reporter2
03-10-21, 11:30
Me and My Money: Investing in long-term and stable assets like property and company
03 Oct 2021
https://i.imgur.com/75482aS.png
SINGAPORE - Long-term investments that bring stability and have an impact down the road tick all the right boxes for finance sector executive David Baey with real estate at the top of the wish-list.
As Mr Baey tells the Sunday Times: "If planned properly and financed correctly, I strongly believe that property purchases can be the best investment you can have. Hence it is the first thing I look at in my investment portfolio."
Naturally he is also bullish on his company Mortgage Master, which he co-founded and now serves as chief executive.
Mortgage Master started in 2018 to help home-owners and buyers secure the best mortgage rates tailored to their needs.
"I believe that the best investments are those made with an acknowledgement of the necessary trade-offs and a desire to uphold what you value the most," Mr Baey, 37, says.
This belief propelled him to leave his job as a mortgage consultant at a bank to co-found Mortgage Master so it can steer homeowners to the product that best suits them rather than pushing bank offerings that might not meet their needs.
"With a business model that is inherently 'bank-agnostic', coupled with access to all the latest mortgage rates and offerings across the market, we could then be sure that we were delivering free, unbiased, and personalised advice to each homeowner, to help them save time and money," says Mr Baey, who has a bachelor's degree in electrical engineering from the National University of Singapore.
The business was started with $200,000 and raised a further $672,500 in seed funding last year and $928,000 in a round of pre-series A funding in April.
The firm now has 17 full-time staff and is looking to expand regionally, starting with Indonesia, where the business has already established a local office and inked partnerships with five major banks.
Mr Baey's 35-year-old wife works in communications. They have two sons, aged five and two and a half.
Q: What is in your portfolio?
A: A total of 50 per cent of my portfolio is in my current property, while 30 per cent is in insurance - my retirement plans, savings plans and children's investment-linked policies.
The remaining 20 per cent is in shares and stocks.
I own and live in a 1,500 sq ft, four-bedroom executive apartment in Bishan. The property has 70 years left on its lease.
On top of residential property being a store of value that is generally inflation-proof, we have seen historical long-term growth in local property values due to economic growth and land scarcity in Singapore. This makes financing a property - if planned for meticulously - both a necessity and a worthwhile investment.
In the past, I focused on fundamental trading, where I was assessing the companies' fair market value and the impact that macroeconomic factors may have on the company.
I dabbled in trending sectors and invested in the pharmaceutical industry last year. I believe that the health and sustainable energy sectors have the most potential in the coming years.
When I was a banker, I had more time to research and analyse the stock market. I was able to enjoy 13 per cent returns on my investments, but they were high-risk volatile investments.
Today, as a husband and father, family stability is more important than anything else. Therefore I choose to adopt a more conservative approach on my portfolio and am happy with my 7 per cent returns.
The rest of my finances are in Mortgage Master.
I am more comfortable channelling most of my resources into long-term investments, and I believe that my new home and my company, Mortgage Master, are the kind of long-term investments that bring stability, returns and long-lasting meaningful impact.
Cryptocurrencies, for instance, have proven to be highly volatile in the past months, and I personally believe that there are other better ways to achieve financial well-being in the long run.
https://i.imgur.com/5w2MTzq.png
Q: Describe your investing strategy.
A: My financial philosophy is relatively simple: separate savings from investments and approach them with two different strategies.
Savings that I accumulate and set aside are low-risk options like savings insurance plans and property purchases.
On the other hand, investments are money that I put into higher-risk products, such as equities. Within this, it is also worth noting that there is a difference between "stock trading" and "stock investing". While both are means of participating in the stock market, the key distinction between trading and investing is the length of time in which you plan on holding your stocks.
With that in mind, I use most of my money for investments in stock investing for the long term. Stock trading is something I do from time to time, depending on market movements, but it is treated as money "you can afford to lose".
I do not have any trading positions in the market right now, as the timing is just not right. Years of experience serving customers in a bank have taught me that if the market is too volatile, the risk of losses outweigh the potential quick buck that can be made from accumulating shares of speculative stocks and trading them actively.
