He saves $16 K of of $20 K each month

March 16, 2008

ME & MY MONEY: He saves $16k out of his $20k pay each month

Financial adviser Eugene Soo makes regular investments and his unit trust portfolio reaps annual returns of 20%

By Lorna Tan, Finance Correspondent


MR EUGENE Soo, 26, has barely worked for two years since graduating from Nanyang Technological University (NTU) with a degree in business administration in 2006. But he is already earning an income that is surely the envy of both young as well as old graduates.

A licensed financial adviser representative with Professional Investment Advisory Services, his gross monthly income exceeds $20,000 a month. This includes his own sales commissions and overriding commissions of his team of 40 advisory representatives.

His interest in the field of personal finance was ignited when he signed up for a banking and finance diploma at Nanyang Polytechnic and found himself topping his cohort in the first year.

'I found out that I was inclined towards finance and numbers...and that spurred my interest in investing,' he recalled.

At NTU, he was the president of its Investment Interactive Club where he had a hand in organising talks and competitions to improve the financial literacy of students. Before long, he was itching to join the real world of investing and eventually took the plunge in his final year at the university by joining a financial advisory firm as an advisory representative.

That year, he qualified for the Million Dollar Round Table - an international, independent association of the world's most successful life insurance and financial services professionals - and was earning $8,000 to $10,000 a month. This was on top of his other income from giving tuition and running a mobile motorbike washing business which he had set up in his polytechnic days. He joined his current firm in September last year.

'I enjoy what I do. Helping people to grow their finances and giving them advice gives me satisfaction and drives me to want to excel,' he said.

His advice to young people is that they should start planning early as the most important factor in growing one's wealth is not how much you have, but how long you have to grow your money.

'Make it a habit to save and the desire to own something, be it an asset, material stuff, or your dreams. Aim for something in life. Never wait for an emergency before realising the importance of planning early,' he said.

Q What are your money habits?

A I used to be a spender when I was in school and when I first started work. I spent almost all that I earned. I would save for something and one big purchase would wipe out my savings.

But I am now a saver and I save close to 80 per cent of my income for long-term goals. I pay cash most of the time and use credit cards only if there is an interest-free payment tied with the purchase.

Q What financial planning have you done for yourself?

A About 15 per cent of my investments are in investment-linked insurance products (ILPs), while 75 per cent are in a unit trust portfolio which I started in my polytechnic days. The balance is in stocks.

My unit trust portfolio comprises 100 per cent equities, mainly in commodities and Asia-Pacific funds. It is also mainly in high-risk sectors because I am building it on a long-term basis.
I monitor it on a weekly basis and it has generated an annual return of 20 per cent.

Q What about insurance planning?

A I have mainly term plans, a whole life plan and ILPs. I am covered for $500,000 on my life. Annual premiums come up to around $5,500.

Get a foundation plan like a whole life and enhance it with a term cover in your prime years. The advantage of a basic whole life plan is that it locks in the premiums at an early age and still gives a cash value when you surrender it in your later years.

Q What's your investment philosophy?

A I believe in dollar-cost averaging over a long period of time. I have been in the market since my polytechnic days and have been pumping in regular investment amounts using my salary from part-time work.

Over the past few years, there were many uncertainties and events that adversely impacted the returns of my portfolio. But by constantly investing into the market, I was able to average out my cost as I am able to buy equities more cheaply when the markets are down.

Overall, this helped me to achieve decent positive returns that outdo the returns of savings accounts.

Q What businesses have you gone into?

A I have a passion for motorbikes, which was how I got the idea for a mobile motorbike washing business. This was set up during my polytechnic days and it generated close to $6,000 a month, excluding exam periods.

I went to condominiums and offered washing, waxing and polishing services to motorbike owners. Now, I still get assignments from clients, which I pass on to my friends. I intend to expand the business once I find time off from my busy schedule.

I have also bought and sold motorbikes. It started out quite by accident when I was surfing the Internet and saw a cheap buy. I spotted the opportunity and made the transaction. It is possible to make up to 40 per cent profit, which amounts to about $2,500 a bike from such transactions.

When at NTU, I ventured into event planning, such as organising company dinners, which was very lucrative. The business involved securing deals and coordinating with different suppliers.

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

A I live in a four-room flat in Aljunied with my parents and sister. My father is a stockbroker, and when I was young, I witnessed how exciting watching the daily teletext could be. My mum is a housewife.

I was taught from a young age to earn money to get the things that I wanted. I did not have many toys or video games and most of the items were hand-me-downs from an older cousin.
My mum, who is a saver, used to take me to different banks every week just to deposit $10 or $20 into my accounts. 'Without $10, you think you will have $100?' she always said.

Q What's your retirement plan?

A I intend to retire before 50 and achieve a passive income of $20,000 a month. I hope to own properties in Australia and travel there often to relax.

My nest egg will be a lump sum of money invested into different asset classes such as properties for rental income, shares, unit trusts and a high guaranteed single premium plan.

Q And your car is...?

A A white Honda Integra. I bought it just before I graduated from NTU with my own money.