Me & My Money Series (Sunday Times)

[KopiKat]

I feel monthly planning is sufficient, unless you have looming big ticket items. Also wondering about the $250,000 they sunk into Perkies - did that come from the purchase/sale of their investment property or through investment in shares and other businesses? They seemed to have got the timing exactly right and made a very good profit from it! But sad to learn of their substantial loss investing in US shares before the sub-prime crisis hit. They seem to be more motivated by share price movements rather than business fundamentals.

Ms Tan recently realised her dream when she founded a snack kiosk Perkies .. pumped in $250,000 of their own money to start the business..
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My husband and I used to set aside about $7,000 to $10,000 a quarter for our investments but have cut it to $1,000 to $2,000 a quarter since a year ago to prepare for our business.
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We lost US$21,000 (S$26,000) in all. We should have let them go when they fell below the safety point that my husband had set.
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My 16th-floor, 103 sq m resale four-room HDB flat in Pasir Ris.

We bought it for $258,000 about five years ago and sold it for $490,000 last September, including a cash-over-valuation sum of $85,000.

The $250k most likely came from the profits from selling their HDB resale flat + savings. They'd lost $$ on Stocks, unlikely they're good at it since no mention of any profits. Also, setting cut-loss levels usually means they're either into stocks they don't fully understand / don't bother to research or they're just traders. No mention of investments into other biz (not much mention about husband's background except 'tough childhood' + used to be army regular, so I doubt they're from the usual rich family which'd come with a lot of free cash for investing in other biz.

[Musicwhiz]

Hi KopiKat,

Yeah that's what I think too - all their savings and profits from their investment property ploughed into Perkies.

Incidentally and coincidentally, I had actually thought of visiting Changi City Point today with my family as I had never been there before; and Sunday Times features a couple who opened a snack shop there! But see how lah, it's really far away and remote (near Expo) and I don't have a car. Unless I can find a good reason to visit the mall, I'd probably go somewhere less "remote".

[Temperament]

They seem to be the common people like most of us. They are trying to carve a niche in this tough world of ours. May they learn to enjoy their journey. May they succeed and prosper. Shalom.

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Hi KopiKat,

Yeah that's what I think too - all their savings and profits from their investment property ploughed into Perkies.

Incidentally and coincidentally, I had actually thought of visiting Changi City Point today with my family as I had never been there before; and Sunday Times features a couple who opened a snack shop there! But see how lah, it's really far away and remote (near Expo) and I don't have a car. Unless I can find a good reason to visit the mall, I'd probably go somewhere less "remote".

Hi Musicwhiz,
There is a indirect SMRT connect to EXPO or Changi Airport. And when the SMRT downtown line is completed, "my station" to airport is only 3 or 4 stations. Really, by that time who needs to own a car? Why give the PAPY so much money when we don't really see the "return much?"

[Musicwhiz]

Interesting, another guy who believes in investing in property, and his foray into equities lost him a lot of money (CAO saga). Wonder what proportion of our population believe more in property rather than equities? His car is also nearly ten years old - time to change to a new car and pay exorbitant COEs?

The Straits Times
May 20, 2012
me & my money
Adventure firm owner keeps his money safe
Focus Adventures boss will spend only on items that give a return on investment

By Joyce Teo

For Mr Andrew Chua, 46, owner of Focus Adventures, Camp Challenge and Outdoor Adventures, enjoying life is part of work.

'I believe in work-life integration. A lot of people work to get money to enjoy life. My philosophy is to work while you enjoy life.'

This is similar to his thinking when it comes to spending money. He will spend only when he can see a return on his investments (ROI).

That's how he views his expenditure on his 60m yacht. He bought it two years ago to charter out, but will use it when it is not being rented.

It's as much a lifestyle choice as an investment as he now lives on board the boat when he is in Singapore.

More than half of his time, though, is spent in Hainan, China, where he is setting up a facility that will run sea sports activities for tourists.

He has already brought Focus Adventures, which offers adventure-learning activities for corporate groups, to Sibu, Batam, Bintan and New Delhi.

Mr Chua, who is single, used to be a Republic of Singapore Air Force pilot.

Q: Are you a spender or saver?

I balance my savings with my spending. And I spend only on things that will give me a return on my investments such as my yacht or a jet ski that I can modify and sell at a higher price.

