Watching Millionaire Inside

My family investment portfolios of stocks,bonds and funds in pte banks is worth around $6mil at this time (hopefully, the market don't turn worse..if not, it might be less. :P) ... This sum excludes the budget I've set aside for direct property investments that I intent to do when the property market turns. I'm currently the manager of the investments and i'm only 34.

For whizzard to accumulate $10mil before 40, he might have gotten it from inheritance or he could be a high risk taker (example, flips properties aggressively and was not caught with his pants down). He might not be the typical sticking it into a portfolio approach to investing, and contented to the 8~10% compounded annual return type.

However, for the rest, I think it's well worth considering portfolio approach to investing as it is better to be slow and steady than be burnt in a blaze of glory.

Whizzard,
Oh by the way, if you are reading this.
Visit my website and maybe send me an email.
Let's keep in touch.

I would like to learn from your experience on the property investments!

OK, this is what I did, all in the spirit of sharing only. (1) I tried my best to spend within my means and have some spare cash left over each month. (2) I accumulated the spare cash and invested it instead of spending it off. I didn't make money on all my investments, but on the whole, I did well enough to grow this a little. (3) I re-invested most of the profits instead of rewarding myself by spending it all away. I did reward myself though, but sparingly.

I made the bulk of my money investing in properties and some of my equity investments multiplied e.g. Capitaland & Keppel Land. To provide some details: bought DBS Land (before it became Capitaland) at $2.95 on 19 July 99, Keppel Land at $2.31 on 22 Sep 99, ST Engineering at $1.93 on 23 Aug 99, Natsteel Electronics at $3.12 on 18 Oct 00 (was taken over at US$4.53), etc, etc. I held these for many years. I began pulling most of my money out of equity in May 07, after the 1st time China stocks corrected in Jan/Feb 07 as I felt that a bubble was forming (I heard stories of Chinese workers demanding to take time off during lunch to trade the markets, young executives and housewives borrowing to trade stocks, people quitting their jobs to trade full time in the market, etc - sounds familiar like 93-94 in Singapore, yeah?) and the markets were getting very dangerous due to the extremely high PEs in China and extreme volatility in the regional markets when the Shanghai Index corrected - but it recovered and continued marching northwards until sub-prime hit for the 1st time in July 07. I got out for the wrong reason but I was out and this accounted for my current cash holdings.

Of course there were some bad equity investments over the years which I realised losses. I do invest in what some may call speculative stocks (I'd rather term them as situational plays which I aim for 30% to 50% returns within a short time frame of 2-3 mths. For longer term equity investments, I look for blue chips and put in smaller amounts per counter but for shorter term situational plays, I do put in substantially more per counter. No prices for guessing which I lost money in.

I have held onto my globally diversified unit trust portfolio for the past 8 years, seeing it yo-yo up and down and am regretfully still holding onto it now. Very bad returns - up 5% based on today's market valuation - but who knows what tomorrow (1 year, 3 years, 5 years) may hold?

My 1st foray into the property market was from 1994 onwards, where I bought and sold a couple of condos. Made a few hundred thousand on those, funded by my wife and my savings and some bank loans. The house which I am staying in was bought in 1996 with those profits, a bank loan and CPF which was subsequently paid off over quite some years. I paid $2.4 mil for all 3 current investment properties which I bought direct from developers in 2002, 2004 and 2005, each time paying the progress payments with my savings from salary, bonus and rental income. I wouldn't want to reveal details of those properties here as I prefer to remain anonymous.

And yes, I had a good opportunity with my career which propelled my annual pay-out to btwn $300k to $750k pa since the last 5 years (depending on whether I had good or leaner years). There are others in my age-group who earn more, I am sure of that.

In short, I could have developed a lavish lifestyle (spent my investment profit/bonus to finance a Porsche, Maserati or even a Ferrari - you get the drift - spend all the easy money) and raised my "core expenses" but I chose to exercise restrain and invested substantially my profits, my salary and bonuses into properties, paying off the bank loan and meeting the progress payments. And I did say that luck and timing do play a role too. Touch wood, I have been lucky on properties thus far.

I also have some friends who have done much better financially and are worth much more, if they did not spend it all away. I pale in comparison but once you start comparing, there's no turning back. So to me, life is a journey. I chose to live carefully in my initial years and now I can take it easier (I think).

The take-away at least for me, is to spend within your means at all times and try to have some leftovers for investing. No matter how small, they can grow into something. All you need is 1 good cycle and not get shaken out during any downturn (and that is why capital is key - I could have invested by leveraging up highly but I may get shaken out during any downturn). Lastly, as long as you spend within your cashflow and don't drawdown on your accumulated capital, you will be OK for the rest of your life. For most, cashflow = salary. I have tried very hard over all these years to change that equation to cashflow = non-salaried income and I think I have finally reached there. Of course, salary is important but the comfort of knowing that you don't need to rely on it is very assuring, trust me on that.

The point I am trying to make is not about how to accumulate $1 mil or $5 mil or $10 mil but to get the formula right from day one and how far you go from there depends on your hardwork, perseverance, discipline, risk appetite, luck and timing. Firstly, spend within your means - if not, no spare cash. No spare cash, no investment. With spare cash, invest it and not spend it. With profit from investment, re-invest. If you made a wrong investment, you start again. If you don't build up the means to invest, you will never generate any returns. The only way to build up the ability to invest is to spend within your means. Otherwise, salary is the only cashflow and that would mean running the rat race for a long time. I don't have a shortcut though I wished I had one. Read the recent article on the guy who blew all his toto winnings away? If he had paid off his bank loan (which he did, wisely) and put the rest in his bank, he would have the means to invest - instead, he blew it all away on dinners, holidays, relatives, friends, etc. If the credit card promoter had saved up her earnings instead of splurging on expensive handbags, she would also have the means to invest. They "lost out" their new found wealth because they did not live within their means.

