Dan Egan, the Director of Behavioral Finance and Investments at Betterment, put out a piece about his cash flow management and budgeting. 

I think it is a great piece because firstly, he shares with us his philosophy of why he manages his cash flow this way. 

Secondly, it is because his philosophy, the way he looks at his cash flow, and his budgeting accounts is very different from the traditional setup:

1. He tries to minimize the cash that he has, because to him, it is a small loss
2. Short to Medium term spending goals are funded by low risk but not no risk assets
3. As much as he can, he will choose to self insure
4. A lot of his spending goals is funded by stock equity portfolio

You should read it, and try to understand his philosophy. 

If a lot of people do what Dan did, there is a high probability your finances will end up in a mess. 

This is because in order to implement something like this, you have to be rather advanced in your personal finance competency. Dan have a few “fail-safe” or contingency processes build into why he does things, such that, in the event things do not turned out properly, he can lived with it, will not affect his life so much, or he could mitigate it. 

Imagine putting a large part of your vacation funds in stocks and then the market tanks. 

I could recommend you do that, but if the market tanks, would you be able to react accordingly if your finances is set up this way? If I understand his plan correctly, he saved more than he needs for the vacation, and if the market falls more than that “margin of safety”, I am sure he is alright not going for a holiday. 

Would you be OK with not going for that holiday? 

Most people would be cursing at him for recommending this absurd plan, without realizing the absurd thing might be, that they do not understand the beauty of why he does this in the first place.

Inspired by his piece, Ben Carlson wrote about how he manages his cash flow, and why he does it this way.

If there is one takeaway is that how you manage cash flow is rather personal.  However, there is fundamentally sound and not very sound way of doing things. The difference, a lot of the time, is determined by the level of competency. 

Both are rather advanced in the way they look at money, so let me point out some things that are in common. 

I would also perhaps share a little of my cash flow management as well. 

Reverse Budgeting – Budgeting only the Boulders

Ben Carlson explained that his focus is on the large and recurring items in his life:

The idea is that, there are some finance stuff that makes a big impact. If you get it wrong, it affects the wealth over time and if you get it right, it has the opposite effect. The rest are the small stuff. 

So this is what he means by the boulders, or focusing on the big rocks. If you put the water, sand and the smaller pebbles into a jar, you  might not be able to put the big rocks. This teaches us to focus on what matters. 

Someone came up with a weird name for it, called reverse budgeting. 

You just set aside how much you want to save, then the rest you decide how you spend it. This information, in the hands of the layman can be rather dangerous. They might not know what they are saving for. Does saving for a vacation goes into this?

I think reverse budgeting seem to focus on saving up for the longer term goals such as retirement, and children’s education, or saving for the rainy day. 

There are 4 different levels to budgeting, and I wrote about them in this comprehensive guide here. 

Ben chose to focus on giving, school tuition and housing because at this stage, they are probably the bigger expenses. 

In general, Singaporeans also have their big boulders that they can focus upon:

1. housing (for private property owners)
2. child-care and children tuition
3. transport
4. food
5. vacation

Some get a house too big for their wallet. Some got so many kids, and are forced to keep up with their kid’s peers. Some decided that a vehicle is a must. Some have rich taste bud, and can only eat visually appealing food.

Right sizing 1 to 5 would probably have a greater impact then making outsize market returns.

Automating investments

For both, their choice of investments are investing in a portfolio of low cost roboadvisor, or low cost managed solutions. 

They treat investments as a form of “saving account that fluctuates in value”. 

When we automate our investments,  it means that the investment firm pulls funds from your savings accounts, to invest in funds which you agreed upon, on a recurring basis. 

Automating investments works because it takes the hassle and the decisions out of the equation.

For most of us that lead busy lives, if we get more busy, we might not get invested this month. 

If we see the market not doing well, we might rationalize and choose not the invest this month.

Thus, automating investment irons out that behavioral deficiency in all of us. 

For some of you, you might have a priority to build wealth versus other areas in your life. You might not need to put yourself on a per month regular savings plan. 

You are already motivated to add more to your investments.

Flow chart Your Cash Flow Management System

One of my friend once told me he was quite shocked a close friend of his didn’t know that there was a total of $800 leaking from one account he forgot that he has.

It happens a lot if you create so many accounts, and money is not a priority to you.

