167 Endowment Plan of a friend (cont.) 朋友的储蓄保单（续）

 167 Endowment Plan of a friend (cont.) 朋友的储蓄保单（续）

 My last post talked about my friend's endowment policy, where I asked him to find out how many they waited before maturity value paid out.

He managed to find the policy, snap shot a few pages to me. I calculated the rate of return, replied him, but he is a bit sad.

So the premium paying period for the endowment policy is 20 years. At the end of 20 years, there will be a maturity value. In the first 20 years, annual premium was RM1332, maturity value is RM34019。

Internal rate of return is 2.27%, as shown below.

Reverse calculate to check whether 2.27% counted by spreadsheet is correct or wrong. (Exact interest rate should be 2.2717%)

My friend is sad because the internal rate of return is even lower than FD rate. Past 25 years FD rate in Malaysia are as below. (Individual banks may have launched better rates, but I don't have any data.)

If the premium had been put in FD, how much will the difference be? (Individual banks may have launched better rates, but since I don't have any data, I rely on data in above table.)

It turns out the difference is a meagre RM1500!

On hindsight, my friend thinks he might as well put the money in bond fund to make more money. He said if bond funds can returned 5.5% per annum, it will be RM49012 after 20 years. Then it will be a difference of RM15000. 

Well, what can we derived?

1. Insurance or savings or investment are different products. If that product is deemed to be suitable for buyer during buying time, it is the the best product. No point regretting later.
2. Since insurance or savings or investment are different products, they should be complementing each other, not competing. If something bad happened, insurance came to rescue. When nothing happened, investment plays its role.
3. When the investment horizon can be as long as 20, 30 years, too small an investment amount won't create jaw dropping total sum. In the early stage, the investment amount can be small, but as salary increase, so must the investment value. Just think of our EPF, who didn't start with twenty thirty fifty bucks, then proceed to a hundred, two hundred, three hundred and so on until it become a huge amount because of compounding interest.
4. When the investment horizon can be as long as 20, 30 years, investing in a too conservative tool is a waste of time. At the very least, one can create a portfolio of high and low risk products, to increase the rate of return. We can see the difference of 3% and 5.5% from the above discussion.

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上一篇说到朋友的储蓄保单，就是要他去问清楚还完供期后等了多少年才拿到最终价值。

他把保单给找了出来，拍了几张照片给我看。把回酬率算了一算，告诉了他，不想朋友有点儿伤心了。

原来该储蓄保单总共要还20年，第20年到期后可以拿到最终价值。头20年，每年的保费是RM1332。最终拿到的最终价值为RM34019。

回酬率2.27%，如下。

反向试算2.27%利率对或错。（切确是2.2717%）。

朋友伤心是因为回酬率少过定期存款利率。马来西亚过去25年的定期存款利率如下图。（个别银行可能曾推出更加优惠的利率，我没有资料。）

那如果那些年的那些钱放在定期存款，结果差别多少呢？（个别银行可能曾推出更加优惠的利率，我没有资料，就只能用以上的资料试算。）

咦，差别竟然只有RM1500！

朋友觉得要是早知道，倒不如就投资于债券型基金，可以拿到更高的总额。他说如果债券型基金有5.5%的回酬率，那20年就有RM49012。如此就有RM15000的差别了。

到此可以怎样说呢？

1. 保险、储蓄、投资是不同的产品。在那个时候某个产品适合买者的需要，那个产品就是当下最适合的产品。事后不要再懊悔了。
2. 保险、储蓄、投资既然是不同的产品。应该成为互补，而非有我没他。万一发生什么事时，保险发挥功能。而如果没事发生，投资发挥功能。
3. 当投资年限可以跨度20、30年，太小的投资金额就创造不出称羡的总额。因此，初期金额可以小，但随着薪水的增加，宜适度增加投资金额以期创造更大的总数。就想我们的公积金啊，谁不是刚开始时几十块钱几十块钱，然后慢慢变一百、两百、三百，又利滚利的越来越多。
4. 当投资年限可以跨度20、30年，仅投资太过保守的投资标的，太可惜了。至少至少也应该有一个高低风险搭配的组合，适度提高投资报酬率。以上可以看到3%跟5.5%的差别。

166 Endowment Plan of a friend 朋友的储蓄保单

 166 Endowment Plan of a friend 朋友的储蓄保单

Last week, my friend said his son's endowment plan (bought by his wife) is going to mature, and they are going to get a sum of money. So, he is curious about the interest (rate of return).

The payment period period for that endowment plan is 12 years, each payment was RM1,585. The maturity value is RM34,019.

And I asked him, after paying for 12 years, how many years did they waited till maturity? He is not sure, he thought they can get the maturity value on the 13th year. I am a bit skeptical, so I asked him to check with his wife again. Till now, he has not reply to me.

OK, we can do some simulation to see the rate of return using different maturity period. I use a spreadsheet, key in 12 lines of -1585 (payment, duit keluar) plus a line of 34019 (receiving, duit masuk). The maturity value (34019), I placed in different different years. Then I use IRR function to calculate the internal rate of return. As below.

We can see the IRR is between 3.34%~8.67.

