Dear Mr Tan,
Are there any low cost endowment plan? I like to get a secure return of about 4% per annum, and have life insurance cover built in as well.
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REPLY:
You can buy a single premium endowment plan. It should give you a return that meets your target. The upfront charge is usually less than 3% of the single premium. This allows the policyholder to earn a good return (after deducting the charges).
I am not aware about any monthly premium endowment plan that are designed to be "low cost". It is possible for this plan to be designed with an upfront charge of (say) 20% of the annual premium. This will give a good return to the policyholder. There will be a good market for this product.
Most endoment plan that are now in the market have an upfront charge that take away one year's of premium. The net return is poor.
Tuesday, June 26, 2007
Streettracks Gold Shares
streetTRACKS® Gold Shares is the first gold-backed exchange-traded fund to be listed in Asia. It is designed to track the price of gold and trade like any stock on the exchange.
The Gold Shares are backed by physical allocated gold bullion and are denominated in U.S. dollars. Investors can buy as little as one board lot of ten shares, with each share priced at approximately one-tenth the spot price for an ounce of gold. If the gold price is USD 650, the minimum investment amount is USD 650.
The Gold Shares are backed by physical allocated gold bullion and are denominated in U.S. dollars. Investors can buy as little as one board lot of ten shares, with each share priced at approximately one-tenth the spot price for an ounce of gold. If the gold price is USD 650, the minimum investment amount is USD 650.
Transparent interest rate on home loans
Hi Mr Tan
What are your views about the "transparent" interest rate charged by DBS Bank on their home loans? It seems to be slightly higher than the interest rate of other banks. As the interest rate moves with the interbank rate, will I have to pay more, if interest rate goes up?
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REPLY:
I prefer a transparent interest rate. The rate charged by DBS is based on a interbank rate, plus a premium of 1.25%. I think that this is a fair rate.
It is better to have a transparent rate. This ensures that you will get a fair rate, even if you do not monitor it closely.
There were news reports that some banks adopt many tranches of board rates previously, and may be overcharging some customers, who do not monitor the rate closely.
It does not matter that the interest rate may move up or down with the market. Over the years, this will average out. It is more important that you arrange with the bank for the following:
* keep the same monthly payment, even if interest rate goes up
* flexibiilty to make early repayment, if you have the cash.
What are your views about the "transparent" interest rate charged by DBS Bank on their home loans? It seems to be slightly higher than the interest rate of other banks. As the interest rate moves with the interbank rate, will I have to pay more, if interest rate goes up?
--------------------
REPLY:
I prefer a transparent interest rate. The rate charged by DBS is based on a interbank rate, plus a premium of 1.25%. I think that this is a fair rate.
It is better to have a transparent rate. This ensures that you will get a fair rate, even if you do not monitor it closely.
There were news reports that some banks adopt many tranches of board rates previously, and may be overcharging some customers, who do not monitor the rate closely.
It does not matter that the interest rate may move up or down with the market. Over the years, this will average out. It is more important that you arrange with the bank for the following:
* keep the same monthly payment, even if interest rate goes up
* flexibiilty to make early repayment, if you have the cash.
Invest in Gold ETF
Hi Mr Tan,
What is you view in investing in Gold via Exchange Traded Funds (ETF)? Is it a good time to go into Gold?
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REPLY:
I am not familiar with investing in gold, and also the right "timing" to invest in gold.
Some experts believe that gold should be part of a well diversified portfolio. If the current price is not too high, it may be a good time to implement this diversification.
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FROM MY STOCKBROKER:
The Counter is Gold 10 US $ under stock exchange. Seller @ US 63.80(Last done 63.60)
It is similar to trading in STI-ETF. However, this is in 10 shares and in US $
Fom the above indication, you can buy min of 10 shares, the cost will be US$ 638
According to my colleague, this price is fair as it is close to physical gold and move in tandem to it.
What is you view in investing in Gold via Exchange Traded Funds (ETF)? Is it a good time to go into Gold?
--------------------
REPLY:
I am not familiar with investing in gold, and also the right "timing" to invest in gold.
Some experts believe that gold should be part of a well diversified portfolio. If the current price is not too high, it may be a good time to implement this diversification.
--------------------
FROM MY STOCKBROKER:
The Counter is Gold 10 US $ under stock exchange. Seller @ US 63.80(Last done 63.60)
It is similar to trading in STI-ETF. However, this is in 10 shares and in US $
Fom the above indication, you can buy min of 10 shares, the cost will be US$ 638
According to my colleague, this price is fair as it is close to physical gold and move in tandem to it.
