Other than trading and investing, what got me excited right now are really ways to organize the way you perform things and ways to get things done. How you are able to improve productivity at home, at work but especially mobile productivity if you use good ways to organize your environment better.

So do tune in to my new space

[Visit The Productive Organizer Today >>]

I certainly have.

• Work wise i manage to engage in a completely different scope compared to a year ago.
• Been to South Africa and Taiwan this year. Taiwan was tiring, i think my trip to South Africa looks better managed then the Taiwan trip.
• The Financial crisis was expected. The fall out was expected. What i didn’t expect is the massive fall in oct-nov. That really makes me understand my risk appetite and the strategy that i will take moving forward.
• The psoriasis problem is getting bad. I really hope i can find a sustainable cheap solution to this. I have been spending too much in this area. I need to cut down on it.

Looking towards 2009, i have a few goals roughly that i would like to achieve:

Be a better manager of things

I haven’t really gotten the hang of team management as an application. The dynamics of managing a group of people with different goals, attitudes and behavior is a true monster.

Managing key performance indicators and execution in a timely manner are areas that i hope to improve on.

Develop more alternative stream of income

First and foremost in these uncertain economic times is to hold on to the damn job. But perhaps that is not enough. They always say you should cut down on what you spend but i think what is equally important is increase how much you earn. It creates additional safety net in the event that Income Stream 1 suddenly gets cut off. Do you guys have any good suggestion? Teaching tuition? Working as pimp?

Be more frugal

The good thing about categorizing your spending, income and using virtual accounts, leveraging Quicken and MS Money, is that at the end of the year, you can see how your spending pattern is.I will write a guide on this when i have the time.

I mentioned above that i been hoping to find some good solution to my psoriasis problem and that is what i spend most of my money on. to the tune of 5.15% of my annual income this year. As you can see, being unhealthy and suay with skin problem is not really a good thing. My goal is to cut down from 5.15% to 2.25%

I am pretty done with vacation this year. Especially the bombastic sort. Will look to cut down this area from 3.54% to 0% if can. One thing i do is that i maintain a virtual travel account where i deposit money for vaction. its -700 bucks right now. so i will need to spend 1.5 years to make up for it.

Savings have been good at 39%. I look to keep it up in absolute terms but not to increase it. The cash free up will go into my emergency buffer account which is around 2k now.

Improve on investing , money management and trading

Difficult year but i learn much abt the market this year and much about myself. I look to leverage more and trust myself more in areas which i am good at rather then suppress them.

I also look into creating better risk controls so that i minimize downside risks. The key to this game is still to lose less money than you make.

Develop a new software

I didn’t expect that i would create anything this year. But i did. I got sick on using to-do list that isn’t to my liking and coded one myself based on GTD concepts.

I find that it is really good way to keep in touch with the development side of things which i am slowly doing less this past year. I find that i can still do a good job.  Next year I hope to create another one. maybe i will work on embedded system like windows mobile or what.

As for the new software, its still very rough. I named it Snowflake GTD and i hope it becomes polish enough for u guys to try it. Do higlight to me some of the things u guys find missing in to-do list. I would try to incorporate them in if it makes sense.

Conclusion

All in all i hope that 2009 we will be able to scrape through. The fengshui for 2009 seems bad. Lets all do our best!

Having said that, Organize IT has 2 very good articles on how to better make use of any to-do list. This i feel is much more useful then finding the holy grail.

[Organize IT | 10 Ways to slim your To-Do List: Part 1]

[Organize IT | 10 Ways to slim your To-Do List: Part 2]

43 Folders has always been about things more subtle and less thought of. Here in these 2 articles, they write about refining the ways you name and work with tasks.

[43Folders | Building a smarter To-Do List Part 1]

[43Folders | Building a smarter To-Do List Part 2]

Next Actions

Alot has been mentioned about next action based on David Allen’s GTD,  but 43 folders illustrate the importance of physical definition. A proper and good definition increases the likelihood you dun encounter mind blocks translating what is written down to an action.

The next action is actually a physical action. For example, if the next thing you need to do is talk with Jan about something, then your next action is "find the address book, look up Jan."

The idea (as described in GTD) is that by focusing on only the very next action, we make the task more palatable to our mind. "I don’t know that I have time and will to do my taxes, but I do have the time and energy to find the address book."

After you have the address book in hand, it’s a short step to looking up Jan, and once you’re staring at her phone number, it’s just a matter of course to dialing Jan. When she says, "Hello?", what naturally follows is what you meant to call her about.

But don’t worry your head with all those details; You just focus on getting the address book. And that’s all you put on your next actions list: "Find address book, Jan’s phone number."

The Next Action should always be an actual physical action. Pick up the paper and read an article, look up the number to the vet, find the duster, fetch the report. Avoid vague (and cumbersome sounding!) items like: "Complete the Project, Deal with Fluffy, Clean the House, Clear off the Desk." See all those capital letters in there? That’s what it feels like, to your mind.

To make your Next Actions (and Projects incidentally) look and feel actionable, use verbs to start the name of each one. For example: Take Fluffy to the vet, File old bills, Mail Bob’s birthday card. For inspiration, take a look at the Next Action and Project verbs from David Allen’s original Getting Things Done Fast CD booklet.

[43Folders | Next Actions: Both physical and visible]

Another good article on next action list is written by Dan Fletcher and it goes abit further to describe the full flow of it.

[Investment Moats | Getting Things Done: A Guide to Next-Action Lists]

Getting Things Done (GTD), is a productivity methodology designed by David Allen.

GTD increases your productivity by getting things out of your mind, and into a reliable system that you can trust. This frees your mind to work on the task at hand, instead of trying to remember a myriad of things at once. You will find yourself more relaxed, and more productive at the same time.

In particular, one easy-to-use part of GTD (which I describe later), only takes 2 minutes to learn, but can increase your efficiency by phonemenal levels.

There are many parts to GTD. One important component is next-action lists, which replace to-do lists in other methodologies.

David Allen realised that in today’s dynamic society, todo lists, daily plans, etc, often do not work. If everything and everyone around you is going 100% to plan they can work, but how often does everything go according to plan? A meeting runs longer than expected, the report you need isn’t ready yet, or the computer network goes down for an hour, and your whole day can go out of whack.

David Allen’s solution to this was next action lists. Rather than plan out the day based on projects, you list the next-action items for tasks you have to do. You record these next-actions into separate lists based on context.

