Introductions!

[exige]

Hi Exige,

Yes that's about right. My portfolio cost is about $238,000 currently, and my yield is between 5-6% on my entire portfolio.

More details on my portfolio can be found on my blog. I do a monthly update on the companies within my portfolio and also compute the XIRR YTD versus STI as a benchmark.

Good to know you are also a cash cum equities only investor!

icic.. I visited your blog. A lot of useful information there! Am waiting for Part 2 of your "The Annual General Meeting (AGM)". haha..

And I guess it seems like you should not have much problems in reaching your goal! Assuming a dividend rate of say 6%, you'll be needing a portfolio in the size of about $600,000 for dividends of $3,000/mth. Assuming you have 18 years, you'll need a compounding rate of about 5.5% per year to hit $600,000. This is assuming that you don't put in more funds from your day job, etc.
Ok, I guess the key would be in how to maintain the average 5.5% yearly compounding rate uh..

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Hi Exige,

I'm not sure if I can put a certain amount on it. Previously, I thought of putting a number on it but I realised that it's a little difficult to put an exact number because there are many factors such as inflation, lifestyle changes as one ages etc.

Hence, the best definition I can think of is that being financially free allows me the freedom of choice. In other words, I would work (in the conventional sense) not because I have to but because I choose to. I would buy/not buy something not because of the monetary constraint but the belief in the value of that object.

Of course, if I want to be able to buy something like a Lamborgini or a Good Class Bungalow...I foresee it'll take me a long long time before I reach a stage where I can call myself financially free. Fortunately, the things that make me happy in life are more time-consuming than dollar-consuming.

Thats nice! I guess life is not just about making/spending money, but to spend time on what matters more, or with who matters more to you.

[Musicwhiz]

icic.. I visited your blog. A lot of useful information there! Am waiting for Part 2 of your "The Annual General Meeting (AGM)". haha..

And I guess it seems like you should not have much problems in reaching your goal! Assuming a dividend rate of say 6%, you'll be needing a portfolio in the size of about $600,000 for dividends of $3,000/mth. Assuming you have 18 years, you'll need a compounding rate of about 5.5% per year to hit $600,000. This is assuming that you don't put in more funds from your day job, etc.
Ok, I guess the key would be in how to maintain the average 5.5% yearly compounding rate uh..

Hi Exige,

Thank you for your kind and encouraging words. I definitely hope to be able to bump up my portfolio cost significantly over the next few years, as I will be reaching 40 soon and want to have a sizeable chunk of passive income by then.

Besides adding to my portfolio through savings, I am also actively thinking of ways to cut down expenses (without compromising on quality of life, of course) and also to improve my revenue (i.e. income-generation ability). The dividends obtained through my investments will definitely be recycled back to be compounded over time - that is if I manage to find the right investments to put the cash to good use.

Haha I think 18 years is a little long! I am hoping to get the portfolio up to about $500,000 in 5 years time. A tall order perhaps? At my current $238,700, that's approximately $50,000 per year for the next 5 years - not unreasonable I guess. A $500,000 portfolio at 5% will generate $25,000 a year which is about $2,000 a month - quite comfortable but the need will still be there to work for a living.

The 5.5% is not easy to maintain over long periods of time, admittedly. During downturns and recessions companies can easily cut their dividends, so the yields may fall precipitously. However, my view is that my current crop of companies will at least be able to maintain their dividends even in a downturn, or at least not cut them by more than 20%.

I noted in another thread that you own Raffles Medical Group shares too. That's a very shrewd move! Seems like you are a very savvy investor!

[exige]

Hi Exige,

Thank you for your kind and encouraging words. I definitely hope to be able to bump up my portfolio cost significantly over the next few years, as I will be reaching 40 soon and want to have a sizeable chunk of passive income by then.

Besides adding to my portfolio through savings, I am also actively thinking of ways to cut down expenses (without compromising on quality of life, of course) and also to improve my revenue (i.e. income-generation ability). The dividends obtained through my investments will definitely be recycled back to be compounded over time - that is if I manage to find the right investments to put the cash to good use.

