Family man's top priority: Safety net for wife and kids

Me & My Money Series (Sunday Times)

This week's Me & My money column.

Nothing new about this guy- decent job, invests just like almost every upper middle-class Singaporean (read: property), paying too much in insurance premiums (40K a year) and got burnt by equities before.

Family man's top priority: Safety net for wife and kids

Rachel Scully
Straits Times
1 September 2013

After losing dad in his teens, Asia-Pac head of multinational firm swears by insurance

When Mr Abhijit Banerjee was just 16, he lost his father, the family's sole breadwinner who was a seaman on a merchant's ship, to illness in his native India.

The younger of two sons had to grow up fast, providing for their mother and earning badly needed money to pay their school fees. He took on part-time jobs as a data entry clerk and also did door-to-door sales promotion work for household consumer products.

As a result, Mr Banerjee, 46, feels strongly about the importance of having adequate insurance coverage to act as a safety net for his loved ones.

"My dad provided us with a very comfortable life, but he had no concept of saving or investing," recalls Mr Banerjee, who was born in Kolkata. "My only initiation to savings was putting money into a piggy bank."

He was determined not to repeat that mistake.

So when Mr Banerjee became a father at 32, the vice-president and Asia-Pacific region head of multinational technology services and solutions provider Servion Global Solutions ensured that his family was adequately insured.

Insurance-linked investments were also less risky than stocks, but offered better returns than regular savings in the bank, he said.

He now spends about $40,000 a year on life and health insurance premiums for himself, his wife Puja, 40, and two sons, as well as mortgage insurance on his properties.

He came to Singapore in 1998 with his wife, became a permanent resident here in 2000 - and hopes to take the next step soon.

"I'm the type of guy who doesn't like to be caught up in the hassle of application paperwork," he quips. "But I intend to apply for Singapore citizenship before the end of the year, and my two sons who were born here will be serving national service."

He says he is largely "Singaporean-ised" and the family enjoys hawker favourites such as laksa, chicken rice and barbecued pork slices or bak kwa.

He and his family members can switch between formal English and Singlish easily and they enjoy watching local movies such as Ah Boys To Men and Money No Enough.

Having spent about four years living in an HDB flat before renting a condominium in 2005, Mr Banerjee says his local friends influenced him to make his investments more "Singaporean-ised".

"I was looking for a safe place to channel my savings and grow my wealth," he says. "And many of my friends suggested that I take a look at property."

So when prices came down during the global financial crisis, he jumped on the bandwagon.

His wife is a homemaker and their sons Aditya, 14, and Akaash, seven, are at school.

Q: Are you a spender or a saver?

Like my Libra star sign, I'm a balanced person and this applies to my spending and savings pattern too.

However, it was fatherhood and the bag of responsibilities which came with it that made me more of a balanced spender and saver in my 30s.

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

I use my credit cards extensively because of the convenience of going cashless and charge a four-figure sum to them monthly.

Although I have 10 credit cards, most of my spending is accounted for by three of them. One is specifically for work, and the other two are for groceries and discounts or rebates on petrol.

A benefit of going cashless is the points which I can accumulate that will come in handy when planning family vacations.

Q: What financial planning have you done for yourself?

When I first came to Singapore in 1998 and wasn't sure if this would be my permanent home, I continued to put my modest savings into India's public provident fund, the equivalent of Singapore's Central Provident Fund, because it offered double-digit interest rates.

I also had some money in short- term fixed deposits, term life insurance policies as well as equity stocks - which later turned out to be bad investments.

But after my older son came along in 1999, I started making more Singapore-focused investments. For example, my wife and I moved out of a rented apartment and bought our first five-room HDB flat, and the monthly mortgage payments on it were less than the rent I'd been paying every month.

Being the sole breadwinner, I also looked out for insurance policies which would give sufficient coverage for my family in case something happened to me.

Under the advice of my wife and Singaporean friends, it made sense to look towards property investments as a viable option.

Some time during the recent global financial crisis, I bought two condominium units.

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

After my father died when I was 16, my older brother and I had to earn extra money to provide for my mother and finance my studies. While I took up some part-time jobs, I'm also grateful that my father's sister-in-law gave me some pocket money and paid for my college fees.

In my late teens, my monthly allowance was the equivalent of $10 in relative terms.

So when I brought home about $100 a month from my first job at 21 doing business development and IT sales, I started splurging on things I had been deprived of in the previous five years.

Q: How did you get interested in investing?

I was never an astute investor by nature. It was the good advice and direction of some friends, colleagues and my wife that made me realise the importance of investing and building my assets.

Q: What property do you own?

In 2009, I bought the three-bedder plus study unit at Costa Del Sol, which I have been living in, at less than $800 psf (per sq ft). It is now selling for about $1,300 psf.

A year later in 2010, I got a three-bedder condo unit in Yew Tee for about $600 psf which I've been renting out, and it is going at $900 psf.

I also have a condo in Kolkata, where I was born and bred, which has been fully paid for; and an inherited landed property which is vacant.

Q: What is the most extravagant thing you have bought?

It would be a BMW five-series sedan which I bought in 2011 for about $250,000.

Q: What's your retirement plan?

I'll work for as long as I need to, at least until my younger son goes to university which is another 15 years away. But I'll look towards having a healthier work-life balance and look for causes that are not driven by money.

It could be something creative and fun that I'm interested in or contributing back to society.

Q: Home is now...

A 1,600 sq ft condo at Costa Del Sol with a sea view, where I live with my wife, two sons and a full-time maid. My mother and mother-in-law take turns to visit us for about three months a year to spend time with the boys.

Q: I drive...

A black BMW five-series sedan which I use to commute to work, and which my wife uses when I'm travelling.