Saturday, April 19, 2014

$250K - First Milestone Target Reached!!

I started out my journey some 4+ years ago and back then I had set out a 10-year projection target for myself. I tried to review them at the every interval of my birthday month to see how I was doing and if the target was overly ambitious.

Projection Target
YearYearStarting CapitalCumulative Annual Capital Injection Dividends on Starting CapitalTotal Yearly Dividend PayoutMonthly Passive Income
01/9/2012$100,000.00$60,000.00$6,000.00$6,000.00$500.00
11/9/2013$166,000.00$60,000.00$9,960.00$13,920.00$1,160.00
21/9/2014$245,920.00$60,000.00$14,755.20$19,190.40$1,599.20
31/9/2015$345,030.40$60,000.00$20,701.82$25,453.25$2,121.10
41/9/2016$469,594.05$60,000.00$28,175.64$33,302.84$2,775.24
51/9/2017$627,460.53$60,000.00$37,647.63$43,245.80$3,603.82
61/9/2018$828,572.82$60,000.00$49,714.37$55,909.12$4,659.09
71/9/2019$1,085,594.23$60,000.00$65,135.65$72,090.20$6,007.52
81/9/2020$1,414,705.83$60,000.00$84,882.35$92,807.76$7,733.98


I started out really wasteful when I started working, always buying the latest trend of clothes and gadgets to keep up with the world. By 25, I realized that I had wasted piles of years of savings that could be used to fund greater needs for the future. One day, right around my 25th birthday, I started to ponder on my financial future. I had a good job and a good income but technically my net worth is still zero. I was eagerly awaiting for the next paycheck to come, only to find myself doing the same thing the following week. The euphoria moment I get when I saw those money hitting my bank account died off very soon. Realistically, I was only 25 years old at that point in time, so maybe I was doing relatively well I thought. Or maybe I was not. I wasn't really sure of my situation.


One day, I decided that I had to be more sensible towards my financial situation if I were going to be successful and so I decided to pen my every thoughts and plans into this blog. I have also been aggressively saving and investing my way toward financial independence for the most part of the past 4 years. I have purchased shares in great companies like ST Eng, SIA Eng, SPH, Singtel, Sembcorp Ind, Vicom, Neratel, Reits and many more on market dips in order to build up my arsenal of solid dividend payers. Slowly but surely, day by day, I continue my ascent to the top and hope that with time and persistence on my side, I will be able to reach the summit - the end goal of my financial independence.

Today, and on this very day, I'm proud to reach my first milestone of hitting $250k in my stock portfolio. It's an achievement that doesn't comes easy, with plenty of ups and downs along the way and I will be the first to admit that the idea of giving up often ponders inside my mind. Fortunately for me, luck and persistence take the better off me and so here I am still alive, kicking and pushing closer to the end goal. I've tried various methods on both defence (savings) and offence (higher income) and it seemed obvious that both are equally important. I've also thought that with the world's best defence but with very little offence to attack things were not going to be easy. So I've decided to upgrade myself with skills that are relevant and can improve on my productivity at work. I guess this is where the value of my MBA comes in - a very debatable tangible and intangible costs and benefits it can offer. The learning and interaction with the other bloggers have also pushed me to understand more towards financial goals. 

Achieving my first milestone now does not mean that I will achieve my end goals in 6 years time easily. In fact, it is going to be even more difficult than ever. But now that my goals are in place and I'm on a designated path for financial independence, I live my life everyday with these end goals in mind. Hopefully, the desire and hunger to achieve the goal is still there by then.

For those who strives to achieve financial independence but does not know where to start, I hope this will give you some motivations and directions. Things are not going to be a replicate of what you see here because each of us has a different set of story but this is my story - and hopefully it can bring the changes to those who needs it.


32 comments:

  1. Congratulations!

    The next $250K may be easier than you have thought.

    In the investment world, we are climbing the Inverted Pyramid of Rewards with our investing skills.

    ReplyDelete
    Replies
    1. Hi uncle cw

      Still I doubt it will be a walk in the park. And hopefully the investing experience accumulated over the course of the years will be put to a good use when it comes.

      Delete
  2. Wow congratulations man! Getting 250k in such a short period of time and constant monthly dividends is no easy feat o.0

    ReplyDelete
    Replies
    1. Thanks xliew.

      Im glad to have started early and to.a certain extent at the right timing as well during the euro.crisis.

      Delete
  3. Next great milestone ... fatherhood.

    ReplyDelete
    Replies
    1. Hi MH

      Indeed it is.

      It will.be the best milestone that I am very proud of ;)

      Delete
  4. Congratulations! You are an inspiration. I hope I can emulate you...

    ReplyDelete
    Replies
    1. Hi jayteesg

      Thank you.

      Ive seen that you have started on your own blog as well. Welcome to the finance community. Im share theres plenty of sharing that you can bring to the table. Looking forward to more of your posts to come.

      Delete
  5. Wow congrats on this remarkable milestone. But how do you manage to inject $60k every year? That means having to save $5k every month. Guess you have a very high paying job!

    ReplyDelete
    Replies
    1. Hi aceirus

      The figure is just an indication but thats because the figure does not take into account capital gains which does play a big part in my portfolio. But I do try to achieve and save as much savings especially when I first started a couple of years early in my life.

      Delete
  6. Hi B,

    Congratulations! Actually I realised that I haven't asked you if your wife also contributes to this portfolio? Or perhaps she also has a separate one?

    I agree with you that even though you have done well so far, it's dangerous to extrapolate your past success to the next 6 years and assume it's an easy path. But then, with your first $250k milestone checked, your lofty goal is indeed getting nearer!