Overall, I would recommend setting aside part of your income towards investment each month; 30 per cent of this amount can go to higher-risk products. Whether you go with stock investing or stock trading is dependent on your risk appetite and the time you possess to monitor the market closely enough to take advantage of price fluctuations.
The remaining 70 per cent should go toward lower-risk products, such as insurance and saving up for your next property.
Q: What are your immediate investment plans?
A: I am not looking at anything that requires a high-risk appetite - certainly not cryptocurrencies. I do not feel the need to shoot for the moon.
Q: What else is in your financial plan?
A; My financial plan is geared toward the long term. I started by purchasing savings plans and investment-linked policies for my children to ensure that they are sufficiently protected.
My wife and I are paying down our home loan as quickly as we can - even though the cost of capital is cheap - so that our family can enjoy greater financial stability. I aim to have three fully paid-up properties by the time I turn 65 years old.
The idea is to use the second and third properties to pay for my children's college education; it is my version of a "college fund".
Q: How are you planning for retirement?
A: My children's "college fund" is invariably my road to retirement. I would stay in one property and rent out the other two.
While rental yield may be lower than other "higher risks, higher returns" financial vehicles like equities, foreign exchange and cryptocurrencies, it is inflation-proof. Property prices tend to rise with inflation, and over time, rental prices would increase as well. This will give me perpetual income in my retirement years and allow me and my wife to spend more time with our family.
Q: Moneywise, what were your growing-up years like?
A: I had a comfortable childhood as my grandfather and father were both successful entrepreneurs then.
In 1997, the family business was, however, hit extremely hard by the Asian financial crisis. We pretty much lost all that we had. While my father was rebuilding the business, it was my mother's stable job as a business executive, and my family's overall financial prudence during those years, that helped my two sisters and I through our teenage and university years.
To ease the burden, my older sister worked hard to earn a university scholarship with the Ministry of Education. My other sister and I also pursued tertiary education in areas that were more likely to direct us toward job stability and security. She became a dentist while I studied engineering.
Our family finances have stabilised and improved over the years, but that experience reshaped my outlook in life.
Firstly, while I am open to taking risks, I believe in a risk-managed approach to account for both the inevitable good and bad times. I therefore segment my finances: the majority goes into lower-risk and long-term investments that have historically performed well across economic cycles and ensuring that my family and I have enough cash savings for a rainy day.
I then put the rest of my finances into Mortgage Master, as well as a few higher-risk investments when the markets are less volatile than they are now, while being fully aware of the trade-offs we must make, such as my wife and I budgeting to have our kids enjoy their childhoods while spending less on ourselves.
Q: Home is now ...
A: My wife and I recently bought a four-bedroom executive apartment in Bishan.
Our previous home was a five-room Housing Board built-to-order flat in Punggol, which we made a 34 per cent profit off selling.
Q: I drive ...
A: I drive a blue seven-seater Mitsubishi Outlander.
Best and worst bets
Q: What has been your biggest investing mistake?
A: When I was an undergraduate in university, I had a close friend who owned a margin account with a brokerage. We followed the market and bought some shares in a Chinese company.
We did zero research, and we did not understand the market nor the market movements.
The stock got de-listed, and I lost all my savings. I lost the $30,000 that I had painstakingly saved up to that point, all thanks to a poorly informed decision.
It took me two years of scrimping and saving to pay my friend back and it serves as a painful lesson to never invest money that you do not have, to consider the long-term implications of any decision, and that you need to acquire sufficient knowledge prior to investing in any asset class, including property.
Q: And your best investment?
A: Despite being an individual who has made a career out of advising others on how they can best manage their personal finances and grow their wealth, I believe that all of this is merely a platform for you to make the non-material investments that you will undoubtedly and eventually look back upon and appreciate the most.
I would therefore say that my wife, and the time spent in our relationship - which has come up to nine years now, is the best investment I have ever made.
Mortgage Master comes in at a close second, as it allows me to utilise the knowledge and skills around what I do best to aid Singaporeans' aspirations for home ownership and affordability - whether it is a nest-egg, an investment vehicle, or both, as well as the positive spin-off effect this can have on their personal finances and lifestyles.
https://www.straitstimes.com/business/invest/me-and-my-money-investing-in-long-term-and-stable-assets-like-property-and-company
03 Oct 2021
https://i.imgur.com/75482aS.png
SINGAPORE - Long-term investments that bring stability and have an impact down the road tick all the right boxes for finance sector executive David Baey with real estate at the top of the wish-list.
