My favorite personal finance blogger

It was a pleasant surprise to see my favorite personal finance blogger, HYOM back in action after more than a year. For the uninitiated, HYOM stands for Help Your Own Money. HYOM started his investment blog at the same time as me (in 2010) and I have always respected his work. In fact, I am one of his biggest fans and enjoy reading his articles. However, after he suffered from retrenchment in 2011, he begun to blog less often. Since then, the local investment blogging fraternity had taken a different dimension altogether. Sadly, the scene is now crowded with many bloggers who cannot match HYOM’s writing standard. Nonetheless, in his maiden article for 2015, HYOM touched on a very interesting subject that resonates deeply in my heart and that is, entrepreneurship in Singapore.

HYOM’s post was triggered by an article from a former high flying civil servant, Mr Devadas Krishnada who commented that Singaporeans are too risk averse and lamented that this is bad for Singapore’s future growth. Devadas’ frustration stemmed from a recent recruiting experience in which an applicant demanded more money in exchange for the risk in joining a SME like his. While I can relate to Devadas’ pain point of recruiting a local talent to support his company’s business expansion, I agree with HYOM’s that Devadas’ arguments are not well balanced.

Whether you like it or not, entrepreneurship is always risky and if you are not the type of person who can accept failures, then it is certainly not for you. This is especially so in our society which places so much focus in our academic and job achievements. You are deemed to be in the “successful” bracket if you graduated from a top university with prestigious scholarship or if you hold the position of Vice President/Deputy Director in a MNC or the civil service. You are perceived as a loser chasing a lost dream if you are a struggling entrepreneur. If you disputed this, just ask among yourselves whether you have ever encouraged your kid to be an entrepreneur. Most of us would expect our children to have a good education and become doctors, lawyers or accountants. Not many of us would hope our kids become a self-employed entrepreneur, much less spending efforts to groom them.

HYOM’s article is well-balanced because he wrote from a perspective of a person who desire very much to be an entrepreneur.  Basically he touched on three very important advice for aspiring entrepreneurs:

1. Don’t start a business with the objective of being rich
2. Most Singaporeans don’t have what it takes to be a successful entrepreneur
3. Don’t underestimate the financial risks of being an entrepreneur

On the first point, I don’t have to elaborate because I had touched on the importance of having passion to be a successful business owner in my previous articles. Money can never be a sustaining motivator for a start-up to succeed and chances are, you will be burning through huge amount of your savings before you even start to earn your first dollar from your business.

And this brings me to the next point on what it takes to be a successful entrepreneur. Most people tend to downplay the amount of negative support from their friends and loved ones. Of course moral and emotional support are important. After all, if you cannot even get the buy-in from your family and friends to support your business ideas, what makes you think that you are able to even convince your potential customers to purchase your products? So negative remarks and comments from the naysayers may not be invalid. Think through and address their concerns before taking the leap. Certainly, the idea of being your own boss is sexy but you don’t want to drag your loved ones financially downhill with you if your business flops.

The worst thing in life is to see your family members suffer as a result of your poor life decision-making. If you don’t take care of the downside-risk and focus only on the upside, it may not be prudent because the market is always very competitive. The possibility of your product being the first-of-type is very low and thus it is unlikely that your idea will create a first-mover advantage. So for goodness sake, always create a safety net first before you embark on the entrepreneurship journey. You are not only answerable to yourself, in terms of personal goals, but also your immediate family as well. Henceforth, I agreed with HYOM’s point that entrepreneurs from wealthy families have an advantage over commoners because they can afford to fail in their business ventures, sometimes even in spectacular fashion.

However, if you are just a typical wealth builder in Singapore, don’t contemplate the entrepreneurship journey because sometimes the price may be too high for you to afford. Your life may be much better off as a salaried worker.

Really look forward to the next article from HYOM!

Magically yours,

SG Wealth Builder