Hi Mr. Tan,
I like to seek your advice on the commission payable to the property agent for extending a lease.
Two years ago, I leased out my apartment through an agent. The agent charged me 1 month of rental, which was a lot of money.
I am now negotiating with my tenant to extend the lease. I was shocked to find that the property agent had included in the lease agreement (without my knowledge) a clause that requires me to pay commission for extending the lease.
I have never agreed to this condition. Am I required to pay this commission? In my case, the agent provided bad service to me and the tenant during the past two years. Why should I continue to pay commission again?
I hope that you can advise me.
REPLY
I understand that the standard tenancy agreement does not have this clause. It seems that some property agent inserted the clause to give them additional income, but it is unfair to the owner.
I suggest that you negotiate a new agreement with the tenant. You can agree with the tenant on whether any commission is to be paid to the agent, and which party is required to pay the commission. Quite likely, the tenant will prefer to deal directly with you, and avoid this additional cost.
As you do not have any agreement with the agent on this matter, you are not bound by the terms of the old tenancy agreement, as it has been superceded.
I hope that you find this to be helpful. As this is a legal matter, you may wish to get the opinion of a lawyer as well.
Monday, December 24, 2007
Feeder Bus
There is high demand for taxis in Singapore due to the difficulty of taking public transport in places that are not served by the MRT trains.
There are many bus services in Singapore. Commuters who wish to take a bus for a short journey find the services to be confusing and overwhelming. There are too many buses travelling in different directions.
In my view, we need to introduce feeder bus. These are services that travel within a a town, such as Toa Payoh, Ang Mo Kio or Bedok and take commuters to the town center, MRT station or bus terminal.
It is easy for the commutter to understand this system. Each town needs only two or three feeder services.
I understand that the light buses in Hong Kong acts like a feeder service to take people to the train station. Many people consider the public transport in Hong Kong to be very convenient.
There are many bus services in Singapore. Commuters who wish to take a bus for a short journey find the services to be confusing and overwhelming. There are too many buses travelling in different directions.
In my view, we need to introduce feeder bus. These are services that travel within a a town, such as Toa Payoh, Ang Mo Kio or Bedok and take commuters to the town center, MRT station or bus terminal.
It is easy for the commutter to understand this system. Each town needs only two or three feeder services.
I understand that the light buses in Hong Kong acts like a feeder service to take people to the train station. Many people consider the public transport in Hong Kong to be very convenient.
A good time to invest in equities
Hi Mr. Tan,
You advised people to invest in an diversified, low cost equity fund for the long term. What is the best time to make this investment? Is it safe to invest now? Will there be a recession in the USA next year? Will it affect the Asian countries and Singapore?
REPLY
If you are investing for the long term, i.e. 10 years or longer, it does not matter if there is a recession next year.
At the current level, Singapore equities are about 15% lower than the peak. I think that this is a good level to start investing a lump sum. There is still a risk that it may go down, but it does not matter for a long term investor.
If you are investing a monthly sum, you can start at any time as you will be "averaging" the cost of your investments.
You advised people to invest in an diversified, low cost equity fund for the long term. What is the best time to make this investment? Is it safe to invest now? Will there be a recession in the USA next year? Will it affect the Asian countries and Singapore?
REPLY
If you are investing for the long term, i.e. 10 years or longer, it does not matter if there is a recession next year.
At the current level, Singapore equities are about 15% lower than the peak. I think that this is a good level to start investing a lump sum. There is still a risk that it may go down, but it does not matter for a long term investor.
If you are investing a monthly sum, you can start at any time as you will be "averaging" the cost of your investments.
MRT in Taipei
The mass rapid transit system(MRT) in Taipei, together with the metropolitan area's dedicated bus route network, forms a convenient transportation system.
The MRT currently has five lines in operation:
Brown Line (Mucha)
Red Line (Tamshui)
Orange Line (Chungho)
Green Line (Hsintien)
Blue Line (Kunyung to Hsinpu).
The five lines are dotted with a variety of attractions and scenic spots. As a result, visitors can take a leisurely journey through the northern part of Taiwan employing the MRT services.
The MRT currently has five lines in operation:
Brown Line (Mucha)
Red Line (Tamshui)
Orange Line (Chungho)
Green Line (Hsintien)
Blue Line (Kunyung to Hsinpu).