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上个星期，朋友说他的太太为孩子买的储蓄保单到期了，有得拿一笔钱了。那他很想知道这份储蓄保单的利息（回抽率）到底有多少。

他说该储蓄保单一共要还12年，每期RM1,585。到期可以拿到RM34,019。

那我问他还了12年后，等了多少年才到期呢？他也不知道，还以为第13年就到期领钱了。我有点儿质疑，要他跟他太太询问清楚。这是因为第几年到期就决定了回抽率。只是到今天他还没有给我答案啦。

那好，我们可以做几个推算，依不同的到期年来看看回酬率多寡。我用 spreadsheet ，输入 12 行的 -1585 （还款，钱飞出去）再加一行的 34019 （收到钱，钱飞进来）。到期日的数目 (34019)，我把它放在不同的年份借此试算出内部回酬率 (internal rate of return)。看下图。

所以回酬率介于3.34%~8.67%之间。

105 Convert cash into cash flow - endowment plans & annuity scheme

Convert cash into cash flow - endowment plans & annuity scheme	把现金换成现金流-储蓄保险计划、年金计划
I always get asked about endowment plans. Normally the person who asked are confused because he was told the returns to be very high. After all, they are selling like hot cake especially during uncertain market condition.	我常常被问到关于储蓄保险计划。通常问的人都是因为听说回酬非常高而感到困惑。这类产品的确是销量俊俏，尤其是股市不好的时候。
I always view endowment plans as a great product to convert cash into much needed cash flow, with some decent rate of return. Another similar product is annuity scheme.	对我而言储蓄保险计划确实把现金转换成现金流的好工具。当然也提供一些些的回酬。另外一个相似的工具就是年金计划。
Since they are all insurance products, purchasers need to understand the payment period, and never miss it. Next is he has to justify his need to take up such products.	这两者皆是保险产品，因此买家必须明了付款期限，不能不还。他也必须了解他是否需要这类产品。
Cash flow is important	现金流很重要
Poor cash flow is miserable. Interestingly, this can happen to both the low income as well as the cash rich.	差劲的现金流会很恼人的。有趣的是，不管高低收入人士都有可能陷入现金流难题里边。
For the poor, one the bills are coming in on time while the income is always late, the anxiety is imaginable. Impulsive or unplanned spending could be the culprit. So, instead of spending, try channeling some money into annuity scheme to provide guarantee income during retirement.	相对贫穷的人面对“账单总是准时，收入总是迟迟”，焦虑自是不带而言的。罪魁祸首可能是冲动式消费或无预算式消费。所以与其消费，不妨把现金转入年金计划来使到退休时有固定收入吧。
Stocking too much cash in low yielding instruments, like in FD etc, can also make someone poor. He may not dare to use the money because he will worry the money will outlast him. Placing his money in some instrument that guarantees a future payment helps.	存放太多现金于低收益工具如定期存款也会让人变得贫穷。这使到拥有着不敢使用金钱因为恐怕金钱会无以为继。把金钱放入某些保证收入的工具将有所助益。
So, the poor and the rich could face similar problems. Releasing cash to generate cash flow is something like buying a house to collect rental income. Cash in FD is nice to see. Regular rental income will let one better plan his life and spending.	或富或穷都会面对同样问题。分配部分金钱来促进现金流就如买了屋子收租一样。定期存款开起来很爽，但稳定租金收入让人更好规划人生以及花费，不是吗？
But buying a house requires some skills and capital. Strategic locations that can fetch good rental could be selling at a premium price now. Thus the rental yield may not look so attractive.	话虽如此，买楼终究需要一些技巧及资金。策略性地点确是可以收到更好的租金但房价可能处于高位。租金收益率就变得不是很高了。
Financial products such as endowment plans and annuity scheme can serve as alternatives. Most of them gives annual guaranteed payment, some monthly.	储蓄保险计划以及年金计划这类的保险产品就成了替代产品。它们多有提供保证式固定年度派款，有些甚至于是每月派款。
Free of choices	选择多元化
Financial planning firm, like Phillip Wealth Planners, worked with many local and offshore insurance companies to provide such products.	理财公司如Phillip Wealth Planners与多家本地以及离岸保险公司提供这类产品。
Once we understand clients' needs, we will look for the products that can match. We can provide in different currencies, premium payment years, annuity payment term and amount etc.	当我们了解顾客的需要后，我们才来寻找适合的产品来匹配。我们可以匹配不同货币，不同付款期限，不同派款期限与款额等等等。
Now one might not only depends on local currency to retire. Their children could be living in Australia or US or UK. Having some cash flow in USD / EUR will certainly be helpful.	一位顾客可能不仅靠本国货币来退休。他们的子女可能住在澳洲、美国或英国。拥有当国货币将会挺管用的。
In terms of premium payment term, it can be 5, 6, 10, 15 years or even a lump sum payment. Payout can start as soon as a year later or 5, 10 years later.	付款期限可以是五、六、10或15年.甚至于单笔付款。派款期限可以是下一年或5年、10年后。
Conclusion	选择多元化
Most importantly, we want clients to feel at ease once a part of their future income will be delivered to their doorstep at the desired time, regardless of market situation.	我们要让顾客放心，就是无论经济市场是否刮风下雨，他所需要的收入将准时送达。
You are welcomed to discuss by sending email to sateo7689@yahoo.com	欢迎电邮至sateo7689@yahoo.com赐教。