This person called Ronald and told me he got my info from SIM and wanted to meet up. I was inquisitive and went to meet him during my lunch break at work. Then he started talking about blah blah products and stuff and he is in his 20s... should have known he was too young... I naively bought this insurance which he claimed can give a minimun of 5% return every year and I asked whether i can get my principal sum back when i need the money for emergency and he was like sure of course no problem.
Then, he passed me this package one week later and I just chucked it aside. I bought this so fast and didnt even consult anyone about it. I realised eventually it was actually an investment linked product. By then, it was too late to cancel, because the refund was only valid for 7 working days and this is long over. I regret not checking up more about it on the internet or asking around and didnt even consult aaron on this before signing on. I read through the package during work after a month and realised that my money is in this indian china fund thingy and worse still, only 15% of my money is invested in the first year and 85% goes to admin fees.
By then it was too late for a termination for a full refund.
The package states that from year 2 onwards 50% will be invested and from year 4 then only 100% is invested. I called up xxx insurance company, and check up on how much i can get if i terminate it now. I put in $1907.28 in July 2010 and guess what, if i were to terminate it now in Feb 2011, the grand total i will get back is $203 only! seriously! no kidding, double checked with xxx somemore. The rest had gone to xxx's agent and his agency. I cannot blame him, I was too naive, but then again, he is not ethical! He told me that of course i can get back my principal if i were to need money for my education. WTH! And worse still, i stupidly believed him! Morale of the story, this is a cruel business world.
Ok, i have to call up and check in June 2011 before my next premium and see how much i can get back and should i just cut loss or carry on this mistake for about 20 plus years?
Lets view the below simplistic calculations- assumption is i am using simple interest rates of 5% p.a for inflation instead of compounding effect becos me too lazy to calculate haha
if i were to terminate it on june 2011 assuming that the amount i can get back is $350
my net loss will be
[(1907.28×1.05-350)÷1907.28]×100%=86.6% loss
if i were to terminate it 5 years later in 2015 the minimum amount i get is $3400. In 5 years i would have put in $1907.28×5=$9536.40 and with simple interest rate of 5% annually i would have put in 5 years is about $11920.50. My net loss would be
[(11920.50-3400)÷11920.50]×100%= 71.5% loss
if i were to terminate it 20 years later in 2020 the minimum amount i get is $40700. In 20 years i would have put in $1907.28×20=$38145.60 and with simple interest rate of 5% annually i would have put in 20 years is about $76291.20. My net loss would be
if i were to terminate it 20 years later in 2020 the minimum amount i get is $40700. In 20 years i would have put in $1907.28×20=$38145.60 and with simple interest rate of 5% annually i would have put in 20 years is about $76291.20. My net loss would be
[(76291.20-40700)÷76291.20]×100%= 46.65% loss
ok, i know this is stupid to continue calculation further, the loss will probably decrease but! the catch is, its still a loss! oh my tien...hoping that china and india will have some kind of extraordinary boom and so i can at least get back $500 to cut my loss by June 2011... four months to go...
ok, treat this as a lesson ba, so glad i mentioned to tell aaron my gold purchase in late July (this was about 2 weeks after the insurance thing) before it was confirmed and so didnt continue on another mistake which is even more costly thanks for his assistance bcos of the email he sent me. From then on, i had this phobia of investing, i have not invested in any shares or anything else other than the occassional toto when the prize ballooned to $1million or big sweeps once in a while hehe. Knowing about what you are buying is very important be it just a shirt, investing, car or house.
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