My investment journey

[psslo]

June 2016 was life-changing for me. The day most people dread arrived out of the blue for me. My boss called me one night after work & apologetically informed me that the company was downsizing & I had been affected. After 24 years with the company (American MNC) as an engineering professional, this was the end of the road for me. Even though I had been mentally preparing myself for such an eventual scenario one day, I was still an emotional mess that fateful night. I had suddenly found myself out of a job in my late forties. Being the sole breadwinner (single income family) added to the gravity of the situation.

What has this to do with investing you may ask? In a sense, I have been preparing for this day for well over a decade. You see, job insecurity was a major factor that propelled me onto the road to investing.

Finding a well-paying job when you are approaching 50 is no easy task. Thankfully, my investment portfolio can now generate sufficient income to maintain the current standard of living (nothing extravagant of course). Therefore, I now have the choice not to return to the corporate world. As such, I have achieved my financial freedom & independence.

Key Success Factors for me
With benefit of hindsight, here are what I think are key to my journey:

1. Time is of the essence. Start your journey as soon as you are able. Time is needed to accumulate capital (without getting into debt). Time is needed for compounding to do its work. Time is needed for market experience (mistakes & successes during up/down market cycles), experimentation & emotional maturity which no book can adequately teach.

2. Live simply without over-committing your finances, live well within your means so that you can invest the surplus. Plan a budget & analyse your expenditure to cut out the unnecessary. I am proof that a middle-class family can survive quite well on a single income in Singapore.

3. Find your own investment style. There are multiple ways to profit from the market, and your temperament will likely decide what you are most comfortable with. Personally, I lean towards Benjamin Graham's school of teaching. 

4. Learn the skills. Learn to analyse companies by reading balance sheets & calculating stock ratios. Learn how to value stocks & set target prices when to sell (Have an exit strategy for every entry). Learn how to generate your own stock ideas. I used to surf the internet (including Valuebuddies) to search for ideas, but what is already public may be too late (from risk-reward perspective) to exploit. A better way is to screen for stocks yourself so you can get ahead of the curve.

5. Put together a diversified portfolio (unless you are of Warren Buffet calibre) in accordance with your own risk appetite, and avoid emotional attachment to the stocks. Having a stake in more companies will also help you get up the learning curve faster.

6. Track your investment performance (preferably with a spreadsheet). Learn from your successes & mistakes to improve. Calculate your returns or losses. Learn where your strengths are & where you are profiting from most (e.g. what industry, company size - smaller caps are more profitable for me). Learn what works for you.

7. Investing in stock is not about getting it right all the time. It is about having the odds in your favour, so that you are correct more time than wrong. Therefore, it is important to buy stocks with as much a margin of safety (low downside & high upside) as you can. Don't be afraid to cut loss if you are wrong (or if a stock is going nowhere after 1-2 yrs).

8. Master your emotions (easier said than done). For me, fear is a bigger challenge than greed. It can be very scary when you see your portfolio evaporating. Have conviction (hopefully justified), try not to panic & know that the market rebound comes after the storm. You will find yourself growing in confidence after each trial.

9. Market timing is a controversial topic. It did not work for me, so I just focus on hunting for value stocks & try not to be sidetracked by bull or bear. I believe things will work themselves out as long as you are focused on value.

10. Expand your horizons. Once you outgrow Singapore, don't be afraid to spread your wings overseas. There are good stocks to be found nearby, eg HK & Japan. 

I write in the hope that a younger generation can benefit from my experience. To bless just as I have been blessed.

[chialc88]

We Thank Thee, God.

While we are blessed and hope that others also be blessed,
remember that, in ancient time, dances and musics are actually played for God.

life is great!

Earlier this year, value buddies Specuvestor reminded me not to be over-confidence.

Just a gentle reminder.

