While working on my next video, I found what I have written in 2019. Reading the post, I still found it relevant now. I made a few edits and reposting it here as a new post.
In the beginning…
I was a late learner and only started to know about investing world when I started working. A total noob and with relatively less available resources then, my return was 13% down even after 5 years in the market. Instead of just going with the flow, I could have been more proactive to learn about the investing basic and set a goal earlier. The good thing about suffering a loss early in the game is that the investment amount was relative smaller as compared to the active income. Hence, the pain was not as bad and it did not douse my interest in investing.
To the new investor, sit down and set your goal as soon as possible. This will set you into action. Make sure you put in the necessary effort to learn investment basics. A year saved in learning is a year to compound your gain.
Growing the portfolio…
The next three 5-year periods saw my return varying from 11% to 15%. For these 15 years, my compounded return is about 13%. In another word, my initial capital of about 30k then would have grown to about 180k now. A 6x return that I am proud of, even if it does not amount to a lot in Singapore today.
With fund injected regularly for about a decade, my portfolio is a few times larger than what is stated above. Looking back, while I would not change the trajectory of my career path, I probably could save a bit more when I had less commitment.
Besides growing your portfolio, it is important to grow your active income. The idea again is to compound the gain as soon as possible. I am not a fan of extreme saving, so my advice is to pay yourself more first with each pay rise, then enjoy spending the remaining.
Venture beyond Singapore…
It was only in the last 2 years that I have gone into the US market. I have missed a whole decade of tremendous grow in global companies! The books that I have read were based on the US companies. Applying the ideas imperfectly, I was fortunate to have a few bigger winners that provided me the return mentioned. However, none of them gave me returns like Apple, Disney, Netflix, Starbucks etc etc. My lack of action in my thirties to find out more about global market has resulted in me not having a much larger portfolio now.
It makes sense to start with the local market. However, if your strategy is to find multi-baggers, then deploying some of your fund to overseas will definitely improve the odds. Is it too late to invest in US companies? Is it better to invest in China companies? My sense (which I hope I am right) is that both countries will remain relevant in the next few decades and US corporations will still be doing well.
After note (7 July 2023): Most people would not have foreseen what happened over the past 4 years. And I am not going to second guess what will happen in the next 4 years. I will stick to what works for me.
I could have definitely do better if I have been more proactive and decisive in my investing journey. Having said that, I am grateful to the 25-year old me for taking the first step in the journey. I enjoyed it thoroughly even though I performed averagely.
This year marks the end of a 20-year journey but also chaperons the start of another journey that I am looking forward to.