Thursday, October 27, 2016

Why Online Gambling Is More Dangerous Than Going To A Casino

(, Singapore's leading personal finance comparison platform, provides free and easily accessible resources such as its up-to-date credit card product page and the latest personal loan packages available in real-time.)

If you have friends or relatives in Singapore who are addicted to online gambling, keep them offline before they lose everything they have. Gambling is gambling, whether it’s on the internet or not, right? In reality, there’s a big difference between the two. Remember that the internet provides a dimension of convenience, which can actually make things worse for problem gamblers. If you have friends or relatives in Singapore with such an addiction, here’s why you might want to keep them offline:
How Does the Internet Make Online Gambling More Dangerous?
There are seven main ways the internet affects gambling:
    It reduces the sting of loss
    It makes it possible to gamble at any time
    It extends gambling time
    It removes distance barriers
    It makes it possible to play multiple games at once
    It adds further gamification elements
    It makes gambling more addictive
1. It Reduces the Sting of Loss
One of the reasons casinos use chips instead of cash (apart from security concerns) is that it reduces the sting of loss. When we have to physically take money and give it to someone else, there is more psychological pain. Having to do that often could deter us from further gambling. Going online creates a further level of abstraction: the gambler doesn’t have to physically handle any kind of currency, not even chips. With the pain of loss diminished, gamblers are more willing to keep gambling, even when they’ve lost huge sums.
2. It Makes It Possible to Gamble Anytime
With physical gambling, one needs to set a time and place to meet. The other gamblers need to be available, and there must be a banker. With online gambling, none of this is necessary – a gambler just pulls out a smartphone, and can start placing bets right away. Needless to say, this results in even more gambling.
3. It Extends Gambling Time
Because online gambling is 24/7, there is never a need to stop. Much like in a professional casino, there is always a game going on somewhere; at the very least, they can go to a different gambling website. Coupled with the fact that it can be done from the comfort of home, this means longer gambling hours. This creates greater opportunities to lose money, because in most forms of gambling, the longer you play the more likely you are to lose. This also has a negative lifestyle impact, in the form of fatigue from sleepless nights, and bad health from being too sedentary.
4. It Removes Distance Barriers
Online gambling can take place anywhere. Gamblers can place bets while they are on the bus or train, or in the comfort of their own home. There isn’t even a queue at the 4D stand to deter them anymore. This convenience encourages them to gamble even more. For games such as live Poker (it is illegal to do this online in Singapore, but it still happens), the lack of distance means there is a constant pool of players. The gambler never runs out people to gamble with.
5. It Makes Multiple Games Possible
If it’s buying the lottery, an online gambler is more inclined to play a wide range of lotteries, rather than just one. This can happen at a physical stand as well of course, but it is much easier to do when just tapping around on your phone. For card games, gamblers may be able to join more than one room, and take part in multiple games. That does mean a chance to lose even more cash.
6. It Has More Gamification Elements
Some gambling sites add perks on top of just the games. For example, there may be a cash prize for the biggest winner of the day, or free chips for anyone who logs a certain number of hours. This is an added dimension of temptation.
7. It Makes Gambling More Addictive
Some gambling sites send newsletters or push notifications about the next game, current first prize amount, etc. If these notifications are always popping up on a gambler’s phone or computer, it can make quitting much harder. At least with physical gambling, just staying away from a certain place or group of people is enough.
It’s Harder to Stop Online Gambling
Despite the Singapore government’s attempts to regulate it, people still find ways to gamble online. The internet is meant to be porous after all, so there’s only so much that can be done to censor and ban such sites. The best thing to do, if you know a gambling addict, is to take them offline for a time.

Sunday, October 23, 2016

4 Awful Money Scams Singaporeans Keep Falling For

(, Singapore's leading personal finance comparison platform, provides free and easily accessible resources such as its up-to-date credit card product page and the latest personal loan packages available in real-time.)

