Grew up in one-room flat, now owns bungalow

 

Tuesday, Jun 10, 2014

Rachel Boon

The Straits Times

SINGAPORE - As a young boy in the 1970s, Eddie Chng worked hard to earn extra pocket money to fund hobbies such as ice-skating.

His mother struggled hard, working as a restaurant cleaner to raise four children. They lived in a one-room flat in Tanjong Rhu. His father was not around much.

But even in those straitened circumstances, Mr Chng, now 52, was showing the entrepreneurial inclination that would take him to considerable wealth - including owning two Ferraris at one stage.

"I started to work part-time (when I was) as young as 12 years old,'' recalled the chief executive of diversified investment group Equation Corp.

"I was living very near the National Stadium. I ended up selling drinks there during the Malaysia Cup," he said.

He would run up and down the stairs of the stadium with his goods amid the Kallang Roar as fans watched star striker Quah Kim Song score, Mr Chng recalled.

The money was painstakingly saved and spent on ice-skating boots, which shocked his mother.

"I'm a very focused person. If I set my mind to do it, I will. I'm that kind of crazy fella. It's just my character."

Mr Chng took part-time classes while in the navy, funding his own studies for a diploma in electrical engineering. He also earned a diploma in marketing.

He worked as a sales engineer from 1988 to 1989, and later co-founded chips trading company Serial System which he left in controversial circumstances.

In May 2001, he was ordered by the Securities Industry Council (SIC) to compensate Serial shareholders with an estimated $32 million in shares for a failed takeover offer for the firm. SIC also barred him from directorships in Singapore for two years.

In 2004, Mr Chng took over a company called Heshe, which was renamed Equation - and has successfully run the business since.

The idea of angel investing came from Silicon Valley, where he spent a lot of time on business trips while he was in Serial.

"At that time, it was the tech era. I'm a very techie person, an engineer by training. So I learnt how venture capitalists behaved, how they invest and tried to apply it here," said the father of three.

"I was lucky throughout the last 20 years... as long as the winners outweighed the losers."

Q: Are you a spender or saver?

More of a saver than a spender, like 60 per cent of a saver.

I have indulgences. We go on holidays as a family, like Japan for skiing. I love snowboarding and my children know how to ski. When the children grow up, they will not want to have holidays with you.

To me, it is difficult to create wealth from saving, and I would rather spend what I think is reasonable and within my means.

Q: How much do you charge to your credit cards every month?

Less than $20,000. My most expensive bill comes from insurance premiums, which I pay with the credit cards. I have only three. Why you need so many, I do not understand.

I had my first credit card at the age of 26 or 27, can you imagine? Now my children have only debit cards. I am very strict.

That was a company-issued Amex (American Express) card. Wow, at that time, I was so happy. I brought a customer out and I paid for dim sum. I was very proud to pay through the plastic, I was that suaku (country bumpkin in Hokkien).

I also spend on general expenses. I have three children who are already teenagers. When they were toddlers, you could spend $50, but now that they are teenagers, you have to spend $500 or more. So children's education, personal expenses, indulgences, shopping, holidays - the typical expenses.

I do not gamble or have any exotic habits, and do not drink like a fish.

Q: What financial planning have you done for yourself?

When I first built up my own career, all my money went into the company, in the 1990s.

This is where I was lucky, with 99 per cent of hard work. I accumulated a bit of wealth, had a bit of capital. With it, I did (and still do) a lot of personal angel investing.

As entrepreneurs, we are not averse to risk, so I do angel investing and equities. I hope the formula works.

On a company level, I recently invested in a firm called Citrine Wireless, which has developed technology that could enhance audio commentary using a mobile app. Just download the app and it will detect when you are within proximity of a specific object you are viewing, and push the desired audio commentary to you.

Imagine tourists in Singapore doing that in Gardens by the Bay or the SEA Aquarium in Resorts World Sentosa. The business potential lies in global tourist spots.

With equities, I have a lot of long positions on companies that I think will do well in the long haul, with their capital gains and dividends. I also have this habit of buying during the downtrend. I got myself burnt a few times. People say: "You catch a falling knife."

I am still 70 per cent buying for the long term, and 30 per cent for the punt. It depends on your own personal risk appetite.

A good example is BlackBerry. Once upon a time, it was US$40 or US$50. It came down to US$7 or so. I was in Los Angeles at that time, looked at it and said: "Holy cow, the stock has come down so much."

After I bought it, it went up to US$10, then came all the way down again to US$7. I am still holding on to it. What to do?

I am encouraging my children to invest early. It is part of my financial planning. My children also take the bus and train. I do not think it is right to chauffeur them back and forth.

They understand why they have to study, and if they understand, they will be very motivated. My son did three years of missionary work in secondary school, organising visits to an orphanage in Thailand.

He took the lead, took fellow students there and taught the orphans, built houses -

that kind of thing. Each time he went, he would go for three weeks. We felt heart pain, but are really proud of him.

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

We came from a poor family so saving and being frugal was a natural thing to do.

I invested my time by going to the stadium and selling my drinks during weekends. I could easily make $8 to $10 a day.

I saved that, and in one shot, I spent it all. I love ice-skating and ice hockey, so I saved for a year and bought a pair of ice-skating boots for about $100.

Q: How did you get interested in investing?

The very first stock I bought was Jurong Shipyard, in the 1980s.

That was when I started to read the newspapers, the money section. I read the story about its initial public offering.

I was convinced, so I applied with the pink form. I was lucky I got allocated some shares. It was oversubscribed. The day it debuted, the stock price doubled, so that was the first time I tasted honey.

Q: What property do you own?

I have some Geylang shoebox units. Good investments relative to the amount I paid for them, as I get a yield of about 4 per cent. I think Geylang is going through a transformation. I liken it to Roppongi (in Tokyo) or Wan Chai (in Hong Kong) which used to be red-light districts.

Now you can see more residential areas popping up and it is very near the city.

Q: What's the most extravagant thing you have bought?

I used to own two Ferraris, but I have sold them. Now I think it is difficult to drive in comfort in Singapore.

These are exotic cars, you need to let them run at 160kmh for a while. You do that in Singapore, you get a ticket.

Q: What's your retirement plan?

To keep working. You cannot retire. When you do, I think you get stupid.

Q: Home is now...

A cluster home development in Sixth Avenue, while we rebuild our old good-class bungalow.

Q: I drive...

There is no place for the Ferraris to run so I decided to drive a BMW 7 series, and drive at a moderate speed. Our traffic is so congested.

This article was first published on June 8, 2014.