So, we’re now officially into the second quarter of the year. The year started badly for markets with most markets getting hammered and most investors saw their portfolios get crushed just like it was 2011 all over again. Some may even have felt like it was 2008. It wasn’t any exception for me.

However, even though my returns (as calculated using time-weighted returns) is still below where it was last August, the dollar value of my portfolio has hit new highs. Why? It’s simple, I took advantage of lower prices in January and February and added some positions as well as contributing more savings towards the portfolio during the said period.

While measuring time-weighted returns is one of the industry standards of measuring returns on your portfolio, let’s also remember that my ultimate goal is to have my portfolio hit a certain number so that eventually I’ll be able to cover all expenses with only 3% of my portfolio. In other words, measuring your investing prowess is one thing, making sure your portfolio grows is equally important and for most people, you won’t get your portfolio to grow without a savings component.

I’m not the type to reveal details due to privacy concerns. All I’ll say is that my portfolio is roughly 3-4x of an average Singaporean’s yearly income and that doesn’t include other things traditionally considered assets such as insurance policies that can be cashed in, cash in my savings account, my car or my house. The portfolio is still going to grow (obviously!) since I’m only in my early 30s and very possibly, generate higher returns than inflation.

So what’s the point of all this? The point is to give hope to slightly younger people out there who only see a monumental task ahead of them- getting married, starting a family, buying a house, getting a car, taking holidays while planning for their retirement.

It may seem impossible on a salary that is average but trust me, it’s possible. In fact, I would be a lot further ahead along this path if I didn’t have a car or the holidays we took were less extravagant but it’s fine. After all, we can’t get back the youth that we have so the idea is to strike a fine balance between gaining experiences and holding on to every single cent.

The other thing is to realise that your investment plan should be more than how you expect to generate returns (investing returns). It should take into account your plans to juice income from work (income improvement), the stability of that income (job stability), income and/or payoff in the event of unforeseen events (insurance) amongst other things.

The results show that my plan is working.

So, how’s yours?

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