25-04-2011, 08:05 AM
In a new series, BT interviews young people (yes, as young as early 20's!) on their investments and their motivations. Will be adding on to the interviews as the weeks pass by in a similar vein to the "Me & My Money" series.
Business Times - 25 Apr 2011
STARTING YOUNG
Trading up towards financial freedom
Kendrick Chia's advice is to learn the basics and see what you are investing in, reports MINDY TAN
ONE could describe 24-year-old Kendrick Chia as a 'man on a mission'. The Singapore Management University (SMU) undergraduate, who is pursuing a double degree in accounting and business management, manages to juggle school, his role as research director for fundamental analysis at the SMU E.y.E Investment Club, a part-time job, and volunteering at the Jurong Bird Park on a regular basis.
He was previously on track for a career in the sciences but Robert Kiyosaki's Rich Dad Poor Dad made him rethink his life goals.
His pot of gold at the end of the rainbow? Financial freedom.
Q: How and when did you start investing?
A: Against the backdrop of a booming 2007, the tipping point came when I redeemed my five-year fixed deposit and realised my interest amounted to $20. Wanting to increase my returns, I decided to try a professionally managed mutual fund in 2008.
Q: What did you learn from your first foray into investments?
A: People have the general perception that unit trusts are safe - you don't earn lot of returns, but you can't get too badly burnt either. When Lehman crashed, I lost about 20-40 per cent of my portfolio.
It got me thinking: Why can't most managed funds outperform a static index?
And I realised that you need to learn the basics. You cannot put your future in the hands of someone else. Especially with funds, you can't see what you are investing in; it's like a black box.
Q: Describe your current portfolio.
A: I typically buy blue chips, with almost no small- or mid-caps in my portfolio.
Now, with a better understanding of how to read financial statements, and a finer grasp of the financial markets and the risks that each company has, I'm moving more towards capital gains.
Q: Is there a particular industry that you favour?
A: For yields, I go for utility stocks such as transport and postal services. The stocks that I favour generally give good, stable dividend yields and have recurring business. They are not exposed to large demand fluctuations around the world.
Q: Do you have any unique quirks as an investor?
A: I tend to like to buy stocks for companies which I can literally walk to and see the business. I don't like to buy things that I can't hear, see, feel touch - for instance Hutchison Port, ports in China.
If, on the other hand, a Singapore port stock ever debuts, I wouldn't mind buying it because I can walk over and see it and get the information first-hand.
Q: Are you a spender or saver?
A: When I first entered the university, I used to scrimp and save, and could save about 25-30 per cent. But I was making myself unhappy by trying to save that much. These days, I aim for a more comfortable 10-20 per cent.
Q: How do you balance school, work and investing?
A: I gave up personal time and hobbies such as photography and cooking. The nice thing is that I don't feel it as acutely because I enjoy the things I do. Plus, we get summer breaks where we can indulge ourselves. It's a pretty good balance for now.
Q: How has investing changed your philosophy in life?
A: I used to think I would have to spend the rest of my life working, saving as much as I can, and hoping that CPF would cover me. But when Kiyosaki's Rich Dad Poor Dad mentioned the term 'financial freedom', and what it really means, and how to get there, it was an eye-opener. Who wouldn't want to cut down on the time you spend working and spend more time with your family?
It made me change my priorities in life. I decided to put down what I love to do and instead learn to love what I do.
It is also part of the reason why I applied to SMU.
Q: What tips can you share from your experience in investing?
A: Read and watch the markets first. If you're unsure, ask someone who is familiar to read and interpret the events for you. Once you have a better grasp of the market, test your philosophy on paper.
Take for instance that there is a flood in China. What are the implications? You would probably expect commodity prices to rise. You can pick a company with distributions in China, and track it for a month or so. Does the stock rise? If so, you're pretty adroit at understanding the market.
If your prediction is wrong, it is time to hit the books again.
It depends on your risk appetite. You would probably learn faster if you put money down because you can't say I will do it tomorrow. You will do it now because it hits your pocket. If you have spare change and you want to make a bet, go ahead, but be mentally prepared that you may lose all of it.
