Me & My Money Series (Sunday Times)

Thread Rating:
  • 4 Vote(s) - 4.25 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Wow another great interview along the same lines as Andrew Hallam! This guy built up his wealth from scratch through frugality, savings and prudent investment, and he deserves my respect. He doesn't flaunt and doesn't purchase expensive cars and items - his most expensive purchase was a $1,200 bottle of wine and he drives a 12-year old car! His philosophy of life also gels with mine - don't let expenses catch up with your salary and live a frugal lifestyle way below your means, so that you can achieve financial freedom later in life.

He's now sailing the world living on his dividends! His job is his hobby and he works for free! That's something I aspire to do when I hit 50. Smile

Have BOLDED areas where I feel are worth learning, including sections on investing and personal finance. Enjoy! Big Grin

The Straits Times
Apr 8, 2012
me & my money
10-year savings plan pays off

Foord Asset Management owner sails the high seas in a $2m catamaran, living off the dividends from his investments

By Joyce Teo

The owner of Foord Asset Management, Mr Dave Foord, believes in investing for the long term so compound interest can work its magic.

'Everybody can gain financial independence within 25 to 35 years,' he said.

'It's possible to save and make money. The hardest part is the first 10 years to get enough capital.'

With that capital, it will take an increasingly shorter time to double your money thereafter, said Mr Foord.

The problem for most people is discipline, added the Zimbabwe- born British citizen. 'As you earn, you tend to spend more. So, the most important thing to control is your lifestyle.'

Mr Foord, 59, is now living off the dividends from his investments and living the life of his dreams.

Home over the past 12 years has mostly been a boat, which he sailed around the Mediterranean Sea. He sold that 42-foot sailing catamaran last year for $400,000 and has just bought a 62-foot sailing catamaran in New Zealand for $2million.

He will sail it around the Asia-Pacific for the next five years.

His firm, which is based in Cape Town, South Africa, has an office in Guernsey, off the coast of France, and will have an office in Singapore by the end of the year. 'I see Singapore as the Switzerland of Asia and I think growth in Asia will be higher than in the rest of the world.'

His partner of 12 years is Ria Voutsas and he has three children, in their 30s, from a previous marriage.

Q: Are you a spender or saver?

I have always been a saver. I don't have toys or fancy cars and I have the mindset of not spending beyond my means.

I started to save diligently from the age of 27, with the aim of investing the money for a higher return.

And for about seven years, my family would mostly stay at home and eat out only on special occasions. We also did not travel as it was too expensive. Meanwhile, my friends were living it up.

Within a few years, I accepted frugality as normal. After 10 years, it became much easier, as I could still save while my standard of living was catching up with my contemporaries. Then, after 15 years, my standard of living was above my contemporaries' and I was still able to save because I had no debt and was earning compound interest on my investments.

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

I do not like credit cards. I have debit cards and a company card though I seldom use them. I like to carry cash.

Q: What financial planning have you done for yourself?

I started my financial planning when I was 27, when I was earning US$1,000 a month as an investment analyst with a life assurance company in South Africa.

That was when I devised this 10-year savings plan, as I believed savings would create capital and capital would free me from working and give me independence.

I calculated that with compound interest, I could end up with US$100,000 in 10 years.

The idea was to save at least 10 per cent of my monthly salary, and then invest the money in the stock market. Then, one day, the income from my savings would be the same as my earnings.

I was inspired by this book The Richest Man In Babylon by George Clason, which says that if you cut back now, you can enjoy later.

It's the initial phase that is difficult. But you need to be disciplined. It's just 10 years at most.


I started saving US$100 a month. As my salary increased, I saved more. In five years, I had $25,000. I was lucky as I caught the bull market and was able to reap higher-than-usual returns from my investments in shares.

Q: What advice would you give to investors?

Saving 10 per cent per annum and earning 10 per cent on your savings, the rule of 72 (a way to determine how long an investment will take to double, given a fixed annual rate of interest) shows that you can double your investment in 7.2 years.

The second time round, it takes half that time to double your money. The next doubling can be achieved in an even shorter time. Eventually, you have enough capital to earn the equivalent of your salary without working.

If you earn a lower return on your savings, you'll have to work a bit longer, but that is okay because the big goal of financial independence will come within a few years.

