Friday, March 08, 2013

Leadership - by Japan Airline CEO

Quah Kok Hwee said:
I attached an article here about the leadership of Japan Airline CEO. 
And I wonder how many leaders in Singapore, I am referring to MPs,
Ministers, Management of Govt Linked firms, do the same as JAL's 

CEO of the People, Haruka Nishimatsu of Japan Airline truly brings leadership to a while new level of meaning.

(1) ...his morning commute on the city bus, Haruka Nishimatsu heads into the office and gets busy at his desk with the rest of his Japan Airlines coworkers.

(2) At lunch, he lines up in the cafeteria...

(3) Not exactly the glamorous life you'd expect from the CEO of one of the world's top ten international airlines. Is it so strange, asks Nishimatsu.

(4) ...when JAL slashed jobs and asked older employees to retire early, Nishimatsu cut every single one of his corporate perks, and then for three years running slashed his own pay. In 2007, he made about $90,000 U.S., less than what his pilots earn.

(5) In Japan, says Nishimatsu, there's less of a pay gap between the top and the bottom. "We in Japan learned during the bubble economy that businesses who pursue money first fail. The business world has lost sight of this basic tenet of business ethics." Nishimatsu says his airline has a long, difficult recovery ahead. As far as his pay, he's dug into his savings like the rest of us.

(6) “If management is distant, up in the clouds, people just wait for orders,” Nishimatsu told CBS News through a translator.

(7) “I want my people to think for themselves.” Nishimatsu says a CEO doesn’t motivate by how many millions he makes, but by convincing employees you’re all together in the same boat.



The Gold Guarantee

Mr. Tan
t is Sunday Times feature of the founder of The founder of Gold Guarantee. Just proves one more what poor disservice The Straits Times does to the public in advertising examples of fake successes bordering on fraud.

The Straits Times
Jan 15, 2012
He plans to give millions to charity

Businessman aims to achieve net worth of $200m and give away 90% of his money

By Joyce Teo 

Business owner Lee Song Teck, 33, is a goal-oriented person who cannot sit still. Just four months ago, he started a gold trading business, and is now preparing to start three more businesses. 

Still, his agenda is not as daunting as it might seem at first sight. 'Over the years, I have learnt to delegate, and to create a system that allows the business to run on its own within a shorter period of three months, instead of two years,' he said.

What spurs him to work hard is his drive to contribute to society.

Eventually, he aims to give away 90 per cent of his wealth to charity. Money does allow you to enjoy life, but the happiness you gain from material possessions is short-lived, he said.

He has sponsored more than a dozen children through World Vision, an international humanitarian organisation, and at his new firm, The Gold Guarantee, he involves his staff in charity work. 

Mr Lee took over the family business in animal pharmaceutical products when he was 20. Two years later, he went to Sydney for undergraduate studies, and to explore living a holistic lifestyle that involved yoga, meditation and martial arts.

Since his return to Singapore, the bachelor has tried his hands at being a property agent, and running a fitness centre and a property investment seminar business. He has also invested in property and gold.

Q: Are you a spender or saver?

I would say I've been a saver in the past 10 years, but my mother would say otherwise. Since I turned 23, I have realised the importance of becoming financially free and creating wealth for the sake of giving back. This is why I save and invest most of my money.

I would say that I spend just about 10 per cent of my earnings. I invest most of my money because I believe saving alone will not help me achieve the financial goals I set when I was 24. 

I was very aggressive in spending on my personal education, in areas such as investment, wealth creation, business, marketing, sales and health. I must have spent more than $200,000 on attending seminars on these topics - more than 30 over the past 10 years.

I invest most of my money in my businesses. I do not smoke, drink or gamble, and I am not into fine dining. The only luxury items I spend on are spa packages for me and my friends. I also buy presents for my friends. It feels nice to be able to buy things for the people I love.

Q: How much do you charge to your credit cards every month?