Haha I think 18 years is a little long! I am hoping to get the portfolio up to about $500,000 in 5 years time. A tall order perhaps? At my current $238,700, that's approximately $50,000 per year for the next 5 years - not unreasonable I guess. A $500,000 portfolio at 5% will generate $25,000 a year which is about $2,000 a month - quite comfortable but the need will still be there to work for a living.

The 5.5% is not easy to maintain over long periods of time, admittedly. During downturns and recessions companies can easily cut their dividends, so the yields may fall precipitously. However, my view is that my current crop of companies will at least be able to maintain their dividends even in a downturn, or at least not cut them by more than 20%.

I noted in another thread that you own Raffles Medical Group shares too. That's a very shrewd move! Seems like you are a very savvy investor!

Hi Musicwhiz,
I think the goal of $500,000 sounds just nice! I believe that all goals should be on the challenging side, in order to push us to work harder. (That's why we have goals in the first place right?)

Agree that a 5.5% dividend rate may be difficult to maintain in tough times, but I guess its probably more important that the shares of the company you're holding is still able to maintain a reasonable EPS or ROA? (Or at least, this is what I am primarily focused on currently...)

You used to own Raffles Medical Group shares? Didn't see it reflected in your portfolio summary on your blog. You saw that I have RMG shares via the "Starting Young" article?

[Musicwhiz]

Hi Musicwhiz,
I think the goal of $500,000 sounds just nice! I believe that all goals should be on the challenging side, in order to push us to work harder. (That's why we have goals in the first place right?)

Agree that a 5.5% dividend rate may be difficult to maintain in tough times, but I guess its probably more important that the shares of the company you're holding is still able to maintain a reasonable EPS or ROA? (Or at least, this is what I am primarily focused on currently...)

You used to own Raffles Medical Group shares? Didn't see it reflected in your portfolio summary on your blog. You saw that I have RMG shares via the "Starting Young" article?

Hi Exige,

5.5% over the long term is achievable but one has to be very careful and very conservative (I believe). Personally I think ROE is a more important measure but ROA may be applicable for companies with high fixed asset levels relative to their total assets.

I guess $500,000 is sort of an intermediate target for me before I push on the proverbial “millionaire” (million-dollar) status, and it represents a convenient halfway mark as well for me to review my financial status and “catch my breath”. It’s tough but I hope to be able to achieve or even surpass it by 2015.

As for RMG, no I was never a shareholder. I think I read in another thread (can’t recall which) where you said you purchased some at very good valuations.

[jaco]

Q: When did you start investing and what got you into it?

A: About 5 years ago, I was an economics major in college and elected a course in investments. The professor gave us A Random Walk Down Wall Street by Burton Malkiel as mandatory reading. This is a classic work that is extremely critical on the efficiency of mutual funds. Following that course, the marketcrash of 2008 increased my fascination with finance even more. I realized that it is incredibly hard to be successful in investing and that mainstream ideas, like mutual funds, diversification, buy and hold may not deliver that success. I had lost about 20% of my savings in mutual funds and decided to take the remaining 80% out to invest it by myself. After a lot of reading, I found myself gravitating towards 3 main ideas: 1. value investing 2. emerging markets and 3 general market valuation by Shiller P/E (see below).

Q: Describe your current portfolio.

A: Right now, I have about 90 per cent in cash (mostly Australian Dollar). The remaining 10 per cent is in relatively safe, high yielding assets, mostly infrastructure and utility stocks. The large cash proportion is explained by the current Shiller P/E (or market PE10) ratio. This ratio, popularized by professor Robert Shiller, is an attempt to value the equity market as a whole and is currently indicating a large overvaluation of the S&P 500.

Q: Where do you see yourself financially in the future?

