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How It All Started
I started off being quite wasteful.After graduation, I maintained my interests in chasing the latest fashion and gadgets and did not quite know what to do with the income I earned from my job.
I signed up for an ILP product from Manulife and bought a WL policy, both of which I have since terminated, with the latter very recently.
One day, I decided that things had to change and I decided to go into investing after reading a couple of blogs which still exist today.
I set myself a huge goal when I started investing some 7 years ago.
1st Milestone - $250k
If I were to attribute a theme for the first stage, it would be Growth.
At the back of my head, I knew that I had to focus on something which could propel me to a head start in having a larger base. I decided that career growth in the first few years was extremely important and so I worked hard towards it.
It also helped that during the 2011 euro crisis I invested most of my money and recieved a huge return when the market rebounded.
But soon, I realized that investing wasn't easy and I continued to learn from mistakes. Thankfully, there wasn't any mistake which dragged down my capital base.
2nd Milestone - $500k
The theme for the second stage has to be Accumulation.
It took me 3 years to get from the first to the second milestone.
Both my career and investment seeds which I had planted have reaped fruits and are paying a nice dividend. I played my trump card fairly decently and it has given me a huge advantage.
The market has not seen a huge fall since 2008 and 2011 and I cannot say that I've done well without being mentally tested in the bear scenarios.
I think I have somewhat positioned myself for luck pretty well in the past few years and I have some huge gains which I have realized in the market which helps the portfolio to grow.
Over the last year, I have also cautioned and prepared myself for upcoming huge expenses I have had to incur for the family. I think my calculation was pretty accurate and it helps that I have not got surprises along the way.
$500K - Investment Breakdown
There were some readers who asked for the breakdown.
Out of the $500k in the portfolio, the capital cost came up to $312k while capital gains and dividends totaled $188k.
Time-weighted returns (including dividends |
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Year |
Portfolio |
ES3 |
2011 |
-4.39% |
-10.96% |
2012 |
40.79% |
21.29% |
2013 |
25.26% |
2.93% |
2014 |
12.44% |
8.54% |
2015 |
2.81% |
-10.59% |
2016 |
22.35% |
3.08% |
2017 |
8.61% |
7.97% |
Overall |
159.02% |
19.58% |
For instance, if my returns were negative 5% over the past 7 years, it would erode my portfolio to $296k. That would have been hugely detrimental.
I don't track my performance closely like a hawk but I do monitor them from time to time.
For me, as long as the value of the portfolio keeps growing, it feels like I'm doing something decent and right.
Year |
XIRR (including dividends) |
2011 |
-3.29% |
2012 |
40.27% |
2013 |
19.93% |
2014 |
11.73% |
2015 |
6.11% |
2016 |
26.45% |
2017 |
41.17% |
Overall |
18.20% |
Maybe it will change someday.
What's Next? 3rd Milestone
I'm going to take baby steps at a time and not rushing in to hit my goal.
The next milestone for me would be to reach $750k and if history in the market could help, I am targeting to achieve the milestone in the next 3 to 4 years hopefully. With higher family expenses, I suspect the higher range of the 4 years but it doesn't matter too much to me at this point.
I think I've grown way more than simply hitting some financial goals.
Equally important to me would be to accumulate more life experience and I am more excited to see my 2 boys finally going to grow up in the next 3 to 4 years, which would allow the entire family to try something really out of this world. I think that's what we are going to go out for and that's why we are going for financial independence.
I do hope in the next 4 years I would be on the way writing about my 3rd milestone experience and looking back at the past 4 years of my life experience.
Thanks for reading.