Jazreel Low only got back $2,000 from her $200,000 stock investment in 1997

Jazreel Low only got back $2,000 from her $200,000 stock investment in 1997 SqIWtbh

Me and My Money is a section in the Sunday Times where they interview many successful people so that readers can perhaps be, inspired to learn from them.

Often I find that most of the successful people are property agents and business owners. It shows how difficult to become successful in life as a person building wealth with stocks and bonds.

This week they interviewed ex-actress Jazreel Low who was part of the first Star Search with Zoe Tay (if my poor memory serves me correctly)

Jazreel is more of a business owner nowadays and a pretty successful one at that.

We try not to post the full article but perhaps I can summarized a few interesting part of the interview

  • She came from a big family where she had to help up in the family’s bicycle manufacturing business. Money was hard to come buy and they can only spend on the necessities. She went through the same experience as a lot of us, teaching tuition, taking on part time jobs, even the ones I did before, hamper packing
  • She is more of a spender instead of a saver. The thought of saving only entered her mind when her daughter was born 11 years ago, at 36 years old
  • She got started investing with the influence from friends, where a couple of them were remisiers. She suffered her worse loss (she described that she lost her life savings) in 1997 which coincide with the Asian Financial Crisis where she put in $200,000 and only manage to get back $2,000. She says “I realised that unless you have the time to monitor and know what you’re buying, don’t go in. I was just following my friends, not knowing what I was doing.”
  • She also shared her bad experience with investing in properties in China, investing in an apartment after hearing that there are easy money to be made. “Strangers just took over my apartment and lived there, squatted there. I wasn’t familiar with the legal system, and somehow we couldn’t get them to move out. So I had to sell it, at a loss. I just wanted to get rid of it.”
  • Due to the trauma she have not held any stocks and shares since. She prefers to stick with things she knows and more “passive” things like property and endowments which she can monitor
  • She did very well in business, selling off successful bridal shop and music production house and currently operating a spa chain and eateries in Bishan
  • She doesn’t have the luxury handbags indulgence of most ladies but instead are rather weak against gadgets which she has to hid how much she spent from her husband
  • She lives in a semi detached house bought 7 years ago at 1.5 mil which is likely to worth 3 mil now. She also owns a three bed apartment at The Lakefront Residences with her mother and sister and drives a Mercedes Benz A Class Hatchback


I find that there are a few take-away from the article.

Fear of bad memories

Many people steer clear of traumatic events in their lives. After it, they want nothing to do with it. It is not just restricted to wealth building. My colleague refuse to eat sweet potatoes after being forced since young by her mom to eat it to the point of vomiting. No matter how we encouraged, she won’t eat it now. Same for bad experience with dogs when young.

It must be real bad to see all you own dwindle from $200,000 to a fraction of that. Those that have been through some of the bad crisis would tell you it is very difficult to prepare for it.

But it might make you steer clear from it. Never to touch it again.

Some of the worse outcome is that it might create some fundamentally flaw plans due to this experience or plans that are not well thought out, such as “Next time to be safe, I will move 100% to cash and then get back in, instead of stupidly holding and watching it go down”

The bad experience not just affected single individuals but also the people in tune with the topic. Those that did not suffer also learnt from it, and it would seem, lost a bit of rationality there.

The rationality is that it is difficult to predict the magnitude of drawdowns, or for the matter when they will happen.

It resulted in the best case study in 2011, where due to the European PIIG crisis, the local market dropped 19%.

Due to how close this even was from the 2008 crisis, every big drawdowns of 10% magnitude, which normally looks okay, looks like the beginning of a 50% drawdown.

Many were sure the magnitude of the drawdown would be like the 2 crisis: at least 50%.

Many were happy that they are in 100% cash.

Turns out the market didn’t go any lower than that. The biggest mistake that people failed to learn is that you can be overweight in cash, BUT you cannot not get back in at good prices. This second part is about magnitude and its hard to tell.

Perhaps a more systematic plan would help better. Read the important part of a market crash.

Knowing what you are doing (really)

The temptation of easy money is hard to avoid and we hear this even in office as the society gets more sophisticated.

To put almost all your savings into stocks and shares or something that builds wealth, say Land Banking, Property, Startups, you need to know what you are channelling to well.

Often, do have a hard reflection and assess if you have achieve a level of competency to divert such a large amount of your wealth building fund to a single endeavour.

We do not know Jazreel well, but from the account given, she might not have a good investing system to begin with, garnered by investing time and effort to build up knowledge to implement the system.

Most would advocate diversification, but I disagree to a certain extend that if you felt that you really have a competency, then go ahead, proceed with a good system

People look at a Stock Market really differently

Jazreel have shown to be a great business owner and operator. To be successful in not just a single business type but as diverse as Bridal, music production, eateries and health related is astonishing.

