Insurance Conster: My best investment is in serving God

[makapaaa]

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Sep 28, 2008
me & my money

</TR><!-- headline one : start --><TR>Learning to live happily with less

</TR><!-- headline one : end --><TR>Financial adviser reckons sensible money habits are more critical than wealth </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Lorna tan, Finance Correspondent

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Mr Winston Chong with his wife Chia Hong Ngee, both 45, and their children (from left) Jillian, 13, Basil, 17, and Alistair, 16. -- ST PHOTO: MUGILAN RAJASEGERAN

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Mr Winston Chong, 45, director of financial advisory firm Life Planning Associates, defines success not by material wealth but by the impact he makes on the lives of those around him.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>Do your research
'I believe in investing in listed companies whose financial fundamentals are sound and which trade below their net tangible asset values. I assess two criteria thoroughly: Are the assets reasonably valued and what is the level of borrowing in relation to their assets?' - MR WINSTON CHONG, on his investment philosophy



</TD></TR></TBODY></TABLE>The certified public accountant was holding a comfortable job as Asia-Pacific head of internal audit at investment bank UBS eight years ago when he decided to leave the secure confines of the corporate world and become a financial adviser. He wanted something more in his life.
The transition was humbling and difficult. Being in a senior regional role previously, people had asked to see him. Now it was the reverse. He had to ask people for their time, to explain what he did for a living and if they were prepared to give him a chance to serve their financial needs.
But he never looked back.
Mr Chong recalled how he used to spend more as he earned more. One day, it dawned on him that if he had a reasonable income and sensible money habits, chances were that he would have more than he needed.
'Our folly is in thinking that our lifestyle must move up with our income. Then I realised that a good number of us will have far more than we need.
'Imagine having $2 million in assets and being able to generate a 5 per cent annual return on them. This would yield $100,000 per annum or approximately $8,000 per month perpetually. Many couples can live very comfortably with less, assuming your home is paid for,' he said.

=> How many Sporns can have enuff spare cash to start a $2M fund to begin with?

He and his wife Chia Hong Ngee, 45, who is a financial consultant with insurer AIA, have no plans to retire. Instead, they plan to continue helping others through their advisory businesses, mission work and service in church. Mr Chong is a deacon at the Church of Christ in Pasir Panjang.
Recently, the family embarked on a church mission trip to the Philippines. They went to a village at Tuao, Cagayan Valley, where they bought a piglet each for the 10 rice-farming families to raise. The piglets cost little to maintain and, when fully grown, can be sold for $200 - more than two months' wages for each of the farmers.
Mr Chong also puts in time as treasurer of the non-profit Association of Financial Advisers (AFA) which represents 30 member firms.
The couple have three children - Basil, 17; Alistair, 16; and Jillian, 13. A Malaysian, Mr Chong became a Singapore permanent resident 20 years ago. His wife and children are Singaporeans.
Q: What are your money habits?
Because my wife and I are both self-employed, we do not have a regular salary. Our monthly income goes into a joint working account to pay for bills, and the balance is set aside as savings in a separate account - out of sight! When the savings build up to a certain level, we will decide on how to invest them. We also make regular Central Provident Fund contributions to enjoy the tax relief.
Our priorities are to pay down our home loan and take calculated investment risks. We also ensure that we have sufficient funds to pay six months of expenses if the need arises.
Q: What financial planning have you done for yourself?
We have made provisions to deal with various catastrophic scenarios - our individual or joint deaths, disability, illness and hospitalisation.
Our children's local tertiary education will be funded by endowments. The return is low, but so are the risks. Some people scoff at the 3 per cent return on insurance endowment plans but fail to recognise that events beyond their control can upset their ability to invest regularly.
I am invested about 30 per cent in equities, 30 per cent in properties, with the balance in cash. I liquidated 75 per cent of my equities early this year in anticipation of a business proposal.
I started investing in the mid- 1990s. The equities portfolio invests in Hong Kong, Malaysian and Singapore companies and it has yielded an average annual return of nearly 20 per cent. In the current downturn, however, my holding position is down by 40 per cent, but I am thankfully still overall in the positive because of prior liquidations. Dividend yield is close to 5 per cent a year. The returns from this portfolio will contribute to our children's later overseas tertiary education.
I monitor stocks weekly. But I don't trade that often. I go for value.
As for unit trusts, I go for thematic or geographical funds like India and Japan funds. So far, the average returns are 6 per cent a year. I look at the funds' underlying philosophy and the fund managers managing them.
Q: What about insurance planning?
We have mortgage insurance, endowment plans and critical illness cover.
For hospitalisation purposes, we are on private plans and have made allowances to use the Shield plan when we are beyond 80.
My term insurance plans, which have a high death benefit of $1.6 million, are owned by my wife so that the payout is not subject to my estate's grant of probate.
Because of the high savings components, our annual premiums are approximately $50,000.