    ReplyDelete
    Replies
    1. Hi 15hww

      My wife doesnt invest so thats mostly comprises of my own portfolio but at the end of the day the intention is for us anyway ;) I use and control all of the proceeds and income from the portfolio as well. She manages her own separate savings account.

      On extrapolation, I find that people somehow easily give up or maybe when they met with unexpected events they are inadequately covered. So the next goal is not going to be any easier. One only need to reach the goal then can be considered a success. Just like liverpoool, near but not yet...

      Delete
  7. Hi B,

    Congrats on a major milestone. I'm impressed you can achieve 250K at your age. I notice you started out with 100K capital? That's most probably when you're my age around 26 at that time? I'm also impressed how you can save 100K at that young age when you haven't started working back then?

    Congrats on your kid coming in soon also. It'll certainly make your life more interesting after that. :)

    ReplyDelete
    Replies
    1. Hi SGYI

      Contrary I actually started working at the age of 22 and have now since worked for almost 7 years of my life. If I was not wasteful back then I probably would hv more but I guess its still a decent start. From a pure number point of view I started off much less. The 100k is only when I started tracking them.

      Im excited to be at the next phase of my life. I hope things does go well smoothly :)

      Delete
    2. Hi B,

      You graduated from uni at such a young age. I always thought you started working at age 25. Now I know. Haha

      You've already got back what you lost back then. I think its ok no regrets for you now. One more thing, you got married, started a family and you could still save so much till now. Its an inspiration for us young people ;)

      Delete
    3. Thanks SGYI.

      Our efforts will realize one day, both you and me :)

      Delete
  8. Congratulation on hitting your target. But at the end of the day, I think it is more worthwhile to think what you are going to do with the sum of money. Are you really going to retire at 40 once you got your 1st millionaire? Money is important but never use it as a measure for success in life.

    Regards,
    SG Wealth Builder
    www.sgwealthbuilder.com

    ReplyDelete
    Replies
    1. Hi Gerald

      Money can never be a measure of my success in life but it does play an extremely important role for that to happen. Ive got a whole list of plans ready of what I want to do once my passive income becomes much more visible and comfortable so I hv no worries on that :)

      Delete
  9. Congrats B, definitely a big milestone!

    JW

    ReplyDelete
  10. Hi B, I'm excited to see your projection, as it is close to mine. May I check if you put all your money into stocks? I'm 28 years old, just married, looking forward to a baby.. I'm thrilled with the 1 million goal, but concerned about how much I should set aside as emergency funds. any advice? so far i've only dared to put $25k of my $250k into stocks (capitaland, sph reit, mapletree gcc, oue, courts)

    ReplyDelete
    Replies
    1. Hi xin

      Congrats on the marriage.

      Ive got about 90% in stocks and the rest as funds in my emergency. Ive also got hospitalization and whole life insurance expenses ready and paid for every months which is why I have a lot in my portfolio.

      I think now that you are married and probably thinking of setting up a family an emergency funds and insurance would be vital. Depending on your needs I think up to 10 or 20% of your assets would be sufficient. That would be about 50k in absolute value. :)

      Delete
  11. This comment has been removed by the author.

    ReplyDelete
  12. Hi B,
    Your spreadsheet of projections is certainly very inspiring. I am keen to know if it is Really feasible to accumulate SGD 1.4 million plus from an initial capital of $100k and reinvesting $60k p.a., I just have a few questions before I decide to pump so much of my savings into Blue chips as you did:

    1) Your projections assume that you never ever lose any of your initial (and reinvested dividends) capital correct? Is that a feasible assumption given that markets will correct? And understood that you're assuming that barring any major financial crisis during this period of time, likelihood is that Blue Chips should hold their value.. but IS the final sum and passive income slightly inflated as it assumes that markets don't ever go down?

    2) Dividend Yield rate applied is 6% per annum I believe. When Blue Chips like SIA or Capland gives averagely a dividend yield of about 2+%, could I understand what Blue Chip stocks or balance of shares in your portfolio gave rise to the average dividend yield of 6%?
    As it certainly makes the future projections look very attractive!

    Am just keen to understand before I perhaps do something similar in terms of investments as you ;p

    ReplyDelete
    Replies
    1. Investing in blue chips for yield will require extreme patience to wait for that short window of opportunities to be opened!

      Do you mind the wait?

      Delete
    2. Hi Janice

      You are right in the sense that my projection did not take into account market weaknesses but on the other hand it did not take into account potential capital gain as well so I think its a fair projection in this sense.

      The portfolio I am aiming tends to give a stable income of around 6% yield. Based on my purchase price earlier it certainly hit the 6% yield but im just looking at a generally 6% payout to fund my daily income.

      If you are investing on blue chip you do need to wait for growth to take place. It could be years before you see the outcome as uncle cw has pointed out.

      Hope that helps you out.

      Delete
  13. Congrats on achieving your milestone! Thanks for sharing your plan! It can be a great inspiration for all of us!

    DY

    ReplyDelete
    Replies
    1. Hi DY

      Thanks for the compliment.

      Hope it helps you achieve your success too. :)

      Delete
  14. I noticed you might not have add in the possibility that there might be a crisis anytime before 2020.

    ReplyDelete
    Replies
    1. Hi Anonymous

      Crisis are always around us and I welcome those moments.

      It is how we take advantage of such opportunities that matters ;)

      Delete
  15. Hi B,
    Congrats! I am at the same age as you and started stock trading at the almost same time as you. however, I really admire you being persistent, tenacious on this path. My stock portfolio is yet to hit 5 digits yet - I have a lot of doubts on investing stock and just wanting to try and gain some experience, though I have received decent returns.
    A side comment - injecting S$60,000 a year is really a lot! Guess you must have make a lot of your current job!

    ReplyDelete
  16. I am older than you but still very stoned now..haiz..

    ReplyDelete

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