Dear Mr Tan
I have a large sum of money to invest. Bank deposit pays only 1.7%. If I lock up in a government bond for 5 or 10 years, I only get about 2.7% per annum. This is too low for me. Is it safe to invest in the stockmarket at this time?
REPLY
I suggest that you read my FAQs. Choose one that is relevant to your situation.
If you are invested for the next 10 years or more, it is better to invest in a exchange traded fund (like the STI ETF), or in a low cost investment fund (like the combined fund from NTUC Income). There may be other suitable funds or investments. You can talk to an adviser.
If the stockmarket corrects further and reaches a lower level, it will be a good time for you to make a long term investment. You can read my FAQ about how to manage risk and get a better return.
Monday, August 6, 2007
Notify consumer about the high charges
Editor
Today Paper
I refer to the reply "the choice is yours, don't let us restrict you" from the assistant director of the Infocommun Development Authority of Singapore (Today, 7 August 1997).
In my earlier letter, I suggested that the telecom firms should be required to notify the customer when their monthly bill reach a certain limit. This is to ensure that the customer is aware of the charges that are being incurred.
The Authority's reply is that the service providers are required to publish their prices, terms and conditions of service, and that they are available on their websites.
I invite the Authority to carry out a survey and find out if new customers, especially the young, are aware about the high charges that they have to incur on some services, for example, IDD calls or roaming charges when they are overseas.
The Authority should also carry out a mystery shopping to find out what information is being given to a customer who subscribe to a mobilephone.
If a consumer to visit the websites of the telecom firms, he or she will be bewildered by the wide range of plans and the lack of essential, consumer friendly information.
Market liberalisation does not help the consumer, if they end up having to pay more, due to lack of awareness of the high charges for some services.
We need some minimal safeguard to protect the interest of the consumer. They have to be provided with clear and relevant information, especially on the charges. They should be notified in time about the high charges that are being accumulated on their bill, in case they were not aware about it.
Tan Kin Lian
Today Paper
I refer to the reply "the choice is yours, don't let us restrict you" from the assistant director of the Infocommun Development Authority of Singapore (Today, 7 August 1997).
In my earlier letter, I suggested that the telecom firms should be required to notify the customer when their monthly bill reach a certain limit. This is to ensure that the customer is aware of the charges that are being incurred.
The Authority's reply is that the service providers are required to publish their prices, terms and conditions of service, and that they are available on their websites.
I invite the Authority to carry out a survey and find out if new customers, especially the young, are aware about the high charges that they have to incur on some services, for example, IDD calls or roaming charges when they are overseas.
The Authority should also carry out a mystery shopping to find out what information is being given to a customer who subscribe to a mobilephone.
If a consumer to visit the websites of the telecom firms, he or she will be bewildered by the wide range of plans and the lack of essential, consumer friendly information.
Market liberalisation does not help the consumer, if they end up having to pay more, due to lack of awareness of the high charges for some services.
We need some minimal safeguard to protect the interest of the consumer. They have to be provided with clear and relevant information, especially on the charges. They should be notified in time about the high charges that are being accumulated on their bill, in case they were not aware about it.
Tan Kin Lian
Buy a fixed term annuity
Dear Mr Tan,
I wish to transfer a sum of money to each of my children (who are now adults). I wish to do it now, instead of many years later on my death. But, I do not want them to squander away the money. What is your advice?
REPLY
You can buy a fixed term annuity to make an annual payment to the beneficiary over a certain number of years, say 10, 15 or 20 years. You should be able to get a yield of about 3% to 4% on this annuity.
More importantly, it meets your goal about giving the money to your children, without the risk that they will spend it away within a short time.
I wish to transfer a sum of money to each of my children (who are now adults). I wish to do it now, instead of many years later on my death. But, I do not want them to squander away the money. What is your advice?
REPLY
You can buy a fixed term annuity to make an annual payment to the beneficiary over a certain number of years, say 10, 15 or 20 years. You should be able to get a yield of about 3% to 4% on this annuity.