This is best shown with an example…

Suppose you had the following todo list:

• Research buying new Palm pilot
• Arrange next marketing meeting
• Service car
• Buy new Apple Mac
• Cancel magazine subscription
• Prepare for the department meeting

The first step in GTD is to change the list to be based on the next physical action for each project:

• Search online to find different potential Palm Pilots to buy
• Phone John to arrange next marketing meeting
• Look in car manual to find qualified mechanic for car
• Phone Apple Reseller and buy new Apple Mac
• Phone and cancel magazine subscription
• Print out the financial report for the department meeting

By listing the next specific physical action, it becomes much easier to proceed on the projects. You might procrastinate on "Prepare for the department meeting", but "Print out the financial report for the department meeting", seems like a much easier thing for you to tackle, and therefore, you are MUCH more likely to get it done. Just this one idea alone will increase your productivity dramatically! It seems simple, but it is actually quite profound, because it focuses your mind on ACTION.

The next step in Getting Things Done, is to move these next-action’s into separate lists based on context:

@Phone (Things I can do when I am at a phone):

• Phone John to arrange next marketing meeting
• Phone and cancel magazine subscription
• Phone Apple Reseller and buy new Apple Mac

@Computer:

• Search online to find different potential Palm Pilots to buy
• Print out the financial report for the department meeting

@Home:

• Look in car manual to find qualified mechanic for car

Why have separate lists?

The main benefit is that it lets you look at the tasks that are only suitable to where you are at the moment. If you are at work, you aren’t distracted by the tasks that are on the @Home list, and if you are at home, you aren’t distracted by the work tasks. The actual GTD contexts that you use are up to you. The standard ones that David Allen recommends are generally based on location (like the ones above), but you can use whatever works best for you.

Another benefit of separating out the lists into contexts is that it becomes easy to change what you are working on quickly if something goes wrong. Suppose your in the middle of some research online, and the computer network goes down. Whilst other people might decide it’s time for a coffee break, you can just look at you phone list, and start tackling some of the @Phone tasks instead.

Breaking your todo lists into next-action lists based on context may seem like a lot more work than a standard todo list, but it isn’t really. It only takes a little bit longer to plan, but the increase in productivity more than compensates for this.

Next-Actions lists are a small part of the Getting Things Done methodology. They are useful on their own, but their power is multiplied when used with the rest of David Allen’s system. GTD is incredibly effective, and I highly encourage you to try it out for yourself, by reading David Allen’s book ("Getting Things Done: The Art Of
Stress Free Productivity"), or by trying out some GTD software.

Dan Fletcher is a developer at dogMelon. They make Note Studio, an easy-to-use tool, being used for GTD on Palms, PC’s, and Macs.

So i began to see if Sunbird and Google Calendar is a more viable option since most of the time i do my checking of calendar on any desktop computer.

I explored Google Calendar and found that it is very good. You can use it to address your GTD needs. The best part is that there are many resources on the web that discuss on productivity with google calendar.

Other positives about it:

Mobile Version for WIFI checking

I can check it on my Dopod C500 as well. They have a mobile version of the online reader that has an Agenda layout.

Sharing of Calendars with others

You can share your own calendar, thereby enabling you to sync with what your friends, colleague and family members are doing. But i find value-addedness in sharing Singapore Holiday and Weather Calendars. This means that i do not need to look up all these dates myself! Others will be doing this for me!

SMS and Pop-up notification

 I am in the midst of trying out the SMS notification. The local telcos that work with this is Singtel and MobileOne. Is receiving the notification free? Google Calendar is a free service and Google doesn’t charge you to receive notifications. However, i believe that it is stil within the number of SMS you receive charges your Singtel and M1 charges, so use it only for your important events.

Integration with Google Map to find your place

An integration with Google Maps. This will be especially useful to Singapore Drivers. If you set the location of where you planned to go for the Appointment or Event, you can look it up in the map option.

Clicking on the map hyperlink will bring you to a search of the location of the place. In this case, it is our dear Funan IT Mall.

You can see i would need to specify singapore, if not it will throw up other Funan malls around the world. by leveraging on Google Maps, you are able to find the driving route from your place.

Here you will see how to get from Seng Kang to Funan. I can even manipulate the route that i drive away from TPE for flexibility.

Offline Google Calendar

I have yet to explore GCal in offline mode. One option you can do is print out and pin it in your office.

Setting up Event Calendar on your site

Google Calendar allows you to set up an events calendar on your site as well. You can check out how it turns out on my site [here].

Linking Google Calendar to Thunderbird

At times you would want to be able to access to your calendar through a consolidated desktop client. Many would go for the free solution in Mozilla Thunderbird. Kudos to chantc for highlighting this hack.

One of Thunderbird’s strengths however, is, like its cousin Firefox, it works on a plugin system. That is, people have written third party modules, which can be used to enhance the functionality of Thunderbird. And I use 2 of these plugins:

• Lightning
• Provider for Google Calendar

Quite simply, Lightning provides a calendar interface for Thunderbird, its part of the Mozilla Sunbird project, and helps provide the Schedule interface which standalone Thunderbird is missing.

The magic here, however is the Provider for Google Calendar plugin, which, unlike just adding the necessary links to Thunderbird, to access Google Calendard, not only provides read access, it provides write access as well..

Install both plugins, and restart Thunderbird, you will then be shown, a Calendar in the left pane, this calendar has 3 tabs Agenda, Todo and Calendars.

To setup Google Calendar,

1. Click on the Calendar tab.
2. Click on the New Button, in the Calendar Tab, and you will be given a choice, you need to select, On the Network.
3. Click on Next, there is an option for Google Calendar, select this.
4. In the Text bar under the Google Calendar you will need to enter the Link URL which allows you to write to your Account, you can find this, by logging into the Google Calendar account you created earlier.
5. In your Google Calendar, create a new Calendar, or if you already have a calendar created, click on the down arrow next to the calendar. And click on Share this Calendar.
   You will be taken to a new page, where you will need to click on Calendar Details on the top of this page.
6. Then Select the XML button, next to the Private Address, this will allow you the read/write access to the calendar, if you need read only access, or wish to share calendars with read only access, use the XML button next to the Public Tab.  
7.  When you click on the XML button a URL will be displayed (i’ve edited the whole strin below for security reasons) Copy this URL , and paste it into the Thunderbird Text box, then click on Next.
8. Give the Calendar a name which you will use in Thunderbird to identify this calendar, and choose a colour, this is the colour which will identify your Google Calendar, if you are using multiple calendars.
9. Then click on Next and then Finish.
10. You will then see your calendar listed as available. you should now be able to add an event in either Thunderbird, or the wEb Interface, and both will update to show the events. You can set reminders, repeat events, and all the usual type of Schedule details.

The end result? You should be able to see this in your thunderbird.

Sync the PDA

The next step is to sync the Calendar with the PDA, this is done using the GMobileSync app for Windows Mobile or Smartphones. it requires .NET CF 2.0 which is available for download from the site, and provides not only read access to they Google Calendar, it also provides write access. This means as well as having PDA based access to your existing schedule, you can provide updates from your PDA to your calendar too. The application requires your login ID and password for the Google Calendar site. The Sync is a manual operation, and not automatic (yet)

Resources for Google Calendar

I don’t have much resources here now, but i will add on to it once i discovered more stuff.

