May 8, 2011
Bouncing back from bad times
After a set of personal and financial setbacks, it's smooth sailing now for entrepreneur
By Lorna Tan, Senior Correspondent
Entrepreneur Daphne Fan has seen dark days in her life. After the death of her first child - due to a complicated heart problem - she quit her job as head of e-commerce and IT at former Translink Freight Forwarding in 2000 and took a one-year break. A year later, she lost $150,000 during the second Gulf War crisis.
In 2004, she was cheated of $8,000 when she invested her savings in a student care centre in Clementi. All the bad experiences led to a dwindling of her savings.
Then things began to look up. With just $20,000 of savings, Ms Fan paid the down payment of a 926 sq ft commercial unit that cost $250,000 at Golden Mile Complex in 2005. When the value rose threefold to more than $800,000 one year later, she refinanced the property to get additional funds for a property in New Zealand, followed by others abroad. Now, at 41, she has 11 properties, of which three are in Singapore.
Armed with the knowledge acquired from attending various investment seminars since 2004, she was inspired to teach and impart money management skills to young children. Training firm Kids Hub was set up in March 2009. At the same time, she runs LogizHub as its supply chain IT consultant. The latter was set up in February last year and was profitable from the first year.
Ms Fan graduated from Nanyang Technological University with a degree in computer engineering in 1992. In 2002, she obtained her MBA from California State University, East Bay. For most of her career, she provided IT consulting services to logistics firms and their customers. Prior to setting up Kids Hub, she worked as DHL's head of customer integration and business IT consulting between 2004 and 2009. Her book Money Champ will be launched next month.
Ms Fan is married to product manager Koh Teck Kim, 42, and they have a daughter, Elaine, eight, and a son, Ee Shon, six.
Q: Are you a spender or saver?
I am a saver by nature. In the past, I used to be too 'stingy' to even buy myself a drink during meals, just so I could save more. Now, I'm more balanced. I still aim to save a minimum 30 per cent of my earnings and reward myself through controlled spending on luxury items.
Q: How much do you charge to your credit cards every month?
I charge about $2,000 to $3,000 to my credit cards and withdraw $3,000 from the ATM each month.
Q: What financial planning have you done for yourself?
I own a few insurance plans such as whole life and personal accident, and I have a life cover of $500,000. Half of the amount is tied to a local property. Should I die prematurely, the property will be fully paid off and my children will be able to survive with the rental income. In addition they can still enjoy any capital gains from the property through refinancing or sale in the future.
Most of my funds are invested in properties to earn rental income, with target yields of 6-10 per cent per annum. My rental income... is able to cover my monthly basic expenses. This is especially important to me now since I have to rely on rental income while I work on Kids Hub. I've invested about $100,000 in the design and patenting of my training methodology called Money Champ.
Q: Moneywise, what were your growing-up years like?
I grew up in a lower-middle income family with six children and I was number four. My father, a shipping supervisor, was the main breadwinner earning an average of $2,000 to $3,000. We lived in a three-room HDB flat in Bukit Merah till I was 18 when we moved to an executive apartment in Choa Chu Kang.
When I was young, the family had to tighten its belt when my father lost his job twice... My mum took up additional baby-sitting jobs and my elder sisters, who were in their early teens, became part- time waitresses. These past incidents had an impact on my spending habits, so I became a 'stingy' spender.
Q: How did you get interested in investing?
I hated the feeling of having to work at a job for an income, fearful of offending anyone in case my rice bowl was broken. The feeling sucked. It was then that I was constantly reminded of the need to find alternative flows of income and gain early financial freedom.
Q: What property do you own?
I now own 11 properties, most of which are co-owned with my husband. They comprise three properties in Singapore, two residential apartments in Kuala Lumpur, one in apartment in Selangor, two apartments in Australia, two serviced apartments in New Zealand and one apartment in the United States.
In Singapore, we own an HDB executive apartment in Bukit Batok where we live and two commercial properties. The office unit at Golden Mile Complex is worth $600,000 and the rental yield is 9.6 per cent. In 2007, we bought a 960 sq ft office unit at Ubi Tech Park for $360,000. The rental yield is 9 per cent and it is worth about $450,000 now.
Q: What's the most extravagant thing you have bought?
The most extravagant expenditure is a lavish family trip to Hong Kong in 2008. We stayed in first-class hotels and spent more than $5,000 over five days for two adults and two kids.
Q: What's your retirement plan?
I don't intend to retire. I consider myself financially free. I am now living my dream, spending most of my time on Money Champ, which I see as my personal life mission and passion towards building a strong financial foundation for our new generation, so that they don't have to go through what I did.
Q: Home is now...
The HDB executive apartment in Bukit Batok, my home since I got married in 1996. We bought it directly from the HDB for $360,000 and it is fully paid off. The current value is more than $500,000.
Q: I drive...
A silver Kia Carnival. But it is getting old and giving a lot of problems. I am considering changing it to a company van.
lorna@sph.com.sg
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WORST AND BEST BETS
Q: What has been your worst investment to date?
In 2002, I lost $150,000 in stocks during the Gulf War crisis. I had parked this amount a year earlier with a close relative who traded US stocks on margin trading.
My other worst investment was when I invested $8,000 from a combination of my cash savings and a loan into a Student Care Centre at Clementi. It was an area that I had no experience in and I failed to exercise due diligence. Three weeks later, my partner was declared a bankrupt and I lost my investment.
Q: And your best?
My best investment was when I bought the office unit at Golden Mile Complex in 2005. I invested my cash savings of $20,000 in it. The property value rose threefold to more than $800,000. I refinanced the property to get additional funds to invest in an overseas property in New Zealand. This was followed by investments in other overseas properties that could provide potentially high rental returns. Since last year, my net passive rental income has been about $5,500. This is enough to cover my family's basic expenses of $3,500 with the balance $2,000 for myself.
