Monday, 10 August 2015

Stomach Churning Volatility : My Constant Companion

I have discussed many times on my blog about my no holds barred approach to EQUITY investments.  As an ERE (Early Retirement Enthusiast) I need to give my networth the best opportunity to increase during the accumulation phase of my working career.  The fervent hope in this asset allocation strategy is that equities are the best way to build up a corpus.

However, there is a high price that comes with a high risk portfolio that is heavily skewed towards equity investments. Obviously it is the highly volatile nature of the stock markets, that cause this risk, and the distinct possibility of suffering significant losses during market downturns. In this post I want to focus on the magnitudes of these swings and what it means to my portfolio in terms of gains and losses. We will use some back tested data, using historical index information

Tuesday, 4 August 2015

Portfolio Building: My Case Study

I am a confessed Early Retirement Enthusiast & I have blogged about my approach to retirement through Early Financial Independence. Saving & Investing for retirement is a good endeavor, something that most folks get serious about in their 40s in preparation for their golden retirement years into their 60s. However, the Early Retirement Enthusiast gets started much earlier, and typically takes on larger risk during the accumulation phase of their careers to amass the necessary corpus to enable financial independence at a much younger age. There is a strong emotional aspect to this journey, and I typically don't blog about my thoughts and feelings on that front. Here is an attempt at sharing with you how the emotional roller coaster ride feels like, as I approach financial independence.

Monday, 3 August 2015

Who is Wealthier? Uncle Scrooge or Donald Duck

My kids love watching cartoons. They are glued to the TV when their favorite cartoon characters are on, laughing along merrily at their silly antics. Of course the cartoon shows these days are very different from the ones I grew up watching. The favorites in my house are Chota Bheem and his gang, Kisna and friends, and Ben10 and Transformers. These cartoon characters are a lot more adventurous and get into more amazing mischief, than I could ever imagine. In our times, for one there was very little content developed purely for the Indian audience (except for Mowgli the Jungle Boy, and maybe a couple others). Also cartoon episodes would be much simpler unlike the ones today which have more elaborate and complex storylines.  So for this blog post, I figured I would use some old cartoon friends to discuss wealth as a concept. You will find other resources on the Internet, that describe wealth in this fashion, but what better way to remember a concept than through cartoons? 

Thursday, 16 July 2015

Having a Good Discussion is Like Having Riches

Having a Good Discussion, is like Having Riches; so goes an African proverb attributed to Kenya. Thanks for the richness of discussion around my post titled A4 Portfolio on the FB page ASAN IDEAS for WEALTH. The fastest way to learn is to engage with other practitioners of the subject matter. I looked through the multitude of notes and comments and decided to respond in a Q & A format. This allows me to capture all the thoughts in one place, and also provides some continuum to the different perspectives shared by readers.

Tuesday, 14 July 2015

My 50+ Year Retirement Map : Do I Even Stand a Chance?

The single biggest challenge of an early financial independence and retirement journey can be quite a revelation.  Most people would think that the toughest part would be, how to collect and grow your corpus at a rapid pace to meet the requirements of early retirement.  

Though partially true, the real challenge (once you have of course reached your required corpus size) is to figure out how to structure your hard earned savings in a manner that will last through the entire period while you cool your heels and chill out!

The twist thrown in by the EARLY retirement, is that you have to spend a much longer period retired, which creates all kinds of crazy challenges and surprises for you to deal with.  I need to figure out a way to carefully nurture my hard earned corpus, which I would have built through the accumulation phase of my financial career, and make it last through all the turbulence I expect to encounter during the distribution phase in my golden retirement years.

Monday, 13 July 2015

My A4 Portfolio: High Risk and (Hopefully) High Reward

Asset Allocation forms the bedrock of any investment strategy.  You will find reams of pages spent describing different asset allocation strategies, for different phases in your career.

I have put in a fair amount of thought into what would make a good asset composition for my situation.  There is one critical factor I need to keep in my mind.  Since I am driving towards EARLY FINANCIAL INDEPENDENCE, I need a strategy that is tailored to achieving this goal.  

In this post, I describe my thought process, and share the actual asset allocation that I currently have in my portfolio.  I am looking for suggestions if there is further improvement to incorporate into my plan.  Read on and let me know what you think

Thursday, 9 July 2015

Confessions of a salaried worker

I have a confession to make. It is not pretty, and it may not be something I like (or dislike for that matter) very much, but it is the brutal truth. Facts are facts, and must be stated as such. 

You might wonder what do confessions have to do with a personal finance, early retirement blog?

Well this confession has to do with my professional earning career. It is not earth shattering, but it is probably true for a lot of us, so please bear with me, and read on.