Tuesday, November 11, 2014

3 Biggest Retirement Regrets by Singaporean

Most Singaporeans wearily envision their lives as a never ending period of working, working, working from the cradle to the grave. Yippee. But people often lose sight of the fact that there are actually people in our midst who have retired and lived to tell the tale.
However, not all the retirees in Singapore are living off generous nest eggs and spending their days having high tea or playing mahjong with fellow retirees. In fact, quite the opposite.
We quizzed some retirees on their biggest retirement regrets in hopes that we might learn from them when reaching for that seemingly unattainable goal of retirement before death in Singapore.

1. Not saving and investing in their twenties

Amongst retirees not just in Singapore but all over the world, there seems to be a general consensus that their twenties offered the greatest chances to save and invest, and many regret not having realised it until it was too late.
Most people overlook the fact that saving $10,000 in your twenties goes a much longer way than saving $10,000 twenty or thirty years later. Because of the power of compounding interest, the longer your keep money invested, the more you’ll get out of it.
In addition, when you grow up, life has a habit of catching up with you. While in your twenties your most pressing financial obligations might be “entertainment”, things change if/when you start a family, purchase property or start to get health problems. Saving money gets a lot harder.
Mr Yeo, 62, who has been retired for almost 5 years and partially financed his retirement by selling his landed property and moving his family into a 4 room HDB flat, recalls his twenties, which were spent at actual discos (not clubs, discos!), consulting fortune tellers and playing mahjong.

2. Making lousy investments

Back in the day, obtaining finance-related information was a lot harder. Without the Internet, people relied on books, newspapers and word of mouth. And of the three, word of mouth has proven to be one of the most dangerous places to get your investment information.
Dr Tan, 65, started dabbling in the stock market in his 30s, and lost a significant amount of money because he didn’t fully understand how to choose and handle stocks. These days, he still invests in stocks but takes a risk-averse approach, holding blue chip stocks long-term.
Mrs Loh, a 60-year-old semi-retired accountant, used her son’s education fund to experiment with stock investing and ended up losing it all. “I came clean and told my son that I had lost all his education money. Fortunately, my husband and I were able to make it up in other areas like real estate.”
While lots of older Singaporeans cite the stock market as one of the key culprits of big losses, some retirees I know have sunk their savings in even more bizarre “investment schemes”, like buying a plot of land in the middle of the Indonesian jungle or contributing to dodgy religious organisations (true stories).

3. Spending too much on the kids

Many parents these days swear by the credo of sparing no expense when it comes to their kids. That’s why you see kids going to preschools that charge more than local universities do.
But surprise, surprise—many old folks cite spending too much on their kids as one of their more stinging regrets.
Mdm Ang, who is in her sixties and has two daughters and a son aged 32, 29 and 26 respectively, is often heard complaining about her children and wishes she hadn’t “spent so much on their university education”.
“I didn’t want them to have to take loans to pay for their education, so my husband and I paid for them out of our own pockets. Now they are working, but they waste so much money. My younger daughter pays $150 every month for a gym even though I always tell her the one near my place only costs a few dollars. They have taken everything for granted. I should have used the money for my own retirement. My children don’t even appreciate the sacrifices we made for them,” she laments.
This is a sentiment Mrs Tan, 60, shares. She and her husband went a little overboard and spent a lot of money on their daughter, now 23, when she was a child, sending her to all types of classes, from ballet to abacus to piano. Today, the family doesn’t even have a piano anymore, and their daughter’s ballet training is a distant memory.
“She was my first daughter, and at the time I just wanted the best for her. We used to spend almost $1,000 every month on various types of lessons for her,” says Mrs Tan. “But on hindsight there was no need to have spent so much. We might have gotten a bit carried away. If we had invested the money instead, we would be able to give her more financial support today.”
Do you have any nuggets of retirement wisdom for us? Let us know in the comments!

Monday, November 10, 2014

4 Lessons for Share Investor

Let me tell you that the purpose of this article is to warn investors about the perils of investing in the stock market. I wanted to share this article with you, in an effort to gain insight into some of my decision making process that went horribly wrong!
I bought these stocks despite Mr Market warning me by providing Red Flags all over the place that I should proceed with caution or at best, these stocks should be avoided at all costs!
But nevertheless I bought into them … I guess I was a sucker ..

1) PN17 stocks

PN17 stocks are companies in financial distress in Malaysia. They are usually very near to closing shop. When the stock exchange categorize a stock as PN17, that action by itself should be a Big Red Flag to current and potential investors. Hello, are you listening?
Well No, I shut my ears to all these “noise” because I thought the turnaround story on this Pn17 stock were genuine. Boy, was I wrong!
Later my own analysis told me that 80% of all PN17 stocks went bust, got delisted and never came back into the stock exchange.

2) Long Term Loss Making Stocks

These are another category of stocks I love to buy early on in my investing life. They are loss making companies which were raking losses for many years – the main attraction of these stocks are they were cheap, speculative and usually have juicy turnaround stories which I bought into. Bad move!
I thought these were good signs of a stock, but in reality, they were Red Flags all over the place which Mr Market put up to inform investors to “Please stay away at all costs “.

3) Buying Overvalued Stocks

Buying stocks which were overvalued were not as bad as the two reasons I’ve listed above, but it was still a big mistake. Have you heard those veteran investors saying to “Buy low sell high” ? They are right.
I bought a lot of overvalued stocks and this is one of the main reasons I did not have much success to show during the early years of investing. 

4) Buying Cyclical Stocks (At The Top Of The Cycle)

I bought cyclical stocks at the top of their cycle. They are stocks that are sensitive to the state of the economy – when the economy is booming these stocks will be priced at the top but when the economy shrinks they tend to drop very quickly. 
The trick to catch these stocks is to buy when the economy is bad and sell them when the economy is booming. Unfortunately for me, I did the exact opposite. Lesson learned, oops ..


These 4 investing mistakes lead me to large losses during the early years of my investing life. Hopeful with this insight, new investors will not make this type of investing blunders over and over again. Lesson learned : I was a sucker.