When I was about 10 years old, I immigrated from Vietnam to Canada. It’s been more than 28 years since I came to Canada. I don’t have a lot of memories of my childhood back in Vietnam. Somehow, there seems to be one particular piece of memory that I often recollect from time to time – my first attempt at entrepreneurship. It wasn’t dramatic, nor memorable, nor exciting at all, but somehow, I kept on getting flashbacks of that experience. So for this post, I’ll share the lessons that I had learned as a young entrepreneur with you.
Being Resourceful
While growing up, my family used to be wealthy. Well, at least that was what I heard from my extended family. By the time that I was old enough to remember, all the wealth was gone (due to the war and trusting the wrong people). As a result, I didn’t have any toys to play with nor did I get any allowance when I was young. I had to be very resourceful and build my own toys or find things to play with to keep my young mind occupied and entertained.
Every Item You Have Is A Valuable Possession
Since I didn’t have anything valuable, when I did get something of value, it was like a gift from heaven. One day, I got a very nice pen as a gift from my mom (it might have been my birthday, but I can’t be sure of that). The pens back then didn’t come filled with ink like the ones that we have today. So in order to write, I had to dip the tip of the pen into an ink bottle and then write on paper. A very primitive item, but a valuable item in my possession.
Entrepreneurial Ideas
Once I got the pen, I somehow instantly became entrepreneurial. Instead of using the pen like any other kids my age, I started to think of ways to turn my one and only pen into two pens or more. Since I knew how much the pen cost and where my mom bought it from, my plan was to try and sell my new pen to one of my classmates and make more money than the cost of the pen.
When A Pen Is More Than Just A Pen
The next week, I started to show my new pen to my classmates to see if anyone liked my pen. My goal was to either trade my pen for items that were worth twice the value of the pen or sell it for cash for the twice the value of the pen. I don’t remember exactly how many kids I showed my pen to, but I had a taker who was willing to pay me the amount that I wanted for the pen – double the cost of the pen.
Is This The Art Of A Deal?
My first business deal, I made 100% return on my investment. At least that was the thought when I made the deal. I was feeling proud and thought that I’ll be on my way to build a business empire. However, one thing was missing from this deal – the payment. You can’t make a profit if you are not paid yet. I don’t remember the exact detail of the deal, but it seemed like I delivered the pen to my classmate and allowed him to use the new pen with the promise to pay me in the near future.
100% Profit Or 100% Loss?
A couple days had passed, that classmate of mine promised that he’ll pay me the next week. Two weeks passed, he once again promised he’ll pay me in the near future. This promise to pay kept on getting pushed from one week to another. So my first business deal with a potential to make a 100% profit started to look like a 100% loss. I wish I was able to recall if I was ever able to collect the money. However, my guess is that I probably wasn’t able to collect any money and I lost all my investment. The memory might have been painful and I might have blocked it out and only remember my first attempt at becoming an entrepreneur.
Fail: First Attempt In Learning
From that failed first attempt to become an entrepreneur, I learn many important financial lessons that formed the backbone of my money management habits (On a side note, there is a great post by The Green Swan that talked about failure). I often reminded myself to thoroughly evaluate the risk of any investment that I make. The credibility of the people/organization that I deal with needs to be validated. How difficult it is to recover my investment capital if something goes wrong needs to be weighted against the potential profit that I will make. How much control do I have to determine when and how I get paid?
First Financial Lesson: Diversify Your Investment
This was a tough lesson for me to learn. All of my investment was in the value of the pen. My success or failure depended on a single transaction and the creditworthiness of an individual. In a way, my judgment was clouded by the potential of the profit that I’ll make without thoroughly evaluating the repercussions of the risk of nonpayment. From then on, I learned not to invest my money in a single investment, regardless of how much potential that investment has.
Second Financial Lesson: Know Your Client’s Credit History
Another tough lesson for a young entrepreneur. It’s important to have collateral to secure against when you are providing credit or loans to others. What was even worse was that I did not evaluate the creditworthiness and payment history of the person that I provided credit to. After that, my policy is to only lend to an individual if I am 110% confident that I can recover my money if the worse case scenario happens.
Third Financial Lesson: Trading Short-term Pain For Long-term Gain
When I decided to try and make more money with my one and only valuable possession, I was trading my short-term pain of not having a pen for the potential of having lots more pens in the future. Though that short term pain stung pretty bad and it cost me everything I had at that time, the long-term money habit that I gained from that experience was priceless. Some lessons are best experienced at a younger age rather than later in life.
My Two Cents
I learned at a young age that if I am going to be financially successful one day, I will need to be resourceful and leverage what I have to increase my wealth. The action that I take may mean a short-term sacrifice or trade-off, however, in the long-term, the benefits that I receive will be a lot greater. To fully reap the long-term financial gain, one needs to look past the short-term financial pain.
Do you have any childhood experiences that shaped or changed your money habit? Are you willing to make short-term financial trade-offs to gain the potential for long-term financial success?
About Leo
I’m willing to make short-term sacrifices for long term gains. That’s the whole concept of investing or starting a business. Lead a life and make sacrifices early so you don’t need to grind so hard in the future.
Right now, I’m putting in probably 40 hours outside of my 9 to 5 working on various projects. It’s been a wild year, and it’s been extremely fun.
