“If wage earners don’t work on their retirement plans from a young age, they will end up as slaves to MNCs in a globalised world.”
Those are ominous words from Mano Sabnani in his book, “Money Secrets – Cruise Your Way to Financial Freedom”. But don’t dismiss his caution, for they come from a man who knows a thing or two about generating wealth, forged over 4 decades of experience in the finance industry and in business.
We all want to be rich or at least be able to afford to retire some day, after a lifetime of hard work and saving up what we earned. We want to have financial freedom, so that we can be happy. And, let’s face it, money can help us achieve that, even as we understand that it can’t solve all problems. But often, most of us are caught in the treadmill of life, running on the spot, unable to hop off and catch a breath.
“We are all exhausted and think it’s normal to feel that way because it’s so common,” says Danielle Town in her book “Invested – How Warren Buffett and Charlie Munger Taught Me to Master My Mind, My Emotions, and My Money”. Danielle, a lawyer, had also felt drained by her work, and sought a better way to achieve financial freedom.
We can relate to her predicament.
The reality is that depending on your salary to enable you to retire is probably the most ineffective thing to do nowadays, whether you upskill, multi-skill or whatever-skill. In a globalised world, even your job is not secure, let alone the wages you get for doing those same jobs.
Most of us will end up (if we aren’t already) “wage slaves”, held ransom by stagnating salaries to continue to slog, and never seeing the end of that tunnel.
“[The] sad sight of many elderly folks still operating a pedicab in the Philippines or cleaning tables at hawker centres in Singapore bears testament,” Mr Mano writes in his book.
So, what should you do, if you want to attain that increasingly elusive retirement in comfort?
It is simple: scrape, save and invest while you are a wage earner. That’s the advice of 68-year old Mr Mano, a newsroom veteran, banker, CEO and successful investor.
“A disciplined, regular savings and investment plan can help millions of wage earners to get out of the wage trap and build up enough reserves for retirement,” says Mr Mano.
Ask any wealthy or rich person and practically all of them invest their money, or in fact got wealthy by investing their money, such as billionaire investor Warren Buffett (who bought his first shares when he was 11-years old and now, at age 88, has a net worth of USD86 billion).
How does he, and many others, do it? Well, there is no secret to it, as Mr Mano reveals in his book.
Written in simple language which anyone can understand, “Money Secrets” is a book which everyone who is interested in making their money work for them should read. Its 232 pages and 9 chapters provide a road map to how you can attain financial freedom, through a 3-pronged plan of savings, insurance and stock investment.
It is the last which the book focuses on, but which is also widely misunderstood. This leads to the perception that the stock market is nothing more than one big casino, where you roll the dice and hope to get lucky.
While it is true that the stock market can be unpredictable, it is nonetheless “quite fundamentally different from a casino”, Mr Mano says.
“It has a serious purpose – to raise funds for companies and allows them to expand their business with larger equity bases,” Mr Mano says. “If the companies do well, everyone gains: the employees and owners, including small shareholders.
“It is not a zero-sum game like the casino where either you win or the house wins,” he adds. “Both cannot be winners.”
One crucial difference is that “there are deep skills involved in studying companies and selecting stocks based on their business fundamentals and valuations.”
“The same cannot be said of a casino punter,” says the man well known as an activist investor who does not shy from speaking his mind to top company executives at AGMs.
Indeed, investing in a business is nothing like playing poker.
Buying the shares of a company, as Mr Buffett once said, is buying a part of the business itself. And because you are buying a business, it is necessary to understand what you are going to buy. This means, simply, that you have to investigate and research the business you intend to put your money into, something Mr Mano’s book teaches.
“Price is what you pay; value is what you get,” Mr Buffett once said. The key is to know what the value of a business is, and not what the price of its stock is.
Yet, many people do not understand this, and end up speculating instead of investing. The two are very different – the former is throwing the dice and hoping; the other is deliberate, informed action after careful study of a business.
If you are serious about investing, know that “it is not necessary to do extraordinary things to get extraordinary results”, to again quote Mr Buffett. “Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.”
And take heart that “there are several routes to financial independence”, and even if you are not a high income earner, you still can invest your money and be rewarded adequately.
