A Financial Stocktake

Money and numbers is in my blood. It has been since the day I chose Commerce as my course of education in college. I did surprisingly well – having no issues differentiating between the debits and credits, balancing the accounts and understanding the principles behind the accounting policies. But I was just as good in Geography and this was the subject that I love.

In University, I also chose Accounting because the Tourism and Hospitality course I was gunning for had been phased out. Had they known that Singapore would allow two IRs, they would have never done that. But that’s a no-brainer now. I wasn’t the most brilliant student in Accounting, not like in college. Here I competed with the creme la creme of Singapore’s future accountants/auditors.

I graduated with a second lower honours. Not the best but not that bad either considering that I had a life on campus. But somehow my path didn’t lead me into the typical route of Accounting graduates. I chose the wealth management path. From being a mediocre financial advisor to an excellent fund accountant, I find myself now in a government body promoting financial education.

But honestly marketing is not my forte. I am not an arty farty person, neither am I a natural presenter. But like in my previous organisation, I excel in doing one thing and one thing only – spotting the loopholes that others don’t notice and patching it up.

And it so happens that one of it is cost efficiencies. There is nothing concrete to support the way we make decisions, everything is based on gut feel and I hope that my strength in numbers would help the department pull itself together.

But I digress. The other wonderful benefit my experience has given me is the ability to manage my cash flow wisely. We are a middle income household with three children.

At present, we have a 5-room HDB flat fully financed by our CPF because we bought the property many years ago before the current bubble. We own a simple 1.4L car that is already in a way funding itself. The car is worth more than the loan outstanding. However our 7 year old Aveo is making funny noises and I suspect it doesn’t have much left in it.

We have personal life insurances for everyone in the family including our children. The idea is to give them a financial headstart with a fully paid plan and a hefty cash value when they each reach 25 years old. For medical coverage, we have the basic requirement for hospitalisation but unfortunately not for outpatient treatment and diagnosis as I painfully found out recently.

In terms of investments, I haven’t really done well in this aspect. I know what needs to be done but always need more time than I have to find the right investment. Perhaps I should engage the help of a financial advisor but I am a bit too proud to do that.

I bought into 5 different mutual funds over the course of the last five years and it seems that I always entered at the wrong time. All of them are seeing red. Finally got down to starting a $100 a month investment plan 3 years ago and that has seen a bit of gain. Also started down the ETF route but once again bought into it when the STI was 3220 and look where it is now.

In terms of savings, we have a 5-digit figure in our banks. It isn’t much by most counts but it is looking too comfortable earning pathetic interest. The more I look at it the more frustrated I become. So I need a place to invest this money.

Given my history in stock investments, I am a little averse to put my money there so am doing a little bit of diversification by pumping it all into property in Malaysia. It will be my single largest investment thus far but I see two benefits in this.

One is the ownership of a physical asset which hopefully is much easier to understand in terms of P&L. And two is having this investment outside of Singapore to leverage on the favourable exchange rate as well as a potential haven away from city life. I have always enjoyed Malaysia as a getaway destination and with the growth prospect of the Iskandar development, this investment looks good to grow.

Actually I have been scouting the region since early last year but I was looking at it from the wrong angle – to buy agricultural property. Now that I am resuming my hunt for residential properties, I realised that I am year or two too late. Should have come across this fantastic forum thread about living in JB much earlier as it would have spurned my desire and cause me to act.

Anyway will be doing an intensive property viewing this weekend and hopefully update the blog on my findings then. Wish me luck.