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Starting on a New Slate for Investments 2012

Panzer — Mon, 23 Jan 2012 02:47:03 +0000

The start of the calendar year brings with it the risks and opportunities as I seek to achieve a return beating inflation for 2012. In 2011, total inflation hovers around the 5.7% figure so if my investible net worth portfolio was to beat this 5.7% figure, I would have to rely on dividend income plus some tactical punts to achieve that returns.

My net realised returns for 2011 was about 4.7% which barely kept up with total inflation. However, it did beat my internal benchmark of 2 x fixed deposits (12 months banks FD rate) interest rate of 0.4%.

Targets for 2012

Thinking ahead for 2012, I believe inflation will still hover around the 5% region, hence I would have to seek to grow my investible networth by 5% for calendar year 2012 just to keep the purchasing power of my networth portfolio intact.

Thus, my target for 2012 will…

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Mastermind Group Towards Financial Freedom

Panzer — Sat, 29 Oct 2011 05:03:06 +0000

When I was reading “Think and Grow Rich” by Napoleon Hill, I recall the concept of having a mastermind group. I don’t remember the specifics now as it’s been sometime since I’ve read the book but it revolves around surrounding yourself with like-minded people who share you goals and aspirations to come together to fellowship, learn from and support one another towards the common goal or aspiration.

It sounds a lot like networking and mentoring doesn’t it?

In your own journey towards financial freedom, it’s helpful to identify which group can function as a form of mastermind group. People who have the interest and passion for all things related to financial freedom and the willingness to explore the principles of living within your means, to save and invest as well as to grow and protect your means.

Your Own Financial Freedom Mastermind Group

The closest thing that I have …

Doing Nothing Towards Financial Freedom

Panzer — Fri, 21 Oct 2011 01:29:55 +0000

Even as the calendar year 2011 draws inexorably towards a close with two months plus left before 31 December beckons, I realise that if I do nothing now, I will end the year with a realised returns of 4.5%.

In fact, I should not buy any more equities now and take bigger positions on the market because most of my returns will come from dividends — truly a form of passive income. The more I trade or try speculative punts, the more I risk losses on capital due to market moves south in tandem with the general global negative outlook over European debt problems and possibility of US and world slowdown or even recession in 2012.

Is doing nothing a strategy?

Do or Do Not, There is No “Try”

This quote from Yoda of “Star Wars” reminds us that sometimes we have to take decisive action or sometimes we …

The Fourth Quarter of Calendar Year 2011

Panzer — Fri, 14 Oct 2011 03:21:54 +0000

It’s the last three months for calendar year 2011. For some if your organisations have hit substantially the key performance indicators set at the beginning of the year, it’s time for staff to clear leave and set aside some down time to recharge, rejunvenate and to refresh.

For others, they may have to push harder at work, business or personal lives to achieve the goals they set out at the start of 2011.

Whatever is the reason, the coming of the end of year in the next 1-2 months heralds the mood for retrospection and reflection.

What have we achieved in 2011?

What do we want to pursue in 2012?

What will the future hold for us and how have we managed our time on the present and the past?

Busy is good

Work-wise, the ironic thing is that things are getting busier towards the year-end partly because I am …

SGX Annual General Meeting held on 6 October 2011

Panzer — Thu, 06 Oct 2011 10:31:25 +0000

As part of my strategy to learn more about how corporate annual general meetings are held to beef up my corporate governance experience, I have started making it a point to attend annual general meetings (AGMs) of the companies that I have invested.

So far, I have attended last year’s DBS and SPH annual general meetings and they were useful exercises in seeing how different blue-chip companies conducted their annual general meetings.

Also, one of my targets is to position myself to be experienced and qualified to become an independent director of a listed company when I am near to retirement age as this could potentially provide a second “career” of sorts when my career as an internal auditor may plateau at some stage near the official retirement age in 20+ years’ time.

Key Highlights of the Singapore Exchange Ltd AGM

I won’t repeat the details of the …

The Markets are Bad Bad Bad!

Panzer — Wed, 05 Oct 2011 06:57:27 +0000

The current market turmoil has seen my stock portfolio’s value decrease as prices of even blue-chips stocks go south. It appears to be 2008-2009 again for many investors. What can we do, how can we overcome the challenges of seeing our portfolios dwindle with the threat of global economic recession threatening growth over the horizon?

Not Having All Your Eggs in One Basket

The key take-away I got from the 2008/09 global financial crisis was not to put all my eggs in one basket. I.e. I should not invest almost all of my investible net worth in one asset class which in my case is stocks and shares or equities.