I charge around $10,000 to my credit card a month. It's a mix of work and personal expenses. I do not carry any credit card debt. In terms of cash, I withdraw a few thousand dollars a week from the bank.

Q: What financial planning have you done for yourself?

I believe in only real estate and gold, which I can see and touch, and which have real value. 

My gold investment portfolio is now worth $30 million.

I have achieved average returns of 200 per cent a year from my property investments and some of my businesses. I plan to achieve a net worth of $200 million; when that happens, I intend to pledge 90 per cent to charity. 

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

I am an only child, and I lived on a pig farm until I was eight. Our farm seemed huge, but we were one of the few poor pig farmers at the time. 

My father set up the animal pharmaceutical wholesale business while running the farm, and my mother helped him with the accounts.

However, we were quite poor until about 10 years ago because my father, who died when I was 17, was a gambler. My parents used to tell me I must never gamble. 

Q: How did you get interested in investing?

It was after I attended personal development seminars. I also read many wealth creation books, which led me to decide on real estate as my investment vehicle.

Since turning 24, I have made sure that whatever path I took would lead me in the direction of becoming a real estate investor.

My first real estate investment was in a rundown basement shop at Golden Mile Complex, which I bought for $250,000 five to six years ago. I sold it three weeks later for $320,000. I put up only $2,500 in cash for the purchase - for the 1 per cent option on the property - as I had managed to negotiate an option period of one month.

Q: What property do you own?

I co-own a highway and a commercial building in Tianjin, China, with my father's best friend, who is a billionaire in Malaysia.

I also have a 12-unit apartment block in Central London and 16 commercial units in Kuala Lumpur. My aim is to spread my property portfolio over five countries to reduce the risks. 

In the past two years, I have sold my properties here, including a shophouse in Chai Chee and a Belmont Green condo unit, as I was anticipating a price correction. 

The market fell in 2008 after I bought the Belmont Green unit, so I had to hold it for three years. I made half-a-million dollars in profit. 

Q: What's the most extravagant thing you have bought?

I recently bought a new Bentley Supersports for $1 million. It's my dream car.

Q: What's your retirement plan?

I have no retirement plan. I feel very fulfilled because I wake up every morning knowing I'm serving thousands of people. 

A year ago, I went to five fortune-tellers, and they all said I was meant to be a teacher. It was the first time I had had my fortune read, and I didn't understand then.

I thought my calling was to make $200 million and leave it to charity. Now, after having set up my gold trading business, I finally understand what they meant. 

As I make my money, I am also inspiring people around me. Anything is possible as long as you believe you can do it. But if you don't believe you can do it, you have already succeeded in failing.

I think I would need a passive income of $100,000 to be able to spend fairly freely. I became financially free a year after I went into the budget hotel business.

When I reach 35, I will spend less time on my businesses and focus more on my spiritual side. I want to set up a non-profit martial arts studio.

Q: Home is now...

A corner terraced house in Hougang, where I live with my mother. It is opposite our animal pharmaceutical business shop, so we store some of the products in our living room.

The house sits on 4,000 sq ft of land and has built-in space of 6,000 sq ft. My mother bought it for $1.2 million eight years ago and spent $1 million rebuilding it. It is now worth about $4.5 million. 

Q: I drive...

A white Bentley Supersports and a white BMW 5 series model.

A different President

Ivan Yeow asked:
I was following the presidential elections in Melbourne while studying and rooting firmly for my Ex-MP Dr Tan Cheng Bock. And I was sorely disappointed when he lost by a few thousand votes. Would love to know your stand on the following questions

1. What are your feelings on losing your deposit for the presidential elections?
2. How would the elections been different if you and MR Tan "check-and-balances" Jee Say did not participate and split the "opposition" vote?
3. Would it be very different today if we had a different president?


1. I was disappointed on the night of the results, but I forget about it the following day. The loss of the deposit is a small matter for me. The disappointment was greater.