I hope to gain some solid investment returns by strictly following my stated principles (to which I may add more later). When I feel these are fully ingrained in my thinking and hopefully indeed yield solid results, I plan to steer my investments more towards environmentally and socially responsible investment opportunities. Alternatively, I could also continue within a strict value investing framework, but then donate to non-profits and charities. In any case, my goal is to make my efforts somehow relevant to society as a whole.

[exige]

Hi Exige,

5.5% over the long term is achievable but one has to be very careful and very conservative (I believe). Personally I think ROE is a more important measure but ROA may be applicable for companies with high fixed asset levels relative to their total assets.

I guess $500,000 is sort of an intermediate target for me before I push on the proverbial “millionaire” (million-dollar) status, and it represents a convenient halfway mark as well for me to review my financial status and “catch my breath”. It’s tough but I hope to be able to achieve or even surpass it by 2015.

As for RMG, no I was never a shareholder. I think I read in another thread (can’t recall which) where you said you purchased some at very good valuations.

Hi Musicwhiz, you are right. ROE would be a more important measure. I guess for simplicity and from the business point of view, I'm a bit used to looking at the ROA as I mainly only look at companies with low debt ratios, also, I see ROA as a measure of the underlying business/businesses, while ROE includes the financing/liability elements.

Wish you all the best on reaching the millionaire mark! It is a goal for me too. Lets push on towards the millionaire milestone together!

[warus]

Hello All,

Just a quick intro since I am new here

Q: When did you start investing and what got you into it?

A: Started in late 90s when I was working in dotcom industry. Promptly lost money during the dotcom crash. Picked up interest in value investing thereafter but threw out what I learn in early 2007 only to again, lose big during the financial crash. All in all, I lost quite a bit of money but I am determined to learn from all my mistakes and stick to a value investment strategy.

Q: Describe your current portfolio.

A: 90% cash and 10% equity. Currently researching companies and trying to figure out their fair value and waiting for investment opportunities.

Q: Where do you see yourself financially in the future?

A: Retire in 15 years with my home fully paid and a $3m financial portfolio so that I can go full time into charity work.

[Jared Seah]

Hello warus!

You have a very interesting history on your financial journey!

We both lost money during the dotcom crash. And we share a similar path:

http://singaporemanofleisure.blogspot.co...story.html

I guess the only difference is I started work earlier, so "stop work" earlier too.

I am guessing you are now in your mid 30s. All the best to your financial journey! They say third time is a charm!

Cheers!

[warus]

Hello warus!

You have a very interesting history on your financial journey!

We both lost money during the dotcom crash. And we share a similar path:

http://singaporemanofleisure.blogspot.co...story.html

I guess the only difference is I started work earlier, so "stop work" earlier too.

I am guessing you are now in your mid 30s. All the best to your financial journey! They say third time is a charm!

Cheers!

Hello Jared,

Thanks for the welcome. I am older just touching 40.

You have a very interesting blog. Looking forward to reading it over the weekend.

Take care and all the best.

[yyt]

Q: When did you start investing and what got you into it?
A:
During internship at a tech company in 2008, the manager was so into finance that he kept pulling us interns out to lecture on personal finance.
Seeing him financially stable and working not for the sake of money made me question my own path in life. He was <50yo.
On top of it, he advised us to read relentlessly.
I started on a few good books, found the required motivation and never looked back since.
Started investing only in 2011, when I felt that I was ready to receive the lessons offered by Mr Market, and when I was clear of my objectives.

Q: Describe your current portfolio.
A: 90% invested in various REITs counters, 10% cash.

Of that 70% is borrowed on a one-year loan from a bank.
My savings is still a small amount at the moment.

My perference of equities is however is not in REITS, I'm just using it as a vehicle to give me a relatively more assured positive cashflow vs the bank loan I'm holding for the year. If all goes reasonably well, I'm a happy man.

Testing the idea of a safer leverage for people starting out like me.

Q: Where do you see yourself financially in the future?
Having multiple sources of passive income

• Business
  
• Dividend stocks
  
• Bonds
  
• Rental
  

Financial goal : +ve cash flow of $8,000/mth in today's terms, by 55.