Car firm boss shifts gears on money

A few years ago, it wouldn't be unusual to find Ms Valerie Tan shopping in high-end stores, driving flashy sports cars and living the high life in general.

While fast cars are still a favourite of hers, the 39-year-old entrepreneur now takes a more austere approach towards her finances.

"I used to be a spendthrift... But now, I always tell my two girls that shopping is restricted to window shopping and we have to save money.

"Financially, we're quite comfortable but I think it's important to teach them the value of a dollar. They need to know money doesn't come easy and if they want to spend it, they have to work for it."

Her financial situation now is a far cry from what she went through as a child. Growing up in a single-parent household, Ms Tan was always aware of how tight the family's finances were.

Fuelled by an urge to find a better way to support her family, she started a used car business at 21, with start-up capital of $100,000.

"It was a rough start... because of the limited capital, we didn't have many cars to sell.

"I remember competitors coming up to me and telling me I wouldn't survive. I had only four very old cars at that time and I was up against other firms that had 50 cars.

"I also had staff who left me because they didn't believe my business would make it. I don't blame them, there were times I didn't think I would make it either but I still stuck with it."

Starting off with just four used cars in 1996, Ms Tan has grown her firm Pinnacle International, expanding the business into car workshop maintenance, vehicle export and the sale of new and used cars.

She currently lives in her home in the east with her two daughters, Terrina, 12, and Jerelyn, six.

Q: Are you a spender or a saver?

Recently, I've become more of a saver, setting aside about 30 per cent of my monthly salary.

About seven to eight years ago, I used to spend a lot on material things like clothes from expensive boutiques but now I feel that having cash is really important, especially when you are running your own business.

Q: How much do you charge to your credit cards every month?

Between $3,000 and $4,000. I spend it usually on food, entertainment for my family and when I'm hosting meals with my clients.

I prefer using cash because I feel using credit cards is like spending "future money". Credit cards should be more for convenience.

Q: What financial planning have you done for yourself?

I have some insurance policies - medical ones, for example - for myself and my family but I've bought only what is necessary.

I also have invested in property, which makes up the biggest portion of my investment portfolio.

My business is also another investment that I regularly put money into.

If we have a new product or new division of the business, I would pump some of my own funds into it to make sure that the new venture is a success.

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

My two siblings and I were raised by my mum. We were not rich and money was always tight so I was always looking for ways to help ease my mum's financial burden.

For a while, I worked in several part-time jobs in fast-food chains and restaurants and by giving tuition to primary school pupils.

When I was 17, I started a service matching tutors to students, earning a 50 per cent commission of a tutor's pay for the first month.

I did it for around a year and managed to pull in about $2,000 a month and used the money to cover school fees and for treats like movie tickets and books.

Q: How did you get interested in investing?

In 2004, my bankers alerted me to sales of foreclosed properties that were being sold cheap and encouraged me to go take a look.

Back then, the economy wasn't doing well and I don't think we'll ever see prices go as low as they did again.

I felt that the prices were very low and there wasn't much risk so I didn't do much market research before deciding to buy a four-storey commercial building in Sin Ming for $5.5 million.

It was eventually used for my business and it was the first in a string of properties I bought between 2004 and 2006.

Q: What property do you own?

Currently, I own two terrace houses in Onan Road and a condominium unit in the east.

I live in the condo while the two houses are rented out. Both those houses have two storeys and I bought them six years ago.

I'm still paying the mortgages on all three of the properties.

Q: What's the most extravagant thing you have bought?

A black Porsche C4S convertible. I bought it for close to $500,000 and it's the most expensive car I've ever bought.

I bought it three years ago and made a loss by selling it for $350,000 last year. I have to ferry my daughters around so I needed a more spacious car.

Q: What's your retirement plan?

I'd love to travel the world when I get older but I don't want to stop working completely, I still want to be involved in something.

My daughters and I often talk about what they want to do when they grow up and where the money is coming from.

Both of them have said they want to become vets and start clinics so my retirement plan is to invest in their business.

The idea is that I'll own shares in their clinics and give them the option to buy them back with their earnings.

Q: Home is now...

A 1,755 sq ft condo. I bought it for $1.9 million more than five years ago.

Q: I drive...

A white Audi Q5. I bought it brand new for $200,000, including certificate of entitlement, about two years ago.

cherlim@sph.com.sg

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