If it’s too good to be true, it probably is. Protect your savings and watch out for these money scams in Singapore. We can all be thankful that Singapore is low on crime. It’s unlikely that someone will pick your pocket or rob you with a knife. But that doesn’t mean we lack criminal elements. Crooks in Singapore are simply smarter, and they know what makes us tick. Here are the common scams in Singapore today, and why smart Singaporeans fall for them.
Scam 1: Internet Love Scams
According to the Singapore Police Force, internet love scams have almost doubled (98.7 per cent increase) between 2015 and 2016. We’ve gone from 150 reported cases in January to June 2015, to 298 reported cases in the same period for 2016. In an Internet love scam, a stranger forges an intimate relationship with you online. They then offer promises of sex, or a visit, or ask for financial help due to personal problems. This leads to the scammer asking you to transmit money to them, often in the form of gift cards (gift cards such as Alipay cards or iTunes cards are the preferred medium, as it is harder to trace where the money goes without a bank transaction). The biggest reported loss was by a 58-year-old woman, who transferred a jaw-dropping S$1.2 million to a scammer. The scammer had convinced her he was wealthy and wanted to invest S$6.8 million in Singapore, but his funds had been “impounded” in Malaysia.
Why Do Singaporeans Fall For This?
Quite often, the victims do have a suspicion that they are being scammed. They willingly choose to suspend that instinct, however, on the hope that they may be wrong. This isn’t “stupid” or “weird” at all: even in real relationships, people stay on despite knowing that their partner cheats, is abusive, is not sincerely concerned about them, and so on. The victims are too emotionally invested to quit. In the case of sham prostitution (the scammer just offers sex), the victims expect clandestine transactions because such arrangements are illegal. So they don’t question the odd requests. They are also too embarrassed to ask for help later and could become blackmail targets. If they want to try and cancel the deal, for example, the scammer can simply threaten to expose them.
Scam 2: Online Shopping Scams
This should be a thing of the past, given the layers of security involved in online shopping (and peer reviews). The problem is, a number of Singaporeans still shop on unverified or dubious websites. The other half of the problem involves auction sites, such as eBay or Carousell. Despite the site administrators’ best efforts, scammers will always be trying to use the system. The promise of anonymity (and lack of legal consequences) is too tempting for crooks. In some cases, victims click on an ad that promises free iPads, laptops, vacation tickets, etc. for “filling in a survey”. Once they “win”, all they need to do is pay for shipping.
And then pay for tax.
And then they find out it’s a one-for-one deal, so while one iPad is free, they need to pay for the other one. It just keeps dragging on, payment after payment, while nothing arrives. For auction sites, it can be hard to distinguish between a true scam and a dispute. Sometimes, when items are not what they expect, it prompts the buyer to launch a police report against the seller. However, there are also outright scammers on auction sites. In May this year, a group of Singaporeans teamed up to take down rogue accounts on Carousell. Most of the scammers simply didn’t mail the goods after taking the money.
Why Do Singaporeans Fall For This?
For the people lured by fake ads, it is simple sunk cost fallacy. Once they have paid a few hundred dollars for two or three transactions, it seems a waste to stop paying. So they allow losses to accumulate, before they finally give up. For auction site scams, it’s because most of the time transactions are safe. This lulls the users into a false sense of security. While they may be smart online shoppers, they may still get lazy eventually, and not want to take steps like physically meeting the seller to exchange cash.
Scam 3: Free Algorithm Trading
Algorithmic trading is a real thing. This is when computers run applications that track price movements, and buy and sell according to programmed parameters. Large banks and funds use them all the time. Needless to say, the workings behind such an algorithm are top secret. They are money making machines, which financial institutions may spend millions to develop or buy. But you can get one for free off the internet! Just run it on your computer, and it will trade for you. This gives you the same incredible advantage that financial institutions fork out tons of money for! Obviously, it doesn’t work. The free algorithm does have a cost: the scammers that gives it to you will want a small cut of any winning trade. To use an analogy, this is like allowing someone to play jackpot with your money. Whenever they win, they take a small cut of it. Whenever they lose, it’s your money. The algorithms are often nonsensical, and do nothing but make random frequent trades. Out of 100, at least six or seven might win by luck and make the scammer some money. You, on the other hand, will probably find your account run to the ground.
Why Do Singaporeans Fall For This?
It sounds clever, and the victims can tell their friends they are engaged in algorithmic trading. In some cases, the victims may also be spurred on by a temporary lucky streak. To those who are not financially savvy, they may think “free” means a total lack of cost. They think that, since a cut is only taken on a win, they are “not paying anything”.
Scam 4: Exotic and Unregulated Investments
Recently, 20 Singaporeans just lost S$1 million in an investment scam, which involved sports betting. Earlier in the year, we heard about investments in Aquilaria trees that went sour. Go back even further, and we can see gold buyback schemes got a lot of attention. These unregulated investments are sometimes outright scams, and sometimes due to someone having a plan that doesn’t work out. Either way, it boils down to the same thing: someone wants to a run a risky business, but they want to do it with your money. Put it this way: if you want to set up a business tomorrow, it’s safer to convince investors to give you the money you need (you can also pay yourself a salary out of their funds), than to mortgage your house and start one.
Why Do Singaporeans Fall For This?
The first batch of investors often do get paid. Most often, a ponzi structure is used, in which money from the second batch of investors is used to pay off the first. Now because the first batch of investors sees the investment is “working”, they will attest to it and rope others in to join them. Even smart people can be drawn in, when they receive word of mouth proof from a friend or relative. As for the original investors, many will double down. If you find an investment that really does seem to work, chance are you’ll invest twice as much at the next opportunity.

Thursday, October 20, 2016

Why Is A Low Inflation Rate Bad For Singapore?

(, Singapore's leading personal finance comparison platform, provides free and easily accessible resources such as its up-to-date credit card product page and the latest personal loan packages available in real-time.)

Simply put, low inflation means the cost of living in Singapore isn’t rising as quickly. But it also poses its own set of problems for the Singaporean economy. At Explains the News, we use plain English to explain what’s happening in the economy and what it means for ordinary Singaporeans. Surveys show Singaporeans are expecting a further bout of low inflation in 2016. The expectations follow on the back of a long period of falling consumer prices, with last July marking 21 consecutive months of negative inflation. What does this mean, and why is the low inflation rate in Singapore a problem?
What is Low Inflation?
Inflation refers to the rising cost of living. It is commonly measured in two ways. The first is to use the Consumer Price Index (CPI), which tracks the movement of prices in a basket of goods (e.g. Housing, transport, food, and so forth). The other way is to use core inflation, which excludes the cost of private housing and transport (this method reasons that Singaporeans don’t need private housing and transport). Without going into too much technical detail, inflation in Singapore has slowed. It is at the lowest point in 30 years. This means that, while our cost of living is still rising, the speed at which it rises has slowed. When it comes to inflation, think of it as a tightrope: you can’t lean too far to either side. Inflation that is too high is bad, but inflation that is too low poses its own problems, which we’ll explain in a minute. The central bank of each country (the Monetary Authority of Singapore in our case) will usually aim to achieve a given inflation rate, which is specific to the country’s needs. One way of doing this is pumping more money into the economy, or encouraging low interest rates. This targets inflation rate is usually between two to three per cent for developed countries.
Okay, Why is This Not a Good Thing?
The problems with low inflation are:
    It could reflect a weak economy
    Over a prolonged period, it can lead to a deflationary price spiral
    It is bad for Singaporeans who are in debt
1. It Could Reflect a Weak Economy
This isn’t always a direct connection, but low inflation often coincides with economic weakness. For example, notice that current low inflation goes hand in hand with a drastic slump in Singapore’s exports and manufacturing, and a recent spate of layoffs. As the economy worsens, people get nervous and they begin to spend less. They buy smaller houses, skip on the idea of buying a car, go on cheaper vacations, etc. This lack of spending means various businesses struggle to expand, or see shrinking profit margins. Now, when no one is buying anything, what’s the point of maximising factory output? Or hiring more staff? For Singaporeans who are jobless, or who are in low-income positions, low inflation is nothing to be too happy about. Sure, it means things will be a little cheaper for them; but it also means they have fewer chances of finding a well-paying job. There’s an old – and accurate – saying that when no one’s buying, no one’s hiring either.
2. It Can Lead to a Deflationary Price Spiral
A deflationary price spiral is an economy destroying effect, in which prices start to fall uncontrollably. It starts with everyone refusing to spend for some reason (perhaps there’s economic uncertainty). Businesses can’t make money with no customers, so they shrink or close down. This mean laying off workers. As more people get laid-off, the available purchasing power falls even more. People with no jobs can’t afford to spend; and when you see everyone losing their jobs, you might decide to hoard your money even if you are employed. This leads to even more businesses closing, and more people getting fired. At a certain point, the cost of goods will start to fall regularly. People will then be even more inclined to wait, because (1) the longer they wait, they cheaper things will get, and (2) they are too terrified of the collapsing economy to spend, even if things are cheap. Eventually, the result will be mass unemployment and poverty. Central banks have nightmares about deflation, and are very sensitive about it. This is why the Bank of Japan and European Central Bank have imposed negative interest rates: they have started to charge banks money for holding large deposits. This is to force banks to give out as many cheap loans as possible, to promote spending that gets the economy back in gear. Singapore is still far from such a position. Nonetheless, we might see our banks being encouraged to continue providing low interest loans.
3. It Is Bad for Singaporeans Who Are in Debt
Some amount of inflation is always good for people who are in debt. This is because the inflation rate, to some degree, offsets the interest rate on a debt. A simple example: a S$100 debt would have been a big deal in 1940, but it would be considered trivial today. That’s inflation at work. The higher inflation is, and the more money there is sloshing around in the economy (high inflation and high money supply tend to go hand-in-hand), the easier it gets to repay your debts. For people who are currently in serious debt issues, the low inflation environment doesn’t help them much.
What Can We Do About It?
Not much, as this is due to wider economic factors in the world (like cheap oil, for instance). Just enjoy the fact that the cost living is not going up as quickly anymore. Maybe even take that vacation now, while it’s still affordable.


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