Investing is a way of life for late starter

		Thu, Oct 08, 2009 The Straits Times
By Lorna Tan, Senior Correspondent Mr Tan Kah Ho got interested in investments only after he joined local insurer Asia Insurance as a manager in 1979. It was his father, Mr Tan Eng Chin, then the chairman of the firm, who asked him to come on board. He had obtained a bachelor's degree in chemical engineering and a master's degree in economics and administration of the petroleum industry from Loughborough University in Britain in 1971. He then joined his other family business that sold spectacles and lenses and worked there for about three years. He went to Esso after that and worked as a sales engineer, and six years later joined his father's insurance firm. 'I started learning about investments only after joining Asia Insurance,' Mr Tan said. 'Insurance, especially the whole life (insurance) business, is about investments. You have your reinsurer to take care of the insurance aspect. The challenge is how the firm invests the premiums that come in to achieve target returns.' The firm's prudent investment strategy held it in good stead. During tough times when rival life insurers resorted to bonus cuts on their customers' policies, Asia bucked the trend. Till today, it has not reduced bonus rates on its life plans. Mr Tan, 63, attributed the company's sterling performance to his uncle Tan Eng Heng - who was then managing director of both Asia Insurance and Asia Life - and his father, who made the investment decisions. He became a chartered insurer in 1995 and took over from his uncle as chairman of Asia Insurance and managing director of holding firm Asia General Holdings in 2004, three years after his father died. His uncle had taken over as chairman when Mr Tan's father stepped down in 1986. In 2007, Asia was sold for just under $1 billion to Japan's Tokio Marine & Nichido and subsequently renamed TM Asia. Mr Tan is married to Ms Joanne Yeo, 59, and the couple have three children - June, 34, Celine, 33, and Jachin, 26 - and four grandchildren with ages ranging from a few weeks old to seven years old. Q: Are you a spender or saver? At this point in my life, I am more of a spender than a saver. Looking at the average lifespan of a male in Singapore, I have another 20 years. But even with God's grace, the number of years I have to live healthily could be fewer. In my younger days, I was always a saver. When I was working, I tried to save about 20 per cent of my income, after taking into account family expenses. Q: How much do you charge to your credit cards every month? I have credit cards from two local banks and two foreign banks. In addition, I own cards linked to NTUC, Ikea and the supermarkets. In all, I have more than 10 cards from most issuers. I pay all my credit card bills in full monthly. It would be foolish not to. There are much better financial options than to get financing from credit card companies. Most of my credit card purchases are for airfares, hotels and things bought abroad. I go to the ATM a few times a month and withdraw about $500 or less each time. Q: What financial planning have you done for yourself? I have accounts with three private bankers and these are mainly for private equity investments in property-related China firms which are in their growth phases. In addition, I manage my own portfolio where I've parked a few million dollars. About half is invested in Singapore equity which I am most familiar with, and the balance is in foreign equities via exchange traded funds and precious metal shares listed in the United States and Canada. I am looking to invest in Chinese equities soon, as I believe that is where the next growth cycle is. In addition, I have investments in Malaysian tile maker Lama Tiles, which has an annual turnover of RM30 million (S$12.2 million), and a Mongolian-based mining firm Central Asia Mineral Exploration, which is still at an exploratory stage. I invested US$5 million (S$7 million) in one Universal Life plan (which is a single premium investment-linked insurance policy) that comes with a guaranteed life cover. This will be used to take care of my family's needs should anything happen to me. I also have three whole life plans and health insurance. My three endowment plans have matured. When I was 55, I bought an annuity from Asia Life at a single premium of $200,000. I've been receiving a monthly payout of $1,800 since I turned 62 last year. Q: Moneywise, what were your growing-up years like? My father, who was a very wise investor, was also very frugal. He had 14 children to take care of, so even though he had acquired great wealth, he hardly spent lavishly. He spent only on what was necessary. All his children learnt how to be careful with their money. I am the eldest son and the fourth child. My father worked in Asia Insurance as a manager and slowly accumulated shares over the years. He became the largest shareholder about 20 years ago. My mother is a housewife. Initially we lived in a terrace house in the Bukit Pasoh area which was rented from the firm, and when I was 12, we moved to a 10,000 sq ft two-storey bungalow with a built-up area of 4,500 sq ft. My father was 86 when he passed away in 2001. Q: How did you get interested in investing? I became interested in investing only after joining Asia Insurance. Since then, investing has been a way of life for me. Q: What property do you own? I own an 8,500 sq ft (land area) bungalow in Sennett Estate. It was bought from my family in 2002 at $2.75 million. I also have a 2,200 sq ft condo unit in the East Coast. It was bought last year for just under $1 million and is being rented out. Q: What's the most extravagant thing you have bought? It is a two-carat diamond ring which I bought for my wife in 1998 for our 25th wedding anniversary. I got it from Belmont Jewellers in Lucky Plaza and it cost almost $30,000. My regret is that she hardly wears it these days. Q: What's your retirement plan? I believe in keeping my mind active with the businesses that I'm involved in. Now I don't go to the office. I start work at home when I get up and I'm free from work when I sleep. I would need about $10,000 a month for both my wife and me when my three children are fully independent. Q: Home is now... The bungalow at Sennett Estate. Q: I drive... A metallic silver Volkswagen Touareg and a dark blue Mercedes C180.   Careful with money 'My father, who was a very wise investor, was also very frugal. He had 14 children to take care of, so even though he had acquired great wealth, he hardly spent lavishly. He spent only on what was necessary. All his children learnt how to be careful with their money...In my younger days, I was always a saver. When I s working, I tried to save about 20 per cent of my income, after taking into account family expenses.' MR TAN KAH HO This article was first published in The Straits Times.