Planning to retire with $10k a month

Asian financial crisis taught insurance guru to put cash in global equity funds and pick unit trusts over stocks.
Lorna Tan

Sun, Jul 08, 2007
The Straits Times

INSURANCE veteran Stanley Jeremiah does not want to work for his investments. Instead, he believes in investing for the longer term and making his investments work for him.

'Once you have invested in something, review it once or twice a year. If you have to check the share price or unit price every day, you are working for your investments,' he says.

Mr Jeremiah, 47, was previously a general manager at NTUC Income before joining employee benefits group Convergys as vice-president of business services, global benefits. He is also president of the Singapore Insurance Institute.

'Don't be greedy. Be prepared to take risk. Don't fret over losses. What works well for me are diversified global equity funds although I invest a little in regional funds too. I'm satisfied if the unit trusts generate returns of at least 5 to 6 per cent a year.' - MR JEREMIAH

While he handles most of his investments himself, he spreads the risk by using a financial adviser to look after a third of his portfolio.

His strategy is clear: He wants diversified investments so he puts his cash mostly into global equity funds. And unit trusts are preferred to stocks - for good reason. He recalls how he liquidated his share investments a year before the Asian financial crisis in 1997 because he was leaving to work in Canada. He had friends who were not so fortunate.

Q How much do you save and invest?

A I have no fixed rules but I do consider savings, protection and investments important.

Q What financial planning have you done for yourself and your family?

A I am a widower and have no children so the only person I plan for is me. Financial plans are fluid.

When I was younger, my wife and I were financially ambitious. We bought landed property with our own money when we were in our 20s. These days the only thing I need to plan for is retirement.

Q What about insurance planning?

A I am not concerned about death but health expenditure and disability should I be unable to work because of illness or injury. A good medical plan is essential - I would go with an 'as charged' Shield plan, and my choice is the Enhanced Incomeshield Preferred Plan. We don't have many good disability policies in Singapore and the best one to my mind is Manulife DAP+. I also have critical illness plans.

I don't buy participating policies and have only one whole life policy. The investment returns on participating policies are poor and there are much better investment products available. I'm covered for more than $1 million.

Q What's your investment philosophy?

A Don't be greedy. Be prepared to take risk. Don't fret over losses. What works well for me are diversified global equity funds although I invest a little in regional funds too. I'm satisfied if the unit trusts generate returns of at least 5 to 6 per cent a year.

Q What has been a bad investment?

A In the early 1990s, I ventured into foreign currency. I had more than $100,000 in pounds when it collapsed by over 30 per cent overnight.

Q Your best investment?

A I bought a ,2,700 sq ft terrace house in Eunos in 1992 for $723,000 and sold it in 1996 for $1.7 million.

Q What other investments do you have?

A I buy watches, art pieces and antique maps but realistically, they are not investments. They are an indulgence. One of my favourite watches is a rose-gold limited edition Omega that cost $13,000. It isn't my most expensive acquisition but it still looks as beautiful as when I bought it in 1994.

I have also bought many second-hand pieces. I have an 18-carat rose-gold Omega from the 1950s which I picked up in Mumbai for US$500 but it cost me $2,000 to get it serviced in Switzerland.

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

A My father was a teacher and my mother, a housewife. I was the eldest of five children. We lived comfortably in a terrace house.

Q What are your retirement plans?

A Retirement funds are a moving target; what is enough today may not be enough tomorrow. It depends on how you live. At the moment, I estimate I will need $10,000 monthly if I retire in Singapore.

Q And your home now is...?

A I live in a three-storey, 3,000 sq ft terrace house in Bedok which I bought in 2001 for $1.2 million.

Q And your car is...?

A I have a BMW 7 series.