This article first appeared in Personal Wealth, The Edge Malaysia Weekly on February 12, 2018 - February 18, 2018

Datuk Eric Tai, general manager and finance director at Nelson’s Franchise (M) Sdn Bhd, built an illustrious career around an extremely underrated virtue — intelligent money management. 

The one-time head of operations and management at Southern Bank Bhd’s headquarters made a name for himself as a conservative, no-nonsense banker with an eye for great deals. Later on in life, he would display a masterful entrepreneurial streak. 

Then in the mid-noughties, Tai traded boardrooms for farmlands when he invested in and joined local sweet-corn franchise giant Nelson’s Franchise. Together with his friend and founder Datuk Seri Nelson Kwok, they would take Nelson’s “corn-in-a-cup” franchise to all corners of the world. 

So, what does the career money manager, entrepreneur and father of three want for his children? “My wish is for them to do the things that make them happy. I want them to be kind to the people they meet and devoted to each other because really, family is the only thing in life that is truly ‘yours’. 

“I want them to be able to live independently and enjoy peace of mind. I believe a large part of that has to do with being able to manage one’s finances. This is something that I have tried very hard to impart to my children over the years.” 

Tai has been increasingly focused on ensuring that his children are schooled in solid financial practices. His youngest daughter, Victoria, 19, is precocious and inquisitive. And as his work-life balance has improved over the last few years, he has worked hard to impart good money management principles to her. 

Schooling in the second degree 

But Tai knows advice and lectures only go so far. An angel investor and enthusiastic mentor to many a budding entrepreneur, he has an enviable network of bright young business stars in the making, many of whom are indebted to him for investing in their company and teaching them to manage their cash flow, or some combination of the two. 

“I realise that children will not always listen to their parents. That is just how things are. So, as much as I want to teach my daughter, I am also sure to expose her to other slightly older entrepreneurs who are just starting out themselves,” says Tai. 

“These young founders are in her general age group and are able to reinforce the various money management lessons that I have taught them. Basically, I get my students to teach my daughter through internships and work placements in these start-ups.”

Tai also makes it a point to bring Victoria to pitching sessions that he is invited to as a potential investor, and even to one-on-one meetings with the founders of his investee companies. By doing so, he is able to expose his daughter to the real-world effects, implications and pay-offs of managing expenses. 

“I want her to know how these start-ups struggle to become financially viable. And by my helping them manage their cash flow, she will see how important it is to have a handle on her personal finances,” says Tai. 

It is okay to fail 

Tai has always been supportive of his children’s aspirations as he believes the younger generation must be given a chance to prove themselves — and fail, if necessary. “I think nothing teaches you more about cash flow than starting a business. This is something that I have tried to support my children in doing,” he says.

“Both Victoria and my son, Wee Liam, 34, have dabbled in entrepreneurship. And every so often, they would come to me with a business idea. I would advise them as best I could and then let them try it out even if I have reservations about the business model.

“Many years ago when my son was much younger, he and some friends got together to set up a small advertising company to sell advertising space on taxis. They actually managed to secure a contract from Astro. But after that contract ended, they could not find other jobs and after some time, the company went under. Obviously, it was quite disheartening for my son at the time, but I think the learning experience — the challenges associated with rolling on the money from contract jobs — has stood him in good stead.” 

A beaming Tai says his son migrated to Australia a few years ago, but the lessons did not stop. “About six years ago, when my son went over to Australia, he had a part-time job, but he could not afford a car, something he needed at the time. He did not qualify for a loan and I wanted to help him. But I also knew that this was an opportunity for him to exercise his independence as well as gain a sense of pride in ownership. 

“So, I wired a sum of money to my brother, who had been living in Australia for many years. My brother loaned the money to my son on condition that he pay him back on a weekly basis, with interest. It was so encouraging to see my son master his finances. Within just two years, he had paid off the entire loan.” 

Wee Liam has since purchased his own home in Australia with his own money. Thanks to the experience he gained from paying off his car and trying to manage a business, he continues to keep a close watch on his expenses while ensuring that he meets his financial responsibilities.

Basics is best 

Drawing on his experience as a banker, Tai introduced his children to basic money management as they got older. “As my children became more mature, I gave them a cash flow template that I had come up with during my banking days in the 1980s. In fact, this is something that I have faithfully used for decades and I still use it to track my expenses every month,” he says. 

Tai walked Victoria through the template, although he did not implement it with her immediately. He wanted to ease her into it. “About a year and a half ago, I set up a bank account and gave it to her along with a debit card. I would put money into the bank account and she could use the funds accordingly, on one condition — every time she uses money from the account, she has to send me a text message with the amount she used and what it was used for,” he says. 

How did that go? “At first, she didn’t text me at all! But after I put my foot down, it got to the point where she would text me without fail,” says Tai.

“The idea is not for me to track her spending or control what she uses the money for. Rather, the intention is to introduce the concept of expense tracking to my daughter. This was how I gradually introduced the cash flow template to her and got her to use it more regularly.” 

Fast forward a year and a half, Victoria now tracks her expenses religiously via a spreadsheet that she updates monthly. This is in addition to those text messages that she still sends her father. 

“It is so easy to underestimate your expenses because for most of us, our daily expenditure is fairly small. But you will straighten out very quickly when you see exactly how much those little daily expenses add up to at the end of the month,” says Tai.

His eldest, Felicia,35, takes after him the most. Like Tai, she has a very traditional view of managing finances. Indeed, her early career mirrored his in various aspects. 

“She qualified as a chartered accountant at 21, after which she joined the banking sector. Like me, she was quite prudent with her finances. But I think she is also particularly conservative in that she is not too keen on taking risks which, of course, is fine. She has invested in some equities and unit trusts. She also has money in fixed deposits. But she has not invested in properties or businesses much yet.” 

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