Debts

Was in Australia over the past 5 days and I am amazed at the advertisements on TV. There were numerous advertisements on TV about insurance and I wonder how many Australians actually pick up the phone and respond to the ad on TV. For the companies to be placing ads on TV, I am sure the call backs must be quite a number. We already know that in many mature economies like US, UK and even Australia many already have embraced the fact that they need to do a financial plan, and they NEED insurance. Well, in Singapore we still haven't got there yet where people actively search for a financial planner and tell them 'I need a financial plan.' Many still fear talking to an adviser probably because of the bad perceptions of them. 

But one ad on TV actually caught my attention. It is the ads on TV that tells people that 'You are not alone if you are in debt, call this number and our friendly consultants can help you with it.' Wow! There was easily 2 companies that is offering that service. Once again, my believe is that if the TV ads was not effective there will be nobody advertising on TV. I wonder if we place ads like that in Singapore how many will respond.

I think it is a very Asian mentality that we do not talk to strangers about our monies or debt issues. Like that Chinese saying about not hanging your dirty laundry in the open. So we will never admit we have a problem in front of a stranger, neither will we admit we need help with our finances. And being Singaporeans we are worse because we expect the government to handle everything for us. We think the government should stop the inflation so things are cheaper. We expect CPF to help us with our housing, retirement, and kid's education. 

And worse of all is that many think that in death all debts are erased. Many do not know that these debts are actually passed on to their dependants when premature death occurs. Many I have spoken to is surprise to find out that debts are not cancelled at death. Some individuals I have spoken to came from rich family backgrounds with one of the parents in highly successful businesses. Highly successful businesses are usually highly geared with business loans generating good profits for the business. But all these works well with the business owner still alive. When the business owner dies prematurely, these business loans are passed on to the business and if the business is a sole proprietor or partnership these loans are automatically transferred to the estate and recovered from families. Some of the people I have spoken to have been victims to such instances. They have to pay off their parents debt because they never believe that death will happen early.

So if you know you or someone close to you are in debt, there are solutions to consider. Do not be afraid to raise it up to your financial consultant. That is one thing we do too. We can help you ascertain critical expenses and ensure that monies are channelled to reduce your debt. We have solutions to help cancel debts during certain events to ensure that your dependants are not burdened or even you are not burdened by your loved ones debt. Call me 9180 3448 or email me tngjinyau@gmail.com if you do not have anybody else to speak to. This is not some ah long service, if you need me to lend you money to pay off your debts, click the X button on the top right hand corner now... 

Crowdfunding... the new way forward?

Just read of 2 ladies helping to raise money for their mother's bills in the newspaper the other day. Their mother contracted ovarian cancer and the  bills and the care for her came up to about $9,000. They raised  $25,000 through crowd funding. Crowd funding is about getting strangers with big hearts to donate to a cause. Read more about crowd funding here. 

Wow! So can I assume the need to do a financial plan is now obsolete? No need to plan for critical illness because I can raise funds through crowd funding? No need to plan for retirement cos funds can be sourced through crowd funding? No need to plan to replace income if premature death occurs for your dependants? If you intend not to do any financial plan, then do your family and yourself a favour and teach them and yourself what crowd funding is. How crowd funding works and where to find the sources to get crowd funding to fund the emergencies. But if asking people for money in an emergency is too much for your pride and dignity then maybe it is time to sit down to do a financial plan. Let insurance be your crowd funding.

The fact is: insurance IS crowd funding. Anyone that pays a premium is technically pooling their monies into a fund so that they can withdraw it when an emergency happens. These emergencies are hospitalisation and surgery, premature death, critical illness or disability. And the amount of money that you fund is technically, one CENT for every dollar per year. Means that you give the insurance company $0.01 per year and when an emergency happens they give you $1 plus bonus. And to fully pay up the $1 the company will give you in an emergency you need 100 years. 

Some of you may think I have already leh... yes of course you have. But is it effective? Is it sufficient? I have met people who have claim to have already leh but only got 1 policy with $10,000 coverage. 

