Are you planning on starting a new business?

But why??!
This post was inspired by the number of people whom I have talked to and aspire to start their own businesses for a few common reasons.

Back in 2012, when I left my job to do full-time tuition and run a tuition centre as a business, I was thinking. Was I foolish to do so? Probably. My portfolio would have been much bigger than now had I continued as an employee while doing tuition part time, although I would have been much more tired with much less free time.

Since then, while I have not regretted the move (yet), my income certainly hasn't seen a phenomenal growth. I was fortunate to have built a sufficient war chest enough to last me for quite a few years, and fortunate not to be making losses (yet).

The learning curve so far was steep, very very steep. I know I have learned much more over the past 8 months than I did over the 4 years I was employed. I have learned what is meant by marketing, advertising, branding, as well as the different government grants and taxes, the different company structures, more about profits and losses, etc. In addition, I have met up with many people over different industries, talked to many friends who have their own aspirations, etc.

It is interesting that a number of people out there are a little dissatisfied about their jobs. Yet most of them stayed at the same job for the same few reasons
1) "I need the money."
2) "I don't know what else I can do."
3) "I want to start a business, but I don't know what business I can start."
4) "If I failed, I don't think I will be able to get employment again at this age."
and probably more I can't remember for now.

To me, the reasons can be broadly classified into one category, Fear.
The fear of change, and the fear of failure.

In my previous company, my superior used to tell me (and quite frequently), "don't be too creative in your approach, just do the necessary things to complete it. You still have a long future ahead in this company."  This happens in most of the times I suggested certain changes, which probably are too radical I supposed, to be fair.

Don't get me wrong, there's nothing wrong at all playing safe all the time, and there's nothing wrong staying employed. But to me, if one wants to start a business to take on the stiff competition in the unsheltered outside world, one needs to step out of the box and try different things. It is not about playing safe, it is about daring to change, daring to fail, and daring to pick up from failures.


For the unsuspecting who are planning on starting a new business, what are your reasons?
Let's get a reality check on the common reasons.

“I’m working so hard at my job and being so stressed all the time.”
But hey, doing business is more hard work than ever before! Your business system isn't ready, and your responsibilities are much more! Any medical leave or vacation leave you take in the initial stages may cost you your business.

My friends usually raised their eyebrows when I told them I'm actually working harder while earning less now. Well...

"I need a second income stream."
Then why run a business? Why not just take on another part-time job, like driving a taxi, etc? Expenses usually comes before revenues, and the expenses could kill you before the business turns into an income stream.

Business building and branding takes time, lots of it. And the amount of time needed could be quite demoralizing. Just imagine weeks and months with minimal business.



“I hate my boss, and dislike being an employee.”
I realised I have more bosses now. My students, their parents, and even my partner and my tutors are all my bosses.

In a way, I have to meet objectives of many more people than before.

“A business will make me rich.”
In a way, I am probably a living example at the moment that starting out by myself earns me less than if I was a working professional. Certainly, there are examples out there where running a business earns the entrepreneur more than what he/she would earn if he/she remained employed, but I guess for the majority, it may not be the case.


As of now, I have my fair share of frustrations, of failures and of headaches of my first attempt to do a tuition business. The business aspect of tuition is addictive, but results are seldom immediate. An advertisement once out, seldom bring an immediate response. The same goes for any other marketing or advertising activities. Branding, recognition, takes time to build.

For everyone who have an aspiration to start a business, I hope I have not discouraged you. Because if you get discouraged just by a blog post, you are probably not suited to start one.


* What makes me continue in this is the addiction of running a business (or more than 1). To me, it feels like playing chess. I was a chess player during my student days, and honestly I was addicted. Every move I make in an attempt to advance my business position is like making a move on the chessboard. The difference is this chess game is for the game of life, and my opponents numbered more than one.

US Markets hitting new highs!

*** Note: This post is of a very simplified calculation. There's nothing professional in it. ***

The numbers are appearing to break new highs. USA has broken it's high of 14198 in 2007 while STI appears to be languishing far below the 2007 high of 3906.

But is it really due to nominal value or currency value?
I shall make a simple comparison using USD to SGD as a simple consideration.


