For Mr Tay Swee Yuan, 39, it is never too early to pick up money management skills. And as the head of equities risk analysis at a global fund management firm's risk and performance management department, he puts his beliefs into firm practice with his two sons.

Every fortnight, the older boy, Xu Yang, six, receives $1 in the form of a 'cash voucher' printed by Mr Tay.

'He can use these vouchers in any way he wants. When he 'redeems' them, we give him the real cash. To encourage him to save, we told him that for every $10 worth of vouchers he accumulates, he will get an additional $1,' he said.

Mr Tay wants his children to understand a basic economic concept: There are unlimited wants but only limited resources.

'They can't have everything they want, whenever they want it. They have to learn to decide what to give up,' he added.

The Tays also believe in recycling, so Xu Yang is encouraged to put together toys, magazines and newspapers, and sell them to the karung guni man (rag-and-bone merchant). They plan to do the same with their younger son, Xu Heng, two.

When it comes to personal financial investments, discipline is also the name of the game. Mr Tay set up his unit trust portfolio six years ago and has stayed invested through a regular savings plan.

'Saving on an 'auto-pilot' mode frees me from having to worry about the administrative work involved in investment,' he explained.

His wife, Ms Joyce Cheong, 35, works in the administration department at Nanyang Technological University. They celebrated their 10th wedding anniversary recently with a trip to Paris for the whole family.

Q: What are your money habits?

I have a regular savings plan set up with Fundsupermart. Each month, about 50 per cent of my income is invested in my portfolio of more than 15 unit trusts and in insurance. Anything left after other expenses goes into the liquidity account for future use.

Generally, we lead quite a simple lifestyle. I'm very much a heartlander.

Q: What financial planning have you done for yourself?

My two main investment objectives are retirement and education. As I'm investing with a long-term horizon of about 20 years, I can adjust for volatility.

My unit trust portfolio is 60 per cent invested in emerging markets, including Latin America and Asia. The other 40 per cent is in developed markets and global sectors such as resources and health care. At this point, the portfolio is 100 per cent invested in equities.

I buy my unit trusts from online distributors and I do my own portfolio rebalancing. I aim for 7 per cent to 8 per cent annual returns.

I also invest in Singapore blue chips such as Singapore Press Holdings, SingTel and ST Engineering. I hope to slowly build up a portfolio of stocks with solid dividend yields.

Q: What about insurance planning?

I believe it is better to separate protection and investment. I have some endowment and life plans, but most of the policies are health-care related.

Q: What's your investment philosophy?

I'm looking for long-term returns, so I think I can stomach more volatility. I go for more volatile asset classes, for example, equities and emerging markets.

Q: Any other investments?

I have also invested in Shoushan stone carvings and wooden carvings of laughing Buddhas. This is a hobby, so I pick up only one or two pieces a year.

So far, I've collected 100 pieces, worth anything from $1 to $5,000 apiece. These are illiquid assets; the returns can be good, but there might not be ready buyers.

Q

: Money-wise, what were your growing-up years like?

I was the youngest in a poor family. We lived in a rented room in a shophouse in Upper Dickson Road. Dad was the sole breadwinner. He worked long hours at a tricycle shop, so I hardly ever saw him, except on Sundays.

He never completed primary school, so he believed education was the most important thing for us. He tried to give us the best he could.

He always reminded us of the importance of saving and being thrifty. He would tell us: 'Fu cong jian qi.' (Riches come from being thrifty first.)

My mum would supplement the family's income by doing some tailoring at home.

My brother, who is nine years older, taught me that the most important thing in life is to be happy and that a balanced lifestyle is the way to achieve this. His outlook helped to shape my perspective of life.

I grew up knowing that money is not the 'ultimate goal' in life. Nor does it represent the 'pinnacle of the corporate ladder'. This is the message that my wife and I regularly convey to our children.

Q: What has been a bad investment?

Lion Teck Chiang's initial public offering (IPO). It was one of my first investments during the IPO-crazy days in the late 1990s. The price fell and I lost almost 90 per cent of my investment. Luckily, I lost only a few thousand dollars, but I learnt not to follow the crowd.

Q: Your best investment to date?

Fund-wise, the Aberdeen Pacific Equity Fund. I have invested in it since the birth of my first boy as part of the savings for his education. Even with the recent market downturn, it still gives fairly good returns of more than 10 per cent a year.

Q: How do you instil good money management habits in your children?

When Xu Yang was younger, we'd shortlist a few options for him to choose from when shopping for toys. He was allowed to suggest things not on the list, but on two conditions: (1) He had to ask politely and (2) we had the final say.

When he turned five, we gave him a fixed budget, for example, $20 for Christmas. He chooses whatever he wants that falls within the budget.

Q: What's your retirement plan?

I don't think I will stop working, but I would like to adopt a less hectic lifestyle when I reach 50-55.

I like to teach, so I hope to lecture part time and earn enough to cover my daily expenses. I could also do consultation work. Our retirement savings will be used for travelling or emergencies.

In addition, I want to do volunteer work, most probably as a teacher.

Q: And your home now is...?

A five-room HDB flat in Ang Mo Kio that is near the home of my parents as well as my wife's parents.

Q: And your car is...?

A silver Mitsubishi Grandis.

lorna@sph.com.sg