Me & My Money Series (Sunday Times)

[corydorus]

150K is really a small sum to talk about for a Charmain of Landbanking. A case of 'puts his money where his mouth is" for the sake of saying it has ?
I will not be surprise if he has other benefits or maybe low commision taken for this investment on top of it.


Cory

[d.o.g.]

Hmmm... the CHAIRMAN of a landbanking company has US$150k (S$186k) invested in raw land but the following amount invested elsewhere:

S$2m semi-detached house in East Coast
RM1.2m (~S$500k) semi-detached house in Johor
$1.2m condominium in East Coast (via wife)
$100k in unit trusts

He mentions mortgage payments so let's assume he bought the properties with 80% loans of the original cost. Since the East Coast condominium was bought over 16 years ago, let's assume the loan is 50% paid up. This implies the following loans:

S$1.1m loan on semi-detached house in East Coast
$300k loan on semi-detached house in Johor
$260k loan on condominium in East Coast (via wife)

Adding it up, we have the following estimate of his disclosed household net worth:

S$900k equity in semi-detached house in East Coast
$100k equity in semi-detached house in Johor
$1m equity in condominium in East Coast (via wife)
$186k in raw land
$100k in unit trusts

That adds up to over $2.2m of net worth disclosed, of which less than 10% is in the "raw land" asset class he is promoting. Personally I would not say that he "puts his money where his mouth is" but in fact the total opposite - he DOESN'T believe in land banking at all. To me, him putting less than 10% of net worth into raw land is basically "for show".

The fact is that he has over 90% of his disclosed net worth in COMPLETED PROPERTY, not the raw land he is trying to sell you. So what does he really believe in? The article's byline says it all (emphasis mine):

"Walton International Asia's chairman believes in putting his money into property"

Maybe raw land makes sense for some people. But most of these people are selling raw land not buying it. Would I buy raw land from this guy? Please don't make me laugh. At least find me a better promoter. This guy fails the "true believer" test by a wide margin.

As usual, YMMV.

[Musicwhiz]

Yes I do agree with d.o.g. that this guy does not put his money where his mouth is. Apparently, I think this Me & My Money interview was to promote Walton's land banking and hence probably generate more commissions for him!

A previous frequent forummer (who has since left) had also touted the benefits of land banking and UK Traded Endowments. I've never been fascinated by such "alternative" investments, and this includes gold and silver too.

Perhaps I am too old-fashioned, but I still prefer equities.

[Big Toe]

Some critical considerations in investments is; liquidity, holding period and how much power you have over your investment.

Land banking works for you if you are able to wait 19years (longest holding period recorded according to the article)
So this investment is rigid in terms of liquidity and holding period.

When we invest in local property, we have a certain level of control/comfort. It is our home ground, we know what the rules are.
We know the ins and outs of buying a residential property. Also, it is relatively liquid compared to other parts of the world. Just like a business
man would want to invest in his own business, a property investor would want to have home ground advantage. On the other hand, god knows what will happen to that vacant piece of land in a faraway place.

[Musicwhiz]

Land banking works for you if you are able to wait 19years (longest holding period recorded according to the article)
So this investment is rigid in terms of liquidity and holding period.

19 years is a very long time and many things can happen in the interim - thus you may need the money but it remains "stuck" in this investment.

Plus, land banking does not pay out dividends or any form of cash flow while waiting, so the gain is completely from anticipated capital appreciation. Hence, I do not find this a viable "investment".

[Musicwhiz]

Two weeks, and two spenders in a row. This guy sounds like he made his money cashing in on the dot.com boom - nothing to be too proud of. The story sounds similar to last week's and his worst "investment" is two Porsches??

May 22, 2011
me & my money
'A house is not my retirement plan'
Entrepreneur prefers to channel savings to businesses and other investments
By Lorna Tan, Senior Correspondent

Lured by the excitement and potential of doing business over the Internet, Canadian Derek Gehl could not wait to start his own in 1998. He was 21 and had just obtained a technical diploma from CDI College, Vancouver.

In August that year, Mr Gehl and a business partner set up Internet Marketing Centre with a few hundred dollars, selling electronic gadgets such as software and third-party e-books online. Its turnover was US$1.5 million (S$1.8 million) a year later. As interest in Internet marketing grew, the firm ventured into teaching people how to build online businesses, and selling its own proprietary e-books, books and marketing tools.

