Voyage to Wealth

My Financial Goal

Posted on February 19, 2019 by Jun8 / 0 Comment

What are my financial goal? My financial goal is very simple, I want to outperform my parents.

Thanks to my parents, I had a wonderful childhood. Although we were a middle-income family, my parents worked hard to ensure our family had enough money to live comfortably. My parents put a lot of emphasis on overseas education, hence, my siblings and I had the opportunity to study overseas for university without worrying about financial constraint. My parents always believe their role is to provide us the opportunities to maximize our potential so that we are able to do well in our life.

When my siblings and I started working, they provided us with financial help for big-ticket purchases such as our first property. When we tried to repay them, they told us not to send them money as they didn’t want to burden us financially. I am truly fortunate to have them as my parents, they have set a high standard on how to become good parents which I hope to emulate.

Looking back at my parents’ life, they sacrificed a lot and became very frugal so that we can have the opportunities that we had. We always tell my parents to spend more and enjoy life but they remain entrenched in their frugal ways.

On hindsight, my parents could have been much wealthier if they invest in equities or other assets. My parents’ reluctance to invest stem from the bad experiences they had from financial crisis which made them extremely risk averse. Luckily for my dad, he had the foresight to run a business which allowed them to have what they have today.

I want my kids to have the opportunities I had: I want them to enjoy their childhood without worrying about money and I want them to study in universities abroad. In addition, I want to have enough money so that I can retire comfortably and help my kids financially if they need it. To achieve these, I need to outperform my parents, I need to be good at running a business and be good at investing at the same time.

Investing

Monthly Portfolio (19/02/2019)

Posted on February 18, 2019 by Jun8 / 0 Comment

From today onward, I’ll post my portfolio’s position every month. However, I won’t disclose the total value of my portfolio due to privacy reasons. In addition, I won’t show whether I have withdrawn/deposited cash into my portfolio. I’ll track my monthly performance by calculating the Net Asset Value (NAV) of my portfolio. I’ll explain my trade (if any) and will also explain my portfolio’s performance monthly. Please bear in mind that this is still a work in progress, expect more improvements in the future!

Below is my portfolio’s position date 19/Feb/2019:

Personal Finance

Lifestyle Inflation

Posted on January 31, 2019 by Jun8 / 0 Comment

What is lifestyle inflation? According to Investopedia, lifestyle inflation refers to increasing one’s spending when income goes up.

I was chatting with my friends few weeks ago on how to achieve financial freedom, we concluded that lifestyle inflation is one of the major obstacles in accumulating wealth. With how connected we are in today’s age via internet, when we are on Instagram or Facebook, we see how happy our friends are with their latest purchases, latest travel, fancy restaurants and etc.

Some of my friends claim that what they see on Instagram or Facebook doesn’t affect them, I call bullshit. Well, maybe you won’t get affected if you only see one of your friends traveling to some exotic places like Nigeria; try imagining almost 10 to 20 of your friends showing off pictures of their trip to Nigeria. Now the herd mentality sinks in and you want to go Nigeria too, there goes your yearly bonus.

As you see more of your friends having a good life on their social media, you will start to compare your life against theirs. That new iPhone you don’t need? Just because you saw your friends on Facebook showing off with their new iPhone, now you want one too. There goes your RM5,000. This is the main trigger of lifestyle inflation, by comparing yourself to others, you will feel pathetic and tempted to “improve” your life by doing what your “friends” are doing.

To accumulate wealth, we must practice delay gratification so that we can resist lifestyle inflation. How do we practice delay gratification? Well, to make things easier, start deleting your social media accounts. And then, associate yourself with people who are also practicing delay gratification. These people are easy to spot: they work in some good jobs or own a business but they dress simply and drive normal cars.

Investing

Investment Thoughts (12/10/2018)

Posted on October 12, 2018 by Jun8 / 0 Comment

The purpose I set up this blog of mine is to improve my ability to transfer my thoughts into words regardless whether what I’m thinking is true or false. I hope to effectively convey my thoughts in writing effectively. Here are some of my thoughts…

For the past one week, equities around the world has dropped simultaneously, sparking fear among investors. It caused a 4% drop in my portfolio YTD. Is this a sign for things to come? Is this a good time to buy? Will it drop further to the tune of 2008-2009 or 1997-1998? Or it is just a temporary drop which will quickly recover and the stock market will slowly inch upwards again, reaching new high? Who knows?

