Read? Q3 2014 Investment Performance Report
A Goal-based Approach Investing Strategy
Uncle8888 has adopted a Goal-based Approach investing strategy by setting for himself a 10-year progressive Goal Targets to be achieved for each year from 2012 to 2021.
Our investing journey is not Horse Race or Rat Race where we compete against others.
No! It is our investment Marathon Race where we set our own pace and compete against ourselves to win our own race.
Year 3: Full Year 2014 Result for Tap No 3 (Cash Flow from Investment Portfolio)
Achieved 26.1% against 25% of 2021 Goal Targets.
Investment Portfolio XIRR
Track, Measure and Visualize!
Without doing it; how to revise investing strategies and to improve year-on-year investing performance?
Investment Portfolio's XIRR includes all investable cash plus the current stocks value at market closing price as on 31 Dec 2014.
Since one year ago: -3.8%
Since 1 Nov 2008: +2.7%
Since 1 Jan 2003: +9.2%
Since 1 Jan 2000: +8.5%
The reality of riding market cycles of Bull and Bear
This reality cannot be anyhow extrapolated in any form of theoretical knowledge including the most popular form of compounding interests - the Eight Wonder of the World.
No. You can't!
Embracing Three Taps Solutions to Retirement Income For Life Model
Uncle8888's Wealth's Formula:
Wealth = Asset Value + Cash Flow
Where Sustainable Cash Flow = Tap 1 + Tap 2 + Tap 3
and volatile market pricing of Asset Value becoming less significant.
Since Tap No 3 is enough to supply the liquidity needs; Tap No 1 will remain shut.
Posts
Read? The Single Biggest Retirement Mistake
ReplyDeleteQuite the same as Three Taps Solution. We have both reliable and volatile source of passive income stream and computed with god margin of safety not to run out of money before we run out of time.
The problem can be alleviated by setting aside up to ten years’ worth of income at the inception of retirement. I address this problem with an approach called the Bucket Plan, which segments a retiree’s investible assets into three categories, or buckets.
Here is the breakdown:
The “Now” bucket is where the client’s operating cash, emergency funds and first-year retirement income reside. It will typically be a safe and liquid account such as a bank savings account, money market fund, or CD. These are the funds on which the client is willing to forgo a rate of return, in order to keep them safe and liquid. The amount allocated to the Now bucket will vary based on the clients assets and sources of income, but typically you would want to see no less than 12 months of living expenses here.
The “Soon” bucket has enough assets to cover up to ten years’ worth of income for the retiree. The Soon bucket is invested conservatively with little or no market risk. That way, we know we have ten years covered going into the plan regardless of what the stock market does.
The “Later” bucket funds income, and hopefully an increase in income, when the Soon bucket is exhausted. By then, the Later bucket has been invested uninterruptedly for at least 10 years. We reload another round of income into the Soon bucket, and the process starts all over again. The Later bucket is the appropriate place for capital market participation.