Just For Thinking ....
Read? Retire by 35 by investing for passive income??? Fact or Fiction?
Don't say Uncle8888 so bad. Here to poke Big Dream!
ME & MY MONEY, the sundaytimes June 30, 2013,
This young investor who is at 25 and hopes to have passive income of $10,000 and retire by 45.
This young chap is more realistic than last Sunday Young Investor.
This is how YOUNG thinks ...
Then you read on ...
small change, invest page 33,
This is what Lao Jiao spending 27 years around the financial markets and seen many of his friends attain financial independence thinks and advise ...
"To be financially independent is to be able to maintain your desired standard of living, without ever facing the risk of running out of money."
"Trusting the vagaries of the stock market to try to achieve that goal is really too much like a roll of dice."
Now, let Uncle8888 shares with you one of Uncle8888's Wealth Formula ....
Investment Dream or Truth? = Expectation on Portfolio's Return minus Reality
Are you having a dream that is so big?
High expectation on future portfolio's return and low reality in life.
But, the reality in life:
No 1: Inflation will really bite us hard!
The same passive income at 20 years ago cannot buy the same bowl of beef noodle at Kovan now!
When Uncle8888 first ate his beef noodle at Kovan, it was $2.50 and this morning he paid $4.50
No 2: There will be future Black Swans in our investing horizon. Black Swans may cause minor or major reset in our portfolio's return.
No 3: How to re-invest for growth when we keep eating away our passive income during retirement?
So what should be the right formula?
Investment Truth = Low Expectation on Portfolio's Return minus High Reality???
Reality of inflation rate on passive income!
After 40 years, you will need $380K passive income and not $120K!!!
Posts
Hi Uncle8888,
ReplyDeleteThe young investor featured this sunday already has passive income a bit lower than the passive income of $10k stated... By retiring at 45, the expected portfolio return required is actually 1.2% p.a. =)
I think the young investor also uses your
ReplyDeleteInvestment Truth = Low Expectation on Portfolio's Return minus High Reality
formula, with expectation of 1.2% and high reality of almost $10k/mth already in the bag
Qian bei,
ReplyDeleteLOL!
Wow, you dare to use the word "truth"! And I thought words like principle, truth, law, etc have stricter criteria ;)
There will be young people today that outperforms you years later - they will snub CW as too conservative, too negative... Tsk, tsk, tsk. Lucky never listened to you!
There will be young people that under performs you and they will say you too optimistic... Give them false hope some more! All your fault! Compensate their money losses!
Then they will be those that have similar results like you years later. Guess what? They will deify you as their Guru Supremo. Whatever you say all came true!!! (That's the best time for you to sell your seminars!)
We were young once. That's the time for silly dreams and romantic idealism. As we grow up, we morph into 2 groups: some became older, wiser, and more realistic; some remain young at heart.
I bet when you started stock investing, you were equally wide-eyed, full of youthful innocence and self-belief!
Ah Ger likes to remind me: "Ah Pa, your England no good."
Delete:)
DeleteThks Uncle CreateWealth and SMOL, I enjoy reading both of your article very much, u guys always make me think, harder.. Thank you so much & Keep up the good work! I wanna keep learning from you.
ReplyDeleteVery nice of you. :-)
DeleteConnie,
DeleteThanks for not calling me "uncle"! LOL!
That's what you get when you put an angler (super patience for 10 baggers) and a cheerleader (talk male chicken a lot) together ;)
Its always good to learn from each other. I'm young too so I know I may not have as much experience and knowledge as others. Its better to wake up from dreams and face reality faster so that I do not go into a wrong path and waste my time and even money lost in it. I try to learn from ppl who have already succeeded and model their steps.
ReplyDeleteWe can learn from other people's mistakes and we can alos learn from our own mistakes.
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