Worst investment ever

Starting his entrepreneurship journey

Rayson met a gentleman about three years ago, and they quickly became friends. Rayson found the friendship quite beneficial as they got along pretty well. They would attend all these seminars and conferences together. Often, they would discuss business and future projects and help each other out with the brainstorming.

A caring friend lends a hand

The gentleman happened to be a financial service provider, and so one day he sat Rayson down and they discussed his financial plans. They also talked about the kind of insurance coverage that he had. It so happened that Rayson didn’t have any insurance.

His friend told him that it was best he considered investing in insurance. He recommended an Investment-linked Insurance Policy (ILP). He explained to him that if he invests X amount, he will get a certain amount of money back. He promised that the monthly payment would increase in a couple of years, and the investment returns would come in as well.

Trusting his good friend

Because Rayson didn’t have any insurance at the moment, he thought, this could be a good thing. Having been good friends for a couple of years, Rayson put his trust in his friend and signed up right away without giving it much thought. His friend knew him well so definitely he was recommending something good for him. Rayson even went on to recommend him to his other friends, some who also signed up for the insurance policy.

Never mix business with friendship

Rayson was excited about his new investment and he would talk about it with his friends and podcast listeners. After a while, another friend, who is also a financial consultant, told him that the kind of insurance he’d signed up for wasn’t making financial sense. Rayson, confident in the friend who sold him the policy, rubbed this off as a case of one consultant being jealous of the other.

One day he met up with a listener, and as they were talking about the podcast they happened to also talk about affordable insurance. Rayson told the listener about his, and the doubts his friend has been having about it. The listener drew the insurance plan down for him and it all made sense now. It became clear that his friend had duped him into signing up for a policy that would see himself benefit more than Rayson would.

It made the most sense to cancel the insurance policy right away even though the friendship was, obviously, not salvaged. At this point, Rayson had already made thousands of dollars in payments, and all he could get back was 1,000 Singapore dollars. To add salt into injury, he had to use that money to pay the remaining term of the insurance policy.

Lessons learned

Never allow your emotions to affect your buying power

Don’t use your emotions to buy anything as it affects your buying power. Investing in anything to blindly support a friend is a no-no. Treat this investment with caution just as you would any other. Ask yourself, why do you need that product? Is it only to support the person selling it? Or is it because that product is really useful to you?

Educate yourself about the product first

Before you go and sign up for anything, do your research and learn as much as you can about the product you’re about to invest in.

Andrew’s takeaways

Don’t be quick to invest

Don’t be so quick to invest in any product. Take your time to learn about the product and gain a deeper knowledge of it.

Know your rights as an investor

A few things that you should expect from any financial services provider:

• You have the right to honest, competent, and ethical conduct that complies with applicable laws.
• Your financial interest takes precedence over those of the professional and the organization that is approaching you.
• You have the right to an explanation of fees and costs charged to you. These fees should be fair and reasonable.
• If you don’t understand something, you have the right to demand that it’s explained over and over again, in a simple way until you understand it.

Take as much time as you need before making a decision

Don’t let anyone pressure you into making a quick investment decision. You have a right to take your time to study the product, sleep on it, weigh your pros and cons until you’re ready to say yes or no to the product.

Talk to other people about the investment

Tell people about the product you’re thinking about investing in to get their thoughts about it. Someone may save you from making your worst investment ever. However, don’t let anyone drive you down a path where they’re pushing you to make a decision. Remember, this should be part of learning about the product.

Actionable advice

When signing up for any investment, find out the terms of canceling the investment midway. With some investments, you might still have to pay the full amount even after canceling.

No. 1 goal for the next 12 months

Rayson’s number one goal for the next 12 months is to complete a book he is writing based on the idea from Tim Ferriss’s Tribe of Mentors. So similar concept, but different in terms of content and other parts of the concepts as well.

He’s also working on an online course to teach people how to be more fluent in terms of branding and how to strategically connect with people like Vaynerchuk, Grant Cardone, and other celebrities, multi-millionaires, and entrepreneurs without any manipulation but by being authentic.