We have been reading about Financial Independence from some investment bloggers on how reaching the Edge of Financial Independence gives us the option to retire from our day job/employment and taking back those 8 to 10 hours of working time for setting our own priorities in life at our own freedom.
- Uncle 8888
So 2000-2008 becomes family chest, 2008 on wards then is your real "war" chest ?
Dunno is it interpret this way.ReplyDelete- Hmm ... Wah!
True leh. 2000 - 2008 the so-called war chest is actually money coming out of family chest. It is just naming convention that is changed. From 2008, the money was taken back from the stock market through War so it is rightfully the War Chest.
clap clap clap!Delete
The above comment by Small Time Investor has Uncle8888 thinking loud for hours!
Why are we working so hard on our investing to generate cash flow from Family Chest (i.e. Savings from our earned income from job/employment?
To achieve Financial Independence. Right?
After reaching Financial Independence, our savings from our hard earned income from our job/employment are still at risks of losing back to Mr. Market. So what next for Financial Independence 2.0?
How about financial freedom in Investing? Right?
The real War Chest from the market without a single cent coming from his Family Chest.
That is financial freedom in Investing!
Our Investment is really working hard for us without us ever losing our hard earned money. Our Investment is returning Mathematically Infinite Return!
sibei shiok!
In the next Bear - Bull (201X to 201Y/202X), Uncle8888 will aim to achieve his Financial Independence 2.0! (No definite time frame here! Let see how that Man can find hole to Poke. Hee hee!)
At the Edge of Financial Independence 2.0, he will transfer all his Family Chest from Tap 3 to Tap 1 to just earn Interests.
Posts
Uncle 8888
ReplyDeleteRespect to you Uncle 8888, Uncle's family chest should be more than 2000-2008 period because uncle subconsciously is doing for family, and maybe is twice of the war chest now.
CW,
ReplyDeleteThere's nothing to poke except its a bit "late" for you to have this epiphany... But better late than never!
1) Entrepreneurs use this all the time to evaluate whether a new venture is worth the investment - they calculate how many years it takes to recoup all their initial investments. Once they got back their capital, they have a business that brings in "free" cash flow to them, and they can invest in another totally new venture with the returned capital ;)
2a) Most traders work a variation of this technique too. If I had a $50,000 trading account, once I doubled it, I can withdraw my initial $50,000 capital and put it in govt bonds or fixed deposits as my "recovery fund". The $50,000 winnings is now the new risk trading capital - the author of Market Wizards have a similar strategy by banking extra profits in his futures account to US treasuries. This way, he makes it hard for Mr Market to win back his winnings.
Now if a trader crash and burn, then it "just" giving past winnings back to the market. Now we can invoke our 2nd life by tapping the old recovery fund of $50,000 for our comeback return!
2b) For aggressive traders, they don't take back their initial trading capital of $50,000. Instead, they use it to open other NEW trading accounts - one for CFDs, one for futures, one for spot currencies, etc. Each of them funded by the winnings of the original trading capitial of $50,000 each time it doubled.
3) And yes, you have just poked yourself by showing how ridiculous it is if we choose to manipulate % to the extreme. Yup, it you do what you do, its "infinity" returns. You win liao lor! Better than 10 baggers!
Like that may I ask will you still calculate XIRR returns, do track and measure powerpoints in future? How to improve on infinity returns?
But measure in actual dollars and cents, that's REAL!
Once investing capital is taken back and lock safety in FDs to count interests without stress, can rename the portfolio to CW8888 Freehold Fund. Track and measure XIRR starting from inception of CW8888 Freehold Fund.
DeleteThat's better!
DeleteReset the matrix ;)
Start the CW8888 Freehold fund as Index 100.
If not, every new cent winning is an infinity return and that you bore you to death since no excuse to track and measure anymore :(
Have fun with your new launch of CW8888 Freehold Fund!
Now you know why money managers love to spin-off and/or launch new funds all the time!