This article was written in collaboration with the Ministry of Finance. All views expressed in this article are the independent opinion of DollarsAndSense.sg. You can refer to our Editorial Policy here.
Depending on who you ask, describing the year 2020 as tough would either be spot on or a gross understatement. Even in Singapore, where we have been relatively sheltered thanks to our world-class healthcare system and financial resources, it has been a deeply challenging time.
Medical workers and essential service providers have been working long and stressful hours to ensure a bad situation doesn’t get worse. Workers across all sectors are grappling with the prospect (or reality) of job loss, pay cuts, or being placed on alternative work arrangements. Parents had to manage additional childcare arrangements while the rest of us made do with virtual interactions with our loved ones.
Amidst this backdrop, the last thing we might be thinking about is to set aside funds to make financial investments for our long-term future or dedicate time (and money) to upskill to remain relevant for years to come.
But here’s why we should not stop looking out for opportunities to lay the foundations for our financial future and career prospects, even during this challenging period.
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Keeping An Eye Out For Investment Opportunities During A Downturn
For instance, as veteran investors would know, market downturns present investment opportunities for the diversified long-term investor. With the prices of many assets looking more attractive, investors are able to buy more with their investment dollars and enjoy significant returns when the economy eventually recovers.
There have been numerous studies to support the view that you would do better if you stay invested through good and bad times, rather than trying to time the market and potentially miss out on stock market upturns.
For example, this report from Fidelity notes that if you invested in the S&P 500 from 1980 to 2018 (a 39-year period) but missed out on just 5 of the best-performing days, your returns would have been 34% lower than if you had stayed invested throughout.
Source: Fidelity
Through any period, growth opportunities remain. The key lesson here is not to base our investment decisions on short-term market sentiments or to make impulsive investment decisions based on day-to-day news.
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Investing In Yourself During A Downturn
What’s more important is investments in ourselves. As we’ve seen in the financial markets, if we are able to invest for the future – in both good times and bad – we will be best poised to take advantage of growth potential during the upswing.
This concept applies on an individual level as well. By the same logic, we shouldn’t stop investing in ourselves, even during downturns such as the one we are currently in. This could mean to learn new skills, undergo training to improve our proficiency and work towards future-proofing our careers in an ever-changing economy.
In good times, taking time off work to study would come at a substantial opportunity cost for many in the form of lost productivity, potential loss of income, and the luxury of time, which we might not have.
Thus, a recession could be an ideal time to invest in ourselves for the future, because job demands are probably lower during this period and we can make use of the lull period to upskill ourselves. Best of all – there’s a wide array of support schemes available.
The COVID-19 Downturn Isn’t Like Previous Recessions
Even before the COVID-19 pandemic, there were many signs that change was afoot in the global economy. Industry 4.0, big data, artificial intelligence, robotics, the gig economy, the flood of venture capital and tectonic shifts between the United States and China – all these macroeconomic trends will transform the nature of the economy and our respective roles in it.
Being in a global financial hub with an extremely open economy, Singapore workers have a unique vantage point to observe these trends and start making preparations to adapt and grow, so that we don’t just survive in the workplace of the future, but can thrive in it.
As early as 2018, the Ministry of Trade and Industry launched 23 Industry Transformation Maps (ITMs) that cover 80% of Singapore’s GDP. These ITMs provide a roadmap for an integrated, whole-of-government approach to build the necessary infrastructure and introduce policies to support the efforts of individual workers to reskill while helping companies pivot appropriately.
Transforming to remain relevant was already a necessity before COVID-19, but the pandemic has just made it even more urgent. While the world is gradually waking up to this reality, we in Singapore have a head start that we should not squander.
Tapping On Available Resources To Invest In Ourselves
Investing in ourselves during this difficult time isn’t easy, even with the many Budget 2020 measures to help households cope with daily expenses, including the enhanced Care and Support Package, greater flexibility on government fees and loans, as well as more funding for the community. Fortunately, there is a wealth of government initiatives available to heavily subsidise programme fees, and even pay us an allowance to undergo training.
For instance, Workforce Singapore (WSG) have a suite of programmes under Adapt and Grow designed to help Singaporeans be better equipped to do their current job tomorrow, or pick up skills for a new job in the future. In view of the challenging climate, the Government has also enhanced the redeployment programmes under Adapt and Grow to support enterprises in retaining and reskilling local workers.
To continue supporting Singaporeans to build skills to seize good jobs and new opportunities, the Enhanced Training Support Package (ETSP) will provide absentee payroll support of 90% of hourly basic salary, capped at $10 per hour, for all sectors. In addition, it will also offer course fee subsidies of 90% for companies in the more badly affected sectors.
For the self-employed, there is the Self-Employed Person (SEP) Training Support Scheme, which provides self-employed persons with a training allowance of up to $10 an hour to attend a wide selection of courses. Extended till December 2020, this training allowance comes on top of the already generous training subsidies provided by the government, which cover up to 90% of fees.
It is also important to highlight that Singaporeans can continue to tap on their SkillsFuture Credits to take SkillsFuture-approved courses, which has been topped-up with a$500 during Budget 2020 for every Singaporean aged 25 and above. There is also a special $500 SkillsFuture Credit top-up for Singaporeans aged 40 to 60. This is aimed at supporting our mature workers to continue acquiring new skills, which would benefit them in making either career advancements or transitions.
With these schemes, the only investment you need to make in yourself is the time and commitment to undergo the training and put it to good use in the future.
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Invest Today For A Brighter, Better Tomorrow
We can take much inspiration from Singapore, which in the midst of the COVID-19 pandemic, continues to keep her eye on the future.
Though overshadowed by the huge relief schemes, the successive Budgets of 2020 contained measures for investing in the future by ensuring companies have what they need to develop their capabilities, and that the workforce are equipped with the relevant skillsets so that Singapore remains competitive. Singapore has the resources to introduce these plans because we had always been fiscally prudent as a nation.
On an individual level, we can make full use of the available measures to upskill ourselves during this period, even though this will require us to invest time and effort on our part. This is made easier thanks to the abundance of support schemes and the knowledge that this will help us be better poised to navigate the post-COVID-19 economy.
Whether in the financial markets or an individual’s level, we can understand that the fruits of our investments might not be seen so soon, and the importance of managing our short-term challenges while not losing sight of our long-term goals.
Perhaps the silver lining to all of this is that in this marathon, all of us in Singapore are in this together, and if anyone has the material resources, fighting spirit, and track record to win this marathon, it is Team Singapore.
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