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Me & My Money Series (Sunday Times)
To get caught out by Ferrochina, I doubt he was practising conservative investing!
The Straits Times
http://www.straitstimes.com
Published on Feb 17, 2013
Doc's finger on the pulse of investing
To achieve financial well-being, he bones up on share trading and emerges a winner
By Joyce Teo
He is a medical doctor but reckons he also knows a healthy stock when he sees one.
Dr Lim Cheow Yang, 42, embraces the idea of learning about financial well-being, since he already knows plenty about bodily health.
"Apart from health, the other important things in our lives are relationships and money.
"Relationship is something you can't study. As for health, there's nothing much for me to study as I am a doctor. So I focus on learning how to invest my money." And that, to him, is a piece of cake.
"I am very strong in mathematics so I find it easy to analyse financial statements and other data."
Dr Lim even reads A-level economics textbooks in his free time to acquaint himself with the investing world.
His interest in stock investing led him to join the recent StockWhiz share investing contest organised by Singapore Exchange, where he emerged the overall winner.
Q: Are you a spender or a saver?
I spend freely on things that I need but I am not fascinated by branded or luxurious goods.
I am easily contented with the simple things in life. I believe money will bring happiness up to only a certain level, beyond which the rule of diminishing returns sets in.
I save about 60 per cent to 80 per cent of my monthly income. I do not make an effort to save and whatever I do not spend becomes my savings.
A few years ago, while in Bangkok, I did an experiment on myself. I stayed in three different classes of hotels (three-star to five-star) on three consecutive nights and found that my happiness level remained the same throughout the three nights.
I realised it was the companionship that determined my happiness. To me, nearly everything boils down to people and relationships.
Q: How much do you charge to your credit cards every month?
About $1,000 to $3,000. I do not like cash as I have a tendency to lose my wallet and hence my cash.
Q: What financial planning have you done?
My priority is to reduce my taxes through my Central Provident Fund (CPF) and the Supplementary Retirement Scheme (SRS). (The SRS is a savings programme that offers tax benefits. Every dollar that you save in your SRS account reduces your chargeable income by a dollar.)
Last year, I contributed $30,600 to my CPF. This is the maximum sum allowed for tax deduction for self-employed persons. Similarly, I contributed the maximum yearly sum of $12,750 to my SRS account.
I used my CPF Ordinary Account funds to buy blue-chip shares and transferred as much as I am allowed to, to the CPF Special Account as it offers a higher interest. I learnt this from a university friend who is now a cardiologist.
I also bought some blue chips with my SRS funds. They generate good dividends annually.
If I am ever severely short of cash, I can always sell my shares in my SRS account and withdraw the cash prematurely. I just have to pay a penalty of 5 per cent on the amount withdrawn. The amount will then become taxable income.
The SRS is good as it forces me to save for a rainy day and, at the same time, allows me to enjoy good tax savings.
I do not have any insurance plans because I feel it will be too much of a hassle to claim from insurance companies if I need to.
I have enough savings set aside for a rainy day.
Q: Moneywise, what were your growing-up years like?
I was born into a very poor family. My father was a blue-collar worker while my mother was a housewife.
We lived with my paternal grandparents, uncles, aunties and cousins in an attap house in a kampung near Defu Industrial Park.
My family has taught me to be thrifty since I was young.
In the mid-1970s, some of my father's friends roped him in as a partner in an industrial gas supplies business.
The business ran into some difficulties. All the partners left, except for my father who persevered and became the sole proprietor. Luck was with him as his business then blossomed.
Q: How did you get interested in investing?
That was when I realised that my savings were getting very little returns from the banks.
My first investment was in SingTel shares, which I bought on the open market at $1.90 a share in 2000. I sold them at $3.40 a share in 2007. I did read some self-help books on investment to teach myself the intricacies of share investing and trading.
Q: What property do you own?
I do not own any property. I am living a busy life as a doctor so I don't have the time to find and engage tenants.
But I do own property stocks. They're something I can just buy and sell. It's quite effortless.
Q: What's the most extravagant thing you have bought?
A new Mitsubishi car that I bought when I was a second-year medical student at the University of Sydney in 1993.
That was just after I worked extremely hard to win a scholarship that paid for my school fees from the second to the sixth year, helping my father save nearly A$150,000.
I have no regrets as I was able to travel to many exotic destinations as well as places with good food where I bonded with many good friends.
Q: What's your retirement plan?
The money that I contribute to my CPF and SRS serves as my retirement savings, apart from helping me save on taxes.
I believe in working hard when I am young and being more leisurely about it when I am middle-aged. Now, I work at a leisurely pace, earning just enough money to lead a happy and simple life, as well as save for my retirement.
In the future, I would like to work in mainland China as a doctor as well as do voluntary work there in my free time.
My interest in Chinese history and culture as well as my strong command of the Chinese language will serve me well.
I have visited China more than 20 times in the past decade and have always felt emotionally attached to my ancestral homeland.
Based on my estimate, I will need about $3,000 (in today's value) a month to retire.
Q: Home is now…
My parents' semi-detached house in Springleaf estate.
Q: I drive…
A blue Toyota Altis.
joyceteo@sph.com.sg
-------------
WORST AND BEST BETS
Q: What's your best investment to date?
My best investment was my purchase of 50,000 shares in property giant CapitaLand, at $2.21 a share, at the end of 2011.
I sold them off at $3.65 a share in December last year and made a profit of about $72,000.
Q: And your worst?
My worst investment was my FerroChina shares.
I suffered a loss of $40,000 after the debt-laden China company was delisted following its inability to restructure its debt.
In stock investing, you cannot always win. My advice for investors who are just starting out is to invest only money that you can afford to lose without losing sleep over it.
