Finance People

Research: The Road To Financial Stability

In this article, we sit down with successful entrepreneur Calvin Cheng and discuss financial literacy, pivoting and how the youth can start on their journey towards financial stability.

Cheng is a Young Global Leader of the World Economic Forum in Switzerland

By Darcel Anastasia Al Anthony

Great financial decisions come with equally or perhaps even greater financial planning. From reading up on investments and stocks to attending lengthy courses on how to save up, there is never a limit on how much one can prepare oneself before taking a giant leap into the perpetual shifts of the financial ecosystem. At least, that is how businessman and entrepreneur Calvin Cheng views the world of economics.

Since graduating from the University of Oxford, with a Master of Arts in Philosophy, Politics and Economics as well as with a Master of Science in Management, Cheng has made quite a name for himself. A former Nominated Member of Parliament and co-founder of ABCC, one of the world’s largest cryptocurrency exchanges that turned over 150 million USD in a day, Cheng is currently the Co-Chairman of the ASX listed Retech Technology Co. Ltd, a solutions provider that offers online corporate training mainly in China.

The 45-year-old businessman attributes much of the success of his career to financial planning. Even as a youth, Cheng was keen in understanding the various ways to make money. He took the initiative to read up on business strategies and finance principles. Though there are courses and university societies that teach financial literacy, Cheng believes that it is important for people to pick up basic finance principles like interest rates at a young age. Failing to pick up such simple fundamentals would result in making unwise decisions and ultimately, losing funds. 

“Finance literacy should be taught in school,” said Cheng. “I think it is very important to start with the young. Otherwise as they grow older, they might sign contracts that they don’t understand.” 

Musing that Singaporeans should start financial planning as early as possible, the former Hwa Chong Institution student strongly advised those who wish to venture into finance to do their research before making the commitment. They should read up on products that they want to invest in and even seek a financial advisor for help. Short courses on how to invest and save up as well as reading comprehensive books would be beneficial. 

“Having financial literacy is important for everyone because everything in our life is tied to our finances,” continued Cheng.

Cheng was the co-founder of Lumina-Looque International, a media company which owns event companies, model agencies, and a publishing company.

Cheng stressed that the only time people can be experimental in the early stages of their financial planning is when they have spare cash, otherwise they should take more conservative routes instead. As an entrepreneur, Cheng takes risks with his own capital, however, he has made it a rule not to invest in a project that he does not understand. According to Cheng, the safest way for a novice in finance would be to invest their money in their Central Provident Fund’s Special Account. It is the only account in the world that guarantees an interest rate of 4% per annum. Singaporeans can leverage off the compounded rates until they are 55-years-old.

In the world of entrepreneurship, the action of being adaptive and making a less orthodox decision is usually condensed into one word, “pivoting”. This is often used when one tries something new that works in their favour after meeting a roadblock in their plans. A recent example of pivoting in Cheng’s career would be with his current business. Retech Technology Co. Ltd, originally an offline training school, was faced with Covid-19 restrictions in China. Realising that it would be too difficult to operate physical classes, Cheng made the necessary pivots to adapt to the new predicament and chose to digitalise corporate training. His innovation made it easier for his clients, which include large Chinese state-owned enterprises and multinational corporations, to take up the classes.

“If you keep trying to sign on people over and over again, and if your work is growing too slowly and you’re not getting enough traction, then you know it’s time to do something else,” said the former Asia-Pacific Head of Elite Model Management.

The Covid-19 crisis, like any other global pandemic, has affected several trades differently. People who already have much capital to begin with have good investment opportunities, such as in Calvin’s current work sector. However, people who are part of industries like tourism and hospitality have to cut back on their expenses. 

“I am one of the lucky ones because I am mostly invested in technology, and technology has been moving,” Cheng said, citing that market sentiments are bullish in the industry. 

Since the Covid-19 circuit breaker that commenced in early April this year, there has been a rise in online shopping. This resulted in many Singaporean youths taking their work online to meet the wants and needs of the public. Selling baked goodies and bohemian garments are some of the more common products, and doing so is most often the only means of making money for these youths. In addition, there are a few Instagram accounts that sell assorted handmade face masks. Unfortunately for these new start-ups, the popularity of similar blogshops means that competition is dauntingly large.

Though Cheng recommended these students to focus on their education and to work for others to gain experience before having their own start-up, blogshops can be an asset if planned wisely. Successful blogshops can make a hefty profit if there is adequate marketing and excellent quality of their products. However, there is always a slight chance of wasted effort and materials if these youths do not put in enough time to do research on their ventures.

“Don’t do anything you cannot afford to lose,” warned Cheng.

All in all, the first step to every successful financial planning would be to research. Before making a final decision, one should do all that they can to grasp as much information on the topic. This ranges from reading books to taking classes such as the ones organised by legitimate financial schools such as DBS Vickers and Phillip Capital. Cheng suggested not to trust social media as a platform for financial learning as most influencers do not have the necessary qualifications to be trusted financial advisors.

“Just take it with a large pinch of salt,” advised Cheng.


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