• Calgoo Seem to have a service that enable you to sync GCal with Outlook.
• Google Gears does not seem to work with Google Calendar for now.
• MakeUseOf has a really good aricle on Google Calendar Tricks titled Best of google Calendar (Addons + Tips)
• This is the bomb of the resources. At the Ubuntu forums, we uncover this topic that enables you to setup Mozilla Thunderbird with Lightning and Provider for Google Calendar to be able to read and write to Google Calendar. The title of the article is [Using Google Calendar, Thunderbird and Lighting to full effect]
• Geek to Live has an article on Black Belth GCal Scheduling/

Where I am today, what i have gotten now, I owe alot to my parents. That said, I attribute a large part of my money management and thrift to what i learnt from my mom.  That said, I’m lucky her money management is nothing like my dad, whom i  believe wasted alot of our money with poor money management and foresight.

• Save as much as you can.
• Spend on only things that you need.
• Reward everyone once in a while.
• Spend within your means.
• Try to repay debt as soon as you can.

I agree with the majority of what this article states. These are the things that i see what my mother did, and slowly I begin to follow. How you live your life, you might not follow what your parents did, however, how you management your money you will.

This is most likely due to the absence of money planning syllabus in students education, and your friends don’t talk about it so the only place you can learn is through watching spending habits of the people you interact with the most.

At investmentMoats, we hope that one day this might not be the case any more.

Still can remember 16 years ago, my primary school best friend told me his parents bought almost everything installments, so thats why they have alot of stuff that i don’t have at home. These are the money habits that he is most likely to grow up using, unless he is smart to see the fallacy of doing that. Hope he is well today…..

By Christina Couch

Think Junior won’t notice that mounting debt and empty retirement account? Think again. According to a 2001 survey by the American Savings Education Council, 94 percent of children ranked their parents as their primary financial educators.

Kate Fitzgibbon still sees that trend today. "Kids really pick up financial literacy from their parents and that’s a scary thing considering where our country is right now with the savings rate at an all-time low," says Fitzgibbon, spokeswoman for the children’s financial literacy Web site Planet Orange, a program run by ING Direct.

"One of the most important things parents can do is teach their kids good money-management skills and model those skills themselves," say Fitzgibbon.

Today’s parents face many challenges, including teaching their children good financial habits. These four fiscal lessons are a good foundation for your kids’ sound money management in the future.

Differentiate between needs and wants

The first lesson is often the hardest: Learn the difference between basic and discretionary spending.

"Parents need to explain that things you don’t think about, like electricity and water, cost money," says Fitzgibbon. "When kids ask for a new video game system, that goes into the ‘want’ category, not the ‘need’ category."

Statistically, fewer and fewer parents are directly discussing the difference between needs and wants. Capital One reports that in 2006, only 43 percent of parents had spoken with their children about the difference, a figure more than 20 percentage points lower than that of the year before.

Neale S. Godfrey, author of "Money Doesn’t Grow on Trees: A Parent’s Guide to Raising Financially Responsible Children," says parents can help kids understand basic-needs spending in two ways.

First, incorporate children into the spending process by showing them exactly how much it costs to run a household. "Pay yourself in cash for the month, then say ‘OK, this is the money,’" says Godfrey. "’It looks like a lot, but here’s the tax bracket we’re in, so count out money for the tax man. Then there’s gas, utilities, mortgage, car, etc.’ It goes quickly."

Once your children understand the money that goes into running a household, incorporate them into the savings process by encouraging them to help reduce household spending. Godfrey says she shows her children the household electric bill, then brainstorms with them on ways to reduce electrical use. If the next month’s bill is lower, Godfrey gives her children a portion of the difference in cash.

Share the secrets of saving

"The major thing we can teach our children is saving," says Geoff Wilson, vice president of volunteer initiatives for the nonprofit financial literacy organization, Junior Achievement Worldwide.

Personal savings are the key to college, retirement, homeownership and anything else in your financial future. Personal savings rates in the United States, however, have declined significantly in the past 20 years, according to data collected by the Federal Reserve System.

Godfrey chalks at least part of the savings problem up to a lack of awareness. "The only thing kids see us do with money is spend it," she says. "They don’t see us save, they don’t see us give to charity, they don’t see us pay bills, so it’s essential to involve them in the rest of the process."

One way to do that, Wilson says, is to show them your own savings vehicles and explain how money grows when it’s invested. To bring those figures into perspective, have your child pick out an item he or she wants, such as a toy, day trip or amusement park pass, and discuss how much of his allowance he’ll have to invest and over what time period to be able to afford it.

For older children, use that same process to calculate how much the family will need to save for a college education. Bankrate’s savings goal calculator can help you demonstrate.

"Kids love to see their money grow," says Wilson. As an example, if a 15-year-old began investing a dollar a day until she reaches age 65, she will have amassed over a half-million dollars, assuming a 10 percent average annual interest rate.

Instill smart spending habits

After learning to pay themselves via savings, kids need to learn how to pay others.

Fitzgibbon says that the easiest way to drive spending and budgeting lessons home is to let children earn some cash, then guide them in their purchasing decisions. "Handing kids an allowance and then not helping them decide where that money should go isn’t cutting it," Fitzgibbon says. "Parents need to show why they make the purchasing decisions they do."

Perhaps the reason most parents don’t discuss their spending choices with their children is because they’re not making the right ones themselves. A survey by the AllianceBernstein investment firm found that more than half of all parents spent more on dining out in the past year than they did on saving for college; 49 percent blew more dough on vacations.

But poor spending decisions also can be effective financial lessons, says Ameriprise Financial private wealth adviser Renee Hanson. She advocates that parents openly discuss financial woes (in general terms if it’s a sensitive subject) and allow their children to make a few poor choices of their own.

"Kids need to make poor purchasing decisions early on to understand how to avoid making big mistakes later," Hanson says. "Parents can also discuss regret. Tell your kids, ‘This is the decision I made and this is the cost of that decision,’ so that your child can make a different decision in the future."

Hanson believes that allowing children to make a few poor purchasing decisions also helps them understand the value of their money and the things it can buy.

"My daughter bought a pair of Nike shoes for $94, which I thought was outrageous," Hanson says. "The back of the shoes rubbed down pretty quickly and she was furious. She wrote to the company and they replaced them. If I had bought them, she never would have done that."

Keep out of credit quicksand

Want to keep your kids out of debt? Teach them about the cost of credit long before they’re old enough to carry plastic, says Hanson.

Credit card debt of high school and college students continues to grow; the average college senior has more than $2,800 in credit card debt, according to Nellie Mae, a student loan company that is a subsidiary of the SLM Corp., popularly known as Sallie Mae. To stem that debt tide, parents need to reach their kids before credit card companies do.