Enjoy:

[MINX]

June 2016 was life-changing for me. The day most people dread arrived out of the blue for me. My boss called me one night after work & apologetically informed me that the company was downsizing & I had been affected. After 24 years with the company (American MNC) as an engineering professional, this was the end of the road for me. Even though I had been mentally preparing myself for such an eventual scenario one day, I was still an emotional mess that fateful night. I had suddenly found myself out of a job in my late forties. Being the sole breadwinner (single income family) added to the gravity of the situation.

What has this to do with investing you may ask? In a sense, I have been preparing for this day for well over a decade. You see, job insecurity was a major factor that propelled me onto the road to investing.

Finding a well-paying job when you are approaching 50 is no easy task. Thankfully, my investment portfolio can now generate sufficient income to maintain the current standard of living (nothing extravagant of course). Therefore, I now have the choice not to return to the corporate world. As such, I have achieved my financial freedom & independence.

Key Success Factors for me
1. Time is of the essence. Start your journey as soon as you are able. Time is needed to accumulate capital (without getting into debt). Time is needed for compounding to do its work. Time is needed for market experience (mistakes & successes during up/down market cycles), experimentation & emotional maturity which no book can adequately teach.

2. Live simply without over-committing your finances, live well within your means so that you can invest the surplus. Plan a budget & analyse your expenditure to cut out the unnecessary. I am proof that a middle-class family can survive quite well on a single income in Singapore.

3. Find your own investment style. There are multiple ways to profit from the market, and your temperament will likely decide what you are most comfortable with. Personally, I lean towards Benjamin Graham's school of teaching. 

4. Learn the skills. Learn to analyse companies by reading balance sheets & calculating stock ratios. Learn how to value stocks & set target prices when to sell (Have an exit strategy for every entry). Learn how to generate your own stock ideas. I used to surf the internet (including Valuebuddies) to search for ideas, but what is already public may be too late (from risk-reward perspective) to exploit. A better way is to screen for stocks yourself so you can get ahead of the curve.

5. Put together a diversified portfolio (unless you are of Warren Buffet calibre) in accordance with your own risk appetite, and avoid emotional attachment to the stocks. Having a stake in more companies will also help you get up the learning curve faster.

6. Track your investment performance (preferably with a spreadsheet). Learn from your successes & mistakes to improve. Calculate your returns or losses. Learn where your strengths are & where you are profiting from most (e.g. what industry, company size - smaller caps are more profitable for me). Learn what works for you.

7. Investing in stock is not about getting it right all the time. It is about having the odds in your favour, so that you are correct more time than wrong. Therefore, it is important to buy stocks with as much a margin of safety (low downside & high upside) as you can. Don't be afraid to cut loss if you are wrong (or if a stock is going nowhere after 1-2 yrs).

8. Master your emotions (easier said than done). It can be very scary when you see your portfolio evaporating. Have conviction (hopefully justified), try not to panic & know that the market rebound comes after the storm. You will find yourself growing in confidence after each trial.

9. Market timing is a controversial topic. It did not work for me, so I just focus on hunting for value stocks & try not to be sidetracked by bull or bear. I believe things will work itself out as long as you are focused on value.

10. Expand your horizons. Once you outgrow Singapore, don't be afraid to spread your wings overseas. There are good stocks to be found nearby, eg HK & Japan. 

I write in the hope that a younger generation can benefit from my hindsight. To bless just as I have been blessed.

Nothing like good advice from someone who have been there & done that. well done, you made it. I'm slightly past the half way mark & working at it, i mean financial independence...

[dreamybear]

June 2016 was life-changing for me. The day most people dread arrived out of the blue for me. My boss called me one night after work & apologetically informed me that the company was downsizing & I had been affected. After 24 years with the company (American MNC) as an engineering professional, this was the end of the road for me. Even though I had been mentally preparing myself for such an eventual scenario one day, I was still an emotional mess that fateful night. I had suddenly found myself out of a job in my late forties. Being the sole breadwinner (single income family) added to the gravity of the situation.

What has this to do with investing you may ask? In a sense, I have been preparing for this day for well over a decade. You see, job insecurity was a major factor that propelled me onto the road to investing.

