Before the 2008 global financial crisis, finance was a heady place to be.
Flashy cars, glitzy jewellery, luxury bags and more were the order of the day, and then forex broker Ellie Kim witnessed it all.
"People made a lot of money but strangely, they had a lot of debt as well. Being on the front line of the financial industry, I observed people with high six-figure incomes still having trouble with money. What I realised was that how much you earned and how you controlled it were different matters," says Ms Kim, 40.
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WORST AND BEST BETS
- Q:What has been your worst investment?
In my initial days of investing, I bought stocks based on news and/or Internet gossip about stock market darlings.
I had Accord Customer Care Solutions, Beauty China Holdings and China Aviation Oil. I wrote off the losses so I can't remember them but they were as much as 50 per cent, and I went through a lot of mental agitation and agony. Investment without purpose or aim never grows.
A few years ago, my husband and I wanted to buy a property that was $1.2 million, and we'd placed a 1 per cent deposit. That night the Government came up with the seller's stamp duty.
I was the one who insisted on the investment but my husband wasn't very happy about it. I was quite sure I wouldn't lose money on this investment but if we were to go through with it, I thought it would be a point of argument so I decided to let go of it and forfeit the deposit.
Q: And what has been your best?
I've had a few good investments. My husband and I bought a property at a mortgage auction in 2010, and it was sold in a collective sale in 2013. I followed classic rules such as choosing a good location we were familiar with and to always pay for value of land, not the building cost.
For stocks, I bought Sarine Technologies when I bought myself a diamond ring. Since I'd spent money on diamonds, I thought it was a good hedge to buy a diamond company to justify my splurge. It went up three times and came off a bit.
I recovered the cost and am still holding my profit, but I learnt that the return from a single stock cannot change my life. It's just an ego booster. It's still the whole portfolio that creates financial security.
Investing in learning has had good return. I spend weekend or weekday evenings at seminars.
But the best investment has been coming to Singapore with only about $2,000. I couldn't even speak proper English then. Sixteen years on, I have two wonderful kids with my supportive husband.
I have the freedom to do what feels right. There are many moments in the day when I feel genuine gratitude to be here, which is a priceless return on investment.
She was also dissatisfied so she decided to change tack and pursue a career as a financial adviser instead. As a first step, she took the Capital Markets and Financial Advisory Services examinations in 2010.
But the South Korean, whose husband is Singaporean, finally made the switch only recently - after 12 years as a forex broker.
She says: "I've always had interest in personal finance and took the exams during my maternity leave but I had no guts to pursue
another career until my father's death in 2011.
"He died of cancer at 66 and I believe it's because of retirement. Although he had a good pension, he had difficulty adjusting after years as a civil servant. I saw the urgency to pursue a career where nobody can 'retire' me. I earn less than before but it's a more balanced life."
Ms Kim, who has an eight-year-old daughter and a five-year-old son, has developed her own money management and investment style over the years.
She could leave her corporate job because she has a portfolio of stocks and unit trusts that produces dividend income of about 5 per cent.
"It's a low four-digit figure which is enough for me to not be a burden to my husband," says Ms Kim, who invests only in what she understands.
"When I bought a Chanel bag, I saw that the shop was well-done, so I researched on the interior and found out it was done by Kingsmen Creative, whose stock I bought. I also read forums and do the valuations myself.
"I use the return on equity (ROE) or price-to-earnings (PE) ratios and I set some criteria, like the ROE should be at least two digits, and I prefer a single-digit PE ratio. I don't like companies with debts. That kills a lot of opportunities for me but I'm fine with that."
Ms Kim also does not buy cyclical stocks, and buys blue chips only when the market crashes.
"In the initial years, I invested without any knowledge, just based on what I read in the newspapers, and that was also when I made my worst investments."
It was like throwing darts at a board, hoping to hit the bull's eye.
"Once I made money, I spent it, and once I lost money, I wrote it off," says Ms Kim, who started to educate herself in investing more seriously after her son was born.
Her attitude towards money has changed drastically. "Money is a way to better serve my life. Setting up a system like my portfolio really helped to give me the freedom to do what I want to do."