Finally, I would recommend reading Rich Dad Poor Dad. It's a very easy read, and you don't feel so intimidated. Most financial books are three-quarters filled with jargon. But he presents it in a very intuitive manner.
Have attached last week's interview as well, with SMU's Daniel Tan (incidentally, so far they are both from SMU)......
Business Times - 18 Apr 2011
STARTING YOUNG
Investing to derive a passive income
Finding finance more interesting than engineering, Daniel Tan switched courses in university. It's proving to be a profitable change, reports MAXIE AW YEONG
SINGAPORE Management University (SMU) business management undergraduate Daniel Tan does not fit into your stereotype of young investors, who are largely thought to come from rich families. As his father works as a driver and is the sole breadwinner, the funds for his investments mostly come from his own savings of monthly allowances and income from previous part-time jobs.
Currently financial secretary of the SMU E.y.E Investment Club, he hopes that growing his current five-figure portfolio will produce a form of passive income for him.
Q: How did you start investing?
A: I picked up a book from the bookshop about investing during NS (National Service) and started from there. I exposed myself to stocks, bonds and other instruments. I got interested, then decided to try it out.
I decided to start an account with an initial capital of $10,000 - quite a big portion of my savings. It's quite risky but you have to make your own decisions.
Q: Did your parents encourage you to invest?
A: Not really. They actually don't encourage me to invest, because they witnessed the financial crisis in 1997. So they would rather that I save the money in a bank. But I thought, since I'm interested and I have passion for it, I don't mind putting a bit of money to try it out.
Q: Are your parents still against you investing?
A: They are not that against it anymore. I tell them I'll try not to inject so much money into it, and I'll control myself and not get them into any trouble.
But they promise that if I do get into any trouble, they will try their best to help me. Again, I need to be more self-disciplined. I cannot bet with just any amount because there are risks.
Q: How do you describe your risk appetite?
A: Moderately high for equities and money. But I will adjust accordingly, depending on the situation.
For now, the market is quite unstable, so if I have some extra cash, I will hold on to the cash first until the market is more positive.
Q: What sort of financial planning have you embarked on?
A: I deal with equities and money, but I am interested to go into bonds if I have more capital. It's safer, and has an edge against equity.
I'm also currently reading up on exchange-traded funds. It's based on a basket, so you just buy into it instead of buying individual stocks. So you are diversifying the risk.
Q: Do you use credit cards?
A: No, I hold a debit card for now. I don't have a stable income, so it will be better for me. Using a credit card is like using future money, and at times it may be difficult to track. If you don't pay, it will levy an interest and you may get into bankruptcy because of it.
So I prefer debit cards for now, where I can just use my savings.
Q: What has your best investment been so far?
A: SIA Engineering. I picked it up around the beginning of the crisis. It has appreciated more than 50 per cent right now with decent dividend yield.
Q: What has your worst investment been so far?
A: A penny stock - one of the local electronics companies. It fell around 50 per cent in value due to some internal accounting issues. It is been quite inactively traded, and is 'stuck' there for quite some time. I still think that stock has potential, because the company is expanding in China. But it will take time.
I don't think I will get into any more penny stock investments for the time being, because they aren't really traded much.
Q: Did your interest in investment steer you to take up business administration for your undergraduate studies?
A: Yes, definitely. I graduated from polytechnic with a diploma in electronic and computer engineering, specialising in aerospace electronics. But I applied to SMU while I was serving NS, after I started reading up about finance. That was when I thought it would be quite interesting if I applied to SMU, which is a business-concentrated school. Fortunately, I made it through.
Q: If you were a millionaire, where would you put your money?
A: Property. At least there is something to fall back on if everything goes wrong. I'll also put my money into funds.
Q: Any tips that you want to share with fellow young investors?
A: I guess that will be to do your own research instead of relying so much on analyst reports. Some analyst reports may be conflicting, so you have to read up more and exercise your own judgment.
