Financial expert Anna Haotanto was determined to make a success of her investment portfolio after seeing her family face money woes in her university years.
There were concerns about whether they could pay the rent and deal with their heavy loans.
The tough times proved an effective motivator for Ms Haotanto to save and invest - and ultimately amass $1 million in cash by age 29.
"We were living pay cheque to pay cheque. For some months, we were behind on the rent. I was very worried we could not pay it," she recalls.
During her university years, other family members also borrowed at credit card interest rates of about 24 per cent, leading to a debt of $15,000 to $20,000.
Ms Haotanto, 31, helped her family pay those debts when she started work at research firm Business Monitor after university.
She then moved on to be a relationship manager in wealth management for five years at a different company.
Ms Haotanto also walks the talk, saving and investing under the tutelage of mentors that eventually yielded a healthy portfolio of assets.
She was earning a six-digit annual salary before leaving the wealth-management industry and made about $100,000 through buying and selling a private property.
"When I started working, I was just trying to save," she says.
"I wanted to be financially free and secure and I didn't want to live pay cheque to pay cheque. I wanted to give my loved ones the life they want and the life I couldn't have in the past."
She has also bought a flat and a car for her family.
When Ms Haotanto realised that she had saved $1 million - 75 per cent was from savings and 25 per cent from investment returns - she didn't reward herself with a lavish gift as she always thought she would, but opted to buy a universal life insurance plan to ensure she and her family would be provided for if anything happened to her.
That plan will pay out US$1.1 million (S$1.5 million) in the event of terminal illness or death.
Last year, drawn by the desire to help women become more financially independent, Ms Haotanto, who is single, set up her own company and founded the website thenewsavvy.com to educate users on financial matters.
Her motivation arose from doing community service during her junior college years when she saw women who were stuck helplessly in marriages in spite of physical abuse or unfaithful spouses because they did not have savings or earning capability.
"If they had money... it'd be easier for them to walk out of the marriage."
The business has not broken even yet but has plans to expand significantly.
Q Moneywise, what were your growing-up years like?
A Money-wise, we didn't have a lot, but we had enough and were not struggling. The only thing was - we were living pay cheque to pay cheque.
When I was growing up, my mum was a middle-management staff member at a textile company of about 10 people, and my dad was doing a business that didn't do very well.
My parents, my younger brother and I rented a four-room flat in Tampines.
The income was just enough to cover our living expenses like rent and food. We didn't have leftover money to buy things like toys. We didn't have savings. My weekly allowance in secondary school was $50.
Q How did you get interested in investing?
A Since I was young, I knew that being the oldest child, I had to take care of my parents and myself.
As a result, I started learning to invest by reading Security Analysis by Benjamin Graham while in Hwa Chong Junior College. I also read a lot of other finance books.
The idea of making my money work harder for me really fascinated me, and I felt that was a way out for me from living pay cheque to pay cheque and feeling very stressed every month.
In 2005, when I was 21 years old in Singapore Management University, I made my first investment of $1,000 to $2,000 in Golden Agri after doing a project in school on palm oil.
Q Describe your investing strategy.
A I mostly invest in listed stocks in sectors I am familiar with. I invest in blue chips or stocks paying a stable dividend of 3 per cent to 6 per cent.
The sectors I invest in include financial services, technology, real estate and casinos.
I identify trends in these sectors and try to stay ahead of them. Also, I study a company's revenue streams, the management team, the business model and debt level.
Also, I will compute valuation multiples for a company - such as its price-to-book ratio and price-to-equity ratio - and compare these against the multiples of the sector to assess if a stock is cheap.
I intend to hold the majority of them for three to five years.
I also invest in insurance to protect myself and provide for my beneficiaries in the event of unforeseen circumstances. I buy life, health, personal accident and even endowment insurance plans.
The insurance payout will be about $2.5 million upon death, depending on how it happens.
I also hold United States Treasuries to hedge against economic downturns.
Most of my investments and my spare cash are denominated in US dollars as I believe the US dollar has room to grow. I bought most of my US dollars at an average price of $1.255.
I also invest in private companies.