When you are saving, your biggest enemy is inflation, your second biggest is yourself, and your third is the banks and financial institutions, which want to charge fees and take away your money.

You can invest in funds but not those that charge too much. You can also choose those where the portfolio managers have been beating the benchmark consistently.

Don't go to the banks and pay them upfront fees. Choose low-cost funds instead. If you have the time and inclination, select individual stocks. It's not easy. About 10 to 15 is all you need and they should not be in the same industries.

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

I am an only child and I grew up in Zimbabwe. My father was a bank clerk and my mother was a secretary. They were both the only child in their families.

My father left Britain in 1948, as people there were starving after the war, and headed for South Africa.

On board the ship, he met a farmer returning to Zimbabwe and they became friends. When my father could not get a job in Cape Town, he went to Zimbabwe, where his new friend said he could find work. He did, and worked there for 35 years in the same bank. I went to school there before going to university in South Africa.

My father was pretty frugal and told me not to borrow from banks.

Q: How did you get interested in investing?

At university, I joined a portfolio competition, where I selected shares over a three-month period, and I won.

I thought it was interesting and then I found it to be a challenge I relished because it was about dealing with the future and with uncertainty. That has always been stimulating to me.

Q: What property do you own?

I own just one residential property, in Cape Town, which I bought in 1999 at a market low with cash. I bought it from a developer in trouble at a crazy low price.

Other people who bought it at the same time as me sold as soon as the money doubled. But I didn't. I spent money fixing it and it is now worth 20 times more. It shows you must have the patience to hold.

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

Twelve years ago, I bought a bottle of red wine for $1,200 at a restaurant. It was an impulse purchase but I have no regrets. I shared it with a friend who loves red wine.

Q: What's your retirement plan?

I retired 12 years ago. I enjoy managing money and I now do it from wherever I am. I spend 10 hours a day managing my money. It's my hobby. I am a director at Foord Asset Management but I don't have a salary. My time is my own. I can choose to do no hours or 10 hours.

Q: Home is now...

The house in Cape Town, a boat in Asia-Pacific, and Fullerton Bay Hotel in Singapore, depending on the time of the year.

Q: I drive...

A 12-year-old white Audi A8 in Cape Town.

joyceteo@sph.com.sg

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

WORST AND BEST BETS

Q: What is your worst investment to date?


In the late 1980s, I invested in a listed furniture company. The earnings kept going up but the share price didn't go up, so I bought more shares. Then, I realised the earnings were exaggerated and the cashflow wasn't there. My investment halved before I found out. The company was later bought out by another firm. I lost more than half of my invested money, which was US$5,000. It was quite a big chunk of my savings then.

But it was a very good lesson for me. It taught me that I have to watch a company's cashflow and not just the earnings.

Q: What is your best investment to date?

This would be at least four individual stocks that I've kept long enough - more than 12 years - for them to go up 25 times. Three of them are in South Africa and one is an international stock. It just shows that if you find a good company, such as one with excellent management that can cope with a rainy day, among other criteria, just hold on to it.

You don't need to be active all the time. It's all about the time in the market, and not about timing the market.
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
Reply
His father worked in a bank and told him not to borrow from banks. Great advice from an insider.
Reply
Wah... simply incredible and very inspiring! From saving US$100/mth at age 27 (drawing US$1,000) to buying a US$2Mil catamaran at age 59 and not even thinking that's extragavant! A timeline analysis for those to derive some inspirations of what can be possible by being frugal and investing what you'd saved.

Quote:I started my financial planning when I was 27, when I was earning US$1,000 a month as an investment analyst with a life assurance company in South Africa.

At age 27, started saving..

Quote:I started saving US$100 a month. As my salary increased, I saved more. In five years, I had $25,000. I was lucky as I caught the bull market and was able to reap higher-than-usual returns from my investments in shares.

At age 32, had US$25,000

Quote:I retired 12 years ago. I enjoy managing money and I now do it from wherever I am.

At age 59-12 = 47, already had enough to retire...

Quote:Home over the past 12 years has mostly been a boat, which he sailed around the Mediterranean Sea.
.
His partner of 12 years is Ria Voutsas and he has three children, in their 30s, from a previous marriage.