"It is not uncommon for a child who has $10 to choose a $15 item to buy and ask mom and dad for the (extra) money," Hanson says. "But it’s important for parents to say ‘OK, I will loan it to you and you will pay me back over these amount of months and with this amount of interest.’"

One risk-free way to teach your children about plastic is to hand them a prepaid card when they are as young as age 10. Godfrey says that the card helps kids equate purchases made with plastic to money being subtracted from their account, but without the risk of high-interest debt.

"If you hand them their own credit card, it’s like handing them the keys to a car and saying ‘Figure it out while you’re driving,’" says Godfrey. "I let them have a cash card and a finite amount of money. When it’s gone, it’s gone."

Godfrey also advocates openly discussing the family’s credit status with older children.

"A lot of parents will say ‘I’ve messed up my credit! How can I possibly talk to my kids?’ but that’s the whole point," Godfrey says. "With our kids we get to do it over."

Do seek a qualified professional to access your needs before purchasing any products. He is not affiliated with any companies mentioned in this article. The writer holds no liability for any mis-advice causing loss of capital or other form of assets due to information gathered from here.

Introduction

I never thought i would write something like this. I guess it is due to a variety of reasons. I have friends coming to me asking me what kind of plans do i have and what kind of plans should they get. I am not a license adviser, thus i cannot provide any advice. All that i can offer is simple coffee talk.

Even for simple coffee talk, it is difficult to explain insurance to them. The problem is that agents and advisers make it a difficult subject, Your mother, father make it a difficult subject, your friends make it a difficult subject.Hell you yourself make it a difficult subject! By the time you finish reading this (which you most likely won’t lol) , you will know that i make it as a difficult subject. That is why I decide to write this to save myself trouble from explaining to them all over again every time.

I am not saying i am tired of explaining, but its not always i get the best opportunity and time to explain so I think this is the best alternative. I hope that readers can contrast what I did and my perception of insurance with what you do so that it reinforced your belief in the way you do it or spark a thought to change if you think you encounter some deficiency somewhere.

To any adviser or agents reading this. This is strictly my point of view. There may be some portion in this that you disagree with or that I have stated wrongly, I would be happy if you can point it out. In any other case, I don’t have an axe to grind against any parties. I am only using this medium to reach my friends.

My Insurance Philosophy

Insurance to me is about hedging against life’s unknown. It is a struggle of the insurer, GOD and yourself about the possibility of something bad striking you. Should your claim in this life time be less than what you pay the insurer, the insurer wins. Should it be the other way round, you win (to a certain extent haha).

In terms of the true cost of how much should be the best to insure me, GOD would most likely have the best figure. The next person would probably be me. The guy that is in the weakest position here is the insurer, since he can only based on what he can gather about people in my age group and the general trend but in the end would depend on how truthful I do my underwriting.

My view of insurance is like how I view other things:

• Everything has to be a balance
• Keep the cost as freaking low as I can
• Control what you can and plan for the worst case scenario

Everything has to be a balance

I have encountered many opinion when it comes to how much you should spend on insurance as a whole. Most advisers will have a figure that is a percentage of your current income. But that is normally not the way it started out. Most is a number of times of your last drawn salary. Based on that figure, I should be insured nearly half a million (yes I am that expensive surprisingly).

I have friends who think insurance is a way sales people cheat alot of money from them. Apparently, he is a teacher. To me that is abit over the top, I would say because insurance is essentially a sales profession, there will always be a situation that many poor souls get mis-represented, with them knowing or not.

I have friends who after hearing agents or advisers talk about the cases they encounter and think that you die die better insure as much as you can when you are young. They are correct about insuring when you are young. This is when you are fittest and have the least health problems. Your health condition will get worse as you aged, and by then, your insurability will change dramatically and your cost of insuring will increase as well. Having said that, my point of view is that many were scared into buying savings and expensive whole life plans.

When the advisers starts to talk about the risks and cases he has encountered, this is when the customers attention is being shifted from cautious about the agent to relating to his own scenario and then coming to realise that he may be in the same situation. At this point, if the customers is still "zhai", his rational thinking will still be working, but most will not be evaluating the planned solutions the adviser comes up with later.

This is when the adviser starts talking about the recommendation. And from almost all that i have encountered, they will recommend Whole life or Limited whole life. This is not wrong (Which i would touch on later). However, many omit the alternative which is term. Without listing all alternatives, it does not benefit the customer. In the absence of a cheap alternative, the adviser can sell what he has on hand more easily should the customer be able to afford.

Insurance, like everything else is about balance. Its about

• Balancing the amount of medical and financial risk that you are willing to take vs the amount you should pay for insuring. For some people, they know themselves that their probability of getting something bad is rather large. These can be, for example, both parents suffer from diabetes or that the parents and grandparents have womb cancer or that you are naturally weak like me. This has to be balanced with a healthy lifestyle and necessary prevention activites to alleviate such concerns.
• Balancing the ability to service the premiums and your employability. One thing that many do not know of my concern when it comes to choosing whole life or term is that in this age of working, there is no such iron rice bowl or working in one company. With globalisation and increase competition, retrenchment and unemployability is a very big concern. Paying so much premium at the start of your working years through buying limited whole life enables you to own the policy and reduce your risk of not being able to pay for premiums in your older years. This may be no longer true. It is especially risky if you are an engineer like me. We are fucking expandable if you ask me. I would rather pay less premiums for more coverage that i can afford even when I am retrenched or unemployed.
• Balancing the duration of insurability with that of savings for retirement and old age. It is about how long you wish to be insured and also knowing the different risks that you faced at different stage of your life. If you balance insurance expense and savings well, you can achieve the same set of results if not better.
• Balance coverage vs cost. You have a limited amount of money. You require a certain amount of coverage. You have a problem. You need to work within that window to best fit all in.

Keep the cost as freaking low as I can

When it comes to insurance, I do follow keeping how much i pay as a % of my total networth quite tightly. It is the same for investments. The returns can be variable, however, the cost is something you can reign in and one should do that if his pocket is not deep like me.

It is not to say that I am strictly a buy-term-and-invest-the-rest (BTITR) guy. I do own a limited whole life plan. I recommend buying term and investing because i see insuring as an expense. It is basically a concept that many kiasu Singaporeans are not able to see. Most would go: "Wah lan eh! I pay so much i get freaking nothing back. Zhun bo!". I believe it is a chinese problem as well lol.

Insurance, like alot of things can be considered an expense. I see many that willingly pay 500 dollars to 1000 dollars for car expense, maintenance of car expense for something that is for sure depreciating. Insurance looks something very similar as well. So why is it "okay" to pay so much for a car and not insurance? Perhaps it is the fact that car you can see it as an asset or basically a hobby or something you long to have since you are a kid. The list of examples can go on.