I wonder why she couldn’t look at stocks as how she would look at businesses. Perhaps without the right mentor and guidance, she would not have awaken to look at stocks as similar to how she would run her businesses.

Or perhaps the market is as treacherous as she make out.

There are traders, short term and long term, they are the fundamental investors, but mostly they are made up of people with hased up plans or lack of any plans.

Its never too late to get started

She really got started at 36 years old, but i wonder if that is a bit misleading since, how did she lose 200k in 1997? Perhaps memories are faulty.

I have friends who realize the virtues of savings or wealth building late, and they lamented that they should have started some time ago.

We can’t always turn back time but take the cue from Jazreel who showed that starting late but with good perseverance can still be rather potent. If you start at 31, you do still have a good 30 years to go.

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CPF Discussion Points: Longevity, Adequacy, Housing and Withdrawal Age

CPF Discussion Points: Longevity, Adequacy, Housing and Withdrawal Age VideoPic

The government’s PR machine is on an overdrive regarding this CPF debate. A few bloggers were invited to listen to it and write about it. I wasn’t there. In the Straits Times this morning, some experts share their views on how to restructure the CPF for the sake of a better retirement for all.

Let me pick out the salient points:

  • There are folks who raised to make the system more flexible so that they have a chance to earn a higher rate of return (Kyith: isn’t the current system already facilitating that)
  • There are folks who felt the CPF board should tweak the amount given back
  • Mr Tharman surprised the participants by saying, to allow for a private pension plan, first discussed by the government in 2007 may still be an option
  • Professor Cherian from Singapore Business School likes a private pension plan. This should not touch the current CPF (meaning keep CPF Life Annuity). Only have 3 options based on risk appetite, conservative, moderate and aggressive (Kyith: he is right that currently too many options, the majority are not well versed to pick them and they serves more to confuse and the ones who reaps the most are the fund companies not the investors.)
  • Wong Su Yen, chairman of Marsh & McLennan Companies, thinks the current system has not so much diversification
        • Wong Su Yen suggest start investing the CPF before hitting the minimum earlier and lowering the administrative cost. She cites research from a subsidiary of her firm Mercer, which advise the original CPF IS that this could boost values by 16%
        • Donald Low, LKY School of Public Policy: There is no distinction between the 25 year old adult and the 65 year old one
        • Stats have shown that almost 50% of those invested between 2004 to 2013 incurred losses. Only 18% managed to beat 2.5% returns
        • People compare the CPF to the Malaysia EPF which yields higher returns at 6.35% last year
        • A.Prof Hui Weng Tat, LKY School of Public Policy: The official statements may paint an overly optimistic picture, causing under saving and disappointments in the future
        • A.Prof Hui: Official statements state that Income replacement rate(IRR) of 60% should be enough for retirement. He thinks this is unrealistic that the same person who starts working and end working would have the same income distribution. If you start working as a grad with $3k you should end up with a much higher salary. Prof Hui computes that for a $3k salary the IRR is at most 50%. If you use CPF for housing, it drops further to 30%. These people may not save enough because they trust the official statements and think they have saved enough
        • Prof Hui thinks that for the lower income, the CPF is enough, and may even be more than enough to replace 70% of last drawn pay (Kyith: that is if they can meet the minimum sum)
        • Prof Hui thinks that if the government is worried about this group, they should remove the salary cap (currently $5k) so as to save more
        • Prof Hui also proposed giving folks the option to put more money in to meet the minimum sum
        • Raising the minimum sum is the end result of not raising the withdrawal age
        • Withdrawal age is determined by life expectancy, which is increasing
        • They are proposing for the withdrawal age of 55 years old to be raised. It has to be done gradually because it will not go down well with the people
        • Prof Hui says why not raised the withdrawal age by 2 years only for those just entering the workforce.It doesn’t matter to them because it is 40 years away!
        • The major flaw of the CPF system is that you need to contribute to benefit. Women who leave the workforce, the disabled who aren’t able to work are the ones who fall through the crack
        • Most of the experts have no solution to this. Mr Low cite to provide top up for those who don’t meet the minimum sum, but to give them the incentive to work, only top up at the age of 75
        • Singaporeans have put too much of their savings in housing, which is illiquid and hard to extract cash out of
        • Donald Low of LKY School of public policy and real estate expert wants to lower the cap that can be used for housing
        • Augustine Tan: Asset appreciation is going to be problematic in an aging population. Who is going to buy your flat?
        • Prof Lum: People spend 30-40 years to build up for it, and they have a problem extracting cash out of it
        • The people are sitting on a gold mine, but they have an emotional attachment to it
        • Monetization means are also weak
        • Lease Buyback Scheme (LBS): Lease back to housing board, continue to live in it for 30 more years. But May reintroduce reverse-mortgages which was removed due to low take upwhat if the person lives until 95 which is more than the 30 years?
        • They also say if you don’t want future generations from facing this risk, maybe you should let them take up at all