My Retirement Plan At 35

Whether $1m or $2m is enough or not, depends on how much one is expected to spend over his lifetime. I believe that that there is indeed something called 'enough', just ask John Bogle.

How much one needs to spend is critical and holds the key to answering the question of how much capital is enough.

There is an opportunity cost to all decisions one makes in life. If one has 'enough' capital, the opportunity cost of continuing to accumulate capital "just to be safe" via doing work he does not enjoy, is the lost opportunities of to do what he love for those years, missed moments which could be spent with loved ones (kids who are growing up, parents who are growing old). Our kids are only young once, and our parents will not be around forever (neither will we, obviously).

In the west, many has applied the rule of the thumb of withdrawing only 4% of capital with annual adjustment to cater for inflation. There are limitations to this rule (just google 4% withdrawal rate). One key underlying assumption is that the early retiree knows a bit about about investing (or knows that he doesn't know much about investing, in which case, both John Bogle and Warren Buffett recommend investing in passive index slowly over time). You don't need to beat the market, just match it.

The decision to retire early in Singapore is never easy to make, especially if you are in your prime. You are likely to be acting on your own, against the advice of your peers, colleagues, parents and spouse. Take comfort in knowing that some people who advise against it (with totally good intentions) may not have first hand experience and hence may not have given it sufficient thought. Therefore, the decision maker has to believe that he has made the right decision and done the right calculations. Having a plan B in place helps also.

(25-06-2012, 10:37 AM)Janjansen Wrote:

(24-06-2012, 11:08 PM)sgd Wrote: I have been investing almost 20 years already I think investing not very easy. Everybody want to become like warren buffet and want to have his successful run but I think only 2-3 out of 100,000 can really do it. You only see him make money but when he had his problems, when he got badly burnt, when he lost money, when he was down early in his investing career did you all see it? Were you there to feel the pain his sense of failure and hopelessness? No right?

I think the entry point is key. I was lucky to have bought most of my shares shortly after the 2009 rebound. I did not catch the bottom, but I bought in phases when the STI was climbing from 2000 to 2500. I have never had to make signifcant adjsutments to my portfolio and just passively collected dividends. I hope that there will be another 2-3 crashes in my lifetime.

How much of the 1 mil is invested currently. Do you intend to liquidate them?

(25-06-2012, 06:22 PM)Drizzt Wrote: How much of the 1 mil is invested currently. Do you intend to liquidate them?

None of it is invested, this is my cash holdings

My portfolio is only slightly over 150k, this is separate from the 1ml. I am not planning to liquid this

wow thats alot of liquidity

My view is that it is always good to build up or have a skill (that you are interested in) and be an expert in it if you really wish to retire. Retail investing is more of part time than full time as you will lose insider knowledge quickly when you stop working which is a real disadvantage to retail investors. Unless you have trustworthy friends whom you can rely on their information for your whole life. Personally, I always admire consultants whom can work projects at their discretion as when needed (of course there are deadlines) and work from home / starbucks / wherever.

Another clarification on investment bankers, there are a few kinds other than ECM and DCM. There are also M&A, private equity bankers and some high networth wealth management bankers also call themselves investment bankers or bankers commonly.

(25-06-2012, 10:46 PM)mrEngineer Wrote: Retail investing is more of part time than full time as you will lose insider knowledge quickly when you stop working which is a real disadvantage to retail investors. Unless you have trustworthy friends whom you can rely on their information for your whole life.

IMO, the internet is the most wonderful invention for anyone and everyone to have quick access to almost any knowledge under the sun. The key is to be able to quickly screen out the useful stuff and viola... you can pick up almost any knowledge / info you want to!

Way back when I just started investing in stocks, I have to sneak into SES Library (supposed to be members' access only) to read analysts' reports and browse thro' hardcopy AR. It's also not easy to find info on different types of biz unless you subscribe to US/UK trade journals. Nowadays, all these info are easily available via the internet and you can relax in your fav armchair in aircon comfort to do your research.

PS. Go read Peter Lynch book 'One Up on Wall Street' if you have not already done so. It's described inside how even a homemaker can look out for good biz in their daily lives to get a headsup on a possible good stock to invest in.

There was an article on michael lewis in yesterday's papers. Although the article was mainly on the role of luck, it gave me some ideas of how investment banking was conducted in the usa. A fresh grad without much knowledge of derivatives can be hired to advise clients on investment in derivatives. One may not lose much to quit from such salesman job.

(25-06-2012, 11:29 PM)wsreader Wrote: There was an article on michael lewis in yesterday's papers. Although the article was mainly on the role of luck, it gave me some ideas of how investment banking was conducted in the usa. A fresh grad without much knowledge of derivatives can be hired to advise clients on investment in derivatives. One may not lose much to quit from such salesman job.

"Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway."
Warren Buffett

(25-06-2012, 11:07 PM)KopiKat Wrote: IMO, the internet is the most wonderful invention for anyone and everyone to have quick access to almost any knowledge under the sun. The key is to be able to quickly screen out the useful stuff and viola... you can pick up almost any knowledge / info you want to!

Way back when I just started investing in stocks, I have to sneak into SES Library (supposed to be members' access only) to read analysts' reports and browse thro' hardcopy AR. It's also not easy to find info on different types of biz unless you subscribe to US/UK trade journals. Nowadays, all these info are easily available via the internet and you can relax in your fav armchair in aircon comfort to do your research.

PS. Go read Peter Lynch book 'One Up on Wall Street' if you have not already done so. It's described inside how even a homemaker can look out for good biz in their daily lives to get a headsup on a possible good stock to invest in.

Not all information can be found from the Internet. It may be sufficient and profitable to rely on whatever you have gained from extensive research as one will be already better informed than average retail investors. For e.g. does the Internet tells you what is e character of a CEO and what is the kind of attitude he is treating his employees? Does anywhere in the Internet tells you the real reason why Capitaland CEO is resigning? Does the Internet gives you the real reason of why china has halted importing of hard commodities and suddenly started to focus on local resources. Does the Internet tells you how much off balance sheet or debt the companies load into their joint ventures or associate companies where they can do proportionate consolidation? I can go on and on but what I want to say is that if one completely stops working or networking, he or she will gradually erode his source of information that are not easily available.

(26-06-2012, 08:53 AM)mrEngineer Wrote: Not all information can be found from the Internet. It may be sufficient and profitable to rely on whatever you have gained from extensive research as one will be already better informed than average retail investors. For e.g. does the Internet tells you what is e character of a CEO and what is the kind of attitude he is treating his employees? Does anywhere in the Internet tells you the real reason why Capitaland CEO is resigning? Does the Internet gives you the real reason of why china has halted importing of hard commodities and suddenly started to focus on local resources. Does the Internet tells you how much off balance sheet or debt the companies load into their joint ventures or associate companies where they can do proportionate consolidation? I can go on and on but what I want to say is that if one completely stops working or networking, he or she will gradually erode his source of information that are not easily available.

Full agree! If you think something is impossible, then it's for sure impossible!
This year is my 10th anniversary of no work and no network. I have not let this huge constraint made me a lousier investor. In fact, either I'd become a lot more lucky in investing or perhaps, I now have more time to be focussed on being a lot more resourceful in digging for info, especially from the internet.