The five lines are dotted with a variety of attractions and scenic spots. As a result, visitors can take a leisurely journey through the northern part of Taiwan employing the MRT services.
Helpful cashier
My daughter went to a drug store in Taipei to look for a specific medication. She could not find it on ths shelf. She approached the cashier.
The cashier said that the medication is not sold in the store. Without being asked, she immediately told he customer where she can buy it from another nearby store. That is helpfulness.
Why is it possible for the cashier to be helpful?
1. She is a local person, who knows the customers and their lifestyle
2. She has worked there for a few years and acquired good knowledge of the product.
I shall do some research to find out if the cashier earns an adequate salary. This will encourage her to stay in the same job for a long time.
There are lessons to be applied in Singapore, if we still aim to be a gracious society.
The cashier said that the medication is not sold in the store. Without being asked, she immediately told he customer where she can buy it from another nearby store. That is helpfulness.
Why is it possible for the cashier to be helpful?
1. She is a local person, who knows the customers and their lifestyle
2. She has worked there for a few years and acquired good knowledge of the product.
I shall do some research to find out if the cashier earns an adequate salary. This will encourage her to stay in the same job for a long time.
There are lessons to be applied in Singapore, if we still aim to be a gracious society.
Beware of bad products
Hi Mr. Tan,
Someone described in your blog, that life insurance as "legalised rip-off". Is this a fair statement?
REPLY:
There are many insurance products that give good value to consumers. They serve a need and are priced fairly. Read this FAQ:
http://www.tankinlian.com/faq/choice.html
There are other products that are bad for consumers, as follows:
1. They are designed to maximise profit for the insurance company
2. They pay high commission to the agent to sell the product
3. The agent are trained to use emotion to sell the product
4. The product has many complicated features that have doubtful value
5. The agent worked hard to push the product
6. The agent and the insurance executive will not buy the product for themselves
You should identify and avoid the bad products (including bad products sold by banks).
Someone described in your blog, that life insurance as "legalised rip-off". Is this a fair statement?
REPLY:
There are many insurance products that give good value to consumers. They serve a need and are priced fairly. Read this FAQ:
http://www.tankinlian.com/faq/choice.html
There are other products that are bad for consumers, as follows:
1. They are designed to maximise profit for the insurance company
2. They pay high commission to the agent to sell the product
3. The agent are trained to use emotion to sell the product
4. The product has many complicated features that have doubtful value
5. The agent worked hard to push the product
6. The agent and the insurance executive will not buy the product for themselves
You should identify and avoid the bad products (including bad products sold by banks).
Taipei 101
I visited Taipei 101 after dinner in a nearby building. Here is the description of this building from Wikipedia.
Taipei 101 (台北101) is a 101-floor landmark skyscraper located in Taipei, Taiwan. The building, designed by C.Y. Lee & Partners and constructed by KTRT Joint Venture, is the world's tallest completed skyscraper.
Taipei 101 received the Emporis Skyscraper Award in 2004. It has been hailed as one of the Seven New Wonders of the World (Newsweek magazine, 2006) and Seven Wonders of Engineering (Discovery Channel, 2005).
The building serves as an icon of Taipei and Taiwan as a whole. Fireworks launched from the tower feature prominently in international New Year's Eve broadcasts, and the landmark appears frequently in films, television shows, print publications, anime media, games, and other elements of popular culture.
Taipei 101 is managed by the International division of Urban Retail Properties Corporation based in Chicago USA.[1]
The name of the building reflects its location in Taipei's 101 business district along with its floor count. The number is pronounced in English simply as One Oh One.
On 2007-07-21 Taipei 101 was overtaken in height by the Burj Dubai in Dubai, UAE, upon the completion of that building's 141st floor.[2] Taipei 101 retains its title until the Burj Dubai is completed, though, as international architectural standards define a "building" as a structure that can be occupied.
Taipei 101 (台北101) is a 101-floor landmark skyscraper located in Taipei, Taiwan. The building, designed by C.Y. Lee & Partners and constructed by KTRT Joint Venture, is the world's tallest completed skyscraper.
Taipei 101 received the Emporis Skyscraper Award in 2004. It has been hailed as one of the Seven New Wonders of the World (Newsweek magazine, 2006) and Seven Wonders of Engineering (Discovery Channel, 2005).
