Me & My Money Series (Sunday Times)

[piggo]

Haha swiber for long term?! He should have a chat with the ppl working there. I really don't understand the purpose of this feature on the national newspaper... Encourage $ worship?

[yeokiwi]

Haha swiber for long term?! He should have a chat with the ppl working there. I really don't understand the purpose of this feature on the national newspaper... Encourage $ worship?

Hi Piggo, care to share the chat? I love juicy stories.

Many electronics shop in Sim Lim Towers probably hit much higher revenue than 2.4 million. Coupled with low margin and fierce competition, it is a difficult business to do well.
The most successful electronics business models are Farnell and RS components. They are so good that they can literally deliver one resistor and earn a profit.

[WolfT]

Haha swiber for long term?! He should have a chat with the ppl working there. I really don't understand the purpose of this feature on the national newspaper... Encourage $ worship?

60k in stocks only, don think he care too much abt stocks.
I think StraitsTime lacking effort in finding good savvy investor for interview.

[Bibi]

I was also looking at this "best" investment - buying HDB in 2003 for $528,000 and selling it last year for $733,000. That's a gain of about $205,000 (38.8%) over 7 years. Without factoring in the cost of financing, that's a compounded gain of about 4+% per annum only, nothing much ....

I doubt think he paid one shot $500+k for the hdb. Assuming only 10% down payment is required that's $52k. Pay 2.5% interest for 7 years, then sold it off. If we don't factor in cost of financing for 7 years, it's 205/52=394% over 7 years. Or did I calculate wrongly?

[Big Toe]

Electronics distribution is pretty much a small market in singapore. Plenty of competition, little value add, not much moat to speak of.
They can only supply to smaller companies/small volume. Bigger firms will have supplier agreements with the manufacturer themselves,
they do not need a middleman/distributor.

What would be a better concept is to start up a specialized component manufacturer/supplier. Get someone to manufacture catering to the specific market and start targeting that market. I.e. connectors for specific industries, large connector companies such as Tyco/molex would not be bothered in niche areas. It is pointless to do exactly what everyone else is doing, in electronics distribution, everyone is more or less doing the same thing.

[Musicwhiz]

Wow, another person who owns some Boustead shares! Also, it sounds as if she signed up for MIP (Millionaire Investor Program) which teaches Value Investing and is run by Ken Chee. I recall it costs somewhere in the range of $3,500.

The Straits Times
Sep 25, 2011
me & my money
An online shop idea that sells
NTU grad didn't plan business but it took off with a little nudging from then-boyfriend

By Joyce Teo

Ms Tan Yi Fong recently graduated with a degree in accountancy from the Nanyang Technological University. But she is no ordinary graduate. At the age of 23, she is already a mother and the owner of a growing online retail business with sales of more than $200,000 a year.

She took a semester off early last year when she was in the late stage of pregnancy but had otherwise attended classes faithfully.

Her tenacity could have been honed from a young age, when money was often lacking. She had to earn her own pocket money by working during school holidays. To support the family, her mum took on whatever jobs she could find, including being a janitor at Ms Tan's secondary school when she was studying there. Her father, who died in 2009, was a deliveryman.

Still, while Ms Tan aimed to make a comfortable living, running her own business was not something she had always dreamed of.

She was doing sprees for free when her husband Vincent Goh, 29, her boyfriend then, suggested turning it into a business. 'I was a student and had time on my side. I thought if it didn't work out, I would go out and work,' she said.

She recently started a second online shop selling women's workwear. The first shop, which started in late 2009, already has a customer base of more than 11,000.

The couple's daughter Clarisse is 16 months old.

Q: Are you a spender or saver?

A saver. I don't splurge and I don't buy brand-name labels. My biggest expense used to be clothes but now that I'm in the fashion business, that expense has been reduced significantly. Another big expense is food. We dine out (usually $10-$20 per head unless we're going for seafood) on most weekends and during special occasions.

I also pay $700 a month to put my daughter in full-day infant care.

We set aside two-thirds of our monthly income, with most of it invested.

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

I have a few credit cards but I use only three which offer cash rebates. Whenever possible, I'll charge expenses to my credit card or Nets card instead of using cash, as there is a 0.5 per cent to 5 per cent rebate. My husband and I charge a total of about $6,000 to $8,000 to our cards every month. It's a mix of personal and business expenses.

Q: What financial planning have you done for yourself?

To be frank, I wasn't financially savvy and I didn't believe in insurance. What gave me a wake-up call was my father's health episode. He was a deliveryman and didn't have any health plan other than MediShield. He was admitted to hospital in early 2009 and upon discharge, had to enter a rehab hospital. Later that year, he had to be at the hospital again. His condition then took a turn for the worse and unfortunately, he died.

It made me realise that life is unpredictable. Also, I didn't want my mum to be burdened with bills should anything happen to the family again. That's when I called up our insurance servicing agent.

I bought the hospitalisation plan and a rider under the private hospital segment so if I were to be struck with illness, at least there will not be financial worries.

After getting married, having a daughter, and becoming a bit more savvy, I bought term policies with $200,000 to $300,000 coverage.

Investment decisions are made jointly by my husband and me. We invest in equities as well as property. The two properties in the Philippines which we bought are still in the midst of building so there are no returns yet.

Equitywise, we started only in March this year and have invested about $70,000 in 10 stocks, including Singapore Press Holdings and Boustead Singapore. We manage it passively (buy and hold).

I tell myself to be rational. I am buying an ownership of the company, not a lottery ticket. Now, when prices go down, I don't panic.

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

I grew up in a lower-middle income family in a three-room HDB flat. To make ends meet, my mum did babysitting and rented out one bedroom and the living room to Malaysian construction workers. She also washed their clothes.

