Former top investment banker Michael Dee will bust all your ideas of what a typical banker should be.

The man does not own a car in Singapore and he flies economy and discount airlines everywhere, whether it is for business or pleasure.

'I think of myself as a personal business and make the same decisions in my personal life as I do in my business life,' he says.

Money is to him, he tells me, just a transference of value. 'If I can transfer my money into an emotional connection, then it has a lot of value to me.'

Personal happiness has nothing to do with one's portfolio. 'Money can create dysfunction in families, conflict among nations, arrogance and a belief that monetary wealth means one's life is better than another's of less wealth.'

It should never control one's compassion for others nor cloud one's ability to do the right thing, says the 55-year-old.

Mr Dee flew economy more often at the peak of his earning power, which helped his company cut costs, 'by hundreds of thousands of dollars a year'.

It was money he could use to improve other people's lives. 'There is no greater feeling than flying to Brazil in economy knowing that I can provide $10,000 or more to a charity.'

And charity, he says, should be thought of as your most important investment.

Mr Dee has clocked 26 years at Morgan Stanley and 'while the economic advantages were good, it was never about the money, it was about loving what you do'. He was also with Temasek Holdings for 2 1/2 years.

A United States citizen, he has spent 18 of the past 30 years working overseas. Now based in Singapore, he is an investor, a job which he says he has come to believe is 'the world's hardest profession, because everything affects the market and every day is different'.

Mr Dee is married to Shelly, 52, a housewife and philanthropist. They have four children - Matthew and Christopher, both 17, David, 15 and Diana, 12.

Q: Are you a spender or saver?

An investor. What I spend on, I look at as an investment of money and/or time. Money as a commodity to be spent or saved is a vastly overrated concept.

Time is the most important commodity people can consider, because you can't save it and you don't even know how much you have. If you don't invest a given minute, it is a lost minute and they can add up.

What most affects people's lives is when they realise how little time they have. Their value of time begins to change and they become more focused and discriminating.

Society needs to realise that there is a much greater return to be made investing in our youth than in our elderly years due to the compounding effect. The challenge is to extend people's productive capacity as they age, so that the retirement burden does not fall heavily on youth as the population ages.

I spend on travel as my wife and family are inveterate travellers and love to see the world in all its glory to seek understanding and adventure. This summer, my three sons climbed Mount Kilimanjaro with two intellectually disabled Special Olympics athletes from Tanzania and Singapore, while my wife and daughter spent the week working with street children in Moshi, Tanzania.

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

I have two credit cards, one in Singdollars and one in US dollars. I charge everything and collect frequent flier miles. I have never in 30 years had a balance on my credit card and never will. I carry very little cash but my wife is my ATM when I'm short.

Q What financial planning have you done for yourself?

Mostly it's asset allocation, tax and estate planning, as there is global taxation for Americans. I get heartburn when I think of the taxes I have to pay while outside the US.

I am underweight fixed income and heavily weighted to high quality equities which are income generating. We have a few funds but generally the fees are too high to justify them. We also have a relatively high proportion of cash.

Exchange-traded funds (ETFs) are increasingly our choice for diversification, because of their low fees and liquidity. I also like high yielding non-financial, non-telecom stocks with a record of growing payouts, high cash balances and solid credit ratings, which can pay dividends out of free cash flow.

My wife, a Harvard Business School graduate, enjoys stock picking more than I do. As most relationship problems revolve around money, I prefer to focus on making it, keeping it and thus the bigger picture is my zone of focus.

My wife and I have life insurance mostly in a second-to-die policy as it reduces the cost substantially. Life insurance is just disaster insurance. It's health insurance that has real value to me.

Q: What advice would you give to investors?

You should never let your money out of your sight or delegate your finances to a third party.

Do your homework, keep it simple with diversification, maintain liquidity and never trade on rumours. The rumours often come from insiders who are not trying to make you rich, or from complete idiots.

Smart money does not tell people specifically what they are doing.

Every child, teenager, young adult should be taught the value of compound interest in school. Saving as much as you can, as young as you can, is the hidden secret to wealth accumulation.

Other issues that are often overlooked are:

• fees drastically reduce returns over the long haul and should be minimised;
• taking less risk the older you get allows you to sleep better at night;
• asset allocation is more important than stock picking;
• growing and stable dividends are the most undervalued asset; and
• real estate returns are overrated because most people do not account for the very high leverage or believe that prices can go down (and they do).

