Me & My Money Series (Sunday Times)

[Devil]

Erm... that's just pretty typical gapping technic of borrowing to invest in higher yielding stuff by taking on additional market risk. That 10% is just the investment return which happens to be positive, that is not the "cost of funds" and neither is it the profit from his card techniques.

To get an accurate view of how much savings his techniques are delivering, you need to compare against a simple phone call to any instant credit facility which usually yields a EIR of 2-3%. The stunts he's pulling is just saving that 2-3% on the $2000, which works out to be $40-$60 a year. Like I said, sure that's some savings, but is it worth the time?

I do not think promotional balance transfer, or balance transfer is available for student credit card. But I will agree that working adults opportunity cost is promotional balance transfer.

This is unique to me, I'm sure others will find more productive use of their time somewhere else. What I'm trying to say is all these supposedly complicated techniques to save that pittance amount really don't make sense for most people unless you are an unemployed guy / student who is very free and has nothing to do everyday.

he will perhaps be an extremely efficient finance manager? he will be maximising the credit given by suppliers, not allowing excess funds to idle. the initial hours spent on learning skills is unprofitable. the profit only comes later with the mastery of skills, and hence the importance of specialising.

Of course hobbies need not be lucrative, but please bear in mind the discussion here is in response to the article in Sunday Times which I'm very sure the subject in question is not performing credit card acrobatics as a hobby. Since it was done with a business purpose in mind, it ought to be measured with a business mindset as well.

please elaborate what do you meant by "done with a business mind". If I sold a stamp I collected for $500, my stamp collecting activities should be evaluated on a business basis?

[kazukirai]

This week's Me & My Money column. Once again, nothing interesting as far as investing is concerned. Completely misleading headline as far as investing is concerned. If putting some money into any asset class is considered investing, then everyone who has some ILP bought in your name would be an investor.

On a positive note, I think this young man has an entrepreneurial streak and that is a good thing that he has going for him.

Businessman and investor... at 18
Teen entrepreneur uses pocket money to start one-stop online guide which recently broke even

The idea of just leaving money in passive investments in hopes of it growing cuts no ice with teen entrepreneur Wong Li Hong.

The Year 6 Raffles Institution student feels his money should work hard for him. This led him to start an online business with pal Lemuel Low, 18, early this year.

Their site, WhatsNext.sg, aims to be a one-stop guide outlining what locals and tourists can do in Singapore.

"Lemuel and I noticed the lack of real guides for events and service providers in Singapore, as opposed to the large number of business directories which feature shop addresses but little else," says Li Hong, 18.

They put $1,000 into the project at first. It took a year to set up before they launched the online platform that allows two-way communication between shop owners and users. They have now invested about $3,000 in total.

Instead of asking their parents for extra money, Li Hong and Lemuel dug into their savings to ensure they were responsible for the project.
Li Hong gets $450 a month as pocket money and said that it was more than enough to cover his expenses - mainly food, transport, half his monthly mobile phone bill and books.

His allowance also covers new gadgets, such as computers or mobile phones.

The site makes money through advertisements and recently broke even.
Li Hong's parents, who are in their 50s, run their own businesses in real estate, food and beverage, and packaging. His 20-year-old brother is studying overseas.

He said his entrepreneurial spirit grew and was influenced by his parents, who started a business together over 20 years ago.

They were conscious about not wanting him to follow in their footsteps and hoped he would take on a less risky career path such as being a lawyer.

But he developed a keen interest in running his own business as he got interested in what they were doing throughout his growing-up years.
The teenager added that his parents have been supportive of his venture.

Q: Are you a spender or saver?

Rather than following a rigid budget, I believe in being flexible but always making sensible purchases.
I believe that good businessmen should be both wise spenders and savers.

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

I own two debit cards, one for personal expenditure and the other for the joint account which I have with my friend for our business.
I use my cards whenever possible because the online records make it easy to log my monthly spending. I typically charge $200 to my personal card every month.

Q: What do you invest in?

I have invested in gold since 2010, when I was looking for a first alternative outlet for my savings.
This was largely influenced by my parents who advised me against leaving my savings in the bank. But instead of speculating in the commodity, they told me to keep it for a longer term.
I invested an initial $250 through an account my parents set up for me and have gradually added to that amount since. I've about $2,000 in gold now.

Even though gold prices have fallen recently, I view this as a long-term investment and will continue this in the future.
Today, I invest mainly in my own business.

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

I developed an outlook on money management under my parents' influence.

