How I Built My Wealth in my Early 20s
For some of us, the process of building wealth may seem difficult and confusing.
It was the same for me.
Should I start to learn how to invest first?
Should I secure a higher paying job although the company is not ideal?
How do I invest?
My journey was not too different from yours.
Part 1: The Realisation
Before I entered Temasek Polytechnic, I started building my wealth through working part time jobs. Like me, most of my peers also worked in restaurants or as admin assistant in various companies.
Back then, I was drawing $7 per hour as a Fish & Co waiter. The training sessions were not well conducted. I was simply given the menu to memorise and I could start work immediately. I felt terribly lost in the first few sessions.
Thinking back, perhaps I was a “strawberry”, I decided to leave and pursue another job at a tuition centre start-up. The centre was generous enough to assign me with a job which required me to create model answers for examination questions.
The pay was $11 / hour. 57% more than my previous job at Fish & Co!
I remembered that my first pay was $1,300. It was such a HUGE sum!
Can anyone of you remember how you felt when you received your first pay?
Excited? Proud?
Same here! But I was dumb and foolish. I became super generous overnight.
I started treating my friends free food and cab rides. I spent on branded clothings to impress people that I did not like. At the end of the day, I was left with no savings.
I struggled badly. I wanted to make back the money which I’ve spent frivolously. After thinking hard, I decided on…
PARTICIPATING IN CONTESTS AND STARTING A SMALL BUSINESS!
Contest was a great way because I did not need to give up my time and I did need to put in any money to win! Okay, maybe, I need to spend some time to fill up the contest forms.
Being strategic, I chose contests where the participation rate was low. I asked EVERYONE around me to participate. Or I participated using their accounts and I would get a cut of their prize money!
Some of my prizes:
When the prize was received, I sold away most of my prizes hurriedly.
As for my clothing business, I was so intrigued by how my peers were obsessing over branded clothes. Even if the design was not appealing, many of my peers still bought for the brand. I took a notepad and visited most of the stores in Orchard Road.
I noted down the prices of all the branded clothings that were easy to sell. Clothings such as t-shirt, polo, and jeans. Then, through some connections, I purchased the same identical apparel from overseas at a substantial discount. After which, I would sell them in Singapore.
My marketing was simply posting on forums such as HardWareZone. Zero costs.
Overall, I chalked up over $15,000 which was a mixture of savings/earnings.
Why did you not learn how to invest first?
As a young teenager, I barely had $1,000 in my bank. If I were to invest in the stock market and make 20% returns in the stock market, that would be $200.
Is that a lot? I would think so, but in terms of priority, that’s not correct logically.
A 20% returns in a year is considered a lot but do I cap my own earning at $200?
What if I go out there and start reselling apparel, I can earn $200 in less than a month!
This led me to a simple realisation.
When my capital is small, focus on building a skillset or business which generates cash flow. When my capital is big (>$10-20k), focus on strengthening my investing skill set.
(RELATED: The Harsh Reality)
The maths tell it all.
20% of $1,000 is $200.
20% of $10,000 is $2,000.
20% of $50,000 is $10,000.
I do not discourage anyone from picking up investing seriously, it IS the ultimate skill set that anyone MUST have. You can pick it up any time. However, the focus should on building your monthly cash flow when your capital base is small.
Build a strong and consistent source of cash flow!
In today’s work, we are not restricted to anything. There are so many ways to make money!
- Dropshipping
- Creating an online course
- Teaching someone a valuable skill set such as marketing,
- Provide tuition
- Launch a Youtube Channel
- Join a Freelance site such as Fiverr
- Become an influencer
- Participate in focus groups / surveys
- Write an ebook and sell
- and so much more!
Part 2: Learning How to Multiply Your Money!
While it may appeared that I was progressing, the fact was… I wish I knew something earlier! 🙁
Here’s a story before I explain further…
I loved to enjoy free things. One of the best resources in the world is the library! I went to Tampines library to pick up a copy of Forbes magazine.
From the magazine, the truth about wealth creation stood out like a sore thumb to me.
It is back to the basic mathematic in school!
Most of us receive our money at the end of the month (addition).
Throughout the month, we spend our month (subtraction).
Our savings will grow as long as we add more than we subtract.
How about learning how to multiply it? The school did not teach us at all.
After obtaining over $15,000 of savings/earnings, I shifted gears into learning how to multiply my money. I tried to keep my clothing business but I saw a greater earning potential from investing because of my asset base.
How did my story unfold? Stay tune for part 2….
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Hope you enjoyed this short sharing of mine! Share with me your stories at kelvesy@gmail.com! I would ABSOLUTELY love to hear them!
BONUS:
When I was working at CLAN, I picked up a best seller book called Richest Man in Babylon. It was life-changing and it created a new way of thinking forward.
I summarise my key learnings here:
- Always save money for the rainy days
- Don’t spend more than you need, be careful how you spend your money
- Invest wisely — pick sound investments and learn how to invest properly
- Avoid investments that sound too good to be true.
To skip all of the reading, watch this video: