Many retirees struggle with gambling addiction. It may be possible to solve this problem with estate planning.
In an article, The addiction trap” written by Straits Times’ Senior Correspondent Radha Basu dated 29 August 2009 describes her conversation with a wife of a gambling addict seeking treatment in Institute of Mental Health (IMH).
According to the report, Radha Basu wrote “I met a dynamic and courageous woman who juggled two jobs to support herself and her husband, while he stole her jewellery and cleaned out her bank account twice to feed his gambling addiction.”
I append the report at the end of this blog in case the link is removed.
I salute this lady for juggling between jobs despite her husband robbing her jewellery and sucking out her bank account not once – but twice. I am unsure whether do they have children and if so, I feel sadden for their children too. I hope her husband has responded well to the IMH’s treatment.
According to the article, “Singapore Council Aims To Defeat Gambling Addiction”, the government found in 2008 survey that 54% of Singapore residents above 18 had participated in some form of gambling from the previous 12 months of which 0.7% to 1.6% are “pathological gamblers.” This means there is a 0.378% to 0.864% probability that you, me or your parents of being a compulsive gambler. This percentage may appear small but I suspect that it is not uniformly distributed across age groups. I don’t have hard data but I do know of retirees who out of boredom would spend their time gambling.
Gambling can be the traditional gambling like TOTO, horse racing, etc. But gambling can also be in the name of “investing” such as forex trading, CFDs, stock trading, etc. In the past, it was common to see retirees sitting in front of the Shenton Way’s TV for the whole day looking at stock price movements. What are they really doing? Obviously they are gambling as investing in stock do not require monitoring of prices on a continuous basis. These days with the Internet, this takes place at home in front of the computer.
I also know of many retirees who will take cruises to international waters to gamble. Also quite common is to make a trip to Genting and visit the casino. Moreover, it comes with free hotel stay. The casino is quite smart. They will give out a number of rooms for free hotel stay. However, it is not possible to encash the free rooms stay. In order to fully take advantage of the free stay before its expiry for so many rooms, the one who has the free gift vouchers would persuade other friends and relatives to join the trip to Genting. Many others will join in since it is free. Of course when they are there, they just need to take a few minutes trip down to visit the casino. By doing this, the casino uses what we call viral marketing in which one lead can bring many other leads who in turn will bring many other leads.
Maybe Singapore has become desperate for business as our economy struggle to find its competition edge in the global market. Many manufacturers have moved to low cost countries and its constant drive to improve its technological intensive industry appears to be just importing foreigners of whom some don’t even want to serve national service. All I hear is the constant slogan that workers in Singapore must do things “faster, cheaper and better.” Aiyo, this reminds of me of putting the sugar cane under the sugar cane machine to suck more sugar cane juice. I guess now that Singapore has no competitive edge, it decided to permit two gambling dens to open in Singapore. My first blog post was actually related to this topic about casino. In the first article HERE, I wrote that I am against setting up two gambling dens in Singapore. But of course, my opinion, together with 99% of the Singaporeans, is not relevant anyway.
Now that the first gambling den has been awarded with the gambling den license, what’s next? All hell broke loose is coming. Why do I say that? If you look at the TV advertisement, it keep on talking about the ill effects of gambling addiction. It is now really an advert going on high on hypermode to tell people how dangerous gambling addiction is. It is obvious that gambling addiction is and will become a very serious social problem. It will cost $$ tax payer money (implies: GST, ERP, Property Tax, etc going up). It will cost pain in the family. It will cost not one, not two, but many thousands of bank accounts belonging to wife and children being sucked dry like a sugar cane machine by husbands who have found a new mistress at the gambling den. Maybe your husband will marry the One-Arm Bandit. But if One-Arm Bandit is not seductive enough, maybe the Black Jack is more sexy. Actually husbands will end up in polygamy marriage because they just need to pay $100 entrance fee to have a night with Black Jack, One-Arm Bandit and the Roulette simultaneously and at the same time sucking dry the bank accounts and their family to support their polygamous lifestyle. Surely there is always $100 from the children’s ang-pao money to pay for the entrance fee right? (BTW, someone is insulting the net worth of gamblers by imposing the $100 entrance fee as a deterrent! Gamblers are high net worth because they have access to so many bank accounts – nevermind these do not belong to them. Also gamblers can leverage and go on margin by borrowing from loan sharks.)
It is now 936 words so far. What has this to do with this blog? As a financial planner, I teach and coach people how to accumulate their wealth, preserve their wealth and distribute their wealth to intended recipients. Financial planning is now become more acute as problems in society escalate. Not only is people not earning enough to retire, constantly being harassed to buy wasteful insurance but now subjected to the temptation of gambling. Because gambling is a zero-sum game, it is always a lose-win situation in which the House must win on a long-run. Some of the so-called investment is none other than gambling in reality. But with the casinos on shore, it does take any effort to just visit the gambling dens. In the past, traveling to Genting can be quite a hassle especially that long and winding road up hill. Old retirees may not feel fit enough to travel up the hill. Now there is no hill to travel up. Just take a taxi or bus because the casinos are on-shore.
I had a discussion with a semi-retiree individual. He mentioned that estate planning at his age for husband and wife is simple. Just write a Will and give assets to each other. I told him that the Will is valid but practically useless. His wife will not receive the assets from him. He looked at me and said WHY? I told him that many retirees out of boredom will end up gambling to past time. So the assets he is going to give her could end up being squandered away at the casinos. Suddenly he realized that it appears that things are not as straight forward as it looks. I also mentioned that if her bank account suddenly increase by $x00,000 from inheritance, surely her financial advisers and bank salespersons will be constantly be prospecting her to by the latest toxic assets, hot funds and gambling products like dual-currencies and other exotics. It also occurred to him that he could end up having squandering his own wealth during the retirement years. Of course, I have solutions to solve all such problems to prevent squandering of inheritance or own assets. Similarly, for children who want to ensure their own aged parents have sufficient to money for their retirement should the children pass away should seriously consider whether is it feasible to give them a lump sum as inheritance. It may be unwise to do that due to the potential gambling problems mentioned above. Of course, I got a simple solution for it and it will not cost more than a sugar cane drink.
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