By 2006, the firm had 100 staff and hit an impressive annual turnover of US$30 million. Mr Gehl, 34, declined to provide the firm's bottom line but said that it is usual for an Internet business that sells electronic gadgets to enjoy a profit margin of some 30 per cent to 40 per cent. In 2007, the business was sold to a US private equity firm for an eight-figure sum.

Mr Gehl stayed on as chief executive for two more years before leaving the firm. While serving out his two-year garden leave from 2009 till early this year, during which time he was not allowed to teach Internet marketing, he built websites and worked as a freelance consultant.

He said it is possible to set up passive streams of income from operating online businesses. Currently, he runs 16 websites, each serving a different niche market, from making bath soaps to selling spa products.

'A perfect example is a little website I picked up a few years ago for under US$2,000. After purchasing it I made a few small tweaks and changes, put it on autopilot and it has been generating US$500-US$1,000 per month,' he said. That website is www.makebathbombs.com.

Now that his garden leave is over, Mr Gehl is in the midst of starting a new firm to get back to Internet marketing training. Recently, he visited Singapore and spoke at an Internet marketing seminar organised by training firm Wealth Mentors.

He is married to Ms Coralynn Webber, 39, who is an accountant by profession and helps him in his business. They have two sons - Carter, 12, and Hunter, three.

Q: Are you a spender or saver?

I'm more of a spender. I like to have fun but it has to be balanced with family responsibility. I like to travel and do fun stuff with my kids. My business partner Corey Rudl died in an accident when he was 34 in 2005. He was just starting to enjoy the fruits of his labour then.

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

Because I do all of my business online, my credit cards are my primary form of payment for most of my business expenses. So if I am running seminars or buying advertising I have been known to spend up to C$200,000 (S$256,000) on a credit card in a single month. But I always make sure it gets paid off before the interest kicks in.

Q: What financial planning have you done?

My wife and I own four universal life insurance policies from which I have C$5 million in insurance on my life. The total premium is C$1,200 a month and I put in another C$1,500 to C$2,000 a month into the investment portion of the plans. The latter are invested in equities and unit trusts. The investment portion is now worth a six-digit sum.

I also invest a percentage of my income up to a cap of C$20,000 a year in a registered retirement savings plan (RRSP). The latter allows me to enjoy tax savings as the tax on the investment amount is deferred. Both the universal life plans and the RRSP are my safety net. To accumulate wealth, I prefer to invest in new business strategies.

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

I grew up in a middle-class family of four. My father was a police officer and my mother is a legal assistant. I have an older sister. We lived on an 8-hectare cattle farm in British Columbia outside Vancouver.

I was encouraged to work from a young age. I started helping out at the farm when I was eight, shovelling manure and feeding the animals. When I was a teenager, we moved to a three-storey, 3,500 sq ft home in the suburbs.

Both my parents have an entrepreneurial side and were very hard workers. Ever since I can remember, my father had a side business going either building houses, farming, teaching at the university or writing books. The work ethic my parents instilled in me has been a huge benefit. But after watching my dad work so hard and sacrifice so much, it motivated me to find an easier way. My dad is retired, while my mum still works as a legal assistant.

Q: What property do you own?

I don't own any property. I had one investment property - a 2,500 sq ft, three-storey house in British Columbia - that I bought for C$100,000 in 2003. It was sold in 2008 for C$310,000. A few months later, the property market in Canada crashed.

I don't think the market will improve for at least another two years. Until then, I will continue to rent. Besides, a house is not my retirement plan. I don't believe in channelling my savings towards a mortgage where you pay predominantly interest in the first five to 10 years. I prefer to invest my savings in businesses and other investments that have potential for higher returns.

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

In 2007, I bought two Porsches - a Porsche 911 convertible that cost C$85,000 and a Porsche SUV for C$90,000. I had wanted to buy one but bought both almost on impulse when I saw them in the showroom. I sold the convertible in 2009 and lost about C$40,000. It was the worst financial decision I've ever made.

Q: What's your retirement plan?

I am still young, so I have no plans on retiring at this point. As long as I am still having fun and my body allows it, I will work. Currently, I need about C$12,000 a month for my family and me.

Q: Home is now...

