April 20, 2008

me & my money

Property man who swears by blue chips

They pay dividends and he can cash out quickly when he needs to move his money elsewhere

By Lorna Tan, Finance Correspondent

Working as an apprentice in a construction firm, developer Victor Ow used to sit at the back of a lorry huddled with construction workers. He was 19 then. Now, he sits behind the wheel of an $800,000 Ferrari.

'When you sit at the back of a lorry, you bear the brunt of Mother Nature. It's very hot on sunny days, and you get drenched when it rains. Today, when I drive my nice car, I tell my wife and daughter how much life has changed.

'If you ever have to earn a living as a worker sitting at the back of a lorry, don't despise yourself. Your life can still change with the right opportunities,' he said.

Mr Ow, 54, has come a long way. While he was doing National Service, he managed to get a diploma in civil engineering. Later, while working as a technical officer, he saved enough money to fund his degree course at the University of Strathclyde in Glasgow from 1977 to 1978.

In 1983, when he was 28, he set up a property development firm, Clydesbuilt Group, with $100,000. The company has built landed homes, condominiums and commercial properties.

Mr Ow owns the company with wife Wong Pui Yee, 53, whom he has known since he was 10. They have a daughter, Carmen, 19, who is studying at Monash University in Melbourne.

It is not surprising that Mr Ow's investments are mostly in properties, in Singapore and elsewhere, with a small portion in blue-chip stocks. Today, his personal property investments - combined with those of his company - are worth about $150 million.

Some of his better buys include Central Hotel on Petain Road, which he bought for $700,000 in 1990 and sold for $14 million five years later.

This February, two days before the Chinese New Year, he picked up a 17,000 sq ft good class bungalow along Bukit Timah Road for $13.1 million. It has a built-up area of 8,200 sq ft and comes with a swimming pool. The asking price was a hefty $17 million last year.

Q Why did you decide to become an entrepreneur in the property business?

I have this flair for design. I behave more like a designer and an architect than an engineer.

When I get involved in real estate development, I have a say over the finishing of the kitchens, rooms and walls. I select each individual item, and it's such fun. I look at functionality, durability and design.

Q What are your money habits?

They went through two phases. In the initial years when I needed to build my business, I needed to save more. I delayed the purchase of my house and bought second-hand cars. I didn't start buying brand-new cars till 1994. That was when I realised that my investments were on auto-pilot mode, and that my income stream had become stable.

Q What financial planning have you done for yourself?

Apart from properties, about 10 per cent of my investments are in blue-chip stocks - banks, Singapore Airlines, City Developments, Suntec Reit - and cash equivalents like fixed deposits.

I started buying stocks 15 years ago, and I've been holding them. The advantage is that when you need to cash out on your blue chips to fund your other high-return investments, it is easy to do so. Moreover, you earn dividends.

Q What about insurance planning?

I used to buy term insurance to insure against payment for estate duty, but now that the estate tax has been abolished, it is no longer necessary. I have medical insurance.

Q What property invest- ments have you made recently?

They are mainly in the Bukit Timah area. I have a few bungalows, and I'm keeping 12 units of Lornie 18, 13 units of Clydes Residence, a 5,000 sq ft apartment in Killiney Road and one unit at Horizon Towers. My overseas properties include an apartment in Shanghai and three condos in Kuala Lumpur.

When I invest and buy anything, I'm always prepared to hold on to it for five to 10 years. I must know from day one that I can sustain my investment.

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

I'm the eldest son and the second child in a family of six. My father was a taiji instructor, so his income was irregular and money was tight. My mother was a homemaker. We lived in a three-room HDB flat, and I used to sleep on the floor.

When I was at university in Glasgow, I survived on a budget of $10 a week. For almost every day for two years, I ate instant noodles and hard-boiled eggs. I worked part-time during school vacations.

Q What has been a bad investment?

I invested $6 million in cash in a Chinese firm that was supposed to go for an initial public listing in Hong Kong two years ago, but the plan fell through. My money is still stuck there.

Q Your best investment to date?

It is in my latest project, Lornie 18, which comprises 18 two-storey bungalows along Lornie Road, opposite the Singapore Island Country Club. The project was recently valued at $100 million.

Q And your home now is... ?

I live in a 5,000 sq ft, five-bedroom house near Sixth Avenue. I will rent this out and move into my newly purchased bungalow by the end of this year.

Q How many cars do you have?

I have two Ferraris: one yellow 360 Modena and one red F430. I also own a black BMW 735.

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Planning for the long term

'When I invest and buy anything, I'm always prepared to hold on to it for five to 10 years. I must be able to plan from day one that I can sustain my investment.'
MR OW, on his property investments

Braving risks, even failure

'As an entrepreneur, if you want to invest, you must expect failure. When you invest and your total gains are more than your losses, you're still considered a winner.'
MR OW, on how he took risks in his stride