The earlier years

During my 25 years of working, I did not have spare cash for equity investment. There were mortgages to pay. Back then, salaries earned were used mainly to reduce mortgages. It was a relentless effort to reduce principal amounts owing to banks so as not to pay hefty interest expenses.


I remember that I bought my first car not long after I started work. Back then servicing hire purchase instalments was a drain on my pay packets. I had to tighten my daily expenses to get by on my nothing-to-shout about salary.


Next came my first home. CPF and cash were required to pay for the mortgage. My wife and I, like all young couples, dreamed of owning investment properties as a source of additional income. Additional mortgages were taken and it was more belt-tightening.


Fortunately, we became debt-free in 2005 after redeeming the mortgage on our last property. We felt at this stage of our lives, we cannot afford to live on credits. Banks suggest all kinds of credit facilities via cold-calls and we do not want to hear of them.


I was not big on equity investment during those years. My first equity investment was in 1994. I used funds from my CPF account to invest in most counters under the CPF Investment Scheme (CPFIS). Equity investment amount was not big. While investors were chasing stocks, I was least interested and not party to the boom and bust of the local stock market of that period.


Now that we have some spare cash, we decidedly consider local equity investment as an important asset class in our portfolio. I began to focus on local listed companies which took on an important proportion of my time reading up on these companies. Investment in local equity is for long-term gains and along the way, short-term sale of shares was undertaken to realise gains or to limit losses. Margin trading and contra-trading are avoided. Any loss on equity investment must be something we can afford to lose. Still we stay true to being debt-free as our most important motto.


Copyright © 2010, the author known as LKT in Singapore.


The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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