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Me & My Money: Nets group CEO homes in on real estate for its long-term value

SINGAPORE – Finance industry executive Lawrence Chan could probably write a book about the long-term value of bricks and mortar as an investment, but two phrases sum it up – capital gains and recurring rental income.

As Mr Chan, 52, notes: “Land is scarce in Singapore and historical data has proven that real estate appreciates in value in the long term.”

He doesn’t just talk the talk: 80 per cent of his portfolio is allocated to real estate – which he declined to provide specific details about. The remainder is made up of stocks, funds and insurance.

Mr Chan is the group chief executive of Nets, whose Banking Computer Services unit operates the clearing and payment infrastructure for Fast (Fast And Secure Transfers) and interbank Giro, and provides services for PayNow.

Singaporeans cannot escape the Nets brand – there are more than 120,000 acceptance points across the island that offer it as a payment method, with 54,000 points that also accept international payment options like Visa and Mastercard.

Mr Chan, a payments services veteran, took over the reins at Nets in June last year. He was previously at American e-payments giant Visa for over four years, serving most recently as its vice-president of regional client management for the Asia-Pacific.

He also held senior leadership positions at PayPal and American Express, including a four-year stint in Japan where he led Amex’s merchant business.

Mr Chan says his priority is to build the Nets team, which now numbers around 1,000.

Nothing is more important than investing in staff, especially because Nets is in the service line, he adds. “The digital payment space is evolving rapidly, and we need to stay innovative as we harness technology to power our financial solutions.”

He says Nets will consolidate its various offices into a central location in Braddell Road by the first quarter of next year.

Another area of focus is to translate Nets’ strong offline presence – half of all e-payment terminals in Singapore use Nets exclusively – to the online sphere.

“With e-commerce growing at an exponential rate, we recognise that the battleground is online.

“We are working hard to improve our online solutions to make them relevant to market needs, including providing Nets Click in more use cases.”

Nets Click allows consumers to add their Nets bank cards in an app and use them to pay for purchases.

Mr Chan, who studied economics as an undergraduate at the London School of Economics and Political Science, says money is a means and not an end.

“If we are privileged to be blessed financially, then it is our blessing to help others who are less privileged. It is better to give than to receive.”

He is married to a Singaporean housewife in her early 50s, and the couple have four children – three in tertiary education and one in primary school.

Q: What’s in your personal portfolio?

A: Most of my portfolio is in property, while 10 per cent is in stocks and funds and the remainder in insurance.

Rental returns range from 1.7 per cent to 2.2 per cent for our investment property.

When it comes to my investment in stocks and mutual funds, I look for an average return of between 3 per cent and 8 per cent per annum. The actual return for the last 12 months was barely above 1 per cent.

Q: What are your immediate investment plans?

A: A significant portion of my investment is tied up in real estate. My immediate plans are to invest in assets that are more liquid, including mutual funds, stocks and short-term fixed deposits.

Q: How did you get interested in investing?

A: Real estate opened my eyes to the world of investing. I got married in my 20s. Our dual income allowed us to invest in property at a relatively young age. That gave us a head start in investment and we have been fortunate to benefit from capital gains.

Q: What else is in your financial plan?

A: With four kids in the family, I definitely need to ensure I have enough to cover the substantial cost of tertiary education. Regular savings plans ensure discipline to set aside investment funds before we spend on other areas.

Legacy planning is important as I have seen first-hand how my loved ones have been burdened in difficult circumstances.

I have set up my Lasting Power of Attorney so that it guides my loved ones on my wishes when the time comes. My wife and I have also written our wills to provide clear instructions on what to do with our estate.

Q: Describe your investing strategy.

A: A lot of my time and energy are focused on my job and it is not practical for me to actively monitor my investment portfolio. I take a long-term view when it comes to investing and am not bothered about short-term market fluctuations.

My risk appetite is moderate and I rely on my trusted financial adviser who invests according to my risk appetite.

For me, insurance is purely intended for protection coverage. As a sole breadwinner, my priority is to ensure my family’s needs are taken care of in case of unforeseen circumstances.

I buy life, critical illness, hospitalisation and mortgage insurances. My coverage for life insurance exceeds liabilities owed at any given time.

Q: How are you planning for retirement?

A: I enjoy working and I hope to work well into my 60s. Work has to be meaningful, and it can evolve into charity or church work.

Financially, we should be in the position to reap the returns from our investments.

The recurring rental income from our investment property should provide a steady stream of income for our living needs.

Additionally, the capital gains and dividend income from stocks and funds should supplement our retirement nest.

Q: Moneywise, what were your growing-up years like?

A: Both my parents are retired teachers in their early 80s. I have an older sister and a younger brother. My parents worked hard to give us every opportunity. We never had abundance but we always had what we needed.

My first flight was to Sydney when I was 17 years old, and I treasure all our prior family holidays to Malaysia or chalets in Singapore.

Q: Home is now …

A: A six-bedroom landed property in central Singapore.

Q: I drive …

A: A blue-grey Mercedes-Benz E250.

Q: What has been your biggest investing mistake?

A: I’m glad to say that there has been no major investing blunders, unless you consider splashing out on a new car in my younger days as one.

Although we did not splash out on any fancy cars when we were young, we saw the need for a car when we started a family.

In today’s shared economy, owning a car is not a priority for the young, which I totally agree with.

Q: And your best investment?

A: I believe family comes first. My best investment is without a doubt my wife, who has sacrificed so much to hold the fort for our family while I devote time to build my career.

Financially, I benefited from capital gains and rental income from property investments.

Apart from rental returns, we have also benefited from capital gains ranging from 20 per cent to 60 per cent from selling the properties, including through an en bloc sale.

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