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Undergrad building on his passive income

This story was first published in The Straits Times on June 23, 2013 

For someone who is barely into his 20s, Mr Arthas Ho is already on his way to being a seasoned investor.

The 22-year business and accountancy student from Nanyang Technological University (NTU) has dabbled in stocks, traded in commodities like gold, and is already thinking of ways to create a passive flow of income so he can retire by 35.

This drive to earn more money and create more value from his savings started with his first "business" when he was in primary school.

"When I was (in primary school) my allowance was 80 cents, which was very little... I decided I could double my income. I was good at running and I told my friends 'if you want to learn to run as fast as me, pay me 50 cents and I'll teach you.'

"Some of them were keen to do that so I would spend my whole recess coaching about two to three friends on the best running techniques."

Even though Mr Ho is working to ensure he can achieve a steady stream of passive income within the next few years, like any good investor, he already has a back-up plan in place.

"I have a few options and looking for a job would be my back-up plan. But I'm more keen to work for myself because you can definitely earn more money doing that and you can set your own income, that's the best part!"

Mr Ho has completed his first year at NTU and lives with his family.

His 55-year-old father is an HR manager and his 51-year-old mother is a regional financial controller. He has two siblings - an accountant brother, 25, and a sister, 18, who is in junior college.

Q: Are you a spender or a saver?

I would say I'm more of a saver. I save every dollar that I can, usually about 90 per cent of my monthly income.

That money is set aside to purchase assets that will appreciate in value or produce positive cash flow.

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

About $100 to $200 per month. I use my dad's supplementary credit card, but always make sure I pay the bills on it.

I use it for things like shopping. The latest item I bought was a pair of Tiffany & Co rings which cost me $500.

Q: What financial planning have you done for yourself?

My investment portfolio consists of stocks, options and Reits. I've also attended several investment seminars to learn more about financial planning and how to carry out technical and fundamental analyses of equities.

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

When I was younger, I used to be a heavy spender, spending every single cent that I could get hold of.

But when I was 18 years old, I realised I couldn't continue doing that and I really started thinking about how I can create some long-term financial goals for myself.

So I stopped taking an allowance from my parents and have been running businesses, working in jobs and managing other forms of income to ensure that I have financial freedom.

Q: How did you get interested in investing?

It was when I started reading books by Robert Kiyosaki including Rich Dad Poor Dad, Cash Flow Quadrant and Unfair Advantage. I think I was about 17 or 18 at that time and it got me interested in creating wealth through investments.

I remember the first investment I made was purchasing about $6,000 worth of IPO shares from Global Logistics Properties.

The share price jumped about 10 per cent to 20 per cent on its trading debut so I felt really good and I earned around $1,000 to $2,000 overnight.

When I first started investing, I was happy enough making $50 a month but now I usually lean towards investments that can give me yields of 10 to 20 per cent.

Q: What property do you own at the moment?

None yet but I'm hoping to buy some property. I had applied for a flat under HDB's Build-To-Order scheme but I didn't get it. My girlfriend and I are probably looking at an executive condominium instead.

Buying an investment property is something I'd like to achieve in the next three to five years.

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

When I was 10, I used to collect World Wrestling Entertainment (WWE) trading cards. Each pack of 10 cards cost $150 and I collected hundreds of the trading cards. I kept them for years, thinking that they would appreciate in value but they didn't. I sold some of the cards and most of the remaining ones were eventually damaged by termites and I threw the rest of them away.

Q: What's your retirement plan?

My goal is to work my way towards creating a passive monthly cash flow of about $10,000. With my monthly income to cover my expenses, I hope to be able to retire by the time I'm 35.

Q: Home is now...

A 1,700 sq ft condominium in the Hillview area that I share with my family.

Q: I drive...

The family cars. A silver Toyota Wish and champagne Toyota Altis.

stmoney@sph.com.sg

This story was first published in The Straits Times on June 23, 2013

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