10 Days to PSLE

I am not retaking my PSLE so don't be mistaken. I am concerned with the twins under my tutelage as their progress have not been up to standard. I do not want them to be regretting in years to come, not being able to receive good education from a good school and mentor.

I do not know much about the quality of schools and the teachers in there, but I am pretty disgusted with the level of standard the school has been giving all these years. Both of them did not pass their exams every year. Yes you did not see wrongly. Every year. And guess what? They still managed to hit the 3rd quartile of their classes every year!! In case you do not understand, there are still a handful of students who performed worse than them.

Given the really short timeframe, I try my best to motivate them the way I motivated myself during my own exams. I made a daily activity planner and a weekly timetable so that they can fill in and be responsible for their own outcome. I told them I can only be there to guide their mistakes, the path to passing will be solely on themselves. I do not want them to take the painful way to learning and I believe the earlier one starts, the faster success will come.

I am sharing the stuff I gave them here.

(link)
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Insurance and Me

Almost reaching my career anniversary and just completed a hospitalisation claim for my client. Talking about making a difference in this line, I am glad that I did the right thing and made sure that I make solid recommendations on the insurance plans that suit the needs of my clients.

I even dare to introduce myself as a healthcare financing specialist to people who don't know me. As of today, I have done claims for 4 of my clients, of which a hospitalisation claim amount of $8503.07 for a 5-day stay at Gleneagles hospital and $410 of TCM claims on an elderly policies. Mind you, it's $410 of medical treatment at a chinese bonesetter (chinese sinseh), when you thought a sprain can be easily treated with ONE visit to the sinseh. That is obviously not the case for people coming with age.

As for the hospital claim, I remembered I was around when the incident happened. My client got an excruciating back pain which she endured through the night and had to go to the A&E for treatment. She asked if she should go to Changi hospital, but I told her to go to Mount Elizabeth or Gleneagles straight, since she got the best hospitalisation plan and I was sure that she could claim the full amount if needed. Personally, after entering this line, I believe that everyone is entitled to the best medical care, not just the rich. I rather pay a known amount of insurance premium every year, to prepare myself for an unknown amount of bill size that might come my way one day.

I am very sure many many agents out there, including those who has been in this line for many years, have not done a claim before. And that kind of agents I am talking about are those who only sell savings and investment plans. Although it is also part of my job, I feel that "insurance" should be really about protection from financial loss first, then accumulation of wealth.

Wealth accumulation can come after protection and medical funding needs are fulfilled. On medical funding alone, everyone needs an integrated-shield plan, accident plan, critical illness (traditional or early payout), income replacement plan. So stop saying that you are fully covered when you only have one insurance plan. Different plans have different purposes, which is why people say insurance cheat money when they can't make a claim. That is because they didn't cover themselves adequately! So start looking into your plans and call up your consultants.

(The opinions expressed at mine, so leave me a comment if you do not agree and we can sort it out.)

CPF LIFE

My father recently received a mailer from CPF ahead of his 59th birthday, asking him to choose a from a range of 4 plans that will determine his monthly payout from age 63 onwards. Seriously, the difference is only about $20 dollars per month and whether you want to leave some money to buy a nicer coffin. What do we call this, freedom of choice?

"LIFE" actually stands for something, which I am sure nobody gives a damn. It essentially pays you a sum of money for the rest of your LIFE and I think you would be more interested in the amount then the name.

I am very sure that in the future, our CPF savings will not be able to see us through retirement. Citing my dad as the example, he took out 50% of his CPF savings when we was 55, which was some $40,000 and this sum was supposed to last for 8 years, which works out to $5,000 a year. How to retire? Oh sorry, government got say cannot retire. By the way, the withdrawal at 55 is lesser than 50% now.

And the Balanced plan will pay about $360 per month. I do not know how this is enough to survive. Of course, I have to take the role of topping up the expenses when the time comes. If we look at the scenario where an individual has no children, he chooses the Income plan and leave nothing when he passes on. That will be $400 per month. So what's the solution? Work till die, die, or go to Malaysia and die. Excellent.

Back to the point where I said CPF savings will not be able to see us through retirement in the future. Look, these days we are paying our housing instalments using CPF and the contribution rate is not like the past. Did you know that in 1968, the contribution rate was 25% each from the employer and employee making a total of 50%? Thirdly, the interest rate now is so pathetic. Plus the living standards in this country is world class, I reckon we have to work till we die.

So how? Other financial instruments have to come in to ensure proper retirement planning. Long term illiquid savings that locks in your money till retirement is a must. Next, investment in financial markets can also achieve this goal. People who reach retirement age like to change their investment portfolio to one of fixed income, so they can have a regular income stream from coupon payments. It is not difficult, but your bank savings is not able to work hard enough for that to happen.

In conclusion, my dad wanted to take the plan with higher payout. To which I replied, "You know when you will die? Later money no more how?"

Who Objected to My Happiness?

You know, this may sound so ironic. Does anyone has the right to put an objection to your life? Do you believe in the butterfly effect?

I don't know how the conversation would sound like. Maybe something like this, "hey mum, thanks for your strong objection then. You were right and I was wrong."

