Hi Derek,

I just came across your blog and was very inspired by the posts that you’ve done. I like how you did up an asset portfolio (something I’m doing on my own as well..) Thanks so much for doing this, really appreciate the website.

I just wanted to ask if you would mind sharing a bit more of your journey with me in terms of how you grew your wealth, perhaps in the last 10 years..? I find it hard to find good Singaporean blogs which share how they grew their money. I’m a 27 year old who has worked for a number of years, and like you, single, and find it challenging in deciding where to allocate my money and how best to grow it. I know this is a personal issue, but it would be very encouraging to hear from someone financially savvy and has perhaps a few years more experience than me in managing their personal wealth.

Thank you and I hope to hear from you.

Best regards,

Hi Y,

Thank you for your kind words. I will be glad to share my journey but it is also important that you find your own path because everyone has a different ‘DNA’ – what works for me may not work for you.

The fastest way to save more is to cut down on my expenses but the question is what can I cut back on? I don’t think I am spending a lot but yet I am not able to save much either. Hence, I started recording my daily spending – I started with Excel, various software like Microsoft Money and finally went back to Excel. I’m surprised that cutting down on some of the small expenses goes a long way in increasing my savings (积少成多). E.g. I use to spend $0.70 on The New Paper everyday and I will buy magazines every week. This work out to about $20 a week. Multiple it by 52 weeks and that is $1K savings.

Some people talk about drastically changing your life style and I survived on $20 a day for a while but I found it to be extremely challenging. I agree that some lifestyle changes is required but it is also important to find the right balance.

Since my primary source of income is my job. It is only natural to think about how I can increase my salary. I thought that having a good attitude, increasing my experience and achieving certifications will put me in good stead. However on the first day of my second job, I saw an entire department being retrenched. It struck me that the above qualities may not be enough and I also need to remain employable by staying relevant to the industry. E.g. I am working on an obsolete or proprietary product for many years and can be considered an expert but when the company decide to shut its doors, do you think it will be easy for me to find the same job? In this fast changing society, it is important to constantly upgrade and keep pace with it. I am ‘fortunate’ that upgrading is not a choice in my industry.

To supplement my income, I did some data entry jobs. It was simple but extremely time consuming. Time is a valuable commodity and I was looking for a way to increase my income without having to give up all more leisure time. While reading up on finance and investing, I came across the term active and passive income. What I have been doing so far is active income – working hard to earn more. Passive income is an income received on a regular basis, with little effort required to maintain it, and it is not difficult to guess that investing is my preferred choice of passive income. However while little effort is needed to maintain it, the initial effort is huge.

I entered the stock market with a “Gung Ho” mentality of all or nothing. With a capital of just $2K, I dived straight into the stock market and bought just one stock. I was sure that with my many hours analyzing it, this stock will definitely double my money. However, I panicked and cashed out after seeing it dropped by 10%, all in a matter of days. I tried out various ‘strategies’ in hopping to find the one that will suit me and then the sub-prime crisis hits. I have heard of stories of people losing everything but I escaped unscathed. Credit has to go to my gambling days because I learn to never punt more than what I can afford. Although my portfolio took a battering, there was no pressure to sell them. As luck would have it, I have a significant portion of my portfolio in a stock that continues to pay me a steady stream of dividend. This allayed my fears because as long as the company don’t go bankrupt, I am bound to recover my money someday.

And so the crisis passed, some of my stocks recovered and some didn’t, and I continue to find the investing style that suits me. It was sometime in the fifth year of my investing journey that I calculated my returns and I was surprised that it did not even beat the Index! I would have switched over to Index Investing at this point but my personality forbade me  – it is just so much more tempting to own a piece of the company than a Index. However I also have to admit that I suck as an investor

I notice that although my returns was poor, my portfolio continue to grow in size. I have been diligently allocating a portion of my salary into my investment fund even during the sub-prime crisis. I come to realize that while I may not be good in growing wealth, I may have some talent in accumulating wealth. This lead to a change in my investment strategy – to invest in Index stocks during a recession and the formation of my war chest.

I have come to the end and I hope you don’t find it too wordy. Do not be too hasty in following the footsteps of others. Take a deep look at yourself and decide what best suits you.

If you don’t mind, I will be sharing your email in my blog and others can give their views too.

Best Regards