April 26, 2009
me & my money
Learning to stretch every dollar from young
Rehab Asia founder, who was taught to live within his means as a kid, now saves half of his income
By Lorna Tan
India-born entrepreneur Dinesh Verma had only US$200 when he arrived in Singapore in 1989.
Undaunted, he saved very hard in the early part of his career, working as a physiotherapist at the Margaret Drive Special School for two years and later at the Gleneagles Hospital from 1991 to 1997.
He saw the opportunity to build a business around physiotherapy equipment and founded Rehab Asia in 2002 with his former boss Lau Peck Ting, who was with local scientific and lab supplies firm Quintech Scientific.
Mr Verma had worked in Quintech as a sales manager from 1997 to 2002. Mr Sandeep Kumar, a friend and also a physiotherapist, joined Rehab as a business partner.
The pair bought out Dr Lau's shares in 2007.
Mr Verma, 43, had always wanted to work overseas. His wanderlust led him to take on a job as a physiotherapist at the Spastics Association in Johor Baru in January 1989.
He had graduated with a degree in physiotherapy from Delhi University a few months before that.
He was in JB for nine months before joining Margaret Drive Special School in Singapore in late 1989.
In 1999, he obtained an MBA from Henley Management College of the Brunel University in Britain, winning a gold award for overall performance.
A Singapore citizen since 2002, he is married to Monica Verma, 41, who is also a trained physiotherapist. She is the managing director of a Rehab subsidiary, the Physio Asia Therapy Centre, in Orchard Road.
They have two daughters, Pooja, 15, and Ragini, 11.
Q Are you a spender or saver?
I consider myself a balance between a saver and a spender as I never stretch my borrowings for any personal needs. I save 50 per cent of my income. Most of my savings is invested in my own business expansion and growth.
Q How much do you charge to your credit cards every month?
I have four credit cards. I use credit cards as much as possible, for convenience. My credit card bills average $6,000 a month since I travel regularly for business.
I withdraw $200 each week, on average. I always make full payment on my credit cards and make sure I am never late.
Q What financial planning have you done for yourself?
My financial needs are largely classified into three areas. For my safety needs, I own insurance policies such as whole life, medical and mortgage plans.
For my liquidity and short-term needs, I used to be more active in stock trading in the early 1990s but not any more after I realised that the net gains are not worth the risk. I still hold some stocks passively, like Keppel Land and Thakral Holdings.
About 5 per cent of my investment portfolio is in stocks while 15 per cent is in currencies. The balance 80 per cent is split equally between my business and property investments.
Q Moneywise, what were your growing- up years like?
I was born in New Delhi but unfortunately not with a silver spoon in my mouth.
My father worked in the Indian Metrological Department and my mother was a housewife. There were three kids in the family and I am the youngest. We lived in a three-bedroom apartment.
Our parents used to give us monthly pocket money and the rule was that under no circumstances would anyone get extra money. Thus we had to spend within our budget.
In order to earn extra pocket money, I did some market survey jobs and also started a small events business on a part-time basis when I was 16 and still in high school.
Q What property do you own?
I bought a three-room HDB flat in Yishun for about $90,000 in 1993, and sold it for about $170,000 three years later. That was when I bought a five-room flat, also in Yishun, for $360,000. It was sold in 1999 at a loss of $60,000.
That year, I bought a three-bedroom 1,270 sq ft condo in Serangoon for $550,000. I've just sold it for $700,000 to cut back on my liabilities.
In October last year, I bought a 2,850 sq ft four-bedroom penthouse along Yio Chu Kang Road for $1.25 million and spent another $100,000 renovating it.
I have an investment property which is an 840 sq ft condo in Bangkok. This was bought in 2005 for $250,000 and is rented out at a return of 5 per cent per annum.
Q What's the most extravagant thing you have bought?
It's my car, a BMW 320i, which I bought in 2005 for $140,000.
No regrets about it as I do like quality and durable products. The car serves you every day so comfort and safety are important.
Q What's your retirement plan?
I've no major plans yet. I am a workaholic so I guess I will keep going for as long as I can.
I would like to accumulate some investment properties over the next few years. I also wish to set up a retirement home and rehabilitation centre in the region.
With our ageing society, such a facility with low-cost operations will satisfy a need where people could take small independent units and live together in their golden years.
Assuming there are no more housing obligations and our major medical needs are well covered, a sum of at least $4,000 a month should be sufficient during my retirement based on today's inflation rate.
Q Home is now.... ?
The Yio Chu Kang penthouse.
Q I drive....?
The Arctic-coloured BMW 320i bought in 2005.
WORST AND BEST BETS
Q: My worst investment to date...?
My partners and I invested about $65,000, of which my stake was about $27,000, in a clinical business in 2004.
We fell short on fully investigating and doing a formal valuation of the business. It is not doing well as it lacks proper management. We do not have great hopes of recovering our investment. We learnt two lessons: Never invest in a business without carefully checking the books, and a business needs a 'champion' to lead it.
Q: My best investment to date...
My firm Rehab Asia. So far, I have invested about $170,000 in it and hold the majority stake. Rehab broke even two years after it was set up in 2002.
Its organic growth is satisfying, and it has been able to refinance its growth. Currently, Rehab has three subsidiaries.
They are: A Malaysia-based physiotherapy rehab equipment supplies firm Rehamed; a firm that treats speech disorders, Integrated Speech and Swallow Works; and a physiotherapy clinic, Physio Asia Therapy Centre. The latter two are located in Orchard Road.
The group generates a turnover of about $2.75 million.