 

[makapaaa]

Q: What's your investment philosophy?
I believe in investing in listed companies whose financial fundamentals are sound and which trade below their net tangible asset values. I assess two criteria thoroughly: Are the assets reasonably valued and what is the level of borrowing in relation to their assets? Also important are a company's posture on dividend payouts, the latent potential within the company and its earnings strength.
Q: Any other investments?
I have interest in two properties in Malaysia. One is a family vacation condominium in Kuantan, Pahang, which I co-own with two other family members.
I bought it in 1995 at RM300,000. The other is a piece of land in the Klang Valley area, near Kuala Lumpur. If sold today, both will return my costs. While the investment returns have not been attractive, the vacation condo in Kuantan has been priceless in terms of family bonding. We spend time there two to three times a year.
Q: Moneywise, what were your growing-up years like?
My father and mother were principals of government schools in a small town in Pahang. They have four children. I learnt to appreciate the value of money at a young age quite by accident. I was studying at Windsor University in Canada, but had to move to New Zealand to complete my tertiary education at Massey University because Canada's tertiary education fees quadrupled to C$12,000 per annum within the year I was there from 1980 to 1981. At that time, New Zealand still maintained a compassionate view of foreign students from Third World nations and levied a nominal tertiary education fee of NZ$1,500 a year.
New Zealand immigration laws permitted employment (not so in Canada), so I worked as a waiter, potato picker, door-to-door oil painting salesman, and eventually a summertime accounting intern in an engineering company. The work was sometimes hard but the pay decent. Being adventurous, I made my first investment in a used Honda CB200 motorcycle which was in pristine condition. With it, I toured some parts of the North Island. I sold it two years later at its original cost.
Q: How do you impart good money management skills to your children?
My children got their own POSB accounts and ATM cards when they entered Secondary 1. They are required to work out a simple budget encompassing their tuition fees, mobile phone bills, ez-link card top-ups and meal allowances.
Each month, we transfer the total sum into their accounts, which they are required to manage. They are made aware of their obligations to pay their fees and bills on time. By allowing them to manage their finances, we are able to impart useful lessons. Below the age of 16, POSB caps the maximum daily withdrawal at $200 - a quantum of risk I accept to allow every child to learn the life skill of money management.
Q: Your best investment to date?
My best investment is in serving God. I converted on Sept 16, 2001.
In earthly terms, we bought into a Hong Kong-based food commodity trading company at 33 HK cents in 2005. Its price languished at this level for two years but it had paid 2.5 HK cents in dividends for several straight years - yielding approximately 7 per cent annually. I eventually exited at HK$1.20 within two years when the market recognised its value.
Q: And your car is...?
A repossessed champagne Toyota Camry for which I paid $1,000 above scrap value at a bank's auction. We also have a little green Kia Picanto as a second runabout. [email protected]

 

[madmansg]

My best investment is in serving God.
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I pray the same god strike him down with lightning for not serving NS and taking full advantage of Sg system while depriving singaporeans males of their jobs.