Industrial property was hardly on the radar for retail investors in 2004 but businessman Joe Fam saw an opportunity beckoning and he went for it, snapping up some promising sites.
But the world has caught up since and Mr Fam, 52, has backed off, maintaining that prices have gone too high, although he has held on to three freehold properties.
'When everybody rushes into the market, you have to get out.'
He has a private investment vehicle that holds all the assets he and his wife have so they can one day smoothly pass on the wealth to their children.
Property is something of a sideline. Mr Fam founded GlucosCare International in 1999 with health-care company Wen Ken and an angel investor as partners.
He wanted to develop a natural product to tackle high blood sugar. GlucosCare Tea is sold in pharmacies like Guardian, Watsons and Unity, among other places. Clinical trials have been done in China, India and Bangladesh, and are now being done here.
Mr Fam, who is also part of Wen Ken's executive committee, dubs himself a non-conformist, one who knew from a young age that he wanted to chart his own destiny.
He studied and worked in Australia, then applied for a working holiday visa in London and landed a well-paid marketing job there. That allowed him to travel extensively in Europe before returning to Singapore in the late 1980s.
Mr Fam is married to Ms Lim Siew Bee, 50, a housewife. They have two children, Victoria, 14, and Elizabeth, 10.
Q: Are you a spender or saver?
I am more of a saver than a spender. My approach to money is that it should be invested in appreciating assets and there should be just enough funds left in the bank for household needs as this yields low interest.
As a rule of thumb, almost 40 per cent of my monthly income is invested while the rest is spent on household and lifestyle needs.
My wife and I believe in providing the children with a good education and we spend time moulding them and teaching them the right values like honesty and being hard-working. Whether they are academically inclined depends on God.
What is wrong must be made right and no one is above the law. Such values must be inculcated from a young age. I would rather they grow up to be mediocre than someone smart but on the wrong side of the law.
As much as we like to save for our old age, we also believe in enjoying life when we are able to, as life is short.
When we reach a certain age, there will be some things that we will not be able to do or enjoy. So I aim for work-life balance. I try to have dinner with my family if I am in town and go on family trips at least once a year.
Q: How much do you charge to your credit cards every month?
An average of about $4,000.
It's a good idea to make use of credit cards in the daily consumption of goods and services as there's free credit for 30 days. But it must be paid off when due, so as not to attract late fees and high interest costs.
Q: What financial planning have you done for yourself?
My wife and I have a private investment vehicle that invests in a few companies, several properties, investment-linked insurance and equities. This way, the estate planning is very clean if something untoward were to happen to me.
I also did it for the children. It'll be easier to pass on our wealth. It's a lot cleaner and there's no need for them to squabble over it. They don't have to sell the properties, for instance. They can just split the income.
When you are in your 50s, you hope that your capital investment will be preserved and be able to give you passive income.
In the late 1990s, I invested in a few companies, of which the one worth mentioning is GlucosCare International. I also invested in residential properties in the 1990s but have sold them all.
As I am the breadwinner, I have term life and critical illness insurance coverage so that my family is protected.
I am into conservative gearing for better investment returns. If I borrow $1 million paying a 2 per cent interest cost and I can get a 7 per cent yield, then literally speaking, I can use other people's money for a $50,000 gain per annum.
My rule of thumb is not to exceed 60 per cent of whatever assets I pledged to the bank so that in case there is a market correction, I will still be able to meet the obligations.
Q: Moneywise, what were your growing-up years like?
I come from a humble family and am the youngest child. I have two brothers and one sister. My father died when I was nine so my mother had to work very hard as a housemaid to support us.
She taught us to be honest and hard-working.
My elder siblings had to forfeit their education and work to help my mum sustain the family. We are fortunate to have strong family bonds.
For this, I am always grateful to my mother and siblings. From a very young age, I treasured money and knew it has to be earned. I also learnt to be very resourceful.
I managed to get the Lee Foundation to fund my bachelor's degree in Australia, which I am very grateful for.
I still had to earn money for my living expenses, but I was turned away several times when I applied to work as a waiter as most employers considered my inexperience a major drawback.
It taught me to be bold and tenacious, and at one of the interviews, I offered to work for free in exchange for a job. I picked up the ropes within a couple of months and could then nail other waiting jobs that paid well.
Q: How did you get interested in investing?
I started investing in stocks in my early 30s when I was still single. It was a bull market during the early 1990s and I thought I could seek better return of investment from my money than having it stay in the bank.
Q: What properties do you own?
My wife and I now own three freehold industrial properties. We bought them at a time when prices were relatively low, at below $300 per sq ft.
They are all tenanted out and the rental is enough to cover the monthly finance costs. I started investing in industrial properties around 2004-2005. The yield was at 7 to 8 per cent and is now 6 to 7 per cent.
Q: What's the most extravagant thing you have bought?
Honestly, I have not bought anything that is extravagant or luxurious. Perhaps it is time to pamper myself.
Q: What's your retirement plan?
My plan is to train some younger colleagues to take over my active day-to-day operations at Wen Ken group so that I can just focus on strategic issues.
If I retire completely from work, my mental alertness will rot even faster than I would like it to. Financially, I am quite independent now.
Q: Home is now...
We are living in a four-bedroom terrace house in Bukit Timah, which we bought at a reasonable price in 2004. The value has gone up significantly.
Q: I drive...
A silver E-Class Mercedes-Benz
joyceteo@sph.com.sg
WORST AND BEST BETS
Q: What's been your worst investment?
In 1997, I started a trading company in a South Asian country by partnering a local.
I put in about US$50,000. It was not that significant but the amount of time and energy I spent in cultivating the market was not worth the returns. The money was nearly gone after three years, when I wrapped up the business.
Running a start-up, I lacked resources and manpower, so I thought my local partner could help drive the company and monitor the market.
But having an operation under remote control is easier said than done. The experience taught me that I had to look for a solution to overcome my shortcomings - resources and manpower.
I learnt that I must leverage other people's strengths to give me the necessary support. In addition, I must have a close working relation with my partner.
Q: And your best?
An industrial warehouse unit at Delta House. I bought it for $550,000 in 2006 and sold it in 2009 for $1.4 million.
I reinvested the realised funds in some industrial properties instead of residential ones, as I think residential prices have gone way beyond the affordability of the mass market.
