Wednesday, 23 May 2018

Thoughts about Financial Freedom part III

Previous: Thoughts about Financial Freedom part II

There is an increasing number of blogs and courses these days talking about methodologies of investing in stocks, advocating financial independence or financial freedom (I am using the 2 terms interchangeably in this post, you could read more on their subtle differences here). They speak of how good it is to reach the stage of FIRE (financial independent and retire early) in life, how one could achieve FI through investing (like bao chiak) and package it with methodologies which are often narrowly defined as long-term investing in dividend yielding stocks.

The holy grail of reaching financial independence is not in its entirety about becoming a skilled (passive /value) stock investor. Those who are inspired by Robert Kiyosaki like to talk about portfolio and passive income by investing - forgetting that he wrote financial intelligence is a synergy of accounting, investing, marketing and law. Why did he say that? Becoming a skilled stock investor is just one part of the equation - to help generate an alternative income stream to our daily job or business. It may be perceived by some that once they have learnt the 'art' of investing, they can naturally be FIRE. It might seem more appealingly so in time of a bull market. However, we have to bear in mind that no matter how skilled we are in investing, we are still a tiny boat in the vast market ocean. In another word, we are always at risk of market downturn and capital losses that could be out of our control (heads-up to passive investors who want to sleep on vested stocks LONG term). Nothing wrong with that as long as we are prepared and have the stomach to tide over right? If we want to talk about investing in general, learning how to invest in different assets and knowing when to shift between asset classes to protect and grow our net worth during change of economic conditions, would put us on a higher pedestal and minimize our risk in market crashes.

Back to the part about being inspired financial intelligence by Robert Kiyosaki. Despite being very inspired and all to get out of the rat race (after reading the Rich Dad, Poor Dad book or played his cash flow game), not many of us caught the insights or have the gut to start or acquire a business for 'passive' income. 'Hey, it is not passive' you would argue, since one would be expected to put in more time and effort in running a business than simply clicking the mouse to make investment transactions. But wait, don't you need time and effort to research, analyse, place orders and track your investments too?

I secretly wished that there are more inspired finance bloggers out who would also talk about how they have ventured and failed/ succeeded in businesses, instead of reporting on monthly stocks portfolio performance.

At the end of the day, I realised that we don't need to pursue financial freedom in order to do what we want in life. Achieving financial freedom is nothing more than breaking away from what we dislike doing or are stressing over for earning a living. As long as one's passion could generate a steady source of income to be able to live comfortably - whether is it in investing, running a business, blogging or simply doing your day-to-day routine job, you are already free.


(I am so inspired by Marie Kondo today. Not on the minimalism or tidying part but by how her bizarre passion made her fortune and fame.)



Sunday, 20 May 2018

Comfort Delgro (C52) - my lost treasure after 5 years

Round 1: Bought $1.57
Round 2: Bought $1.46

Sold all at $1.84 in year 2013

Gain: $0.325  :)

But price rocketed in the years after. -.-
Silly me.


Round 3: Bought $2.02

Selling at _________ ??



I guess I won't be selling it anytime soon and likely to be collecting more if opportunity presents itself.

Not going to "let the car drives off without me" again.

Monday, 14 May 2018

The past 30yo reflections

Have I been aging gracefully? It's time for some reflections.

1. Learnt to appreciate work more, 敬业乐业

Having moved out of my comfort zone which I was so discontented with due to a lack of 'prospect', the past 2 years of 'venturing out' served as both a learning journey that opened my eyes up to entrepreneurship and a humbling experience which led my heart to 最初。I learnt to recognise that there is no so-called 'easy job', regardless of being worker or boss - there is only job you hold passion for or no passion for. To put a price tag on a job you hold no passion for (or no meaning to you) is pointless. More money does not translate to higher job satisfaction. It became clearer to me of what I want to do and what I can do as I go back to 最初。

Over years of working in various organizations, I have also recognised that in every work environment there's shits and barriers - some people just suck it in and overcome, some people will complain, some people will escape by quitting. Look back and see what shits you have survived, cos what doesn't kill you makes you stronger. Think about whether you are worse off now or without a job. It may seem like self pep-talk, but hey it works!

Another takeaway is that the higher one climbs, the lonelier one gets - 高处不胜寒?  Being in power yet not in total power, being alone yet not entirely alone, being ambitious but the ambition is not yours...

At times I will recall this quote when I feel jaded:
"Life is a performance art, no matter what field you are in." - Donald Trump

2. Delayed gratifications and discipline

I have learnt to let go of my addictions through delayed gratification and putting my gaming device out of sight. Stopping the gaming habit has made me more productive. I will game once in a while for the fun of it but I am no longer addicted. It was such a waste of time to be addicted to things that don't bring value to real life. (Being productive means doing housework promptly, spending more time reading, researching about stocks.... ok and I need to start embarking back on an exercise regime.)

3. Less is more

Read: The Pursuit of Less

"Minimalism is about prioritising the things that bring value to your life."

