Money Choice: My decision cost me my daughter's schooling fund

(Photo: Getty Creative)

By Able Lim

As parents, we want to give our children the best and make sure they are well provided for. Sometimes that fervour can blind you to investment schemes that seemed too good to be true. Amanda, 47, sales director, shares her story.

I wanted to make my money work harder as I am an older parent.  I had my daughter Janice when I was 40. When my daughter was seven years old, my husband was retrenched at the age of 47, but we weren’t too worried as I was still bringing home a monthly income of about S$6,800, and we had no loans. Still we agreed we should make our money work harder so we can provide for our daughter who is so young.

I shared my thoughts with my group of long-time friends. One of my closest friend Ivy mentioned a financial product that had given her attractive returns of an average of four per cent per annum for the last four months.

Ivy was kind enough to put me in touch with Shirley, the financial consultant who helped her invest. Shirley used to work for a global investment bank and she seemed to have connections to high profile management at major global banks, according to her Linkedin account. She appeared to be a down-to-earth lady in her early 40s and is a single mother with a teenage daughter.

Shirley spent 40 minutes talking about her life philosophy and took 30 minutes to explain the investment product. It seems like a clear, reasonable and easy-to-understand investment funds with a minimum return of 3.5 per cent per annum and is capital-protected.

She said the investment company is founded by Asian investors who have hired the best in the industry to help identify and manage impact funds.  Shirley explained that impact investing can create beneficial social impact and also generate good financial returns.

I was convinced. I told my husband about it and we spent time on the internet doing research.  I called Ivy and she confirmed that she had been receiving good monthly payouts for her investments.

I went to Shirley’s office with the plan of investing S$250,000. Shirley even asked me to invest only S$180,000 initially, and said I can always increase the amount after I am more assured.

For the next three months, I received interest of about S$780 per month. So I topped my investment to S$300,000 from S$120,000, and for the next two months I received a monthly payout of S$1,000-S$1,250.

One day Shirley called to give us some bad news. She apologised as she said the funds might face a weaker performance with returns at a 3.5 to 3.8  per cent per annum for the coming six months because of various reasons. My husband and I were alright with it as we would even be happy with a 2 per cent per annum return.

I checked my bank account one day and realised I didn’t receive any payment from the investment company for the past three months. I checked with Ivy and she checked her bank account and found the same thing.

We called Shirley, and she said the funds weren’t meeting targets because of market fluctuation and also because some Chinese companies were pulling investments out of Southeast Asia due to change of foreign policy in Malaysia.

Shirley sounded genuine when she assured us the company would return our capital within the next 90 days. We were both quite calm as we trusted Shirley. She called us the following week to update that the company was processing the payments and we will receive the capital as agreed and promised.

That was the last time we heard from her. We didn’t receive any payout nor got back our capital till this day.

We went to the her office after calls to her mobile phone went unanswered. It was locked and dark. There were other investors waiting outside the office and they had similar stories.

We waited at the building where Shirley said she lived, and there was no sight of her. We made a police report and learnt that such scams have been taking place across the world.

I felt so guilty and stupid. Looking back, I can see that we didn’t do enough research and were too trusting and lured by the promise of high returns. I threw our hard-earned savings out of the window.  I wasted away little Janice’s college funds. It is hard for us to earn and save up that amount of money again at our age.

I took on a part-time job to make up for the loss we suffered. We now watch our spending very carefully.

My husband has been very understanding and supportive throughout the ordeal, but I know the reason for his insomnia for the past year.