I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

Click to email CW8888 or Email ID : jacobng1@gmail.com

Welcome to Ministry of Wealth!

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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Saturday 11 November 2017

Should you follow the 3% or 4% retirement rule? (2)

Read? I Took All My Money Out of the Stock Market and It Feels Amazing

Thanks to Temperament for pointing out this article. One good example of not following the 3% or 4% retirement rule? 

CW8888: Once we have bulk of our net worth exposed to future market cycles; how many of us dare to claim that we are able to sleep well when market crashes and wipe off 40 to 60% of our net worth?

Do I think the stock market is about to crash? Am I afraid that with Donald Trump at the helm of our ship of state the economy is at risk of going down like the Titanic?

Sure, that could happen. But that’s not why I took my dough off the table.

Back in the early 1980s, I inherited $50,000. At the time, that was so much more money than I’d ever had before that I decided I’d better educate myself about financial matters.

After much research, I put that money — and a percentage of the money I’ve made since as a writer and part-time librarian — into a low-cost index fund. Specifically, I invested in a Vanguard balanced fund that invests 60% of its assets in the stock market and 40% in bonds.

And I left it there.

This turned out to be a good strategy. Back then, the S&P 500 index of U.S. stocks was at 208. Now it’s closing in on 2,600.

Nevertheless, I cashed it all in last week.

Now all my money is stashed in U.S. Treasuries, Treasury Inflation-Protected Securities (or TIPS bonds), and laddered CDs, which, in the years to come, I can count on to earn me essentially nada.

Why would I do this?

CW8888: How many of us have that level of confidence that we have enough of net worth to last our lifetime; and stop or drastic slow down to accumulate more?

I once figured out exactly how much money I would need to live on — not lavishly, but comfortably — for the rest of my life. I promised myself that once I had that amount, I would actually do just that — take my money out of the market and live on it for the rest of my life.

Last week, I reached that goal.

I’m 62. I’ve spent decades caring about the market. I counted on it to make me enough money so that I’d be able to cash in my chips and walk away when I hit retirement age.

And so it did.

And now? It’s time for this librarian to declare victory and get the hell out.

The day after I cashed out, the market soared, as if to say, “Ha ha Roz, the joke’s on you.”

Did I feel some regret?

Of course I did! Had I waited just a day, my bank account would be fatter than it is now. But that’s not the point. The point is no longer amassing as much money as I can. It’s peace of mind.

And that’s what I’ve got.

Timing is everything. But you can’t time the market. I have no idea whether it’s about to go up or down. But I no longer care.

I now have enough money to live on for the rest of my life with absolutely no concern about what the market is up to. The Dow Jones industrial average could zip up to 30,000 (and I hope for the sake of those of you who are still in the game that it does.) Or it could crash and burn tomorrow.

Not my problem. That part of my life is over. I’ll never again experience the elation of a market that is rocketing into the stratosphere. Or that sick feeling you get as the market is “correcting” and your net worth is circling the drain.

All done.

But if the market totally tanks tomorrow, you ask, and stocks become such a crazy bargain that I’d be a fool not to put at least some of my money back into that mutual fund that served me so well, wouldn’t I?

Of course I would! I’m no fool. Plus, the one thing I’ve learned about the market over the past three decades is “what goes down, eventually comes back up.” But until that happens, I’m staying put. And if it never happens? I’m still set.

So how much money have I got? I’m not exactly a millionaire. But I do have a nest egg in the high six figures, a modest home with no mortgage, and zero debt. That might not impress you, but it’s good enough for me.

Now that I’ve made my nut, I have no big plans to buy a yacht or travel around the world or even splurge on a few extra outfits from Eileen Fisher.

I plan to continue to work at my local public library and write essays. Which is to say that I’ll continue to do the work I love, which provides me with a small but steady income. (And, at age 70, I’ll start collecting Social Security, which, both because I’m an optimist because I believe in the lobbying power of the AARP, I fully expect to be, like me, alive and well.)

I’m not saying you should follow my lead. You could be more of a risk taker than I am. (Most people are.) Or more worried about inflation. (I’m betting on the TIPS to shelter me from that.) You might have more expenses, or more people who rely on you financially. Your own goal could be to leave a bucket of money to your heirs. (I’m leaving that task to my wealthy ex-husband.)

