Perhaps the interviewees in this column still fail to get it - a car is NOT an investment, yet many claim it is their "worst investment". Also, I would not really consider endowment policies an investment, but more of a savings plan.
As for his home, I do agree that a 3-room flat is small considering he has 2 children, but to recycle his home equity into a $1 million house seems rather risky. He bought his place for $150,000 (fully paid-up), is planning to sell it for $300,000 and will inject another $200,000 in and take a 50% loan. So you end up with (yet) another loan (of $500,000 - a large sum indeed), and you still do not fully own a home (therefore, you do not enjoy the cash gains on the profit from your first property). Doesn't sound prudent to me but that's my personal opinion. Views, please?
The Straits Times
Dec 18, 2011
Avid saver keeps his money safe
Boss of office interior design firm goes for insurance and shuns the stock market
By Joyce Teo
Conserving cash is a big part of Mr Tay Kyqo Kiat's life. He started saving when he was in Primary 1 and his savings have allowed him to buy his first car, pay for a wedding in Paris and start his own business. Soon, his savings will allow him to upgrade to a bigger home.
Four years ago, he set up an office interior design firm, Plus Advant. It was a one-man show in the first year. He then ploughed back the money he made into the business and roped in three partners, who are smaller shareholders.
He has invested $100,000 in the firm, which now employs 10 people and is profitable. It is based in a 7,000 sq ft space in Ubi.
Mr Tay, 33, says he was forced into the interior design industry as there were no construction jobs for him when he graduated from Singapore Polytechnic with a diploma in construction back in 1997. He started off doing computer-aided design work for an interior design firm before trying his hand at marketing interior design services.
Of Plus Advant, he says: 'My grand plan is to get it listed in 15 years.'
But for now, he and his wife Esther Lim, 34, are focusing on getting a private apartment in the next few months. They now live in a three-room HDB flat in Bedok.
His wife is a financial controller. Their son Memphis is two and their daughter Heidi is six months old.
Q: Are you a spender or saver?
My wife makes sure we save our money. I don't buy much for myself but I will happily spend on my kids and my wife.
In Singapore, you need quite a lot of money to have a good life.
It is important to save because you never know when you will urgently need funds. One needs to be frugal but that doesn't mean you need to save on everything. There are always good deals out there.
I charge about $1,500 on average every month to my credit cards. I have six of them, all from the same bank.
They are all linked to a Giro account, hence late payments are a thing of the past.
Q: What financial planning have you done for yourself?
My wife and I believe in insurance. We have $500,000 worth of policies, including a 10-year $50,000 endowment policy for our first kid's education.
I plan to invest in properties in the future when I have spare cash.
Q: Moneywise, what were your growing-up years like?
I grew up in a family of four.
My dad was an iron worker in a shipyard before he became a subcontractor. My mum was a cashier at a supermart.
Life was tough. At one stage, we were living in a small flat in Balam Road with my grandma and my uncle's family of six. Things got better when my dad's business grew and my mum was promoted to be a store manager. We moved to a five-room flat in Eunos when I was six.
We had very little money because my parents had to set aside money to pay for the flat. I had a piggy bank when I was in Primary 1 and every day, I would save half my pocket money. Since then, saving money has been a part of my life.
Q: How did you get interested in investing?
I bought my first endowment policy back in 1998 after I was introduced to it during my army days. We do need some form of investment to prepare for our retirement.
But I don't have an interest in the stock market and I am not good at investing my money. I'd rather save and buy endowment policies for now.
Q: What property do you own?
A fully paid 700 sq ft three-room HDB flat in Bedok that we bought for $150,000 in 2006.
We plan to sell it by June next year and upgrade to a $1 million private apartment in the east.
We were preparing to buy early this year but decided to wait for a better time. We will get a 50 per cent loan as we can sell our Bedok flat for about $300,000 and we have saved about $200,000.
Q: What's the most extravagant thing you have bought?
This would certainly be our wedding celebration in Paris and our honeymoon in Europe in 2005.
We spent $30,000 on the wedding photography package and solemnisation as well as a 14-day tour of Europe. It wiped out our savings then but it was once in a lifetime.
Q: What's your retirement plan?
I would like to retire to a country with more greenery. I think it would be nice to be able to manage a vineyard.
No doubt Singapore is a nice place, but I would like to go back to nature in my retirement years.
Q: Home is now...
The three-room flat.
Q: I drive...
A grey Honda Odyssey.
joyceteo@sph.com.sg
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WORST AND BEST BETS
Q: What is your best investment to date?
My business, as it is profitable. It will still do okay in bad times because people will move offices to take advantage of cheap rents, though they may spend less on renovations.
Q: What is your worst investment to date?
I would say it was my first car.
I was overjoyed when I got my driving licence back in 2000. So, I poured all my savings into a Honda Civic that cost me $82,000.
I drove it for five years and sold it for just $30,000.
Hence, I would say I lost about $10,000 a year, which wasn't that bad.
But car repairs cost me $20,000 in those five years because of my poor driving skills.
I should have bought an old car and avoided 'kissing' the backs of other people's cars or the trash bin, which would have saved me at least half of the repair costs.
The one good thing about this interview is, however, her willingness to do