ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

Full Version: Me & My Money Series (Sunday Times)
You're currently viewing a stripped down version of our content. View the full version with proper formatting.
The Straits Times
www.straitstimes.com
Published on Oct 14, 2012
Company boss puts all his eggs in one basket

Environmental brand consultancy owner opts to pump savings back into his business

By magdalen ng

A common mistake made by many investors is to put all their eggs in one basket. But that is a risk business owner Simon Faure-Field is willing to take.

Especially when that one basket is his own firm.

After starting his environmental branding consultancy Equal Strategy in 1998, he liquidated most of his portfolio and diverted all the resources to his business.

Equal Strategy utilises scents and music to create an ambience that makes consumer, retail and hospitality environments more attractive to spend time in. Its clients include banks and retail outlets.

Mr Faure-Field, 42, said: "A steady savings plan is good if you are an employee. I choose to pump my savings back into the business, and nothing in the market will give me the same kind of growth rate."

He added that this is also one basket that he is "very much in control of".

Mr Faure-Field moved to Singapore from Britain in 1995, to work for City Phone Communication, which did voice work on telephone systems for companies.

His wife is a senior account manager for China Telecom, and they have a seven-year-old daughter.

Q: Are you a spender or a saver?

I am a spender, especially on my main investment vehicle, which is my business. My plans are quite dynamic due to the volatility of the markets. I draw from the business what I need to fund my lifestyle, while the rest gets pumped back into the business.

There is not a lot of distinction between what I save and what I put into my business.

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

My personal spending varies from $500 to $8,000 a month, depending on whether I travel.

I tend to use one card to accumulate reward points, but have multiple cards so I can use them if there's a worthwhile promotion, but no Tupperware or pots please.

Q: What financial planning have you done?

I used to have a steady plan, but needed my capital to fund my business in its earlier years. My plan was to put some money away each month into an investment fund.

When my business needed more cash, I could have got other people to invest in it, but I did not want to dilute my equity. At that time it was also not easy to get loans from the banks.

My other option was to use my savings to inject into my business, which is where I am still at now.

I have a term life and critical illness plan and am covered for about £1.5 million (S$3 million).

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

They were not exactly easy. My parents separated in my earlier years and my father did not contribute to maintenance, so my mother, a personal assistant at the Ministry of Defence, paid for our privately owned house and had to pay the bills.

My father lived overseas as the managing director of an advertising firm.

I missed out on the exotic school holidays, and up till I was 10, I had to wait at school for my mother to finish work. I also worked part-time, once at a clay pigeon shooting range where I worked the traps. At one point I was also cutting grass.

This had quite an impact on me and the aspirations for the lifestyle that I want to provide for my daughter. One of the reasons I work so hard is to fund the correct education, support and facilities for her, so she will not have to go through what I did.

My experience also taught me that money does not grow on trees, and you have to work hard to define your destiny.

Q: How did you get interested in investing?

I wanted to be able to fund the lifestyle that I want and the future for my family. There was also a need for survival and to fund my aspirations.

When I was an employee, I had a fixed income and you more or less knew how much your bonus would be. Nothing outside of that would generate money, so I knew I had to be putting some money aside.

Q: What property do you own?

I do not own any property as of now. To buy in Singapore is really too expensive, and you need a lot of liquidity. To have that much money as down payment, I'm not sure how that stacks up against putting it into my business.

I've started looking in different Asian markets where there is a little bit more accessibility in terms of affordability.

Q: What is your retirement plan?

I plan to retire in Asia or Australasia. At the moment, Singapore is too expensive a place to retire. I would need about $10,000 a month to live comfortably, and I hope to fund that through my eventually diversified portfolio of my business, property and commodities.

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

It will have to be my Audi A5 coupe. If you are talking about a couple of hundred thousand dollars, I haven't spent anything like that on anything else for myself.

I could have got myself a smaller car, but I chose this one, and when I look at it, it makes me happy.

I had my first Audi coupe when I was 19, which I got rid of a year later. It was 22 years before I got reunited with the brand. When I was younger, the rally cars of the time that were winning were the Audi Quattro Turbos, but I never got around to buying one. Now, they are so old you can't buy them.

Q: Home is now...

A three-bedroom apartment in Kembangan, which is about 1,500 sq ft. I would like something bigger, but it all comes down to money, doesn't it? I rent it for $5,000 a month.

Q: I drive...

An Audi A5 coupe 3.0.

songyuan@sph.com.sg

Worst and best bets

Q: What was your worst investment?


It was my first investment in a unit trust fund. I was 23 years old when I started to put in about £150 each month, but when the market crashed eight years ago, I made a major loss.

I would not say it was my life savings because at an earlier point I had cashed in some of it for my business.

Q: And your best?

It would have to be my business, Equal Strategy
i agree with his comment that sg is too expensive to buy a property now and is too expensive a place to retire.

where should we retire?
(14-10-2012, 09:30 AM)pianist Wrote: [ -> ]i agree with his comment that sg is too expensive to buy a property now and is too expensive a place to retire.

where should we retire?

Property is expensive. Sure.
But for retirement, if the retiree owns a residential property, the monthly retirement cost is not exactly very expensive.
Most retirees probably can get by with $1000 per month currently.

Of course, for more luxurious retirement life with a seaside chalet, wine and fine foods with frequent overseas travels, $10k also not enough.
(14-10-2012, 09:52 AM)yeokiwi Wrote: [ -> ]
(14-10-2012, 09:30 AM)pianist Wrote: [ -> ]

Property is expensive. Sure.
But for retirement, if the retiree owns a residential property, the monthly retirement cost is not exactly very expensive.
Most retirees probably can get by with $1000 per month currently.

