SingSaver co-founder invests mainly in low-risk products and spends only on essentials
Comparison website SingSaver co-founder Rohith Murthy, 36, has a knack for financial management, a skill he attributes to his family background.
The computer engineering graduate grew up in India in the first 16 years of his life and came here for tertiary studies.
Mr Murthy says supplementing his father's income with his university allowance taught him the importance of spending money wisely and managing his finances well.
"To ensure I had enough money for my family, I led a frugal lifestyle in university and was very careful with my expenses. I ate at home and hardly went for parties," he says. "I gave tuition to earn more to support my household."
Mr Murthy is now his family's sole breadwinner and supports six dependants - his parents, wife, two daughters and a younger brother.
He set up SingSaver two years ago to help local consumers make informed choices when choosing financial products.
SingSaver is a comparison website offering free information on credit card deals and personal loan products. The service enables users to save time and money when picking a suitable product.
Mr Murthy,now a Singapore citizen, and his Romanian wife, 30, have two daughters, aged seven and two, with a third child on the way.
Worst and best bets
Q What has been your biggest investment mistake?
A It was during the 2008 financial crisis, when many stock prices fell to very low values. Many of my friends were purchasing stocks then and I, too, decided to take a chance without any knowledge of what I was buying.
There were a lot of voices and speculation in the market. I remember purchasing an inverse exchange-traded fund and lost money in doing so. Fortunately, I lost only about half of the $1,000 I had invested.
However, it was a bigger lesson than anything. It made me realise I had become too complacent and overconfident in my investments.
After that incident, I have learnt to invest only in something where I know what I am trying to achieve. I have also learnt to set limits for myself, by pulling out immediately when certain investments look dubious, and never looking back at what I have pulled out from.
Q What has been your best investment move?
A SingSaver has been my biggest and best investment move. Investment is more than just putting in money and expecting money to accumulate. A good investment requires time and commitment, and I have definitely invested much of my time and efforts in SingSaver - from finding offices, to registering and getting the website up and running, to finding manpower.
My time is always divided between SingSaver and my family, so SingSaver can be considered a very huge form of investment personally.
He says his investment and retirement plans depend largely on his children.
"I have not set aside money for retirement, but I constantly reassess my portfolio as my children grow up. My children's education comes first.
"I plan to cash out $250,000 for their education. My portfolio distribution depends on how much I want to invest for my family and how much in other assets."
Mr Murthy intends to shift his focus from other investments to developing SingSaver, and believes strongly in his decision.
"I am investing in a good cause by giving back to society and helping people pick the right products. The dividends will always be positive."
Q Money-wise, how were your childhood years?
A My parents taught me to live a simple lifestyle and spend only on the essentials. I learnt to set my priorities right when spending money and live within my means. They never indulged us, except for simple treats like a movie or a short road trip.
Q What made you start investing?
A My first job at Citibank got me interested in investing. Working for a financial institution helped me see the big picture of investing through real-world experiences. The bank exposed me to financial products that help clients save, grow and invest money.
One of my first investments was a few years after I started working. I invested about $10,000 in Citi's stocks as it was a known entity and I understood its operations.
Q Describe your investing strategy.
A Diversification is important. I invest across stocks, equities, bonds, properties and real estate investment trusts, like Mapletree. I invest across countries as well.
I invest in exchange-traded funds (ETFs) as they are well diversified and have relatively low fees. I keep a lookout for the price-earnings ratio and debt-equity ratio as indicators of companies' performance.
I use the barbell strategy. I keep the bulk of my portfolio in low-risk assets with guaranteed returns over a long period of time. I also put small amounts into various forms of volatile assets for short-term high returns.
This ensures that if anything goes wrong, it would not cause major financial damage. I choose the type of shares to invest in based on fundamental analysis.
I invest in the technology sector. I keep an eye on tech firms, which are among the top most-valued companies. I understand the industry and know what I am investing in.
Q What's in your portfolio?
A My portfolio is worth about $1 million, including real estate, shares and other individual investments. Also 40 per cent of my individual investments is in balanced funds, mainly Singapore Government bonds, which are a safer type of instrument, and 60 per cent is in stocks with higher risks, including blue chips and regional equities, particularly stocks from India and China.
I invest in blue chips like Tencent and Alibaba. Their growth has exceeded my expectations by two to three times. I have invested 40 per cent of blue-chip investments in Tencent and 60 per cent in Alibaba.
I have an investment-linked insurance plan (ILP) from AIA with coverage of $1 million for life, disability and critical illness. There is a projected cash value of up to $568,500 at age 64.
My investments are in the sub-funds under this ILP. I invest $1,000 a month into four AIA funds: $200 in each of the Regional, Greater China and India Equity Funds, and $400 in Acorns of Asia Fund.
I invested $5,000 in short-term investments, usually individual, high-valued stocks that drop in prices for no apparent reason. These include gold, United States Oil ETFs, DBS and Facebook. I aim for 10 to 15 per cent in returns, and have made overall returns of 12 per cent.
I bought DBS last year when its price fell to $13.65. It then went back to $15 to $16 within a single month.
In the last 18 months, I have made an overall annual yield of 12.5 per cent for all the investments in my portfolio. Particularly for my Asian equity funds, the annual yield is 20 per cent.
I bought a five-room Housing Board flat in 2002 with my parents for about $200,000. The value has appreciated to about $650,000.
Q What does money mean to you?
A Money is a choice we make that either gives instant or delayed gratification. You can buy something small or accumulate the money to buy the big item you really want. There may not be right answers, but you can spend the money only once.
Q What's the most extravagant thing you have done?
A A one-week trip to Bali with my family. We went there on Christmas in 2015, spending $5,000 in total.
Q What are your immediate investment plans?
A SingSaver is my biggest asset. I intend to spend most of my time and efforts in further building SingSaver and providing more information and products that help consumers manage their finances. I believe this is a good form of investment.
Q How are you planning for retirement?
A I do not have concrete plans for retirement yet. My wife owns a farm in Transylvania, Romania. I would probably retire on the farm with her.
Q Home is now...
A A five-room Housing Board flat in central Singapore.
Q I drive...
A I don't drive because I don't see the need to in Singapore, where we have world-class public transportation and the advent of on-demand services such as Grab and Uber. And very soon driverless cars too. I believe driving will be an obsolete skill in the near future.
A version of this article appeared in the print edition of The Sunday Times on June 25, 2017, with the headline 'Frugal childhood taught him to spend wisely'. Print Edition | Subscribe
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