When I first started investing, I relied too much on them, and got into a few wrong bets. Luckily, the loss was not very significant. After that, I decided to do my own research.
Business Times - 25 Apr 2011
STARTING YOUNG
Trading up towards financial freedom
Kendrick Chia's advice is to learn the basics and see what you are investing in, reports MINDY TAN
ONE could describe 24-year-old Kendrick Chia as a 'man on a mission'. The Singapore Management University (SMU) undergraduate, who is pursuing a double degree in accounting and business management, manages to juggle school, his role as research director for fundamental analysis at the SMU E.y.E Investment Club, a part-time job, and volunteering at the Jurong Bird Park on a regular basis.
He was previously on track for a career in the sciences but Robert Kiyosaki's Rich Dad Poor Dad made him rethink his life goals.
His pot of gold at the end of the rainbow? Financial freedom.
Q: How and when did you start investing?
A: Against the backdrop of a booming 2007, the tipping point came when I redeemed my five-year fixed deposit and realised my interest amounted to $20. Wanting to increase my returns, I decided to try a professionally managed mutual fund in 2008.
Q: What did you learn from your first foray into investments?
A: People have the general perception that unit trusts are safe - you don't earn lot of returns, but you can't get too badly burnt either. When Lehman crashed, I lost about 20-40 per cent of my portfolio.
It got me thinking: Why can't most managed funds outperform a static index?
And I realised that you need to learn the basics. You cannot put your future in the hands of someone else. Especially with funds, you can't see what you are investing in; it's like a black box.
Q: Describe your current portfolio.
A: I typically buy blue chips, with almost no small- or mid-caps in my portfolio.
Now, with a better understanding of how to read financial statements, and a finer grasp of the financial markets and the risks that each company has, I'm moving more towards capital gains.
Q: Is there a particular industry that you favour?
A: For yields, I go for utility stocks such as transport and postal services. The stocks that I favour generally give good, stable dividend yields and have recurring business. They are not exposed to large demand fluctuations around the world.
Q: Do you have any unique quirks as an investor?
A: I tend to like to buy stocks for companies which I can literally walk to and see the business. I don't like to buy things that I can't hear, see, feel touch - for instance Hutchison Port, ports in China.
If, on the other hand, a Singapore port stock ever debuts, I wouldn't mind buying it because I can walk over and see it and get the information first-hand.
Q: Are you a spender or saver?
A: When I first entered the university, I used to scrimp and save, and could save about 25-30 per cent. But I was making myself unhappy by trying to save that much. These days, I aim for a more comfortable 10-20 per cent.
Q: How do you balance school, work and investing?
A: I gave up personal time and hobbies such as photography and cooking. The nice thing is that I don't feel it as acutely because I enjoy the things I do. Plus, we get summer breaks where we can indulge ourselves. It's a pretty good balance for now.
Q: How has investing changed your philosophy in life?
A: I used to think I would have to spend the rest of my life working, saving as much as I can, and hoping that CPF would cover me. But when Kiyosaki's Rich Dad Poor Dad mentioned the term 'financial freedom', and what it really means, and how to get there, it was an eye-opener. Who wouldn't want to cut down on the time you spend working and spend more time with your family?
It made me change my priorities in life. I decided to put down what I love to do and instead learn to love what I do.
It is also part of the reason why I applied to SMU.
Q: What tips can you share from your experience in investing?
A: Read and watch the markets first. If you're unsure, ask someone who is familiar to read and interpret the events for you. Once you have a better grasp of the market, test your philosophy on paper.
Take for instance that there is a flood in China. What are the implications? You would probably expect commodity prices to rise. You can pick a company with distributions in China, and track it for a month or so. Does the stock rise? If so, you're pretty adroit at understanding the market.
If your prediction is wrong, it is time to hit the books again.
It depends on your risk appetite. You would probably learn faster if you put money down because you can't say I will do it tomorrow. You will do it now because it hits your pocket. If you have spare change and you want to make a bet, go ahead, but be mentally prepared that you may lose all of it.
