AS AN advertising professional, Arthur Lim did not give much thought to organising his own money affairs, but a job switch to the financial services sector quickly changed that mindset.

The sea change came about nine years ago when Mr Lim, 39, moved to an insurance firm and then a bank before joining local insurer Great Eastern in 2004 to set up its financial advisory arm, Alpha Financial Advisers.

Mr Lim said advertising was fun, but he wanted to play a bigger role in the overall business scheme of things and not just oversee one component of the marketing process. He also felt advertising was a cyclical industry and usually the first to be sidelined in a downturn and the last to be restored.

The career switch coincided with the birth of his elder son, Ryan, nine, and the purchase of a semi-detached home - events that tend to focus the mind on personal finance.

"Before the switch, the difference between need and want was alien to me," said Mr Lim. "But marriage and three children changed my whole orientation. It's no more just about me; it's about them. I used to spend what I earned, but now, I'm more of a saver and investor."

He made his first foray into the stock market while he was a business student at the University of San Francisco. He bought 100 shares of beverage firm Snapple at about US$20 apiece and sold them for more than US$30 each six months later.

Four years ago, he started to build a proper stock portfolio. Half of it is made up of blue chips, both local and international. The rest is in small and mid caps. His annual returns average 30-50 per cent.

He also has an equities-based unit trust portfolio.

Q What do you like about working in the finance sector?

A We can have a real impact on people's lives. Not many other industries offer such an opportunity on such a personal basis.

Q What are your money habits?

A I'm more of a saver/investor now, although I do still splurge occasionally on golf stuff. I want to make sure that we have enough for an overseas education for the children if they want one, that my wife and I can live comfortably after we retire, and that we are ready for any financial emergencies.

We have a "bad patch" fund that will cover more than 12 months of monthly expenses and that is rolled over in a one-month fixed deposit. We put aside more than the generally prescribed 10 per cent of monthly income, and this is on top of what goes to insurance premiums.

Q What financial planning have you done for yourself?

A My wife and I do joint planning for education and retirement plans. We have various investment portfolios based on a mix of equities and unit trusts for each of the three children and for our retirement.

Our unit trust portfolios are managed by Alpha's investment department, which follows a tested and very robust process. It adopts a portfolio approach with defined strategic allocation guidelines. The portfolios are rebalanced regularly according to Alpha's internal rebalancing guidelines.

So far this year, the net returns have come to about 15 per cent despite the United States subprime crisis.

The stock portfolio is more volatile than the unit trust portfolio, but has returned twice as much on average and sometimes much more. Still, we believe in diversification, so we don't put all our money directly into stocks.

Investing in our freehold landed home in Upper Bukit Timah was part of our retirement plan. If our other strategies don't pan out, then we are prepared to sell the house, move to a smaller property and use the sale proceeds to help fund our retirement.

Q What about insurance planning?

A Insurance planning was the first thing I looked at because it's the only instrument that guarantees a certain amount should something untoward happen. Recently, Alpha revised and restructured our protection portfolio based on its latest assessment of our means and needs. We restructured our life coverage based on a hybrid strategy, so we now have limited pay life plans and term life plans.

We focused heavily on critical illness and health covers, and took pains to include personal accident and estate duty covers. My life is insured for more than $1 million, while my critical illness cover comes to $700,000.

For my children, I focused mainly on critical illness and health plans. Their education funding is taken care of purely through dedicated and focused investment strategies.

Combined, we channel more than $20,000 a year into insurance premiums.

Q What's your investment philosophy?

A No one can beat the market all the time, so having a strong asset allocation mandate and investment discipline is important. Apart from certain lump-sum investments, we invest monthly, which gives us the benefits that come with dollar-cost averaging and also reinforces the savings discipline. These days, with inflation being such a concern, it's important to stay invested, so you can make your money work harder.

With regard to direct equity investing, I like billionaire investor Warren Buffett's philosophy that one should be greedy when others are fearful and fearful when others are greedy. It's a contrarian approach and riskier, but that's where hyper-returns lie.

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

A My wife and I came from rather large families by today's standards. I was the youngest in a middle-income family of six. My dad was a businessman while my mum was a school teacher. While we were better off than some and we got by, it wasn't always a bed of roses.

Whenever I wanted extra cash, my mother made me work for it. I remember doing chores and working during school holidays. I even sold comics in primary school to earn some extra money.

Working for what I wanted taught me the value of money from a young age. More importantly, it taught me that, if I wanted something, I had to make it happen. I want to hand this kind of thinking down to my children.

Q What has been a bad investment?

A Many years back, I bought the stock of a construction firm that was forced into liquidation soon after. In eight months, I think I lost more than 90 per cent of the capital I had invested of about $10,000.

That was investment baptism by fire. It taught me to invest, not speculate.

Q Your best investment to date?

A Our home, for both financial and non-financial reasons. We bought the two-storey, 3,500 sq ft, semi-detached house in 1996 and it has nearly doubled in value since then.

Q What's your retirement plan?

A I want to be in a position where I can retire whenever I want to, as soon as possible. I estimate I would need about $5,000 to $7,000 a month in retirement, if everything's paid up by then.

I would like to be able to golf as and when I feel like it, travel and spend my golden years with my wife without needing to depend on our children. Basically, I'd like to be able to do whatever I want, whenever I want. I would also want to get involved with a worthy cause related to cancer and/or children.

Q And your car is... ?

A An Audi. My wife uses the Toyota Estima to go to work, and to ferry the children around for their wushu, music, swimming and Chinese classes.

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