Insights into Financial Investments
Dear Mr Tan,
Thank you for so unselfishly sharing your knowledge with us. I especially appreciate your insights into financial investments and your friendly approach. I enjoy reading your blog!
I wish you all the best.
Thank you for so unselfishly sharing your knowledge with us. I especially appreciate your insights into financial investments and your friendly approach. I enjoy reading your blog!
I wish you all the best.
Understanding Research
Research is important to build our knowledge based industries in Singapore. Besides manpower and infra structure developments we must bring our capabilities to higher levels through research in order to advance and remain competitive.
Dr. Lee Kum Tatt has been involved in many fields of research in his life. He shares with us his experiences and views on how he classified research and how they are evaluated. Read his article on Classification of Research Activities in his blog.
Dr. Lee Kum Tatt has been involved in many fields of research in his life. He shares with us his experiences and views on how he classified research and how they are evaluated. Read his article on Classification of Research Activities in his blog.
Insurance is pooling of risk
Insurance is pooling of risk. If we have a large group of people joining an insurance scheme, everyone pays a contribution to the pool. The contribution is used to pay benefits to those few who have to make a claim for the insured event, e.g. death or accident.
If you join a pure insurance scheme, the cost should be quite low. It is based on the total amount of claim divided by the number of people, plus a small loading to cover the expenses.
Unfortunately, the real cost to the consumer could be much higher, due to the following factors:
* the pure insurance is combined with some other benefits, such as savings and investment
* a proportion of the premium is used to pay the commission for the adviser to sell the product
* the consumer may not get a good deal
If you buy the simple product that offers only the pure insurance, you will be able to compare the prices charged by a few insurance companies. You can get a product that offers you the coverage at a modest cost.
Lesson: Go for the simple products that you can understand and make a comparison. You can get a better deal.
If you join a pure insurance scheme, the cost should be quite low. It is based on the total amount of claim divided by the number of people, plus a small loading to cover the expenses.
Unfortunately, the real cost to the consumer could be much higher, due to the following factors:
* the pure insurance is combined with some other benefits, such as savings and investment
* a proportion of the premium is used to pay the commission for the adviser to sell the product
* the consumer may not get a good deal
If you buy the simple product that offers only the pure insurance, you will be able to compare the prices charged by a few insurance companies. You can get a product that offers you the coverage at a modest cost.
Lesson: Go for the simple products that you can understand and make a comparison. You can get a better deal.
My approach towards my career
Hi Mr Tan,
I'm just finished NS and is currently awaiting for my enrolement into NTU to study engineering. During my free time, I had been thinking about my future goals and what I want to achieve in the future, in my personal development, career, wealth ,and family and friends.
I'm writing to you hoping that you could share with me your advice. What made you chose the path you have choosen? Before you started out did you had a vision of what you want to achieve? Did you just know by instinct that the financial industry was the right fit for you? Was money the primary consideration?
As a corporate veteran, what are your views? Is it really hard to get promoted these days? Do you have any advice on how to successfully climb the corporate ladder? What in your opinion are the most important factors or skills that has contributed to your carrer? Is it the people-skills like they always say (EQ) rather that the credentials? Any tips on how to be a people person ?
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REPLY:
I decided to take the actuarial course because it suited my interest. I was strong in mathematics and was able to communicate clearly. These strenghts make it quite easy for me to pass the actuarial course. However, for most other people, this course was considered to be very challenging and difficult.
I know that the actuary is well paid, but it was not an important factor to me. Interest was more important. I enjoy studying the actuarial course, because the subjects are very useful for many aspects of daily lives, eg financial, investment and demographic matters.
I also took an active interest in learning about information technology and how to program computers to do the calcuations, data processing and other work. They help to make it easy for business to be conducted more efficiently, at lower cost and better customer service.
Here is my approach towards promotion in my career:
* I learn the skills that are useful for my work
* I put them to good use, to improve the business results
* The opportunity for promotion will come
* I am patient.
I hope that you find these remarks to be useful.
I'm just finished NS and is currently awaiting for my enrolement into NTU to study engineering. During my free time, I had been thinking about my future goals and what I want to achieve in the future, in my personal development, career, wealth ,and family and friends.
I'm writing to you hoping that you could share with me your advice. What made you chose the path you have choosen? Before you started out did you had a vision of what you want to achieve? Did you just know by instinct that the financial industry was the right fit for you? Was money the primary consideration?
