Me & My Money Series (Sunday Times)
The Straits Times
Published on Apr 21, 2013
Saving up to buy his own table-tennis bat as a boy shaped his thinking on spending
By Cheryl Lim
Growing up in a financially prudent household in the 1970s helped Mr Joe Poon, 42, develop keen instincts for managing his personal finances.
A table-tennis bat taught him one of his first financial lessons, he recalls.
"When I was in Primary 1 or Primary 2, I wanted to buy a top-of-the-range bat at that time and my dad was supportive but told me that I would need to pay for it on my own, because this is not a need, it's a want. That got me thinking at a very young age about how many cents I would need to save every day to get this bat."
While that outlook on personal finance has stuck with him ever since, he has picked up a few more investment tips along the way, some of them from his work at Xchanging.
The global company helps firms across diverse industries simplify and streamline business processes with the use of technology.
As the Asia-Pacific president of Xchanging, Mr Poon spends his days analysing how businesses work and trying to make them more efficient. He oversees 4,500 staff in 18 offices across the Asia-Pacific region.
"If a company wants to drive a certain process, what are the investments they need to make, are the investments sound, is it the best approach for the customers? These questions are almost instinctive.
"Now when I look at my own investments, I always ask myself to look at how well the companies are performing, are they efficient, how transparent and compliant they are with regulators."
Mr Poon graduated from King's College in London with a degree in biomedical science. His 42-year-old wife is a housewife and the couple has a nine-year-old son and a seven-year-old daughter.
Q: Are you a spender or saver?
Instinctively I'm a saver. I save about 20 to 30 per cent of my salary every month. My views towards money and investments are quite moderate and conservative. I feel that you have got to be realistic.
Q: What financial planning have you done for yourself?
I'm naturally a conservative investor but I think on the advice of some of my fund managers, I've become more comfortable taking on some risk in my portfolio.
I've taken on some foreign and local bonds and those make up about 50 per cent of my portfolio. But I'm also gradually investing in equities like Microsoft.
Q: Moneywise, what were your growing-up years like?
We were the standard poster family of the 1970s; civil servant father, housewife mother, two children, all living in a three-room HDB flat with no car.
What we had was enough for necessities but not for luxuries.
Q: How much do you usually charge to your credit cards?
About $5,000 to $8,000 every month. I use the cards to pay mostly for family-related items and activities, the occasional meals out, and groceries as well.
It's also partly due to convenience because the more I charge to my card, the less I have to visit the ATM.
Q: How did you get interested in investing?
My dad, in the first 60 years of his life, was always very careful with his money and his investments. Once he retired, he started investing, but at the same time, he was always very clear about his end goal and when it was time to cash out.
This was in the 1990s when the stock market was doing well and as a result, he became more generous towards others and himself.
At that point, I had just started working and I saw how investing improved the quality of his life. He died five years ago but that really got me thinking that maybe there might be some way to make my money work harder, without being a gambler.
Q: What property do you own?
I own a three-bedroom apartment in Taiwan which I bought for around $100,000 and another three-room unit in Penang.
I bought those two homes when I worked in Taiwan and Malaysia and I feel it is important to be familiar with the market before deciding whether to buy property in it.
We also have two other apartments in Singapore, in the Bukit Timah neighbourhood.
I personally believe that our family shouldn't be too heavily leveraged so with the exception of the home that I am living in, all four of the properties are fully paid up.
The two foreign properties we bought were at relatively cheap prices and the other two homes here were paid using bonuses or from investment gains.
Q: What's the most extravagant thing you have bought?
A silver Daihatsu Copen. It's a fun car - small and quick to zip around in. I bought it second-hand for $60,000 with COE, in 2011.
I make it a point to see customers every day, and since my wife needs the family car, it works out better to get another car than to keep catching taxis.
Q: I drive...
The Daihatsu Copen is what I drive on weekdays, but on weekends, we use the family car, which is a blue Honda Airwave.
Q: What's your retirement plan?
I would like to be financially independent when I'm around 60 years old. My wife and I are very passionate about volunteer work so we hope to get more involved in that by then. How we are going to get there is still a work in progress.
Q: Home is now...
A three-bedroom apartment at Twin Heights in Balestier.
WORST AND BEST BETS
Q: What is your worst investment to date?
My worst investment was made in 2005 and 2006 in the bull run leading up to the Lehman Brothers crisis. I had invested in a local fund and was
aiming to get a return of 25 per cent on my initial investment.
When I hit my investment target, I told the fund manager I was ready to cash out. At that time I was working in Taiwan and later found out he didn’t execute my instructions and I lost up to 30 per cent of my initial investment.
I only managed to break even last year before I could cash out.
This episode made me realise the importance of being clear about the investment process. It also reinforced the point about how discipline is key to any successful investment.
Q: What is your best investment to date?
Over the years I’ve put money into bonds, about a couple of hundred thousand. I’ve gotten returns of about 8 to 9 per cent.
It’s not a huge profit but at that rate, it’s still higher than the yield I would get from a rental property.
I’ve always been more comfortable getting a lower yield from more stable investments than trying to make more with riskier financial instruments.