When does XIRR really matters?
Most retail investors’ investing goals and road map will look like this one.
XIRR is the speedometer of our investment portfolio strength; it will roughly tell us ETA (Estimated Time of Arrival) to cross over into Income phase.
During Income phase, your Absolute Return now really matters!
When your absolute return is not enough to meet your living expenses in your retirement; then XIRR is just for boosting your ego. It doesn’t help much!
But, when your Absolute Return and XIRR are both high, then it is not just for boosting ego; in fact you have arrived. You should also have earned your right to boast and not just boost…