As a corporate veteran, what are your views? Is it really hard to get promoted these days? Do you have any advice on how to successfully climb the corporate ladder? What in your opinion are the most important factors or skills that has contributed to your carrer? Is it the people-skills like they always say (EQ) rather that the credentials? Any tips on how to be a people person ?
------------------------------------
REPLY:
I decided to take the actuarial course because it suited my interest. I was strong in mathematics and was able to communicate clearly. These strenghts make it quite easy for me to pass the actuarial course. However, for most other people, this course was considered to be very challenging and difficult.
I know that the actuary is well paid, but it was not an important factor to me. Interest was more important. I enjoy studying the actuarial course, because the subjects are very useful for many aspects of daily lives, eg financial, investment and demographic matters.
I also took an active interest in learning about information technology and how to program computers to do the calcuations, data processing and other work. They help to make it easy for business to be conducted more efficiently, at lower cost and better customer service.
Here is my approach towards promotion in my career:
* I learn the skills that are useful for my work
* I put them to good use, to improve the business results
* The opportunity for promotion will come
* I am patient.
I hope that you find these remarks to be useful.
My blog had 60000 visitors
Dear Mr Tan,
Congratulations for having more than 60,000 visitors to your blog. This is a milestone during this short span of time (since 8 Feb 2007).
Once again, thank you for the free and independant advice on financial matters.
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REPLY:
I receive an average of 500 visitors a day. The visitors have incresed in recent weeks.
Congratulations for having more than 60,000 visitors to your blog. This is a milestone during this short span of time (since 8 Feb 2007).
Once again, thank you for the free and independant advice on financial matters.
--------------------------------------------------------
REPLY:
I receive an average of 500 visitors a day. The visitors have incresed in recent weeks.
Market Timing
COMMENT POSTED IN MY BLOG
Mr. Tan, you seem to be an advocate of market timing, from most of your postings. Investors following your advice are in great danger. I think, Mr. Tan, you need to get your understanding of investment right.
Despite your many years as a CEO of Income and to be fair to you, your knowledge of investment is horrendous.
You better stick to insurance. Even in this area I also find your recommendations not appropiate sometimes. You have great knowledge in products but not planning.
You are sincere, there is no doubt at all. but this is not enough. Hope you take this in good spirit of sharing.
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REPLY
I posted a study by Plexus Asset Management. It showed the experience over the past 100 years in the United States. For a investor who made an investment at a time of high market P/E ratio, the return over the next 10 years is lower than for other periods.
If you wish to ignore this study, it is all right. In my case, I prefer to avoid investing a lump sum at a time when the market is high. I prefer to wait for a more normal time. It is all right, if you make small monthly investments, and take take advantage of "averaging".
Mr. Tan, you seem to be an advocate of market timing, from most of your postings. Investors following your advice are in great danger. I think, Mr. Tan, you need to get your understanding of investment right.
Despite your many years as a CEO of Income and to be fair to you, your knowledge of investment is horrendous.
You better stick to insurance. Even in this area I also find your recommendations not appropiate sometimes. You have great knowledge in products but not planning.
You are sincere, there is no doubt at all. but this is not enough. Hope you take this in good spirit of sharing.
----------------------------------------------
REPLY
I posted a study by Plexus Asset Management. It showed the experience over the past 100 years in the United States. For a investor who made an investment at a time of high market P/E ratio, the return over the next 10 years is lower than for other periods.
If you wish to ignore this study, it is all right. In my case, I prefer to avoid investing a lump sum at a time when the market is high. I prefer to wait for a more normal time. It is all right, if you make small monthly investments, and take take advantage of "averaging".
Three in one
Jakarta imposes a "three in one" system. For certain roads, during certain hours, each car should have at least 3 people. If not, the driver has to pay a heavy fine.
This is simular to the "four in one" system adopted in Singapore about twenty years ago.
This is simular to the "four in one" system adopted in Singapore about twenty years ago.
My experience with Valuair
I took Valuair to Jakarta and back.
My experience is positive. The seat is comfortable. They serve a light meal on each trip. The fare is a discount of about 30% compared to Singapore Airlines.
The only disadvantage is that they allow a maximum of 9 kgs for a bag taken into the cabin. I had to check in my bag.
My experience is positive. The seat is comfortable. They serve a light meal on each trip. The fare is a discount of about 30% compared to Singapore Airlines.
The only disadvantage is that they allow a maximum of 9 kgs for a bag taken into the cabin. I had to check in my bag.
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