As I grow older, material things tend to matter less as compared to experiences. To buy only things that I need - think 3 times before buying things instead of buying things that I will only use 3 times. Uncluttered space also means less time spent on cleaning up. Yeah and I have thrown fashion trend out of the window. I am more environmentally conscious and doing more of Reduce, Reuse & Recycle. I buy cosmetics that I will actually use (aging has forced me to use make up more often), instead of buying just because the colour is pretty.

I will try to travel at least once a year to experience the cultures and activities in different countries.

A skewed version of applying 'less is more' in investing is now I always start with a small position in any fundamentally sound company and scale in when the opportunity comes. Diversification and smaller positions, especially in an uncertain market, seem to give me better control and higher 'hit rate' by having more greens than reds.

More reflections to come. I shall go to dreamland first.

Saturday, 31 March 2018

Watchlist: ThaiBev Y92 (2)

Previous post: http://rainbowcoin.blogspot.com/2018/02/watchlist-thaibev-y92.html

Not wanting to catch a falling knife, I shall wait for the plunge to end and consolidation to set in before entering.



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Side notes:

Maybank is now running a promotion for fresh funds fixed deposit at 1.65%. Finally increased.

If you are not looking to touch your emergency money for a number of years, then SSB is an attractive option. It is giving 1.65% payout too on the first year.

Wednesday, 28 March 2018

Book review: Momentum - how to build it, keep it or get it back

This is a big concept book by Michael Mcqueen. It brought me through the equation of Momentum with brilliant explanations on each part of the formula and a number of case studies on famous companies like Sony, Lego, Facebook and Kodak. You will find the equation at the end of this blog post - after snippets of wisdom which I have lifted from the book (they are in italic, whereas my inputs are in non-italic).

The momentum concept covered is not just for individuals (who are turning into couch potato or in status quo like myself), it is also useful for leaders who are looking to veer their sluggish companies in new directions (turnaround).


Getting into momentum...

You can't steer a parked car. When a car is stationary, you can turn the steering wheel as much as you like but it will have no effect/ However, when a car is in motion, even if it is going slowly or even in the completely wrong direction, you can always steer.

While it is great to be inspired, don't make inspiration a prerequisite for getting started.

Clear enough, the gist is - get your arse moving!
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Vision - why we need it...

I would encourage you to reflect on what it is that helps you to refocus on a vision for the future. Discover those activities that keep you forward-looking, inspired and passionate - rather than merely productive.

My takeaway is vision helps us to keep our eyes on the goal. Why would we waste energy on purposely activity?

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"Never confuse action with activity." Benjamin Franklin


Put things into perspective when we embark to do something...

"When you change the way you look at things, the things you look at change." - Dr Wayne Dyer

Before setting about a course of action, ensure that there is alignment between what you are looking to do and your core values. Innovation without integrity leads to chaos.

My takeaway is -
Work towards your vision and work alongside your core values.


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Focus and saying no are important to achieve what we desire...

Many of us have a well-developed messiah complex where we unconsciously believe that things will fall apart if we are not involved. Added to this, we must be wary of the fact that it can feel good to be busy - even when this busyness robs us of effectiveness.

By setting clear boundaries around how you invest your time, others will begin to value your time and input more.


"If you chase two rabbits, you will catch neither one."

"Always do one things less than you think you can."


The author also talked about this concept on Pruning (like pruning the plants) when he finished talking about the importance of focus...

Pruning serves to confer vitality, strategy and symmetry to an organisation.

You can read the book for more details about what each of those means.

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Diversification or Diworsification?

History is replete with misguided initiatives that failed the 'sensible test' - an assessment of whether something is the right course of action, at the right time, in the right way.

"Entering markets where a company lacks skill or expertise is a key factor in as many as 75 per cent of business failures."

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Consistency

Why consistency is so difficult to maintain - we overestimate the impact of our decisions in the short term but grossly underestimate their impact in the long term.

We need to persevere and not simply give up after a short try. If we stay consistent in our activity, we will gradually achieve momentum.

Not forgetting that we got to keep ourselves motivated along the way...

Tangibly celebrating even insignificant progress can be incredibly motivating.

No matter how successful you are or how high you have risen, you will inevitably lose speed and altitude unless you take deliberate steps to counteract the forces of gravity and entropy.

Remember...  Law of inertia - it takes far less energy to keep doing something once you've started.



And ultimately aim for autopilot.

"All our life is but a mass of small habits." - William James

In the case of quitting smoking, studies found that people who don't smoke in the first week after they have decided to quit are nine times more likely to follow through and able to actually stop smoking permanently. Never underestimate the power of getting momentum early in the process.

When you have successfully made what you set out to do a habitual thing, it will be much easier, as though on autopilot.


And there you go, the magic equation:

Momentum = (Activity + Focus) Consistency


To apply the concept of momentum in investing, it is the same. You need to be clear and focus in your execution, sticking to your investing principles and be consistent.

If your plan is to start investing, do it. Go pick up a book on stock investing, open a brokerage account, find a stock that meets your criteria. If you are already into investing and your plan is to review and re-balance your portfolio every quarterly, do it.

Am I right to say the only way to invest with no momentum is Buy-and-Hold?

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