Money Choice: My appetite for high risk investments is addictive

By Francis Kan

SINGAPORE — An appetite for risk led to large losses for serial investor Jenny Goh who has put funds into everything from land banking to diamonds. These days her money is invested solely in her own business ventures.

“As an entrepreneur who has run my own PR agency for over 10 years, I’m clearly not risk-averse. But that also reflects how I used to invest.

Over the years, the knowledge that I could win big has led me to put my money into many different types of alternative investments. That said, I only ever invested cash that I could afford to lose.

I started in my 20s, investing in everything from land banking to diamonds. For most of them, I had hoped to get my money out in two years, with a tidy profit. Unfortunately, I lost money on all of them.

My first alternative investment was 12 years ago in land banking in Canada. I had just left my corporate job and a friend introduced me to the scheme. The company was well-known in land banking and had a good track record. In fact, they are still doing business in Singapore. Real estate is also seen as a safe long-term bet.

I parted with around $20,000 for a 1-acre land parcel in Calgary. The sell was compelling – the land was supposed to be developed by the Canadian government as part of a commercial super corridor. But that promise never materialised. As it turned out, the land’s potential had been overestimated, and there was actually no demand for it. To this day, I still own that land parcel.

I clearly didn’t learn my lesson, because a few years later, I was introduced to the idea of diamonds as an investment. The scheme was supposed to have worked like this: you purchase a Grade A diamond – I spent $30,000 to purchase mine – and, each year, the company would pay a return of 1% to 2% on it. In five years, the initial sum invested would be returned. But the ‘deal’ was tied up in deadlines I was unclear about.

When I tried to cash in, I was told that I had “just missed the deadline”, and could not get my money back. What was ironic was that the company had itself missed deadlines for annual payouts. But I was stuck with a diamond that turned out to be worth only a third of what I paid.

I then lost another $20,000 when my investments in wine and art went sour.

Maybe I was naïve. In hindsight, I realise that many of the companies offering alternative investments had no foundation or reliable revenue stream, and roped in new investors to pay off older ones. But from where I stood, everything had looked quite legitimate. And while the investments were risky, there seemed to be a chance that they would pay off in a big way. Because a few of my friends had made money on similar investments, I thought they were worth the risk.

Ultimately, though, I was prepared to lose the money. I was young and told myself that if the worst happened, I would have time to make the money back. And the reality is that some alternative investments do pay off well.

Still, these were tough lessons. I now moderate my risk-taking and am focussed on building something more financially stable – my own business. Today, my company generates enough income to sustain itself and I have paid off all my business-related loans. At 42, and after many years of high-risk investments, I’ve realised that the best bet I can make is on myself.”

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