Finding a well-paying job when you are approaching 50 is no easy task. Thankfully, my investment portfolio can now generate sufficient income to maintain the current standard of living (nothing extravagant of course). Therefore, I now have the choice not to return to the corporate world. As such, I have achieved my financial freedom & independence.

Key Success Factors for me
1. Time is of the essence. Start your journey as soon as you are able. Time is needed to accumulate capital (without getting into debt). Time is needed for compounding to do its work. Time is needed for market experience (mistakes & successes during up/down market cycles), experimentation & emotional maturity which no book can adequately teach.

2. Live simply without over-committing your finances, live well within your means so that you can invest the surplus. Plan a budget & analyse your expenditure to cut out the unnecessary. I am proof that a middle-class family can survive quite well on a single income in Singapore.

3. Find your own investment style. There are multiple ways to profit from the market, and your temperament will likely decide what you are most comfortable with. Personally, I lean towards Benjamin Graham's school of teaching. 

4. Learn the skills. Learn to analyse companies by reading balance sheets & calculating stock ratios. Learn how to value stocks & set target prices when to sell (Have an exit strategy for every entry). Learn how to generate your own stock ideas. I used to surf the internet (including Valuebuddies) to search for ideas, but what is already public may be too late (from risk-reward perspective) to exploit. A better way is to screen for stocks yourself so you can get ahead of the curve.

5. Put together a diversified portfolio (unless you are of Warren Buffet calibre) in accordance with your own risk appetite, and avoid emotional attachment to the stocks. Having a stake in more companies will also help you get up the learning curve faster.

6. Track your investment performance (preferably with a spreadsheet). Learn from your successes & mistakes to improve. Calculate your returns or losses. Learn where your strengths are & where you are profiting from most (e.g. what industry, company size - smaller caps are more profitable for me). Learn what works for you.

7. Investing in stock is not about getting it right all the time. It is about having the odds in your favour, so that you are correct more time than wrong. Therefore, it is important to buy stocks with as much a margin of safety (low downside & high upside) as you can. Don't be afraid to cut loss if you are wrong (or if a stock is going nowhere after 1-2 yrs).

8. Master your emotions (easier said than done). It can be very scary when you see your portfolio evaporating. Have conviction (hopefully justified), try not to panic & know that the market rebound comes after the storm. You will find yourself growing in confidence after each trial.

9. Market timing is a controversial topic. It did not work for me, so I just focus on hunting for value stocks & try not to be sidetracked by bull or bear. I believe things will work itself out as long as you are focused on value.

10. Expand your horizons. Once you outgrow Singapore, don't be afraid to spread your wings overseas. There are good stocks to be found nearby, eg HK & Japan. 

I write in the hope that a younger generation can benefit from my hindsight. To bless just as I have been blessed.

Thanks psslo for sharing your story. After reading it, I felt very emotional as I can relate to it.

I encountered several restructuring with different companies in the course of my IT career, to the extent that during one of my job interviews, the interviewer jokingly commented that if he employed me, I may curse his company.   Being retrenched is really emotionally devastating; especially when the victim has performed well in the company, or/and the company did not give any advance warning or indication that such an exercise is impending.  Needless to say, experiencing restructuring not once but several times had a very drastic effect on my personal life, e.g. my character changed(according to my loved ones), I almost tore my NUS honours degree cert(what's the point of studying so hard),  and I was so desperate that I went for fortune telling to explore life improvement remedies.

But somehow I survived and ...

During the period of time, it dawned on me that I should be on the other side of the equation; be part owners of companies as the directors/CEO seemed to treat the shareholders better than employees.  Hence, I began to read widely and teach myself finance &  investing(I began to take the concept from Rich Dad Poor Dad seriously). The Key Success Factors that psslo mentioned mostly applies to me too, however, I try to buy blue chips whenever there is a recession(i.e. always try to keep some spare cash) and try to have hands-on experience running a business - it really helps to one to understand what makes a good/bad business. 

