While he describes himself as a conservative investor, Mr Derrick Chang, 40, has a radical approach when it comes to his career. He believes in change - and lots of it.
"Every five years, I must move on," he says of his job. "In a lot of my work, I try to make myself redundant to make way for my staff and juniors to climb and create new value for the organisation."
His ever-changing career path means he is exposed to different industries, which is valuable when it comes to investing.
Mr Chang is now chief operating officer at PSB Academy - a private education institution - a post that he took up in April 2013.
Before that, he worked in a bank as a business analyst from 2000 to 2001. He then joined the public service and was a part of the manpower development division that set up the Singapore Workforce Development Agency (WDA) for three years from 2001 to 2004.
In 2004, he joined PSB Corporation as an assistant manager of the corporate training department and helped the company to expand overseas, taking up posts in Dubai, Abu Dhabi, Shanghai and Jakarta.
His experiences in these countries shaped his views about the education system in Singapore.
"To us, education is taken for granted, but in these countries, it is not. I was served by an office boy my age who earns around $100 a month in Jakarta - that cannot be, I thought to myself."
Mr Chang's work at PSB Academy now focuses on making private education affordable to its students.
He tends to bursary and aid requests to ensure that deserving students do not hold back on higher education due to financial constraints.
But when it comes to his personal investments, Mr Chang, who is single and lives with his parents, concedes that he is less ambitious.
The money he makes now is primarily for his retirement. However, for those who are in need, money can help fulfil their aspirations, he said, explaining his decision to focus on helping others rather than on making money for himself.
"What is in another $10,000 or another $20,000? Nothing beats the fact that you're in a more meaningful position to help people," he said.
Q Moneywise, what were your growing-up years like?
A I grew up in a three-room flat in Boon Lay, and came from a small humble family that prized saving for a rainy day.
My parents always educated us on the importance of saving to ensure we have a good life in the future.
My mother came from Johor Baru after her family lost everything in a flood many years ago. She had to endure much hardship. Studying well and saving for the future became important for me and my brother.
When I started making money from tutoring, my mother cautioned me to have at least six months' worth of living expenses in my account, no matter what I did.
This influenced my own spending habits. I tend to save more and avoid being extravagant.
For example, in university, I was sceptical of the high premiums my insurance-selling friends were offering me. I believed in being covered by insurance but felt that the prices were too exorbitant. So I took up investment-linked products, hybrid insurance policies that allow insurance premiums to be deducted from the invested funds. I reduced my coverage to really low, and kept the monthly deduction for premiums low as well.
Q How did you get interested in investing?
A When I made my first $10,000 through tuition earnings, it felt like a lot of money and since I had the chance to see the world on university exchange programmes, I decided to save and invest the money for the future.
The fixed deposits at the Post Office Savings Bank in late 1996 had a decent rate of 4.5 per cent, so I deposited my money there. I also started investing in a few China-based companies, but my returns were limited; I received only my principal back.
From these "safe" experiences, my risk appetite grew, so when I saved up my first $20,000, I dumped it into a Fortress Fund in 2001, and into an ILP.
Q Describe your investing strategy.
A I primarily go for the dividends. I believe in investing for the long term in unit trusts and not to be distracted by short-term fluctuations.
I also invest in property because having a private property enables me to have the versatility to use it, and to turn it into an investment when its demand rises.
As for individual stocks, I believe in researching and understanding the companies first before diving in. I made a mistake when I blindly bought into an information technology stock in 2002. It was my worst investment.
Q What is in your portfolio?
A I hold mainly bank stocks and unit trusts. I am still holding on to 10 lots of shares in OCBC. I also have around $60,000 worth of investments in mutual funds.
My past holdings included shares in blue-chip firms such as DBS and Singapore Airlines (SIA). The dividends enabled me to grow the value of my portfolio.
In 2014, I flushed out my shares in DBS and SIA worth around half a million to fund my condominium unit valued at $1.45 million. I paid the remainder through a mortgage.
It is a four-room apartment at The Skywoods in the Dairy Farm area. It occupies 1,200 sq ft and faces the Bukit Timah Nature Reserve. Its proximity to an MRT station, an upcoming German international school, and natural greenery makes me think that its property value is likely to appreciate.
Q What does money mean to you?
A Ten years ago, money was everything. I needed it to survive. But now I realise it's not the be-all and end-all. I am paid sufficiently. I look at money now (as a means) to build up my retirement (nest egg). Rather than earning more, I would like to focus on what I can do to help others.
For instance, many people believe that private education is expensive. I am trying to debunk that myth. Most people take a loan to pay for a degree. PSB is looking to subsidise the interest rates to make the loans interest-free.
We also provide scholarships through self-help groups like Yayasan Mendaki and Singapore Indian Development Association (Sinda). We gave out more than $1.2 million last year, and will continue to do so. I want people to have the chance to pursue a relevant education.
Q How are you planning for retirement?
A I plan to retire in 10 years' time. So before that, I plan to accumulate enough savings of around a million dollars through my passive income. This is in addition to my Central Provident Fund (CPF) savings.
I'm thinking of getting a second investment property to add to my passive income. I'm hoping for the property market to soften before I plunge in.
I also plan to build up my cash savings through my CPF account. The CPF rate is around 4.5 per cent to 5 per cent, which is a lot more generous than a bank's.
I plan to spend three to four years studying for a doctorate, and then do casual part-time teaching in my retirement.
Q I drive...
A A Honda Civic which I bought nine years ago. Cars are a depreciating asset. It only takes me here and there. Money can be used for other purposes.
This article was first published on June 19, 2016.
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