Whatever your financial goal is, I hope you reach it.

CW8888: Invest well! We will be on our way  to build sustainable retirement income for life (with draw down strategy; it will be easier)

The stock market has been very good to me. Without money in the market, there’s no way that this part-time library worker and freelance writer would now have enough money to live on into her 90s.

But, as the song goes, you’ve got to know when to hold them and know when to fold them.

And for me, the time to fold them has come.

I’m out of here. Best wishes. Enjoy the ride.


  1. CW,


    She obviously don't practice buy and hold ;)

    I like her savvy gambling instincts!

    "But, as the song goes, you’ve got to know when to hold them and know when to fold them."

    Some retail "investors" really believed being 100% vested in the stock market is "not gambling"...

    1. Investing is still Game of strategies. Like it or not.

    2. temperament,

      You are what Hokkiens call "iron teeth" - "ai gong wei"!

      If you read the post properly, this ang moh librarian practice the same as you and me lah!

      "But if the market totally tanks tomorrow, you ask, and stocks become such a crazy bargain that I’d be a fool not to put at least some of my money back into that mutual fund that served me so well, wouldn’t I?

      Of course I would! I’m no fool. Plus, the one thing I’ve learned about the market over the past three decades is “what goes down, eventually comes back up.” But until that happens, I’m staying put. And if it never happens? I’m still set."

      She more gungho than you and me! She is now 100% out of equities! Power!

      She'll be back when the next crashes ;)

      She has gone through what you've gone through during the past 3 decades. Buy and hold my foot!

    3. And note her honesty!

      She relied on mutual funds that served her so very well.

      I can't imagine her interested in the craft of DIY investing. She smarter. She hired a shepherd to do the investing for her ;)

      But she knows a shepherd will not voluntarily return cash or advocate market timing (how to earn fees like that?)...

      So like a land owner, she knows when to dismiss the services of the shepherd ;)

  2. This is classic example of B & H. Holding it for three decades and quit the Game when she has enough.

    Buy & Hold is alive!

  3. Traders love to poke failed B & H investors. But; those successful B & H investors will point to their bank account and laugh back. Right?

  4. CW and temperament,


    This is classic example of we see what we want to see ;)

    Traders see and take into account entries and exits.

    You guys see and count her entry, her holding period of 30 years, and "convenietly" ignore her final EXIT?

    100% exit from equities is still counted as Buy and Hold?

    And I thought the meaning of "Hold" meant still vested...

    Let's say I am very impressed with this 62 years young librarian. She knows she has "enough".

    She is more guungho than the 3 of us. She dares to go 100% all out!

    C'mon, all 3 of us are not 100% vested in equities right now... That's not Buy and Hold too ;)

    If you believe Buy and Hold is still alive, what take partial profit? (People listen to what we do; not what we say)

    We are just 50 steps laughing at 100 steps :)

  5. temperament,

    I'll leave it you and CW to work it out between you two... You both have quite different definition of Buy-and-Hold ;)

    temperament version:

    "On the other hand, i think she a little like me loh - B & H & S, B & H & S."

    CW version:

    "This is classic example of B & H. Holding it for three decades and quit the Game when she has enough."

    What the hell is "S" and "quit" when it comes to Buy-and-Hold?

    Just having fun lah! Its quite clear my mental bias is on the end game :)

    I think all 3 of us know very well how we can tell whether an investor is competent or not. Its never the noun or label of "trader" or "investor"...

    COMPETENT investors/traders know when to sell ;)

    Hand to heart right?

    Had you held all the 3 Temasek stocks you mentioned, you would love to sell nearer to their 2013 highs right?

    Definitely not at current prices...

    Can agree selling is much harder?

  6. Have a Great Retirement! U have work hard for it!

  7. temperament,


    I don't care about labels. Don't sell how to take profits?

    Although I am teasing and debating with you - we both are closer to the same definition - we both see and acknowledge the "S" ;)

    CW sides with you in "words"; but his multiple rounds in "actions" speak louder! LOL!

    We both know WHY CW will NEVER sell his multi-baggers out COMPLETELY like the US librarian above even if STI zooms up to 10,000. It has nothing to do with fundamentals or technicals. Or lack of guts or conviction.

