Me & My Money Series (Sunday Times)

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I really feel for him as two of his kids have medical issues, it can't be easy to cope but I think he is doing admirably well! Simple lifestyle to boot - lives in a 4-room flat and drives a manual car. Smile

The Straits Times
www.straitstimes.com
Published on Nov 11, 2012
Me & my noney
Sold on insurance after mum fell ill

Engineer became a financial planner after seeing value of critical illness policy first-hand

By magdalen ng

An engineer by training, Mr Andrew Ang decided to become a financial planner after he experienced the value of insurance first-hand.

Eleven years ago, the graduate from the University of Surrey was working as an electronics engineer when his mother was diagnosed with breast cancer.

Mr Ang, 39, said: "My parents spent their life savings to send me abroad, so the insurance payout from my mother's critical illness policy was so important. It was about $50,000, and was enough for her treatment."

Mr Ang's mother, 59, made a full recovery.

His belief in the value of financial planning was further underscored when his eight-year-old daughter, Charlotte, suffered from a congenital heart problem, and needed open heart surgery two years ago.

His son Alexander, six, suffers from autism. He and his wife have another child, five-year-old Abraham.

Mr Ang's wife, Corrine, 36, quit her job as an accountant and became an insurance agent so that she could have more flexible working hours to take care of their children.

Q: Are you a spender or saver?

I am not a spender, but I also don't save a lot. My monthly income is about $15,000 on average, and I have to set aside $7,000 for family expenses.

My son, who has autism, attends two private schools and one government-subsidised school, and spends about 55 hours a week at school. His school fees alone are more than $4,000 a month.

I pay about $1,500 in insurance premiums, and also have to pay for the upkeep of three cars, driven by me, my wife and my father.

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

About $5,000 a month.

Using a credit card allows me to track expenses for my business, which include spending for clients' birthdays and events and my team activities.

For other spending, I prefer to stick to cash. I withdraw about $200 every three days.

Q: What financial planning have you done?

I have 12 insurance plans under my name and am insured for $1.8 million in death and disability coverage.

I have two hospital plans and I have recently bought an early critical illness plan to cover for more medical conditions relating to critical illnesses.

Each month, I pay about $1,500 in premiums.

My wife and I have invested more than $300,000 from our CPF savings and cash savings in managed funds. I also own some equities.

At the end of every year, I also review my own financials. This is critical in managing cash flow, given my family's situation.

My wife and I diligently keep the receipts for our spending, and we key them into Excel spreadsheets so we can try to forecast what will happen in the coming year.

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

I worked extremely hard during my schooldays. I started working at the age of seven.

I remember I earned $2,000 every month when I was older, by distributing newspapers as early as 5am, and peddling drinks and food at the former National Stadium till 10pm.

Even though my parents were farmers, they provided my siblings and me with a good education.

They have always taught us to give back.

All of us will donate and volunteer our time whenever possible to give back to society because we benefited from charity when we were younger.

Q: How did you get interested in investing?

I went for quite a few investment classes organised by SGX (Singapore Exchange) and Sias (Securities Investors Association (Singapore)). Also, I learnt from the four professional certifications I have acquired over the 10 years as an adviser.

Right now, I have completed four core modules of Master of Applied Finance by Macquarie University.

Q: What property do you own?

My wife and I bought a four-room HDB flat for $187,000 10 years back and are still living in the same flat.

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

I have a weakness for cars. Maybe because I am an engineer, I like experiencing what it is like driving different types of cars.

In 2007, I bought a second-hand BMW 3 Series for $72,000, and decided to sell it a year later.

Q: What's your retirement plan?

I plan to get a yacht. I was a trained diver and naval officer.

It will probably require about $10,000 a month for me to travel the world with my loved ones. I have endowment plans that will give me about $20,000 a year.

My other investments will fund the rest.

Q: Home is now...

My four-room HDB flat. It is an important reminder to my children about the importance and value of money.

Q: I drive...

A manual-transmission Honda Civic 1.8.

songyuan@sph.com.sg

Worse and best bets

Q: What has been your worst investment to date?


My worst was $1,000 put into a technology fund unit trust in 2000. A banker friend recommended it to me. At its worst, it was worth only $300.

It is still on my portfolio and is worth about $700 now.

Q: And your best?

I do some trading in US equities whenever I spot opportunities. Mainly I buy blue-chip stocks that are at a discount.

I bought $100,000 worth of BP's shares after it had its oil rig explosion two years ago. I sold them for $150,000.
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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(11-11-2012, 09:14 AM)Musicwhiz Wrote: I really feel for him as two of his kids have medical issues, it can't be easy to cope but I think he is doing admirably well! Simple lifestyle to boot - lives in a 4-room flat and drives a manual car. Smile

Don't sound very simple to me... maintaining 3 cars and despite having $15k monthly income, unable to save much as family expenses is $7k/mth (after setting aside $4k for son's school fees and $1.5k for insurance premiums).
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
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Sounds like a boh pian. Expenses sound about right (i have 5 yr old son with autism and it costs me prob 4.5/mth). And u need a car to transport everywhere as they sometimes adapt to public transport badly.

Sounds like a boh pian. Expenses sound about right (i have 5 yr old son with autism and it costs me prob 4.5/mth). And u need a car to transport everywhere as they sometimes adapt to public transport badly.
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(11-11-2012, 10:20 AM)godjira1 Wrote: Sounds like a boh pian. Expenses sound about right (i have 5 yr old son with autism and it costs me prob 4.5/mth). And u need a car to transport everywhere as they sometimes adapt to public transport badly.