“Live like no one else, so you can LIVE like nobody else.”
So inspiring . Thank you for sharing your great article based on your own experience .
you are so inspiring.. I hope to learn how to be like you…..
This is really inspiring! and super useful for anyone who would want to become an entrepreneur! there are so manny things you need to take into account! xx corinne
I used to work in a corporate setting and resigned to prepare for a family after marriage. We are now into starting up a business. I know it is hard at the initial stage but I am positive and will definitely try my very best to make is work and successful.
I remember being a young entrepreneur as well…. but the other day, as I was chatting with my dad about an old school friend, he told me that I once beat her up. I had forgotten about that episode. According to my dad, the reason of me beating her was that she didn’t pay for something that I sold to her. Hahaha!
These are some great tips for up and coming entrepeneurs! It’s sad that you lost your pen investment, but so a great lessons were learned. There will be failures in your business before you succeed!
These are really great tips for the upcoming entrepreneur! I started my online buisness awhile back and I did struggle at first, wish I had these great tips when I started, would have ease my journey.
Very interesting perspective on your past. I wonder if I have moments like that that I’ve just blown off or forgotten about.
This is a very inspirational post. Such great advice for entrepreneurs!! Love it!
Thank you for sharing your great article based on your own experience .
These are some beneficial tips. I love when people get out there and create things for themselves.
Your first example is why, as a freelance writer and editor, I never start any work prior to being paid. Good for you for learning a lesson from your first entrepreneurial endeavour, especially at such a young age.
I’m a Canadian as well and live in Ontario (Kingston). I immigrated here too 🙂
This is inspiring, and it’s really good that you get to understand entrepreneurship at such a young age.
I agree on Fail is just attempt of trying, this can be applied to not only entrepreneurship, but all aspect in life.
Do not give up!
xx
good that you shared here. I shall let my friends know of this , they wanna be entrepreneur
Really an amazing sharing.. More to learn from you
Great info. Thanks for sharing!
As a parent, reading this is so inspiring. I think you did a wonderful job writing this!
I always love reading your insight and your stories. Often times I feel like we learn most from our failures which make us stronger in the long run. Sounds like this is a memory seared in your head that you won’t forget and have made remedies so that this won’t happen again in the future. Great story!!!
I found that I learn more from my failures than my successes as well. I am so pleased to hear who much you have learnt on your journey and learning to be resourceful is definitely something that comes in handy x
I really like hearing your backstory. My family was not well off and I learned at a very young age the importance of saving and scrounging. I really think that stories like this make us harder workers and learn how to become successful.
Brilliant post with the pen story. I was sad you may not have gotten paid, but you r perspective reminds us of one of the miost important lessons in business. NO CREDIT!
Never give up when you fall down. Learn from it and I believe everyone will success from there.
I come from a long line of entrepreneurs, and if I pay attention, they all have incredible words of wisdom. Each always says that they’ve learned more from their failures than their successes. I’ve tried to remember that every time life takes a downward turn!
I know that all of those things are imporant if you want to be a success in business. It’s rought out there sometimes. But I know that ultimately investing in myself is what I want to do.
When you start early, chances are you’ll learn more and get to try more things than the usual. Some entrepreneurs can’t have errors in their business and that’s because they didn’t give themselves enough space to learn.
Great tips!!! I think viewing failure with a silver lining is so key, if you are terrified of failure, you’ll never do anything!! You just have to take a leap, and learn from any failures.
A thought provoking post this! Very informative and with some lessons I really ought to be passing on to my own children (who are half Canadian too!)
This is such an inspirational post. I really admire what you’re doing 🙂
Louise
What an inspiring post. I could never claim that I am good with my finances but I’m learning. This is a great read for me.
Knowing your client’s credit history tells you a lot about how serious they are in working with you. And, whether or not you can actually help them in the meantime.
I am very much willing to make short-term financial trade-offs to gain the potential for long-term financial success. B ack when I was a child I ussed to sell different kinds of things in front of our house to have money. I even rented out comic books.
Thanks for the inspiring sharing! I would love learn since small and keeping a habbit is all started when you are small =) But it also never too late to learn!
I am not a high risk taker. I would invest a little but not much because I don’t believe in taking high risk.
Thanks for the motivation, there is no easy way to be successful. Everything is hardwork and determination.
It’s so important to be resourceful and use what you have. When money is not an option, trading supplies definitely works!
Nowadays, its very hard to find a business that when people buy, and they will return to buy from us again.Too many competitors for a single business. One way to make sure the business success is, the price play a huge part on selling.
Leo, I have looked around your blog to try to find what is in your portfolio of investments in terms of stocks/equities, option contracts etc (excluding real estate) . Any chance of you posting what is in each of your portfolio in each of the TFSA, RRSP and non-registered accounts?. Is it hidden somewhere or do you choose not to disclose them?
@John, thanks for your interest in my portfolio. I don’t post the details of my holdings because of the following reasons
1) I believe in teaching and presenting concepts not advising people what to buy or sell.
2) For liability reasons – if I don’t posted, then there is no chance for people to mistake it for a recommendation so people would not come back to me if they did not do well with their own portfolio
3) My motto, “give a person a fish, you feed that person a day. Teach that person how to fish, you feed that person for life.” Same thing for investments.
@ Leo, thanks for the reply as well as the clarification