Monday, August 13, 2012

Keen investor doesn't sweat the small stuff

Straits Times: Sun, Aug 12

Ms Carolyn Seet had always wanted to live abroad, and achieved her dream soon after finishing her studies.

Armed with a psychology and philosophy degree from the National University of Singapore, an Association of Chartered Certified Accountants qualification and £800, she went off to London to find work in 1999 at the age of 27.

She found a banking job and returned to Singapore five years later with a British husband and son in tow.

Her philosophy: Life is short, just do it. It also comes through in the way she handles her money, right back to her first property.

"I spend when necessary, and won't sweat the small stuff," says the 40-year-old, now the general manager of the Singapore branch of Serisys Solutions, a capital markets IT solutions firm.

She did spend most of her years in London busy saving as she had little to spare then.

"I became a manic saver when I went to London because I had very little money. Then, I became an anal saver for about four years."

That changed when she returned home. "I realised life is too short. If I am not living the life I want to live, what's the point of saving so much?"

She is married to Mr Karl Chaundy, 41, a freelance jewellery designer and maker whom she met in part-time theatre school in London.

They have two boys, Rian, nine, and Liam, five.

Q: Are you a spender or saver?

I used to be a saver, but now I'm a bit more balanced. As we live only once, I decided that I should enjoy some of the fruits of my labour before I am physically unable to.

I can't take my wealth with me to my grave, so I am happy to spend on things that enrich my family's and friends' lives.

My view is that money is just an exchange - not just for material goods, but also for time and peace of mind.

I invest about 20 per cent to 25 per cent of my salary and save about 5 per cent to 10 per cent of it. The rest is spent on household needs and experiences like theatre and travel.

We travel twice a year and my younger son is in private childcare, which costs up to $1,000 a month. We eat in a lot, but we tend to spend on expensive ingredients like cheeses and premium meat. My husband is great at creating amazing meals.

My current fascination with sports and its related gadgets has also upped my spending. I love gadgets.

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

I charge about $8,000 to $9,000 to my cards - it includes my British fund investment - and I pay off my credit card debt religiously.

Q: What financial planning have you done for yourself?

I've invested in properties. I used to look at property, when the yields would cover interest risk. I don't believe in investing solely for capital gain as that comes about only if the asset generates a good cash flow in the first place.

Now, I just dabble in options. I am quite conservative and am satisfied making a few hundred bucks a month.

I also invest in stocks and have a reasonable sum invested in stable, long-term plays Coca-Cola and Yum! Brands Inc, which owns brands like KFC and Taco Bell.

I have enough insurance such that if anything happens to me, all mortgages would be repaid and enough cash flow will be generated for daily living and education.

Every month, I put some money into a 15-year British fund. My elder son is a British citizen so if he ever wants to study in Britain, there will be a nest egg there. My goal is not to give my children money but to help them out.

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

I am an only child. My father was a clerk with the statistics board and my mother was a housewife.

I spent my early years in a two-room flat in Queenstown. My mum would sew clothes for office ladies for extra money. We were quite poor although my parents never used that word.

My first flight was to Manila in 1992 to represent Singapore in the Chess Olympiad. I started playing chess when I was in junior college and went into obsession mode. I dropped my computer science subject so that I could train for a chess competition.

Not being able to buy the latest toys or fashion taught me two things: You have to work for what you want or just stop wanting it; and it is not necessary to have what everyone else does.

I rarely envy people nor yearn for branded handbags or expensive watches. I tend to buy things that can make my life easier, better and more fun.

Q: How did you get interested in investing?

I went to London without a job. I was single so I had to take care of myself financially. I didn't want to rely on men. I wanted to be independent so I went to invest in some funds. I realised that if I didn't get interested in investing, I would die a bag lady.

I also bought my first property - a flat - in London. I was looking around for a place to rent when I realised that if I bought one, the mortgage interest payments alone would be less than the rental. At 3 per cent downpayment, the capital outlay was just a bit more than the deposit for the rent.

Also, as interest rates fluctuated quite a bit during that period, it taught me to be sensitive to interest rate risk, something we seem to have forgotten in the current low-interest climate.

It was only after reading Rich Dad Poor Dad that I understood how powerful it is to invest for cash flow.

I went on to buy a second property in London, a house, around 2003, which I sold for a small profit in 2005.

Q: What properties do you own?

We bought a 2,044 sq ft three-bedroom resale penthouse in Geylang in late 2008. Karl noted that not only does Geylang have a bad reputation and is hence cheaper, but also that the Circle Line was going to open in Paya Lebar.

He predicted that living within walking distance of two MRT lines would be a no-brainer. As the economy was depressed then, we paid less than $400 per sq ft for it. The price has since gone up by over 50 per cent.

We also own a three-room HDB flat. We bought it for $260,000 in 2005 before prices in Tiong Bahru shot up and then spent about $40,000 to renovate it. We stayed there for three years. It is now rented out for $3,000 a month.

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

I paid slightly over $1,000 for a designer dress in 2008. I wore it to three weddings and a company dinner, so the per use cost is not too bad.

It meant that I did not have to go shopping for that year's black-tie events (I hate shopping). However, I can't wear it any more as I've lost weight since and I won't pay that kind of money again as it's ridiculous.

Q: What's your retirement plan?

I aim to be financially independent by 50. I enjoy doing meaningful work and building relationships.

Q: Home is now...

A penthouse in Geylang.

Q: I drive...

My dad's car. He is kind enough to lend it to me on weekends. On weekdays, he chauffeurs the kids to school, gives me a lift to work and picks up the little one with my mother.

The only expenses I have are petrol and gantry charges. I just can't bring myself to buy a car. If I travel alone, I prefer the MRT or bus as I can read, e-mail or check my Facebook.

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