I Started with S$30K Loan and Zero Knowledge
My investment journey in the Singapore stock market began in July 2010.
At that time, I knew absolutely nothing about shares or the stock market. I didn't know how to analyse a company, how to value a stock, or even how to identify a good investment.
To make things more challenging, I didn't have any spare capital to invest either.
I was introduced to the stock market by a friend who had already been investing for some time. He told me about his success and encouraged me to join him.
I remember hearing that he had made around S$400,000 the previous year with about S$80,000 of capital.
That sounded incredible to me.
I thought, "If he can do it, perhaps I can do it too."
The problem was that I didn't have S$30,000 or even S$10,000 available to invest.
So, I did something that, looking back today, was a very risky decision.
I borrowed S$30,000 from the bank, with my small business acting as the guarantor.
I invested S$20,000 into the stock market and kept the remaining S$10,000 aside to pay the monthly loan instalments. If I remember correctly, the repayment was around S$1,100 a month.
I had no investment plan.
I had no proper knowledge.
I simply trusted my friend and followed his recommendations.
My First Stock
My first stock was Qingmei Group Holding Limited, a company that manufactured and traded shoe soles in China.
I held the stock for about a year and, fortunately, made approximately S$1,800.
For a beginner who knew almost nothing about investing, that first experience probably gave me more confidence than it should have.
I had made money.
Perhaps the stock market really could help me make a lot of money.
But the reality of my life at that time was very different from what people might imagine when they think about someone starting to invest.
My first child was only a few months old.
I was busy taking care of her, running my small business, managing the household and looking after my family.
On top of that, I had responsibilities towards my parents. I was supporting my mother's monthly expenses and, from time to time, helping my father as well.
I was carrying many responsibilities, yet I was also looking at the stock market thinking that perhaps this could be a way for me to improve my family's financial situation.
At the same time, I felt completely lost.
I didn't understand the market.
I didn't know how to choose a good company.
I didn't know how to determine whether a stock was cheap or expensive.
And I certainly didn't know how to multiply my money.
I only knew that I wanted to make money.
From Investing to Speculating
After my first investment, I started looking at different stocks on my own.
But I didn't really know what I was doing.
One of the things I noticed was the historical high price of a stock.
If a stock had previously traded at, say, S$5, but was now trading at S$1, I would look at the huge difference and think:
"Wow, this stock used to be S$5. If it goes back to S$5, I could make five times my money!"
I thought that if the current price was much lower than the historical high, perhaps the stock was a bargain.
I had no idea whether that was actually true.
I didn't understand the company's business.
I didn't study its financial statements.
I didn't know about earnings, cash flow, debt, competitive advantages or valuation.
I was basically using my gut feeling.
Looking back, I wasn't really investing.
I was speculating.
And, as you might expect, I lost a few thousand dollars.
That was a painful lesson.
I was completely lost, but I still had hope.
I believed that if I could figure out how the stock market worked, perhaps I could make a lot of money and improve my family's financial future.
A Turning Point in 2012
Then came August 2012.
I was pregnant with my second child.
I started thinking seriously about my family's future.
Another child meant more expenses. My responsibilities were increasing, not decreasing.
I had a small business to run, a young child to take care of, another baby on the way, household expenses, and financial responsibilities towards my parents.
I knew I had to do something.
I couldn't simply hope that things would somehow work out.
So, in September 2012, I finally decided to start studying investing seriously.
My friend had actually recommended investment books to me when I first started investing in 2010.
But at that time, I was simply too busy.
Now, I felt that I had no choice.
If I wanted to invest successfully, I had to learn.
The First Two Books
The first two investment books I read were The Zulu Principle by Jim Slater and One Up on Wall Street by Peter Lynch and John Rothchild.
These books opened my eyes to a completely different way of looking at stocks.
Until then, I had mostly looked at stock prices.
Now I was beginning to understand that behind every stock was a real business.
I started asking different questions.
What does this company actually do?
How does it make money?
Is the business growing?
Is the company profitable?
Is the stock price reasonable compared with the company's fundamentals?
These were questions I had never seriously considered before.
I was slowly moving away from simply asking, "How much can this stock go up?"
I was beginning to ask, "What am I actually buying?"
But my financial situation was about to become even more complicated.
Another S$30,000 Loan
Around the same time, I took another S$30,000 loan from the bank.
My first loan still had about one year remaining.
Once again, I used the same strategy.
I put approximately S$20,000 into investments and kept S$10,000 aside to make the loan repayments.
That meant I now had two loans.
My total monthly loan repayments were approximately S$2,200.
For someone running a small business, this was a significant commitment.
Some months, my business generated enough cash to cover the repayments.
Other months, it didn't.
Yet the loan repayments still had to be made.
There was no pause button.
At the same time, my monthly household expenses were high. I had a young family, another baby on the way, responsibilities towards my parents, and a small business to manage.
It was a very challenging period of my life.
And somewhere in the middle of all this, I was trying to learn how to invest.
I didn't have a financial adviser guiding me.
I didn't have a large amount of savings behind me.
I didn't have formal training in finance.
I was learning through books, experience, mistakes, and whatever information I could find.
Looking back now, I realised that my investment journey didn't begin with knowledge.
It began with hope.
And, unfortunately, it also began with debt, risk and a lot of ignorance.
But September 2012 became an important turning point.
I had finally decided that if I wanted to succeed in the stock market, I needed to stop guessing and start learning.
That was the beginning of my real investment journey.
("This post was assisted by ChatGPT")