When I was eight or nine, I used to spend all my pocket money at the toy shop near my old house. I wasn't conscious of my spending and thought that whatever money they gave me could be spent.
It was around that time that they made me keep track of all my purchases and jot down what I spent in a book.

Despite their belief in the virtue of saving, my parents never dictated how my allowance ought to be spent.

After I turned 12, my parents also made it clear that I would not be getting anything above my monthly allowance.
They pay for my school fees and holidays. Other expenses come out of my own pocket.

That taught me, albeit by force, that if I wanted more to spend, I needed to earn it on my own.

WORST AND BEST BETS
Q: What is your worst investment?

I made my worst investment in my lower secondary school years when I was still inexperienced in doing business.
I'd bought 50 low-cost music players for about $300, with the intention of selling them online.
Unfortunately, demand was poor and I was forced to sell more than half of them below cost just to break even.
It taught me to always test the waters before stepping in.

Q: What is your best investment?

My best investment happened during a six-month stint starting from my
year-end holidays in Secondary 3.
I invested a total of $600 over three shipments of smartphone accessories, which I sold online.
After making over $3,000 in profit, I stopped the business and shifted some of the proceeds into developing my website WhatsNext.sg, which I expect to be my next best investment.

[corydorus]

One thing is key, he has RICH parents there to help and guide him. This makes a lot of difference.

[kazukirai]

The kind of overcoming adversity story that we all love. Nothing much to say once again with regards to investments but seems like the brink of bankruptcy really made him turn into a completely different person.

Spa boss' million-dollar lesson
Business failure taught him to value money and appreciate people around him

In 2005, Mr Felix Liau and his wife were facing debts of close to $1 million as his spa business that he had set up with four other partners went into the red.
Mr Liau, now 48, who was the managing director of the company, said: "I was too ambitious and grew the business too quickly. When we decided to fold the business, I had to deal with customers who had signed up for our spa packages, loans for the equipment, bank overdrafts, employees' salaries and supplies."
His wife Sophia Chong, 38, was also helping out in the business. Mr Liau recalled how the third day of the Chinese New Year in 2005, which coincided with Valentine's Day, was one of his life's lowest points.
The stress was immense as the couple had mortgage payments, debt from the failed business and more bills to pay with the arrival of their first child. "But I never considered that episode financial embarrassment," he said. "What is wrong with having debt when the money was used for a business?
"In fact, I needed that downfall to know the value of money and appreciate the people around me."
Most of the $1 million debt was in the form of spa packages that customers had paid for in advance.
"The first thing we did was to run to the bank and try to negotiate terms of payment," Mr Liau said.
He also redeemed all his insurance policies which had a cash value of $20,000, emptied his savings and borrowed some money from his family and friends.

But that business failure did not deter him from re-entering the business world. He and his wife started a spa business again that same year in July. They honoured the packages signed by their customers. Instead of running the business themselves, they found a franchisee, thus earning a fee from the revenue.

Another opportunity came knocking in October that same year which allowed the couple to manufacture spa products such as oils, body scrubs and masks. The franchisee is the sole distributor of their spa products.

With some customers waiving the remaining spa sessions from the prepaid packages, as a goodwill gesture of support, their debt was finally cleared in 2009.

Mr Liau also does freelance landscaping and interior designing to supplement his income. He brings home about $12,500 a month.
He has two daughters, Rui Ni, six, and Rui En, nine.
Q: Are you a spender or a saver?

I'm a saver but I'll spend on things that are of value to my family and me such as educational and adventure-type holidays. Other than that, we usually eat at home rather than at expensive restaurants.
I limit myself to $10 a day on food, down from $50 previously, and carry a big water bottle around so I don't have to spend on drinks.

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

I've a UOB credit card for my personal spending, and I don't charge more than $300 a month to it. My family also has an OCBC credit card which is used to buy groceries for the cashback benefits.
My wife and I prefer to pay for big-ticket items through Nets or cash, including our family trips.

Q: What financial planning have you done for yourself?
I have been attending seminars and workshops on how to manage one's money and make it work for you.
But my investments are in these main areas - the spa business and manufacturing as well as property.

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

My parents had always taught me to live frugally and save money. Unfortunately, their advice fell on deaf ears.

I didn't know the true value of money in my younger days so I'd splurge on branded apparel, dine at expensive restaurants and buy things I didn't need like furniture.

Even after I was married, I continued these bad spending habits until my elder daughter was born.

Q: How did you get interested in investing?

We believed that buying property was akin to forced savings.

