me & my money
Husband and wife sold on real estate
Their team of property agents is doing so well that they can live on passive income alone
By Lorna Tan, Senior Correspondent
Mr Kelvin Fong and his wife Janet at home with their daughters, Chloe (left) and Carlyn. The passive income generated by the commissions from their PropNex team of agents allows them to spend more time together as a family. -- ST PHOTO: MARYANNE TAN
In 2007, Mr Kelvin Fong and his wife Janet Lim - both real estate agents with PropNex - achieved their first million in sales commissions.
Mr Fong, a senior associate district director, went on to become the No. 1 team leader a year later when his team of 1,200 agents earned $13 million in commissions. His team, Power Negotiators, brought in $28 million last year, which ensured his reign as the No. 1 team leader.
Mr Fong, 35, now earns as much as $30,000 a month in passive income from overriding commissions from his team.
But in 2001, he didn't even have $5,000 to pay for the cash portion of the downpayment for his matrimonial home, a four-room HDB flat in Woodlands. He resorted to borrowing the amount from his father-in-law. The loan was repaid in instalments by 2003.
The purchase of the flat led the couple to become property agents. In an effort to earn extra income, they started out as part-time telemarketers for property agents in 2001. Madam Lim, now 36, became an agent a year later and Mr Fong followed suit in 2003, leaving the air force where he had served for six years.
An electrical engineering graduate from Singapore Polytechnic, he studied part-time while in the air force and graduated with a Bachelor of Business Administration degree in 2001 from La Trobe University, Australia.The couple now have two daughters, four-year-old Chloe and 11/2-year-old Carlyn.
Q Are you a spender or saver?
Because of my childhood experiences, I'm very careful with my money and I don't spend on unnecessary things. I believe in investing in assets that will grow.
However, I do set aside some money for family holidays, so I can spend quality time with my family after working so hard. I save about 30 per cent of my income for cash flow and invest 50 per cent in various investment vehicles, including my businesses, and spend the rest.
Q How much do you charge to your credit cards every month?
I charge about $10,000 a month to my cards. I have four cards and I pay my bills in full` every month. I withdraw about $500 a week from the ATM.
Q What financial planning have you done for yourself?
The team (Power Negotiators) in PropNex is an investment that my wife and I have built up together. It has helped us generate a good flow of passive income monthly so that we can choose not to do any sales.
Janet and I love this job so much that we will continue to serve our personal clients. We've spent $150,000 promoting the team since 2004.
I also bought insurance to provide my family with sufficient protection. I have two whole-life plans and one endowment policy. The yearly premiums are about $14,000. When they mature, the projected amount is about $1.5 million.
We've about $160,000 invested in stocks, mostly blue chips such as CapitaLand and SGX. Recently, I invested $50,000 in education and training firm Zest Consultants with some partners. The firm aims to teach property investors to be more knowledgeable in real estate investing.
Q Moneywise, what were your growing-up years like?
I am an only child. About a month after I was born, my parents placed me with my grandparents who brought me up until I was 21 years old. I grew up in a three-room HDB flat in Commonwealth with my grandparents.
My parents had to make a living so they couldn't take care of me. I saw them only on weekends when they visited me after work.
That made me realise the value of money. My father was working in a photo shop as an assistant and my mother was a waitress. I would go to my parents' three-room HDB flat in Ang Mo Kio once a week.
I was an independent child. I worked during my school holidays to earn my own pocket money and saved up for a rainy day. I took a bank loan to finance my part-time degree course during my days as a regular in the air force. I guess this is why I believe so strongly in investments.
Q Please share some property tips.
One of the key points in making a sound property investment is knowing what you can afford after taking into consideration the capital gain and rental yield potential.
I advise my clients on committing to a sale or purchase only after I have worked out their risk factors and potential profit gain.
It does not matter whether the property has a 99-year lease or is freehold. The most important factor is the location as land is scarce here.
Good properties at good locations will always have strong potential upside even during a downturn. Their prices may drop but when the market rebounds, they will be the first to move upwards in price compared to others.
One analysis that I do for my clients is to chart the history of the property. This helps me to see what the upside is and whether it is worth it to buy or sell.
Q What property do you own?
I own a four-room HDB flat in Rochor. We bought it for $313,000 in end-2006 and it should be worth more than $500,000 now. I can't buy private property now as I had taken a $40,000 grant to buy my HDB flat. I can invest in private property only after I have lived in the flat for more than five years.
I bought my parents a 1,033 sq ft unit in Balmoral Road for $1.7million in March as I want to enrol my daughter in Singapore Chinese Girls' School nearby. It will be more convenient for her and my parents as they are helping to take care of her. The value of the property remains the same.
Other properties that I bought for my parents include a 980 sq ft apartment at Tessarina in Bukit Timah. I bought it for $1 million and sold it for $1.1 million.
Another good deal was a 1,055 sq ft apartment at Robertson 100 which I bought for $1.15 million and sold for $1.48 million. Both properties were bought and sold in 2007.
Q What's the most extravagant thing you have bought?
In 2008, I bought an Audemars Piguet Royal Oak Offshore watch worth $35,000 for my wife for Christmas. It is a woman's watch and is limited to 100 pieces.
Q What's your retirement plan?
My retirement plan is to have a strong flow of passive income from my team and accumulate assets that will also generate passive income.
I believe that if my investment channels can provide us with $30,000 in passive income per month, it will be sufficient for my family. I want to spend more time travelling with my family.
My target is to achieve a consistent flow of passive income of $30,000 when I'm 40.
Q Home is now...
My Rochor flat.
Q I drive....
A black Audi A6.
lorna@sph.com.sg
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WORST AND BEST BETS
Q My worst investment to date...
My worst investment was buying 40 lots of a penny stock (Advance SCT) in 2007 based on hearsay.
It was trading at 40 cents per share then. I did not understand what I was buying nor did I check the historical performance of the stock.
Now the stock is worth less than five cents.
The lesson I learnt is that we must understand the fundamentals of the stock, instead of relying solely on tips. I'm still holding on to the stock.
Q My best investment to date...
My best investment to date is this job as it has helped Janet and myself achieve our first million at the age of 32 - something which both of us never imagined was possible.
Janet was the No. 1 producer last year at PropNex. She also received the IEA (Institute of Estate Agents) Top Achiever Award 2009.
The next best investment is my team in PropNex - Powerful Negotiators.
We have been the No.1 team since 2008, thanks to my dedicated team leaders and members.
Our team's group sales in terms of commissions have been growing since 2007, from $10 million to $13million in 2008 to $28million last year.
We have already achieved more than $28million this year.
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