Hi uncle MK,

I wasn't sure I could do early retirement at the start. Took me a few years to test out passive income before taking the plunge. So far so good. Stress level is down. I figured I am still young enough to go more aggressive with investment. Will likely tone down when I hit 50.

Meanwhile, I have hospitalization insurance, term and life/critical illness coverage as well. It's very important in SG to have hospitalization insurance.

Like you, I did it via doing business. No magic formula, it's through hard work, perseverance, taking some risk, making judgement calls and a lot of luck.

In good faith
 

To the post by LLL,

Uncle respect your decision in taking higher risks, reminds me the good old days of investing and losing hard.

Indeed, hospitalization insurance is crucial to hedge against unforeseen dangers - H&S plans to be exact. It seems that you're adequately covered. Any intentions to diversify into annuities and endowment plans?

Yes, running a business is not simple. Frankly speaking, networth in business term is inaccurate due to fluctuations/volatility. Take a look at the current raw fish market, due to news outbreak, most businesses tanked hard. These businesses flopped due to poor planning, lack of contingency, low vision etc. but those who adapt through creative means or other food items for coverage will emerge battered.

Uncle lost 5 businesses in the past before achieving self-actualization, not hard to figure why hair is already grey.

Uncle MK,

I don't believe in annuities and endowments, as I think I can generate better returns than the insurance company. :)

Agree with you that it's tricky to add value of business to net worth calculation. Valuation methods are just estimates, until there is a buyer, they are just numbers. So I simply don't. I only count cash and liquid financial assets plus properties. I have already exited and cash out my main business anyway. The other businesses I consider as risky investments and would be a bonus if they succeed. I am quite kiasu. Haha

Hi Uncle MK,

Thanks for taking the time to post, your perspective on life and respect for other's own decision is very refreshing.

Do you mind me asking would you say you're more comfortable with stock investment or property investment for networth building? And what would you look for on your prefer approach?

If you have the time and don't mind would really appreciate if you could share the loses you took in your old days (financially or otherwise). Personally I think one could learn a thing or two especially with experiences from the real world of business.

Regards
101

Resentment days
 

To the post by 101,

Uncle (personally) prefers investing in stocks mainly; lower initial outlay, easy access to diversification, higher liquidity and low negative equity valuation. However, opportunity cost to faster capital appreciation and status quo are inevitable.

In property investment, unless you're a tycoon or reit manager, diversification seems almost impossible. To make matter worst, negative valuations attracted margin calls even out of recessionary phases. This is definitely heart-stopping for uncle especially above age 50. In stocks, uncle may buy/sell/hold for extended periods without leverage - dividends are a bonus and capital appreciation is nice. The main objective is to combat inflationary pressures.

Uncle suggests young (aspiring) millionaires to adopt investing so as to secure a foothold in retirement; common (blue-chip and mid-cap) stocks, long-term bonds (no perpertual), (almost) guaranteed T-bills, index funds mainly vanguard or s&p and insurance. If an individual wants to start a family, service finished the mortgage within 6-8 years before investing.

In uncle's era, businessmen are more like swindlers where who gets the contract signed wins. It's unevitable to see unscrupulous dealers overpromising but under-delivering and not much can be done. In today's context, global uncertainty and intense (global) competitors wiped out SMEs in Singapore, not to mention third-world nations emerging victorious. Uncle warns aspiring entrepreneurs not to be laid-back and innovate quarterly. Else, pardon to say day-jobs are in better positioning per se.

As I remembered those days, many businessmen and entrepreneurs seek investments involving tens of millions to be the next big 'thing'. Uncle lost closed few millions in earlier ventures but the final one before giving up succeeded. The rest is history. When I wrote down my variable package, what isn't included is my annual dividends declaration of which isn't taxable. You see, sometimes it's about persevering while others attributed to luck.

Okay, uncle rattled quite a bit..

Hey uncle MK,

I didn't lose millions in business investments like you but hundreds of k, yes. It just takes one to take off to cover the rest. So fortunately, my first one succeeded. It's really true that out of 10 business you invest in, 5 will die, 4 will be in purgatory and hopefully 1 make it. Lots of lessons learned. It's safer to invest in financial instrument imho than businesses you have little control over.

Curious, do you use private banks? Advisory or discretionary?

Hi Uncle MK

Thanks, if that's rattling then by god do we need more of that on this forum :)

I've always been intrigued by stock market investment as a source of revenue but unfortunately always had a bad run when it comes to picking the right stock. So far I estimate I have lose some 400k on various stocks/gold investments, the only ones I've not lose much money on are some local stocks I bought (Reits & Etfs). I'll persevere and try to discipline myself into not taking riskier bets. Do you do any kind deep analysis on the companies you invest in?

I do have a knack at property investments thankfully, but I have yet to go thru any major downturn (i.e 97) so I admittedly have not gone the full cycle of the negatives of property investment. I do agree with what you said on the diversification being impossible, not to mention challenges on asset disposal, time lag to dispose etc. Currently I'm trying to sell a property and already the tenants is making things difficult. That said I do enjoy the process of fixing up places I bought and ensuring my tenants enjoy good standards of comfort. Also when it comes to spotting a good asset I find it a lot less challenging compared to finding a good stock.

I would imagine most successful businessman go thru rounds of unsuccessful ventures before hitting the right one I suppose a strong businessman always persevere otherwise he might not have hit the right business to get into. I heard stories from my friends family who took on a lot of risk to keep the company afloat and the made it big just due to luck & timing, its funny how life works out. One day one faces the possibility of bankruptcy or the next day was on track for listing.

Thanks again for the sound advise and the informative post really appreciate it. Would be great to know in more detail the unsuccessful ventures and successful ones you've had but that would be too much to ask especially on a anonymous forum :D

Keep in good health
Regards
101

army tank firing shells in progress :P

Diversification is crucial
 

To the post by LLL,

Uncle is fortunate to inhale the last breath of business endeavour. Some of my business partners lost faith and when back to day-jobs. With due respect, they're able to regain dignity and doing a stable career.

Initially, I self-managed my funds as no one takes care of money better than I (you) do. However, there is a time when I hit the plateau bar hence diversifiying out to Private Bankers. This too reduces my risk exposure as (commercial not investment) banks won't really 'collapse' due to Central Bank's reserve ratio requirement and monetary policies, no? My funds are mainly locked up in high-yield mutual funds like Blackrock etc. which to me is merely to protect my assets, nothing more.

Oh yes, uncle like to warn you guys that bankers and other financial institutions may harass you for almost all sorts of banking services. Do use the 'DNC' registry to your advantage - sometimes I would feel sad for this folks as not many old people like me will apply for credit services, banks might not approve too.

Gosh, more rattlings coming in

Understanding is key
 

To the post by 101,

Thank you for the well wishes. Uncle does't know about any magic formula but this quantitative guide; Business Nature, Management Style, Financials and Valuations. In this case, observe the guide to learn about fundamentals before making a decision.

Since you're into properties, why not continue progressing in a cautious manner. Perhaps, your strength lies at property investing. Sometimes, uncle attributed this ability to passion and experiences.

To your kins, it must be close misses and shaves. Traumatic and Exciting I should say.

Yes, I may reveal some non-sensitive information but only when I can recall interesting ones, anonymity provides a good way to share humble experiences. What are you interested to know?

Take care.