Why Interest Rates Rise

Interest rates of bonds are rising in the bond market. That means that people are more confident in the economy. Why is there this correlation?

The Federal Reserve Chairman Ben Bernake says he does not expect the US economy to fall back into another recession.

This boosts people's confidence in stocks and thus reduces the demand for safer investment instruments like bonds and treasury notes. In order to attract investors to bonds, the issuers of bonds thus need to raise the interest rate or coupon rate to make it competitive and lucrative enough for investors to invest in them. Otherwise, these investors would rather invest their money in the stock market.

Hope this provides a simple explanation on why interest rates rise when the economy is doing well.

Question:
As interest rates rise, can we also expect the interest rates or deposit rates in our banks to rise?

Are You A "Loser" for Eating Alone?

I saw this short article on Straits Times regarding eating alone.

In Singapore culture, it is deemed embarrassing to be seen eating alone. In fact, I think most people would rather skip their meals if they have to eat alone.

Is it true?

Based on my personal experience, I have certainly felt that way before. In the past, when I was still working in an office, we would all go and eat lunch together at the cafeteria nearby. Sometimes, due to work committments, my usual lunch kakis would be out of office and I was left alone. It was really "embarrassing" in a sense to be seen eating alone in the cafeteria where there were many other acquaintances / colleagues around. These are of course the people that you don't usually mix around with because they are from different branches and departments.

Many times, I found that I resorted to packing my lunch and eating at my desk rather than be seen eating alone.

Nowadays, I have overcomed that fear. Perhaps it is because I no longer work in an office. I certainly don't mind eating alone. But there is still that nagging fear that I might meet someone I know and it might be an "embarrassing" situation.

Do you dare to eat alone?

What Happened to Michael Fay?

I read with interest the news on a Swiss man who has been charged with vandalising the MRT trains at the train depot in Singapore. 33 year old Oliver Fricker has been released on a bail of $100,000 even though his passport is still impounded. His accomplice who is British is apparently already out of Singapore.

This reminded me of the Michael Fay incident back in 1994 where there was this whole big hoo haa when Singapore decided to cane a 18 year old American (who was reportedly suffering from ADHD) after he vandalised cars and stole road signs.

So what happened to Michael Fay?

After much pleading from the US, Singapore still proceeded to cane him at Queenstown Remand Prison. President Ong Teng Cheong however reduced the number of strokes of cane from 6 to 4. Still, the United States media had a field day thrashing Singapore's supposedly draconian laws, almost labelling us as a repressive state for scarring a poor boy for non-violent act.

When he was released from prison, Michael Fay flew back to the United States to be with his biological father. He had moved to Singapore earlier to join his biological mother and step-dad.

After that, he went on various television interviews and claimed that he was "tortured" and did not actually vandalise any cars. He admitted to stealing road signs but not to vandalism. Subsequently, he was involved in substance abuse and also possession of marijuana. He was also involved in reckless driving and stuff in Florida.

What Will Happen to Fricker?

So if an 18 year old American teenager who supposedly came from a broken family and had ADHD was actually sentenced to jail and given 4 strokes of the cane, what will happen to Fricker?

33 years old isn't exactly young.

Perhaps his punishment might be even more severe. But then we can only wait and see....

Cure Hiccups

I was hicupping the whole of yesterday. It was really irritating.

Knowing that hiccups is caused by too little carbon dioxide (I read it somewhere), I tried to hold my breath, hoping that it will remove my hiccups. But it didn't and so I kept hiccuping.

Then I came across this amazing 30 second cure for hiccups. I totally did not believe it but when I tried it, it worked like magic and my hiccups was gone. This must be the best cure that exist today. Here is how I did it:

Step 1 : Inhale air with your mouth until your lungs are full. Keep the air in there.

Step 2: Start swallowing. It is just the act of swallowing. You don't really have to be swallowing anything. Remember to still keep the air inside your lungs.

Step 3: Inhale some more air even though it is just a wee bit of air since your lungs are still full from step 1 and then do the swallowing thing again (repeat step 2).

Holding your breath alone does not seem to work well. You need to do the swallowing thing. Don't ask me why.

My hiccups was gone in less than 30 seconds just by using this method. This is the best method I have discovered in my 28 years of living! It was so good that I just had to blog about it.

The Fear of Something Specific is More Real than the Fear of Something General

As humans, we fear the specific more than the general.

I stumbled upon this thought while reading Al Gore's "Assault on Reason". In one of the chapters, he gave the example of how people would rather buy air travel insurance that covers specifically terrorist threats compared to just a normal air travel insurance (which by the way, also covers terrorist threats).

Somehow, it seems that people are more afraid when they know the specifics of what they have to be afraid of.

Air travel insurance.... No way... But air travel insurance that covers terrorist attacks...Now, that paints a picture in the mind of the consumer and the fear of this improbable event becomes more real (Remember September 11?).

The fear of something specific - something we can visualise - is often more real than the fear of something general.

