Suddenly I was thinking when I actually started my investment journey then I remembered I did made my first investment with OCBC at a tender age of 18 (too young right?) without any guidance; it was a “capital protected” structured deposit with a fixed investment period of 5 years.
Story begins 12 years ago back in 2001, I still clearly remembered that I walked into an OCBC branch in my neighborhood, wanted to put my savings into a fixed deposit account. When I told the bank officer, I had $10,000 (accumulated after years of savings through my weekly allowance from my doting father, working part time $5/hr sales man and “angpow” gathered each year) and wanted to put into a FD, he immediately referred me to a relationship manager (RM).
The RM treated me politely and with full respect like a matured adult (quite “high” at that moment) and tell me all the standard items “bla bla bla” and finally he took out a piece of paper and started drawing an investment plan of 5 years with beautiful returns of at least 1% every year plus “POTENTIAL” returns up to 4-5% if the fund performs well and the best thing, it was 100% safe and capital protected if I hold my investment till the end of 5 years.
I don’t even remember what was the fund strategy and what kind of instrument is the SD investing in but I am very interested in the total returns of total returns of 5% vs. FD of only 2-3% per annum.
When I told the RM I was only 18 (min age to sign the documentation is 21), he looked disappointed (maybe I look damn “chao lao”) as if he wasted 1 hr to explain the details to me. But he was persistent; he says why not you ask either of your parents to come over to the branch to sign the document as your guardian.
It was 3.30pm and branch closes at 4pm, I told him why not I bring my mum over to sign tomorrow but he said that the branch can wait for us, no worries on that. Damn sincere!!
Okay lah, I immediately called my mum and she rushes down from her workplace (workplace nearby) within 30mins and after I “assisted” the RM to explain this product like a “sales man” myself and with a total returns of 5% per year was awesome (my persuading skill also quite good after years of working as part time sales man), confirmed earn one and capital protected somemore.
Mum was eventually convinced and signed on the dotted line and by then it was already nearly 5pm. Power right, branch delayed closing because of me.
On the hind side; how I hoped my mum scolds me and don’t allow me to make investment at such a tender age? I knew “shit” about investment; I was only concerned about the 5% returns, that’s it.
So happy, I thought I made a superb investment decision and every year can have $500 (5% of 10k) returns, better than the returns of the FD my parents renewing every year at 2-3%.
Excited when I saw the first letter from OCBC, telling me my returns for first year was 1% and $100 was credited to my savings account. God damn disappointed, I was thinking at least also have $300-$400 right, how come only $100? Worst thing was, the current value of my SD was below $10,000.
Shocking, I thought he says it was capital protected. I went back to search the document that we signed, it did clearly states that the SD will be “mark to market” at an ongoing basis. The RM never say this to me leh when drawing the superb returns on that piece of paper.
Cut the story short, 3 years later; at age 21, a matured young man serving National Service (NS). Well more matured than 18 years old right? I received another letter from OCBC at the end of 3rd year and it was 1% again, the return for 2nd year was also 1%. This means my total returns for past 3 years were 3% and current value was below my initial investment amount.
Angry and about time to make a decision, I decided to go to the same OCBC branch to terminate the SD and take back my investment. This time doesn’t need my mum to sign anymore, “heng ah” else sure get an earful of nagging by her.
Although I can’t remember what the SD value was when I made the redemption, but I vividly remember that including the miserable 3% or $300 I received for the past 3 years, I did not lose out much.
This also meant that I didn’t earn a “shit” out of the investment because of my early redemption and still loses out on inflation. Of course you might be thinking if the RM was around when I returned to the same branch. Long gone already!!
Scared and worried of making any further investment, I only dare to put my money into FD account earning 3-4% (interest rate was definitely higher than current) till I turned 23 years old before started my REAL investment journey.
Nothing to fault OCBC or the RM, it was my own decision back then but this will always serves as a good reminder throughout my investment journey. On the hind side, luckily never lose my capital else it will be a really costly lesson.
Lesson learnt!! Read properly before you sign anything including fine prints. When making any investment decision, do your own research and trust only yourself and not hearsay by others.
What’s your first investment and at what age? Lets learn from one another by sharing lesson to avoid making the same mistake again.