MR MARK Laudi, 35, has seen the world of investing from both sides of the fence.
The former television journalist, who spent seven years with business news network CNBC Asia, quit his job 18 months ago to set up his own firm, Hong Bao Media.
The company is involved in digital content production and distribution. It also produces video news reports on the stock market.
As an entrepreneur, Mr Laudi says wise money and cash flow management is crucial.
'Having the security of a financial plan is vital when you set up your own business. You need to know that your family will be okay if your business fails and that you can pick yourself up again,' he said. He declined to disclose his start-up investment, saying only the sum was 'not to be underestimated'.
The experience he chalked up as a business reporter came in useful, but he says having a financial plan and a financial coach to help enforce discipline is indispensable.
A coach will challenge you and say, 'I know you've run around the field four times but I need you to run another five times.'
Mr Laudi said that, left to his own devices, he would cut himself too much slack.
He noted that savings are the most boring but most necessary aspect of financial planning. Whether you choose to invest in mutual funds or stocks, you need to have the money first and the only way to get it is to pay yourself first.
'When you work in financial news, you're in touch with what the market's doing every day, but that's when you're tempted to flip in and out of investments,' he explained.
Instead, Mr Laudi, who admits he is rather conservative and risk-averse by nature, adopts a buy and hold strategy for his investments.
About 30 per cent of his money is in a handful of funds and stocks, and another 30 per cent is in cash. The remaining 40 per cent is in property: a 1,893 sq ft, three-bedroom apartment at Lakeside Condominium that he calls home.
Low returns do not worry him in the least, because 'it's about long-term investment rather than timing the market'.
He said he and his wife have a 25-year time horizon as they are in their 30s and their children are still quite young.
Q Why did you decide to be an entrepreneur?
A I had reached a stage in my radio and television career where I was hungry to learn new things and young enough to take the risk.
Q What are your money habits?
A We have a financial plan that helps keep us disciplined about saving. We put about 10 per cent of our monthly income into our savings plan before we pay any other bills. Eating out is probably our biggest expense in terms of disposable income.
Q What financial planning have you done for yourself?
A The biggest and most important asset anyone ever owns is their house. People tend to buy one either to live in or as an investment. We're definitely in the former category. We bought our condo for $620,000 in August 2000.
When we started our financial plan, we had six years to go on our mortgage. We are now mortgage-free and it is very liberating. If we hadn't had a plan to help us reassess and reallocate our investments, we would still be stuck with the mortgage. The condo is currently valued at about $740,000.
My pipe dream is to have a property on Sentosa with a sea view within three years.
Q What about insurance planning?
A We do have some policies that promise a payout at the end of a fixed term. But to be frank, I don't believe in these products. I would much rather pay less for a decent life insurance policy than pay more for an insurance-linked investment product where I share the returns with the insurance company.
I pay $2,000 in annual premiums for life insurance, but I have no endowment plans.
Q What's your investment philosophy?
A I am definitely a value investor, which means I buy undervalued assets for long-term gain. It's the sort of philosophy that allows you to sleep well at night. Only if you're over-leveraged do these things really disturb you.
At the supermarket, you buy items when they are on offer, not when they are expensive. Why shouldn't people invest in the stock market in the same way? Value stocks are the way to go. For me, this means a price-earnings ratio of less than 10 times and a yield of more than 2 per cent. I also go for stocks with stories to tell, be they blue chips or otherwise.
Q Moneywise, what were your growing-up years like?
A My parents taught me to save and to understand that prioritising expenses, rather than just cutting back across the board, was the way to go. I'm teaching my kids to save. They started with piggy banks and now have their own personal bank accounts.
Q What has been a bad investment?
A A bad investment is one predicated on emotion rather than fundamentals. My worst investment was in 1999 when I bought into ERG, which makes automated fare collection products, including EZ-Link cards. Great product, awful stock.
I kept hoping the shares would recover. They never did. Every time I get on the bus or MRT and tap my card on the reader, I think of the $10,000 I lost.
Q Your best investment to date?
A Australian equities have definitely been my best investments. I also bought Singapore Airlines shares at $8.60 during the Sars period in 2003. I'm still holding on to them.
Q What's your retirement plan?
A Our financial plan has some specific goals we're working towards. We want enough to maintain our lifestyle but still be flexible enough to cope with changes in circumstances in between.
Q And your car is... ?
A An Audi. We used to joke about buying one because my last name is Laudi. Then we found that, with our financial plan, we could actually afford it, so we went ahead and bought one.
Savings come first
'We have a financial plan that helps keep us disciplined about saving. We put about 10 per cent of our monthly income into our savings plan before we pay any other bills.'
MR LAUDI, on the need to follow a strict regimen when planning for the future
Going for value
'I am definitely a value investor, which means I buy undervalued assets for long-term gain. It's the sort of philosophy that allows you to sleep well at night.'
MR LAUDI, adding that he always checks yields and ratios before buying a stock
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