As Mr Baey tells the Sunday Times: "If planned properly and financed correctly, I strongly believe that property purchases can be the best investment you can have. Hence it is the first thing I look at in my investment portfolio."
Naturally he is also bullish on his company Mortgage Master, which he co-founded and now serves as chief executive.
Mortgage Master started in 2018 to help home-owners and buyers secure the best mortgage rates tailored to their needs.
"I believe that the best investments are those made with an acknowledgement of the necessary trade-offs and a desire to uphold what you value the most," Mr Baey, 37, says.
This belief propelled him to leave his job as a mortgage consultant at a bank to co-found Mortgage Master so it can steer homeowners to the product that best suits them rather than pushing bank offerings that might not meet their needs.
"With a business model that is inherently 'bank-agnostic', coupled with access to all the latest mortgage rates and offerings across the market, we could then be sure that we were delivering free, unbiased, and personalised advice to each homeowner, to help them save time and money," says Mr Baey, who has a bachelor's degree in electrical engineering from the National University of Singapore.
The business was started with $200,000 and raised a further $672,500 in seed funding last year and $928,000 in a round of pre-series A funding in April.
The firm now has 17 full-time staff and is looking to expand regionally, starting with Indonesia, where the business has already established a local office and inked partnerships with five major banks.
Mr Baey's 35-year-old wife works in communications. They have two sons, aged five and two and a half.
Q: What is in your portfolio?
A: A total of 50 per cent of my portfolio is in my current property, while 30 per cent is in insurance - my retirement plans, savings plans and children's investment-linked policies.
The remaining 20 per cent is in shares and stocks.
I own and live in a 1,500 sq ft, four-bedroom executive apartment in Bishan. The property has 70 years left on its lease.
On top of residential property being a store of value that is generally inflation-proof, we have seen historical long-term growth in local property values due to economic growth and land scarcity in Singapore. This makes financing a property - if planned for meticulously - both a necessity and a worthwhile investment.
In the past, I focused on fundamental trading, where I was assessing the companies' fair market value and the impact that macroeconomic factors may have on the company.
I dabbled in trending sectors and invested in the pharmaceutical industry last year. I believe that the health and sustainable energy sectors have the most potential in the coming years.
When I was a banker, I had more time to research and analyse the stock market. I was able to enjoy 13 per cent returns on my investments, but they were high-risk volatile investments.
Today, as a husband and father, family stability is more important than anything else. Therefore I choose to adopt a more conservative approach on my portfolio and am happy with my 7 per cent returns.
The rest of my finances are in Mortgage Master.
I am more comfortable channelling most of my resources into long-term investments, and I believe that my new home and my company, Mortgage Master, are the kind of long-term investments that bring stability, returns and long-lasting meaningful impact.
Cryptocurrencies, for instance, have proven to be highly volatile in the past months, and I personally believe that there are other better ways to achieve financial well-being in the long run.
https://i.imgur.com/5w2MTzq.png
Q: Describe your investing strategy.
A: My financial philosophy is relatively simple: separate savings from investments and approach them with two different strategies.
Savings that I accumulate and set aside are low-risk options like savings insurance plans and property purchases.
On the other hand, investments are money that I put into higher-risk products, such as equities. Within this, it is also worth noting that there is a difference between "stock trading" and "stock investing". While both are means of participating in the stock market, the key distinction between trading and investing is the length of time in which you plan on holding your stocks.
With that in mind, I use most of my money for investments in stock investing for the long term. Stock trading is something I do from time to time, depending on market movements, but it is treated as money "you can afford to lose".
I do not have any trading positions in the market right now, as the timing is just not right. Years of experience serving customers in a bank have taught me that if the market is too volatile, the risk of losses outweigh the potential quick buck that can be made from accumulating shares of speculative stocks and trading them actively.