Ben Carlson flow chart his cash flow management system:

Or probably the parts that he care about the most. 

I think he prefers to keep things in a very simple manner. Income flows into one account, then it automatically flows into some savings account, retirement plans, investment accounts. Those are the boulders for him. 

If you keep your cash flow simple, life gets easier as well. 

In Singapore, it can be a bit tough, because for a lot of people, to earn a better interest, they are forced to put their money in hurdle savings account like OCBC 360, UOB One and BOC Smartsaver. 

That made their cash flow diagram very confusing.

click to view larger image

The image above is roughly how I would flow chart my money flows. Most of my money is either in some savings accounts or in some custodian shares accounts. 

I collectively view them as my wealth machine. In reality, I track the part of investments and cash holding meant for investment virtually, through my stock portfolio tracker.

So in reality, I am not so rigid to place all my cash meant to be invested in account 1, 2 and 3. they can be in 4. As long as in my stock portfolio tracker I see that my cash holding is $XXX,XXX, the rest of it is mean for living or some other stuff. 

I get this question a lot, and I think its better that you restrict the money meant to be invested in 1 or 2 saving accounts. You purchase assets from these saving accounts. When you have cash distributions, they flow to these savings accounts.

Then at the end of the day, you wish to find out what is your portfolio worth, just tally up the financial assets accounts and cash accounts, and you get your wealth. 

I try to funnel as much of my expenses to one credit card, which pays for recurring and one time expenses. For those that I cannot use credit card, I will depend on a local cash account 4. 

I would like to think mine is rather simple as well. Just more accounts.

I would be interested to see the flow chart of a married couple with kids. 

In one of our talks, Lionel from Cheerful Egg showed the audience his automated system. 

It is damn awesome because of the additional complexity as a married couple. 

Prioritizing Things

We all have a lot of things we want but what sets apart those that got more comfortable financially was the ability to know that you can get something good, but only for some of the things you desire. For the rest you have to compromised. 

And in Ben Carlson’s article, there are a few examples:

We like having a nice home but have filled it with relatively inexpensive furniture (much of which we had to painstakingly assemble ourselves).

We understand the power of compounding through regular savings at a young age but we also value experiences and don’t want to miss out on a beachside vacation now just so we can have a beachside vacation in the future (having kids has completely changed my perspective on this).

In my conversation with some, I realize that if they cannot put some things before others, they end up not able to get both things. 

That is just the way it is.

Do Like Me on Facebook. I share some tidbits that is not on the blog post there often.

Here are My Topical Resources on:

1. Building Your Wealth Foundation – You know this baseline, your long term wealth should be pretty well managed
2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
5. Free Stock Portfolio Tracking Google Sheets that many love
6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free

My brain is still not working so well after taking a short break from work. I think I cannot remember how much I do not like Monday morning but I do feel that if you take too long of a break, it amplifies that feeling a lot.

If your break is shorter, you do not get a feeling that you are very detached from the work, and so its easier to kick start the engine. However, because if you took a short break, you wonder whether that is enough.

So my mind is a bit blank this week but just chance upon this article from Financial Samurai, that I would like to give it a plug.

This article gives a good way to frame the problem of managing your equity exposure, balancing up your risk tolerance.

This article would be less timely, considering we just went through some volatility in the markets in December. However, there will always be another period where this is applicable.

Some of us cannot take a large draw down to our wealth.

People call these kind of folks risk adverse people. The opposite are those who feels very OK to see their net worth go down by 75% and carry on with their lives. These are the risk seeking folks. Risk adverse folks are less risk tolerant. Risk seeking are more risk tolerant.

So how do we factor this into the management of our wealth?

For the more risk adverse folks, they favor financial assets that are less volatile.

These kind of financial assets include individual bonds, fixed deposits, government bonds, insurance savings plans, investment property. These are less volatile in the eyes of wealth builders (which might or might not be true in reality)

Then there are the more volatile financial assets such as individual stocks, commodities futures, options, non money market/bond unit trusts.

Financial Samurai states that we often overestimate our risk tolerance.

What this means is that we think we can endure much downside to our net worth but in reality we struggle with some residual mental issues when we implement our portfolios based on this assumed high risk tolerance.

And thus he introduced his Financial SEER, which is short for financial samurai equity exposure rule.

Sizing your Equity Exposure according to the Number of Months of Income

He raised the point that when your portfolio is down, usually the main way to “rescue” your portfolio is via capital injection.