2. If I did not participate in the Presidential Election, it was most likely that Tan Cheng Bock would be disqualified for the same reason that Andrew Kwan was disqualified in the previous election. See my blog post

3. If we have a different President today (instead of Dr. Tony Tan), there will be a small difference, but it will be insignificant. When Ong Teng Cheong was President, he had strong differences of views with the Government, but could not make them known to the public until his last few days in office. I don't think that TCB could make a difference, but this is just my personal opinion.

I now wish to add a few words that were not said before. Shortly after I collected the nomination form, I approached TCB for a discussion about collaboration in the event that only either or both of us were approved. His reply was "wait for the Election Committee to decide first".

In the following weeks, I received vicious and malicious attacks in the social media and they were traced to supporters of TCB. I protested about this attacks to TCB's campaign manager, whom I know personally, but he denied the allegation. After that, I gave up all thoughts of collaboration.

For supporters of TCB who were disappointed that he lost for a few thousand votes, the outcome would have been very much different ,,,,,, if some of their supporters had not played "dirty politics".

Wednesday, March 06, 2013

Cost of raising a child

Here is an estimate made by Ryuu Shun Hayashi 

Food - approx $400 a month.
Transport - approx $200 a month.
School fees - approx $500 a month (from primary which is cheaper than this to uni which is much more expensive than this).
Housing - approx $200 a month if two children share a room, in terms
of cost difference between 4 room and 3 room flat divided by number of years.
Miscellaneous - medicine, clothes, computers, interests, lost income due to child sick leave etc - approx $500 a month.

Total cost - $1,800 a month ish.

$21,600 a year.

For the 25 years that they'll be under your care, that costs $540,000 per child. I estimate I cost my parents about $400,000 in total so far, costs were lower previously. And I never took tuition classes, but still ended up near the top tier of the A levels. Tuition isn't necessary - you can do a lot better than it for free by simply bringing your children to the library often when they're young, and inculcate a reading habit. There's no better way to teach a child than to teach a child how to learn by himself/herself. I used to give my mom quite the headache by reading 32 books every week - weekend trips to Queenstown community library and all that.

But to be safe you'll need to budget S$600,000 to take care of a child if born today - and this is WITHOUT budget for tuition classes.

If only one parent works, and earns about $3k (or if both work and earned a combined amount of 3k), that's 36k a year. Deduct expenses, the most frugal people can save about 20k a year under these conditions. It takes 30 years to fund one child by one parent. Don't forget you still need to spend on the wedding and on the HDB flat, and you'll need money to take care of your retiring parents as well (or rather, you should need money to take care of them - please don't be an ingrate to them), as well as save for your own retirement. That puts the maximum practical number of children for a couple with one working PMET parent (or 2 blue collar workers) as exactly 1. The maximum practical number with two working PMET parents is 2.

Is it any wonder that few people have more children than 2? Until the income divide is fixed by the State, there will be no increase in birth rate. It is simply impossible to come up with enough funds to safeguard everything even with prudent investment on current pay to support more than 2 children. The only way you can have more, is to cut back on something else - risk your own retirement and put yourself at the mercy of your children or stop taking care of your parents - and neither is a good option.

The Gold Guarantee

Investors of The Gold Guarantee sign Petition

It is quite sad to have another group of investors lose so much of their savings. They are partly to be blamed, because they wanted to earn the high interest rate, which is really impossible.

So many people are involved due to the activities of the financial advisers, who sold these products to them. As the financial advisers are licensed by MAS, the investors may not realize that the products are not approved by MAS. It is necessary for MAS to ban financial advisers from selling non-approved products, to avoid any misunderstanding.

The petitioners asked MAS to stop similar schemes from being sold to the public. I agree with this request. MAS should step in and regulate all financial products, instead of leaving some of them as unregulated. A financial product can be defined as one that promises  a full or partial return of the principal, or payment of regular interest.

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