Buying term and choosing the cheapest term can reduce your monthly premium by a hell lot. For example, a 100k term plan that covers Death, TPD, CI would set me back for 50 bucks per month. If you pay for a similar Whole life (not limited whole life) you will pay about 191 bucks. Thats almost 4 times. Think of the savings that you can save.

That does not mean you save the money and go buy a car! The rational that accompanies BTITR is that the main objective for insuring against death, tpd and critical illness is that should something hit you, your dependents would be in a very bad situation. That is why it is important to firstly, access who are your dependents, what kind of lifestyle your dependents require.

By the time you are 65-70, it can be assumed that your dependents are getting less (mom and pop most likely not around liao, children working can take care of themselves liao). By then, should u pass away, their impact will not be huge.

However, there is still a risk of total permanent disability(TPD). With regards to this, most TPD plans will stop insuring up till the age of 65. Pack that together with the increase possibility of getting critical illness, you will require large amounts of money. This is where it is either offset by:

• Monies from the cash from your retirement savings
• Covered under your whole life or limited whole life plan
• Children paying for it (this is real!)

This is why you need to save the difference that you save from BTITR from that of whole life. It is for the situation after the age of 65. If you spend it on buying sprees, then BTITR is definitely not for you.

This is when many would think a whole life or limited whole life would be better. My opinion is that at that age without less dependents, you need that money for treatment of disease. If its whole life or limited whole life, your payout will most likely be more than your savings. This is where you have to decide whether you want to balance this risk. If you can do without the big payout when you are after age 65, then term is a good alternative.

One dimension that i can think of that the payout + cash value after 65 won’t matter that much from savings: Inflation. With inflation your healthcare cost will escalate. By then your 100k whole-life might not be such a good medical payout compare to the cost of healthcare then. Do correct me if my thinking is wrong here.

For me, Its more of a limitation of the nature of job, limitation of budget and the acceptance that I can pretty much save on my own that i choose term as the main vehicle.

You would see that, I don’t even have spare cash liao. If my dependents increase, I would really need to cut back sia.

On Planning

So what should you be buying? For me, what you should be buying will depend on

• At which stage of life you are at
• Number of dependents you have
• Number of dependents you will have
• Budget
• Lifestyle
• Ability to save

You should be addressing your immediate concerns rather than ones that matter less to you now. The following is from my point of view what should be of high priority at different stages of your life:

This is not a one size fits all. This one fits into mine thats why I am putting this up. When you are young or just starting out work, your most probable dependents are your parents. If they are still working, that isn’t much dependents.Most advisers would recommend buying life plans whether its term or whole life now. This is not because it of high priority but because you are most likely with a clean slate of health. It is important to know which direction you should take and buy it soon to avoid the prospect of suffering from something and paying a higher premium or not being able to be insured at all.

As you grow older, get married have children, parents retire, you get into the great sandwich phase. Now the whole freaking world may depend on you. At this stage, your life plan is usually one of the most crucial. Along with that, you do not want to be injured or suffer from something that renders you unable to continue your job. This is where Disability Income comes in, which pays you a certain % of your last drawn salary should you be partially impaired  or permanently impaired from performing the job you were train to do.The jury is still out for this one, due to limited knowledge of claims experience. I still do not know whether this is worth it or not. The understanding of the terms and condition is important here. For more on disability income, you can tune in to this 2 topics here and here in SGFUNDS on this topic.

If you look at the diagram, there is always one item that is of high priority. That is Hospital and Surgical or H&S plan. This is a guard against catastrophic medical bills such as those large operations that require you to stay in few days ICU, few days B ward and major operation costing such as 30k to 40k. What happens is that under the plan, you will pay a percentage of the total bill and the plan will take care of the rest.

If the plan is effective, it should shoulder the majority of your fucking big bill and you pay the small portion in cash or medisave. I say if it is effective, because the government of Singapore realise that it is not insuring well against fucking big bills thats why they did some keyhole econs changes.

Needless to say, this is the first thing you should be insured for, a must have. There are also H&S plans paying from the first dollar onwards. For more on these you can participate at the discussion here.

Finding an adviser

This shouldn’t be difficult! Why because there are so many advisers in shopping centers, bus stops, even computer shows! However, find one you can trust and service you well and knows his beans is hard to come by. So choose well. I wrote an article a few weeks back taken from the Straits Times on some good questions to ask your adviser, you can read them and get a feel of what to ask if you see one.

My criteria:

1. Integrity and trustworthy. Needless to say without this one, we cannot maintain a long term relationship. This goes both ways not just your attitude of him, but him towards you. Its a sales job sometimes and if it doesn’t work out, give him a direct answer! Don’t just siam him and don’t reply his calls! I sometime do that in the past but that is more due to my character when i am busy i dun feel like calling or talking to anyone. So gotta apologise if any of  you guys see this post.
2. Knows his/her stuff. If he doesn’t thats ok if he can find out and get back to me. I don’t like people who patronise me by saying they will try to check but don’t get back to me when they cannot find or probably too lazy to find.
3. A brain of his/her own. Ability to think out of the box and not be a herd follower. I realise that it is they way they are taught and the culture of the consultancy. I heard rumors of some particular IFA where there is little room for the adviser to sell things his own way. That to me is a kind of organisation limitation that prevents a good adviser from performing a good job. But heck, i believe it guards against out-of-line advisers.
4. Must compare products. I bring up this because i am deeply disappointed with one of my adviser from an IFA. The advantage of an IFA to a tied agent is that he has access to more products from more firms. No product is the same and thus the needs of the clients need to be looked at so a comparison need to be done face-to-face. I don’t understand the concept of "we have people at the back who has come up that this is the best policy for you".That don’t sound right to me? I have a justification to be skeptical. I am not sure if its the product manager that is pushing this. This is also where you see the IFA or Tied advisors point of view. Ironically, it is my other 2 tied advisers that did this much better, but sadly its more of a apple and orange comparison most of the time.
5. Don’t need to drive or drive big cars. This one don’t need. I have friends who prefer to have one that does. I prefer to be serviced by one who can explained his priority in life to me. I can always go and meet some where.
6. Help me with claims and procedural matters. This is where value is added. We can do it but they will seriously value-add here.
7. Experience/Older. I’m not strict on this one, but generally the ginger the older the better. If he/she is young but willing to learn then I don’t mind, but you always run a risk that they would drop out of the race and your policy being taken over by dunno who.

Comparing Plans

Here is where it gets tricky. I personally don’t have a systematic way of looking at plans. But i do have some objectives so its a question checklist to make sure that i do consider most of the stuff before i make my decision:

 Most of the time, I had to worry about which plans are more cost effective for the meat that they come with. Its different for Disability Income and H&S as that is heavier on Terms and conditions understanding.

My Comparison of AIA Recommendations

The recommendations that I received is mostly whole life, limited whole life or on the occasional endowment and more strange limited whole life. This time, there are 3 recommendations. They are recommended as a direct replacement for my AIA Recovery Lifeline.