Sounds like a boh pian. Expenses sound about right (i have 5 yr old son with autism and it costs me prob 4.5/mth). And u need a car to transport everywhere as they sometimes adapt to public transport badly.

I'm sympathetic of that part of the expenses. I was commenting on the balance $7k/mth monthly expenses not equating to a Simple Lifestyle (comments by 'MusicWhiz')....
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
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This guy pays about 10% of his monthly income for premiums. Seems like a lot to me but would that be within the prescribed norms for a financial planner? Plus what's with financial planners and managed funds? Aren't fees a big reason for fund underperformance? I can understand if they sell these to clients for higher comissions but when it comes to their own portfolios? What are they smoking?

Also, if think of this guy as a Company, it's like one of those companies that bring in a lot of revenue but have little over in terms of Net Profits. And as shareholders, that's the point we should be concerned with right? In this case, the only 'hope/expectation/merit' I can think would be betting on revenues rising much faster in the near future (at 39, this guy is at least halfway through his working life so even then the odds are probably 50/50?).

Of course, he has his situation with the kids so it's undeniable that his expenses would be higher than most. Still, it makes you wonder how those earning much less than him but with kids having even more serious problems live.

Still, not a sure way to join the realms of the financially free if you ask me.

I think I would prefer to be earning half his income but having expenses at a much lower level (1/4 of his).

What do you guys think?
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i think the report may not be complete. $7k a month for "family expenses" may not include the car expenses and/or the school fees. He said school fees for 1 autistic kid alone is $4k.

I understand that a car may be a necessity for his situation, but ... three?
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(11-11-2012, 10:44 AM)kazukirai Wrote: This guy pays about 10% of his monthly income for premiums. Seems like a lot to me but would that be within the prescribed norms for a financial planner? Plus what's with financial planners and managed funds? Aren't fees a big reason for fund underperformance? I can understand if they sell these to clients for higher comissions but when it comes to their own portfolios? What are they smoking?

I think I would prefer to be earning half his income but having expenses at a much lower level (1/4 of his).

What do you guys think?

Well I think to be fair to him he didn't ask for the problems with his kids, and I think a large part of his expenses (probably >$7k per month) constitute his kids' education, medical needs and other support services. It may seem at face value that he earns a lot yet spends a lot, but if this is for his family I think it's understandable (Kazukirai's comment). The fact that he does not drive a luxury car and stays in an HDB flat (and has no investment property) seems to give me the impression that he is prudent and does not leverage unnecessarily (KopiKat's comment).

His $15,000 a month is only his income, and we have to remember his wife also earns an income working as a financial planner; so his family income is probably much higher than $15,000 a month and I think they will have leeway to save.

As for the three cars (wee's comment), he and his wife probably need it for their kids and also for their jobs, since both are financial planners. So if taken from the perspective of enhancing their income, I think the cars can constitue productive assets and are worth paying for.

As for him paying for his dad's car, I think he's just being a filial son. Big Grin
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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haha musicwhiz, are u suffering from the halo effect?
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(11-11-2012, 12:34 PM)Musicwhiz Wrote: Well I think to be fair to him he didn't ask for the problems with his kids, and I think a large part of his expenses (probably >$7k per month) constitute his kids' education, medical needs and other support services. It may seem at face value that he earns a lot yet spends a lot, but if this is for his family I think it's understandable (Kazukirai's comment).

Hi MW,

No doubt, he didn't choose for his kids to have these issues. No sane parent would wish these (congenital heart problem, autism) upon their kids no matter what the cost.

However, there are parts he could control- number of, sum assured and type of insurance policies (12 imo seems excessive. almost an irrational fear of dying/getting maimed/getting some disease); and investing in managed funds (even though we don't know the proportion. Also it could be an index in which case, good for him) etc. You're right, I left out his wife's income. And maybe he played down his earnings to avoid the tax man (remember a certain curry puff seller?).

But, my point is, if we were to go on what he says, he doesn't sound like a good model to follow to grow wealth. Work hard and earn big bucks- yes. Caring and devoted father- yes. But I don't think it's the right recipe for growing wealthy in one lifetime.

Btw, he also did mention buying and subsequently selling a BMW. So we can't be sure if he's frugal or he can't afford a spanking nice car.

Not that it should matter to most folks here- after all, different folks, different strokes. And each person's aim should be to maximise one's happiness in life. No one can tell you how to get there but yourself.
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Hi Kazukirai,

Yes, I do agree he cannot be held up as a model for being financially free, at least not at this stage of his life. At least he was honest and upfront in admitting that cars were his weakness, so at least we can understand why he (seemingly) made such financial decisions to buy and sell a car within one year!

Just wondering though - this is one guy (out of probably 10 being interviewed) who does NOT invest in property of any sort; and he seems to be the one who is not financially free, or at least not on the way there as yet. General Question - Are we as a population tending to equate real estate investments with being financially free? Tongue

Note that his main "investment" if you can call it that is more of protection, as he believes in insurance for himself and his whole family. His coverage is about $1.8m for 3 kids or about $600k per kid; and I'd say I come pretty close as my own coverage is around $600k-$700k and I have one child!

You got a point though, he mentions "Managed Accounts" which usually charge a pretty hefty fee, rather than buy into endowment plans which give a steady return. Maybe he thinks such accounts can earn higher returns over the long-terM? He also invests in "some equities" though I think the amount is probably not significant enough to mention.

He's more of a saver and slogger rather than a savvy investor.

But I wish him all the best - life can't be easy and as a father I know how important kids are! Big Grin
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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