That painful lesson has served me well today because I am currently about 70% invested in equities and 30% in cash and cash equivalents. This allows me to ride out the market downturn as most of …

Challenging Myself – Class 2B Licence

Panzer — Mon, 26 Sep 2011 06:05:38 +0000

One of my life goals that I’ve listed in my life list in 2009 was to obtain a class 2B motorcycle licence. That list was written in April of 2009, more than 2 years plus ago. It is timely to revisit that list as there has been some changes to it since I last wrote it.

I started my new journey to challenge myself by registering for the class 2B motorcycle licence at one of the training centres in Singapore. The road will be long and challenging as one needs to clear quite a number of theory lessons even before one can book the practical lessons to get hands-on training with the motorcycle.

Why Challenge Yourself

One of the interesting and thought provoking personal development books I’ve read is “The Art of Learning” by Josh Waitzkin. The book is about the personal journey of Josh Waitzkin who …

Make a Decision and Move on in Life

Panzer — Fri, 23 Sep 2011 07:02:04 +0000

One of the things I’ve learnt in my journey towards financial freedom is to be more proactive and do something instead of lying around waiting for things to happen. In life, we will be faced with many decisions on a day-to-day basis. Some decisions are relatively easy, e.g. what to eat for breakfast, what to wear to work.

Other decisions are harder, e.g. should I cut loss on my paper losses or hold on to a stock? Should I set my asset allocation at 50% equities to 50% cash or 70% equities to 30% cash or 100% cash and 0% equities.

Being paralysed and afraid of making a decision sometimes inhibits our growth as a person because we do not want to accept the consequences of our own decisions.

Life can only be lived looking forward

Steve Jobs’ commencement address that talked about how we …

Working Hard and Working Smart Towards Financial Freedom

Panzer — Fri, 16 Sep 2011 03:27:14 +0000

My current interest in the Korean girls’ pop group Girls Generation (SNSD) has led me to searching for their music videos as well as reality programmes subbed in English on youtube. Those who follow SNSD know that one of the earliest documentaries about them is “Girls Go To School” (GGTS) where it features the group’s inception, pre-debut and debut into the Korean market by SM Entertainment.

As I watched the documentary, I could not help from being inspired and awed by the amount of hard work put into their performances through practising their dance moves and singing as well as acting for the music videos and live and recorded shows. To be the best, you need a combination of talent, luck and sheer hardwork to see you through the end of your objective.

Working Hard Like SNSD

I can relate to what the girls went through in the GGTS documentary …

Investing in Yourself

Panzer — Fri, 09 Sep 2011 08:23:50 +0000

The Korean (K) wave or Hallyu of popular culture in terms of K-drama and K-pop culture reflects the globalisation of consumer taste in entertainment. The easy accessibility of music videos, television programmes and radio through the internet has allowed consumers who have a decent broadband internet access to tap onto the different genres of music, film and entertainment.

What has Hallyu have to do with financial freedom?

Interest in Hallyu

One of the key principles of financial freedom is to grow our means. For many of us, that means to develop ourselves through studying for a good education to get a good job or to embark on business to earn our incomes.

Earned income is still fundamentally the key driver of our investible savings. We can only start saving if our income exceeds our expenditures. The starting point of income generation typically is ourselves, i.e. we receive earned …

Decision Support Systems Towards Financial Freedom

Panzer — Mon, 05 Sep 2011 03:35:46 +0000

As an auditor, recommending automation and increasing the efficiency of business processes are some of the things that I work towards on a day-to-day basis. Automation and having templates makes life easier for the 80% of things that we do that achieve 20% of the results.

One of the key templates that have helped me in my journey towards financial freedom, especially with regards to making investment decisions has been my poems tracking Excel workbook (spreadsheet). The name does not give a full description of what the spreadsheet does, it in fact has worksheets for the following items:

Investment returns
Speculating calculator
Balance Sheet
Financial calculator

Decision Support for Portfolio Management

Investment Returns

This worksheet helps to track all my income streams from capital gains, dividends, interest and others such as advertisements from blogs that I author. It really allows me to have some sense of what …

How to Stop Doing and Start Managing

Panzer — Thu, 01 Sep 2011 03:00:07 +0000

As more and more little grey hairs develop on my head and as less and less hair are left, I start to see some similarities in my career as an internal auditor and my approach to investments.

In most careers, one starts at the bottom rung of the corporate ladder and slowly works himself or herself up through gaining experience, doing the actual work and learning the ropes of the trade, business or profession. I started out as an audit officer who was the lowest rank for degree holder. I prepared working papers, drafted audit programs for my audit supervisor to review and carried out the detailed audit procedures myself. There was no-one to delegate to and that was how I learnt my internal controls, auditing and interviewing skills and basic draft management letter observation writing.

