When I was still an army regular, I have always dreamt of running a business that that generates an income without me actually managing it. My idea is to hire someone capable to run mundane day-to-day operations, reports on the revenue, and hopefully, at the end of the month the revenue surpasses overheads and expense, with enough profit to end up in my pockets.
Looking back after so many years, I realised although it was a plan with many loopholes. To start a business, the first hurdle is the initial sum of money which is known as startup capital. Even I do have the capital, what’s next? What business? I do not have any experience or expertise in term of running any business.
The 90’s - MLM
There were some amongst my peers who ventured into the 3-letter word starting with ‘M’. Yes it was the good old highly-profiled barely-legal (and completely illegal in Singapore) Multi-Level Marketing. I regret to say I naively took part hoping to make some quick income. In the year 2000, Singapore government came up with a revised
‘It shall be unlawful for any person to promote or participate in a multi-level marketing scheme or arrangement or a pyramid selling scheme or arrangement or to hold out that he is promoting or participating in such a scheme or arrangement.’
The early 2000’s -Forex trader
Still without any startup capital, my next choice a money making business was forex trading, Some of my peers then were showing the quick money that with the speculative currency trades. At the same time, many private entities are offering forex trading courses on “How to be a successful trader” at a cost of a few thousands. Being curious (but more careful this time), I started reading forex technical books, opened online (demo) trading accounts preloaded with some money, studied the trends, like candle sticks etc, participate in online forex forum, trying to get some tips and pointers on how to be a good and profitable trader. I blew every demo account that was created, yet I managed to convinced myself to open a real trading account, placed deposit of $1000 to trade and blew the $1000 out of the water.
The late 2000’s - Mutual funds
I left my service in 2008, and had the opportunity to have someone telling me about mutual funds. I felt that this was different from my past 2 “businesses”. I can leverage on professional expertise to make my money grow, or receive dividends from the invested funds (passive income). I began with a small sum and voila, it worked, my capital grows within the first year without me even need to monitor it. I was overwhelmed with the initial success, I thought I have hit a goldmine, but then in the later part of 2008, funds performance across many sectors were badly hit by the financial crisis in the US, my funds portfolio value was down by 60%.
A decision that I still kicked myself today
I reacted by selling the funds at a 50% loss. To make matter worse, a few months later, the funds I sold off rebounded back with vengeance, by up to 80%.
Today in 2019
Investing into mutual fund is similar to running your own business. You make your own buying and selling decisions, and there are risks involved. However, with the information available from the internet, you can research on individual fund performance, and depending on your personal investment strategy, you can choose to apportion your capital into capital appreciation funds and/or dividends funds. With knowledge-based decisions on risks involved, it also means the probability of losing initially capital is very much reduced.
To further mitigate the risks, it is advisable to have additional funds to enter the market when funds market turns bearish. The best part is that you can kick off this business with as low as $1000 or a monthly $100 (if you prefer long-term business).
Through my sailing experience on my entrepreneur-”Ship”, these are the lessons learned;
Don’t make emotional or rash decision when market is slightly down
Don’t attempt to run a business or be a day trader if you have a day job (you won’t be make it both ways in the long term, and your day job will suffer as well)
If you have an investment strategy, stick to it, don’t make any knee jerk reaction by cutting cost
Timing is everything
Interested in starting sailing with Mutual Funds now?
You can start today by leaving me a message on the Chat below, or PM me on my Facebook @borhorserun.