By April Zara Chua
SINGAPORE — When COVID-19 first hit our shores, no one knew how monumental its impact would be to the economy. In its wake, multiple industries were disrupted leaving companies on survival mode. Salaries were reduced, and in worst cases, headcount cuts were made. With this much of uncertainty, most people were clinging onto their savings and rainy-day funds, and investing was the last thing on their minds.
Alan*, 28, a self-employed financial advisor, saw the upside of it all, and decided to risk bringing his money out to set up new businesses and invest.
“I have been investing for slightly over a year. My earlier investments were into mutual funds and those gave me decent returns considering the duration of my investments.
I have always been on the lookout for investment opportunities even before COVID-19. The opportunities were there, but they were not as attractive as when COVID-19 hit. The economy took a downturn when it happened. I firmly believed that it will only be a matter of time before this blows over and things pick up again, so I had to strike while the iron is hot.
Even though I’ve only previously invested in funds—which were less risky—I still took this chance to open a few e-commerce stores and invest in stocks. I felt everything just aligned perfectly for my plans because everything was at low cost. Stock prices were low and the capital needed to open an e-commerce store was much lower than before too. It also helped that the government launched campaigns to help people tide over this difficult period.
I opened two e-commerce stores one after the other, one selling perfumes and the other selling baby clothes. My first online store selling perfumes acted as a stepping stone and learning experience for me. I made unnecessary mistakes when I set it up and as a result, incurred a bit of cost which the business could have done without. I invested over S$5,000 on this and I pretty much lost it all.
Most would have called it a day since we were going through a lot of uncertainty. But I didn’t feel discouraged, I took the lessons I learnt from my first attempt and channeled it into my second e-commerce store selling baby clothes.
I decided to invest in an online e-commerce store for baby clothes as I felt that there was a lack of good designs online. Furthermore, with COVID-19 forcing everyone to stay home, people were shopping online more than before. I felt it was a natural progression and that is why I got into it.
My initial investment for this was much lower as I knew what the startup essentials were and only spent on what was needed. In total, my startup cost was less than S$1,000 and my running costs were between S$8,000 to S$10,000 per month.
My goal was to break even within the first three months. To be honest, I was not expecting much. However, I saw returns on my first month where I made a healthy profit of around S$1,200, after covering my initial startup costs. It only got better from there—I made SGD8,600 on the second month, S$13,8000 on the third, and S$5,800 in the fourth. It is stabilising now at about S$2,000 to S$3,000 profit per month.
On top of my e-commerce business, I also decided to invest in stocks. Most company stocks took a plunge during this time so I took the opportunity to invest in some ranging from tech companies in the US to blue chip stocks in Singapore. In total, I invested about S$15,000 into stocks and they are currently valued at S$36,000.
If you ask me what my thought process was during all these, I would say I went with my gut or I asked my wife but I know it goes beyond that. I normally think about the potential of an investment first, what type of risks are involved, and whether I’m prepared to lose this money if things don’t go according to plan. After considering all that, I seal my decision by asking my wife!
But, like in all things, there are good and bad days. The toughest challenge was working through those bad days when everything wasn’t going well—like when I lost all that I invested in my first e-commerce endeavour. I also found it tough to decide when enough was enough and whether it’s time to pull the plug on a project.
Looking back at the financial decisions I made this year, my key takeaway is to focus on what you can learn from each experience rather than on what you lost. There is an outcome for every cent spent and it is up to us to focus on what brings us value. Sometimes it is monetary value and other times it can be invaluable life lessons.
Yes, we live in an imperfect world but I remain optimistic. Make mistakes while you can afford it because these are the most precious lessons we can learn!”
*Name has been changed as the interviewee prefers to remain anonymous.