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Sing Investment
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" Wealth is a great servant, but a very bad master.
Money is good when it's under your control.
But when ... money ... begins to control your life,
then you have a problem."

By Vikas Malkani
Author of The Yoga of Wealth. 


"Fa Cai" or Prosperity:

It touches the deep desire of most people, and that 
" Man dies for the sake of wealth and birds die for food ".
Man works hard, day and night, in order to become rich. The rich want to be richer.
The poor want to gain wealth to break the root of poverty and live a comfortable life.
 Some people cannot gain wealth the right way and resort to crooked ways.

Money is very useful, but it is not indispensable.
It may increase our bank account, but may not give us true love,
inner satisfaction and good sleep.

Money is not almighty. 
As the one without money,
        Sure most prospects will "m a t i."

Simple Financial Management:

Saving for emergencies: - by putting aside a percentage of your income, say 10%
(amount depends on individuals).

Live within your means: - distinguish Needs (those items essential to your daily life) 
& Wants (those items you like to have, but can survive without them). 
Spend on your Needs first, and then your Wants when you can afford them. 

Budget and plan your expenses or cash-flow, by setting yourself a weekly / monthly allowance.
Adjust to live within that amount.
If you use your credit card, always pay off in full when the bill is due.

Save & Guard your money:

If you have the spare money ( i.e. the money you do not need to satisfy your Needs ),
you may invest it in any profitable and secure financial institutions, like the banks, etc.

Beware of anyone who could be out to swindle you. Do not believe that person(s), 
before you have checked his/her identity and background. Analyze his/her motives.

Do not invest all your spare money in one financial institution.
Diversify your investments ("Do not put all the eggs in one basket").
Keep a record of all your accounts.

By Yuen H.C.
Economics Enthusiast.


What happens to assets if there's no will?

The Sunday Times  -  JUNE 6, 2004 SUN

Q: MY BROTHER, who was a bachelor, died recently at 55 without leaving a will. He left behind some money in his bank account and there were also some funds in his CPF account. 

He had appointed my deceased father as his next-of-kin. My mother is still living and there are four married siblings around. What happens, therefore, to the money that he has left behind?

We were told that he has some personal debt. Are his siblings required to settle the debt?

A: I PRESUME that your brother nominated his father to be the beneficiary of the CPF money.

Since the nominee has died, it is deemed that there is no nomination and the CPF savings will be forwarded to the Public Trustee for distribution to the deceased's family members in accordance with the law.

Under the Intestate Succession Act, where a person dies without a will, and leaves no spouse or child(ren), the parent(s) will be entitled to the whole estate.

Only where there is no surviving parent will the sibling(s) be entitled to the estate. Your mother is therefore entitled to the whole estate.

She should see a lawyer to help her apply to the court for Grant of Letters of Administration to deal with the estate and, in particular, the money in the bank.

Alternatively, if the assets left behind by your brother are relatively small, your mother may contact the Public Trustee to administer the estate.

The Public Trustee can be contacted at #05-11/06-11, The URA Centre, East Wing, in Maxwell Road. A fee is payable.

Please note that the creditors have to be paid off first before the money is distributed to the beneficiary.

The creditors may take court action against the estate to recover their debts.

Chye Kit Soon
Chan Jer Hiang & Co.


Q: MY SISTER, who is in her late 20s, has credit card debt of $35,000 and a cooperative loan of $20,000.

She has been servicing the latter dutifully as the instalments are deducted directly from her salary.

She also has a renovation loan of $8,000 which is serviced regularly every month.

As for her credit card bills, she pays the minimum every month as she has every intention of repaying the debt.

Will the bank declare her a bankrupt with these amounts outstanding, even when she pays the minimum dutifully?

If she were declared a bankrupt, what would happen to her job in the private sector or with the Government? She is worried about her job.

Will it affect her chances of finding a new job, if necessary?

A: So long as your sister continues to service the loans, it would be most surprising if a bank would wish to make her a bankrupt. After all, banks and financial institutions derive quite substantial income from loans.

As long as the chicken continues to lay the eggs, there is really no reason to slaughter it as that is what happens when bankruptcy is proceeded with.

And if she were a bankrupt?

First of all, while the Official Assignee (OA) is not automatically entitled to receipt of the bankrupt's salary, there is a duty requiring the bankrupt to account for money and property received during the bankruptcy and to hand over to the OA what is not required for maintaining himself and his family.  

Therefore, that is an indirect way to obtain part of the salary.