The Straits Times
http://www.straitstimes.com
Published on Feb 17, 2013
Doc's finger on the pulse of investing
To achieve financial well-being, he bones up on share trading and emerges a winner
By Joyce Teo
He is a medical doctor but reckons he also knows a healthy stock when he sees one.
Dr Lim Cheow Yang, 42, embraces the idea of learning about financial well-being, since he already knows plenty about bodily health.
"Apart from health, the other important things in our lives are relationships and money.
"Relationship is something you can't study. As for health, there's nothing much for me to study as I am a doctor. So I focus on learning how to invest my money." And that, to him, is a piece of cake.
"I am very strong in mathematics so I find it easy to analyse financial statements and other data."
Dr Lim even reads A-level economics textbooks in his free time to acquaint himself with the investing world.
His interest in stock investing led him to join the recent StockWhiz share investing contest organised by Singapore Exchange, where he emerged the overall winner.
Q: Are you a spender or a saver?
I spend freely on things that I need but I am not fascinated by branded or luxurious goods.
I am easily contented with the simple things in life. I believe money will bring happiness up to only a certain level, beyond which the rule of diminishing returns sets in.
I save about 60 per cent to 80 per cent of my monthly income. I do not make an effort to save and whatever I do not spend becomes my savings.
A few years ago, while in Bangkok, I did an experiment on myself. I stayed in three different classes of hotels (three-star to five-star) on three consecutive nights and found that my happiness level remained the same throughout the three nights.
I realised it was the companionship that determined my happiness. To me, nearly everything boils down to people and relationships.
Q: How much do you charge to your credit cards every month?
About $1,000 to $3,000. I do not like cash as I have a tendency to lose my wallet and hence my cash.
Q: What financial planning have you done?
My priority is to reduce my taxes through my Central Provident Fund (CPF) and the Supplementary Retirement Scheme (SRS). (The SRS is a savings programme that offers tax benefits. Every dollar that you save in your SRS account reduces your chargeable income by a dollar.)
Last year, I contributed $30,600 to my CPF. This is the maximum sum allowed for tax deduction for self-employed persons. Similarly, I contributed the maximum yearly sum of $12,750 to my SRS account.
I used my CPF Ordinary Account funds to buy blue-chip shares and transferred as much as I am allowed to, to the CPF Special Account as it offers a higher interest. I learnt this from a university friend who is now a cardiologist.
I also bought some blue chips with my SRS funds. They generate good dividends annually.
If I am ever severely short of cash, I can always sell my shares in my SRS account and withdraw the cash prematurely. I just have to pay a penalty of 5 per cent on the amount withdrawn. The amount will then become taxable income.
The SRS is good as it forces me to save for a rainy day and, at the same time, allows me to enjoy good tax savings.
I do not have any insurance plans because I feel it will be too much of a hassle to claim from insurance companies if I need to.
I have enough savings set aside for a rainy day.
Q: Moneywise, what were your growing-up years like?
I was born into a very poor family. My father was a blue-collar worker while my mother was a housewife.
We lived with my paternal grandparents, uncles, aunties and cousins in an attap house in a kampung near Defu Industrial Park.
My family has taught me to be thrifty since I was young.
In the mid-1970s, some of my father's friends roped him in as a partner in an industrial gas supplies business.
The business ran into some difficulties. All the partners left, except for my father who persevered and became the sole proprietor. Luck was with him as his business then blossomed.
Q: How did you get interested in investing?
That was when I realised that my savings were getting very little returns from the banks.
My first investment was in SingTel shares, which I bought on the open market at $1.90 a share in 2000. I sold them at $3.40 a share in 2007. I did read some self-help books on investment to teach myself the intricacies of share investing and trading.
Q: What property do you own?
I do not own any property. I am living a busy life as a doctor so I don't have the time to find and engage tenants.
But I do own property stocks. They're something I can just buy and sell. It's quite effortless.
Q: What's the most extravagant thing you have bought?
A new Mitsubishi car that I bought when I was a second-year medical student at the University of Sydney in 1993.
That was just after I worked extremely hard to win a scholarship that paid for my school fees from the second to the sixth year, helping my father save nearly A$150,000.
I have no regrets as I was able to travel to many exotic destinations as well as places with good food where I bonded with many good friends.
Q: What's your retirement plan?
The money that I contribute to my CPF and SRS serves as my retirement savings, apart from helping me save on taxes.
I believe in working hard when I am young and being more leisurely about it when I am middle-aged. Now, I work at a leisurely pace, earning just enough money to lead a happy and simple life, as well as save for my retirement.
In the future, I would like to work in mainland China as a doctor as well as do voluntary work there in my free time.
My interest in Chinese history and culture as well as my strong command of the Chinese language will serve me well.
I have visited China more than 20 times in the past decade and have always felt emotionally attached to my ancestral homeland.
Based on my estimate, I will need about $3,000 (in today's value) a month to retire.
Q: Home is now…
My parents' semi-detached house in Springleaf estate.
Q: I drive…
A blue Toyota Altis.
joyceteo@sph.com.sg
-------------
WORST AND BEST BETS
Q: What's your best investment to date?
My best investment was my purchase of 50,000 shares in property giant CapitaLand, at $2.21 a share, at the end of 2011.
I sold them off at $3.65 a share in December last year and made a profit of about $72,000.
Q: And your worst?
My worst investment was my FerroChina shares.
I suffered a loss of $40,000 after the debt-laden China company was delisted following its inability to restructure its debt.
In stock investing, you cannot always win. My advice for investors who are just starting out is to invest only money that you can afford to lose without losing sleep over it.
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