Q: What property do you own?

On top of the four-room Housing Board flat, we bought a three-bedder unit at Changi Rise in 2003 which is rented out so the rental income covers the mortgage repayments.
After our debts were cleared in 2009, we invested in a 1,087 sq ft industrial unit in Ubi in 2010 for a few hundred thousand dollars. The unit is leased out.

As for overseas properties, we have two condo units in Iskandar Malaysia which we bought in 2012 that are not completed yet. We also bought an apartment in Kuala Lumpur, Malaysia, and a two-room apartment in Melbourne, Australia.

My daughters may use the Australian home if they study there in future. While we have made downpayments for these three overseas properties, the monthly mortgage repayments will kick in some time only in 2016.

Q: What's your retirement plan?

Both my wife and I can be considered to have retired from our jobs but not from our life as we spend a lot of quality time with our children.
We continue to run a business and I take on freelance jobs because we love it, not because we have to. Ultimately, I hope to stay in Iskandar and enjoy life as a gardener.

Q: Home is now...

A four-room simplified HDB flat in Simei. This is the smallest among the range of four-room public housing offerings.

Q: I drive...

A second-hand Volkswagen Touran which is good enough to ferry my family around. I'll purchase only second-hand cars.

WORST AND BEST BETS

Q: What is your worst investment to date?

I'd have to say it was an investment-linked insurance policy. It's the kind of product where an agent promises to monitor it for you but honestly, I believe he is more focused on his commission than my interest.
I lost about $11,000 which was drawn from my Central Provident Fund for a policy which I held from 2003 to 2010.

Q: What is your best investment to date?

If you're referring to best investment for my personal development, it would have to be the investment seminars and workshops which I have been attending.
Money-wise, I'll have to say it's my revamped spa business under a new model and branded under the Bali Tangi name. I've always believed that every business, if managed well, can be sold for a much higher return. The revenue from spa products, royalties, licensing of trademarks and management fees crossed $1 million last year.

rjscully@sph.com.sg

[CY09]

I like the comment of the ILP as worst investment to date. It just tells us that most agents are more interested in filling their wallets before yours. Hence to truly learn how to grow your money, you have to learn to do it and not rely on others to manage it for you.

[Dividend Warrior]

I like the comment of the ILP as worst investment to date. It just tells us that most agents are more interested in filling their wallets before yours. Hence to truly learn how to grow your money, you have to learn to do it and not rely on others to manage it for you.

I agree.

Nobody cares more about your money than you do.

[LionFlyer]

He has a properties in Iskandar. A number of my friends had also invested (well before the current interest) in places like Horizon Hills. Is it a increasing belief that it would be too expensive or to unhealthy to retire in the Singapore in the future, say 2030-40 etc?

[kazukirai]

As MW would have said, "another guy who loves spending on cars".

This guy is also a property lover only because he got burnt by stocks (once bitten, twice shy). Not the trait of a good investor who should be more concerned about the process. Outcome should be viewed in the long run.

Is it me or Singapore is really crowded with property lovers these days. I know the early to mid 90s were somewhat like this too.

I think property lovers need to come out and admit that what they really love is the leverage. I also note that he personally doesn't mention much about his badminton coaching business which is a shame.

Property agent has several balls in the air
PropNex consultant also runs a centre that conducts badminton lessons

Property agent and sports entrepreneur Haden Hee has come a long way from his first job as an all-night cashier at a petrol kiosk when he was 15.
He has turned his love of sports and liking for making deals into successful businesses.

His love of badminton led Mr Hee, 32, to set up Haden Development Centre in 2004. Classes are conducted for students and adults, aged seven to 50, with the help of eight badminton coaches. At its busiest, Mr Hee can earn $15,000 a month. Then in May 2011, he also became a property consultant, specialising in food and beverage spaces, and has been with PropNex Realty since last May.

"After buying my first property in 2008, I somehow felt that I could possibly broker my own deal rather than go through an agent," he says.
And the flexible hours of a property consultant and agent allowed him to work around his badminton coaching commitments.

Mr Hee says he earns about $150,000 annually from property and thinks this can continue as the cooling measures are not affecting the commercial market.

And while the tightening labour laws may hurt food and beverage businesses, he adds that foreign brands and concepts are still looking to set up shop here.

The self-professed impulsive spender says he appreciates the value of money better after an epiphany in 2008 when he bought his first condo, in Tanjong Katong.