My crew and I are repairing a yacht for sale.

I don't spend on clothes as I wear a uniform every day. You will see me in a beige company T-shirt, beige pants and brown belt seven days a week.

I also don't spend on drinks, cigarettes and karaoke as these do not give me any return on my investment.

When it comes to charity, I like to help underprivileged children as I want to help them achieve their own ROI.

Q: How much do you charge to your credit cards every month?

I applied for my first Amex card when I was 21. I charge about $5,000 a month to my credit cards.

Credit cards come in handy as I buy a lot of spare parts and gadgets online.

Q: What financial planning have you done for yourself?

I have health insurance and I used to invest in shares. But I liquidated almost all my shares to raise cash for my house in 2010.

Right now, my business is giving me the lifestyle that I want. But I plan to invest in one or two properties in the next few years. Then I will have a stable passive income stream for my later years.

I like property as I've always made money from my property investments.

Property is a good hedge against inflation. I used to speculate in property and have bought a few on and off.

Q: Moneywise, what were your growing-up years like?

My mum was a nurse and my father ran a small retail business. They provided for me and my two younger siblings but we were not rich.

I signed on with the armed forces when I was 18 and started to live on my own since then. Enlisting in the military was a good option as I did not have to rely on my parents for money.

Q: How did you get interested in investing?

I became a fully qualified pilot earning about $4,500 a month at the age of 21.

I saved quite a bit as I was staying in the officers' mess where food was provided and so I did not spend much money for three years.

I decided I needed a savings plan. I made up my mind to buy my first property as it would mean that I had to be disciplined and set aside a specific amount of money every month to pay the mortgage.

I borrowed some cash from my parents for the down payment to buy a freehold Flamingo Valley unit that cost $393,000.

I sold it for $680,000 four years later.

Property gives you very good value and is the most stable in terms of your return on investment. You can also get good rental yields here.

If I did not commit to a property, I would probably have spent the money and bought some flashy sports car.

Q: What property do you own?

It's a four-storey terrace house in Sembawang that I bought for $1.95 million in 2010.

I rented out four rooms, which pay for the mortgage, and I keep a small room for myself. I go back once in a while to do the laundry and to make sure everything is in order.

Q: What's the most extravagant thing you have bought?

I bought a sea plane for $80,000 a few years ago. I flew it a couple of times but unfortunately I crashed it. I had to spend another $40,000 to $50,000 to rebuild it.

Q: What's your retirement plan?

I plan to work till I cannot work.

Q: Home is now...

A room in my 60m yacht. I bought it second-hand for $150,000 and spent about $100,000 to do it up. Recently, someone offered to buy it for $350,000.

Q: I drive...

A 2003 C-class Mercedes-Benz.

joyceteo@sph.com.sg

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WORST AND BEST BETS

Q: What is your worst investment to date?

I invested almost $70,000 in shares in China Aviation Oil and I lost $50,000 after news of the firm's financial scandal broke in 2004.

I still have the shares. Hopefully, their value will creep up over time.

Q: What is your best investment to date?

I bought a three-bedroom unit in Poshgrove East in the Katong area back in 2007 for more than $800 per sq ft.

When I received the keys to it in 2009, a property agent asked me whether I wanted to sell it. By then, the price of my unit had gone up by another $200,000, so I said OK.

[shanrui_91]

Interesting, another guy who believes in investing in property, and his foray into equities lost him a lot of money (CAO saga). Wonder what proportion of our population believe more in property rather than equities? His car is also nearly ten years old - time to change to a new car and pay exorbitant COEs?

Around 12% of our population participates in equity. The figure is around 30% for Hong Kong and 50% for USA

[KopiKat]

Interesting, another guy who believes in investing in property, and his foray into equities lost him a lot of money (CAO saga). Wonder what proportion of our population believe more in property rather than equities? His car is also nearly ten years old - time to change to a new car and pay exorbitant COEs?

Around 12% of our population participates in equity. The figure is around 30% for Hong Kong and 50% for USA

It just goes to show that very likely, it's a lot easier to invest in Properties than Stocks. But, I believe the majority of us here will continue to allocate a much bigger proportion of our assets into stocks as it's a lot more fun and profitable, without the need to physically interact with agents, buyers, sellers, tenants, lawyers,.. It's also a lot more pleasant to interact with the Buddies here and you can switch off anytime you don't feel like doing that!