I live in a 7,000 sq ft, three-storey home on the side of a mountain just outside Vancouver, British Columbia. I'm renting it for C$4,500 a month.

Q: I currently drive...

A black Porsche Cayenne (SUV) and a charcoal Toyota Tundra Platinum that cost C$55,000.

lorna@sph.com.sg

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

WORST AND BEST BETS

Q: What has been your worst investment to date?

Buying two new Porsches at the same time in 2007. The minute I drove them off the lot I lost at least C$40,000 in total because of the depreciation. Ouch!

Q: And your best?

Definitely investing in myself... in my own education. Since 1998, I have spent roughly C$300,000 on courses and training seminars, mainly on Internet marketing and running businesses, all over the world.

The returns have been phenomenal and I will continue to pay for such education for the rest of my life.

[Musicwhiz]

May 29, 2011
me & my money
Making $10 from each dollar saved
That's the goal of businessman Victor Teo who started out as a hawker assistant
By Lorna Tan, Senior Correspondent

Mr Victor Teo was 14 when he arrived in Singapore in 1966 from Muar, Johor, with his parents and younger sister. His father had odd jobs, while he worked as a hawker assistant selling noodles from a pushcart in Tanjong Pagar. He was paid $1 a day.

Deciding that learning a trade was the way to go, he joined an electrical subcontracting firm in the early 1970s. Over the years, he became a skilled electrician through his stints at Meritus Mandarin Hotel in Orchard Road as a senior plant operator, and subsequently as duty engineer at Furama City View Hotel and then at Oriental Hotel.

While working at Oriental, he set up mechanical and electrical firm E-Tech Building Service. That was in 1990. He held on to his job at Oriental for four more years before taking the plunge and going full-time running his business.

Since then, the business in Singapore has grown to include trading of printed circuit boards, owning and running two hostels in Lorong Buangkok and Telok Kurau, a Chinese restaurant at Suntec City Mall, and importing Taiwanese premium tea leaves.

In 2002, he ventured into the Philippines where he operates two petrol stations, a motel and a restaurant, in the cities of Bacnotan and Santa Lucia. He is now planning to expand his food and beverage business in Singapore, Manila and Australia.

'My business philosophy is 'Never leave till tomorrow what I can do today'. Reliability, quality and personalised customer service are the key driving factors in my business operations,' Mr Teo, now 59, said in Mandarin to The Sunday Times.

A Singapore permanent resident since 1970, Mr Teo is married to housewife Lim Poh Keow, 55, and they have four children who are involved in the running of the various business units. They are Shirley, 37, who runs the hotels; Davies, 36, who runs E-Tech; Richard, 35, who runs the restaurant; and Cheryl, 33, who manages the tea business.

Q: Are you a spender or saver?

I am a person who saves as much as I can to build up my capital and reserves so that I can spend (by ploughing back my savings) to grow my different businesses, or venture into a new business opportunity. In my earlier days, I could save at least half of my pay. When I save $1, I hope to use it later to make $10. That's my business and investment philosophy.

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

I have 12 credit cards from various banks. As I usually pay cash for my purchases, I charge only about $1,000 to $5,000 to my credit cards each month, depending on the types of purchases made here and in the Philippines. I always make my credit card payment in full to avoid the interest. I usually have between $1,000 and $1,500 in my wallet. It's a habit that I developed over the years, as I do not like the idea of being poor again.

Q: What financial planning have you done for yourself?

My portfolio comprises insurance, stocks and my businesses. For insurance, I own both life and investment-type policies. I'm insured for about $800,000 on my life.

I always believe in money making more money, so I tend to look out for suitable investments to make from time to time. My daughter Shirley looks after my stock portfolio, which is worth about $800,000. My stocks include OCBC, DBS, Genting, Popular and Wing Tai. She targets capital gains rather than dividends.

My E-Tech Group of businesses now includes E-Tech Building Service, Bee-Tech Trading (started in 1993), the 130-seat Chang Feng Ji Superior Restaurant (set up in 2007 with $200,000), Alliance International Hostel (set up in 2008 with $200,000) and Mizu Enterprise (started last year with $150,000).

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

I'm the third child in a family of six. My late father did odd jobs in carpentry and my mother was a housewife. I grew up in a very harsh and tough environment on the outskirts of Muar, Johor, where there was no electricity and we relied on a kerosene lamp for lighting at night. My home in Muar was a rented garage. During school holidays, I would go round the village selling fruits on a bicycle.

