From riches to rags - and the richer for it

(2013-02-03 06:38:06) 下一个
Me & My Money Series (Sunday Times)
Just a curious question - this guy sounds like he's not very rich and he even lost money in his first business venture ($200,000); and till he hit 30 he wasn't even paying his Credit Card bills in full. Then how is it that he can "afford" a $900,000 2,002 sqft penthouse AND a Porsche? Tongue

His worst investment is also somewhat funny - a fixed deposit? I think everyone knows FD are not investments, but simply a place to park money. And his best investment does not generate cashflows, so how can it be considered an investment? Huh

The Straits Times
Oct 2, 2011
me & my money
From riches to rags - and the richer for it

Tech entrepreneur faced setbacks on path to success, and learnt vital lessons

By Joyce Teo

Mr Daniel Lim, 36, started his own Web design firm - called Magic Mushroom - without formal training in the area.

Today, the self-confessed 'Energizer bunny' is also the owner of Studio MDS, which has created interactive virtual tours for companies such as Singapore Flyer and ExtraSpace since the start of the year. Mr Lim had stumbled on the advanced virtual tours developed by an American and sought him out as a business partner.

But it has not always been smooth sailing for him. He lost about $200,000 in his first business venture, a boutique day spa. He had borrowed money and dived into it with a close friend, but the money was siphoned off the business, he says.

'I was down and out for half a year, but I knew I was not going to go back to the corporate world,' says the Nanyang Technological University graduate.

'I like the fact that I call the shots, that people don't breathe down my neck.'

Q: Are you a spender or saver?

On a bad day, I am a spender. I just had a bad month. I've been a bad boy, buying everything in this anime store.

I am a huge addict of Apple products and shoes. I buy branded goods, but these are transient stuff. Yes, they give you pleasure, but I can also live without them.

'I strive to save 15 per cent of my monthly income and invest 25 per cent of it.

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

I charge most of my personal and business expenses to my Amex platinum card, which average about $8,000 a month.

I pay off my credit card bills on time. Credit card interest is the worst kind. Our hard-earned money should be spent more wisely.

Q: What financial planning have you done for yourself?

I heard a lot of horror stories about financial planners before I met mine. I am not exactly a numbers person and I have a bad memory, so I leave my investments to him.

I'm currently invested in an actively managed portfolio in Asia and the United States. I have managed annual returns of 6 per cent so far.

I invest for the long term. I do dollar cost averaging and increase my investments when the market is weak. I just pumped in another $10,000 and will be putting aside an extra $1,000 each month for the next 12 months.

When tension escalated between North and South Korea last year, I put about $5,000 into the FTIF-Templeton Korea Fund-SGD. I made a profit of about $2,000 when I sold in April this year.

There is a big difference between investing and speculating. Like casino gambling or betting on horses, speculating in the market can be exciting or even rewarding if you get lucky. But it's the worst imaginable way to build your wealth.

That's because Wall Street, like Las Vegas or the racetrack, has calibrated the odds so that the house always prevails in the end, against everyone who tries to beat the house at its own speculative game.

I have $1 million worth of life insurance coverage.

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

I was born into a very wealthy family and then we became paupers when my father fled the country after his business failed. We have not seen or heard from my dad since I was 10.

We survived on whatever savings we had.

When I was doing my A levels, we ran out of money and couldn't afford to pay for my exam papers.

I got permission from school to take time off during the revision period to give tuition. I made enough to pay for the exam.

During my national service, my mum started working to make ends meet. Unfortunately, due to a heart condition, she fell ill and required a bypass.

Being stuck in camp and having no money for my mum's operation left me exasperated. Fortunately, my captain allowed me to take time off and he also gave me some money. I will never forget such genuine kindness.

Because we went from riches to rags, I understand that money and material things are but transient objects. That could be why I used to live and spend for the moment.

My maternal family taught me the value of kinship and that we can be poor but happy. So I do not have an emotional attachment to money. Money is a currency, a means to an end.

Thanks to this lack of emotional attachment, I am able to stay calm amid market crashes.

My belief regarding investments is this: Investment is about the tenacity to lose battles and the ability to win the war.

Q: How did you get interested in investing?

I'm a late bloomer. Being a Gemini, I live for the moment. I was hard-wired not to think beyond my next meal or my next pay cheque.

But when I turned 30, I started asking myself a lot of questions - many centred on my lack of personal achievements.

I freaked out when I looked at my bank account balance and decided to take charge of many aspects of my life.

Not knowing what to do or where to start, I headed to the bookstore and Robert Kiyosaki's Rich Dad Poor Dad was shouting: 'Buy me, buy me! I will change your life!'

It taught me really simple personal financial management concepts that were embarrassingly absent from my entire education and which are sadly still sorely missing in today's education system.

It was a shock to me that I had some of the worst financial habits ever, like not paying my credit card bill in full.

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

An 8-Core Mac Pro. I maxed out on the specs and it cost me over $10,000. I have absolutely no regrets as investing in the best tools can make a huge difference in one's work.

Q: What's your retirement plan?

I subscribe to the idea of having financial freedom to afford mini-retirements throughout life, instead of working towards one grand retirement. I may have the will to travel extensively during my golden years, but it may be physically taxing.

I enjoy what I do too much to want to retire. The concept of retiring completely is quite a nightmare to me.

I plan to attain financial independence when I am 40.

Q: Home is now....

A 2,002 sq ft penthouse in Upper Bukit Timah that I bought for $900,000 five years ago.

Q: I drive....

A black Porsche Boxster PDK



What is your worst investment to date?

It was my first investment, a $20,000 fixed deposit with a local bank. It matured a few months ago. I made a pittance, it was not enough to cushion inflation.

I was doing regular banking one day and the teller suggested I speak to a manager who introduced me to the idea. I signed up on the spot. I thought they were very nice people and really wanted to help me.

What is your best investment to date?

My best investment to date is in humanitarian causes. I support a Vietnamese boy, who has just turned 12, and a few less privileged students in Thailand.
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