MELISSA Low's firm belief in investment lies not in monetary terms, but in investing in herself.
To this end, the 26-year-old accountant takes the time and effort to attend investment seminars and to pore over books and research before deciding what to invest in.
Her passion for investment lies in real estate and to date, she has three properties in Malaysia to her name, with one rented out at a 7 per cent yield while the other two are still under construction.
Besides her main passion for real estate, Ms Low has also diversified into an online and book distribution business, where she sells books concerning real estate. http://www.alphamarketingsg.com/
Q: How did you handle money when growing up?
A: I was very prudent with money. Since young, I had been financially independent. My venture into business started when I was as young as six years old, when my neighbours and I would organise house parties and charge an entrance fee to other neighbourhood friends. In school, I would organise games and events where again I would charge a fee for participation.
Q: What sort of financial planning have you embarked on?
A: I've placed 60 per cent of my assets in real estate. I also have a few insurance policies in Singapore and Malaysia. I also invest regularly in unit trusts, which so far have been giving me a 30 per cent return because I invested in commodity-linked unit trusts during the financial crisis.
Q: Do you spend more or save more?
A: It depends on certain months. When I buy property, I will certainly spend more, but I consider that as an investment rather than pure liability spending. I only shop when necessary or when there are bargains.
Q: Do you use credit cards?
A: Yes. Having credit cards can be good for loan application if you pay your bills on time. The Central Credit Reference Information System or Credit Bureau Singapore keeps track of your credit record, which can be helpful when you apply for a loan, as a clean record can help you secure one much more easily.
Q: What got you interested in investing?
A: I was influenced by my dad, who is an entrepreneur himself. I was taught to be independent and work hard for what I want in life. When I joined the corporate world, I realised I was living paycheque to paycheque, and having an investment plan assures me of a side income as well as a way out of the rat race, as I have control of my finances.
Q: When and how did you get started investing?
A: I first invested in a bubble tea business when I was 23, which folded after six months. I then decided to earn passive income instead, and hence I started to actively search for real estate properties in Malaysia.
Q: What do you currently invest in?
A: Real estate is my main investment. I also invest in my own business, Alpha Marketing, which sells and distributes real estate books and research articles online.
Q: What is your investment strategy?
A: My objective is to buy properties with positive cash flow. At the moment, I only have one property in KL with a yield of 7 per cent and two under construction, one of which will be ready next year, and the third one due four years later.
Due to the new cap of 70 per cent margin of financing for third properties onwards, my investment activities has slowed down tremendously.
Secondly, I buy properties in prime locations and target the middle to higher income tenants, as I do not want the hassle of dealing with problematic tenants due to the distance as I am currently working in Singapore.
Q: How would you describe your risk appetite?
A: Prudent. I do my homework before putting my money down. I buy properties for yields and am not much of a speculator.
Q: What has your best investment been so far?
A: An office lot in the city centre of KL. I bought it for RM700 (S$284) psf, the project beside the office was launching at RM1.2k, that is already a gross RM500 psf gain.
Q: What has your worst investment been so far?
A: Most probably my bubble tea business at Wisma Causeway, KL. It was mismanaged and not quite optimised despite it being located strategically. It was also a hassle to manage as I was in Singapore. Long distance management is not suitable for a retail business.
Q: Any tips to share from experience in investing?
A: Do a lot of research and mingle with the right crowd. Networking is important.
Invest in financial education, attend seminars and set an objective when you invest.
Before you start parting with your hard earned money, set aside a few hundred dollars to be educated, be it through books or seminars. Take action only after you think you are ready.
In terms of real estate, look for undervalued, distressed and fire sale properties.
Q: What are your long-term investment goals?
A: To have five properties giving me positive cash flow before I turn 30.
Q: If you were a millionaire, where would you put your money?
A: I would invest in real estate and would like to set up hotels. It will be killing two birds with one stone, as I like businesses and real estate. Owning a hotel would be good.
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I know there are a lot critics out there questioning how did I do it, owning 3 properties in short one year.
First and foremost, I do not inherit any riches from my parents, infact I am funding my youngest sister's education to a private university in Malaysia. My capital purely derives from my salary as an accountant in an MNC, if you must know, I work in IKEA Singapore. Before that I was an auditor in KPMG Singapore.
My bubble tea business only cost me about S$2k to set up, if you convert into RM, thats about RM5k, how did I do it? Magic. Being an accountant, I know my numbers. My business was just breaking even when I close it down. Was thinking to revived it but again distance is an issue.
How did I managed to afford 3 properties?
1. I earn in S$, thats 2.4 times for you :) Don't blame me, blame the currency.
2. I don't go for long holidays, the further I have been to is Hong Kong, and even that is sponsored :D.
3. I bought undervalued property (not very much undervalued but still below market).
4. My dad's a contractor, so I save a lot in renovation as he only charges me for the material and labour :D (ES Interior - 012-3983903 ask for Mr Kingston Low)
5. I have got the guts to sign on the dotted line. I dont have much liquid cash in all honesty, you can rob me but there is no money in my bank account.
Cheers :D
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