Me&MyMoney

Education opens doors to the future

Mr Daniel Ng and his wife Nicole Lim are convinced that the money they spent on her MBA programme at the Wharton Business School is well-spent, clearing the path for her to advance her career. She is now an investment specialist with an American bank
Mr Daniel Ng and his wife Nicole Lim are convinced that the money they spent on her MBA programme at the Wharton Business School is well-spent, clearing the path for her to advance her career. She is now an investment specialist with an American bank. They are setting aside money for their daughter's education as well, while looking to acquire assets that will help generate passive income for their retirement years.ST PHOTO: FELINE LIM

Couple ploughed all their savings and more into an overseas MBA for her, confident of the gains

To some, a postgraduate education overseas might seem a stretch financially, perhaps even unnecessary.

To businessman Daniel Ng, 43, however, ploughing more than $200,000 into his wife's Ivy League MBA turned out to be the best investment of his life.

The MBA clearly opened up career opportunities for Ms Nicole Lim, 41, now an investment specialist at a major American bank.

But Mr Ng, who has a bachelor's degree in business administration from the National University of Singapore, is quick to point out that it was the intangibles of the experience that made the difference.

"Studying at Wharton Business School at the University of Pennsylvania allowed Nicole to learn from and network with other bright minds in the programme. An overseas education builds maturity and teaches you to see things with a global perspective," he said.

  • Worst and best bets

  • Q What has been your biggest investing mistake?

    A I bought my Audi A6 in 2013 when the certificate of entitlement was priced at an all-time high of around $90,000, so I spent around $240,000 on a depreciating asset. I would say that was my biggest investing mistake.

    I also bought a few initial public offering stocks of electronics firms many years ago, in 1999, but most of them went under water after some time - I sold them at a loss in the end. I lost about $2,000 per stock I bought. In total, I lost less than $10,000.

    I learnt that for every investment, you need to do your due diligence and understand the situation, instead of blindly jumping in.

    Q And what has been your best investment move?

    A My best investment move would be investing in my wife's MBA, which cost around $250,000.

    The sharing among the students from diverse backgrounds gave her global perspectives that she could draw on in the future.

    While the MBA did lead to a consultancy role, which paid substantially more than her previous income working at a bank's mid-office operations and eventually led to a job in one of the largest US banks as an investment specialist serving the ultra-high net worth clients, I would say benefits such as the networking with a global cohort of MBA students and the rich sharing of experiences made the strongest impact.

    Over the years, the return on this investment has been manifold.

"Education opens doors - not only for your career but also for your mind," he declared.

In 2011, he set up recruitment firm DN & Associates, which now has five staff, including himself.

The couple have a daughter, now aged eight.

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

A I'm from a middle-income Singapore family. My father ran his own sole proprietorship in the hardware supply business, but my family did not have a luxurious lifestyle.

We had what we needed, but we did not have extra to buy brand-name goods. My parents believed in saving for the kids rather than spending on themselves, and taught me to be prudent with what I had.

Education gave me the opportunity to get out of a less advantageous financial situation, so I know first-hand what benefits it brings.

Q How did you get interested in investing?

A My parents placed a lot of emphasis on education because, to them, it was the way to a better life.

This made me see investing in education as a necessity. Wealth can be taken away easily, but education, which opens up avenues in life, cannot.

In 2002, Nicole and I started to get interested in the idea of investing in her education because we firmly believed that she would gain immense benefits. It was also something that she has always wanted to do, so we decided to go ahead with the investment once she was accepted into Wharton.

Q What is your investing strategy?

A To be sure about what I put my money into. Hard-earned money should be spent wisely.

In 2002, when Nicole and I first started to plan for her MBA, we had slightly over $120,000 in savings - not enough to cover the total cost, which we estimated would come to around $250,000.

In 2003, I sold our Subaru for around $30,000, and surrendered some insurance policies for around $10,000, to go towards paying for her tuition fees and expenses.

I was confident that the experience would pay off in the end - and so it did.

As for my business, I am looking to expand it in the near future. The firm is currently doing quite well, so I can take part of the revenue and invest it in the business instead of having to use my personal funds.

Q What's in your portfolio?

A I don't have traditional asset classes in my portfolio, but I run my own recruitment firm, which I started in 2011 with just $2,000. It now generates more than $1 million a year in revenue.

I finished paying for the house last year, so that is now an asset. We bought the property in 2009 for $1.5 million.

Every year, I set aside 5 per cent of my annual income for my daughter's education.

I do have some endowment and insurance plans as well, but I look at insurance more for the protection element than for the investment element.

One of my hobbies is collecting antiques. They will appreciate in value, so they serve as a sort of investment as well. Most of my pieces are Peranakan, and I have been collecting since 2007. The entire portfolio is now worth more than $400,000.

Q What does money mean to you?

A Money enables people to do something significant. It can bring families together by putting food on the table and providing other material goods, but it should also be used to help those in need.

I am currently engaging in preliminary discussions with a local education institution to set up some bursaries that will help low-income children with their education. I'm setting aside around $5,000 a year for this.

I do not see any point in hoarding money. If the money can be used wisely and meaningfully, then I shouldn't be keeping it. Of course, some money needs to be set aside for rainy days, but money should be used to serve the community whenever possible.

As a company, we donated over $12,000 to charity last year, and we have sponsored five kids through World Vision in the past two years.

On a weekly basis, I volunteer with the Food from the Heart foundation to distribute bread. My daughter, Jeanette, comes with me during school holidays.

Q What are your immediate investment plans?

A I am actively looking to acquire another asset for passive income, but this move will depend on the market and the prices.

I also want to expand the company in the next couple of years, so I will be investing in that as well. Every year, I put 10 per cent of the revenue back into the company.

I also hope to invest in other businesses with my personal funds, but I have not thought through the details yet.

I have set aside 5 per cent to 10 per cent of my income for possible future investments in other businesses, even though I am not actively looking to make such investments right now.

Q How are you planning for retirement?

A Acquiring a property asset in the future will definitely help generate passive income. I also save 10 per cent of my income every year.

I have a Supplementary Retirement Scheme account that complements my Central Provident Fund savings for retirement so, every year, I contribute the maximum amount towards that too, which comes to $15,300.

Q Home is now...

A An inter-terrace in the central-eastern part of Singapore.

Q I'm driving...

A An Audi A6.

A version of this article appeared in the print edition of The Sunday Times on April 09, 2017, with the headline 'Education opens doors to the future'. Print Edition | Subscribe