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

I grew up in a small town outside Buffalo, New York. When I was young, my relationship with my dad was based on me working with him every weekend. He was an electrical contractor. He worked very hard, loved what he did and was a perfectionist. You could count on his work and in particular the bits you would never see. As I put on his tombstone, he was 'A Great Guy'.

My fiercely independent mother is 84 and she has been teaching figure skating for over 60 years. Till today, she puts on her skates and goes on the ice to teach. She embodies all that is great about excellent teachers.

In the 1950s, the idea of working women and, in particular, an entrepreneurial woman, was virtually unheard on.

My parents knew the value of education and even though neither ever went to college, they drove me crazy drilling college into me. We never had much money and most of what my parents had went to my education. I graduated from the Wharton School of the University of Pennsylvania in 1981. They were both all about helping others and they taught me value and values. I hope I have lived up to their lessons.

I have one sister, Anne, who has Down syndrome, which is why I support the Special Olympics.

Q: How did you get interested in investing?

When I was young, I saved as much as I could in every tax deferred plan I could find. Because I started early, those plans are now worth many multiples of what I invested.

I learnt about the value of delayed gratification when I spent my summer savings as a 16-year-old on some fancy racing tyres for my car. They cost US$500 and were stolen a week after I had bought them.

Had I invested that money at a 10 per cent annual rate, I would have had US$22,000 today. My dad showed me the maths just to make the point about how I had wasted my money and it made a huge impression on me. Now, I keep it simple and look to invest in things I generally feel will have long-term value.

My very first stock was in a tin can packaging company called American Can. It later became Citibank. I sold it much later and made 30 times my investment.

Q: What property do you own?

We own very little real estate. I don't like the debt that goes with it. If people had to pay cash for a house, they would save and be more rational in their finances.

I have had zero debt almost my entire life and have no interest in owing any bank any money. I would rather rent and invest my money.

For what a good class bungalow costs here, we could buy hundreds if not thousands of acres of the world's most beautiful land in the US.

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

I lost my mind when I bought a Porsche in Singapore. I had driven one when I was 16 and always wanted one to relive that drive of my youth.

But driving in Singapore is boring and analogous to the garage as people treat their cars with the greatest of care. The real value and action was in Malaysia at the F1 track on the weekends. Fortunately I'm over that phase of my life, although I still keep my American Muscle car in Texas.

I bought the used Porsche for about $300,000, at a 35 per cent discount to the new price after its first owner had had it for six weeks, and I sold it for about the same price four years later.

Q: What's your retirement plan?

Retirement is for the unimaginative or the lazy. No interest, thanks. (Former prime minister) Lee Kuan Yew is setting a fine example and raising the bar for everyone. At a minimum, as we get older we should give back to children of the disadvantaged, but never give up completely.

I am financially independent but still have the drive to develop businesses and people and to ensure the next generation has the opportunity to fund my efforts to help others.

The whole concept of old age has radically changed in the last 40 years and will continue to do so. Current retirement ages are far too low, given life expectancy and should be raised immediately.

At the same time, the concept of retaining older workers should change also. Companies could take out life insurance policies on workers to fund current health care costs, for example. Capital and labour are on a collision course as the population ages and pensions and government plans need to get in front of the curve.

Q: Home is now....

A rented five-bedroom house with a pool in the Bukit Timah area.

Q: I drive....

I take the taxi. I will not own a car in Singapore because it is the worst investment I can think of here (my wife has a used car for the kids). Singapore has one of the lowest tax regimes in the world until you buy a car, then it's in the middle.

Most people drive their cars for about two hours a day, or 700 hours a year. It's ridiculous when you consider the capital outlay and depreciating asset versus the annual cost and the opportunity cost of not investing it.

joyceteo@sph.com.sg

WORST AND BEST BETS

Q: What is your best investment to date?

It was the investment in the company I committed half my life to, Morgan Stanley. I joined when it was a private company with only 1,100 people.

I bought my first stock at a discount during the initial public offering, and sold a large portion of it in 2000 at $104 a share. I made more than 30 times my money.

Q: And your worst?

Without question, it was the energy giant Enron Corp. I love pipelines and it had been a great investment for decades.

My first shares were at about $5, and the stock rocketed, rising over 17 times. Enron collapsed in 2001, after a false accounting scandal erupted. Its stock price, which hit a high of US$90 per share in mid-2000, plunged to below $1 by the end of 2001.