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Personal perspective of Phillip Nova Strategist, Derek Wee, 30 years old
Full-Time National Service is a mandatory two-year obligation that every Singaporean male has to complete. During this time, servicemen would exchange their time and energy for monthly allowances, accommodation and daily meals. Back in my day, most Full-time National Serviceman (NSF) received a monthly allowance of S$560 a month when we entered the army. After roughly three months of training, we graduated and got posted to our next phase of training. I was posted to the Specialists Cadet School and cadet my allowance was raised to S$845 a month. After six months of training, I graduated as a 3rd Sergeant and my allowance got bumped up again to S$1050.
Assuming I did not spend a single cent, below is a breakdown of the total amount of allowance I would have received from my time in the NS:
| Allowance | Duration | Total | |
| Recruit / Trainee | S$560 | 3 months | S$1,680 |
| Specialist Cadet | S$750 | 6 months | S$4,500 |
| 3rd Sergeant | S$1,150 | 9 months | S$10,350 |
| 2nd Sergeant | S$1,300 | 6 months | S$7,800 |
| Total | 24 months | S$24,330 |
A majority of my two years was spent in camp. Even on days where no activities were scheduled, I stayed on the camp premises. I spent a lot time on my mobile phone and came across the concept of investing and trading. I vividly remember reading an article which taught the concept of inflation, and how we could lose money by leaving our savings in a bank that returned little to no interest. Back then, I had about $10,000 in a savings account but the interest generated was too little. Motivated to do something about this, I began reading up on trading and investing content. Little did I know that this would be the start of my investment journey.
Contrary to many investors who start with stocks, my first dips into trading was in Foreign Exchange (FX). I used one of the more popular FX brokers then, due to its competitive spreads (the cost difference between buying and selling the same currency pair). I recall opening my first account with a small sum of $500. As FX is a leveraged product, I only needed to deposit a small amount to place a large trade.
As my broker offered a margin rate of 20:1, this meant that I could place trades that were 20 times the size of my current trade amounts. For example, to buy a micro lot (1,000 units) of GBP/USD trading at 1.3229, I would only need US$66.145 to place the trade (1000 x 1.3229 / 20).
Shortly into my trading stint, I developed a habit of checking the FX market every morning and placing trades in the night. After a series of losses, I was making US$5 to US$10 a day trading FX with US$2000 of my savings. I learnt a lot about technical and fundamental analysis, and knew that taking active steps to grow my money would benefit me more than just leaving my money in the bank. At the end of two years, my trading account had about US$2800, a profit of about 40%. Overall, I managed to save $20,000 by the time I completed NS – a feat that I would not have been able to achieve leaving my money in the bank.
Looking back, there were three things that I wished I had done differently.
Firstly, allocating more of my savings to trading FX. Prior to starting my trading stint, I had about S$10k in savings of which I only took out about 30% to trade. Should I have traded at a higher volume, I might have made more profits.
Secondly, diversifying my portfolio by investing some of my money into dividend yielding blue chip stocks. As a 21-year-old, I had a much longer investment horizon and could afford to expose myself to higher risks. Singapore stocks like DBS was trading at much lower prices compared to today, and the stable dividend pay-out of around 6% would have made me a significant sum over the years. Finally, I would have spent more time building my financial knowledge through free online webinars, articles and courses. These would have helped me make better trading decisions and possibly limit losses.
Whether you are still in NS or are about to enlist, I hope this article encourages you. You could use these two years to achieve a little more financially and/or improve your financial literacy. Phillip Nova is an official participating merchant of the We Support NS Campaign 2022. National Servicemen, NSF and NSmen will receive $100 when they open an account from 1 July to 31 August 2022. Find out more here.