That is why we see advertisements about critical illness insurance that mentions specific illnesses like cancer. Critical illness just seems too general and nobody really knows what critical illness means anyway. But highlight the specifics and you sort of create a visual image in the person's head. Let me show you 2 scenarios that helps bring out a person's fear when the specifics are highlighted.

Scenario #1

Insurance agent: Let me show you this plan which gives you coverage for critical illness.

Consumer: I don't think I need insurance. (Thinking in his head: What on Earth is critical illness?? Better not ask.. Later I look stupid)

Scenario #2

Insurance agent: Let me show you this plan which provides coverage against Cancer, Heart Attack, Stroke...

Consumer: Wah... okay..how much does it cost?

The above just highlights two simple scenarios. It could be the same insurance product that is being recommended but when one highlights the specifics (cancer, heart attack, stroke, etc), the fear suddenly becomes real. The insurance agent has painted a picture in the person's mind of a specific scenario that could happen to him in the future.

Funny isn't it? Our mind (and ears) sometimes do play funny tricks on us.

The author is really amused that humans often fear the specifics more than the general even though the general could include the specifics. (Hope that does not confuse you). However, he too finds himself falling into this trap.

4th Cheque from Google's Adsense

I received my 4th cheque from participating in Google's Adsense program.

It is not a lot really but still works out to be some"kopi lui" to keep me motivated to keep on blogging. Since people have been saying that I have been too transparent with my finances, I guess I won't reveal how much I got this time. All I will say is that it is the biggest cheque I have received thus far.

What I like about the cheque is that it seems to be mailed from all the way from the United States. The cheque is green in color and is very different from other personal cheques that I have received. On the cheque, everything is printed out. The best thing of course is the currency exchange rate. With the exchange rate now at 1US$ to 1.4S$, it works out to be quite a neat sum. Enough to eat a good meal =)

And in case you are thinking that this blog is making lots of money, it is not. It is some other site of mine that is actually raking in most of the money. Though I spend lots of time on this site, it still hasn't been that "productive" in that sense of the word.

NTUC I-Term Policy: The Cheapest in Singapore?

I was alerted by a reader of my blog that Aviva's SAF Group Term Policy might not be the cheapest around in Singapore. In fact, he pointed out that Philips Capital was selling some term insurance on its site. So I did a check and realised that he could be right afterall! The policy is actually called I-Term and is underwritten by NTUC Income and distributed by Philips Capital.

I had bought Aviva's SAF Group Term Policy some years back. Looking at the NTUC I-Term Policy now, I think that it is indeed a competitive product that might be much cheaper than other term policies around. Please do your own research as this is just based on my gut feel and opinion.

NTUC I-Term Policy

NTUC's term policy is a pure protection plan that provides coverage for death, total permanent disability and terminal illness. Terminal illness should not be confused with critical illness. Suicide is excluded for the first year of coverage. For TPD, the payouts are over a period of 5 years (10% for the 1st 4 years and the remaining 60% on the 5th year). This is pretty common amongst all insurance plans.

For a male of 30 years of age (non-smoker), a coverage of $100,000 will cost only $9 per month for a 5 year term and $13 per month for a 20 year term. As such, it does seem that the premiums are much lower than Aviva's SAF Group Term Policy! In addition, the premium rate is guaranteed for the term of the policy. That means that the premiums you will pay are guaranteed based on the number of years you are covering for yourself. Based on the website, you can choose between a 5 year up to a 35 year term of coverage (in increments of 5 years).

In fact, a Business Times article on August 2006 reported that I-Term was the cheapest term policy around then. I am not sure whether it is still the cheapest around in the market today.

No Minimum Entry age and Max Entry Age of 74yrs old (age last birthday)

I-Term has no minimum entry age. This means that a baby can be covered from as young as 1 year old. The maximum entry age is 74 yrs old.

A Quick Analysis

Based on first glance, I-Term indeed looks to be a value for money term insurance policy offering high coverage for low premiums. Unless someone corrects me, I would like to think that this is the cheapest term insurance I know of in the Singapore market today. Thanks to my reader for giving me the heads up on this cheap term insurance plan!

What I like about this plan is basically how it is competitively priced and how it offers a variety of terms for coverage. If I were to switch to this term insurance, I will most likely opt for the 35 year term coverage. In terms of monthly premiums, it might be cheaper than the SAF Group Term Policy that I have. In addition, it will be guaranteed renewable.

Aviva's SAF Group Term Policy provides rebates each year that help to make their term plans even more competitive when you take into account the rebates. For example, I have received this year's rebates of up to $100. So comparing premiums wise, it is a close fight between these two term plans. Nevertheless, I still think that for the benefits provided, the I-Term is rather competitive for its pricing. As my SAF Group Term Policy is lumped together with other critical illness and personal accident coverage, it is difficult for me to do an apple to apple comparison and decide whether it is truly worthwhile to switch plans at the moment.

If there is any NTUC income agent reading this blog, do let me know what the premiums are like for critical illness coverage and personal accident coverage. Who knows, I might even purchase the policy from you! =)