And a lot of the capital injection comes from your income.

For example, your portfolio is $10,000. The average decline in this region is about 50% for example. So you could see your portfolio  get cut to $5000.

If your income is $5,000 a month, that decline is almost like 1 month of your income.

You can view it as an opportune time to buy into volatile assets with a prospect of higher return at a good price.

If you frame your brain that way, you should sleep pretty well at night.

However, if your portfolio is $300,000, the average decline is the same. You could see your portfolio being cut to $150,000.

That $150,000 reduction in value is almost 30 months of your income, or 2.5 years. Generally it is also a good time to purchase more, at a good valuations, but psychologically, it is hard to endure such a great net worth reduction, and the income cannot readily “rescue” your portfolio.

If your portfolio is 50% stocks, 50% bonds, then the reduction is probably half, or around there. So it will take 15 months instead of 30 months to come back.

Generally, I do think if your capital injection to your portfolio, can make up for the unrealized losses in 12 months that is pretty good.

So according to Financial Samurai, the portfolio size, the allocation to volatile equity and your working income is related.

With that he came up with this rule:

Your Risk Tolerance = (Public Equity Exposure X 35%) / Monthly Gross Income.

Suppose your portfolio is $500,000 and you are 70% in equity, and your monthly gross income is $7000/mth.

The expected equity draw down is 40%.

Your risk tolerance = (500,000 x 0.70 x 0.40)/7000 = 20 months.

financial samurai equity risk tolerance

If your risk tolerance is higher, you could take it that your monthly income makes up for the decline in net worth. If it is lower, generally you can take less.

My metrics is a little different from his in that, I generally only consider the recurring capital injection from gross income into the portfolio and not the entire paycheck. If we use the same metrics, the multiple will be higher.

As financial samurai says, 12 to 18 months is a good gauge.

Calculating your Maximum Equity Exposure

Given that we know this relationship between income, equity draw down, portfolio size and equity allocation, we can re-arrange them and compute your maximum equity exposure.

Suppose you are rather moderate, and can frame your mind to inject 1.5 years of your income to make up for the declined in portfolio value. The higher percentile decline you are afraid of is 40%. Your portfolio size currently is $500,000. Your monthly salary is $7,000.

Maximum Equity Exposure = (Your Monthly Salary X Risk Tolerance Multiple) / Expected Percentage Decline

Your maximum equity exposure is = (7000 x 18)/0.40 = $315,000.

That would be a 63% equity exposure.

Now, that is probably your psychological point if you would like to preserve your mental capacity to make investment decision soundly. It coincides with what I always say that you can be an entrepreneur by concentrating when your portfolio value is lower, but over time it might make more sense to increase the returns per unit stress by being a little more diversified.

We could layer this with what Morgan Housel illustrated in my previous article on how much you would invest, at different market falls. The data, is based on developed markets. And if you are afraid of a more than 20% fall, it happens once every 3.5 years and typically lasts 10 months.

So if this is the average, to cushion this, your maximum equity exposure is (7000 x 18)/0.20 = $630,000. This is more than your current portfolio, so it also means you can be rather fully vested, to cushion greater than 20% fall.

The main reason you can have more equities is that

1. the draw down is lower
2. your risk tolerance is 18 months which is less conservative but not to the point of being very aggressive

I do think that this ratio is very useful but it could possibly make a person under invested in equities at the wrong time.

Let us go through some thoughts.

The Maximum Exposure Should be More Fluid

I think it pays to layer this with how long has been the duration a secular bull market.

The average duration of a bull run in developed markets is 4 years plus. In emerging markets probably shorter.

And thus if we just emerged from one big market draw down, or in the midst of one, your maximum exposure might make you under invested.

The general equity market are in a process of dropping and you might have already suffered some losses. It will be challenging to implement something like this in the middle of it as your portfolio have already taken hit, and then you found yourself over exposed.

This maximum exposure can still work, but perhaps you need to tweak the parameters a bit. Since the value is already down a fair bit, the potential draw down should be adjusted downwards, and not used like 40-50% of your portfolio. If you use that, you will probably be so overweight in cash or bonds at the wrong time.

If we are in the midst of some initial recovery (if you can spot this, which can be difficult), limiting your exposure to equity this way… just feel really weird and not right.