    Shhh... Don't say it out loud ;)

    Young people too respectful and courteous to you and CW. So I play the "rude" idiot role here to have a bit of fun playing out the Socratic method.

    Maybe some bei kambings reading our debates can benefit and figure out for themselves what does Buy-and-Hold really means - especially the "Hold" part :)

    We make a good 相声 pair!


  8. Any young ones see the difference from the above comments?

  9. The $800,000 question (I'm assuming that's the rough size of her portfolio) is how much capital she put in? I'd bet it wasn't more than $100K. Vanguard's balanced funds are about 8+% to 9+% CAGR from mid-1980s till now.

    For the 9.57% CAGR Vanguard Star Fund, it'll just take about $43K to hit $800K over last 32 years. With starting capital of $50K, it'll be $930,000 today.

    No definite definition of B&H --- generally just means no or very little emphasis on selling assets within weeks or even months to cash in on a higher price. Emphasis is on compounding interest & re-invested dividends to grow capital.

    For how long? Up to societal norms lah. 30 years ago people in US generally held stocks for 10 years before selling. Now it's like 1-2 years.

    The US tax dept is quite helpful in deciding whether to be a trader or B&H (at least on a mini scale). If you realise profits after 365 days of buying an asset, you pay "long term" income tax of 15%. If you realise profits within 365 days, you pay "short term" income tax at your marginal tax rate (usually much higher than 15%).

    That lady is also very lucky ... for compounding to work, not only it requires TIME, but also the RIGHT ASSET. She invested into the US market at the beginning of the longest secular bull market in US history from 1982 till Mar 2000. The crash of 1987 & the mild bear in 1991 were just small blips in that 18-yr bull run.

    The double-dips in 2000-2002 and 2008/2009 basically resulted in 10 years of flat portfolio growth. But the last few years of QE gave her the final Oomph to cross the finish line.

    Just imagine if she practiced market timing ... no need expert level, just follow brain-dead 200-day MA --- she would easily be millionaire now instead of "not exactly a millionaire .... a nest egg in the high six figures". :)

    But if she did use long-term market timing, she'd probably have avoided the draw-down in 2000-2002 and cashed out in 2008 & declare victory then. LOL!

    Btw she was only vested in 60% equities; the other 40% in bonds. To me that's still B&H lah.

    Btw2 she's still vested in bonds, Treasuries & TIPS --- should be mostly in Vanguard mutual funds. Does this still count as being B&H?? Does B&H only mean risky assets? Heheheh!!

    1. Spur,


      Something so "simple" as Buy-and-Hold has become not so crystal now...

      Why get out of bonds when the 37 year old bull market in US Treasuries is still on going? I envy her capital gains in bonds!

      She has beaten many hedge fund managers who shorted Treasuries as they refused to accept how interest rates can still stay so low for so long... That's power of QE for you!

      Painful widow maker trade to short US or Japan Treasuries :(

      But then, as with all cycles, mean revision will exert its pull.

      It will be interesting to see if this US librarian will exit her bond holdings BEFORE or AFTER the bond crash?

      That's how we tell competence ;)

  10. Paiseh... me not young 1... but still dont understand... bcos i blur blur 1... hehehe


  11. Uncle CW,

    Thumbs up. I also wondered how many fold the cards. I call that 瀟灑。

    Have a great golden period:



    Sillyinvestor 谨启

  12. Who should poke this Grand Investor from selling?

    Buffett began rolling back this decision earlier this year, dumping about one-third of his position prior to Berkshire's annual meeting. He cited tough competition, saying he had revalued the stock "somewhat downward" as a result. With revenue slumping for more than five years, those competitive advantages had clearly eroded.

    Berkshire's latest regulatory filing shows that Buffett has trimmed this multi-billion-dollar stake even further. Berkshire owned 37 million shares of IBM as of Sept. 30, worth about $5.5 billion today. That's down from around 50 million shares earlier this year. IBM's turnaround effort has dragged on, and even Buffett's legendary patience has run thin.

  13. CW,

    No need to poke Warren Buffett. Great investors have the ability to poke themselves:


    Well, at least Warren Buffett never Buy-and-Hope that crude will go back to above USD100 again... Maybe one day it will. He rather take his one billion loss and make it back not the same way he took the losses ;)


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