Finally, I would recommend reading Rich Dad Poor Dad. It's a very easy read, and you don't feel so intimidated. Most financial books are three-quarters filled with jargon. But he presents it in a very intuitive manner.
Have attached last week's interview as well, with SMU's Daniel Tan (incidentally, so far they are both from SMU)......
Business Times - 18 Apr 2011
STARTING YOUNG
Investing to derive a passive income
Finding finance more interesting than engineering, Daniel Tan switched courses in university. It's proving to be a profitable change, reports MAXIE AW YEONG
SINGAPORE Management University (SMU) business management undergraduate Daniel Tan does not fit into your stereotype of young investors, who are largely thought to come from rich families. As his father works as a driver and is the sole breadwinner, the funds for his investments mostly come from his own savings of monthly allowances and income from previous part-time jobs.
Currently financial secretary of the SMU E.y.E Investment Club, he hopes that growing his current five-figure portfolio will produce a form of passive income for him.
Q: How did you start investing?
A: I picked up a book from the bookshop about investing during NS (National Service) and started from there. I exposed myself to stocks, bonds and other instruments. I got interested, then decided to try it out.
I decided to start an account with an initial capital of $10,000 - quite a big portion of my savings. It's quite risky but you have to make your own decisions.
Q: Did your parents encourage you to invest?
A: Not really. They actually don't encourage me to invest, because they witnessed the financial crisis in 1997. So they would rather that I save the money in a bank. But I thought, since I'm interested and I have passion for it, I don't mind putting a bit of money to try it out.
Q: Are your parents still against you investing?
A: They are not that against it anymore. I tell them I'll try not to inject so much money into it, and I'll control myself and not get them into any trouble.
But they promise that if I do get into any trouble, they will try their best to help me. Again, I need to be more self-disciplined. I cannot bet with just any amount because there are risks.
Q: How do you describe your risk appetite?
A: Moderately high for equities and money. But I will adjust accordingly, depending on the situation.
For now, the market is quite unstable, so if I have some extra cash, I will hold on to the cash first until the market is more positive.
Q: What sort of financial planning have you embarked on?
A: I deal with equities and money, but I am interested to go into bonds if I have more capital. It's safer, and has an edge against equity.
I'm also currently reading up on exchange-traded funds. It's based on a basket, so you just buy into it instead of buying individual stocks. So you are diversifying the risk.
Q: Do you use credit cards?
A: No, I hold a debit card for now. I don't have a stable income, so it will be better for me. Using a credit card is like using future money, and at times it may be difficult to track. If you don't pay, it will levy an interest and you may get into bankruptcy because of it.
So I prefer debit cards for now, where I can just use my savings.
Q: What has your best investment been so far?
A: SIA Engineering. I picked it up around the beginning of the crisis. It has appreciated more than 50 per cent right now with decent dividend yield.
Q: What has your worst investment been so far?
A: A penny stock - one of the local electronics companies. It fell around 50 per cent in value due to some internal accounting issues. It is been quite inactively traded, and is 'stuck' there for quite some time. I still think that stock has potential, because the company is expanding in China. But it will take time.
I don't think I will get into any more penny stock investments for the time being, because they aren't really traded much.
Q: Did your interest in investment steer you to take up business administration for your undergraduate studies?
A: Yes, definitely. I graduated from polytechnic with a diploma in electronic and computer engineering, specialising in aerospace electronics. But I applied to SMU while I was serving NS, after I started reading up about finance. That was when I thought it would be quite interesting if I applied to SMU, which is a business-concentrated school. Fortunately, I made it through.
Q: If you were a millionaire, where would you put your money?
A: Property. At least there is something to fall back on if everything goes wrong. I'll also put my money into funds.
Q: Any tips that you want to share with fellow young investors?
A: I guess that will be to do your own research instead of relying so much on analyst reports. Some analyst reports may be conflicting, so you have to read up more and exercise your own judgment.
When I first started investing, I relied too much on them, and got into a few wrong bets. Luckily, the loss was not very significant. After that, I decided to do my own research.