At the end of the day, we have to recognize that this way of portfolio allocation is to manage your downside based on risk tolerance and that, downside will shift.

There are some markets, such as the emerging markets, that the volatility is so much that perhaps fluid shifting of equity exposure is just difficult.

If you cannot take this volatility, then most likely it is better for you to form the majority of your portfolio with bonds.

What if you Do Not have Income?

One of the components of determining risk tolerance and maximum equity exposure is income.

If you do not have income, then it means that this way of determining risk tolerance is not applicable to you.

What both financial samurai and myself advocate is a trick on your brain by showing you that in the future you will accumulate more human capital in the future, greater than your current portfolio.

If you do not have income, then it probably means that your asset allocation plan will have to be determine by the financial or life plan.

For most that do not have an income, you could be a student, or a retiree. For the former, wait a while more, and the maximum equity exposure rule will be applicable to you.

For the retiree, you should have an asset allocation plan based on whether your portfolio should be subjected to such volatility.

The safe withdrawal rate can be used as a guidance.

For example, if your annual expense is $30,000/yr and your portfolio size is $750,000, this makes your initial withdrawal rate to be 4%. In some past 30 year periods, it has shown that if you withdraw a consistent inflation adjusted amount, there are some 30 year periods that you would run out of money for a 50% equity/50% bond allocation. It is even more so if you suffer negative returns on the portfolio in the early years versus suffering from that in the later years (read sequence of return risk).

And so reducing equity exposure near the early stage of your retirement make sense (before ramping back up later)

However, if your annual expense is $30,000/yr but your portfolio size is $1,100,000, this makes your initial withdrawal rate to be 2.7%. Based on the research, looking at past rolling 30, 40, 50, 60 year periods of real returns, the probability of your money lasting for those duration should be very high for a 50% equity/50% bond allocation.

The asset allocation would still matters but more of if you increase the bond allocation at the expense of equity allocation. More bonds, means lower rate of return, which means your money do not last as long.

The summary is that, when you are in the retirement phase, its not so much about tricking the brain already. Its about having a plan that works.

Summary

I think Financial Samurai conceptualize something good here.

This rule show you the relationship between your current income and equity exposure, which is seldom mentioned.

Do go and read his article, or subscribe to his blog. It is pretty good for those who are high income earners, or high net worth.

As mentioned, this is not the first time I talk about this related subject. You might want to check out these relevant posts:

1. How Traditional Portfolio Allocation Strategies Can Alleviate Large Market Plunge Fears
2. You Not Only Have Downside Risks. You have Upside Risks as Well
3. Taming Portfolio Size Risk

Let me know if this way of determining things work for you too.

Do Like Me on Facebook. I share some tidbits that is not on the blog post there often.

Here are My Topical Resources on:

1. Building Your Wealth Foundation – You know this baseline, your long term wealth should be pretty well managed
2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
5. Free Stock Portfolio Tracking Google Sheets that many love
6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free

I have never come up with a post about my wealth building as a summary for the year and really hate to come up with something like this because my results have always been bad.

However, since some readers asked, I tried to keep it brief.

Here are some things you need to know about my wealth building system, or how it has evolved until this current state:

1. Active investor
2. My main wealth machine is through active stock investing
3. Asset allocation of Individual Equities and Bonds/Cash
4. Portfolio Construction/Management takes place before individual financial assets (stocks, bonds, cash) selection
5. My equities position goes up and down between 40% to 70% depending on my reads of the market
6. I understand fundamentals, valuations, a little momentum, and a little technical analysis, but I would call myself a stock investor
7. My asset selection, holding period, selling condition, and review is based on expected returns model. You can read more about it here
8. I am very, very, very, very risk adverse
9. I speculate a lot
10. My speculation sometimes turned into long term holdings
11. If my conviction or my previous fundamental view of how things played out is challenged, I sell first, think later
12. Try to eliminate sunk cost fallacy, do zero based investing on your financial assets

In 2018, I have a total capital injection of S$25,764. I saved but I do not inject additional other, than putting in like $2,154/mth.

Total Unrealized Gain + Realized Gain + Dividend/Interest Income in 2018: $7,496 + $26,141 + $29,427 = $63,064.