After two years of doing the “grunt” or ground audit work, I was …

Have a Plan and Stick with it

Panzer — Mon, 29 Aug 2011 07:16:22 +0000

I am a science-fiction fan and one of the better sci-fi drama series I have watched in recent times was “Battlestar Galatica” the re-imagined series. If you follow that drama series you would be familiar with their tagline:

The Cylons Were Created by Man.
They Rebelled.
They Evolved.
They Look and Feel Human.
Some are programmed to think they are Human.
There are many copies.
And they have a Plan

What is your Plan?

Planning for financial freedom does not mean having an a to z, 1 to 100 steps to achieving financial freedom. Rather, it is about thinking strategically about your own financial goals and working out some clear direction that one needs to move towards that goal.

In the series, “Battlestar Galatica”, the Cylons started with their plan to destroy all of humanity in the twelve colonies. But as the plot developed, we realise that the plan is more …

Taking a Break from Routine

Panzer — Tue, 23 Aug 2011 08:37:54 +0000

I was at a conference yesterday at a nice hotel along Orchard Road to give a presentation related to my area of expertise. Whilst I was at the conference, I got many good ideas from listening to the other speakers as well as thinking about some of the questions raised by the participants during the sessions.

It was a nice break from my normal office work routine as I got to do a formal presentation in a suit and powerpoint deck of slides and have a nice lunch and tea break in a hotel function room.

What does my break from routine have to do with financial freedom?

Taking a Walk out of One’s Comfort Zone

This post is partly inspired by LP’s “Breaking out of my comfort zone”, as it discusses how taking a break from our routine is sometimes good for us in our journey towards …

Happiness is Little Moments in Time

Panzer — Mon, 15 Aug 2011 03:16:14 +0000

The more little white hairs start to show up on my head, the more I realise that time truly waits for no-one. I was reminded of that again last week when I went for an early morning job. As I was doing my pre-run stretching exercises, I overstretched my left hamstring muscle. I managed to complete the short 3km run but realised afterwards that my left hamstring and butt part started to hurt. My body at 40 is not my body at 20 or even 30.

This post is more philosophical and takes a step back from the focus on financial freedom. It really aims to put into context why I want to achieve financial freedom rather than the financial freedom strategies and techniques.

Happiness is Fleeting but Achievable

Underlying my own search for financial freedom is this elusive thing called being happy. We all want to be happy but …

Can You Sleep Well During This Market Upheaval?

Panzer — Wed, 10 Aug 2011 07:27:04 +0000

I was chatting with some of the nice at people LP’s Bully The Bear blog and was asking some of the people if they can sleep well at night with the market positions they have taken on SGX on the stocks that they are investing.

It’s an interesting question because when I went through the 2008 crisis, I went through a lot of personal upheavals myself even as the value of my stock portfolio gyrated as violently as a ship caught in a storm of a hurricane. That experience helped me understand more about this whole idea of asset allocation of one’s portfolio and managing one’s cash.

Fundamental Rule of Investing: Don’t Put All Your Eggs in One Basket

Living within our means, saving and investing as well as growing and protecting our means remain the fundamental tenets of financial freedom. The key towards investing is knowing how much to …

A Random Walk Down Equity Street

Panzer — Fri, 05 Aug 2011 10:12:01 +0000

To paraphrase Burton G. Malkiel’s excellent book, “Random Walk Down Wall Street”, I’ve titled my post “A Random Walk Down Equity Street”.

I guess today will be known as a somewhat “black” Friday for the STI plunging 112.23 points (3.61%) to 2,994.78 points. This follows massive losses on Thursday 4 August 2011 on Wall Street for both the Dow Jones Industrial Index (-512.76 points / -4.31%) as well as the broader S&P500 indices.

My own experience about investing in equities or stocks and shares is that truly, it is a random walk in that one is unable to consistently predict the price movement of individual securities. My own stock picks that generate winners have been largely due to blind luck plus a little bit of common sense and my losers have largely been to my own lack of understanding of the psychology of investing/trading …

Hedging Against Inflation

Panzer — Thu, 04 Aug 2011 09:47:18 +0000

Inflation rears its ugly head from time to time. If you track the MAS statistics on inflation or just tune to the headlines from the mainstream media. You will realise that it’s about 4.5% for May 2011.

It’s sometimes scary to think that every dollar you save in your bank savings accounts gives you 0.10% to 0.30% or so per annum. Thus, our savings are technically losing their real value of 4%+ every year if we do nothing.

So what can you do against inflation?

Should you run out and buy any blue-chip index stock on SGX to hedge against inflation? Or should you go out and buy a property as a hedge against inflation?

Inflation is here to stay

The hard truth that we don’t like but face everyday is that the cost of living rises over time. We face it when the same $2.50 …