Financial disasters are not always triggered by bad investments. The choice of one's life partner has a critical bearing on one's financial happiness too.
In the case of orthopaedic spine specialist David Wong, 47, if he has any regret in his life, it would be his first failed marriage, which lasted 14 years. As the property market was down when he sold his first matrimonial home in 2000, he lost about $200,000.
He got married a second time in 2002, but is now going through a separation. Another divorce may mean a further depletion of his assets.
When it comes to investments, Dr Wong believes that you have to start with a stable stream of income.
'With the power to earn money and a stable income, one can invest more. So building up one's career is the first thing. For example, without the power to earn, no one will give you a loan to buy a house with,' he said.
He has indeed focused on building up his career. After being a general practitioner for three years, he underwent extensive training for about eight years before becoming an orthopaedic spine specialist. He has been with Raffles Hospital since 2005. Before that, he was at the National University Hospital for 10 years.
With a stable income, Dr Wong has invested in three properties, all of which have appreciated recently.
'One cannot depend on salary alone. We need passive income as well...I hope to be a business owner rather than a worker,' he said. At a later stage, he hopes to invest as a private equity partner in medical-related firms.
Dr Wong has two children - Samantha, 15, from his first marriage, and Sidney, four, from his second.
Q: What are your money habits like?
I adopt the following practice, which has served me well over the years: 10 per cent of my income in a savings account, 10 per cent for investments in structured deposits, 10 per cent for self-education, 10 per cent for charitable causes and 10 per cent to 'blow' on indulgences. These include golfing and eating at nice restaurants occasionally.
The remainder is used to pay for my mortgages, insurance, utilities and daily living activities.
The maxim 'nobody cares about your money as much as yourself' holds a lot of truth. In the past, I sought advice from insurance agents, but now, I manage my own financial affairs.
Q: What about insurance planning?
Having read several Straits Times and Business Times articles on insurance, I now believe in term policies and paying premiums primarily for protection.
Insurance companies might not be the best choice for investment as it is not their core competence. I have term insurance, a hospitalisation Shield plan, disability income and endowment policies.
Q: What's your investment philosophy?
Although I believe in saving for the proverbial rainy day, it's important to also enjoy the present as we do not know what might happen tomorrow.
If one follows the way I proportion my monthly earnings, one can have the best of both worlds.
Q: What are your property investments?
I have two condominiums in district 10, both of which have been slated for collective sales.
One is a 3,800 sq ft unit at Ridgewood near Pandan Valley, which I bought in December 2005 for $1.3 million. It is now worth nearly $3 million and the monthly rental is $6,500.
In 2002, I bought a 1,700 sq ft Pine Grove unit for about $1.4 million. It is rented out at $2,500 a month.
I also have a five-room HDB flat at Holland Close, which I bought in 2003 for $528,000.
Q: Moneywise, what were your growing-up years like?
I came from a humble background and my parents have instilled in my two brothers and me the value of money.
My father, a cobbler who later set up a small shop in a market to sell shoes and sundry goods, died of a heart attack during my first year at medical school. Thankfully, an uncle in Hong Kong sent us money regularly to help cover our education costs until I graduated.
I did various part-time jobs, including being a relief teacher and a hamper salesman. At university, I managed to get scholarships for three years.
Q: What is your best investment?
My best investment is the Ridgewood unit.
Apart from my property acquisitions, I have invested heavily to improve my skills by going for upgrading courses in state-of-the-art procedures for spinal surgery, such as artificial disc replacements, nucleoplasty, kyphoplasty and so on. In 1997, I joined a year-long spine specialist training programme at Nottingham University's Queen's Medical Centre in Britain. I spend about $5,000 a year on self-help books and overseas training and conferences.
Q: What has been a bad investment?
I have one failed marriage and that has affected my net worth. Both my marriages have cost me a lot of money. Properties get divided and if they are sold when markets are down, one can get saddled with negative equity. That was what happened in my first divorce. It is also expensive to engage a lawyer. My legal fees totalled about $40,000 for my divorce.
If I have another divorce, all three of my properties are likely to be sold.
The best thing to come out of my marriages would be my two children.
Q: What's your retirement plan?
There's no real need to 'retire' as such because I truly enjoy my work. I suppose when I start to take it easy, I would maintain my current lifestyle through passive income, that is, rental income, share dividends and business returns.
Assuming my properties and car are paid for, I would need around $4,000 for my monthly expenses.
Q: And your home now is...?
I rent a two-bedroom condo in Bukit Batok for $3,000 a month.
Q: And your car is...?
A black Toyota Picnic.
This article was first published in The Straits Times on May 11, 2008