My Wealth Machine rough XIRR in 2018 (including not utilized cash): 4.44%
My Wealth Machine 14 Year rough XIRR (including not utilized cash): 9.36%

My Current Wealth Machine Income Yield (including not utilized cash): 3.46%

Current Top 10 Position (my current portfolio on my free spreadsheet):

1. Vicom
2. Manulife US REIT
3. Frasers Logistics and Industrial Trust
4. Citic Telecom (HK 1883)
5. Mapletree Commercial Trust
6. Wharf Real Estate Investment Company (REIC)(HK 1997)
7. Keppel KBS
8. Cheung Kong Hutchinson Holdings (HK 1)
9. SBS Transit
10. Yuexiu Transport (HK 1052)

Top 10 position forms 99% of equities allocation. Top 5 position forms 78% of equities allocation. Current equities to cash allocation is 46%. Currently position forms more than 10% of the portfolio or net worth.

So that is about it.

So from here on out is just comments.

Commenting on #4. How you set up your portfolio is based the wealth building goal that you wish to achieve. What kind of instrument do you put into depends on what kind of investing philosophy you follow, be it value investing, technical trading, momentum based strategies, passive ETF strategy, concentrated property strategies. It is also determined by volatility of these strategies and how close you are to the goal.

For example, my wealth accumulation is almost done. The game is won. To start near the next phase, negative sequence of return risk outweighs the investing performance. Why go on a Ego boosting game and jeopardize the ideal situation you want?

In contrast, if you do see your saving for the next 10 years to be $200,000, and your portfolio now is $38,000, the game is still on, keep invested. Any drop is an opportunity to add more. Any run now where  you are not in, is an opportunity cost.  Saving yourself from a $14,000 loss is not going to make a big difference 10 years down the road when you have $200,000.

Commenting on #5. Don’t ask me about predicting whether I will be scaling up or scaling down my equity allocation. Firstly I abide to what I comment about the previous section. The system is to slowly scale up on equities, because in the end you need equities in the long run, even in financial independence. Secondly, I scale up and down due to my “feel” about the market, based on being in it for the past 13-14 years.

If I see some Dragon wind or Phoenix breath coming, you will see me scaling up. If I see something I really don’t like, I will scale down. However, I try not to be in 100% in any extreme position. Both are seriously bad position to be in. I do see myself in 100% equities, that is when I found 10 to 14 really good assets at fair to good valuations.

If you are 100% cash, you become captive to the mindset of when to jump in when to not.

My wealth machine is based on collecting good financial assets, pruning those pretenders, keeping the winners, selling those that ran too much.

Commenting on #6 and #7. An understanding about the financial statements is good. A deeper understanding about the META behind the numbers, the reading of annual reports, analyst reports, what was done versus what was said by the management have helped by now to avoid the big shit. If you avoid the big shit, a lot of times, the results should follow.

I respect valuations a lot. If you buy something that is overvalued, most of the time nothing good comes out of it.

If you hold on to something that is fair valued,  you have to make sure the company has some real quality.

If you buy something that is undervalued, it does not always work out because for some, they are cheap for a reason.

However, if you build up that competency on understanding the fundamentals, it will help you size your positions accordingly. It will steer you away from real shit. Those that are good opportunities,  you size them accordingly, cut them fast if they do not work out, and make them your core if your conjecture make sense.

However, there are limitations to these fundamental reads. For one, it depends on competency. You can have a rough idea how competent you are, but even if you are competent, there is every chance your reading of the company/stock is wrong.

I always say you are not the owner operator.

Respect that knowledge. Add to that, respect your competency.

Your position sizing, what you do when news hit, when poor results hit, will depend on these factors.

This is what I respect about traders. Act first, think later. The value investors will just ask the question what went wrong, wait for the results, assess the results then make the action.

When there is a price rise, or fall, there are two possibilities:

1. you know this company well enough, the reactions by the general crowd is wrong
2. someone in the general crowd knows something that you do not

You need to have a sensing of your competency, and what you know, respective to the crowd. This determines whether you think first, then act, or act first than think.

This is fundamental of my expectation returns model. If there is a high probability you think you do not know enough, sell first. If you think the probability you have sussed out this company well, think first.

In order for this to work, think more of the scenarios. What is likely to happen. What are the outliers both optimistic and pessimistic.

It is easier to action, when you thought about it.

Recently, I have been asked by someone who thinks value investing doesn’t work. A lot is due to some of the crazy draw down we seen when there is some announcements and things goes to shit. Hyflux perpetual, APTT, Design Studio, Keppel KBS, Manulife, FSL.