I allocate maybe about 10 per cent to 20 per cent of my money for short-term investments. Sometimes, I trade daily, weekly or monthly if there are opportunities like price drops.
Q What's in your portfolio?
A Fifty per cent is in equities, 15 per cent is in bonds, 20 per cent in cash, and 15 per cent in private companies. The total value of the portfolio is now about $1.5 million.
The investments are spread evenly across companies for diversification purposes. I am invested in stocks like Google, Amazon, Tesla and Facebook.
The amount in bonds is mainly invested in 30-year zero-coupon US Treasuries. When their price goes up by a bit, I sell them and when their price drops, I buy them back.
The returns on my stock and my bond portfolio have worked out to an average of 8 per cent to 10 per cent per year since 2009. The majority of those returns came from equities, particularly when markets recovered from a crisis.
The private companies I invested in are mostly Singapore tech start-ups. I entered about one to two years ago and their revenue has since grown on a collective basis by about 10 per cent.
I spend about $11,000 a year on my personal insurance premiums. Including the premiums I pay for my family, the total is around $26,000 annually.
Q What does money mean to you?
A Having money means having the choice and financial security to seek a life I find meaningful.
It is also to provide my loved ones the kind of life they desire.
Q What's the most extravagant thing you have done?
A I was selected to attend the Fortune Most Powerful Women Next Gen conference in San Francisco.
I travelled there alone and learnt a lot and networked with many inspiring women there.
Afterwards, I went to Silicon Valley to visit tech companies where people I knew were working in. I got a better feel for what's happening in the tech scene. I spent close to $10,000 on the whole trip, which lasted about two weeks.
Q What are your immediate investment plans?
A For equities, I'll wait on the sidelines and observe for the next six months as markets are very turbulent.
I am looking to buy private property when the time is right, and go around looking at properties and launches.
I believe property prices will come down some more. As interest rates increase, people will have to pay more for their mortgages and, with the measures the Government has in place, a lot of people are finding it hard to refinance.
When there are a lot of distress sales or if the price comes down another 10 per cent, I will seriously look at buying a private property. For now, I'm going to invest in my business. We want to further improve the website content.
We are also developing bite-sized financial online courses and looking at holding workshops for financial education every two months. These plans will require about a seven-digit sum over three years. I work almost 12 hours daily.
Q How are you planning for retirement?
A I don't feel like I'm working now and don't intend to retire.
Hopefully, I will have about $10,000 to $15,000 a month from my investments and work.
I hope the insurance payout to my parents and children, should death or any serious illness affect me, would be $6 million by then.
Q Home is now/I drive...
A I live in a four-room flat in Paya Lebar with my parents. I paid for the flat.
I drive a Volkswagen Golf.
Q And what has been your best investment?
A It's my own start-up. I officially launched my site, thenewsavvy.com, about eight months ago.
My investment so far is about $100,000, and we have raised a six-figure sum from different investors and are looking to raise more money.
Why is this my best investment? I was at a networking event and I met a 27- or 28-year-old woman. She told me she had seen the site, and said: "When I saw it, I knew that was something that I needed to read, and I kept reading it; I couldn't stop reading it." And she said it has been very helpful. I was really very happy then.
I hope to help women manage their money, better their lives, and give them a bit more confidence and security.
My stake in the business is around 80 per cent. We haven't broken even yet. We have invested only about 30 per cent of the seed capital and recovered about 50 per cent of what we have spent. I have eight advisers, some of them are in the financial industry.
It's been only seven months but the response has been overwhelming. I received three offers to invest in the business from angel and venture capitalists within the first three months of launching the website.
Q What has been your biggest investing mistake?
A I lost US$150,000 (S$209,000) on a stock called GT Advanced Technologies. It provides crystal equipment and advanced materials. That's all I knew about it.
I invested in the stock in 2014. I received a tip from a friend that they were going to enter into a huge contract with Apple. If they secured the contract, the price would fly.
When the price came down, I bought more shares. However, the contract didn't materialise. Eventually, the company filed for bankruptcy.
I still have the stake. The company has already fallen 90 per cent in value, so I might as well still hold it.
It is a painful reminder to always invest in what I am familiar with.
This article was first published on Feb 14, 2016.
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