More importantly, it meets your goal about giving the money to your children, without the risk that they will spend it away within a short time.
Financial Planning for Seniors (revised FAQ)
I have updated my FAQ on Financial Planning for Seniors. It contains tips on investment and insurance for seniors (i.e. age 45 and older). I hope that you find it to be useful.
Financial Planning Tips
To find out my tips on your investments, you can visit this website.
There are tips on:
- for the young
- for seniors
- structured products
- life annuity
There are tips on:
- for the young
- for seniors
- structured products
- life annuity
Working closer to home
I met a teacher who lived in Pasir Ris and worked in Bukit Panjang. He has to take a long journey each day to get to his school.
There are many schools in Pasir Ris and Tampines, that is closer to his home. Surely, it is desirable for him to work closer to his home?
It will be difficult for the teacher to ask for the transfer. He has to get the approval of principals of his current school and the new school that is closer to his home.
If this exercise is managed on a national scale, by the Ministry of Education, it will be easier for all parties and beneficial in the long run.
There are many teachers and many schools all over Singapore. It will be beneficial if many teachers could be transferred to a suitable school near his or her home?
This exercise can also be applied to other government departments and large businesses that have operations all over the island.
If 20 percent of workers can be relocated to work closer to their homes (without any long term loss of productivity), there will less congestion on the roads and public transport, and a better quality of life.
I hope that this idea can be pursued.
There are many schools in Pasir Ris and Tampines, that is closer to his home. Surely, it is desirable for him to work closer to his home?
It will be difficult for the teacher to ask for the transfer. He has to get the approval of principals of his current school and the new school that is closer to his home.
If this exercise is managed on a national scale, by the Ministry of Education, it will be easier for all parties and beneficial in the long run.
There are many teachers and many schools all over Singapore. It will be beneficial if many teachers could be transferred to a suitable school near his or her home?
This exercise can also be applied to other government departments and large businesses that have operations all over the island.
If 20 percent of workers can be relocated to work closer to their homes (without any long term loss of productivity), there will less congestion on the roads and public transport, and a better quality of life.
I hope that this idea can be pursued.
Collapse of bridge in Minneapolis, USA
There are 70,000 bridges in the USA. One bridge in Minneapolis collapsed last week, killing a few people. Some are still missing.
Is this an isolated incident? A bad accident?
Apparently, it seems that the condition of many of the bridges are unsatisfactory. There is a wider problem.
Many years ago, it was considered to be the duty of the government to provide the public works and utilities. There was no issue about the costs (although the government do manage them quite prudently). These public expenditure were considered to be necessary and beneficial.
The priority changed during the past 20 years. The governments tried to adopt business principles, using cost-benefit analysis. Some of the expenditures were reduced, as they were felt to be unnecessary. Some activities, e.g public transport and hospitals, were privatised to be runned by profit-driven entrerprises.
The outcome was a deterioration in the quality of the infrastructure and public services in many countries. There was a focus on cutting costs and increasing profits, instead of the public interest.
I hope that there will be a change in thinking, and that governments will move away from the concept of adopting business principles for public service.
Is this an isolated incident? A bad accident?
Apparently, it seems that the condition of many of the bridges are unsatisfactory. There is a wider problem.
Many years ago, it was considered to be the duty of the government to provide the public works and utilities. There was no issue about the costs (although the government do manage them quite prudently). These public expenditure were considered to be necessary and beneficial.
The priority changed during the past 20 years. The governments tried to adopt business principles, using cost-benefit analysis. Some of the expenditures were reduced, as they were felt to be unnecessary. Some activities, e.g public transport and hospitals, were privatised to be runned by profit-driven entrerprises.
The outcome was a deterioration in the quality of the infrastructure and public services in many countries. There was a focus on cutting costs and increasing profits, instead of the public interest.
I hope that there will be a change in thinking, and that governments will move away from the concept of adopting business principles for public service.
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