Friday, December 26, 2008

The Need of Discipline and Convenience

I walked into the California Gym 2 months ago to ask about their Gym membership package. I thought of starting 2009 with a disciplined exercise regime.

Many friends tell me not to sign up because it is cheaper in Sport Councils where it cost only $2.50 per entry and that I can do my own weights exercises and jogging myself to keep fit. Its not necessary to sign up a Gym Package.

I know about the lower cost in Sports Councils and that I can do my own exercise at home but the thing is that “I never do it despite the low cost of keep fit”. My usual excuses are the lack of convenience and discipline.

* To overcome the convenience factor, I had chosen a gym within walking distance to my office and rented a personal locker in the Gym to put my clothes, shoes, bathing stuffs in my locker. I don’t need to bring all these barang barang now compared to the times when I go to sports council.
* To overcome the Discipline factor, I had asked my colleagues to join me so that we can encourage each other. The thought of putting in money monthly will also ensure that I fully make use of their services. This shall motivate me as well.

I eventually sign up the package without waiting for 2009. I'm currently going Gym on a regular basis and I must try to keep it this way...

*********************
This incident reminded me of my investment plan.

In the past, my investment discipline was through setting aside my monthly surplus and target to buy ETFs and shares every 3-4 months because of the lower cost structure compared to Unit Trust.

I encountered a few problems with this way of investment
1) It take rather long before I can accumulate enough money to get into ETF and shares at reasonable cost. I normally buy only after I accumulate $3-4k.
2) I also realized that I do not have the discipline to save because I spend more when I have more money.
3) After accumulating that $3-4k, I become fearful with my money that I will lose it. I was very emotionally with this money and start to punk the market, hoping for quick returns.
4) I become greedy at the height of the bull market like many investors and I got myself burnt with my investments.

To control my greed and lack of discipline, I decided to adopt a very simple and convenient way of investment called RSP (Regular Savings Plan). In the past, I failed to target an amount to save and I tend to spend more when I have more money. With a Unit Trust RSP, I forced myself to invest $XXX/month without trying to time the market. I spend only after setting aside the money for investments.

My investment plan is somehow similar to my new exercise regime. I need the Discipline and Convenience to achieve my fitness target. I also need this Discipline and the Convenience of RSP to achieve my financial target. The cost of Unit Trust is slightly higher and potential returns are smaller compared to the stock market, but it suits me well.

To start an RSP is simple and the cost is reasonable. I strongly encourage you to start one. Don’t need to wait so long!!!

28 comments:

SGDividends said...

Adrian,

Actually one can use Poems Share Builders Plan to RSP. Its still cheaper than Unit Trust. Just a suggestion.

SGDividends Team

Anonymous said...

POEMS Share Builders Plan focuses in Singapore centric stocks. Any sensible financial practitioner will not recommend putting a single cent into Singapore stocks because if one's job is already in Singapore, investing in Singapore has no diversification at all for the Singapore based wage earner.

You should consider paying Adrian a financial planning fee to help you do your financial planning rather than relying on cheapskate DIY methods like Poems Share Builder Plan.

Helmi Hakim said...

Way to go Adrian! :)

Yup....Keeping ourselves fit and healthy is very important!

There's a series of marathon run lined up for year 2009.

Participate in it, and you will enjoy! :)

Anonymous said...

I wish to use your blog to provide some feedback to Wilfred Ling whose blog does not permit any feedback.
I cannot help but want to point out serious flaws in his thinking in general and in particular his take on hourly charge for his renumeration. In his blog he compared his hourly fee as common and uses cleaners, taxi drivers and other menial workers in his comparison. It is unfair to use this comparison because a menial worker's work is very visible. In other words, either your room is clean or not can be seen immediately and payment can be made. Same thing for taxi drivers, you know immediately whether you have arrived at your place or not and you pay the driver. Hence lump sum is not encouraged because you pay once you see the work done.
Not in Wilfred's case, one does not know the outcome till much later. However his comparison with professionals like doctors and lawyers are also flawed. Many doctors do not charge 200 dollars an hour, and the work they do impact upon your life and death, not so wilfred's work and he charges up to ten times more than general practitioners?
Also Wilfred belong to a class of financial advisers whose reputation has taken a knock recently of epidemic propoertions.
Lastly, wilfred deliberate refusal to allow feedback on his blog and only unilateral views shows his personality of allowing only one-sided views and a one sided approach adopted by many financial practioners whose lack of transparency is the cause of their downfall. Remember what Madoff told people who ask him how his investments are made? Madoff does not want to answer his client's questions and does not entertain questions.
That said, I think Adrian is so much more reasonable and charges a much lower fee and allows feedback. These are the signs to look out for if one in unsure about a financial practitioners integrity and honesty.

