Growing up was a challenging time for Ernest Tan with his parents arguing over money matters day in and out.
His family was not well-off, and his father knew nothing about managing finances, which made it harder to make ends meet. His dad had tried working in various trades, from selling soya-bean milk to starting a renovation contracting business, but none of them took off.
At the age of nine, young Ernest, the eldest of five siblings, had to help bring home the bacon by dehusking coconuts at his grandmother's market stall, often late into the night.
"My grandmother was always spoonfeeding my father financially," Mr Tan, now 55, recalled during an interview with The Sunday Times. "When she died, he had no way of managing the family's cashflow, and eventually went bankrupt."
This financially difficult childhood cemented Mr Tan's commitment to work hard for a better life.
Determined not to end up like his father, he took on all sorts of jobs - from plumbing, to running a karung guni business, to driving a taxi - until he found his calling as a financial practitioner at the age of 36.
Today, he is the founder and managing director of a financial education company, Jopez Academy, and a staunch advocate of financial literacy.
"I wasn't given the privilege of picking up the rules of the money game, nor did my father, who barely provided for the family. But money is one thing that we deal with every day. We must learn to talk about it and understand what it means to handle it well, especially from a young age."
Through Jopez Education, Mr Tan runs training courses and workshops that teach both children and adults about money and investments, along with managing their available resources. Last year, he put out a book, Financially Savvy Kids, aimed at helping parents inculcate positive habits and attitudes in their children when it comes to money.
"Many children these days don't see the hard work that comes before the money.
"They don't know how much they're paying for a packet of Ribena. If they don't have enough money, mummy or daddy can simply pay using their credit cards or get more by 'pressing the wall' - their way of referring to the automated teller machine."
More has to be done, said Mr Tan, to change the way children think about money, and better prepare them for the working world.
"They need to learn how to be responsible in saving, spending, and managing their own allowance," added the father of three, who stopped giving his children pocket money after they finished secondary school. His children, now aged 23, 25 and 28, had to take on part-time jobs to fund their own fees for tuition lessons.
"The children can compare with their friends, in terms of what they have and what they don't, and they can resent me," said Mr Tan. "But along the way, they have to know that money doesn't fall from the sky. Then they know I meant well for them."
Q: Are you a spender or saver?
Because of my family's past financial experiences, I am very careful with my money. So I save, spend, share, and invest according to what I have allocated in my "money jars".
I have six such "jars" for different purposes - financial freedom (money that is locked up in long-term investments), saving for spending (money set aside for bigger-ticket expenses such as vacations or even credit card bills), necessities, education, play, and giving.
Each jar gets 10 per cent of my monthly income, except for necessities, which get 50 per cent.
Q: How much do you charge to your credit cards every month?
I charge about $2,000 a month to my cards for family expenses and entertainment, unless I am on a business trip, where I may then spend a little more.
However, I pay all my credit bills in full every month from my "saving for spending" jar.
Q: What financial planning have you done for yourself?
Since entering the financial industry about 20 years ago, and having attended numerous wealth mastery workshops, I have built a diversified portfolio comprising stocks, unit trusts, land banking and insurance.
I also hold physical gold and diamonds.
I've been putting my money into some riskier assets as well, including a single-country fund for India, although I am trying to hedge my returns with safer assets, preferably those that come with a stable 5 per cent dividend income each year.
Q: Moneywise, what were your growing-up years like?
I grew up in a poor family with four younger siblings in a one-room rental Housing Board flat in Mattar Road.
My mother had to support the family by working at a hawker stall, and my siblings and I had to help her at the stall as and when we were needed. My father was a bankrupt by the time I was in my mid-20s.
All that made me realise the importance and the value of money. As a child, I was independent, and I promised myself not to be poor when I grew up.
I worked odd jobs during the school holidays to earn my own pocket money, and learnt from my mother the habit of saving for a rainy day, which later helped me to weather two retrenchments.
Q: How did you get interested in investing?
I started investing when I was about 25, but didn't make good money out of it. It was only when I became a financial practitioner that I started getting serious with investing again, this time with coaching from various mentors.
Keeping money in the bank today is only letting its value erode via inflation.
Q: What property do you own?
A four-room HDB flat in Hougang that my family and I live in today.
I'm definitely on the lookout for a good buy in the property market, if the price and conditions are right.
Q: What's the most extravagant thing you have bought?
I've spent more than $50,000 on various financial and wealth mastery seminars as well as workshops.
It was painful for me, at the beginning, to spend such a huge amount of money, but looking back, I'm glad I did so.
The only way to get out of the rat race was to set aside some money to build my financial education, which has, up till today, empowered me greatly.
Q: What's your retirement plan?
My plan is to build my business and investment portfolios, and draw passive income from them.
Currently, income from my business and dividends from my investments provide me with a passive income of $5,000 each month, which is sufficient for a comfortable retirement lifestyle.
Q: Home is now...
Still the same four-room flat in Hougang. My family and I have been living there since 1985.
Q: I drive...
A Mazda 6.
WORST AND BEST BETS
Q: What is your worst investment to date?
Penny stocks. I bought them when I was in my early 30s after listening to what other people were saying, but they didn't make any money for me.
In fact, I think I lost at least $6,000 to $7,000 on those stocks.
Q: What is your best investment to date?
I bought a landed property in Tampines Road back in 1999, when I was 39. It cost about $1.1 million and was my biggest single investment.
Twelve years on, in 2011, I took advice from a good friend and sold it for close to $2 million, which translated to a gain of about 90 per cent.
It was very good timing, just before the various property cooling measures were introduced, because the real estate market went down right after that.
I'm still looking to buy property now. I'm just waiting for the right time, conditions and price.
Looking at the landscape of Singapore, the prices of real estate will always appreciate.
Another of my best bets was having put my money into the various wealth seminars to build my own financial knowledge.
Without that kind of education, I wouldn't have known my mentors, who convinced me to take the bold step to invest. I wouldn't have dared to buy property or stocks, or learnt the right financial planning skills, such as mitigating risk by putting my eggs into different baskets.
It showed me what financial freedom really was and gave me the ability to provide stability for my family.
The way I do financial planning is just like gardening, which is something I love. You need to plant the seed and have the discipline to water it regularly, observe it and take good care of it so it can grow.
Do you believe I can grow grapes in Singapore? I have a grape plant at home, and it has already borne fruit. It gives me a sense of achievement - just like my good investments.
This article was first published on April 12, 2015.
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