Paying himself first before spending the rest

IT IS is no surprise that Mr Davy Wee, as POSB's managing director, has a well-thought out savings strategy.

His first step is to set aside the amount he wants to save before spending the rest, a discipline the 49-year-old father of two applied last month when he received his year-end bonus.

Mr Wee, who regards himself as a 'medium-risk' investor, sank the bulk of his bonus into an investment portfolio that has more equity funds. He thinks this will leave him positioned to take advantage of the potentially higher returns from equity markets.

His portfolio also includes fixed deposits at higher rates that POSB is offering its staff.

As for the balance of his bonus, he has given a portion in cash to his wife and two teenage kids. The cash bonus was complemented with a sumptuous meal at the family's favourite restaurant, Iggy's. His staff were not forgotten either and were treated to dinner and drinks.

Mr Wee recalled that he experienced a change in mindset after he joined the bank in 2004.

'I realised I should always put aside what I want to save first and then the remainder on what I can spend on, as opposed to spending and then seeing what's left to save,' he said. 'This change has certainly helped me better manage my finances.'

The bulk of his monthly income goes towards investment and savings. Entertainment and clothing usually rank low on his spending priority list. In fact, he has been using the same Seiko watch for the past 10 years.

As for forced savings, Mr Wee puts aside a regular amount into the bank's Money Smart plan - a regular premium insurance plan that combines the stable returns of a with-profit endowment plan and the growth potential of an investment-linked fund.