Anonymous said...

Hi Adrian

Sorry mate but this sounded more like a pitch than the usual honest blog entry.

I mean come on, initially you wrote ETFs and shares every 3-4 months because of the lower cost structure compared to Unit Trust.

now you must have come to that conclusion after reasearch and hoping after initial successful tries of saving some amt then you faced obstacles you mentioned. Well do u know you can open a another savings a/c with bank and simply transfer the money from one a/c to another and do not carry ATM of that a/c resulting in you not touching that amount. I don't think this is any difficult for a person like you.

Why are you ready to give up on trying simple things to take efforts to overcome your fear of overspending and greed etc. Plus I am guessing you mention one should set a goals short term, mid term, long term. why did you get greedy with all your "extra" money in hand to invest. Shouldn't you save certain amount for cert term plan.

I am not sure if you understand what you wrote and for why you wrote. May be you just got an idea of CC gym and california fitness gym and built a story showing connection with saving money management strategy.

Overall a bad script.

Please do not take it personally. Hope you improve in your writing next time around.

Regards
Paddy

Khiat Han Hwee Adrian said...

Hi SGDividends, thanks for your suggestion with Shares Builder Plan. I'll find out more on this and I think it can be a good way to diverisify my portfolio.

For Anonymous 1:09, I'm posting your comment on Wilfred not because I think alike as you. He charges a fee because he is confident of doing so and the model suits him well. He chose not to allow comments because its time consuming to monitor comments where a lot of time are not constructive.

For Paddy,
Thanks for your comment too. I shall take it constructively.

Anonymous said...

December 28, 2008 1:09 PM:

you can call up Promiseland and get Wilfred's phone number. Call him directly. There's no need to spam other blogs.

Anonymous said...

'Anonymous 1:09, I'm posting your comment on Wilfred not because I think alike as you. He charges a fee because he is confident of doing so and the model suits him well. He chose not to allow comments because its time consuming to monitor comments where a lot of time are not constructive.'

Haha... Everyone who charges a fee is confident of doing so but the point is whether it is justifiable or fair to do so. Choosing not to allow comments because it is time consuming? Haha... Why not retire since it is not time consuming? Why not go home and shake legs, even that is time consuming. The only reason a reasonable person does not allow feedback is because feedback will show up his weakness but this is still better than some who not only disallow negative feedback but generate false positive feedback to give a positive spin. Ah... such is the corrupt financial world we are in today... Sad

Anonymous said...

To "December 28, 2008 1:09 PM",

Some of financial planner's work could only be "seen" after a period of time. Some are tangible.

However, largely most of which are not tangible until much later. Using your line of reasoning, it means that all financial planners' work should not be compensated. But do you know that all customers pay their financial planner a fee? The fee is either transparent (e.g. hourly rated) or hidden like commissions.

If you feel that you should not pay a single cent to a financial planner due to its "intangible work", you should not even pay any commissions. The only way not to pay a fee and commission is not do engage a financial planner.

Since this is Adrian's blog, we will use him as an example: Currently he is commission based. Clients pay him via commissions. From his blog he has demostrated how he try to help his clients. Are you saying that he should not be compensated and shall work for free? If you think Adrian is a good guy and deserve the commissions - how much commission should he get? $1, $50? $200? $2000? or $20,000? Nope - the client has no say as to how much a commission an agent gets because these are hidden fee. So which you prefer? Hidden or transparent which you can see?

Remember this once again - all clients pay their financial planner - either it is transparent fee or hidden like commissions. Which do you prefer? I tell you - most of the time commissions are larger than fee-based. Look at this Vista product from Z company, it pays $40,000 in upfront commission!!! See TKL's blog HERE

In more developed country, fee-based financial planning is the way to go. UK is going to ban commissions in favor of fee. In Australia, a large number of planners are fee only as well.