Of course, for more luxurious retirement life with a seaside chalet, wine and fine foods with frequent overseas travels, $10k also not enough.

I agree. A lot of what we deem "necessity" falls away when we are retired.

Another plus for retirement in Singapore is the health care system we take for granted sometimes. In Singapore, if one is to have a heart attack or a stroke, he can get to a nearest state-of-the-art hospital (meaning with all the right equipment and specialists) within an hour or so, leading to higher survival chances. In many large/cheaper countries, that is just not possible. Susan Buffett, Warren's first wife, died of a stroke partly due to the long journey it took for the ambulance to reach her, and then to reach the hospital (as described in Snowball, it was a painfully long journey for Warren Buffett in the ambulance that fateful night).

Or has anyone has encountered good retirement locations with good and easily accessible healthcare?
Q: What financial planning have you done?

I used to have a steady plan, but needed my capital to fund my business in its earlier years. My plan was to put some money away each month into an investment fund.

When my business needed more cash, I could have got other people to invest in it, but I did not want to dilute my equity. At that time it was also not easy to get loans from the banks.

My other option was to use my savings to inject into my business, which is where I am still at now.

I have a term life and critical illness plan and am covered for about £1.5 million (S$3 million).

good job.

Q: What property do you own?

I do not own any property as of now. To buy in Singapore is really too expensive, and you need a lot of liquidity. To have that much money as down payment, I'm not sure how that stacks up against putting it into my business.

what a silly comment. Is his business a sure earn money thing? When his business goes bankrupt, where will he stay?

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

It will have to be my Audi A5 coupe. If you are talking about a couple of hundred thousand dollars, I haven't spent anything like that on anything else for myself.

I could have got myself a smaller car, but I chose this one, and when I look at it, it makes me happy.

So, buying a home is a waste of money. But buying an Audi, a depreciating asset is a dream, Oh well, it is his choice.


Q: Home is now...

A three-bedroom apartment in Kembangan, which is about 1,500 sq ft. I would like something bigger, but it all comes down to money, doesn't it? I rent it for $5,000 a month.

$5,000 a month x 12 mths x 30 years = 1.8m

Is this guy sure he is doing the wrong thing. Why not purchase one?


Q: I drive...

An Audi A5 coupe 3.0.



songyuan@sph.com.sg

[b]Worst and best bets

Q: What was your worst investment?


It was my first investment in a unit trust fund. I was 23 years old when I started to put in about £150 each month, but when the market crashed eight years ago, I made a major loss.

I would not say it was my life savings because at an earlier point I had cashed in some of it for my business.

Ya ya, u are the smartest. You earn the most and lost the least. Y cant we have some honest stories here. All of them are hiding the bad things n only saying the positive sounding ones.


Q: And your best?

It would have to be my business, Equal Strategy
[/quote]
(17-10-2012, 12:16 AM)tubecreamer Wrote: [ -> ]$5,000 a month x 12 mths x 30 years = 1.8m

Is this guy sure he is doing the wrong thing. Why not purchase one?[/b]

Because easy for him to exit. Also, while 5k x 12 x 30 = 1.8 million, this excludes interest rates, taxes etc. At the end of 30 years, you pay a lot more.

(17-10-2012, 12:16 AM)tubecreamer Wrote: [ -> ]what a silly comment. Is his business a sure earn money thing? When his business goes bankrupt, where will he stay?

And is the putting in the property market now a sure earn money thing? For all you know, he gets a better rate of return on his business than property. As for going bankrupt, that's life. Different people different strokes. I won't go as far as to claim he is silly.
This guy is smart. He done his sum. Despite his wealth, he rented and refused to be slave to sg property.

Clearly he has the right mental mode to do business which most locals could not because of fear of failure and need of safety net.
The best net maybe not to fail in the first place.

Having say that, his wife seems able to hold her own when things fall apart.
From my observations, it appears that Asian Chinese much prefer to own houses, unlike ang moh who prefer to rent. I think it's the in-built mentality. If they do not intend to stay long in a country, they can just pluck and go, and move around easily.
Wasn't MF Global required to put their clients' money in a segregated account? I thought that is a requirement from MAS. No?
(21-10-2012, 01:43 PM)wsreader Wrote: [ -> ]Wasn't MF Global required to put their clients' money in a segregated account? I thought that is a requirement from MAS. No?

Of course they were. But the law and compliance with the law are 2 different things. Murder is illegal, for example, but it still happens. What matters is (1) prevention and (2) enforcement. Enforcement punishes the perpetrators but doesn't help the victim, so let's focus on prevention.

MAS requires separation of client and broker assets, but it does not stipulate that the assets are LEGALLY separated. What this means in practice, is that the brokers continue to keep client money in the name of the brokers. All they do is open 2 bank accounts, and they mentally label one "broker" and the other "client". Their own money is kept in the "broker" account, and client money is kept in the "client" account.

But clearly, all of the money is still in the name of the broker, so if there is a sudden liquidity crunch, the broker can still take and use the client money, because it legally belongs to them (clients are merely beneficial owners i.e. creditors). If the crisis passes, the broker returns the money and nobody is any the wiser. If the broker fails, that's when people find out that their money was never legally segregated to begin with.

This is a big reason why people should be extremely cautious in dealing with independent brokers. Using client money is illegal, but by the time you find out, it's too late and you have lost money anyway. Murder is illegal, but by the time it happens the person is already dead. Much better to prevent it in the first place.

Bank-backed brokers can call on their bank parents to help, so they don't have to resort to "borrowing" from the client account. Usually the banking franchise is much larger than the broking franchise, making it more likely the bank will absorb the losses in order to maintain client goodwill and its banking reputation.

As usual, YMMV.