Whatever your income level, Mr Mano says, “the road still leads to a good place (financial independence) for those who have the willingness to learn how to drive sensibly and navigate the obstacles and hazards – plus the fortitude to go the distance.”
“You also need the resilience to bounce back from setbacks and mistakes,” he adds.
Mr Mano uses his own experiences as examples to show that anyone with determination can succeed.
It was in 1976 when he first got interested in investing in the market, learning from his investor reservist friends in the military. After his national service, he joined the Business Times as a young reporter on the Companies Desk. He advanced rapidly to become the editor of the Desk where he had opportunities to meet with and interview corporate chiefs which made him more intimately aware of the ups and downs of business and the companies.
“I learnt more about how to analyse companies and to decide what made a good investment at any point in time,” Mr Mano writes in his book. He also preferred investing in stocks to, for example, bonds or property because they give ordinary people the opportunity to experience what he calls ‘the magic of business’ – “the power to grow one dollar into two, ten or even a hundred dollars.”
“I was into value investing,” he says, referring to the investment methodology where investors buy shares of good companies whose share price they feel are being undervalued by the stock market. Buying a dollar for 50 cents, in other words.
Investing in stocks, however, is not a sure-win, as there will always be risks. Which is why Mr Mano abides by certain “core principles of investing” which he has learnt from his 4-decade investment journey, to guide him.
He says investors should, among other things, “combine common sense with critical thinking” and not let this “lapse into common stupidity”, mindlessly believing something just because the crowd believes it”; and to cultivate emotional discipline because “an investor’s worst enemy is himself”.
“Invest time not only in your job, but spend a bit of your time on the art and science of investing as well,” he says. These would include reading company reports, understand the basics of of the industry that companies operate in, the basics of accounting and financial reports.
In other words, do your due diligence before you put your money in a company or business.
“Don’t worry even if you have zero accounting knowledge to start with,” Mr Mano says, “just pick it up piece by piece.”
The important thing is to “treat buying a stock as entering into a business deal”, and this include looking at the people behind the business, the management team.
“Only when you have a high degree of assurance that they are people of integrity should you put your capital in their hands,” Mr Mano says.
While adhering to such investing principles has brought financial success to Mr Mano, it has also seen some investments turning out unexpectedly.
The former chief editor of The Business Times and Managing Director of the Development Bank of Singapore (DBS), is quite frank and open in the book in revealing his personal investment record, including the “considerably muted” returns in the last seven years from his investments in China-based companies which, he said, “had very poor corporate governance and let down many investors very badly.”
Despite these, he says he had already saved and invested enough to attain financial independence by 2005 when he reached fifty-five. If you are wondering what this means, well, consider that his monthly expenses (for himself and his family) are in the region of $16,000.
So, if you are serious in learning about investment but do not know how to, “Money Secrets” is a good place to begin.
The book leads you through basic concepts and core principles of investing, what kinds of stocks to buy, how to value a stock, how to identify scams and shady “investments”, and it also includes several case studies.
In summary, don’t be discouraged that you may not know the first thing about investment, finance or accounting. They may seem intimidating or daunting to learn but with patience and diligence, there is no reason why you cannot understand the basics and invest wisely and profitably.
After all, Mr Mano – a science graduate – himself knew little about business, as he says in his book.
“But I learnt along the way, not only about what makes businesses tick, but also their accounts and balance sheets,” he says.
Now, decades later, his patience has paid off, and he lives a comfortable life free from financial worries, a life which we all hope and work for – and can achieve for ourselves.
“I hope this book will play a part in getting you there,” he writes. “Lasting happiness for you and your family.”
Mr Mano on radio recently to talk about his book:
You can purchase “Money Secrets – Cruise to Financial Freedom” here.
Married with 3 children
Chairman & CEO, Rafflesia Holdings
Adjunct Professor, SIM
Adviser, Centre for Applied Research (CFAR)
Editor, Business Times
Managing Director, DBS
CEO & Editor-in-Chief, TODAY
Executive Director, Corporate Brokers
Bachelor of Science, NUS
INSEAD Business School (France)
Press Fellowship programme, Wolfson College, Cambridge (UK)
Released autobiography in 2017
“Marbles, Mayhem and my Typewriter”