So let us take for example, you think you have no need for insurance because you are single and no dependants. Have you ever wondered how much money your parents have spent to bring you up? Lets not make it too complicated. Lets just take a meal of $4 a day. Your parents fed you 3 times a day, $12. In a year, $4,380 for the past 30 years $131,400. I have not even taken into consideration education, pampers, utilities and the other miscellaneous items. So if you left prematurely, all that money they spent is wasted and if you have only a $10,000 coverage what does it stand for. What can $10,000 do in this time and age? Think about it. 

You know who to call or email if you want to speak to someone.

And I have to share this video below.. I just love commercials that are tongue in cheek...enjoy!

Wait a minute! Did I just heard that?

If you have been listening to the radio while you are driving, taking the MRT or taking the bus, you will have heard the advertisement on radio by Singapore Cancer Foundation. I heard the advertisement on radio and thought to myself, 'these organisations should start realising ads that striking fear in people do not work anymore in a skeptical Singapore.

Saw a similar range of ads by the NKF in the MRT stations and thought the same thing. I usually give these ads a second thought and wonder how effective it has been for Singaporeans to take action. I mean, if we had seen the haze situation most people are reactive rather than proactive. You only do something when something happens. You only buy mask when haze happens. You only think about your spare tire in your car when you get a puncture. You will only study when there is an exam. So I really wonder if these ads were working.

While I was driving yesterday, the Cancer Foundation ad came on again and this time, I actually paid attention. I heard a startling statistic: in Singapore, 1 in 3 adults is diagnose with cancer everyday.. wait wait, just 5 years ago when I was still actively training financial people that statistic is 1 in 5! Its 1 in 3 already!! Damn those odds are better than 4D! I remembered then that the statistic will become 1 in 2 by 2020 or 2030 I cannot remember. So what does 1 in 3 means? Look to the person to your left and look to your right, one of you will be diagnosed with cancer. But you know what, most will still think its going to be the other 2 and not me.

For those who do not think its going to happen to them, I have a proposal for you. Buy me 2 meals with a drink a day everyday (you are very lucky I don't take breakfast, if not its 3 meals a day). If just so happens you are diagnosed with cancer, I will buy you 3 meals everyday thereafter, terms and conditions apply. 

If you want to take up this offer, please email me tngjinyau@gmail.com or call, sms or whatsapp me 9180 3448.

Anti Competition? You want to pay more?

I read in forums of our newspaper with interest after our National Day Rally. During our rally, there was an announcement that there will be a launch of Medishield Life and all will be included including people with pre existing conditions. Much has been written on forums with some calling for government to standardise the price for a private integrated shield plan.. but I am dead against that.

Where will be the competition if that happens? How will we know companies are pricing their plan at the most affordable price for us? Wouldn't that be anti competitive? So if all companies is suppose to come up with a plan that is priced the same then if they were to collude and price it high so all makes a tidy margin, will that not be detrimental to you as a consumer? Banks have been brought to task for fixing Libor rates in London, and some banks here too.

Once again, the choice is yours to go find out who has the cheapest plan in the market. Why should the governent do it? If they are suppose to fix prices then why not fix prices for hawker food.. televisions.. property prices.. utilities (oops they are already doing that).. everything that concerns us more on a daily basis.

Price fixing only benefits the companies and not you as a consumer. There are anti competition laws for a reason.

This post dedicated to Chris Chan, great question!

Sad Day For The Diving Industry

It is tragic to learn about the loss  of 2 fellow divers in Tioman over the weekend. Its always sad to know that people have loss their lives especially if they loss their lives doing something you love. 

My heartfelt condolences to their family and loved ones. 

National Day Rally

Its good news for the elderly in Singapore after the rally last night! It seems by next year, those who have pre-existing conditions and the elderly will also be accepted under Medishield Life! Even those who do not believe in insurance and opted out of Medishield (Really? Why would you do that!?) will now be automatically included. 

Medishield have just undergone a revamp March this year and this means that will be another revamp soon. Premiums have almost doubled for somebody age 21 to 30 years old in March this year from 30 plus dollars to $66 per year this March. And by the time you have about $2,000 in your medisave, the interest you earn from it will more or less cover the premium for your medishield. But this is for now. With the increase of coverage to cover for pre-existing conditions and coverage for life there maybe another round of premium increase next year but we still do not have to worry too much because I am sure even when we are old, the maximum cap on our medisave with the current interest rate of 4%, it still covers the premiums for Medishield.