As for the part which you are unhappy with the lack of feedback in wilfred's blog, you can always ask him the reason. I believe his contact is in his blog. There is no need to sink in frustration and complain like those losers in TKL's blog. Also if you feel that he is not being transparent, you can always make an appointment with him and suggest ways which he can improve. If you have no suggestion, just shut up and get a wife/husband and do some national service like have some babies for the country. At least this is more productive than just sitting behaving like a baby crying for milk.

BTW, as I typed this I found from Wilfred's website that he does not charge anything for the first 4 hours. Looks to me that the anonymous baby don't realised this implies that Wilfred do not charge anything for a large number of cases.

- Someone from the industry that hates babies crying for milk

Anonymous said...

Many doctors do not charge 200 dollars an hour, and the work they do impact upon your life and death, not so wilfred's work and he charges up to ten times more than general practitioners?

This anonymous fellow is living in Mars. My GP charges me $25 for a 3 mins consultation. That's equivalent to 25*60/3=$500 an hour!

The impact of a financial adviser also affect a person's life and death. Without able to save up for retirement, the only way is to jump and die. With proper insurance coverage, the life assured can live another day knowing that his medical bill is paid for. With proper budgeting and debt management under the supervision of a financial planner, the person can live a normal life without resorting to borrowing from credit cards and ah-longs which have driven people to sucide.

by the way, no GP or doctor can guarantee that his treatment will 100% work. In fact, prior to a surgery, the patient or patient's family is asked to signed a disclaimer form.

I suggest this anonymous fellow makes an appointment with adrian and ask him to do a comprehensive financial planning for him to see for himself how a planner works. But don't take advantage of adrian's kind heart.

Khiat Han Hwee Adrian said...

My Personal Trainer in the Gym charges me $75/hr and it must be in 4 sessions which cost over $300 with GST.

I did not engage him yet because I want to ensure I'm able visit the Gym regularly for at least 3 months and to take this time to do a bit research.

Is $75/hr too much? I think I'll pay him eventually because I know I'll need him to guide me when the times come.

Now, I have a rough guide on the cost of engaging a Personal Trainer but do the public have any rough guide on how much they should pay their financial planner?

Most people are getting Financial Advice for free. I have encountered few people who come to me will never get anything from me because they already know what to do and just want to ensure that what they did are correct from our perspective.

They contacted me as if they don't know anything but when they meet me, they'll bring all their policies and investments for my evauluation and asked all sort of questions.

Can I get my Gym Personal Trainer just to see how I'm doing without paying him that minimum 4 sessions of $75/hr?

SGDividends said...

Hi anonymous,
December 27, 2008 12:01 PM

We think putting all money in Singapore stocks is perfectly alright even if one is working in Singapore.

Singapore companies are by themselve well diversified as they have operations in China, Middleeast, S.E.A , USA., UK.

Example: Singtel has operations internationally. Keppel has operations internationally. SFI has operations internationally. Comfortdelgro has operations internationally.

Investing in Singapore and since one is living and spending in Singapore, you absolve yourself of the following risks:
- exchange rate risk
- political risk

In addition, one can see and know and hear and touch the assets of Singapore Companies.

Example: Singtel, we can see the shops. SIA, we can see their headquarters ( and heck have frens wokring in there), Keppel, we can see its docks...

Therefore, its really a fallacy to say that " Any sensible financial practitioner will not recommend putting a single cent into Singapore stocks..............."

The only downside we see with Poems Share builders plan is that shares are custodised with them and if they go belly-up..what will happen to them.

BUT isn;t it the same if you place with fund managers who custodise the shares bought through them with some custodians too?

So frankly, Share Builders PLan cost less, has less risk, compared with investing with fund managers.

There is a joke going around. Investing in unit trusts is like trying to select fund managers now. Why not just select companies directly and save the hassle of selecting fund managers?

Utterly no sense.

Anonymous said...

Anon December 28, 2008 5:41 PM
said:
"you can call up Promiseland and get Wilfred's phone number. Call him directly. There's no need to spam other blogs."

So now wilfred wants people to seek him out to teach him how to conduct his business without paying a fee? Even have to pay phone charges to educate him? Haha... There is a need to reach out to him through another financial adviser's blog because he made it difficult to reach him deliberately by not having an interactive function.

Anonymous said...