I do not know if a particular decision can result in a different ending. Not that I really care it, just that I feel it isn't fair to me. Should I say, "Hey thanks for that objection too. Because of you I learnt to take disappointments, suck it up and move on. See what an impact you have made in my life."

=)

Items so old that I can't believe I'm still using

This yellow file has been with me since sec2. Yes, that would be year 2000. Till today, I am still using it to protect my documents and school work. I remembered that I bought it sometime in the early part of the year (who still remembers such trival things 9 years ago?!). What I am sure is that it cost $2 and I got it at a DIY shop in Tampines Mart.

I like this file so much because of its ability to detach (held together by an internal clip) when the contents are too thick, telling you that it is overloaded, which is the reason why it is still alive today. This is unlike similar files we see, where the joint is weak and there is no way to fix back once it gives way. Even 9 years ago, it was hard to find a file like this.

One look at it I realised that there are dust trapped in areas that are impossible to clean. Bright yellow has became dull yellow. Even so, I still can't bear to throw it away.

Incidentally, it also says Made in Japan.

Good Food Must Share

Famous Sungei Road Trishaw Laksa
#02-67, Hong Lim Food Centre

Don't be mistaken, I am not turning this into a food blog, just had some really delicious food and decided that I must share this with my friends.

Hong Lim Food Centre houses some really good food stalls, like the crayfish hor fun and prawn noodles. However, this laksa stall really deserve some solid comments from me. It serves mee siam, mee rubus and laksa. The uncle was really friendly when I approached to order. He asked if I would like the "speciality dish" laksa, which costs $5. Fortunately I didn't turn him down!

Food took awhile to prepare, which was quite surprising... Laksa leh, need to take how long? The chilli is not fantastic and gravy is not too strong like katong laksa, very much to my liking. I ordered without prawns, to which I got crayfish (1 whole), chicken breast, cockles (big!), egg, tou pok, fishcake. Needed some help to stir the noodles from the bottom. Who said $5 is expensive?

After the bowl was emptied, the stall uncle came to my table and asked if it was good. I guess he already knew the answer...

Pictures are shown to tell
people how nice the food is.
Right.

Book Review

Against The Gods: The Remarkable Story of Risk
Peter L. Bernstein

This book is a classic worldwide bestseller that covers really in depth on the topic of risk measurement and management. From the title "Story of Risk", it can be translated to "history of statistics" dating back from 1200s to modern times. Names suchs as Keynes, Pascal, the Bernoullis, Laplace, Galton etc are mentioned in great detail as they contributed much to what we have now (such as the bell curve).

As a matter of fact, I do not really understand the earlier chapters as the subject matter and the depth of it tend to bore me out. But I have to admit that if the interest is there, it would be a tremendous read. However, as it approaches the last third of the book, topics covered becomes more relevant to what I have learnt, therefore understanding became easier.

John von Neumann is a name that facinated me. According to the author, he is the inventor of game theory and many other fields from economics to quantum mechanics. He also contributed to the utility theory (where satisfaction is measured, isn't it amusing). If you don't think that is facinating, then you probably won't be surprised that risk can also be measured. Harry Markowitz taught us that risk can be measured by something he called "variance", derived from a normal distribution. Until today this concept is still debated and I still do not understand how a value of variance tell me if I should make a gamble.

Financial engineering is not too old but has its roots in the aboved mentioned names as well. In the past people take on certain risk and win (or lose) to the house. Today, it is possible for risk to be traded through derivatives, first invented by some brillant mathe- maticians called Fisher Black, Myron Scholes and Robert Merton. Risk now has a monetary value attached. The market for options exploded not long after their paper on option pricing saw light in the world with the Chicago Board Options Exchange (CBOE) performing this function for bankers, institutions and commoners alike.

Just like what we saw in the subprime crisis, where some banks created stupid risks and won, and AIG became the ultimate loser.

This is definitely a must read for deeply interested in mathe- matics, statistics and risk. Will revisit this book again in the near future for a better understanding.

Book Review

Secrets of Millionaire Investors
Adam Khoo & Conrad Alvin Lim

Somehow, having read Adam Khoo's work before, I believe this book is the sole work of Adam. Maybe he knows that he's publishing too many books and people are starting to feel cheated reading repeated content.

As usual, the delivery is concise and the layout is well divided with headers explaining what is going to come next (also a sign of thick book with little content). Pictures explained his points well. In this book, investing strategies such as long term investing, value investing, momentum investing and options trading are covered, but with very little depth. Steps to select appropriate stocks were covered, which is good for a start, but also a good start to introduce his courses to readers. HA.

However, as a person who has been introduced to finance before and the fact that this book is more of a dummy's guide (there aren't many secrets in there, by the way), I do not know how the dummy thinks of the content. Almost a third of the book covers the topic which I'm proficient at, which is options mechanics and trading strategies. Good thing is, Adam introduced some very useful websites for research of a appropriate stocks.

And if you are thinking that this Singaporean is writing about investing in the Singapore Stock Market, you can save your money to buy some other books that teach you how to cook instead. He is right for simple reasons that Singapore market is not liquid enough as compared to US and also a much wider selection of stocks in the US. Then again, if you are into long term holding, it is important to know the company you are about to buy. Now what?

Nonetheless, it is a good book to start with, at least it won't bore you out.