When we moved to a four-room HDB flat, she rented out the living room and two bedrooms.

Mum was always struggling to make ends meet. Seeing her work so hard, I dared not ask for expensive toys like PlayStation, which I'd play at my cousin's house.

I worked during the school holidays and after my A levels, I did relief teaching in the morning and then worked as a boutique assistant for the rest of the day. I also gave tuition on weekends. I saved all the money earned.

Q: How did you get interested in investing?

My husband is the more financially savvy one as I've always thought investing is for the rich. But after speaking to some business owners, I changed my mind.

Although we wanted to invest in stocks and property, we were unsure of exactly how to do it. So, I attended a $3,500 course on value investing in March this year and he attended a $3,000 course on property investment later that month.

The money spent on the courses was really worth it. My course instructor became my business mentor. It is also cheaper than if I were to start investing and lose it all.

In value investing, we were taught to buy during a crisis. In March, there was the Japanese tsunami and the market crashed so we swept up a few stocks and they are doing pretty well now.

We were then introduced to some property deals and we bought two freehold units in the Philippines. We couldn't afford Singapore property. It's also been bubbling for quite some time so we didn't want to step in anyway.

Q: What property do you own?

A 250 sq ft freehold studio apartment and a 500 sq ft Soho unit in Makati city, Philippines. The first one cost about $70,000 while the second cost $180,000.

I also have a 115 sq m five-room HDB flat in Jurong, which we bought last year for $500,000.

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

My flat. I was hesitant to buy at that time as the market was hot and I was afraid the property bubble would burst after that.

But we needed a home pretty urgently as our daughter was already born. Also, we had failed two rounds of ballot for sale of balance flats. I'm thankful we bought it as I now have a proper work space at home and should we have gotten it any later, it would have cost us $30,000 more.

Q: What's your retirement plan?

I plan to take it easy by the time I am 30. It's because our expenses are low that I can retire so early. I don't foresee myself retiring if it means doing nothing and just taking long vacations.

I should still be running my businesses, just that perhaps I'll have more time for recreational activities (like playing golf) with my husband and my children.

By then, I think I should be sharing my experience by giving talks in schools and holding regular 'kopi' sessions with business owners to chit-chat and exchange ideas.

Q: Home is now...

The HDB flat in Jurong.

Q: I drive...

I don't have a driving licence. My husband drives a Mitsubishi Lancer. It's a weekend car.

joyceteo@sph.com.sg

-------------------------------------------------

WORST AND BEST BETS

Q: What has been your worst investment to date?

In March, my husband and I bought 10 lots of Bestworld International. We lost about $600 when we sold it in May or June. Its revenue had been decreasing for a few years when we bought into it. It was meant to be a turnaround play but after a while, the company was still declining so we decided to dispose of the shares and buy into another company. For all we know, this might turn out to be a turnaround play but we didn't really understand the business well enough to judge.

Q: And your best?

My family.

[pianist]

Q: What property do you own?
A 250 sq ft freehold studio apartment and a 500 sq ft Soho unit in Makati city, Philippines. The first one cost about $70,000 while the second cost $180,000.
I also have a 115 sq m five-room HDB flat in Jurong, which we bought last year for $500,000.

is she violating the rule? it seems like she got the private first before getting hold of the public hdb housing and she didnt dispose e private's?
in either way, even she got the hdd first last year, it cannot be so fast she got her 2 private properties overseas which violates the 5-year MOP?

[piggo]

It depends... Houses bought before the measures kicked in are exempted.

Nice way to keep your wife busy! Hm... 200k revenues, assuming 20% NP margin it's 40k/yr!

[Bibi]

They bought 70k worth of stocks during jap tsunami and the stocks were doing well. It can't be. The current sti level is much lower when during the jap tsunami occurrence. Both sph and boustead I believe are trading lower than when during the tsunami period. I wonder why she bought best world when she knew the co. Revenue is sliding. When all other companies have recovered yet best world is still struggling. Pteris is another one.

[Musicwhiz]

It depends... Houses bought before the measures kicked in are exempted.

Nice way to keep your wife busy! Hm... 200k revenues, assuming 20% NP margin it's 40k/yr!

Yes I believe it was probably before the new housing measures kicked in. But I can't imagine why she decided to purchase property in Philippines, of all countries. The country is not politically stable and the security there is also a big issue - almost everyone carries guns and there are also frequent cases of bombings and violent crime. Unless you have specialized knowledge of the property market there or some hidden connections with the political parties there, I really cannot imagine the attraction of purchasing property there.

For an online retail business, I seriously doubt the net margins can be as high as 20%! Probably if they are lucky they can get a 3-5% net margin, as there are very low barriers to entry and you would need to build p a substantial level of stock in order to offer variety and operate efficiently. This means potentially high levels of stock obsolescence and also low stock turnover. If we assume a very optimistic scenario of 8% net margins on $200,000 of revenue, that's about $16,000 per annum which is nothing much to shout about. But I feel it's commendable that they are striking out on their own and I do admire their entrepreneurial spirit!

They bought 70k worth of stocks during jap tsunami and the stocks were doing well. It can't be. The current sti level is much lower when during the jap tsunami occurrence. Both sph and boustead I believe are trading lower than when during the tsunami period. I wonder why she bought best world when she knew the co. Revenue is sliding. When all other companies have recovered yet best world is still struggling. Pteris is another one.

Yes, this is true. SPH and Boustead were definitely trading higher than during the tsunami period as compared to now. Boustead's price level on March 11 was 95 cents compared to 84 cents today, and adjusting for a 5-cent dividend the price would still be just 89 cents today, lower than during that tsunami period.

Probably she did not do enough research on Best World to figure out that its business was declining. I suspect some of the examples for investment may have been provided during the MIP course costing $3,500 which she attended!