Me & My Money Series (Sunday Times)

(21-11-2010, 07:42 AM)Musicwhiz Wrote: Q: What's the most extravagant thing you have bought?

I paid $4,000 for a training course on starting a business last November and another $3,000 on a course in money attitudes in March. I consider my expenditure on these two financial courses as most extravagant as I didn't get any value out of them.

This is the best quote I ever read!!

I admire him for one thing, he does not act as if he is proud etc... he states his values clearly and sticks to it. Most people would not say they are frugal and don't have car etc.... because they feel they will lose face .

Finally a different profile for a change.

all of us,well actually most us at least will have earned a million or close to it in total during our working lifetime.

I think he has long passed the age of succumbing to peer pressures
The ability to withstand peer pressure needs to be imbued during adolescent period.

He had paid up his flat in full in 2006. There are different opinions in finishing off the payment of the flat as early as possible. As for me, if the loan is a HDB concessionary loan, it is far better to keep the money in CPF so that the money can be reinvested during distress time.

The opportunity cost for the interest rate is only 0.1% per year and for a good value investor, the opportunity to get much higher than 2.6% return during the 30 years loan period is actually pretty high.

Unless, there is no stock market crash during the 30 years..haha..
Probability wise, it is quite unlikely.

(21-11-2010, 11:20 AM)sgd Wrote: all of us,well actually most us at least will have earned a million or close to it in total during our working lifetime.

1. Quite a lot of people don't get to touch million.

2. If you do, and earned it. But would it be in the bank or spent by the time you are in retirement.

Common quote " Earning is easy, keeping it is hard".

Nice to read someone who is down to earth. Not born with a silver spoon and strong financial background. Someone which we can relate to us, living in HDB flats and his tips for investing. Good stuffs. Thanks.

(21-11-2010, 12:25 PM)flinger Wrote:

(21-11-2010, 11:20 AM)sgd Wrote: all of us,well actually most us at least will have earned a million or close to it in total during our working lifetime.

1. Quite a lot of people don't get to touch million.
2. If you do, and earned it. But would it be in the bank or spent by the time you are in retirement.
Common quote " Earning is easy, keeping it is hard".

in the news that guy was holding not cash but $1million of equity, this is not yet counting his cash holding which he said he tend to hold high level of cash to play interesting situation with stock market..

so i guess he is easily nearing $2million

This guy is certainly an inspiration as he's just a man on the street who saved hard, invested and now is financially free! Just a few things of note:-

1) He has a 4-year old son and is currently 47 years old. This means he had his first child at 43 years old. Assuming he started work around 23 years old, he would have about 20 years of working and saving without having to spend on children's items (and children are expensive, no doubt).

2) Having said that, it also means that when his child is 21, he will be 64 years old. I think that would be the problem when one has a child late in life - you tend to be much older when your child has just hit adulthood. For myself, I had my first child at 33, which was not young either!

3) It's easy to see why he could save 60% to 70% of his salary - he kept his lifestyle the same even as he progressed in the working world! He did not own a car at all throughout his life and probably saved tons of $ along the way. He also stays in an HDB flat which has been fully paid. I'd assume that before he got married, he lived with his parents and thus could save even more money that way.

4) He had a hard life as a child and it was a tough childhood for him; I believe this is what teaches people to be frugal and work hard to build their fortunes. If you look around now, there are so many pampered kids with parents showering them with all sorts of items - how will this teach resilience in the face of adversity? The parents are not doing their kids a favour by spending so much on them and making their life so cushy.

5) It's impressive that he could pick himself up even after losing $100,000 in 1998, which goes to show a strong savings habit can really help one to re-build their portfolio and grow their wealth even if one made mistakes along the way.

6) His dividend yield ranges from 4-6%, which is very close to mine (mine is 6% currently). Assuming a portfolio cost of $1 million at 5%, this will yield $50,000 per annum or $4,000 per month, more than enough for him to subsist without working as he needs just $3,500 (including insurance).

7) It's easy to do a back of the envelope calculation to see how much cash buffer he has. He has about 5 years worth of living expenses, and needs about $3,000 a month (exclude insurance). So this means he has a cash buffer of about $180,000.

8) He originally had a mortgage loan with a 27-year tenure, but he paid it off in just 9 years! I've been paying for my mortgage for the past 6 years, and intend to finish off in the next 6 years, so my total tenure will be about 12 years, down from my original 21 years. But if you factor in the finance costs paid over the years, there's probably not much capital gain on his current HDB flat.

9) He sounds like a very disciplined investor who understands fundamentals and sentiment. Kudos to him!

I guess I still have a lot to learn from him. Oh well, he's an inspiration to me.

He's another Dennis Ng.
Just proves that if you want to get a million by 40s, it is possible as long as you start investing in your 30s with regular routine investment.

Peter Lim said before.. something like.. it's easy to get a million or a few hundred millions. But to get a billion, someone up there really likes you. Funny guy.

Interesting eh? Last week's column featured a guy who owned stocks but no property (for investment). This week it's a guy who owns property but no equities! Just goes to show there are so many different paths to Rome.....

But wow, he bought 2 expensive properties this year alone, so I think the leverage used must be fairly substantial. And he also seems to be a man who likes fast cars, judging from his purchase of the S$400,000 white Porsche Panamera. All in all, I think I can still relate better to last week's interviewee Mr. Brennan Pak!

Nov 28, 2010
me & my money
Entrepreneur has a finger in every pie
Property sales, event management, fish farming... Eric Cheng's into these and more
By Lorna Tan, Senior Correspondent

Former air steward turned property guru Eric Cheng earned a feather in his cap when he won the Entrepreneur of the Year Award in October.

The award, given by the Association of Small and Medium Enterprises, recognises people for their business acumen.

