Most of my wealth creation is through savings from active income. And as I looked back at old posts (not that there were many to begin with), I realize my investments have stagnated since the last time I blogged. Well, I still performed transactions here and there, but not very actively. I'm therefore keen to revive this blog for a few reasons: (i) to help me plan my investments better and improve clarity of thought; (ii) so that I can actively look at market updates and remind myself of how much I love investing and finances in general; and (iii) monitor my progress. It's true they say, you can only manage what you can measure.
It's interesting how I reviewed old posts and notice how my analysis of Starhub's dividends maintaining at 20cents per share was right. Of course, this requires review now with the changing competitive landscape. I also looked at one of my first posts in May 2008 where I planned my wealth growth - I still have a hard copy of this stored somewhere to remind myself of my initial struggles and my eagerness in achieving the plan. It's now 2015 - a good 8 years have passed - and I'm proud to say that I'm close to my 2022 target. Or rather, I've doubled what I had said I wanted to achieve in 2015. This is a good result, indeed. At least, I can tell myself I didn't waste my youth in vain on my career as I managed to earn quite a bit in active income. I also now indulge in more luxuries than before, where I would scrimp and save every cent (it took me two years to consider and almost a year after I passed CFA before I rewarded myself with an ipad, of which my spouse still uses it now).
I probably didn't perform as well as I could have on the investment front, but managed to still reach my goals nonetheless due to conservative model underwriting, lol. Based on the bare records I had on my trades, I figured I had obtained an IRR of about 10.6% over the past 8 years - no mean feat, yet a large part due to luck as a number of investments were made during the global financial crisis. A summary over the 8 years is below:
Initial Capital (2008): $110,000
Increases in Capital over the years (net of sales): $180,000 - mostly injected in year 2011 with some withdrawals in 2012
Trading gains/(losses): $35,000 - definitely more active in early years, with gains of about $2,000 annually over the past 2 years while I sold down stakes in earlier positions
Dividends: $100,000 - definitely the piece I'm most proud of, as I'm trying to build up a stable stream of passive income
Ending Value of Portfolio (2015): $345,000
My passive income hovers at about $18,000 a year, or $1,500 a month. Initially the goal was to attain $30,000 / $2,500 a month but as my needs increased and with higher costs of living plus desire for travel, I believe I should only settle when my passive income hits $48,000 i.e. $4,000 a month in today's dollars. This means I do have some way to go in achieving financial independence, which is sad as I do wish to take some time off work (still very hectic and taking a toll on physical health).
Luckily for me (I guess), there's still the component of interest income which is $5,000 a year or $450 a month as I'm fairly conservative in my portfolio (only ~35% invested). This means I'm probably halfway through my goal now, and the purpose of blogging more frequently is to take a more active approach towards reaching $4,000/month without having to double the capital required.
Going forward, to meet the personal objectives of this blog, I'll only focus on the passive income bits and not on overall wealth. Let's see where this journey takes me to, I can't wait to begin - everyday is the start of a new journey.
No comments:
Post a Comment