I wonder how many of the 12% are Investors, maybe less than 1% of our population? Outside of this forum, I don't know more than 1 handful of real stocks investors who're still around after 5 years!

[shanrui_91]

It just goes to show that very likely, it's a lot easier to invest in Properties than Stocks. But, I believe the majority of us here will continue to allocate a much bigger proportion of our assets into stocks as it's a lot more fun and profitable, without the need to physically interact with agents, buyers, sellers, tenants, lawyers,.. It's also a lot more pleasant to interact with the Buddies here and you can switch off anytime you don't feel like doing that!

I wonder how many of the 12% are Investors, maybe less than 1% of our population? Outside of this forum, I don't know more than 1 handful of real stocks investors who're still around after 5 years!

Drumming up retail buzz in SGX
Whetting investors' appetites proving to be a significant challenge
Published on Dec 30, 2011

Drumming up retail buzz in SGX -- ST ILLUSTRATION: ERIC ROCA
By Anita Gabriel , Senior Correspondent

SINGAPORE Exchange (SGX) chief executive Magnus Bocker is on a tireless crusade to woo retail investors.

His latest suggestion is to revamp the decades-old Central Depository (CDP) system to give retail shareholders the option of letting their brokers see what shares they hold. The CDP holds the shares of about 1.4 million investors.

The idea is to put brokers in a better position to advise clients on tweaking their portfolios and thereby add some sparkle to retail trading.
The proposal is aimed at a deficit that has long niggled the local bourse - the lack of any real 'retail buzz'.

That's a tough nut to crack, especially at present, considering the risk-averse climate which has engulfed much of the world as a result of the financial turmoil in Europe and the United States.

A healthy dose of retail buzz does wonders for a stock market. It raises liquidity - the amount of funds swishing about in the bourse. This, in turn, draws in more investors and perpetuates a robust and vibrant trading cycle.

This is evident in Hong Kong, where about 35 per cent of the adult population dabbles in the stock market and in the United States, where 50 per cent of households own stocks.

Based on comparative data provided by the World Federation of Exchanges (WFE), as of 2009, only 12 per cent of Singapore's population owned shares either directly or through mutual funds.

Both the US and Hong Kong stock markets enjoy relatively high share turnover velocity - a measure of a market's liquidity based on the ratio between trading volume and market value. In stark contrast, SGX's share turnover velocity underscores the gap between the local market and the other developed markets.

The Singapore market's turnover velocity for the year to last month was 38 per cent, well below Hong Kong's 58 per cent. ut the figure was even further shy of the turnover velocity of the Nasdaq and NYSE Euronext in the US and the Korean, Australian, Tokyo, China and Taiwan stock exchanges, which far exceed 100 per cent, based on WFE data.
This is 'far from satisfactory for a developed market' such as SGX, Mr Bocker has lamented.

'A bourse loses its charm if it lacks liquidity,' said Tokyo Stock Exchange president Atsushi Saito. In fact, the planned merger of the Tokyo Stock Exchange and Osaka Securities Exchange - creating the world's third-largest stock exchange - is predicated on the all-encompassing liquidity factor, indeed, a powerful gauge of a market's appeal.

In a recent interview with The Straits Times,Mr Bocker revealed that of the 1.4 million CDP accounts, only 200,000 conduct one transaction per quarter and a mere 20,000 execute a trade a day. (When contacted, the SGX said it has no further information on retail investor participation in the local bourse.)
The local stock market boasts of having the highest composition of listed foreign companies - about 40 per cent of all listed companies, to be exact, in the region. In comparison, of Hong Kong's total 1,477 listed companies as at last month, only 1.6 per cent were foreign.

But as far as being a magnet for retail investors is concerned, there's much to be done. ompared to Singapore, Hong Kong has a thriving and high level of retail investor participation.

Mr Bocker has frequently admitted that there's room to lift retail participation in the market here as well as boosting liquidity. nother issue is size. Hong Kong's Hang Seng Index has more than twice the market value of the Straits Times Index and has about eight times as much daily total share volume.

NUS Business School finance professor Joseph Cherian points out that Hong Kong derives much of its retail buzz from its proximity to mainland China.