Cap for Medisave Contribution = $38,500

Interest per year for Medisave = $1,540

For individual who is 51-60 years old, premiums for Medishield = $345.

Interest will nicely pay for the premiums with change. 

But of course there are many limitations in Medishield, if you are looking at staying in wards higher than B2 or C wards. 

If you are Singaporean and do not mind staying in a B2 ward or C ward you get 100% subsidy. If you are Permanent Resident here. Your subsidy is 44% and 58% respectively. If you are a foreigner on Medishield you only get 20% and 35% subsidy. 

If you decided to go with a private hospital you will only be subsidised 35%. 

In todays Straits Times (19 Aug 2013) article with the title 'Universal, Compulsory and for Life.' One health economist said:

'MediShield Life plugs the gaps in MediShield by extending basic cover to all. This is enough for the bulk of the population, so he is in favour of moving away from integrated shield plans provided by private insurers.

The important thing, he said, is to ensure "everybody is perceived not to be denied or deprived relative to other people".

This is a very dangerous statement to make as it is very irresponsible. My worry is again, a reliance on the Government to do everything for Singaporeans. One particular report on therealsingapore.com today was a 30 plus year old man who has an 8cm gash on his arm and fainted while waiting for treatment in A&E at CGH. They waited seven hours yet no doc to see them. They ask for transfer but no ambulance for them to use. The article is written by one who once again is pleading with the government to do something...................

Do something for yourself! Get a private integrated shield plan with the rider. Most plans come with ambulance fee covered. If you got the private hospital plan, go straight to a private hospital and get it done in 15 mins. You have a choice! The government have done that for you and given you that choice. Take it. But if you chose not to do it then its your fault and nobody elses's.

And to the health economist, your statement have just planted the idea that the government will do all.... they don't. Once again, what you do today echoes in eternity.

And if you are a Permanent Resident reading this, all the more you should get a private integrated shield plan. Ask your financial adviser about it. If you do not have one email me tngjinyau@gmail.com

Impossible To Retire in Singapore

How many times have we heard the phrase mentioned by Singaporeans? 'Singapore is getting too expensive.' 'How to retire here?' 'Government must do something'. It always irks me that many people expect the Government should do something for them, anything goes wrong its the Government. MRT breakdown, Government fault. Bus driver strike Government fault. Toilet breakdown, Government fault. Lorry knock down people, Government fault. I cannot retire, Government fault. 

The way I see it, many things are within the control of ourselves. Whether we can retire in future is very much dependent on the things we do today. For example, if you know you need to have 1 million in future at retirement, what do you do today? You save. But Tang, things getting more expensive in future! You save more. But Tang things so expensive now how to save? Why you never save earlier? But the truth is its all about managing your money. Too many of us (including me in the past) saves after spending. Our saving formula looks like that:

Salary - Expenses = Savings

But every month we have an excuse to spend on something or we want to go on a trip or there is a newly launched gadget or new season fashion or new handbag, new shoes, new everything... so Tang how to save?

Lets move the formula:

Salary - Savings = Expenses

Wa Tang like that no need to spend already. Well maybe, but  I dare bet that if your formula changes to the above you will definitely be able to retire. If you were to spend on one less gadget or one less holiday or even one less beer per week, you will have found some extra money to save for the future. 

If you believe that the above formula can work you will probably ask how much to set aside each month. Rule of thumb 10% to 20% of your current income will be a good start. As your salary increases (and I hope it does, if it doesn't please take a good hard look at yourself) you increase the saving amount to maintain the 10% to 20% ratio. 

Have a good mix of asset to ensure the monies you have set aside is moving your monies closer to the inflation rate. Yes property is a good hedge but please it should not be the only hedge. It is still an asset and the value will fluctuate. 

If you are currently planning for your retirement already, get a financial adviser to project and estimate the amount of retirement fund you will need and work backwards to ascertain the amount to save today towards your goal. This will give you a more specific amount to set aside on a regular basis. Once again, if this actually concerns you and you do not have somebody to speak to, please email me tngjinyau@gmail.com. Whatsapp or SMS me 9180 3448. My consultation is on a no-obligation basis and I do not charge a fee.... yet...