Author and famed investor Jim Rogers picked what he sure knows a lot about when asked to choose the one investment he would make in Singapore now.
“Well, it would be my little girls. They are very important to me,” the 71-year-old American told Yahoo Singapore last week in a phone interview in which he shared some investing tips.
The author of five investment books, the latest one titled Street Smarts, Rogers started a family late in life. He was 60 when he had the first of his two daughters with wife, Paige Parker. Famously bullish on China and commodities, he moved from New York to Singapore in 2007 so his two children could learn Mandarin.
Having retired at the age of 37 after a smashing success at the Quantum Fund, which he co-founded with George Soros in 1973, Rogers now juggles raising his family, writing books, speaking at events and managing his own money.
Advice for parents
Speaking as a father and investment expert, Rogers said children’s education should be a top priority for parents who are would-be investors.
“So everybody should first make sure they educate their children, because once the children’s education is taken care of, that will change their lives and their children’s lives, and Singapore, too, eventually,” he said.
“Secondly, you should probably have your own home before you start investing. Thirdly, you should have adequate insurance. And then after you have a home, and insurance and the children’s education taken care of, then you can start thinking about investing,” he asserted.
Even then, “you should only invest in what you know a lot about”, he advised.
Teaching kids about money
Rogers, who was raised in Alabama in the US and still speaks with a Southern drawl, also shared how he and his wife have been teaching their daughters, now ages 11 and six, how to handle money.
“When they were born, I got each of them six piggy banks. They have piggy banks for US dollars, Singapore dollars, etc. I’m not trying to teach them to be currency speculators, but I do want them to know that a) they should save and b) that there are different kinds of money,” he explained.
Also, the children get paid when they do extra chores, he said, explaining that he wants them to understand money “doesn’t fall out of the sky” and “you have to work hard and save it”.
“If I can instill in them the necessity to save and the habit of saving, then I will have done the best I can in this stage of their lives,” he said.
Investing around the world
Before getting to his own current stage in life, Rogers spent many years travelling the globe, picking up two Guinness World Records in the process. The first was for riding across six continents on motorcycle in the early 1990s, while the second was for journeying through 116 countries with his wife in a custom-made Mercedes during the turn of the century.
Those trips have given him first-hand knowledge of international markets. Speaking about his current outlook on the global economy, he reiterated a view he has long propounded – that the US is living on borrowed time.
“Well what’s happening in the world right now is a gigantic artificial ocean of liquidity. All of the world’s central banks are printing huge amounts of money. The people who are getting that money are having a good time,” he noted.
He doesn’t know when the party is going to end, but he believes when it does, “we’re all going to suffer very, very badly”. He said the US would also fare worse than it has in previous economic setbacks because the country’s debt is now so much higher than before.
“So the next one [economic bust] is going to be much worse… so be worried, be careful and be prepared,” he warned.
Everybody should have a game plan, he said. “Learn how to cut back if you need to, even learn how to sell short. Short sellers are going to earn a lot of money the next time around,” he pointed out.
He believes some currencies are going to do well in that time of turmoil. “The Chinese renminbi, for instance, will probably continue to do extremely well over the next few years. I even own the US dollar at the moment. The US dollar is a terribly, terribly flawed currency, but at the moment I own it because when the turmoil comes many people will flee to what they see as a safe haven,” he said.
When invariably central banks start printing money to pump prime their economies, he’s not sure which currency he’d flee to. “Maybe the renminbi, maybe gold, probably real assets, because once the floodgates open even more, the value of paper money everywhere is going to go down a great deal,” he said.
Investing mistakes to avoid
He may talk a lot about investing overseas, something that many Singapore investors do if one were to look at the big property buyers in Europe, but Rogers would not encourage it as a general rule.
Asked what he believed to be the biggest mistakes he has seen people from Singapore making when investing abroad, he replied, “They don’t know what they’re doing. That’s the biggest mistake when investing anywhere, but especially overseas. Many people wind up investing in Norway when they can’t find Norway on the map.”
Investors, he said, should know currencies, bonds, governments, taxes and the like – everything, in short. “You have to know all that when investing in your own country, but even doubly when it’s a different country,” he said.
He would advise people to figure out what they know most about, whether fashion or cars, for example, and find investments in that field.
“The only thing people should invest in is what they know a lot about,” said Rogers, who has shown he knows what he’s talking about.
Jim Rogers will be speaking at INVEST Fair 2014, which takes place on the 2nd and 3rd of August at Suntec Singapore Convention Exhibition Centre.
Jim Rogers reveals his Singapore investment strategy