25-11-2011, 05:55 PM
(25-11-2011, 04:27 PM)KopiKat Wrote: [ -> ]Your 1st $200k probably took you 10yrs as it was coming mainly from savings. The 1st 10yrs is also the toughest as there're many expenses to be paid, especially for those who have gotten married, set-up their own house and perhaps with kids coming along.
I think your next $200k will take a lot shorter (likely within next 5yrs) to come along. The 1st $200k is already put to good use and working hard for you. There'll also be lower "CAPEX" demands (unless you choose to buy a new house) or you suddenly acquire expensive tastes.
After that, perhaps another 5yrs to double your Net Worth (your $$ need to continue to work hard for you). At that point in time, 10yrs from now, you'd be in a position to choose to retire from the rat race if you so desire. With some "luck" (more homework done usually equates to better luck), one single multi-bagger where you'd put in a substantial amount to invest could also shorten the time towards financial freedom.
I'm speaking from my own experience and I don't even do half as much analysis as you. I could have been lucky, but I'd also gone through a few major corrections and had not lost eveything... yet. So, I don't think you really need to wait till your 60s!
Hi KopiKat,
Yes the first $200,000 did indeed take about 7-8 years and you are very right to say that it was tough because of:-
1) My wedding expenses
2) Fully self-funded my own MBA
3) Purchase of a house and renovation-related expenses (also funded with 100% equity, no debt)
4) Honeymoon (blew about $10,000 to fly to Europe)
5) My child (birth + upkeep and other recurring expenses)
I am just glad I don't have to add "car" to the list, I still survive by using my own "BMW C Series" (Bus, MRT, Walk and Cycle).
But I think looking at another $200,000 in the next 5 years is a little optimistic, as the economy is down, my job is not great (but at least it's stable) and with no major opportunities for windfall gains. I suspect I may have to slog, save and invest another 10 years to reach the $500,000 mark, after which admittedly it may be easier as the compounding kicks in.
THe multi-bagger thing is definitely going to be a boost but I am not hoping for it - just getting consistent dividends and protecting my capital is sufficient enough for me, as I see many others being unable to achieve that. I am just glad that I managed to build up a "base" over the years in my investing which I can use as a cushion for bad times.
Sadly, more analysis may not bring better returns. Though you say you do less analysis than me, perhaps you may have more luck or other factors such as career may have given you a boost?
(25-11-2011, 05:18 PM)yeokiwi Wrote: [ -> ]For those who had just started off with their careers, it pays more to put in more energy into your daily job. Given some luck and having a good boss, the returns will be much higher than investing in the early phase till mid-career of the work life.
After a decade of investment, my humble opinion of annual average investment return is..
5% return - a reasonably good investor.
10% return - a good investor.
15% return - outstanding investor.
20% return - outstanding investor and with some luck.
Anything that is above 20%, the god is smiling at you.
Hi yeokiwi,
Good point! So far I have not been investing long enough to compute my returns over a 10-year period, but so far for this year my XIRR is about -5%, though overall portfolio is still in the black as of today.
I think I will try and target 10% lah. If cannot, then at least above inflation of 5.5% (as of Oct 2011).