A Chasing Sunsets Fund – A Better Way to Plan Nice-to-Haves in Financial
Independence.
-
One of the spending needs that many of you would consider as part of the
income needs for your financial independence (FI) or FIRE, is to have
enough mon...
1 week ago
You may see your investment success at the end of the Rainbow. The end of Rainbow may be decades away and nearer your retirement; but you may not be aware now. The beauty as long-term successful retail investors.
ReplyDeleteCongrats !! Yes , the wonder of "compounding effect " and also buying solid and good fundamental company ..Cheers !! :D
ReplyDeleteHuge difference in buying at the right price and be lucky at right time
DeleteCW,
ReplyDeleteThis is a good example of financial alchemy to "verify' whether the reader's Mind easily fooled or not!
You har!
1. If you had re-invested your Keppel dividends, DEFINTELY the compounding returns will be greater than leaving in CPF OA ;)
Your past powerpoints said so!
2. For greater CLARITY, just compound the 31 Dec 01 dividends of 50 cents by 2.5% for 17 years; that's the true effect of
compounding ;)
3. The main growth and compounding from your example comes mainly from your Keppel dividends. Naughty, naughty!
This is like someone starting with $50K, never invest but put under the mattress. Every year continue to add $50K. Then
10 years later proundly declare his "investment" portfolio has grown and compounded to a 10 bagger!
How's that for the magic of "compounding"?
To answer your question, YES, a nominal return of 2.5% is LOW RETURN on capital :(
If we discount 2% for inflation, that REAL return is only 0.5%...
Have fun with FIRE goals based on 0.5% real returns :( (You think why GIC and Temasek measures REAL returns?)
That's why voluntary contribution to CPF is not investng.
Your dividends strategy in Keppel is!
And that's Earn More ;)
I am with Earn more camp. Corporations earn more will be winning stocks for investors
Delete