On... KEN

Compounding is the 8th wonder of the world. And it works wonders if compounding is done over the long term. However, sometimes the importance of time in compounding can be taken over the top as if it is the only important aspect of increasing one's wealth. Time is important but we have to look at other factors as well in our Financial Planning. Figure 1 shows the scenario of compounding my Networth by 4 percent per annum over twenty years. With a starting value of 600 AUD, and additional injection of 600 AUD annually. That takes us to a total of 20,000 AUD. You can see the 'hockey stick' part of the chart forming as we're entering our 20th year. From there on, it probably goes parabolic. That shows that compounding works best if we have a long time frame. However, what if we missed the first 10 years? Is that the end of our compounding dreams? Actually, not at all. We often state that time is the greatest part of compounding. Well, yes, you need to compound for a long t...

 Is inflation bad or good? Maybe inflation is neither good nor bad. Sure, generally it is considered bad as the costs of living keeps going up. As time goes by, your purchasing power is decreased, eaten up by inflation. A good example of this is the Big Mac price inflation as reported in the Visual Capitalist website . A Big Mac in Australia costs 2.27 AUD in 2004 and 4.51 AUD in 2022, a price increase of 98%. So, the price of Big Mac has gone up 98% in that time frame. Therefore inflation must be bad right? Well, not so fast. How about other things like property or stocks? Those things have gone up in price as well. Average house prices have gone from 539k AUD in 2014 to 993k AUD in 2023. I know average house prices is not really the best number to use because there are too many factors that govern the price of property ( such as location, type of house, etc.. ) but we know generally it has gone up. Well, then if the price of house has gone up, its bad if you want to buy a house ...

How much is our hourly rate? People chase money, but is the extra time we put into earning worth our time? You definitely need to put in the minimum time at work to fulfill your basic necessities of putting food on the table, a roof over your head, and paying bills. However, after fulfilling that, how much time do you want to put at work versus enjoying your life? My father in law was diagnosed with cancer and his medical bill was around 100k for chemotherapy. Unfortunately, that did not work, and he passed away. My auntie was recently diagnosed with cancer, and she paid around 100k for chemotherapy. As of now, she is still doing fine and I hope she continues to recover. The reason I brought up these stories, is because they made me think of time versus money. 100k is what we may pay to live longer ( if only just for an extra year? ). How much longer we don't know. Sometimes medical treatment doesn't work, but the gist is we are willing to pay a lot just to have more time. The ...

Some people ask "Why Bitcoin?" Thats a very difficult topic because people buy Bitcoin for all kinds of reasons. My reason is very simple - because Cash is Trash. Let's start from the premise that Cash is Trash. Where do we go from there? There are a few options of investment vehicles that you can look at. Super Annuation, Stocks, Property, Business, Crypto. The are dozens of ways that you can invest but the most accessible to most people are probably the 5 above. So, lets take a look at the different asset class. Super Annuation is touted as the Holy Grail by my mom and mom in law. That may not be a bad choice at about 7% annual returns. But 7% may just be tracking or even below inflation. Stocks is definitely a good choice. Just buying the index would get you a 10% annual return. I did actually start from stocks before I dabbled into crypto and it is still a major holding for me. Property is the go to investment class traditionally. I was actually into property even bef...

Money is like a melting ice cube. Given enough time, it disappears. People know inflation but my guess is they don't think about what that means and how it affects their life in the long run. A melting ice cube is a good way to look at it. Its because inflation erodes your net wealth over time. Generally, I see people react to inflation in 2 ways ( at the extreme end of the spectrum ). First is the rich ones. They worked hard and saved a lot. So they think they have enough in the stock pile to support their life post retirement. The other end of the spectrum is the one who is poor and at this end, there is no more choice. The only option is to work until they die. This time, I want to look at the first case - those who have money. The question is, how do they treat their money? Do they realize that money is a melting ice cube and if you don't do anything about it, it eventually disappears. If you invest your money ( in any way, shape or form ), then kudos to you. If you don...

 You should invest like you're running a business. I have written about this  before . After running this business for 6 years plus, it is a good time to have a snapshot on where I am. Unfortunately, it is still Cashflow Negative but with a little bit of luck I might get to Cashflow Positive within the next few years. Some metrics to track a regular business is as follows ( modified for use in Trading ):- CAPEX:- Starting Capital OPEX:- Annual Capital Injection Cashflow:- Cumulative Net Cash  PnL:- Annual Profit or Loss

Most people want to make money fast. I just want to make money slow. All things being equal, of course I'd rather make money fast than slow. However, not everything is equal. There is more stress and risk if you want to hit it big at a quick pace. Much less stressful for me, if I take the time. Some of my friends doing leveraged trading are going for 20x returns this bull market cycle. I'm just looking to increase my portfolio by 50%. And 50% would be a record year for me! Doing it slow lets compounding take care of your returns. I was reminded of this in the gym. I always thought of walking on the treadmill as silly as you walk but never reach a destination. But here I am, using a walking machine, on average twice a week. On the walking machine, I set the target of walking 2.4km by the end on an hour. I always beat the target and this is how it goes. On the 1st 5 minutes, I'm right on target. At the 10 minute mark, I usually beat my target by 10m. At the 15 minute mark, I ...