This short Q&A series with ST's beat reporters lets readers meet the person behind the byline. These are the experts who will be answering readers' questions in our new askST section.
1. You have been writing about the financial market for 28 years now. Is the financial advice that you were giving in the 1980s and 1990s still relevant today?
Wow, there is so much to respond to your one simple question that I can write a book about it. Or to be more precise, two books.
What you ask is encapsulated in Small Change: Investment Made Simple and Small Change: Turning Cents Into Dollars – my two books recounting what I had learnt as a financial columnist.
There are some investment principles which are perhaps eternal in nature. Whether you apply them now, 10 years ago or even 100 years ago, they stay relevant.
2. How about the changes you have seen in the last 20 years?
Now, that is another question whose many answers I can cheerfully put into a book which I am actually in the midst of putting together.
This year marks the 30th year of my working life. There was never a dull moment and I still enjoy what I am doing.
There is one observation worth sharing: The great American writer Mark Twain once remarked that history never repeats itself but it often rhymes.
It is one of those rare insights which an investor must be acutely aware of.
Every time, when the bulls go rampaging in the financial market and I hear the so-called stock experts trying to convince me that “this time, it is different”, the stock market rally is for real, I would say under my breath: “Here we go again.”
Sure, as night follows day, booms and busts are part and parcel of the stock market.
3. What does it take to become a personal finance columnist?
It must be in my blood. I always have a passion for teaching and before I became a financial journalist, I was a physics teacher for two years.
Some of the stuff which my university professors taught me – and I had some very good ones in Cambridge – were stranger than fiction like things which are so dense that they could even suck in light. We call them “black holes”.
But they didn’t teach me anything about how to balance my finances – or any of the stuff which would ensure that I could keep that proverbial wolf far away from my doors.
The same can be said about our education system. I had a good laugh some years ago when there was a new syllabus rolled out for Secondary One and Two students which was supposed to give them some basic foundation on how to manage their finances. But the course was labeled “Food and Consumer Education”.
4. What is your relationship with money? How much is enough for you?
The answers are in my two books.
For most people, there are two benchmarks to measure up against – how much you need to earn a month to feel happy and how much assets you must accumulate to be considered rich.
Some years ago, there was a poll conducted by Princeton University in the United States which showed that if a person earns less than $75,000 a year, he will get a boost in happiness each time he gets a pay rise. But after crossing $75,000, bringing home more income doesn’t make any appreciable difference to his overall satisfaction level.
Similarly, there was a UBS survey, also conducted in the United States, which shows that a person considers himself to be a millionaire if he has at least $5 million of assets. That is because with that amount of assets, he will have $1 million or more in cash – and having that much cash makes him feel like a millionaire.
As for me, I have always believed that wealth should not just be measured in material terms. After 30 short years’ working, I know better than to be bothered about whether I am rated a success in other people’s eyes – by staying in an upmarket apartment or driving a flashier car.
4. Are you a spender or a saver?
What I can say is that I spend within my means.
I would mentally have an envelope for the monthly mortgage payment, another for the PUB bill, yet another for my credit card payments and so forth.
What is left over I would put into a cookie jar labeled investments. Sometimes, I would raid this cookie jar to reward myself with some goodies like an expensive holiday overseas.
But I must make sure that I do not develop a sweeth tooth and raid the cookie jar too often. Otherwise, it gets depleted and there will be no goodies left to savour.
5. What's your worst investment? And one that has paid off handsomely?
There is no such thing as a bad investment – only poor judgement.
Before you plonk down your money into any investment, you are supposed to do your homework and make sure that you are not throwing your good money away. As the saying goes, a fool and his money are soon parted.
In some sense, I had been lucky. I started working at a time when Singapore’s economy was on a steep growth trajectory – and I had been sensible enough to hold on to whatever I had bought, instead of taking profit at the earliest opportunity possible.
But the truth is that whether you had invested in a blue-chip stock or a property during that period, you would have reaped a similarly bountiful reward if you had kept it till today.
Just to give an example: A brand-new five-room HDB flat bought 30 years ago for $100,000 would be worth at least $550,000 now. That would mean a profit of $450,000 on paper. It doesn’t even require you to be a Warren Buffett to achieve that kind of outsized return.
6. Most expensive thing you have invested in or bought?
For once, I can respond in one breath: My apartment.