Tuesday, 27 July 2021

Background Notes on “Personal wealth in a changing world – we are all responsible for ourselves”

Moderator:

Emmanuel Daniel, Chairman, The Asian Banker

Guests:

Adam Khoo Yean Ann, Executive chairman and Chief Master Trainer, Adam Khoo Learning Technologies Group

 

Agenda

Notes:

Global Wealth Trend: All the World’s Wealth in One Visual

 

 Desjardins, J. (2020, January). All of the World’s Wealth in One Visualization. https://www.visualcapitalist.com. retrieved November 2020.

 

ASEAN: The emergence of a new middle class brings vast opportunities for global wealth management:

China: Admist US China tension, China’s giant middle class is still growing, with the wealth of richest 10% surpassed the US:

Table 2: Distribution of adult population in China in 2019, by wealth range group

 

Where capital is being placed globally in 2019?

Wealth Market Forecast for 2020

How are the institutions (banks, fund managers, securities brokers and even insurance players) meeting the most fundamental needs of their customers?

The global economy has entered a period of significant uncertainty, with Covid-19 presenting a dramatically changed reality. High Net Worth wealth declining by 4 percent or $3.1 trillion in 2020.

Investors Landscape:

Investors’ investment channels:

Investors’ concerns about Asset Management:

Wealth Managers’ opportunities in a changing environment:

The wealth gap between rich and poor countries has widened again. In 2000, net financial assets per capita were 87 times higher on average in the Advanced Economies than in the Emerging Markets; by 2016 this ratio had fallen to 19. Since then, it has risen again to 22 (2019). This reversal of the catching-up process is widespread: for the first time, the number of members of the global wealth middle class has fallen significantly: from just over 1 billion people in 2018 to just under 800 million people in 2019. Looking at the development since the turn of the century, however, the rise of Emerging Markets remains impressive. Adjusted for population growth, the global middle wealth class grew by almost 50% and the high wealth class by 30% – while the lower wealth class declined by almost 10%. Despite this progress, the world remains a very unequal place. The richest 10% worldwide – 520 million people in the countries in scope with average net financial assets of EUR 240,000 – together own roughly 84% of total net financial assets in 2019; among them, the richest 1% – with average net financial assets of above EUR 1.2 million – own almost 44%. The development since the turn of the millennium is striking: While the share of the richest decile has fallen by seven percentage points, that of the richest percentile has increased by three percentage points. So the superrich do indeed seem to be moving further and further away from the rest of society.

Interviewee Background

     Adam Khoo is the Executive Chairman and Chief Master Trainer of Adam Khoo Learning Technologies Group Pte Ltd, and director of seven other private companies. He is currently a member of the Singapore Chapter of the Young President's Organization (YPO). His business interests include advertising, conference events management, pre-school education, corporate training and learning centres. Adam Khoo Learning Technologies Group is one of Asia’s largest private educational institutions which runs educational seminars for over 80,000 people annually in 7 countries.

Khoo was introduced to stocks and shares by being given share certificates of Singapore and Malaysian listed companies by his grandfather since he was 15. He had lost nearly $30,000 at the beginning of investing at stock markets and realised stocks that generate consistent profits tend to obey certain criteria. Khoo then started to buy stocks which were sold at low prices during the economic depression in 1998-1999 and achieved a high profit on these investments. He continued to invest in companies stocks at low prices in the dotcom bubble burst of 2002 and the financial crisis in 2009 and made significant gains. Khoo set up the Wealth Academy Mentorship Programme to help people invest.

Khoo is a conservative and long-term investor goes for investments with low risk and high returns, favouring cash-rich companies with low debts and the potential to consistently increase their earnings. He prefers investing in stocks and options, using a variety of investing strategies including momentum and value investing.

Khoo’s comments on investments:

People who had attended Khoo’s camps commented on his program:

“Then there was the infamous crying session. They turned off all the lights, told us to close our eyes and started to speak to us in a low, hushed tone. They told us to imagine going home one day only to realise that our parents were dead, and tried to make us feel like we were unfilial and ungrateful. I guess their end goal was to guilt-trip us into working hard in case their parlour tricks didn’t work.”

Negative comments on Khoo

“Adam Khoo is a walking bundle of contradictions and a man who sells the transformative potential of self-belief, coupled with the tools to make those beliefs materialise.” He believes that it’s more valuable to teach people how to become better versions of themselves, and still teaches them about investing instead because it’s what the economics demand. He builds a name teaching kids how to do well in school, and still believes grades aren’t important. He believes grades aren’t important but also that they are, because it’s good to have choices. He believes that money doesn’t make you happy, but derives immense satisfaction from teaching people how to make more of it. He attains every conventional marker of success, only to realise that he really cares more about doing what he loves, which is helping other people attain conventional markers of success.