On... KEN

Money can ’t buy happiness - so the saying goes. I politely disagree. There are some things money can’t buy - like love for example ( according to the Beatles anyway ), but it definitely can buy happiness. I had KFC with a bottle of coke and some fries just the other day, and boy was I happy. And guess what, I bought that with money. When you’re hungry and thirsty, money buys you food and drinks. If you need a roof over over your head ( the last time I check, most people do ), money buys you shelter. If its winter and the weather is cold, money buys you a jacket to keep you warm.  And the list goes on.     So, since money buys you happiness - the more money, the better? Absolutely not! For the very simple fact that money don’t grow on trees. Usually, there is a trade off to earn more money. Either you spend more time working ( time which you could spend with your family ) or you take on more responsibility ( which normally comes with stress ).   The questi...

Nobody likes making mistakes, but it is inevitable especially in the world of investing . In a Coffee Can investing forum, Tom Gayner said mistakes become less important with time ( something along that line ). That got me thinking, and I created a scenario to have a look. The scenario is as follows:- You invested 20,000$ and split it into 10 stocks. ( 2,000$ per stock ) After the first year, 6 of those stocks ( 12,000$ ) went to zero ( in reality, this would not happen even if you try ) ! You just lost 60% of your portfolio value in a year. Investing is terrible?! However, let’s look at what happens with the passage of time, assuming your remaining 4 stocks generate an annual return of 10% each. After the 1st  year, your portfolio lost 60% of its value and it takes you 10 years to return to your initial invested amount of 20,000$.  In 20 years, you would have increased the investment to  53,000$. That ’s  a gain of 169% with a total portfolio ...

Recently I overheard my relatives  talking about retirement plans.   It went something like, “You’re going to be retiring in 5 years time. Have you planned on what you’re going to do next?”….. I would think that it’s quite obvious that when you reach retirement age - you retire? Well, it depends. Some choose not to whilst others don’t have a choice. Whichever it is, when is it a good time to start planning for it? I would say the earlier the better. Warren Buffett coined a term - Tap dancing to work. That ’ s basically how he feels when he goes to the office, not with reluctance but with joy. And if you ’re enjoying your work that much, then it isn’t really work, is it? He has been investing since he was 10 years old. In that case, you can probably say he retired at 10, and his next 70 plus years of investing was just having fun.   IF we plan-to/have-to work past retirement age ( about 65? in Australia ) , I assume ( given a choice ), most people would choose...

T he good news is I beat the market in 2018 ( ASX200: -6.99%, Me: -2.94% including dividends ) .  The bad news is I am way below my base case target ( Target: 10% CAGR ) .     In order for me to achieve my base case target, my return next year would need to be circa 25%!    This would be a tall order, especially given the market conditions. 2018   appears to be a bad time to start my investing journey .  It is believed that the poor performance of the market this year is driven by the US - China trade war, Quantitative Tightening and interest rate increase by the Federal Reserves, Australian Banking Royal Commission and Brexit among other things. These are some of the macro views but I believe that the market does what it does and these explanations only come after the fact. These issues highlighted by analysts and economists does not come as a surprise and should largely already be priced in by the market. The best perform...

Tell someone that you bought a property and he replies “It’s good that you’re investing and thinking about the future”. Tell someone that you bought some stocks and he replies “Why are you gambling with your hard earned money?”. Not always, but most of the time.       So why is buying property considered as investing; but buying stocks considered as gambling? I guess it depends on the definition of gambling. Ask ten different people and most probably you will get ten different answers. Personally, I think as long as your action has an uncertainty in its outcome, it should be somewhat considered gambling ( and its not only financial terms that we should consider ).   You drive your car to work. There’s always a probability that you end up in an accident. You’re gambling with your life. You start a business. There’s always a probability you go bankrupt. You’re gambling with your money. You take an airplane to travel for vacation. There’s always a pro...

Recently my wife asked me how my investing is going and how much I am earning. It is a straightforward question but the answer is anything but simple. Why? Because investing is not like opening a lemonade stall where you can report your monthly sales/profit or a regular job where there is a monthly income ( unless you’re doing trading which is similar-to but not the same as investing ).       So I could go into the details of investing but that’s not the simple answer that she is looking for. And if I just reported the dividends I received as my investment earnings, it would not do investing justice. I thought a little more about the question because I was sure it would not be the last time I will hear of it. Sure enough, a month later, when I met up with an old friend he asked me the exact question. This time around, I was kind of ready. Most people understand property investing ( most people that I know at least ) and I thought that would be one way for me t...

Early on in my career, a senior geologist told me over breakfast, “If you want to get rich, then you have to maintain your lifestyle”. Lifestyle creep is what he is referring to and everyone is guilty of that. Basically, when you age, you spend more to upgrade your life quality. Isn’t that the definition of success? To earn more so that you can spend more to live better.    When I was a student, I was contented to share a 2 bed room house with 3 other person . When I started working, I was contented to share a 2 bed room house with 1 other person. After working a couple of years, I had to have the whole 2 bed room house to myself. Pretty soon, 2 rooms isn't even enough for me. The same goes for clothes, food, electronic equipment…etc. You get the idea. Now I’m not suggesting that there is anything wrong with improving your quality of life, but where or when does it stop? When is enough actually enough? When do we realise that we have exceeded a decent level of comfo...