Adjusting for Currency Value + inflation
********************************************************************
Year 2007:
1 USD = 1.55 SGD
Dow Jones hit a high of 14198

Year 2009:
1 USD = 1.5 SGD
Dow Jones hit a low of 6469

Year 2013
1 USD = 1.23 SGD

Supposed value of SGD (simplified assumption) remains a constant,
14198 will work out to be 17892 (14198 / 1.23 * 1.55)
6469 will work out to be 7889 (14198 / 1.23 * 1.5)

Adjusting for average inflation rate of 2.0% for the USA from 2007 to 2013,
17892 will turn to 20149 today
7889 will turn to 8539 today

There is difference of 11610. Given the Dow Jones close is 15105, a difference of 6566 from the low.
The retracement percentage is roughly 56.6%



And if we assume the SGD stays at a constant value throughout.
With a high of 3906 in 2007 and a low of 1455 in 2009 (numbers from daily values of STI from Yahoo Finance)

Adjusting for average inflation rate of 3.5% for Singapore from 2007 to 2013,
3906 will turn to 4801 today
1455 will turn to 1670 today

There is difference of 3132. Given the STI is about 3430, a difference of 1760 from the low.
The retracement percentage is roughly 56.2%

In other words, nominalizing all to SGD and country inflation rate actually shows that the retracement percentages are very close (56.5% vs 56.2%).




So while the numbers in Dow looks to be breaking new highs, it is in my opinion a credit driven rally, made possible by the devaluation of the USD. In other words, valuations of stocks in USD are higher because valuations of USD has dropped significantly.

Just some two cents of thoughts, with plenty of simplifications.

Musings and Ramblings

Seriously, I have no idea what to write for this post, but I'm just rambling along.

Much as I would like to have a more relaxing 2011, Jan 2011 turned out to be a crazy month so far. I had so many things on hand.

As my dividend investing strategy continues, I realised that my cashflow gets better over time. While having achieved a $1.1k average monthly dividends does not ensure retirement, it does give some form of flexibility if I ever want to strike out on my own. Given my current circumstances, if I were to remain in my current state, I could retire if I want to right now, giving the occasional tuition and doing the occasional trading.

But I'm not going to do so. Why? It's not really about money, although more would be nice. It's about my passion, it's about what I want.

Why do I teach tuition? I really find it fun, but that's only one side of the equation. The best reward comes from successfully turning a failing student into acing the exam! The most recent example would be my 7 O level students with a score of 2 A1s, 3 A2s, 1 B3 (had expected an A2), and 1 B4 (from failing). It's a feeling of euphoria that I can't really describe with words when I know that these students who ace their exams were once lacking confidence, scoring badly, and looking for me to help pass their exams.

Musings -- A loyal employee's life

Musings is a category where I will muse about random stuffs

I just had a salary raise from my full time job. While it might be fair considering the company's position, I'm still a little dissatisfied. However, I'm still stuck because I have to serve my scholarship bond with it.

Basically, I'm dissatisfied because this will contribute very little to the rate at which one can grow his/her networth. Being an employee entails
1) obeyance, follow the orders and directions of someone higher up!
2) being paid a fraction of your worth. The company needs to make profits for shareholders and for the CEO to own a personal helicopter!
3) repeating the same mindless thing many times. This is what others call job experience, or in my opinion, the experience of being able to repeat jobs that are slightly too complicated to be automated by a robot.

Musings -- Credit Card Debt Defaults

Musings is a category where I will muse about random stuffs 

Recently, I read with interest that the statistics released by the Credit Bureau of Singapore. A whopping 7.16% of those in age group 21 to 29 defaulted their credit card debts. That's about 1 in 14 of us. The news article can be found here.

Being in this age group, I'm indeed extremely appalled. Most of the times, to be eligible for a credit card, one needs a minimum annual salary of $30k, so these are not exactly people who do not earn enough. It really makes me wonder how these people get into such debts. Most of my friends in this age group does not appear to be in credit card debts.

Musings -- Achieving a million dollar portfolio

Musings is a category where I will muse about random stuffs

I remember in my primary school days, there's always essays on "what would you do if I have one million dollars". Somehow, the sample essays, or the essays written, were always about the same content, which are

1) I will donate some money to charity.
2) I will spend the money on a holiday.
3) I will spend the money to buy so and so something.

etc... etc... etc...

Looking back, it does appear interesting that very few essays would include using the amount in an investment portfolio. Perhaps some would say that they will use the money to set up a business, and that's that. I do understand that the main gist of writing such an essay is to train the students in thought processes, language skills as well as composition skills instead of skills of managing finances. Yet, I can't help thinking how this might impact the little minds 20 years later in the area of finance.