After moving to Singapore in 1966, we rented a room in a shophouse in Toa Payoh.

Q: How did you get interested in investing?

My father's death in 1974 made me realise that life is short and that I have only one chance to make good in life. I decided to upgrade my skills and ventured into business when the time was right. I got interested in investing when I realised that through a sharp mind and hard work, I could turn a small capital sum into a massive business.

When you work for someone, the pay is fixed. But the sky is the limit when you have your own business and are prepared to work very hard. I believe in hard work, good listening skills and building relationships based on trust and integrity.

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

In 1995, I bought a gold and diamond Rolex King watch for $40,000. I'm still wearing it today.

Four years later, I bought a $30,000 yacht just to satisfy my ego, to know that I had finally made it after years of hardship and struggle. I didn't use it much, so I sold it two years later at half its original price.

Q: What's your retirement plan?

Like Mr Lee Kuan Yew, I do not believe in retiring. It is in my blood to work and be active... to contribute to society and grow my business together with my children.

Q: Home is now...

A Housing Board maisonette in Tampines.

Q: I drive...

I own a black BMW 520i.

----------------------------------------------------------
Worst and Best Bets

Q: What has been your worst investment to date?

In 1993, I invested $30,000 to bring six Wa Wa machines (toy picking machines) from Taiwan. They were placed outside neighbourhood provision stores in Tampines, Bedok and Hougang estates. Unfortunately, there was poor human traffic and children were more attracted to electronic games. The business folded in one year and I lost my entire investment. But I did not look back.

Q: And your best?

It would be my children, who also grew up in a tough environment. From a young age, they helped to generate extra family income by hawking snacks and tidbits prepared by my wife and mother in the HDB estates. I ruled them with a cane and tried to instil my entrepreneurial spirit in them. I am happy to say that I am very proud of them today. All my children are firmly united and work in the family business.

Apart from my children, my best investment to date is my first business venture, E-Tech Building Service, which was started with $50,000 in 1990. It has given me a great sense of gratification and achievement, as the business has grown from strength to strength and diversified. The group's annual revenue is about $5 million. My business in the Philippines has 20 staff and it generates another $600,000 a year.

[pianist]

it drives me up after reading this impressive story..somehow i feel also he came to singapore at the right time in the earlier days in 1966 where the economy is ramping up and pockets of suitable business opportunities for entreprenuers were present

[Zelphon]

On a serious note, what kind of sustainable business can one venture into in Singapore now?

I have seen many people taking the plunge into being financial advisors (aka Insurance Agents) and property agents...
I have also seen some fresh graduates going into F&B by either being hawkers or setting up yogurt shops...
Some of my peers give tuition for extra income...

What other opportunities are there in a mature economy in Singapore apart from importing the latest craze from taiwan and japan?

[koh_52]

Nothing to excited about this guy…purely a sub-contractor based business…mainly he started his business at the right time…and he extremely hard working…..this 1 i must salute to him. Now forming multiple companies there a reason…...

Born in the year of dragon…in mandarin hotel he under a malay chief engineer whose invented the key access system in early 70,now retired. whereby you pull out the key the whole room electrical supply cut-off.
In Furama he under Goh, now still there, in Oriental he under either Wu or Martin, now still in hotel industry….he is a duty engineer. Only a shift engineer getting less than 2k during that time got nothing to loose, fails go back to the hotel and work lor……

He claimed to have many companies with high turn-over , but what is the profit margin?, What is his liabilities, every month how much money he has to pay to his workers….The Engrg firm is mainly doing aircon servicing/repair works dun really make big money being a sub-contractor with yearly contract….in market there are many this sort of company like…M-tech, I-tech, L-tech, G-tech…tech here and tech there but only leverage on foreign worker to make money…they have to under cut each other to secure the contract….some daring one, make the FT to sign an agreement with an agreed lower than MOM declare pay of S-pass $1.8k/mth instead paid them 1.4k….of cos after few yrs this worker left and he is not binded anymore, so words go aro...

This business is people orientated, w/o good workers the company collapse..worker is their asset.

I dun see him to own any property.....so to said his asset are all in his business..hmms putting his egg in 1 basket.