Sep 18, 2021

Cory Diary : Annual Net Worth Growth Rate

FINANCIAL AWAKENING started right before Year 2008 GFC during an oversea posting. It soon STARLED on me if to return home for good, whether there will be opportunities and what are the available options. Being in well protected environment in Singapore, we often take things for granted from education to work to medical to CPF. That everything layout appropriately. Any "mispricing" is someone fault. Being there alone, I have only MYSELF to BLAME.

When Year 2008 Global Market Crash came, one good lesson is how irrational market was then and still is when comes to pricing of stock values and the fear of the market mispricing it again. The only sure thing is the salary income and saving resulted. Property price then is dirt cheap and so are many stocks. Therefore if one is not greedy, familiar with the business they invested and able to hold stocks that they value appropriately as a business, the stock price will just return after market crashes. So is a good option to be paid while we wait therefore dividend stocks are attractive for investors.

DIVERSIFICATION is still key for most investors since we aren't Warren Buffett. There is a good chance we will pick a wrong stock and one should quickly terminate the cancer as soon as possible and not wait for full price recovery. It soon occur later that the Guru himself said that Index ETF is probably the way to go for most of us. Well it has becomes a self-fulfilling prophecy in that aspect as new savings will be ploughed into it consistently. Unfortunately for local investors there are withholding tax on dividends and currency risk because our government do a good job in keeping inflation in checks SO FAR. Will this Index ETF theme comes to an end ? Never say never. So putting all our eggs in an ETF is not diversification imo.

As the net worth grows throughout the years, there will be a point where we will have to retire. To keep this up, there need to be gradual transition into investible asset to stock, property or whatever incoming producing that can protect and grow what we have Safely. They key word is Safely. Not Fixed Deposits or Get-Rich Scheme. Unless our gold pot is huge, we need to invest. And we must learn how to invest. Letting someone invests for us is not investing. Is waiting for something BAD to happen.

By the way, 9.5% Growth Rate at Net Worth Level currently doesn't seem easy to continue.


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Articles in this Blog is personal take and educational purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.