Mr Cheng, chief executive of real estate agency ECG Property, certainly has business acumen. He owns several businesses, mainly in property sales and development and events management.

In a recent interview with The Sunday Times, the 35-year-old recalled being passionate about being his own boss, even when he was younger, and about his love of real estate.

Besides his businesses, he owns five residential properties and is insured to the hilt.

After leaving Singapore Airlines in 2002, his employer for eight years, he ventured into property sales at PropNex and made his first million in 2004 from sales commissions and management fees. Back then, he had 1,600 agents.

In 2007, he joined property agency HSR, where he was the agency executive director looking after 5,000 agents.

Meanwhile, he began building his business empire, starting with programming and software firm SG1Stop in 2004. A year later, he set up property development firm ECG Development with $7 million, of which $3 million came from him.

In 2007, he set up SGYacht, a licensed yacht charter firm. The following year, he set up ECG Events and Lifestyle and interior design and construction firm SG Concept.

Last year, after leaving HSR, he set up ECG Property. The firm has 1,500 agents.

He also acquired a fish farm in Pasir Ris, which cost nearly $1 million. It specialises in high-value tiger garoupa and lobsters.

Last year, his ECG group pulled in an impressive $61 million. Moving forward, he is eyeing a listing of one of his firms in Kuala Lumpur soon.

Mr Cheng obtained an international diploma in computer studies from the Informatics Computer School in 1994.

His wife Lena Tang, 35, is ECG's finance director. They have two sons, Ethan, four, and Edgar, two.

His book, Get Rich Through Property Investment, which was published last year, has sold more than 10,000 copies.

This month, he launched his second book Get Rich Through Business Leadership.

Q Are you a spender or saver?

I maintain a good balance between saving and spending. I save 25 per cent to 35 per cent of my income.

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

I have two credit cards. One is for work while the other is for personal use. On average, I charge $8,000 to $12,000 to my cards. I have always paid my credit card bills on time as I believe that if you delay paying once, you will develop a habit of repeating it. I withdraw about $500 a week and whenever necessary.

Q What financial planning have you done for yourself?

Besides my businesses, I own several properties.

I have a thing for property and cars. Since my army days, I have enjoyed reading classified advertisements to keep myself updated on market trends and the prices of properties and cars.

The potential returns from property investments come from their capital appreciation or rental yield. When I buy a property, I make sure I have 12 months' worth of instalments in cash set aside as a back- up, in case the market dives and I have no rental. This means I have 12 months to re-strategise my plan for that property.

I also believe in insurance. I have almost US$5 million (S$6.5 million) in life cover. I also have a critical illness cover of US$1 million and endowment plans.

I do not own stocks as I have no time to monitor them.

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

I am the eldest of four children and am from a middle-income family.

My father was a manager in the entertainment industry, running pubs and discos.

My mother inherited two outlets selling Nonya food but she gave up the business in 2006 when my first child was born.

We lived in a three-room Housing Board flat in Chinatown.

My parents used a reward system to encourage me to study hard. I would get a toy if I achieved good marks above 90.

Growing up, I wanted to live a more comfortable life.

Q How did you get interested in investing?

My first investment was a Housing Board executive apartment which I bought in 1998 for $350,000, before I ventured into the real estate industry.

The investment broke even - I sold it for $380,000 in 2003.

After gaining more knowledge in real estate, I invested in a two-storey, 2,800 sq ft terrace house in Telok Kurau which cost $850,000. In less than five years, the property was sold for $1.4 million in 2008.

Q What property do you own?

I have five properties.

In 2006, I bought a 3,900 sq ft terrace house in the East Coast for $690,000. It was refurbished for another $500,000 and its current value is about $2.3 million. My family and I live in it.

A year later, I bought a two-bedroom, 936 sq ft condominium unit in Orchard for $940,000. It is currently valued at $1.5 million.

I bought a 1,600 sq ft condo in the same area for $1.7 million in 2008. It is valued at $2.3 million now. The two condos are generating rental yields of 4.3 per cent and 3.9 per cent, respectively.

This year, I bought two properties. One is a single-storey semi-detached house of 4,000 sq ft in the East Coast costing $2 million. The other is a 630 sq ft condo unit in Newton that cost $800,000. Construction will be completed in 2013.

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

It would be the white Porsche Panamera that I bought for my wife's birthday last month, for almost $400,000. We're collecting it next month.

Q What's your retirement plan?

My goal is to list my firm, ensure it is sustainable profit-wise and bring it to greater heights.

I intend to fully pay for the five properties that I have and retire before 45.

Good rental yields from the properties I own would contribute an additional passive income stream to our nest egg of $5 million. I also expect yearly dividends of $2 million from my businesses.

I would like to spend quality time with my family after that.

Q Home is now....

The terrace house in the East Coast.

Q I drive....

A metallic grey BMW 7 series.

lorna@sph.com.sg

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BEST & WORST BETS

Q My worst investment to date...

I made an investment of close to $800,000 in an events management firm in 2008. It is still unprofitable and I have lost nearly all of my investment as I am a sleeping partner and have no control over the running of the firm.

Q My best investment to date...

My best assets are my family. They have supported me in my business.

My other best investment is my company, the ECG Group of Companies, of which I hold more than 70 per cent.

It was formed in 2002 with a turnover of only $3 million.

Our turnover was $61 million as of end-December last year. My investments in the businesses have paid off handsomely.

We are now getting takeover and acquisition offers and I am in the midst of exploring options which may include listing one of the businesses on the Malaysian stock exchange.

It is not that he did not own any shares, just that it is not public listed but private company.

somehow most articles seems to have hidden agenda, so read with pinch of salt. His guy into property development and sale so obviously trying to "sell" idea property investment. Last week case, he is conducting some share investment courses, so...