Bouncing back from a bad beginning

 

Tuesday, Feb 18, 2014

Rachel Scully

The Straits Times

Mr Wilson Ang lost a few hundred thousand dollars in his first foray into property investing in 1998.

He was just 33, and the loss came as quite a blow.

Mr Ang and a few friends had pooled their money to buy a few industrial strata title units, hoping to reap good returns in the rental market and yield a passive income.

But the Asian financial crisis wrecked their chances of getting tenants and sent the value of the properties plummeting by half.

"We made the hard decision of cutting our losses then," said Mr Ang, now 48. "That experience made me reconsider putting my money into illiquid investments."

So when real estate investment trusts (Reits) were introduced here in 2002, he jumped on the bandwagon as they offered a chance to gain exposure to real estate without the big outlay.

Reits have since become his vocation as he is chief executive of the manager of the recently listed Viva Industrial Trust.

"When buying into a Reit, you should regard it as a property investment instead of an equity and consider holding it for the long term," he explains.

"A Reit also has the added benefits of liquidity, which you will not enjoy when investing in a physical property.

"Talk has been rife that the rising interest rate environment linked to the Fed's tapering will hit the Reit market.

"But if you have the holding power, it should not affect your investment decision."

Aside from his job, Mr Ang puts his own money where his mouth is. Investments in Reits make up more than half of his personal investments.

He is the second youngest of 11 children and learnt the value of money the hard way. His father ran a neighbourhood provision shop.

"I lost my father, the family's sole breadwinner, when I was 12," he recalls.

"But I was fortunate enough to make it to university and had the help of my elder siblings, who chipped in financially, to provide for the family."

Mr Ang has been married to Madam Joyce Chong, for 17 years and the couple have a 14-year-old son.

Q: Are you a spender or a saver?

I'm definitely a saver and make it a point to save at least half my salary, of which half will be channelled into investments when the opportunity arises.

Q: On average, how much do you charge to your credit cards every month?

We spend about $3,000 a month on petrol, groceries and enrichment classes for my son.

I'm the sort who holds a number of cards, which can come in handy for promotions.

But I charge most of my expenses to two or three cards, including one that allows me to earn air miles.

Q: What financial planning have you done for yourself?

One of my older sisters is in the insurance line, so she recommended that I take on medical and endowment policies as forms of protection. I also bought an endowment policy for my son, which can be a source of cash for him in future.

I also have a diversified portfolio in bonds, blue-chip stocks as well as Reits. As I grow older, I'm looking at products that are not too risky and offer regular payouts.

My wife and I have talked about drafting a will and we intend to do it soon. Though we have only one child, a will would simplify the process for him to retrieve our remaining assets.

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

My parents always advocated the value of spending within your means, especially as they had to bring up 11 children.

We did not have the luxury of having gifts on our birthdays, except for a bowl of vermicelli and two hard-boiled eggs.

Every Chinese New Year, we would look forward to receiving a red packet from our parents as that would give us a little bit of extra pocket money.

After my father died, it was up to my eldest brother to take over his provision shop to support the family.

Q: How did you first get interested in investing?

One of my older sisters is a remisier and she would introduce us to various counters when the family met for gatherings. I sometimes think that she may have been trying to get us to be her clients.

I then developed an interest in reading analysts' reports on my own before making my first investment at 26.

Q: What property do you own?

In 1998, my wife and I bought a three-bedroom, 1,300 sq ft condo unit in Serangoon for about $800,000. It's near the areas I grew up in and has sentimental value. Also, we liked its central location.

Early last year, before the Government introduced the Additional Buyers' Stamp Duty, we bought a freehold semi-detached cluster house for a few million dollars.

The project will be ready in about two years.

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

That would have to be a brand new Audi A6 I got my wife as a present last year for about $200,000. She uses it to run errands and ferry our son around, and deserves the gift.

Q: What is your retirement plan?

When I left Cambridge Industrial Trust in 2009, I thought that I had entered my retirement.

But after a six-month break, I felt "sian" or bored and decided to go back to work.

I'll probably keep working and look at slowing down the pace a little when I hit 65. That will give me more time to pursue my interests, such as golf.

Q: Home is now...

A three-bedroom condo unit in Serangoon where I live with my wife, son and domestic helper.

Q: I drive...

A BMW 7 series which I bought brand new in 2011 for about $300,000.

WORST & BEST BETS

Q: What is your worst investment to date?

That would be the industrial units I bought with a couple of friends back in 1996.

It was a painful but valuable learning lesson and reminded me that property investments hinge on timing.

If you enter the market when the property cycle is on a high, chances are the prices will come down when the market cools.

Investors should not be overgeared and I recommend that the size of the property loan should not exceed 80 per cent of the property's value.

That is a good gauge for someone in their 30s with a 20- to 30-year working horizon.

Q: And your best?

On paper, that would have to be the property I'm living in now, a three-bedder condo unit in Serangoon.

Its value has doubled since my wife and I bought it in 1998, and its location is close to the Lorong Chuan station along the Circle Line.

Its central location and accessibility have helped prop up the value of the property.