Overall, I would recommend setting aside part of your income towards investment each month; 30 per cent of this amount can go to higher-risk products. Whether you go with stock investing or stock trading is dependent on your risk appetite and the time you possess to monitor the market closely enough to take advantage of price fluctuations.
The remaining 70 per cent should go toward lower-risk products, such as insurance and saving up for your next property.
Q: What are your immediate investment plans?
A: I am not looking at anything that requires a high-risk appetite - certainly not cryptocurrencies. I do not feel the need to shoot for the moon.
Q: What else is in your financial plan?
A; My financial plan is geared toward the long term. I started by purchasing savings plans and investment-linked policies for my children to ensure that they are sufficiently protected.
My wife and I are paying down our home loan as quickly as we can - even though the cost of capital is cheap - so that our family can enjoy greater financial stability. I aim to have three fully paid-up properties by the time I turn 65 years old.
The idea is to use the second and third properties to pay for my children's college education; it is my version of a "college fund".
Q: How are you planning for retirement?
A: My children's "college fund" is invariably my road to retirement. I would stay in one property and rent out the other two.
While rental yield may be lower than other "higher risks, higher returns" financial vehicles like equities, foreign exchange and cryptocurrencies, it is inflation-proof. Property prices tend to rise with inflation, and over time, rental prices would increase as well. This will give me perpetual income in my retirement years and allow me and my wife to spend more time with our family.
Q: Moneywise, what were your growing-up years like?
A: I had a comfortable childhood as my grandfather and father were both successful entrepreneurs then.
In 1997, the family business was, however, hit extremely hard by the Asian financial crisis. We pretty much lost all that we had. While my father was rebuilding the business, it was my mother's stable job as a business executive, and my family's overall financial prudence during those years, that helped my two sisters and I through our teenage and university years.
To ease the burden, my older sister worked hard to earn a university scholarship with the Ministry of Education. My other sister and I also pursued tertiary education in areas that were more likely to direct us toward job stability and security. She became a dentist while I studied engineering.
Our family finances have stabilised and improved over the years, but that experience reshaped my outlook in life.
Firstly, while I am open to taking risks, I believe in a risk-managed approach to account for both the inevitable good and bad times. I therefore segment my finances: the majority goes into lower-risk and long-term investments that have historically performed well across economic cycles and ensuring that my family and I have enough cash savings for a rainy day.
I then put the rest of my finances into Mortgage Master, as well as a few higher-risk investments when the markets are less volatile than they are now, while being fully aware of the trade-offs we must make, such as my wife and I budgeting to have our kids enjoy their childhoods while spending less on ourselves.
Q: Home is now ...
A: My wife and I recently bought a four-bedroom executive apartment in Bishan.
Our previous home was a five-room Housing Board built-to-order flat in Punggol, which we made a 34 per cent profit off selling.
Q: I drive ...
A: I drive a blue seven-seater Mitsubishi Outlander.
Best and worst bets
Q: What has been your biggest investing mistake?
A: When I was an undergraduate in university, I had a close friend who owned a margin account with a brokerage. We followed the market and bought some shares in a Chinese company.
We did zero research, and we did not understand the market nor the market movements.
The stock got de-listed, and I lost all my savings. I lost the $30,000 that I had painstakingly saved up to that point, all thanks to a poorly informed decision.
It took me two years of scrimping and saving to pay my friend back and it serves as a painful lesson to never invest money that you do not have, to consider the long-term implications of any decision, and that you need to acquire sufficient knowledge prior to investing in any asset class, including property.
Q: And your best investment?
A: Despite being an individual who has made a career out of advising others on how they can best manage their personal finances and grow their wealth, I believe that all of this is merely a platform for you to make the non-material investments that you will undoubtedly and eventually look back upon and appreciate the most.
I would therefore say that my wife, and the time spent in our relationship - which has come up to nine years now, is the best investment I have ever made.
Mortgage Master comes in at a close second, as it allows me to utilise the knowledge and skills around what I do best to aid Singaporeans' aspirations for home ownership and affordability - whether it is a nest-egg, an investment vehicle, or both, as well as the positive spin-off effect this can have on their personal finances and lifestyles.
https://www.straitstimes.com/business/invest/me-and-my-money-investing-in-long-term-and-stable-assets-like-property-and-company