The moment he retired, he lived out his dreams.. Lived mostly in a boat, sailing... with a new partner!! (I wonder how many of you will emulate him to live up to this part of your dreams when you achieve financial freedom,..Hee...)

I think the greatest untold story is the part from age 32 (only US$25k) to age 47 (financially free to retire). Big Grin
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
Reply
1 property 20 bagger

4 stocks 25 bagger

I guess that's part of the secret sauce to the untold recipe Wink
Just google singapore man of leisure
Reply
You'll never find these multi baggers in Singapore. SGX is too small and most people have turned to property.
Reply
(08-04-2012, 05:33 PM)Jared Seah Wrote: 1 property 20 bagger

4 stocks 25 bagger

I guess that's part of the secret sauce to the untold recipe Wink

He's still holding that property. He may still be holding the stocks, since he mentioned,

'It just shows that if you find a good company, such as one with excellent management that can cope with a rainy day, among other criteria, just hold on to it.'

Most likely, the secret sauce is 'Foord Asset Management'. My guess is he must have saved and invested till he'd enough start-up capital to set up his own biz. He may also have become one of the rising star in his old job and once he'd set up his own biz, the clients would have flocked to him, which helped him achieved financial freedom within that short 15 years (the great untold story). Tongue

More info of his background from his company website,

Business Experience:
1981 to present date: Founder and Director of Foord Asset Management
1980 - 1981 Investment Manager - share portfolios, National Mutual of Australasia.
1979 - 1980 Investment analyst, Old Mutual
1975 - 1978 Articles of Clerkship, Arthur Young and Co, (CT); Ernst and Whinney


Looks like he only had 2-3 years' experience before he set up his own Asset Management co.
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
Reply
(08-04-2012, 05:46 PM)FA+TA Wrote: You'll never find these multi baggers in Singapore. SGX is too small and most people have turned to property.

Why not?
Cosco Corp
2002 10cts
2007 $8.00

Osim
2009 6cts
2011 $1.7

JC&C
1998 $2.09
2012 $51

Dividends not included. List not exhausted.
10 baggers are too numerous to count.
Reply
KopiKat,

I spotted and knew what you alluded to Wink

Joined in the fun by using "part" to hint it's not the "MAIN' ingredient.

Never expected you to give the answer so quick! Let other have a chance to spot it themselves mah. LOL!

It's always back to OPM and OPT - the business owner quadrant Wink

It's an interesting example of we see what we want to see in these "success" stories.

From a salesman angle, I am greatly impressed with his subtle use of publicity.

Everyone that appeared in this BT series all used the opportunity to get free exposure for their business or books. And I bet BT have a queue of entrepreneurs "volunteering" to offer their stories.

But instead of talking about his business, he cleverly focused on his lifestyle and savvy investments.

Most past interviewees will say their business is their best investment. Now that selling too hard... I am here to help you sell, trade, invest your way to financial freedom; and by the way, my business is my best investment! Hello?

"Foord Asset Management owner sails the high seas in a $2m catamaran, living off the dividends from his investments"

Next time you come across this firm, our mind will have this mental hook: "Isn't this the firm owned by that ang moh guy living on his boat?"

Applause; applause. Now that's how you do an interview!
Just google singapore man of leisure
Reply
(08-04-2012, 06:17 PM)yeokiwi Wrote:
(08-04-2012, 05:46 PM)FA+TA Wrote: You'll never find these multi baggers in Singapore. SGX is too small and most people have turned to property.

Why not?
Cosco Corp
2002 10cts
2007 $8.00

Osim
2009 6cts
2011 $1.7

JC&C
1998 $2.09
2012 $51

Dividends not included. List not exhausted.
10 baggers are too numerous to count.

most would not enjoy all profit, either by selling too early or selling too late.
Reply
yes, it is simply incredible and inspiring. it give hope for all value investors, dream can come true one day... but wait a minute...

25k at 27, retired at 47, it is 15 years, assume the retirement fund is 5 millions, so it is 200 time or approx 40-45% compound annual return over 15 years

so i agree with Kopikat, there is untold story there. "value investment" probably is not the only means to achieve his success.
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply


Forum Jump:


Users browsing this thread: 17 Guest(s)