It is not whether it will work or not.

It is how competent you are in prospecting with fundamentals. For the above, I would say, a lot of their weakness can be seen in the financial statements. If you take your time to read 3 years, 5 years, 10 years of it, you will gain an appreciation.

The second is going back to #7. If there is too much uncertainty, don’t sleep with this stock! If you go ahead with it, you are the vegetable head. If there are some uncertainty but we can see if it works out, size accordingly based on probability and pair this with your execution.

I think I could probably comment on this because I have tried this myself.

I won’t tell a trader that his trading system doesn’t work, because I don’t know or use it long enough. I would rather listen to what those good ones have to say, listen to their vulnerable sharing, to understand the upside and the downside of things.

You also learn to pay attention to those less bull shit people who make use of these areas you are not strong at, to supplement your investing.

This is like forming your team.

Have something that worked well for you. Keep to it. Then see something that can augment to it, add on to it, observe if it helps you.

Don’t keep saying I don’t know about this, all these sound Greek to you, and then when shit happens, you lament why does this happen to you.

Sometimes old things worked well, but new things at times can be immense as well. You will just have to learn to understand things better.

Commenting on #9. There is a danger in speculation. It makes you very trigger happy, and that is habit building. However, there is an advantage to that in that, it sharpens your execution as well. You just have to learn to resolve that and the demands of longer term investing well.

Speculation, is making an educated guess about the direction, or the value of financial assets. It is not gambling. In order for it to work, there are some skills you need to learn to make it work better.

Short term speculation is better than long term gambling.

Commenting on #12. You may find it hard to sell things when they are at a loss. Best way to think about wealth building is that, your net worth or portfolio should be positioned in such a way that it contains the financial assets that give you the greatest risk adjusted returns going forward, or something that aligns to your financial goal.

Some assets are permanently impaired, sell them. Some are not permanently impaired, but are just temporary in a cyclical funk. You need to up your fundamental prospecting game to discern this. Ask yourself, if you had not currently own Stock A (which you currently do), would you buy it today?

This is why I like zero-based budgeting like envelope budgeting.

You have $4000 to deploy and ask yourself how would you spend going forward. Whatever, happen in the past is to help you form your opinion about things going forward.

You are only concerned about putting your best front forward.

This is why I don’t believe in expense tracking apps that aggregate stuff so much. They will work for you, if you strive to change your habits. However, for most it doesn’t help.

Investing is also like that. Its a bit brutal.

Every dollar is like a foot soldier. You position them to win the war. Those that are lost cause, don’t let them die, pull them back. Re-strategise and try to put your best front to winn it.

Summary

Over the years, I kept hearing people tell me I want to start but the market is so expensive. Well, now this year a lot of valuations are getting more attractive.

Then you start hearing people saying my portfolio is negative, losing money here and there. Is this a good time to go in?

Short term is always hard to swallow. And you feel like shit.

Acquiring financial assets at good valuations is always the same as eating in a toilet. The stench is damn jialat.

However, I will tell you that is how investing is like. You live through times you feel happy about your portfolio, times when you regret putting your money to work. Some folks say don’t look at your portfolio so much.

I would tell you, if you are building wealth, a down market is an opportunity to collect more, if your horizon is long. Majority of your wealth now is made from funneling capital into wealth building, not the result of your portfolio.

Be aware of that.

If you do not put money away, at shitty times, then its worst. I have friends who either wait for a fall that never came and missed out on opportunity cost, and those that gave up due to times like this (it could get even worse)

Holding assets through a year of draw down is shorting your psychological capital. It is tough and something I struggle to come to terms with. I learned that I am not very good at this. So I choose to use strategies to avoid much of it, sharpen my senses in other ways.

Ok, this is getting too long. I really don’t like to come up with stuff like this. I am very superstitious. If I do this, next year, the market will bite whatever I say today, and the portfolio will shit on me.

Most of my sharing on these kind of stuff is in my Active Stock Investing section below.

This is for the readers. Try not to share it.

Do Like Me on Facebook. I share some tidbits that is not on the blog post there often.

Here are My Topical Resources on:

1. Building Your Wealth Foundation – You know this baseline, your long term wealth should be pretty well managed
2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
5. Free Stock Portfolio Tracking Google Sheets that many love
6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free