Starting early is always prudent

Aviva S'pore CEO is a firm believer in saving and investing in the firms that he works for.

Thu, Jun 10, 2010
The Straits Times

Ask Mr Simon Newman, chief executive of British insurer Aviva Singapore, for investment tips and he will list investing early as a top priority.

After all, he has benefited from the experience of starting in 1985, when he was just 25.

That year, he started building a unit trust portfolio after his father, a manager at IBM, bought him a seat at an investment seminar as a birthday gift.

Encouraged by what he learnt, he began channelling a modest sum of about $150 every month into the unit trust portfolio. And as his salary grew, he put in more each month.

By the time he was 30, he was saving about $2,000 a month and 75 per cent of that was invested in his portfolio.

Being a teenage parent also made Mr Newman, now 49, realise the importance of financial planning for the future.

He married at 18 and became a father in the same year. His wife Trudy Dowling, then 19, had to postpone her studies and the couple survived on his student grant and holiday jobs.

Between 1978 and 1981, Mr Newman studied economics at Warwick University and graduated when he was 21.

He began working at Barclays Bank in London after his graduation, and stayed there for 23 years before he switched to the insurance sector. From 2004 till 2008, he was director of PruDirect at British insurer Prudential. He joined Aviva Singapore as chief executive in October 2008.

He and his wife, who teaches at the Overseas Family School here, have two sons - Andrew, 31, and Robert, 28. He also has a grandchild, Braiden, who was born last September.

Q: Are you a spender or saver?

More of a saver than a spender. On spending, my ethos is very much quality, not quantity. For example, we enjoy memorable holidays and fine wine. I save about half of my net income, which goes into a combination of cash and equities in Singapore and Britain.

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

I have eight credit cards but, like most people, I use just two to three cards regularly. I charge about $2,000 in total to my cards each month and always pay the bills in full. I draw out $600 a week from the cash machines.

Q: What financial planning have you done for yourself?

Quite a bit as you would expect. I have three pensions - Barclays pension, Prudential pension and a private pension - that are designed to ensure Trudy and I have sufficient income in our retirement.

I have an equity portfolio split between funds (mainly index funds covering Asia, Europe and Britain) and pure equities, and also a fair amount of liquid savings parked in fixed deposits and money market funds for emergencies.

I have good life and health cover which are critical - particularly as I get older. I own shares in Aviva, British Telecom and Barclays.

My target returns are 2-4 per cent from dividends and capital appreciation of 5 per cent per annum.

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

My parents looked after my older brother Kevin and me well and gave us a good education.

My father was responsible for disk drive development at IBM while my mother was a part-time teacher. Home was a modest two-storey, three-bedroom semi-detached house near Southhampton.

My parents taught us about hard work and to be careful with the pocket money we got. I started working when I was 16, cleaning glasses at a pub for $1 an hour, three evenings a week.

Q: How did you get interested in investing?

It was at a weekend seminar on investing when I was 25, a birthday gift from my Dad. There were about 12 people and the next youngest person was in her 50s.

The trainer said we would all learn a lot, but that there was only one person who benefited fully from it and that was me, because I had time on my side.

I started putting money monthly into a unit trust portfolio the next week and have never stopped. The moral of this story is that people must start long-term saving at an early age either with their bank or insurance company.

I have also always invested in the companies that I worked for, as I believe strongly in the concept of having a stake in their success.

I hold shares in Aviva and also the other companies I had worked in previously.

Q: What property do you own?

We have a lovely, two-storey, four-bedroom house in Tunbridge Wells, in Kent, England, which we bought for $500,000 in 1998. Our eldest son lives there now. We also have a little single-storey, three-bedroom bungalow by the River Lot, in the south-west of France, which is about 2,800 sq ft.

My parents bought it about 30 years ago for $70,000 and gave it to me in 2000. It is probably worth about $450,000 now.

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

In 2003, I treated myself to a beautiful, burgundy red Honda VFR motorbike for $25,000. I had just received an unexpected one-off bonus at that time while working at Barclays. I don't use it much, but when I do, I love it.

Currently, I'm eyeing a Blancpain watch which costs $12,000. I'm still negotiating with the shop.

Q: What's your retirement plan?

Like lots of people, our plan is to 'semi-retire' first. We want to be financially independent by the age of 55.

I would like to do some consulting work and perhaps get a couple of independent director roles. When we finally do retire, I look forward to spending much more time on the golf course than I can now.

Q: Home is now...

We rent a great 4,000 sq ft penthouse apartment on the 35th floor of a condo in Tiong Bahru with fantastic views of the city.

Q: I drive...

A Honda ST1100 motorbike which I use for leisure, such as for rides up to Malaysia when I have the time.

In Singapore, I use the company car or take the bus and MRT to work and back.

This article was first published in The Straits Times.