Here are the insurance charges for an ILP bought in 2002 by my client from an adviser 8 years ago.I asked her to get the latest benefit illustration with the mortality and morbidity charges from the insurer. $100,000 death benefit and $50,000 critical illness, they are paying an annual premium of 1,826.40. When she bought the policy, she was 44. Now she is 52. I calculated that the insurance cost based on the different ages will be:

I saw an endowment policy that was bought in 1989. It supposed to mature on 2043. The original illustration shows that estimated maturity value is $169,757. The premium is $509.60 per year. Based on these figures, the IRR is 5.56%.

However, in the latest statement the projected maturity is $83,131. The revised IRR is 3.56%. By reducing the return by two percentage points, the maturity value drop by half! After taking into account of inflation, this is a disaster! The lesson? Never buy a product because of nice market materials.

By now, all new rules to curb speculators from causing a property bubble have been out. Frankly speaking, I seriously doubt anyone truly could fully understand all the rules. I always give myself 3 minutes to read a newspaper article. If the newspaper article requires more than 3 minutes to comprehend, I consider it as an academic paper meant for academics. From what I see, the desire to curb property speculation is good but the solutions are too complex and require too much resource to implement.

There have been a significant number of changes to HDB rules. Of significant is that individual who purchase a non-subsidised HDB flat has 6 months to dispose existing private residential property. The summary of changes can be found on this webpage: HERE

I always feel that HDB just has too many rules. I always advice my clients never to “invest” in HDB. Buy a HDB flat because of need and not for investment purpose. There appears to be changes to HDB rules every year. Some crazy people would actually spend a fortune buying a HDB flat. There is no need to be a guru in financial planning to know this is a crazy thing to do. All it takes is some common sense. The question is this: Does an ordinary Singaporean have some common sense? Related article: Cash-Over-Valuation for HDB

New measures to cool the property market was announced today. The wonderful thing is that these measures are with immediate effect. The new measures are:

It was supposed to be a happy family vacation but it turns out to be a total disaster. By now everybody knows what happened. On 23 August 2010, Rolando Mendoza, a former high-ranking commissioned police officer hijacked a tour bus carrying 25 tourists from Hong Kong in an attempt to get his job back. After a botched rescue attempt by the Philippine National Police, 8 persons died. Those who survived like Tracey Wong Cheuk-yiu, 15 and her brother, Jason Wong Ching-Yat, 12 became orphans instantly.

I wrote to Straits Times forum page about the poor take up rate for CPF Life. However, they did not publish my letter after 10 days which I assumed was rejected. Here was what I wrote to them:

Dear Editor,

I refer to Straits Times article “CPF Life: Some want to be given a choice” dated 18 August 2010.

I read with dismay about a case in which a man left nothing to his legally married wife upon his demise. Instead, it appears that the only insurance – dependent protection scheme – was left to his ex-spouse through nomination. You can read about it on Mr. Tan Kin Lian’s blog post: HERE. It is difficult to comment on the case as little facts are presented. But in my experience as a financial planner, majority of the Singaporeans are like this

The Youth Olympic Games is now considered the failed project. Despite all tickets being sold out, the attendance turns out to be extremely poor. I find this to be an embarrassing event. Many bloggers and writers to the Straits Times forum page have written on the many negative aspect of the YOG. I shall not add anything that was already repeated by someone else. But I got something to add that so far nobody mentioned.

Someone state that CPF Life is not subjected to Insurance Act. I did a check. Actually there are many schemes under the CPF which are exempted from Insurance Act. Here is a brief survey:

I read with dismay from Straits Times article “CPF Life: Some want to be given a choice” dated 18 August 2010 that out of 700,000 of CPF members who are eligible for opt-in, only 40,000 took up CPF Life and committed S$2 billion to the scheme. This means that the remaining 94% said “no”. This is shocking to me. I think the government should listen to what the ground is saying and review why the take up rate is so low. Do bear in mind that the CPF Life will eventually be compulsory.

I believe no firm in Singapore can be considered independent financial adviser. Really? Even myself is not independent as I face restrictions. For instance, an insurer threatened to suit me if I tell others how bad one of their product is. If I cannot even copy and paste the relevant part of the benefit illustration to show how bad their product is, how can my advice be objective and free from pressure? Anyway all my clients know this legal threat from this gangster-like insurer and they agreed not to buy any of their products. Back to the definition of “independent”. The following are my comments restricted to clients only because I don't want product manufacturers to issue lawyers' letters to me for stating the hard TRUTH: HERE (login required)