Me & My Money Series (Sunday Times)

[freedom]

ETF is more cost-effective than most other investment means, I believe.

You don't spend much time reading annual report/quarterly report/news release/announcements.

[Temperament]

ETF is more cost-effective than most other investment means, I believe.

You don't spend much time reading annual report/quarterly report/news release/announcements.

Ha! Ha! AS i have said, it is very suitable for old man like me who has not much human capital left. Though compare to holding individual-stock portfolio, i still have to pay a "ETF's management fees" for sleeping soundly at night. And even with dementia, i still can live on the dividend if my STI ETF's portfolio value is large enough. What do you think? i am here to learn from anyone.
Shalom.

[yeokiwi]

ETF is more cost-effective than most other investment means, I believe.

You don't spend much time reading annual report/quarterly report/news release/announcements.

Ha! Ha! AS i have said, it is very suitable for old man like me who has not much human capital left. Though compare to holding individual-stock portfolio, i still have to pay a "ETF's management fees" for sleeping soundly at night. And even with dementia, i still can live on the dividend if my STI ETF's portfolio value is large enough. What do you think? i am here to learn from anyone.
Shalom.

I think stock analysis is still a better choice.
1) It takes time...and rich retirees like Temperament has lots of times
2) helps to generate discussions among friends(online and offline) and even family members.
3) heard that probability of dementia will be reduced if there is more brain activity.
4) Lastly, the reward is more satisfactory.
5) Can write a book later on "How to be a successful retiree"

[Temperament]

ETF is more cost-effective than most other investment means, I believe.

You don't spend much time reading annual report/quarterly report/news release/announcements.

Ha! Ha! AS i have said, it is very suitable for old man like me who has not much human capital left. Though compare to holding individual-stock portfolio, i still have to pay a "ETF's management fees" for sleeping soundly at night. And even with dementia, i still can live on the dividend if my STI ETF's portfolio value is large enough. What do you think? i am here to learn from anyone.
Shalom.

I think stock analysis is still a better choice.
1) It takes time...and rich retirees like Temperament has lots of times
2) helps to generate discussions among friends(online and offline) and even family members.
3) heard that probability of dementia will be reduced if there is more brain activity.
4) Lastly, the reward is more satisfactory.
5) Can write a book later on "How to be a successful retiree"

i am not that rich as you think. i need some protection ma as i grow older and older

[redcorolla95]

Yes ETF is a good idea for most people.
The problem is that majority of the ETFs traded on the SGX are synthetic; whereas the HKEx has done a great favour for Hongkongers by discouraging the synthetic kind.


FT - Synthetic ETFs get thumbs down (25/3/12)
By Chris Flood
Synthetic exchange traded funds are rated as poor quality by almost a third of European investment managers, according to a survey by Edhec-Risk Institute.

Physical ETFs were much less likely to be viewed as poor quality. Edhec’s 2011 European ETF survey found just 1 per cent of those surveyed rated ETFs that hold all the constituents of an index as poor quality, a proportion that rose to 11 per cent for ETFs that hold a representative sample of stocks.
“It appears the recent debate about synthetic replication and, in particular, the communication on supposed advantages of physical replication had an impact on respondents’ overall perception,” Edhec said.
Edhec found synthetic ETFs rated badly for counterparty risk but more highly for costs and reliability, in terms of having low tracking errors. However it said the results were “rather surprising” as physical ETFs also exposed investors to counterparty risk if they engaged in securities lending.

“The view that full replication has the lowest exposure to the counterparty and synthetic replication has the highest implies that there might be confusion about how these products are constructed,” Edhec said.

[Musicwhiz]

Maybe it's just me - but the headline seems a bit of an oxymoron right? Compulsive saver and weakness in cars? Debt-averse yet (and prefers avoiding big loans), yet takes up a one-year loan of $100,000 to purchase a Porsche (yes, not a family saloon car or a hatchback, but a sports car; though granted it is a second-hand). What is he trying to prove here? He has not even driven it for two years and now he wants to change it already! If you have a weakness for cars, it's going to make you a lot poorer over time unless you have an astronomical salary or superb investing skills. This is what I personally believe.

It's also the very first time (in memory) that I've seen an interviewee comment that he has NO best investment, but he certainly learnt a big lesson from investing in ILP, which have returned negative if you factor in inflation!

Lastly, I feel that Sunday Times should not interview someone who likes fast cars and is into changing his fifth car in 10 years - what kind of signal are they trying to send out to the general public? [Sorry, but this interview seems like a complete contrast from last week's interview with Andrew Hallam].

The Straits Times
Apr 1, 2012
Compulsive saver's real weakness: Cars
Debt-averse CFO is into fifth car in 10 years but prefers dipping into savings rather than taking up big loans

By Joyce Teo

Actuary Woon Dar Vei shuns the stock market and prefers to see the numbers in his bank accounts grow.

The 37-year-old compulsive saver began saving in earnest when he started work in 1997 with AIA Singapore.

Now the chief financial officer at Tokio Marine Life Insurance Singapore, he recalled: 'When I collected my first pay cheque, I didn't spend all my money. Every month, I would ensure I had some money left. Savers save just in case they need the money.'

It was a habit instilled in him since young, when his parents would save all his hongbao money for him.

He is debt-averse like his parents and would rather dip into his savings than take up a big loan for a major purchase like a car.

Mr Woon, a Malaysian, has a Bachelor of Economics in actuarial studies from Macquarie University, Sydney and a Master of Business Administration (MBA) from University of Chicago Booth School of Business.