The building serves as an icon of Taipei and Taiwan as a whole. Fireworks launched from the tower feature prominently in international New Year's Eve broadcasts, and the landmark appears frequently in films, television shows, print publications, anime media, games, and other elements of popular culture.
Taipei 101 is managed by the International division of Urban Retail Properties Corporation based in Chicago USA.[1]
The name of the building reflects its location in Taipei's 101 business district along with its floor count. The number is pronounced in English simply as One Oh One.
On 2007-07-21 Taipei 101 was overtaken in height by the Burj Dubai in Dubai, UAE, upon the completion of that building's 141st floor.[2] Taipei 101 retains its title until the Burj Dubai is completed, though, as international architectural standards define a "building" as a structure that can be occupied.
Set limit on commission
Dear Mr. Tan,
I am quite shocked to learn from your blog that up to 21 months of savings can be taken away to pay the agent to sell an investment-linked policy. If the monthly saving is $500, the total deduction is $10,500. Why should the agent earn so much money to sell a policy?
I am sure that the consumer is not aware about the total cost. Which consumer is willing to give away so much of the hard earned savings to pay commission to the agent?
I understand that the consumer is provided with a lot of information about the insurance product, including the charges. Many consumers are overwhelmed by the information, so they blindly trust the agent. When they find out the truth, it is too late.
Surely, the Government should set some reasonable limit to protect the consumer?
REPLY
I agree that there is a need for consumers to be better protected in Singapore. The commission rates for life insurance policies are too high.
In many countries, the regulators imposed certain limits on the commission rates, to protect the interest of the consumers. I hope that a similar practice can be adopted in Singapore.
I am quite shocked to learn from your blog that up to 21 months of savings can be taken away to pay the agent to sell an investment-linked policy. If the monthly saving is $500, the total deduction is $10,500. Why should the agent earn so much money to sell a policy?
I am sure that the consumer is not aware about the total cost. Which consumer is willing to give away so much of the hard earned savings to pay commission to the agent?
I understand that the consumer is provided with a lot of information about the insurance product, including the charges. Many consumers are overwhelmed by the information, so they blindly trust the agent. When they find out the truth, it is too late.
Surely, the Government should set some reasonable limit to protect the consumer?
REPLY
I agree that there is a need for consumers to be better protected in Singapore. The commission rates for life insurance policies are too high.
In many countries, the regulators imposed certain limits on the commission rates, to protect the interest of the consumers. I hope that a similar practice can be adopted in Singapore.
Sufficient funds for retirement
According to a recent survey, 80% of Singaporeans want to retire at age 60. Do they have suffiicient funds to retire? How much money do they need to retire?
I carried out a survey with the participants in a class on financial planning. Most of them come from the lower income group. The results surprised me.
To cover food, utilities and other essentials, a couple needs about $1,000 a month. This assumes that they have a home that is fully paid for. It may be possible to get by with $800 a month, but this does not leave any margin for unexpected expenses.
To provide a monthly sum of $1000, with adjustment for inflation, a person retiring at age 65 needs accumulated savings of $200,000 to last an average remaining lifespan of 20 years. If the person wishes to retire at 60, he will need $230,000.
If you wish to have a more comfortable lifestyle, you will need $2,000 a month. Your accumulated savings has to be $400,000 when you retire at 65, or $460,000 when you retire at 60.
If you do not have this sum of accumulated savings (that is needed for the bare minimum or a comfortable lifestyle), you have the following options:
a) Extend your retirement age to 65 to 70 years.
b) Retire from full time work at 60 to 65, and continue to work part time to earn a supplementary income.
To ensure that you have sufficient savings to last a lifetime, in case you live a very long life, you need to buy a life annuity (which provides pooling of longevity risk).
When you are working, it is important for you to make adequate savings for retirement. You must save 10% to 15% of your earnings, and invest in a low cost investment fund that can earn you a good rate of return.
Do not spend too much money on unnecessary insurance that depletes your savings for retirement. Do not buy financial products that give a poor return, due to high expenses.
Read this FAQ:
http://www.tankinlian.com/faq/fptips.html
http://www.tankinlian.com/faq/life.html
I carried out a survey with the participants in a class on financial planning. Most of them come from the lower income group. The results surprised me.
To cover food, utilities and other essentials, a couple needs about $1,000 a month. This assumes that they have a home that is fully paid for. It may be possible to get by with $800 a month, but this does not leave any margin for unexpected expenses.