It was during the financial crisis so "prices were really good but I realised that I didn't have enough savings to buy a second unit", he adds.
If you think he looks familiar, that is because Mr Hee also took on supporting roles in local Chinese drama serials such as 4D in 2009's Your Hand In Mine and more recently as a director of a variety show in ongoing drama The Dream Makers.

He is also the younger brother of former MediaCorp artiste Julian Hee, who starred in productions such as Red Thread and Channel U's Perfect Cut.

His mother, 63, is a remisier while his father, 64, is retired from his bank job. Mr Hee also has two younger siblings, aged 19 and 22. All five live in the family home with his golden retriever Hermes.

Q: Are you a spender or a saver?

Unfortunately, I'm more of a spender. I don't really keep track of my expenses, which is probably my biggest financial weakness.
I've changed cars six times since 2005 (five were second-hand), but won't continue doing so now that loan restrictions have set in.

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

I use my cards to pay for most of my expenses amounting to $5,000 a month, and make it a point to fully pay my bills on time.

Q: What financial planning have you done for yourself?

As a property consultant, I practise what I preach and allocate the bulk of my investment portfolio to property.
I view property as a long-term investment and recently bought two private homes in Singapore and two others in Malaysia.
But I also diversify my portfolio into equities, most of which are United States stocks. I've been holding on to them since 2008 as they aren't performing too well. In addition, I pay around $600 per month for my endowment plans.

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

I've always craved financial independence.
When I was in Secondary 3, I got an allowance of $100 a month which wasn't enough to pay for my badminton gear and equipment so I took a part-time job as a cashier at a petrol kiosk earning $3.50 per hour for about six months.

As a national youth team player, I had to attend training at the Singapore Badminton Association from 7pm to 10pm Mondays to Saturdays. I'd start my shift (at the petrol kiosk) after that till 6 the next morning, when I would go to school. That took a toll on my body, grades and badminton performance.

That's when I switched to handing out survey forms over the weekends in Orchard Road earning $1 a piece. It wasn't easy, but I tried to get 50 pieces filled a day before calling it a day!

Q: How did you get interested in investing?

I was first introduced to stocks by my friends in 2007. I felt then that it was so easy to buy shares with just a few clicks. But I got my fingers burnt during the global financial crisis. So I looked to property after seeing how its value can appreciate over time. With the rising cost of land, raw materials and labour, I don't think property prices will fall below current levels in the long term.

In 2008, I bought a two-bedder freehold property in Tanjong Katong for $770,000 while the economy was suffering from a credit crunch. I sold it for $1.4 million last year and have used the profits for my subsequent property investments.

Q: What properties do you own?

I bought four condos in the past year. Last October, I got a three-bedder unit at Miltonia Close and paid a 20 per cent down payment. I intend to move in when the development is ready.
My "first" investment property is a one-bedder in Pasir Ris, on which I had to pay a 50 per cent down payment. I also paid a 20 per cent down payment for two private homes in Kuala Lumpur and Malacca. Mortgage payments for these two properties will kick in some time in the next few months.
I'll be renting out these three projects and the rental income can help cover the monthly instalments on them.

Q: What is the most extravagant thing you have bought?

My BMW 325i convertible. The then one-year-old car cost me $200,000 last year.

Q: What's your retirement plan?

I don't think I'll ever retire but I hope to take on more of a management role in my business. I'll continue running Haden Development Centre and be a property consultant. But I may also pursue my interest in acting and take on those "uncle-type" roles.

Q: Home is now...

A four-bedroom terrace with my parents and siblings in the Yio Chu Kang area.

Q: I drive...
A white BMW 325i convertible.

rjscully@sph.com.sg
Background story

WORST AND BEST BETS

Q: What is your worst investment to date?

The $50,000 investment in land banking sold by Profitable Plots. I also have about $100,000 stuck in penny stocks which I bought in 2008 and am still holding on to.

Q: What is your best investment to date?

With a stroke of luck and good timing, I’d have to say it’s my first property investment in 2008. I made about $600,000 profit from selling the freehold Tanjong Katong two-bedder last year.
That gave me the capital and cash flow to invest in subsequent properties.

[Dividend Warrior]

Wow......
$100k stuck in penny stocks. He is quite a risk-taker!

[evilbdboi]

"Mortgage payments for these two properties will kick in some time in the next few months.
I'll be renting out these three projects and the rental income can help cover the monthly instalments on them."

Looks highly leveraged to me. He is going to depend on rental income to finance his monthly mortgage payment.

When interest rates starts to raise and if he is not able to find a tenant will it not become double whammy?