The Singapore permanent resident is married to Ms Diana Chang, 31, who runs the corporate development and marketing departments of childcare chain NTUC First Campus. They have no children.

Q: Are you a spender or saver?

I am definitely a saver. In a typical month, I save more than half my income.

In the past few years, I've saved at least $10,000 a month. But there are times when I would indulge myself and spend on, for example, electronic gadgets and cars.

I manage and plan my finances carefully - I have bank accounts for specific purposes. I used to have a detailed system of filing and tracking my expenses but I have not kept this up due to my busy work schedule.

My expenses would spike during festive seasons and whenever my wife and I go on a big holiday, which is at least once a year.

And over the years, I've spent the most on my cars and many 'one-off' gadgets such as phones and laptops. But I've mostly not spent more than what I earn. Living within your means is very important. It's about being mature and responsible.

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

On average, excluding work-related expenses, I charge about $2,000 to $3,000 to my credit cards.

Q: What financial planning have you done for yourself?

Since I work for a life insurance company, investment-linked policies were a natural choice. Since 2004, I've put in a total of $1,200 a month in my two investment-linked plans, which invest in balanced funds.

I view these as my retirement funds.

I have insurance coverage of about $1 million. I believe in the rule of thumb of having life protection that is five to 10 times annual earnings, so I am probably only halfway there.

I hate the idea of owing too much money. So right now, I am conserving cash to buy our next property as I want to set aside a substantial sum for the down payment.

We are looking for a bigger freehold home that may cost us about $2 million to $3 million. We will then rent out our current place in City Square Residences, next to Farrer Park MRT station, for passive income.

I have saved more than $500,000.

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

I grew up in a small middle-class family in Ipoh. Now retired, my father was a school principal and my mother was a teacher and school administrator. I also have an older sister who is now based in Kuala Lumpur

I grew up with a large extended family and most of them believed that spending beyond one's means was somewhat irresponsible. Saving for a rainy day was a very much valued virtue.

My parents invested the little they had carefully and started an education fund for my sister and me before we were born. I was given very little pocket money when I was in school and my mother would insist that I save the bursary I got from doing well in school.

She would also deposit my hongbao money in my bank account, something which I wasn't too pleased with then.

Q: How did you get interested in investing?

In 2004, I wanted a savings vehicle where I could park my money without thinking much about it.

So I put some money into a balanced fund through an investment-linked policy. It's not a pure growth fund so it's more stable.

When I was young, my mother would take me to the stockbroking firms she and her friends frequented. But it had the opposite effect of making me uninterested in stock investing. I felt it was like gambling.

Q: What property do you own?

A three-bedroom unit at City Square Residences. My wife and I bought it for $710,000 in 2006 and its value has more than doubled by now.

There is just $100,000 left on the loan. When the lock-in period is over, I'll redeem it.

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

I am now into my fifth car in 10 years. It is a Porsche Cayman S, which cost more than $200,000.

It is a pre-owned car in very good condition, which has a lower depreciation value, thereby giving more value for my money, even though I recognise that it is still extravagant. I took a one-year $100,000 loan and have just paid it off, so I am planning to change my car.

Cars are my real weakness.

Q: What's your retirement plan?

I hope to be financially independent and retire from my career at 50, although I do not plan to retire from work altogether. I hope to continue working for a good cause.

Looking at what I am likely to build up by then, I should have sufficient to retire on. I think we will need at least $5,000 a month.

Q: Home is now...

The 1,216 sq ft City Square Residences apartment.

Q: I drive...

The red Porsche.

joyceteo@sph.com.sg

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WORST AND BEST BETS

Q: What is your worst investment to date?

I suppose this would be my investment in unit trusts.

I invested about $15,000 in two unit trusts some years back. One was a regional fund combining bonds and stocks while the other was a Singapore equity fund.

The trusts were not performing well, so I decided to sell them off after about three years.

I made a profit of about 1 per cent to 2 per cent, after paying the fees. I could have just put the money in a savings account.

Q: What is your best investment to date?

None so far.

[KopiKat]

In the past few years, I've saved at least $10,000 a month.
.
.
On average, excluding work-related expenses, I charge about $2,000 to $3,000 to my credit cards.

The only think I learnt from this week's article is that Tokio Marine pays their CFO rather well! I always thought Japanese MNCs pay rather badly or is that considered badly?? Take home pay should be easily $15k-$20k, unless he's talking about combined savings (with his wife) or his wife pays for most other household expenses or both.

[Drizzt]

why is having a car a liability. my friends are selling their cars for 20k above the price they bought.

[Musicwhiz]

why is having a car a liability. my friends are selling their cars for 20k above the price they bought.

It's unique to Singapore since we are the only country to have the COE, and a shrinking supply means prices will go up.

Ask your friends to factor in the costs of financing (interest paid on their car loans), maintenance and repairs, road tax, insurance, petrol, parking and the occasional fine(s). Then see if they are still very much in the money?

[Drizzt]

why is having a car a liability. my friends are selling their cars for 20k above the price they bought.

It's unique to Singapore since we are the only country to have the COE, and a shrinking supply means prices will go up.

Ask your friends to factor in the costs of financing (interest paid on their car loans), maintenance and repairs, road tax, insurance, petrol, parking and the occasional fine(s). Then see if they are still very much in the money?

you cannot think of everything that way. in some cases if you dun even have a BMW you cannot gain excess to privilege customers. how does that work out. 4 deals to cover your bmw cost. it is never a given.