I am MJ Tan and This is How I Invest

Published 17 Dec 2020

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By Fi Life Team

I am MJ Tan, I am...

A 21st-century educator and trainer, I’ve been in the education industry for the past 15 years. A value investor, and nonetheless, a mom of my 11 months old daughter. I am a firm believer that financial education is essential for everyone, especially females, and it should be taught in school.

Sharing knowledge has always been in my blood, from classrooms to training rooms. This year, I’ve taken a step to share more via Value Investor Mom’s blog and social media.

1. What is your best investment and worst investment?

I would love to acknowledge that the best investment I have made is myself. During the early years of my career, I set aside education funds monthly. It was spent on books and courses, from personal development to business courses, and investing programs. These had expanded my perspectives of the real world and opportunities for growth.

Financial wise, I would like to believe that my best investment is the stock portfolio I have created for my daughter (Note: CDS account registered with my name). In July 2020, a year after her portfolio had started, its return was at 11%. My husband and I agreed that most if not all of her monetary blessings (i.e. ang-paos) will go into her portfolio for its compounding growth. By the time our daughter is 18, there will be a decent fund either for her education or exploration of a business idea, if there is any.

My worst financial investment was on equity crowdfunding. Sadly, I made this mistake twice, one on a wellness chain and another on a private villa. I did not perform my due diligence before saying yes. Both invested capital is currently stuck, the recovery possibility is almost null. It was painful but great lessons to remember.

2. What was your first-ever investment (and how did that go)?

I made my first investment in 2012 with a capital of RM10,000 on a primary property (i.e. new development) in Subang. I received a RM14,000 cheque 6 months later from its rebate program. When I got the keys in 2016, I reinvested the RM14,000 in refurbishing the unit to increase its rental rate.

The unit has been rented out for the last 4 years, yielding about 5-6% rental yield per annum. Not the best investment return but I am thankful it is generating a positive cash flow.

3. Your investment no-nos (why not and what happened)

Do not jump into an investment because everyone says yes to it.

My personal experience was an equity crowdfunding pitch invitation. I have no clue what equity crowdfunding was at that time. I was a naïve young lady who got sold with an optimistic projection with a "guaranteed" return per annum. What made it more convincing was the Tan Sri & Dato backing the project and investing in it. The FOMO bug bit me as people whom I thought had better financial sense went ahead with it. I was wrong, I was blinded by emotions and I trusted others rather than myself. I was not mindful of the herd mentality in the room.

Generally, it is hard to analyse private companies as their financial data is not publicly available. Not to mention most startups do not have any track record. It is tougher to justify the optimistic projections from the presentation without data. Statistically, only 20% of startups succeed in the first 3 years.

However, I am not implying that all public listed companies are great either. One fact is that there is more accessible data to look at before making any decisions.

Ultimately, always perform due diligence and exercise independent thinking before making any decision for any investments.

4. What are you investing for?

These may not deem as great traits by many but I do believe in working hard and living below your means. Especially at the beginning of your working journey.

While passive income is great, active income is often underrated. Have a side hustle, work on weekends. I was tutoring young kids when I was in college, took up extra tuition classes after my day job, and made and sold crafts on weekends. It was the time traded for income in the early days that allowed me to size-up my savings for investments. But, there were opportunity costs, I didn't get to enjoy a fun life like most of my peers had.

The early twenties are the best time to generate more active income when we have more energy and “time”. As a mom now, I would love to have 25 hours a day to catch an extra hour of sleep.

As cliché as it sounds, I am investing for freedom.

Before I became a mom, I looked forward to the freedom of choice, joining companies that I want to bring value to, without worrying about the offered salary. Now as a mom, I look forward to more freedom of time so I can nurture my daughter.

My investment goals are a work-in-progress. While properties are one of the great assets, I started focusing on value investing 4 years ago. Investing in stocks is more flexible as compared to properties. With value investing, I can start with a fraction of what I invested with my properties. I can analyze the financial data and accumulate great companies one lot (i.e. 100 units of shares) at a time, one month at a time.

5. MJ’s investment philosophy and approach

Start with an end in mind.
Figure out what and why we are investing for.
We could ask ourselves questions, journal them down. Have frequent discussions with your spouse or family members.

I was certain that the properties I bought were for investment purposes, not for own stay. The cash out funds will be for my retirement in the future, not as my child's education fund.

Be open to learn, unlearn and relearn along the way.
There are many tools and methods to invest our money with. Read up, ask questions, and learn from quality mentors.

I once believed that stocks investing were extremely risky and it is only meant for accountants. That myth was busted after I learned about the fundamentals of value investing.

Have big goals, take small steps, and begin now.
Have a gauge on how much do we need for our retirement, may it be frugally or luxuriously. Then we work backwards, which may sound like starting to save up for investment capital. Take one step at a time.

I am on my journey to financial freedom still. From saving up capital, analysing companies, to investing in great businesses. One month at a time.

Value Investor Mom wishes you great momentum. Let’s be financially free together.

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About “This is How I Invest” - As Fi Life’s motto is “Buy Term (Term Life Insurance) & Invest the Rest”, this series features how different personalities “Invest the Rest.”

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