Watching Millionaire Inside

Originally Posted by whizzard

Why this focus on money? Well, with sufficient money, one can build a life with meaning around oneself based solely on participating actively in one's interests. Some require more money, some less - but whatever the case, they still require money. I have a friend who retired from a high flying career when he was in his forties ... I am watching and learning how he has developed his new lifestyle and whether it is something I would emulate or adapt. He has a portfolio of real properties where he is collecting a chunk of rental income regularly, more than what his expenditure requires (this idea resonates well with me). He also does active trading in stocks, which I think replaces the highs and lows that you get in the workplace. But I still think he has yet to fill the void of having too much time. He needs to pick up some hobbies or participate actively in some interest groups.

In summary, as I gather ideas on how to build a portfolio of assets which will generate me a stable inflow of cash, I am also building a life that doesn't revolve around work, little by little.

Whizzard, I think you are going about it sensibly in my opinion. Work should be part of life, but life should not revolve around work. We have worked hard enough in the past to achieve a balance in our later years where we spend sufficient time working, relaxing and with friends and family.

The issue of "How much is enough?" is a difficult one. When you have $100K, you want $1m. When you have $1m, you want $3m. When you have $3m, you want $10m. When you have $10m, you want $50m. It was quite hard to step away from earning a huge amount of money. Even now, I wonder if I should go back so I can buy that Chateau my colleague has in the south of France. All it takes to dissuade me is to meet my old colleagues still in the game. The rings around their eyes, their intensity talking about the deals they did, their holidays in first class paid by frequent flyer miles makes me realize that I *really* don't want to go back. I'm much happier taking economy (well... admittedly business for long haul vacations).

I think the most important thing is to diversify. I think 50% property 50% financial instruments is the way to go and to try to time the cycle but only in the very long-term i.e., 5-10 years. Learning to tame the emotions of greed and fear (I'm a Chris Wood fan) is the key skill for an investor.

[whizzard]

Originally Posted by anoldanalyst

The issue of "How much is enough?" is a difficult one. When you have $100K, you want $1m. When you have $1m, you want $3m. When you have $3m, you want $10m. When you have $10m, you want $50m. It was quite hard to step away from earning a huge amount of money. Even now, I wonder if I should go back so I can buy that Chateau my colleague has in the south of France. All it takes to dissuade me is to meet my old colleagues still in the game. The rings around their eyes, their intensity talking about the deals they did, their holidays in first class paid by frequent flyer miles makes me realize that I *really* don't want to go back. I'm much happier taking economy (well... admittedly business for long haul vacations).

I think the most important thing is to diversify. I think 50% property 50% financial instruments is the way to go and to try to time the cycle but only in the very long-term i.e., 5-10 years. Learning to tame the emotions of greed and fear (I'm a Chris Wood fan) is the key skill for an investor.

Dear Anoldanalyst,

Agree with you that the most difficult bit about investing and trading is to control one's emotions. Probably that's why so many get it wrong, afterall humans ARE creatures of emotion.

In terms of how much is enough, my personal preference is to look at it from a cashflow point of view as I really loath to drawdown on my accummulated capital (obviously, accummulated returns could also be capital in nature). Hence, as long as I can generate more than sufficient regular cashflow to support my lifestyle on a consistent basis, anything more is a "nice to have" rather than "die, die must have". You are right to say that cashflow is dependent upon capital and a good part of cashflow is also dependent on how active and how well one manages his returns and I need to keep refining this bit.

I agree with you totally that diversification is the only sustainable and tolerable way to invest. When I was younger and my capital was small, my investments tend to be "bang everything on one" and then hoping and praying that I got it right. Over time, I realised that the volatility is just too great for me to stomach and the only way to sleep soundly is to have a diversified portfolio that gives a more regular and consistent return.

Trading and timing the markets is exciting but, requires one to be on your toes and stay up-to-date on world events. Whenever you get it right, the rush is till there but wears off pretty quickly, I must add. Haha.

Have a great weekend!

[I agree with you totally that diversification is the only sustainable and tolerable way to invest. When I was younger and my capital was small, my investments tend to be "bang everything on one" and then hoping and praying that I got it right. Over time, I realised that the volatility is just too great for me to stomach and the only way to sleep soundly is to have a diversified portfolio that gives a more regular and consistent return.

