The Business Times
January 15, 2007
Jason Low
This 28 year-old is living comfortably on the income generated from his equities.
Financial freedom may be a distant reality for most youths, but not for this particular savvy private investor.
Alvin Chia, 28, gained financial freedom a year ago through private investing and is living comfortably on the regular passive income that his equities are generating for him today. This is a remarkable feat considering that most people find it hard to be financially free even in their senior years. With a very substancial sic figure equities portfolio, fully paid condominium home and various overseas investments, Mr Chia is very much the ideal investor that youths wants to be these days.
When asked how he started out, Mr Chia explains: "I come from a middle-class family and my parents emphasised the importance of saving right from the start. I did not received much pocket money and had to work and save to buy what I wanted."
For Mr Chia, the importance of investing struck him at a young and tender age. "I made my first conscious investing decision when I was in secondary school while I was selling hamsters to schoolmates." he says. "I realised that the more I invested in rearing hamsters, the more passive income I will receive once the hamsters reproduced."
Indeed, it is such financially astute decisions that made him the successful private investor he is today. Working as a tuition agent and toiling long hours in other part time jobs, he managed to save $40,000 for investment in equities by age 21.
But like all young investors, he made some costly mistakes at at the start but managed to turn the tide since then. In fact, he became so confident about his improved investing techniques that he decided to invest full time a few years back.
"I learnt from my intial mistakes and right now, i only invest in fundamentally good dividend yielding stocks at a discounted price from it book value," he says. "These stocks give the investor passive income on a regular basis and the potential capital appreciation to its book value in the long term makes them a highly attractive investment."
And that has been his investing philosophy for the past seven years. Even when he decided to invest full time, he did not trade in the market.
Instead, he went long on several fundamentally sound dividends ever since. Indeed, his investing style and occupation give him a lot of free time to pursue his interest in trekking in the tough terrains, especially those in Nepal and Thailand.
"I am adventurious by nature and relish the challenges posed by tough terrains," he says. "It truly develops my adeptness in making the right decisions in severe conditions, a quality that is vital in making crucial investment decisions."
In fact, he can converse fluently in both nepalese and thai and he puts it to good use. "Learning to speak the native language is not only essential in understanding the instrcutions from the trekking guides, but also gives me the opportunity to have a heart-to-heart chat with the natives to really understand the local environment."
Indeed, the well-travelled investor feels that local youths are taking the stable and safe environment in Singapore for granted. "The local youths are so much more fortunate than those in other parts of the world and should really take this opportunity to work even harder in upgrading themselves and contributing to the society," he says.
Inherent risks
But perks aside, the inherent risks of being a private investor are evident. Mr Chia has no fixed income to fall back on during rainy days and his portfolio value is vulnerable to the volatility of the market.
Thus, he has to monitor the market constantly and does his own in-depth market research. "Reported market news are usually second-hand information, hence I cannot usually rely much on these outdated information in making my investment decisions," he says.
He also has this last piece of advice for young budding investors out there: "Cultivate good investing habits early by reading about warren buffet's trading philosophy and learning from the mistakes made by other prominent and successful investors.
"Saving and acquiring financial knowledge are two life-long habits that a young investor must practise right from the start. And while mistakes are bound to be made in the process, take them positively as mistakes are the best teachers in life."