Anon December 28, 2008 11:56 PM
resorts to name calling and a flawed line of reasoning. He imagines people asking for free service. There is no free lunch in this world. I am providing Wilfred with free advice and you still wanted me to make an appointment with him? Who is the unreasonable one? Of course people must be paid for their services, no one is questioning that. The issue here is one of being reasonable.
It is silly to rationalise that hourly rate should be paid simply because cleaners and taxi drivers are paid that way. I have already demonstrated very clearly that for taxi drivers and cleaners the time span of discretion is short, hence must be paid by the job done. The issue here is not whether one should be paid or not. Cannot even understand this basic definition come here and KPKB and resort to name calling to inflate your own bruised ego. Don't make anymore silly assumptions if you itch to attempt procreation. Just do it!
And by the way, those who post in TKL's blog are not losers but kind and docile people who have been taken advantage of by web spinning financial crooks with flawed and dishonest reasoning, much of which can be seen by your remarks.
To resort to tainting the good names of those who post in TKL's blog reflects badly on your state of mind. What happened? Your scam exposed and business has been slow? Don't blame others but reflect on yourself and stop assuming others are idiots just because you are one yourself.

Anonymous said...

Gosh, $40,000 in commission? How long did the agent took to sell a $40,000 ILP? Perhaps 10 hours of selling? That's equivalent to a fee of $4,000 per hour! I'll opt for $400 per hour anytime man!

Anonymous said...

There is a need to reach out to him through another financial adviser's blog because he made it difficult to reach him deliberately by not having an interactive function.

Made it difficult for others? Reading a blog is purely voluntary unless you have been addicted reading it. How could one make life difficult for others just because certain function don't exist? I am not siding for Wilfred but you're getting ridiculous to be frustrated that a particular website do not have certain feature. What is so addictive about his blog that you must read it all the time? Come on man, grow up. You can always channel your time to read a book or watch a TV rather than reading people's blog. If you disagree with that guy, just don't read lah.

Anonymous said...

Investing in Singapore and since one is living and spending in Singapore, you absolve yourself of the following risks:
- exchange rate risk
- political risk


What is so special about Singapore that it has a lower political risk? Are you actually staying in Singapore?

Anonymous said...

The spams and name calling as shown by this entry of Adrian's blog shows what happens when the "comment" feature is activated.

I suspect those who want wilfred's blog to enable the comment feature are insurance salesworm jealous of him and wanting to see spams and names calling to appear in his blog as well.

Anonymous said...

Anon @ 8.07 am said:
"My GP charges me $25 for a 3 mins consultation. That's equivalent to 25*60/3=$500 an hour!"

Fortunately, life is not that simple. He forgot to add that for the $25, usually the patient gets cured and it ends there. He also forgot to add that most Singaporeans need only spend $9 and even get their GST absorbed by the OPD doctors. The patient if needed to go to a hospital A & E for a full day observation and blood tests and scans need only pay $85 for the whole treatment and that is more than ten hours so using his logic still works out to be $8.50 or less.
This pseudo financial "wizard" went on to sensationalise his "usefulness" by saying that :
"Without able to save up for retirement, the only way is to jump and die."
The fact is many who are financially independent did so on their own. Yes, planning is important but there are more people out there who spent alot on financial planners and are now reeling in shock when their portfolios disappear together with their advisers. It is just an assumption and a far fetched one to say one has to jump and die because he did not invest in a financial adviser.
He went on to assume that others should pay Adrian a visit to see how planning works. He is taking advantage of Adrian's kind heart by again assuming that the writer he is replying to does not know what planning is. With all due respect to Adrian, the writer could very well be like the Chief Abbot of Shaolin being asked to pay a visit to a street performer to see how KungFu is being practiced. Ah, the foolishness of assumption.

Khiat Han Hwee Adrian said...

Many comments are anonymous because some are not couragous enough to show who they are. I'm trying to be as open as possible and allow the readers to decide who is right.

TKL and Wilfred are 2 people I respect a lot. They have aspirations that I admire. They are not worried about critics and saying unpopular things.

Instead of calling names, we should be working together to bring awareness to the public about proper financial planning and stop buying products off the shelf they do not know.

Vincent Teo said...

Let me just put it this way.

If you think that you can afford to pay Wilfred Ling several thousand in fee to do your financial planning, so be it.

If you think that you are able to DIY your financial plan, so be it. In short, to each his own.