Q:Are you a spender or saver?
I think I am a value spender. I can be quite stingy over small stuff but when I see the value, I don't mind paying a premium.
Q:How much do you charge to your credit cards every month?
A credit card is an evil. I maintain two credit cards just because it looks cooler than digging for cash. I don't believe in points and perks.
One credit card is for family expenses like tuition fees, and the other is my personal card. I charge about an average of $500 to $800 on each card unless it's for a special occasion like a holiday.
I know a few people who can control their credit card usage very well but I'm not one of them so I am always cautious.
When I was working as a forex broker, I was given $50,000 as a credit limit. When I called the card company to cut my credit limit, the lady on the line said it was the first time she had that sort of request.
Q: What financial planning have you done for yourself?
Before I quit my corporate job in December 2013, my husband and I went through a comprehensive financial planning process in March that year, which gave me a third-party financial perspective on our life.
We've taken care of our insurance, investments and our wills as well, and I really learnt the value of financial planning and advisory.
I've a portfolio of unit trusts and stocks that I built up over four to five years, and it is part of my retirement plan. I call it the Ellie fund (laughs).
After reading books and attending seminars, I learnt that the key to growing money is to stay invested. It has to be continuous and sustainable.
The rule I have for this portfolio is that whenever I save, I invest in it. There is no outflow, only inflow, so the extra money or dividends I have goes back into the fund.
After some time, I realised the portfolio runs and grows on its own. I am quite comfortable with my underlying assets. It's a kind of system where money works for me. Even after I left a regular job, I didn't take any money out of it.
Q: Moneywise, what were your growing-up years like?
I was a mummy's girl until I got to university. A third of my father's salary was sent to me in university, but it barely covered the school fee and housing.
There were lots of Gangnam (a wealthy district in Seoul) kids in university while I was just a country bumpkin. I felt poor in my university days, yet I couldn't complain because the money my parents sent me was like their flesh. So I learnt how to live within my means and to never feel small.
Q: How did you get interested in investing?
As a married couple we wanted to be financially stable, and I started to see money in my bank account as I was doing well as a forex broker, so it was natural to get interested in investing.
I feel a Singaporean man appreciates a woman with independence, and when I became a mother, I yearned to quit my job and spend more time on myself and kids someday. That motivated me to get into investment and personal finance.
Around 2010, I started reading books about investments and even philosophy, and attending seminars and workshops - not only on investments but also for self-improvement and development, or whatever I was interested in.
Q: What investment property do you own?
We used to have an investment property but sold it in 2013. We bought our current home and kept the rest in cash and financial products like bonds and equities.
If I were truly a smart investor, I would have bought a resale Housing Board flat in a good location and invested the rest in the passive income-generating equities or funds. I used to live in one in Serangoon and it was so convenient.
Others like to see rental income but I'm very comfortable with other financial instruments that give me a 5 to 6 per cent income, and I don't have to leverage on them.
Q: What's the most extravagant thing you have bought?
A Chanel bag for myself as a Mother's Day present "from my one-year-old daughter" (laughs). It was really because of peer pressure. For instance, at my office there was a lady whose bag collection could have probably bought a small HDB flat.
They would talk about what kind of bag and how many of those you should have after working in the industry for six to seven years, for instance. But I found the Chanel bag not practical and it's too small.
I learnt a life lesson - the consequences of buying something because of peer pressure. In my case it was a bag, but for my peers, it could have been an Audi, Ferrari or a house.
Q: What's your retirement plan?
I quit my corporate job so that I don't have to "retire". I hope to be able to work for as long as I can be useful to others.
My retirement plan involves setting up a system where money works for me so I can work on a lifelong career. So far, I've managed to create a small stream of passive income and I am learning from my new job.
Q: Home is now....
A condo in Bukit Timah Road. Although I don't like the feeling that I am sitting on the money, I want to be around good schools. Sometimes in life, certain things are priceless.
Q: I drive....
Sometimes I borrow my father-in- law's Honda Jazz.