Equity valuations have gotten very cheap recently. Property prices have also been moderating. Imagine having spare cash around - you can start planning how to enter the markets.

One more thing I believe that makes a difference between a millionaire and someone who's not.

KEEP AN OPEN MIND.

In this blog, we can see people doubting how much people earn. But the point is, when you are not in that league yet, you will always think it's not possible. But when you reach that league, you starts to know it's very possible and there are many more who earns way way more than you or have networth more than you.

I've seen too many people who doubt others or are always so negative about things. These people are the one who can't change their live. They will always think it's beyond them and it's outside their control. If They start to believe in themselves more and be open to opportunities and concepts, they might find that a lot of things are within their control and they can start changing their life.

But ultimately, do have a roadmap of what you want to achieve in life, what do you expect from life and work towards that. Financial Success is only an enabler to the life you want. So unless you know what you want, all the money in the world is not going to help you live a fulfilled life.

Dear whizzard, do you mind revealing the industry you work in? Is it sales related?

Whizzard, thanks for the explanation, it is much appreciated. Good luck to you and I hope that I can achieve success such as yours, while still maintaining the humility you have. Well done...

Wealth Journey June 24th, 2008 at 11:51 pm , very well said.

Folks have tall poppy syndrome and dont like winners, but this only reflects their own self-doubt and limitations. Most of us relate better to the underdogs, who struggle all their lives with fleeting glimpses of success.

Thanks both, you've certainly made a positive impression on me.

Yes, though it might sound very stupid at first .. but for people who lack motivation or have limiting self-beliefs, it is sometimes good to be open to those free preview seminars and learnt what those speakers have to say.

I'm like most people who basically lacks motivation and had self-limiting beliefs in my early years. What turned me around was I started to attend those free seminars (try to pick those with known personality - Dont go to success seminar where the personality is not even successful). The definition of success if you aspire to be a milliionaire, the person must be a millionaire. I believe this 'coz it's similar in every sports. Example, you want to improve your game of POOL. Try to play with better players and benchmark against them. I'm sure your pool game will improve.

From the seminar, you get rough ideas of what they are saying and they drop mentioned of books they read.
Most of the motivation books I picked up first was thru the mention from seminars. So I got the typical ones but that was good enough.

1) The Cashflow Quandrant (Rich Dad Poor Dad series)
2) Awaken the Giant (Anthony Robbins)
3) Master Your Mind, Designed Your Destiny (Adam Khoo)

My motivation level will fall most times but I just have to re-condition myself. Though sticking around positive people does have an influence on your mental state. But don't be overly confident/optimistic till you believe you can jump onto the road anytime and not get killed.

Sam, if you believe you can relate better to underdog, You can try Adam Khoo. His story is of an underdog making it big and successful.

Yes, I am involved in sales and marketing where the revenue pressure is constant.

And my last point on building wealth, at least in my case, is that it was built up over many, many years of slogging. It didn't come easy. And I am sure it could unravel just as easily if one gets complacent.

Cheers and good luck!

Just a few days ago, a sudden idea pop, i did a search in google, wanting to find out the top 10 millionaire in singapore. I remember reading it in Adam khoo book, its becoming easier to become millionaire nowadays. Result from Forbes - http://www.forbes.com/2007/08/23/biz...hest_land.html
Number 1 goes to Ng Teng Fong. From Adam khoo & stuart tan plus some other source, the concept of modeling can be very true. I notice that of the top 10 in singapore, most or if not all of them invest(property related).As what whizzard mentioned investment and if you look around lots of people & aunties are doing house rental - arghh i learnt that from rich dad poor dad in 2004 about getting passive income from that stream but 4 years had past and i have yet to do anything about it. Well what's past had past, we cant do anything about it what we can do - is control our future right ? =D I want to achieve a saving of 18k SGD by this Dec 2008 which breakdown to saving $2k per month after minus my existing saving. (Yeah with the rising petrol which leads to rise in almost everything how to save $2000 ? Well i m in IT security sales currently, would you guys offer a hand to help =D give me an opportunity if your company have IT security concern =D!! ) (hey dun do backward calculation of how much I have, yeah after working for almost 3 years that the amount of saving i have =\ but i do have some investment link plan from NTUC =D). From whiz & wealth, we need capital (big or small counts) to start investment : just do it early !

Shu,
Your ILP is a good start though it might not be an optimal solution for you. Do you know that your ILP gives the agents at least 50% of the initial investment as commission for 1~3yrs. But I understand that most people just feel safer with ILP than doing direct investments into stocks or unit trusts.
There might be a conflict of interest with me telling you to invest instead of buying ILP 'coz I am a Licensed Financial Adviser by MAS. For me, I would recommend clients to create an immediate estate using term insurance. The investment should be done thru' unit trusts or ETFs or shares.

I do a combination of the above for my equity allocation in the portfolio. Maybe I'll write an article to explain how I generate passive income from the portfolio and how you can do it too. But yes, to generate enough passive income, you need time. And it's better to start as early as possible. I'm fairly confident of helping my clients get at least a million within their lifetime within 20-30yrs if they are willing to commit $20k a year into the investments in a disciplined manner.