He started investing actively only when he was 38 years old.
Now, about eight years later, he is close to his retirement goal of getting $5,000 in dividends a month from his investment portfolio.
It was when he was in Shanghai eight years ago that Mr Leong Tan, 46, realised that inflation was eating into his retirement savings.
Says the manager of a corporate learning centre: "When I was stationed in Shanghai, the inflation rate was so high.
"When my wife went to the supermarket, she noticed that the prices of vegetables and meats doubled within a year."
China's average inflation rate in 2007 was 4.82 per cent, while Singapore's was 2.1 per cent.
The interest rate for savings in Singapore banks that year was only 0.25 per cent per annum.
That meant deposits in the bank did not grow as fast as inflation.
Mr Tan, who does not have any children, realised he would not be able to retire at that kind of rate, and that he needed to start investing actively.
Despite having opened his brokerage account when he was an undergraduate 25 years ago, Mr Tan was a passive investor.
He says: "I started investing then because all my classmates were doing so. They would buy 200 lots of shares (200,000 shares) on contra at one go and sell them off two or three days later.
"When you make money, you can gain a lot, but when you lose, you can lose a lot too. I felt it was risky, so I didn't join them."
Instead, Mr Tan bought initial public offerings such as Rotary Engineering and Singapore Technologies Industrial Corporation (STIC), which merged with Sembawang Corporation to form SembCorp Industries in 1998.
For example, Mr Tan bought 2,000 STIC shares at 70 cents per share then, and he is still holding on to them.
Over the years, his initial investment of $1,400 has grown to about $6,500 over 20 years, excluding yearly dividend payouts, which he estimates is cumulatively more than $2,000 over the two decades.
After the initial plunge, Mr Tan, being risk-averse, decided to invest in unit trusts instead.
At the end of 2007, he started managing his investments.
He says: "I realised that during a market downturn, unit trusts go down just as bad or worse. Besides, there is an annual fee and dividends don't come to me directly. For shares, however, there are no holding costs and I get dividends directly."
Over the next one year, he invested a total of $100,000 into the Singapore stock market, picking up 20 stocks, most of them real estate investment trusts (Reits).
In the first five months, his portfolio went up by 20 per cent and he invested more.
Then came the global financial crisis in 2008, and his portfolio shrunk by 60 per cent. He says: "I didn't give up. I continued to buy stocks selectively."
Among the stocks he picked up then were Reits like Ascott Residence Trust, Suntec Reit and CapitaLand Retail China Trust.
He says: "I went to visit some of their properties. When I was in Shanghai, I visited The Ascott's service apartments. They looked quite good and guests were still staying there.
"Even though its share price came down so much, guests were still checking into its apartments."
That gave him confidence to buy more of the shares.
Two years after the crisis, he recovered his losses when the stock market rebounded.
"It was quite a bit of a roller-coaster ride," he says.
Getting regular dividends helped him through the dark days, he says.
"You feel you are still making money as you are still getting dividends... and with the dividends, you can still buy more," he says. On average, he invests $30,000 into the stock market yearly.
His ad hoc share-buying style continued until three years ago when he decided that he needed to get educated in investing.
He says: "I attended courses and read analysts' reports, to be prepared in case another crisis comes."
Now that another storm is looming, Mr Tan says he is more prepared this time round.
He says: "I am saving some cash. When the share prices come down, I'll have some cash to go in again."
Investing tips from Mr Leong Tan
If a person starts investing when he is 15 years old, by the time he is 40, he would have 25 years of experience.
He would have probably experienced five cycles (of stock market boom and bust). you cannot learn from others; you need to experience it for yourself. And you have more time for your money to compound over time.
Too many people invest based on gut feel or price movements, without looking at the valuation and fundamentals of a company.
I wish I had learnt how to read company financial reports earlier.
EMBRACE VOLATILITY AND DON'T GIVE UP
Whatever goes down must come up. sometimes, when you buy at the peak, it can be scary (when the stock market plunges).
If I had given up and sold all my stocks then, I would never have been able to enjoy the fruits of investing.
KEEP OPPORTUNITY FUNDS
If I have $100,000, I don't dump everything in at one go. I also don't use leverage. using leverage means using various financial instruments or borrowed capital to increase the potential return of an investment.
This article was first published on Jan 25, 2016.
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