However, let’s be logical for a second and look at the historical KLSE chart below:

Look at the very right of the chart above, it is just a minor drop in the grand scheme of things. There is absolutely no reason to panic, not yet. And this is definitely not a good chance to buy unless you sincerely believe that the drop will rebound quickly. According to the historical charts, the three largest drop in KLSE’s history which includes 1997-1998, 2000-2001 and 2008-2009 are around 30-50%. So if you think that a crisis is coming, you will have plenty of chances to accumulate in the future. Even if you think a crisis is not coming, according to “history”, a recession will happen every 8-10 years. Since we are at the end of a cycle, the probability of a recession is high.

Since the change of government in Malaysia. The Malaysia government has removed GST which contributes a lot of tax revenue and reintroduce SST which doesn’t contribute as much. To make up the shortfall of the revenue, the government will have to (a) introduce new taxes , (b) cut expenditure or (c) sell government assets. The new government has cancelled/renegotiate some infrastructure projects. The government is also mulling to introduce “capital gain tax” and seems to open to sell some government assets. In my opinion, option (a) and (b) are not favorable to the equities market while option (c) is neutral/positive.

Malaysian in general has a lot of debt, especially among the civil servants which tend to take on more debts because their pay is lower than private sector. If the government choose to cut expenditure, this might affect the domestic spending thus affecting the GDP. In addition, globally, US is seen to increase its interest rate at a faster pace than expected. To avoid further weakening of the Ringgit and to attract capital to Malaysia, the Bank Negara can opt to increase interest rate. However, such a move will not be popular, since Malaysians are the most indebted household in the region, an increase in interest rate will affect many families. While Malaysia is still a stable country economically, there are cracks in our fundamentals due to excessively cheap money during the past 10 years.

We have also yet to see the true impact of the trade war between US and China. Malaysia is a small country. Ultimately, what will affect our local equities market is what’s happening around the world, especially in China and US. China has their own problem with its debt and economic growth. US has their own problem too with Trump and their economy. Europe has their own problem. Their government and their central bank are running out of options to solve these problems, the only thing they can do is to kick the can down the road and pray that the next generation is capable to solve the problems.

Is this the perfect storm? Is this it? Cracks within Malaysia’s fundamental coupled with a serious economic downturn globally? One thing is for sure, I will continue to hold on to cash for now. For my portfolio, since I’m on 50% cash, if the market drop by 50% in the next 6 months, I will only be down by 25%, which is manageable psychologically. However, if I’m wrong, my returns will be lackluster. It pays to be a contrarian…

Life

My Personal Goals

Posted on June 13, 2018 by Jun8 / 0 Comment

They say that you should have goals in life. Aim for the stars, even if you fail, you will still land on the moon; which is better than staying on the ground doing nothing. When I was in college, I dreamed of being a billionaire by 30. Now that I am 30, although I am financially stronger than many of my peers at my age, I am nowhere near becoming a billionaire.

Regardless, I do have a few goals that I want to achieve in life. One of my goals is to provide what I received from my parents growing up to my future generations. I believe that life is unfair. Some people are born with a silver spoon but some people are born with nothing. However, let’s say you inherit RM10 million from your parents in addition to the overseas education that you have received; if you end up with RM1 million in 30 years, to me, you have failed in life. My goal is to perform better than my parents financially. Of course, it’s not only financially, I need to become a better role model for the future generation.

Another goal of mine is to reach financial independence as early as possible. If I reach financial independence early enough, meaning, the cost my future generation’s education taken care of, loans paid for and living lifestyle accounted for. Once I reached financial independence, I can pursue any projects that I want to pursue. I can confidently and safely pursue high risk entrepreneurial ventures without risking my family’s future. That is the reason reaching financial independence as soon as possible is one of my goals.

One of my goals is to contribute to society in a positive way. I would like to become like Bill Gates, using my personal wealth for the greater good to the world. I hope to become one of the positive influences to the society.

As you can see, the goals that I mentioned above are financially related. After all, the title of this site is: “Voyage to Wealth”. I hope that I will achieve these goals of mine. If I achieve all of them, I can proudly say that I have lived a good life.