Why argue over Wilfred's fee structure? Several thousands dollars may seem as too steep for some. But I believe he has his own clients group who believe that his service is value for money. It may be that you do not belong to his target group of customers.

Wilfred Ling is just another FA running his own business and his blog is part of his business approach to reach out to his potential client. While I do not always concur with what he wrote (and yes he does appear to be a bit too extreme at times), I do respect his view as a professional.

Khiat Han Hwee Adrian said...

I agree with Vincent. To each its own.

Financial Plan may not be as complicating as one thought. But if the person is totally clueless about it and have no interest with it, its better to engage a professional.

Taking my Gym personal trainer case again. Those in the industry will say how stupid I am to pay $75/hr to engage them. I do it simply because I'm clueless about fitness.

To each its own. I'm sure there are people willing to pay thousands for a Fianncial Plan. Did anyone check how much did Providend charge for a Financial Plan? I heard that its in the region of thousands as well.

Anonymous said...

Adrian,
I had wanted to be kind to you but your repeated posting about your 75 dollar an hour trainer really make me unable to resist putting in a word here.
There are lots of physical trainers out there. In fact, yesterday I was at Fitness first and they charge 238 dollars for a three hour session. I was also talking to another young personal trainer who wanted to charge me 20 dollars an hour. There are choices out there.
It makes me wonder how good a financial advisor you are when you cannot even get a good deal for yourself. How to put my money into your care when you are so clueless when it comes to financial management?
A fool and his money is soon parted is not rocket science but common sense.

Anonymous said...

TKL I respect alot too. He always answer our queries and is upfront about it. This wilfred I do not. I was a potential client before but I was put off with his surreptitious replies and his constant calculating tone. There is a thin line between educating the public about finance and trying to make a fast buck out of them. I think Adrian is honest like TKL and would put his client interest first before himself. My two cents worth.

Anonymous said...

I believe those who suspect this and suspect that are small minded people who have a vested interest. It is not right to suspect that people who post in TKL blog are losers. It is not right to suspect that people who did not like Wilfred blog for not having a reply link to be insurance worms. I think people are just uncomfortable to be unable to post a reply to those things that are said and an honest to goodness blogger would naturally want to hear the views of his readers. What do you think about people who tell you "I will contact you but don't contact me?"

Anonymous said...

Vincent Teo said:
Why argue over Wilfred's fee structure?

Nobody is arguing over Wilfred's fee structure but himself. He was trying to justify his fee structure by comparing to Doctors and lawyers. When people say that Doctors and lawyers are professionals then he resort to using taxi drivers and cleaners. He can use all sorts of flawed examples to justify his own existence but it irks others to see him talk nonsense and mislead others and not able to have the right of reply but instead have to use other difficult methods like Adrian's blog to educate and enlighten him on his absurdity.
I think this is the issue that people are unhappy with. Not his fee structure, not his ability but his unfair methods.
Sure, people can ignore him and usually intelligent people do. But these same intelligent people cannot stand idly by while he harp his snake oil.
Just like TKL who cannot stand idly by while the financial bigwigs do their magic with retirees' money in the name of caveat emptor.
Can you tell people to to each his own, hey why you buy high notes huh, people who like and can affort can buy lah, don't like don't buy lah. It is not so simple lah. So simple then will not have minibonds crisis lah, right?

Khiat Han Hwee Adrian said...

Thanks everyone for the postings.

The comments are getting too personal and I think I have to stop further comments if they are not constructive.

Wish all of you a very happy New Year.

Anonymous said...

Many comments are anonymous because some are not couragous enough to show who they are. I'm trying to be as open as possible and allow the readers to decide who is right.

Adrian who posted the above comments probably have not learn that "Discretion is the better part of valor".
Looked at those who have shown "courage" before, JB Jeyeratnam, Tan Lian Hong, Francis Seow, Lee Siew Choh, Teo Soh Lung, Chee siblings etc.

They are not wrong to show "courage" but other people are also not wrong to decide that discretion is the better part of valor here. I bet Adrian will not be as courageous if he is meeting one to one with a 200 lb man, that is 100 Kg man and tell him in the face that he is not courageous. My point is it is wrong to label those who post anonymously as not courageous simply because it is their choice. As one bloghead puts it earlier, you have a choice whether to read the anonymous posting, why so interested to read hah, don't read can die arh, kind of statement. Can this apply to you too?