Mr Bocker has boldly introduced a slew of measures centred on stirring up retail demand and raising liquidity since he took the top seat at the exchange two years ago.

He has tightened the minimum bid-ask spreads for selected counters, cut transaction costs for investors, extended trading hours by doing away with the lunch break, enabled trading of Singapore bonds and launched a new trading engine touted to be the world's fastest.
But none of these has whetted retail appetite in a significant way.
Courting the notoriously hard to entice retail investor, who has long tended to snub stocks in favour of a sexier option - real estate - is proving a significant challenge.

Securities Investors Association president David Gerald said the stock market does not have sufficient pulling power.

'We do not have sufficient number of big stocks to provide sufficient liquidity. We also do not have that many products for investors to trade. SGX will have to embark on more marketing efforts to boost investor interest,' he says.

It is also hoped that the introduction of high frequency traders in Singapore will drive liquidity in the market - as has been done fruitfully in other markets.

Thanks to its proximity and access to mainland China, Hong Kong draws in the mega businesses such as the Chinese banks, telcos, petrochemical companies which, based on their scale and weight in the regional indices, enjoy a significant share of regional attention.
Therein lies the urgency of linking the SGX with other Asean markets through a common trading platform.

For starters, Singapore, Thailand and Malaysia will be hooked up via electronic trading links to allow for cross-border trades sometime next year. Eventually, it is hoped, other Asean markets will join.
This would benefit SGX tremendously, given its potential as a cross-border trading hub for large regional investors and traders.

If Mr Bocker stays on for another term, he may get the chance to see his plans play out (his initial three-year term ends on Dec 1 next year).
But if he doesn't and very little changes in the next year, his tenure may face the risk of being unfairly defined by one major blip - SGX's failed A$8.4 billion (S$11 billion) takeover attempt of its Australian counterpart ASX.
anitag@sph.com.sg

[KopiKat]

It just goes to show that very likely, it's a lot easier to invest in Properties than Stocks. But, I believe the majority of us here will continue to allocate a much bigger proportion of our assets into stocks as it's a lot more fun and profitable, without the need to physically interact with agents, buyers, sellers, tenants, lawyers,.. It's also a lot more pleasant to interact with the Buddies here and you can switch off anytime you don't feel like doing that!

I wonder how many of the 12% are Investors, maybe less than 1% of our population? Outside of this forum, I don't know more than 1 handful of real stocks investors who're still around after 5 years!

In a recent interview with The Straits Times,Mr Bocker revealed that of the 1.4 million CDP accounts, only 200,000 conduct one transaction per quarter and a mere 20,000 execute a trade a day. (When contacted, the SGX said it has no further information on retail investor participation in the local bourse.)

Thx!

If we assume the 200,000 are investors, then ~1.7% (not too bad, almost double my ball-park estimate). We are actually endangered species..

[ValueBeliever]

The only interesting thing is the nos of active account. It sucks! The way SGX is managed is indeed sloppy! First this idea of trying to proposed a merger with ASX. Waste lots of money on it. The touted expense of more than 100mil invested to improve the trading, is even more horrendous if you look what kind of site vs other bourses. Even Malaysia bourse website looks better and is more informative!!

SGX screw up big time on S-Chip and couldnt do nothing about it - period.

[swakoo]

Interesting, another guy who believes in investing in property, and his foray into equities lost him a lot of money (CAO saga). Wonder what proportion of our population believe more in property rather than equities? His car is also nearly ten years old - time to change to a new car and pay exorbitant COEs?

Around 12% of our population participates in equity. The figure is around 30% for Hong Kong and 50% for USA

It just goes to show that very likely, it's a lot easier to invest in Properties than Stocks. But, I believe the majority of us here will continue to allocate a much bigger proportion of our assets into stocks as it's a lot more fun and profitable, without the need to physically interact with agents, buyers, sellers, tenants, lawyers,.. It's also a lot more pleasant to interact with the Buddies here and you can switch off anytime you don't feel like doing that!

Post GFC, equities seem to have lost out to physical residential property and cash.
The property agent's favourite post-GFC tag-line: A stock can go to zero. A property cannot.

[Image: sghouseholdsbalancesheet1997-2011markedup.jpg]

If KopiKat is right, Valuebuddiesians are helping keep the equities flag flying.