To provide a monthly sum of $1000, with adjustment for inflation, a person retiring at age 65 needs accumulated savings of $200,000 to last an average remaining lifespan of 20 years. If the person wishes to retire at 60, he will need $230,000.
If you wish to have a more comfortable lifestyle, you will need $2,000 a month. Your accumulated savings has to be $400,000 when you retire at 65, or $460,000 when you retire at 60.
If you do not have this sum of accumulated savings (that is needed for the bare minimum or a comfortable lifestyle), you have the following options:
a) Extend your retirement age to 65 to 70 years.
b) Retire from full time work at 60 to 65, and continue to work part time to earn a supplementary income.
To ensure that you have sufficient savings to last a lifetime, in case you live a very long life, you need to buy a life annuity (which provides pooling of longevity risk).
When you are working, it is important for you to make adequate savings for retirement. You must save 10% to 15% of your earnings, and invest in a low cost investment fund that can earn you a good rate of return.
Do not spend too much money on unnecessary insurance that depletes your savings for retirement. Do not buy financial products that give a poor return, due to high expenses.
Read this FAQ:
http://www.tankinlian.com/faq/fptips.html
http://www.tankinlian.com/faq/life.html
Christmas is not a public holiday
I arrived in Taipei on December 24. It is a working day. Tomorrow, 25 December is also a working day. Christmas is not a public holiday in Taiwan.
People working in American companies take one or two days of annual leave to celebrate Christmas.
People working in American companies take one or two days of annual leave to celebrate Christmas.
Politeness in Taipei
During her previous visit to Taipeh, my wife observed that the people in Taipei are polite and helpful. Their culture has improved considerably in recent years.
I am now in Taipei. My experience over a few encounters with the local people has been positive.
I am now in Taipei. My experience over a few encounters with the local people has been positive.
High speed train in Taiwan
The distance from Taipeh to Kaoshiung is 340 kilometers. It takes 5 hours by ordinary train and 1.5 hours by fast train. The speed of the fast train is 300 km per hour.
The distance from Singapore to Kuala Lumpur is 300 km and now takes 7 hours. I hope that there will, in the near future, be a fast train from Singapore to Kuala Lumpur that can cut down the travel time to 1.5 hour.
We are supposed to be good neighbours. Yet, it is so difficult to have a project that will benefit the people of both countries.
The distance from Singapore to Kuala Lumpur is 300 km and now takes 7 hours. I hope that there will, in the near future, be a fast train from Singapore to Kuala Lumpur that can cut down the travel time to 1.5 hour.
We are supposed to be good neighbours. Yet, it is so difficult to have a project that will benefit the people of both countries.
Save for child's education
Dear Mr. Tan,
I have read comments from many people in your blog. Some people recommended that parents should save for their child's tertiary education. An education is the best gift for your child. Other people said that the priority is for one's own retirement needs. What are your views?
REPLY
The first priority is to have adequate savings for your own retirement needs. You need $200,000 to $400,000 at age 65 to retire comfortably. Do you have this sum?
If you have more than adequate savings, you can set aside the excess savings for your child's tertiary education. The saving can be made in your own account. You can decide on the amount to be set aside for your child's education when the time comes..
You should do a cost benefit analysis for the education expenses. How much are you spending? What additional income can your child earn from the overseas education? What is the payback period? Are there other options to get a more affordable education?
I usually recommend students to study in university in Singapore, as it is highly subsidised. A student can study in an overseas university, if you are on scholarship. Do not spend half of your retirement savings on your child's education. It is not wise.
I have read comments from many people in your blog. Some people recommended that parents should save for their child's tertiary education. An education is the best gift for your child. Other people said that the priority is for one's own retirement needs. What are your views?
REPLY
The first priority is to have adequate savings for your own retirement needs. You need $200,000 to $400,000 at age 65 to retire comfortably. Do you have this sum?
If you have more than adequate savings, you can set aside the excess savings for your child's tertiary education. The saving can be made in your own account. You can decide on the amount to be set aside for your child's education when the time comes..
You should do a cost benefit analysis for the education expenses. How much are you spending? What additional income can your child earn from the overseas education? What is the payback period? Are there other options to get a more affordable education?
I usually recommend students to study in university in Singapore, as it is highly subsidised. A student can study in an overseas university, if you are on scholarship. Do not spend half of your retirement savings on your child's education. It is not wise.
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