Some ground rules before we start. AIA Recovery Lifeline is

• a level-term plan covering Death, TPD and CI.
• For a 25 yr old non-smoking male, its term for 50 years till the age of 75 is 809 dollars per annum.
• that works out to be 67.40 dollars per month.
• Why did i cover to 75? I forgot the exact reasoning, but think it is because they only have that duration of term.

That is not the only level term i have. The other plan is from Asia Life Enhanced Crisis Assurance. Its

• a 40 year level term covering Death, TPD and CI.
• Total Premium paid is 594 dollars per annum.
• That works out to be 49.50 per month.

There could be 2 reasons for the drastic difference although both are 100k level term. One, being that the term is extended longer for AIA term and secondly, because of the "Branding" of AIA which is a internationally recognized insurance company as to Asia Life, a local insurer that not many knew.

This is one factor that many AIA, and Prudential advisors would love to compete on. It is up to one to decide if you want to pay that premium for the same kind of coverage. It is well known that Asia Life which is one of the smaller firms has chalked up the highest rate of investment return and paid high projected returns consistently for many years. That study was inclusive of heavy weights such as Prudential, Aviva and AIA as well.

In terms of rating of a insurer that is triple A rated, my feel is that it only shows the credit worthiness of a company. But in bad times like now, liquidity drys up. You want to borrow money also cannot. Furthermore, being "big". does it mean

• Your credit rating will remain as triple A rated for the duration that i have the policy?
• You can be cutting edge in your offering
  • Your products are revolutionary and influence insurance trends
  • Bring something new to emerging markets as a whole
  • Be cost effective where it matters
  • Provide superior returns to customers
• Avoid the fallacies and herd instinct of your peers?
  • Reduce the proportion to subprime as you percieved the risk to be higher?

These are open-ended questions I would ask to AIG. Granted, the last i checked, they are one of the more considerable outstanding financial institution that I recall seeing.

Back to the comparison, there are 3 products we are talking about here. I would compare them against Asia Life Enhance Crisis Assuarance simply because of the objective towards my goal,my plan and it being the most cost effective. Granted, readers should take note that this ain’t a apple and apple comparison. But it is based on the suitability towards my overall plan and the way I view them.

A few things that I realise about comparing Term vs Whole Life vs Limited Whole life:

• Term is cheaper when you start comparing, but thats because you normally do it in your 20s and they normally isn’t build to last till 99
• In Full Whole Life you pay till you are 99 wheres normal Term, you pay until 65-75. Term is drastically more expensive when you are talking about 75 and above.
• Limited whole life is freaking expensive at the start, but do remember to factor in the years later you won’t be paying.
• Advisers will normally tell you this is the amount of premium you pay after X no of years. Not realistic. They did not factor in present value in their calculation.
  • Perhaps that is why they wanna sell more limited whole life policy.
  • The insurer get the commission near present value
  • The adviser get the commission near present value
  • You, the consumer has to worry about your returns because of inflation
  • It should be noted that most advisers get their commissions out of the first 3-4 years of your policy, with about 85-90% of your total premiums in year 1 going to their commission, thus they have no inflation risks.
•  Project Returns at 5.25% and 7.25%(last time) unrealistic. A Straits Times article shows that the best returns achieved by Asia Life is even less than that 5.25% (except asia life at 6.35 on average). So why the confidence you can get that projected long term going forward?

AIA S$ Life Plus

We start off by taking a look at  AIA S$ Life Plus. This is a full whole life plan. So instead of stopping premium payment at the age of 75 for LifeLine or 65 for Enhanced Crisis Assurance, this one you would have to pay until 99 if you want that coverage to be in force after your retirement.

This comparison like the rest below is not apple and apple comparison. To compare more closely, It is better to compare Life Plus against a term plan with a duration up till age 99. Term premium starts getting more expensive after the age of 70 as compared to Whole Life. Thus my comparison is based on my objective, that is to insure against death, TPD and CI up till the age of 65.

 On itself, Life Plus only offers coverage for Death and TPD. To cover for Critical Illness, they are throwing in a CI rider as well. From my experience, it seems that the majority of the premiums will be going into building up the cash value. Death and TPD by itself is not very expensive. I have a group insurance that insured for 50k Death and Major Illness for 8 bucks per month.

Thus out of the 3, the one that commands a higher premium is CI. The premiums for CI rider is non-guaranteed, which means that there is every likely-hood that they will increase the premiums for CI based on perceived increase in insurance risks. Total premiums paid is way higher then the term plans (65-75% more). However, as i mentioned before, that is factoring the cost of insuring from 66 till 99.

If my aim is to insured till 65, it makes no sense to get such a bloody expensive whole life. In the diagram below i have included Total Premiums Paid at Future Value when I am 65 and also discounted present value total premiums at 3% inflation expectation.Either way, I’m paying 3 times more than what I am paying for term for the same coverage up till 65.

By opting for term plus savings, I can save up till 1772 dollars per year. To get to the returns that was projected in the Benefits Illustration, My rate of return will need to be 3.3%. Far lower than the projected 4.43% (35% equities, 65% fixed income aka bonds). 3.3% is a conservative target that most of us can hit easily if our alternative is Singapore Government Bonds here at fundsupermart.

Conclusion: No go for me. Pretty made up my mind on this one.

AIA S$ MoneyBack Protector 25

AIA MoneyBack Protector is a non-participating 10-year premium term plan with the option of either 15, 20 or 25-year term coverage. This plan provides benefits for death and terminal illness, with double indemnity for accidental death. The premiums will be refunded at the end of the policy term provided that no claim is made during the policy term.

Basically, this plan provides:

• Death Benefit: Upon death of the insured, they will pay the insured amount less any amounts owing to them.
• Accidental Death Benefit: If the insured dies due to an accident, and death occurs within 90 days from the date of the accident, they will pay one hundred percent (100%) of the insured amount in addition to the insured amount of the Death benefit of your Basic Policy less any amounts owing to AIA.
• Terminal Illness: If the insured is diagnosed with Terminal Illness, AIA will pay from the date of confirmation of the Terminal Illness the insured amount less any amounts owed to AIA. Terminal Illness lump sum payment is an accelerate benefit that accelerates the payment of the Death Benefit of your policy. Once this accelerated benefit is paid or deemed payable, all other benefits will be terminated. Terminal Illness means a condition, which in the opinion of 2 registered medical practitioners is highly likely to lead to the death of the Insured within 12 months. The insured must no longer be receiving active treatment other than that for pain relief. (Under this definition, its like you are almost nearly dead)
• Return of Premiums Benefit: The total annual premiums paid will be refunded without interest  at the end of 25 year policy term, provided that no claim is made during the policy term.
• Convertibility: Convert this policy to any regular premium whole life or endowment up to 100% of the insured amount without evidence of insurability before your 70th birthday.

