter to the Quality Service Department or a senior person in the financial institution.

Level 2: Financial Industry Disputes Resolution Centre Ltd (FIDReC)a) FIDReC will only handle problem which remains unresolved with the financial institution.
b) FIDReC adopts a two-step process. First by mediation between the buyer and the financial institution. If still not settled, then Second step will be adjudication where a Panel of Adjudicators will decide on the dispute.
c) FIDReC's Panel of Adjudicators includes retired judges, senior counsel, senior lawyers and retired industry professionals.
d) These rulings are final and binding on the financial institution, but not on the buyer. If you are unhappy with the Panel's ruling, you can choose not to accept the decision of the Panel and pursue legal action or other resolution options.

Level 3: Legal Aid Bureau
a) Before taking legal action, you can consider approach CASE, the Singapore Mediation Centre (SMC) or the Small Claims Tribunal. They might be able to help.
b) Taking legal action should be the last resort as it can be a time-consuming and costly process. You can either engage your own lawyer or seek help from the Legal Aid Bureau. However, there are certain conditions to meet before the Legal Aid Bureau will help.

Summarised from

Tuesday, March 11, 2008

The Lop-sided Scale after the Election

The Malaysia Election result last week was expected to be pro-opposition but was not expected that the Ruling Party will lose as many as five states to them. The KLCI dropped 9.5% today. Investors are worried about the political future of the country considering that a weak government will face difficulties in pushing for policies in a multi-racial society.
PAS fights for Islamic rule, DAP fights for equal rights and pro-business environment, PKR fights more wealth sharing and BN can now only fight to ensure they can control the opposition well to push their policies.
The Barisan Nasional Logo of the Scale is no longer balanced. Imagine the scale to be lopped towards either side. This is the result of dissent by the people. The government did not fulfil their promise of less crimes, less corruptions, more growth, more money.
The situation does not spell well for Singapore because Abdullah is a very pro-Singapore leader. If he is ousted out by UMNO during the General Assembly later this year, there will likely be more tension with the future Prime Minister who is most likely be Najib, the deputy minister during Mahathir's era. Worst, what if the Prime Minister is Anwar. He is known to be unpredictable and cold/hot towards Singapore.
Singapore must never come to a situation where PAP lose their power. We are a small country. Political Stability is very important for foreigners confidence. The weakened PAP will means a leaking boat and risk sinking into the open sea.
Well, stock picking wise, it may be wise to keep out of Malaysia for a while. See how the opposition works and buy into the country later.

Sunday, March 9, 2008

Money Tips for 20-Somethings $$$

Extracted from Today's newspaper on 8th March. Might be useful for some who did not read it.

1) Budget for monthly living expenses according to your lifestyle needs. Spend within the budget.

2) Put aside at least three months' worth of savings for a rainy day.

3) Buy insurance while premiums are low for your age band. Paying premiums annually is actually cheaper than paying monthly.

4) Start a regular savings plan by investing. Leaving the money in the bank yields just 0.25% currently, meaning inflation itself will wipe out the already measly gains.
Instead, set aside a percentage of your monthly salary, say 10% for a long term investment and then watch the power of compounding unfold.
The money may come in handy later for big-ticket items such as wedding expenses or a new home.

5) If you want to buy a stock, research the company's fundamentals first. don't buy purely on sentiment or gut feel.

Friday, March 7, 2008

Private Banking Vs Privilege Banking

Private Banking is a term for banking, investment and other financial services provided by banks to private individuals with sizable assets. It is viewed as very exclusive, only catering for high net worth individuals with liquidity over $1 million. Some banks accepted private banking for those with lower liquidity at around $500,000.

These high net worth individuals are usually very successful businessmen, entrepreneurs, or inheritors of the family wealth. With a large fortune behind them, they engaged private bankers to assist them in managing the wealth, be it to create more wealth, preserve the wealth, or manage the fortune in preparation of wealth transmission to the next generation.

Private bankers provide a very personalized service include investment advice, discretionary portfolio management, lending, insurance, estate and trust planning, and wealth structuring. They will carry a wider range of products like offshore and hedge funds specially designed for this group of people.

The top 5 global banks in 2007, in term of assets under management, profitability, ratio of clients to relationship managers and services offered are UBS, Citigroup, HSBC, Credit Suisse and Merrill Lynch.

Privilege Banking is the mid-section between Retail Banking and Private Banking, basically targetted at the Mass Affluent with liquidity over $200,000. Some benefits they get includes:
* Having a personal Relationship Manager
* Dedicated Premier Banking Centres & Private Tellers
* Express channels at all branches for counter transactions
* Financial needs analysis and personal financial planning
* Investment and currency updates
* Private invitation to talks and seminars on leisure pursuits, etc

The range of product available for this group of people is near to those under private banking though the level of service will be slightly less personalised.

Don't know if I'll have the privilege to engage a Relationship Manager or Private Banker to manage my wealth one day... :)

Wednesday, March 5, 2008

More Money = More Scholars = More Policies??

I visited many families during my course of work where we can talk about anything under the sky. One of their favourite topic is about their children with their studies or work. Coincidently, I met 4 families recently where their children are under Scholarship with government linked agencies namely DSTA, PSC, MAS and SGH. There seems to be more scholarships given out recently when our country is doing well with fat surpluses.

Our government is spending a lot of money grooming young talents and I think they are doing the right thing. Though I have not done any correlation studies between government surplus = more scholars = more policies, I think there could be a strong linkage between the 3.

There are 2 recent implemented policies which I feel are pushed by people who do not know what is happening on the ground. I suspect that they are implemented by these overseas scholars who have no idea on how these policies will affect people on the ground.

