Burnt by Asian crisis, back with a bang

Straits Times: Sun, Jul 08

Businessman and property investor Victor Lim needed 15 years to recover from the wreckage of the Asian financial crisis but that searing experience has brought rewards, not least the insights he picked up along the way. 'Never give up,' he says. 'It is important for people to not be brought down by disappointment or be demoralised by defeat. 'They should continue to strive to get out of any dark patches they face and to come up stronger each time.' The crisis destroyed Mr Lim's light bulb business, sent the value of his property investments plunging and hammered Asian Micro Holdings, a listed firm that he founded and where he is the chief executive. He had invested heavily in industrial properties. 'The rentals fell and I could not rent out many of my properties. I also had to top up the loans. But I know that I will benefit from these investments in the long term,' he says. 'I was very stressed. My wife helped me a lot in managing the properties so that I could focus on running the company. 'For close to 10 years, we didn't have much money to spend on ourselves. We just made sure that our workers and rent were paid. But now, we are enjoying life.' Mr Lim, 55, had to downgrade from a bungalow to a 1,100 sq ft rented apartment. But he has clearly taken the experience in his stride. The workaholic restarted his energy-saving light bulb business called saveOne two years ago - he invented the light bulbs as he was frustrated with the quality of the bulbs in the market. 'I want to help poor people... leave something behind that can help them save energy and money. My design can help people save 30 per cent to 60 per cent more than the other brands in the market.' He is married to Ms Stella Leong Lai Heng, 54, a director at Asian Micro Holdings. They have four children aged 21 to 29. Q: Are you a spender or saver? I don't spend much. I prefer to invest in industrial properties, which gives me a regular rental income, while my wife believes in saving for a rainy day. She manages my money. We have a simple lifestyle. We usually eat simply. I was from a very poor family so I am used to this. I don't shop much and I give my parents about $2,000 every month. Q: How much do you charge to your credit cards every month? About $2,000 a month. Q: What financial planning have you done for yourself? My wife and I invested in many industrial properties and some land in Singapore, Penang, the Philippines and Thailand more than 20 years ago. I was hoping to provide my kids with a space to do business if they want to do so as I believed prices might go beyond their reach one day. With these investments, I know that if the day comes when I cannot work, I will be able to rely on the rental income or reap capital gains if I need to sell them. We have sold our properties to reduce our debt or when the value went up a lot. Otherwise, I don't want to sell my properties as I believe that prices will appreciate in the long run. In Singapore, we also own two houses, which give us good rental income. My family used to live in one of the houses - a 6,500 sq ft bungalow with a pool. But I was badly hit by the Asian financial crisis and found that we could not afford to continue living there. The monthly expenses for the house, including the mortgage and maintenance, amounted to almost $25,000. That was when my wife 'forced' the whole family and one maid to move into a 1,100 sq ft rented apartment. I will never forget that. The landlord did not even allow us to hammer nails to put up our wedding photo. But I appreciate my wife's guts, thinking and sacrifice. It was for me to downgrade to survive. We had to cut back significantly on our expenses. But I am a fighter. I refused to be defeated and have since recovered, thanks to the price appreciation of most of our properties and the rise in rental yields. We have greatly reduced our debt. When we moved out, we paid $1,000 rent for the condo unit and collected rent of $14,000 a month for our bungalow. We also renegotiated our loan with the bank a few times and, in the process, significantly cut down our monthly instalment. People need to know that they can save a lot of money if they just renegotiate their loans. My wife and I purchased a condominium unit in Woodlands after renting a place for two years. We got used to the smaller space and it's actually a good thing because my family became closer. We didn't use to talk much at the house as it was so big and we sometimes did not see the kids. But now we do. I also believe in insurance. I bought two policies for each of my kids at birth. And each time I buy a property, I will get insurance for the loan amount so that if anything were to happen to me, my family does not need to worry about the loan. Another thing is I never leave any money in my Central Provident Fund (CPF) account. It's been this way since I started work 32 years ago as I believe I can make my money work harder for me on my own. Q: Moneywise, what were your growing-up years like? I have seven siblings. I am the second-youngest one. I come from a very poor family as my father was an alcoholic and jobless while my mother was a housewife. But she is very smart. She would make wine for new mothers and make us sell it at the market. She would also buy whole cakes and cut them into small pieces for us to sell. We also helped her sell other food products this way. She forced me to think about how to make use of the money she gave me, which was less than what I needed. For example, if I needed 60 cents a day to travel to and from Singapore Polytechnic, I was given only 50 cents. I used to hitchhike to school. I do not blame her as she had eight kids to feed. She made us think of how to survive. My mum is now 87 and my father, who is a changed man, is 90. Q: How did you get interested in investing? I was a senior production engineer for a United States company and spent quite a bit of time working in the US when I was in my mid-20s. So I would visit the bookstores to read books on how to get rich and on property investment. I did not want to stay poor as I know the sadness of being poor. But due to a lack of funds, I started investing only at the age of 28. I borrowed $20,000 from my mum and got two of my brothers to use their CPF money to help me buy a $120,000 industrial property in Lam Soon Industrial Building. I leased it out right after purchasing it. From the books I read, I learnt that you must have guts to invest in property. When you buy, you may suffer for the first three to five years. After that, the investment should break even and be self-financing. Q: What properties do you and your wife own? Our current industrial portfolio comprises 32 properties, including 16 in Penang, two in the Philippines and the rest in Thailand and Singapore. Most of them are fully paid-up. Here, we have eight Lam Soon Industrial Building units, which we bought more than 22 years ago for $90 to $280 per sq ft. We also own some land in Penang. I went around to scout for investment opportunities when I was there for work more than 20 years ago and paid just RM4 per sq ft for four empty plots of land. The Penang government acquired two of them recently for many times more. To hedge against currency depreciation, we have ploughed the money back into more land there. In Singapore, we own two bungalows near the American School in Woodlands, which we bought about 15 years ago for around $400 psf. They are almost fully paid up. We also own the condo unit that we are living in. Q: What's the most extravagant thing you have bought? A limited edition of the Classic Mercedes-Benz 300. Till today, I still have good memories of it because I could drive my young children around in comfort. Otherwise, I would rather buy things for my wife, who has gone through thick and thin with me, without regret. I know many couples have divorced over money matters so I really appreciate my wife. Q: What's your retirement plan? We are financially independent now and can retire any time we want. But I feel that I want to do something that can benefit the poor or help people to save energy and electricity because I think a lot can be done. I do not believe in countries giving subsidies as it is not a long-term solution. Q: Home is now.... The condo unit in Woodlands. Q: I drive.... A black BMW 730L. Sometimes, I take the MRT if I have time. [e-mail] WORST AND BEST BETS Q: What is your best investment to date? It's a piece of empty land in Penang. I bought the one-acre plot for RM300,000 more than 20 years ago. About two years ago, the Penang government acquired it, so I sold it for RM3.2million (S$1.3 million). I had bought it at a low price, so I just kept it there. I knew the price would appreciate eventually. Q: And your worst investment? I lost nearly $800,000 in my energy-saving light business about 15years ago. I had managed to obtain a joint US patent for high-power-factor energy-saving light bulbs. I thought they would take off and I could help people save money. I was too enterprising and it was too early for the market. Emerge stronger 'Never give up. It is important for people to not be brought down by disappointment or be demoralised by defeat. They should continue to strive to get out of any dark patches they face and to come up stronger each time.' BUSINESSMAN VICTOR LIM, whose light bulb business was badly hit by the Asian financial crisis. He restarted his energy-saving light bulb business two years ago. Source: The Straits Times