Trading and timing the markets is exciting but, requires one to be on your toes and stay up-to-date on world events. Whenever you get it right, the rush is till there but wears off pretty quickly, I must add. Haha.

Have a great weekend! [/QUOTE]

Diversification is a game of zero sum

Whizzard, did you by any chance just buy a yellow Porsche? mid-life crisis? haha

[whizzard]

Originally Posted by Unregistered

Whizzard, did you by any chance just buy a yellow Porsche? mid-life crisis? haha

Nope, that's not me. I am looking at a black one though, hahahahaa!

Not because of mid-life crisis but a change in perspective. I figure I can't bring my money with me hence, better to enjoy some of it first!

Originally Posted by whizzard

Nope, that's not me. I am looking at a black one though, hahahahaa!

Not because of mid-life crisis but a change in perspective. I figure I can't bring my money with me hence, better to enjoy some of it first!

That's the spirit man! A few suggestions for you:

1. Avoid Used Import. There are sometimes serious hidden problems with these cars.
2. Sweet spot is about 2-3 yrs old because of Stuttgart's 4 year warranty.
3. Be careful of PI cars. OMV is low, so depreciation will be high.
4. For the S model, target about $20K depreciation per year. Actual depreciation may be only $15K if you maintain it well and manage to sell it after 10 years.
5. Have it inspected at Stuttgart for around $500 before you buy. Even though under warranty, you don't want the hassel of repairing it if there are leaks etc.

Good luck on your supercar

Originally Posted by whizzard

Not because of mid-life crisis but a change in perspective. I figure I can't bring my money with me hence, better to enjoy some of it first!

What you describe is the definition of mid-life crisis

Midlife crisis - Wikipedia, the free encyclopedia

[whizzard]

Originally Posted by Unregistered

What you describe is the definition of mid-life crisis

Midlife crisis - Wikipedia, the free encyclopedia

A crisis usually denotes something negative ..... in my case, its a positive change in perspective! Definitely no depression.

[whizzard]

Originally Posted by Unregistered

That's the spirit man! A few suggestions for you:

1. Avoid Used Import. There are sometimes serious hidden problems with these cars.
2. Sweet spot is about 2-3 yrs old because of Stuttgart's 4 year warranty.
3. Be careful of PI cars. OMV is low, so depreciation will be high.
4. For the S model, target about $20K depreciation per year. Actual depreciation may be only $15K if you maintain it well and manage to sell it after 10 years.
5. Have it inspected at Stuttgart for around $500 before you buy. Even though under warranty, you don't want the hassel of repairing it if there are leaks etc.

Good luck on your supercar

Wow, thanks for the great advice. You sound like you know quite a bit about Porsches. If you have any recommendations, do refer!

Hi guys,

I wrote on this track because there are a couple of people like Whizzard with the same background as me ie from the finance industry and of similar age and just wanted to get some feedback from you guys.

I am currently reaching close to 40 years old and had worked in the finance industry practically all my life. Had a few good years, not exactly super rich but had accumulated close to SGD3m liquid assets which excludes a fully paid condo which I live in and an investment property which has debt of about SGD1m.

Currently about SGD1.5m is invested in REITS/Preference shares. Nothing really exciting but generates about 5-6% blended yield and therefore pays me dividends about $70-80K dividends a year which frankly is enough for me to live on and feed my family and kids if I choose not to work as my condo and car is fully paid. Another SGD500K is in FD and another 500K invested in fund etc and another $300-400K in CPF.

When I was 35 years, I always thought of retiring by 45 years. But as I get closer to that age, I am beginning to worry that retiring early may not be a good idea after all. I don't really have that much hobbies etc occasional golf games which I like to play more but don't think I can play everyday. I do volunteer somewhat but it currently takes up about 2 days in a month. My kid will be 12 years old when I am 45 years so he may not need me as much by then.

My job pays well close to $20K/mth however it requires lots of travel and frankly recently have been getting a little frustrating due to management changes. I have been around in the same firm for close to 13 years. I am really contemplating looking for a change of scene and less travel as I am not getting younger.

My questions to you guys out there who had gone through similar situations and to just share:

1. Was early retirement as great as it seems? Did you guys find enough things to occupy yourself?

2. Any mid life career crisis issue and how did you guys deal with it?

3. Did you guys do a career switch at 40 years to something else? How was the experience is trying to do something new at finance at 40 years?

Regards,

John