I think it is important to expand one's horizons. Years ago, someone advised me to look at the China big 4 banks as he noticed I liked our local banking stocks. Since then, I began to expand my horizons and look overseas to US/HK and have not looked back since. I have been watching(and learning from) 财经郎眼 since I read about it by one of the valuebuddies(my shares are quite heavily exposed to China). In fact, there is this particular episode at 27:00 https://www.youtube.com/watch?v=xs_bdoPnn-8    which summarizes what I wanted to share here. 

I feel in SG, we have already passed the golden era of growth as we are now heading towards a rapidly aging population, a trend which doesn't seem like reversing. The future also seem more uncertain as we will unlikely see the kind of past leadership stability of political  continuity. At the same time, it is getting harder to find management level jobs(or is it just me again, sigh).

While I may have a ill-starred career life, I thank God for His Blessings on my health, family and my investments(which are now generating passive dividend income for very basic needs). I feel investing is really a lot of hard work but at the same time it can be a workable source of income(need to be really patient and really persevere). 

Like psslo, I hope my sharing can bring comfort to whoever needing it, especially those who are facing restructuring in their companies.

[opmi]

It is not just you. I have Uni classmates in mid-career rut too.
Age 40-50s are prone to corporate redundancy.

Probably a cue to quote my usual line. Haha.

[Life is a game]

Work in government sector seems to be a wise choice.

Sent from my SM-N9005 using Tapatalk

[zz...]

Work in government sector seems to be a wise choice.

Sent from my SM-N9005 using Tapatalk

working for self is a better choice as you never know when gov need a scapegoat, but majority of us are destined to be salary workers as education systems train mostly workers, not owners

[Ben]

Thanks Psslo for sharing your life experiences. It closely resemble what I had gone thru myself.

I left corporate world on June 30, 2013. I was actually doing pretty well in my last job, in a US MMC company. Having worked there for more than 7 years and promoted 3 times during that time. However, things changed drastically when my boss was transferred to another country, and an ang-mo guy was transferred in to be my new boss. Within 3 months, I resigned, deciding not to take his nonsense anymore.

And the reason why I can let go that easily is, liked you, I have prepared for this day way in advance. In working for others, not only there is a risk of losing your job due to company downsizing, you also risk falling out with your boss. You can only choose your boss once, before joining the company, after that, the company chose your boss for you.

My overall wealth being today is much stronger than when I left the company. Thanks to the bad times we saw during the years from 2013 to 2016, and stocks can be bought for a bargain. Ironically, when working for others, we fear about recession and bad times. However, in investing, we should embrace recession as an opportunity to build up our long term wealth.

For those who are still in the process of building up a career, be it working for others or own business, do also spend some time and money building up a portfolio to diversify your income stream.

As for me, life is simple but certainly happier now than before. Each day, I will spend about 3 hrs driving for Uber/Grab. Rest of the time to have kopi with friends, join activities in CCs, exercise and of course, on investment related stuff.

[gzbkel]

Thanks for all the useful sharing on this thread.
Though I am still working (IT), I definitely need to plan ahead.

For the people already retired/semi-retired, whether by choice or circumstances, do you subscribe to the theory of Safe Withdrawal Rate (SWR) of 3-4%?

Many websites cite this theory, here is one example: https://www.madfientist.com/safe-withdrawal-rate/

[psslo]

Thanks for all the useful sharing on this thread.
Though I am still working (IT), I definitely need to plan ahead.

For the people already retired/semi-retired, whether by choice or circumstances, do you subscribe to the theory of Safe Withdrawal Rate (SWR) of 3-4%?

Many websites cite this theory, here is one example: https://www.madfientist.com/safe-withdrawal-rate/

Teh Hooi Ling studied this question & did some backtesting from a Singaporean context. She quoted 5% as a safe withdrawal rate if your returns can match the STI. I am relying on this strategy myself starting this year.

https://docs.wixstatic.com/ugd/b39173_db...4e9e61.pdf

https://docs.wixstatic.com/ugd/b39173_24...f57693.pdf