My take: This policy is cute. I have a hard time figuring out why this is recommended in the first place. I see alot of cons more than pros:

• It doesn’t insure me long enough. A 25 year plan will terminate at age of 51. That is still a long way from 65.
• I realise that with the way premiums are paid, your surrender value will only break even when the plan terminates. Not that it matters to me. It looks like another "I pay you valuable present value monies, you return me less valuable future value monies" . Your 10,300 dollars that you finish paying in yr 10 is more valuable then the 10,300 dollars they return you at yr 25. That is even worse considering we are in an accelerating inflationary environment.
• You pay 1030 bucks and you do not get full CI coverage? This one sounds more like a death and accident plan to me! And we are paying so much for it! The bulk of the cost is normally the CI portion. This one doesn’t contain CI, so why do I pay so much for this?

Given the things this policy insures against, I am wondering why I used the same matrix below as that of the previous analysis to analyse this. The other 2 term plans, insuring more than this cash back plan. To offset this, I should be basing my analysis on my group insurance that insures death, TPD for a mere 192 dollars per annum. If i do that i will be able to save 838 dollars for the first 10 years. However, for the next 15 years, i will incur more for the group insurance at 192 dollars per annum. If you look at the aggregate figure, I would have save 10650 dollars. Thats even more than the 10300 payout at the end of 25 years! And I’m calculating at 0% interest!

Conclusion: It begs the question: does the convertability and  accidental death benefit really commands that premium? I don’t think i wanna find that out after 25 years.

AIA S$ Guaranteed 15 For Life

 A Limited whole life plan at last. Something that sounds promising. I have mentioned previously that Limited whole life has its pros and cons:

       Cons:

1. You do pay more premiums at the start.
2. With large premiums comes premium servicability risks.

       Pros:

1. You own the policy after 25 years. At which, you are covered for life. If you are one that wants to hedge the risks even after you passed 65 and beyond. This is a good alternative
2. This actually frees up budgets when you get to a stage where you will see your budget tighten when the children grows up. Your insurance needs are important then and since you have own the policy, this free cash can be put for other purpose.

This plan, does not cover critical illness. It seems like most CI accelerating riders are sold with whole life like this. The rider will set you back 757 per annum. This one altogether will set me back 310 bucks per month. I would say that at this moment i cannot afford any more limited whole life based on my budget. A 15 year one is a real liquidity bloodsucker.

For the folks whose earning power tends to be stronger when they are before the age of 40 (Regulars in the army for example.), this i feel is good.

However, AIA might not offer the cheapest Limited whole life vs projected guaranteed and non-guaranteed value. Do look for other alternatives as well.

One thing you will realise is that the terms for limited whole life vary quite wildly. I think the different insurers wouldn’t want to put out durations that are similar to a competitor. Why? If you can compare a 10yr 100K limited whole life plan with another one similar side by side, it will most likely result in the consumer choosing the cheapest one  for the same projected returns.(Although how do you judge projected returns? They are after all projected!)

Conclusion: No budget for this. Expensive. I will rather rely on my current term plan.

Some Last Thoughts before I call it a late late day

You may ask: What about retirement planning and investment? Where to put your money for the long term?

I think i would rather take that out of the equation now. My brain is drain from all these insurance stuff.

As folks can see, it is difficult for a noobie like me to dissect such things. I do not know why they can’t make it more simple. Guess had they do that, we might think about things differently then.

Insurance does not end after you purchase a plan.Do sit down with your adviser periodically to access your needs at different point of your life. Many of us fall into that loop hole of saying "Orr, I got insurance liao, I don’t need to buy more.". We may sometimes be in a good position to judge what we need, but we have our limitation, that is why we engage adviser to consult and help evaluate such stuff. They might see something you don’t see.

Just do your best to dissect sales talk from factual and helpful advice.

Lastly, most of my insurance stuff, I learnt it from others. Without interaction in SGFunds, I would not uncover so much information (and mis-information) and contrast with how others settle their insurance needs. You can get most of the resources here.

Disclaimer:The writer is not a certified professional planner of any sort. All advise shown here are opinions based on the writers interaction with other parties and self-fact finding.  In no way should they be used as the only advice to make final decision. What works for the writer may not work for you.

Do seek a qualified professional to access your needs before purchasing any products. He is not affiliated with any companies mentioned in this article. The writer holds no liability for any mis-advice causing loss of capital or other form of assets due to information gathered from here.

I saw this post in SGFunds here where durio asked about Why equities fund go down, bond funds go up? The discussion wasn’t very eye catching, but Wilfred’s reply below was:

Wilfred:

“This has been a historical observation that bond and equity have a lower correlation.

But is this now still valid? There is so much liquidity in the market that both bonds and equiteis have one thing in common, in times of panic, investor just pull out from ALL assets back to the source. Sometime this “source” is actually just nothingness. Nothingness? I like to illustrate what this means:

I spoke to someone who taught me how many private bankers do business with their client. A typical scenario is this: The private bank sees that the client owns a fully-paid landed property. The private banker will proposed to the client that using the landed property as a colleterial, the bank is willing to lend him 70% of the property value. The loan is in YEN (because it has low interest). In order to protect the client from currency risk, he also sells him a hedging strategy to hedge against the appreciation of the YEN. Say the property is worth $1m, the client now got $700,000 in cash as a loan. This $700,000 is then invested into various instrument products like hedge funds. Hedge funds itself is often leveraged by x2. The hedge fund gives regular dividends. Therefore:

$700,000 becomes $1,400,000 through hedge fund levearging.

Say the underlying instrument of the hedge fund gives 5% dividend yield, it becomes 10% dividend yield after x2 leverage.

The client will receive a yearly income of $700,000 * 0.10 = $70,000.

But what was the capital in the first place? Nothing. There was no capital because the “capital” was merely a loan using the property as colleterial.

I think it sounds great in commission for the private banker.

(1) He earns a commission for selling the loan
(2) He earns a commission for selling the currency hedging product
(3) He earns a commission for selling the hedge fund

Cool! But then when the party ends, what will happen? All money will go back to the source which is nothingness. What can happen? The weakest link in the above example is that if the value of the property goes too low, a margin call will be issued. Then the entire food chain starts unwinging. Another week point is the hedge fund. Since it is x2 leverage, it can go down to zero easily. This means that the client will lost the entire $700,000. Since this is merely a loan which has to be repaid, he has to sell his entire property and be left with $300,000 to buy a HDB flat!

Conclusion:
It is because of this that the market is being filled with liquidity created out of nothing. That’s why we cannot safely say that if we buy bonds and equity, we are “safe”.”

Thought that was ingenious. Too bad my stupid brain didn’t thought of this.

Another Kind of ‘Vampire’ Invades Homes This Halloween: Energy-Sucking ‘Standby Mode’

COLUMBUS, Ohio (AP) — A force as insidious as Bram Stoker’s leading man is quietly sucking a nickel of every dollar’s worth of the electricity that seeps from your home’s outlets.