1) Taxi can only stop in Taxi Stands in Central district from 1st Mar 08.
* Try booking a taxi, the operator will tell you to go to a ulu taxi stand which you have no idea where it is
* Try waiting for a cab in some taxi stand. There are no space for queue. No one knows who came first.
* Try telling the driver to drop you at a specific place. They will bring you to a nearest taxi stand, maybe 500meters away from your original destination. You got to walk to your office regardless rain or shine.
* Ask these taxi driver how he feel about this policy. Ask him if he is now avoiding entering CBD area.
* No taxi to CBD area? Next time LTA will raise fare to attract more taxi drivers into CBD. Who suffer? People like you and me lar...
* The people who implement this must be driving their own car, so not affected.

2) The new disclosure policies by Insurance advisers implemented by MAS
* A normally 7-8 pages quotation became 16-17 pages overnight. They feel that everything should be disclosed in a quotation and there are no reason why they should not be.
* I am not against disclosure because it is important to ensure clients know what they are getting.
* I feel that disclosure should comes in 2 layers.
a) 1st layer info consisting of Basic details that affect client decision to get the plan.
b) 2nd layer consisting the good to know info that can be disclosed after the client get the plan and to be included in the policy document.
* Such wordy quotations will only confuse the customer and also to chop more trees in future...

- The root problem lies in Singaporeans not getting the correct advice, not on the product itself.
- The quotations should be simplified in simple English with straightforward points so that the customer can grab the main issues that directly affect them.

Tuesday, March 4, 2008

Taking Risk or "Not" Taking Risk

I had mentioned in my previous postings that Singaporeans are living in an environment of gambling and speculuations. They are not living in an environment of guided Investment.

Human by nature are risk averse and greedy at the same time. They overestimate returns and underestimate risk when they are greedy. They underestimate returns and overestimate risk when they are risk averse.

How they preceive greed and aversity depends on the investment climate. Greedy when market is up. Risk Averse when market is down. (Though should be the other way round as Warren Buffet advised)

Today, I like to write about 3 principles for you to ponder about if you like to invest:

1) Is it necessary to take risk?
a) What is your returns required to meet your objective?
b) If 4% yearly returns are required, why should you be greedy and go for 8% which translate to unnecessary risk?

2) Do you have the ability to take risk?
a) What is your time horizon? When you need this money?
b) Do you need the liquidity? Is your cashflow regular?
c) What is your age and are you in good health?

3) What is your willingness to take risk?
a) You can use a risk profiler to understand how you preceive risk
b) Some people simply cannot sleep well when the market comes down. Everyone is different in this aspect.


As a Financial Planner, we need to guide our clients through the process on how much risk they "need" to take. We should not be guided on how much risk they "want" to take.

Give you 3 typical examples on why some people need to be guided through the 3 principles:

1) Mr Tan, age 58, need $1million for retirement in 4 years. He currently has $950,000. He wants to buy a property costing him $1.2 million because he feel property prices may go up.
* Needs - He don't need to take such high risk because he is near his objective amount
* Ability - He is near retirement, cashflow decrease and liquity needs increase
* Willingness - Though, he wants and willing to take risk, he don't have the need and ability.

2) John, age 12, average student, exam coming, but want to watch TV
* Needs - He need to study because his exam coming
* Ability - He is only an average student so must study
* Willingness - Not willing to study. So we must counsel him that he "Need" to study

3) Michael, age 45, needs $1million for retirement at age 55, now no savings, earns $2k/month
* Needs - He have an objective, but is the objective realistic for his current ability? He needs to relook on his objective.
* Ability - How much can be invest with current income. Small investment need high risk to hit objective
* Willingness - Even if he is willing, we have to counsel on his ability. Excessive risk is as good as gambling.
The 3 principles sounds simple but unfortunately, Singaporeans are generally guided by greed and risk aversity, not by the correct investment principles.

Sunday, March 2, 2008

Calcium and your Health

Did not write much about Health issues lately. So today, I must put up a posting on it. An inspiration came about when I drank my HL milk recently.
From the side of the packet, there was this label telling us how much calcium we need per day.
So what exactly is Calcium and how can it help us with better health? Let me share...

(Extracted and Summarised from

1) Simple facts about Calcium
a) The average adult’s weight is made up of about two per cent calcium.
b) 99% of calcium is found in bones and teeth with the remaining 1% in the soft tissues and watery parts of the body where calcium helps to regulate normal processes of the body
c) Calcium deficiency may lead to disorders like osteoporosis (a disease of both men and women in which bones become fragile and brittle later in life).

2) Role of Calcium
a) Strengthening bones and teeth
b) Regulating muscle functioning, such as contraction and relaxation
c) Regulating heart functioning
d) Blood clotting
e) Transmission of nervous system messages

3) Good sources of calcium
a) Milk and milk products – milk, yoghurt, cheese and buttermilk. Calcium fortified milks can provide larger amounts of calcium in a smaller volume of milk
b) Leafy green vegetables – broccoli, collards, bok choy, Chinese cabbage and spinach.
c) Soy and tofu – tofu and calcium fortified soy drinks.
d) Fish – sardines and salmon (with bones).
e) Nuts and seeds – brazil nuts, almonds and sesame seed paste (tahini).
f) Calcium fortified foods – including breakfast cereals, fruit juices and bread:

4) Factors that can reduce calcium in our bones
a) High salt diet
b) More than six drinks per day of caffeine-containing drinks – Eg, coffee, cola and tea
c) Excessive alcohol intake
d) Very low body weight
e) Very high intakes of fibre (more than 50g per day, from wheat bran)
f) Low levels of physical activity
g) Low levels of vitamin D – this may be an issue for people who are housebound or for women who cover their bodies completely when they are outside, as they do not get enough sunlight on their skin.

Okay. Till here and hope you have a better idea of what Calcium is about from this short posting...