As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

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Value Investing
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Wednesday, 10 October 2018

Do We Plan For Our Own Retirement Based On Other People To Provide You The Number?


Every household is different and relative!

How much is enough is definitely relative?

Read your Past and forecast your Forecast.

So far; Uncle8888 still prefer this model after searching through the cyber world and NLB bookshelves on adequacy for retirement planning.

Read? Is Your Nest Egg Holding Up?


The Balance Sheet

A more sophisticated way to measure the success of a retirement portfolio is the one used by large pension plans. You compare what's called the actuarial present value of your assets and liabilities. The twist: Instead of looking at current assets and liabilities, you look at the value of all your expenses in retirement as a lump sum as compared with the value of all your assets as a lump sum.






8 comments:

  1. CW,

    You made me panic for a while...

    I thought you've turned "grey" :(

    How to poke you in futute?



    Then out it comes: "A more sophisticated way..."

    Phew!

    I'm happy again :)



    ReplyDelete
  2. Errr .... "Read your Past and forecast your Forecast"

    How to be grey when need to measure your past to 2 decimal places? Kekekeke!!

    Hey as long works for you can already! :)

    Some are numbers people, others are broad brushstrokes people.

    The "more sophisticated way" can be very grey as it involves plenty of predictions & assumptions. That's why many pension plans are running into problems. A 0.5% difference in long-term projected returns, inflation rate, life expectancy, expenses rate, contribution rate etc can (and did) result in unexpected outcomes.

    It's more sophisticated coz the "pros" will tell you yes can meet your projected retirement needs at 90% probability and at 98% confidence level. LOL!

    ReplyDelete
    Replies
    1. Spur,

      You horrible plus terrible!

      I just poked; you twist and twise the bayonet!!!


      Next time when its my turn, please give chance!

      Just tickle me can oredi? Please? I buy you coffee?


      P.S. I remember learning the Discounted Cashflow method of valuation for the first time. It went well until we came to the assumption this, assumption that part...

      Hey! That's no different than wetting my index finger into my mouth and holding it up in the air!?

      LOL!


      Delete
    2. Here is safe to poke. Try to poke even harder

      Delete
    3. CW,

      You the best!

      Unlike youths who are super "sensitive" to different opinions (poked a bit cries confrontation), the strength of experience is you have grown a thicker hide and have a lot more convictions in what you say :)


      The PAST is easy to backtest and benchmark - it already happened. Duh!

      As for forecast the FUTURE...


      You assume your liabilities will be "similar" to yesterday, but life is not a straightline extrapolation :(

      1) You never expected it, but what if xiao mei mei starts flirting with you? Mistresses cost money OK?

      2) You think you finished supporting your grown-up children... Wait they come and tell you they want to go for their Masters!!! Sugar daddy scholarship can?

      3) Bored and itchy fingers so start frequenting our "integrated resorts" how? (That's where you find your XMM?)


      Men got money will be up to "mischief" ;)

      Shh....





      Delete
    4. I am old, weak and and poor so I should be quite safe from predator xmm.

      Delete
    5. CW,

      You are not poor - your powerpoints say so ;)

      Old and weak are your strong attaction points!

      If I'm a gold digger, the last thing I want is someone young and strong with lots of years ahead of him!

      LOL!


      Delete
  3. Actually De-accumulation phase is the hardest time for investing if your accumulated capital & assets still are not large enough to generate cash for your daily/yearly expenses.

    Then tighten your belt if U must until more conducive time in the market.



    ReplyDelete

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