Insert the little fangs of your cell phone charger in the outlet and leave it there, phone attached: That’s vampire electronics.

Allow your computer to hide in the cloak of darkness known as “standby mode” rather than shutting it off: That’s vampire electronics.

The latest estimates show 5 percent of electricity used in the United States goes to standby power, a phenomenon energy efficiency experts find all the more terrifying as energy prices rise and the planet warms. That amounts to about $4 billion a year.

The percentage could rise to 20 percent by 2010, according to the U.S. Department of Energy.

In California, lawmakers passed a proposal last year — dubbed the Vampire Slayers Act — to add vampire electronics labels to consumer products, detailing how much energy a charger, computer, DVD player, PlayStation, microwave or coffee maker uses when on, off or in standby mode.

“It’s something people don’t know about,” said Dave Walton, home ideas director for Direct Energy, a utility and energy services company that has one of its four main offices in Dublin, Ohio.

The issue is particularly pressing in Ohio, the nation’s No. 1 emitter of toxic air emissions — mostly from electricity production at the state’s coal-fired power plants. Walton said skyrocketing energy costs mean everyone should worry about the vampires in the house.

The International Energy Agency has estimated standby energy use by vampire electronics at 200 to 400 terawatt-hours a year. The entire country of Italy consumes about 300 terawatt-hours of electricity each year, according to the agency.

Picture any appliance that displays a clock while otherwise idle, such as a microwave oven, coffee maker or DVD player. They constantly consume little bits of energy.

“About 40 percent of the electricity being used to power your home electronics is consumed while they are in that standby mode,” Walton said. “If you just focus on that piece, you will be making a big step.”

Ditto for things that charge, such as cell phones, PDAs, toothbrushes or portable tools, some of which trickle a charge even after the device that’s charging is at capacity.

Some chargers halt the flow of current when it’s not needed, which should happen automatically with chargers for lithium-ion batteries. If you’re uncertain, Walton advises unplugging chargers when not in use.

He recommends hooking up your home computer system, including accessories like a printer or scanner, to a single power strip that can be easily switched off each night. He advises shutting off the other vampires too, though the inconvenience of resetting the clocks, channels and timers on those devices each morning will discourage most people.

The government-backed Energy Star program, coordinated jointly by the U.S. Department of Energy and U.S. Environmental Protection Agency, identifies appliances that consume less energy.

If one in 10 American homes used only appliances endorsed through the program, the Energy Department estimates, it would reduce U.S. carbon emissions by the same amount as planting 1.7 million acres of trees.

They do have to realize before even talking about gains, they have to be clear about the objectives they wanna achieve. If its investment, what is it for? and how long they have to when they wanna take the money out. Simple questions but if you don’t ask, you may be buying something just on impulse.

One thing i realize is that the financial adviser recommending him stuff like that should have made sure he understands this before recommending ilp to him. I am not a certified financial planner, thus my advice to him is to assess how competent is this adviser. The Straits Times this Sunday came up with a list of questions to pose your agent. It does not encompass every aspect, but nevertheless its a good list.

Here is a checklist from Straits Times invest section on questions that you can pose a prospective insurance agent:

1. What services can you provide?
   Find out if the adviser offers cost-effective solutions from multiple product providers or if the products he recommends are restricted to one source. Some consumers feel safer with advisers and products from large well-known institutions. Others may want to deal with advisers that offer a wider choice of products.
2. Who else could benefit from your recommendations?
   An adviser who promotes insurance, unit trusts and stocks may have seperate tie-ups with the firms that supply these products.
   He may also have other business relationships that should be disclosed to you. This includes income he receives for referring you to an insurance agent, an accountant or a lawyer in relation to recommendations that he makes to you.
3. What are the risks and disclaimers?
   Don’t hesitate to ask the adviser to highlight any risks, potential downside or restrictions that may apply to the product he is recommending.
   Ms Wendy Lee, 40, suffered a rude shock when she realised, after her divorce, that she was unable to change the person who would be a beneficiary of her life insurance policy.
   She was not told at the point of sale that an “irrevocable statutory trust” is created – under Section 73 of the Conveyancing & Law of Property Act – for the spouse and/or children when they are named as beneficiaries in a policy.
   In simple terms, that means her ex-husband is entitled to the insurance proceeds because he was named as the beneficiary when the policy was taken out.
   Even having a will does not change the situation.
4. How do I pay for your services?
   Payment can take several forms.
   • Commissions paid by a third party for the sale of products. These are usually a percentage of the amount you invest in a product.
   • Fees based on a percentage of the assets you invest.
   • A combination of fees and commissions. Fees are charged for the amount of work done to develop financial advisory recommendations and commissions are received from any products sold. Some planners may offset a portion of the fees you pay if they receive commissions when you buy products they recommend.
   • A salary paid by the firm for which the adviser works. The advisor’s employer receives a payment from you or others, either in the form of fees or commissions, in order to pay the planner’s salary.
5. What commissions do you earn?
   Don’t be afraid to ask the exact commission amount that the adviser will earn from the sale. For instance, the commission for a regular premium investment-linked plan can be as high as 50 percent in the first year, before dropping to 25 percent in the second year, 10 percent in the third year, and 5 percent each in the forth, fifth and sixth policy years. This means that if the annual premium is $50,000, the first-year commission earned by the adviser is a substantial $25,000.
   For a single premium investment-linked plan, the one-time commission is typically a much smaller 2 percent to 3 percent.
   In the case of hospitalization Shield plans, some generate first-year and renewal commissions of up to a 25% percent and net premiums of 15 percent for the adviser, as long as the plan stays in force.
6. What experience do you have?
   You have a right to be nosy. Find out the adviser’s experience and the number and types of firms which he has been associated with. Some experts advise consumers to choose an adviser with at least 3 years of experience in providing financial advice.
7. What qualifications do you have?
   Ask the adviser what qualifies him to offer financial advice and whether he holds or has held any financial planning designation.
   If the answer is yes, check on his background with the respective organization.
8. Can i have it in writing?
   Ask the adviser to put in writing the services he has provided and the recommendations he has made. Keep this document for future reference.

At the end of the day, ask for a list of documents for recommending that product to you. These include:

• A summary of your financial information such as investment objectives, current financial situation and personal needs.
• Recommendations made by the adviser and the basis for making these recommendations.
• A copy of the benefit illustration and product summary for insurance products.
• A copy of the prospectus for unit trusts.
• The name of the firm he represents and the type of advisory service he is licensed to provide.

At the end of the day, after asking all these questions, there are still room where the adviser can play you out. Governance can only do this much but it is whether you are fated to meet such a good adviser.

I do have much to gripe about my current 2 advisers that i am being serviced but i will leave that to another day.