Financial Freedom SG

The former Fed Chairman Paul Volcker recently remarked that the only financial innovation to improve society since 1980s is the ATM.

After visiting the POSB bank with my wife after lunchtime, I tend to agree with him. The long snaking queues are a ever present reminder that customer service for banks is more hot air than real. For an organisation that is earning millions and whose CEOs are invariably multimillionaires if not billionaires and this is the best they can come up with?

At good restaurants, they provide you with seats to wait comfortably while the tables are being cleared. If not, places with longer queues and better services will take down you number and give you a call when you may have a table soon.

Is that too difficult for the banks? Or are they too busy trying to make another buck or two?

During the bank visit, I saw the old, the infirm and people who came in, saw the queue and walked away.

If not for the ATM, I guess the queues will be even longer. Or maybe there will be more customer service with there being more tellers.

Anyway, poor service is not just limited to banks. I had a problem with my telecom provider, Singtel, as my internet and home line were both down. I managed to resolve the issue through troubleshooting with the internet services helpline. But the home line helpline was still engaged after 30 minutes of fruitless waiting.

Worse, there isn’t any help guide online. If your organisation cannot be bothered to man the lines with enough people, the least you can do is to provide pdf guides or self help FAQs to customers encountering problems.

The only thing that these organisations are interested in is to get more new customers, not servicing the old customers they already have.

If we are brave enough to invest in such companies, we should put aside a bigger margin of safety in case these companies take a big hit from their lack of customer service.

Do you have any pet peeves that you have regarding the lack of customer service encountered?

I read this article by Bad Money Advice’s Frank Curmudgeon about “The Truth About Mortgages” and I agree with what he says about stretching your housing loan to the maximum.

Whether you live in United States or here in tiny Singapore, the conclusion is the same.

If you borrow it at 2.6% for the HDB home loan here in Singapore or 2.48% after taxes in Frank Curmudgeon’s case, it will be possible to get a return higher than that low base rate. Just last year, my dividend returns on just the shares and ETFs were 2.2%. That’s not counting the returns for unit trust nor the returns from last year. If I had panicked and took out all my investment at the start of 2009 and ploughed it all back to my housing payment, I would be much worse off today.

And the fact of the matter is that there are investors out there who’s return are even better than mine. A fellow investment blogger, Musicwhiz, has dividends returns north of 3% and a very solid portfolio.

The question is then, are you prepared to change your mindset and weigh the pros and cons of paying off a housing loan later rather than earlier?

If you need further persuasion, an earlier article of mine, “Early House Repayment or Invest the Sum” will give you more food for thought. And if you have gotten this far in this article, you should go and do the sums for yourself to decide what your own position is.

Sometimes, investing needs you to do a fair bit of calculations and “what if ” scenarios to decide what is the best option for yourself. Paraphrasing what Gandalf said in Lord of the Rings, “All you have to decide is what to do with the money that is earned by you”

Saw a quotation in a book that I identified with strongly:

We think we can count everything. We can count everything, except what’s important. We can’t count integrity, we can’t count loyalty, we can’t count character.

John C Bogle – Investment Legends that Leads to Wealth

Been reading this book by Barrie Dunstan about Investment Legends: The Wisdom that Leads to Wealth (Financial Review) and have read about Peter Bernstein, Barton Biggs and John Bogle. The thing about reading about people like them is to realise that when even people like them keep learning and are humble about it, what more an ordinary investor like me?

Investing is a funny business. You need to know something so that you are not suckered into a fools’ game, trading positions on a daily or regular basis, contra without the basis to cover your position, putting all your money into one stock etc. At the same time, the more you know, the more you realise you don’t really know.

Another investor legend, Barton Biggs, is “essentially someone who looks at investors’ big picture asset allocations, rather than picking individual stocks. He appears to approach this task like a sponge, building a base of knowledge, talking to people, reading various information sources before getting a feeling that a market is attractive”.

If an investor who has managed billions and is still managing these billions thinks like that, and is eager to learn more, what more a mere ordinary investor like me?

And still the same Mr Biggs has this to say “This book (Hedgehogging by Barton Biggs) is not a how –to primer. There are no enduring answers about how to invest successfully in these pages because I have none.”

I find such humble attitude and eagerness to learn more endearing. I like that a lot better than those who try to preach and have a know it all attitude.

So the next time someone comes up to you and say buy this or sell that, listen politely, learn more and find out more instead of blindly following.

Before I go, I have to explain the photo above. It was taken by my brother-in-law as we were taking a taxi to visit my grandmother in Yishun. The sun was setting and we saw the most amazing sunset that I have ever seen. I didn’t bring my DSLR, my brother-in-law did.

Which investment book do you find the most useful to you thus far?