There is, however, a specific provision in the law to the effect that if the bankrupt is a public officer, the OA must apply to the court for a payment order as only so much of the salary as may be decided by the court is available to the OA for distribution among the creditors.

A bankrupt is disqualified from practising certain professions such as law, accountancy, and architecture.

She cannot be employed by a lawyer in his practice without prior approval of the court, and an accountant cannot employ a bankrupt without the consent of the Public Accountants Board.

Apart from the specific restrictions mentioned above, there is no reason the bankrupt cannot get another job as she will be able to contribute to an organisation with her skills and labour.

Amolat Singh
Amolat & Partners

Advice provided in this column is meant for information only and not as a substitute for comprehensive professional advice.  


Just how good investments are structured deposits
offered by the banks?
High early payout but so-so returns.
The returns seem alluring when compared to measly interest on savings accounts,
but wait - there's more than meets the eye.

The Sunday Times -
JUNE 6, 2004 SUN.
Leong Chan Teik.

STEP into a bank, and chances are there is a big placard by the doorway
screaming for your attention.

You reach the teller, and after eyeing the cash pile in your passbook,
she may point you ever so casually to some brochures at the counter,
or refer you to financial planners in the corner.

The placards and brochures tout high payouts on investment products
known as structured deposits.

It is '10.5 % interest guaranteed' in the case of United Overseas Bank's product,
and '10 % payout after just three months' in the case of DBS Bank's offering.

That sounds great when the annual interest on savings accounts, in contrast,
is less than 0.5 %. 

But financially savvy investors say there is more to these products than meets the eye.

On the face of it, they do serve a purpose. They target people who are bedeviled
by a fear of losing money but who also salivate for a high return.

The problem is, when it comes to investments, 100 % safety and sizzling
double-digit gains do not quite go hand in hand.

Mr Ben Tai, OCBC Bank's vice-president of wealth management
(treasury and structured products), says that generally, the interest gain to expect
is a few percentage points higher than that of conventional fixed-deposit accounts.

As an example, in 11 out of 13 of OCBC's bond-linked structured deposits
which have matured, the return was 1.8 % per year, compared to 0.5 %
for a six-month fixed-deposit account.

Structured deposits have attracted overwhelming response from consumers,
though critics say it is sometimes for the wrong reasons.

For one thing, there is clever marketing in the form of the enticingly high early payouts,
says Mr William Cai, a chartered financial consultant.

For another, consumers themselves do not understand how the products work
but they are drawn to the allure of potentially higher returns.

About two months ago, the Monetary Authority of Singapore said that the practices
of institutions marketing those products have been in some cases 'less than satisfactory'.

It pointed out three areas of concern:

1.  Inadequate disclosure of risks of these products;

2.  Excessive focus on potential returns including the use of unrealistic headline rates;

3.  Marketing of such products as conventional fixed deposits.

Many structured deposits have key features:

High early payout: An example is the 10
% payout after three months
in the DBS Dynamic Account.

Some people wrongly equate such a payout as interest earned in the conventional sense.

The initial payout is one-off and not repeated every year, which is unlike what
some people imagine. In many cases, you get nothing in subsequent years.

Protected capital: This is music to the ears of people who are afraid
of losing money.

The capital is protected by a simple process. The bank will invest most of your money
in bonds. The returns from bonds are what enable the bank to return you 100 %
of your capital.

The rest of your money which is not invested in bonds, typically 20 or 30 %,
is put into riskier assets such as shares and stock market indexes.

The DBS Dynamic Account currently offered in the market, for example,
will be invested in shares of five companies: Cisco Systems, CNOOC,
Intel, LVMH Moet Hennessy Louis Vuitton and Newmont Mining Corp.

This is the engine that is supposed to give you an enhanced return if the shares perform.

Long lock-in period: You are required to stay invested for, typically,
five years
or more. It can be as long as 10 years in the case of the DBS Dynamic Account.

You get back at least your capital plus the initial payout if you stay the course.

You could get back less than your capital if you withdraw your money prematurely.
Worse, you may have to pay a penalty, in some cases.

Possible early termination: The bank can terminate the products early
f their underlying investments perform well.

Here, you are likely to enjoy better returns than if the products run their full course.

Together with the initial 10 per cent payout, your gain is effectively 9.43 % per year
if the bank terminates the product in the 14th month.

The longer it takes to terminate, the more the return shrinks.
If the Dynamic Account matures only in the 10th year, your return works out to a modest
1.5 % per year.