Surviving a walk through a minefield


Most of us hope to grow wiser as we grow older, and to learn to make better decisions in life along the way.

We learn new things from most of our personal experiences, both good and bad. But it’s often the mistakes that have the most powerful impact. Particularly if you’re aware enough to recognise what went wrong, be grateful for the learnings, and use the experience to make better decisions in future. This is when wisdom really develops, wisdom that can also be shared for the benefit of others.

But where this can all go terribly wrong is when you resist the mistake. You pretend it never happened, or you don’t face up to it and deal with it in a constructive way. The ego is just overwhelming you to keep its pristine appearance intact – to admit mistake would be like death! [Read more...]

Advanced Retirement Calculator – a detailed picture of your financial future!

Advanced Retirement Calculator - main2

Two weeks ago I introduced you to the Early Retirement Calculator, a useful tool to give you a quick snapshot of your expected retirement date with a few quick inputs.

But life is never this simple. Income and expenses don’t just grow at a simple, annual growth rate forever. Perhaps you’re expecting a significant promotion in three years, your partner is going back to work once the kids are a couple of years older, or you’re expecting a windfall on your 40th birthday.

Perhaps you’ll have your mortgage paid off in 7 years, assuming you put all your net income towards this, which will significantly change your annual expenses at that point. What if you have some major home renovations planned in the next few years, or an overseas family holiday every four years? And what about your plans to pay for your children’s private school fees in 10 years time? How will all this affect your financial future and potential retirement date? [Read more...]

Another great investment – but definitely a bad decision…

20150317 - bad decisionRecently, I shared a particular investment I made in the past that I was very happy with, even though the stock continued to soar many multiples above the price I sold at. It was all about sticking with my plan and not wavering.

Similar to that investment, I have another great example of a stock purchasing decision I really did my homework on, and had a very solid basis for my investment decision.

However, unlike my Greencross investment, my decision to sell this investment was definitely not a good one. But every poor investing decision offers an excellent investing lesson for others based on real experiences! So let me explain… [Read more...]

Early Retirement Calculator (from the Treasure Chest!)

Early retirement calculator - small

Hi Readers! Some of you might have already stumbled across an exciting new discovery on the Islands of Investing – The Treasure Chest! It’s filled with resources to help you with your own investing and personal finances, with plenty more to be added over the coming weeks and months. Today I’ve pulled out one particular Jewel to share with you – the Early Retirement Calculator. 

Discovering the potential for Financial Independence or Early Retirement is usually a huge eye-opener for most people. It’s like you’ve been unplugged from the system and see the world from an entirely different perspective.

After that burst of excitement and adrenalin hits, the next step is to get a handle on the cold hard numbers. [Read more...]

Is the Holy Grail you’re chasing just a mirage?

ChasingA common goal that many people in this part of the blogging world are striving for is Financial Independence, or Early Retirement. When we talk about investing, this is usually the main reason for putting those hard-earned dollars away to grow, so that one day (hopefully sooner rather than later) we can sit back and live off the cash our portfolio spits out.

And most who aspire to this goal have some very strong motivations to do so, ranging from spending much more time with family, taking up old hobbies, pursuing meaningful projects, escaping a horrible, dead-end job, giving back to society, or just plain old freedom from the work force to do whatever they want.

As I’ve been planning my own journey towards financial independence, I’ve found that along the way I have swung pretty wildly between two radically different perspectives. [Read more...]

Long Service Leave – take the money or the time?

Long Service leaveThis weekend marks a big milestone for my career – hitting the 10 year mark with my current employer! Wow how the time has just flown!

But the most exciting thing is that after reaching 10 years, I’m now entitled to Long Service Leave! Around 9 weeks of paid leave, just for having stuck with the same employer for 10 years! Woo hoo!!

For those non-Australian readers (which is actually most of you), this concept might sound a little odd. Apparently it dates back to the 1860’s where civil servants were allowed 6 to 12 months leave to go home to Britain after 10 years service in the colonies. [Read more...]

Million Dollar Islands update – Fantastic February, and farewell leverage!

Portfolio 28 Feb 2015 - Islands summary

Two months has passed already in 2015, which means Summer is officially behind us for those in the Southern Hemisphere. February is usually one of the hottest months of the year in this part of the world – and the Million Dollar Islands portfolio was pretty hot too over the shortest month of the year!

For those who haven’t previously visited these Million Dollar Islands, the goal is to have these Islands collectively grow to $1 million before I turn 45 (around 11 years from now), as I highlighted in this post.

I mentioned in my last post that my portfolio has (luckily!) been doing great over the last 2 ½ months, despite the last day of February taking a little gloss off the result: [Read more...]

I stole from the cookie jar

Cookie jar

Discipline is a hugely important trait to develop for a successful life, whatever success is to you.

It means doing the things you need to do to stick to your plans and achieve your own worthwhile goals, whether financial, personal, spiritual or in any other form.

Unfortunately for me, discipline is one of my biggest weaknesses.

One great example is what I did just before sharing my first overview of the Million Dollar Islands portfolio. I had a cash balance set aside for some large expenses over the coming months, as well as a little cash buffer as a general safety net. But after seeing the market take a little dive on the back of the oil price slide, I just couldn’t help but put my hands into the cookie jar and use this cash to snap up some more stocks like BHP. [Read more...]

A great investment – but a bad decision?

great investment bad decision

Hindsight is really the only way to know whether an investment result is ‘great’. When you can sit back, calculate the price you paid, the price you sold it for, the dividends you collected along the way, and measure the result.

But at the time you make the decision to invest, you can’t know for sure that it will be a great investment. The future is unknowable, there is uncertainty, but that’s exactly why you get compensated in the form of higher returns on average for investing in stocks. There’s always some sort of risk / reward trade-off when it comes to investing in any asset.

Fortunately, there are many things you can do to put the risk / reward balance in your favour. Understand what it is you’re investing in. Determine if you’re paying a good price. Understand your own biases and weaknesses, where you are most likely to slip up. Think in advance what will cause you to sell. Use a checklist to make sure you cover off on all your important criteria, and that this decision sits well with your broader investments. And keep learning. [Read more...]

The scales can mislead you

ScalesEverything is becoming pretty high-tech these days. And I’m not just talking about the obvious things like fancy iphones and voice activated car features – “Wind down the back left window 4 inches please Mr SUV”… “Your command has been performed my noble driver – how else may I be of service? Do you need your eyebrows trimmed while you drive?” (at least that’s how I imagine these new fancy cars which I obviously don’t own…)

My wife recently received some bathroom scales when we moved into our new home – and of course, they have the fancy digital display, telling you your weight to the decimal.

But what happened to the good old scales that had that little red needle? Whenever you jumped on the scales it flung dramatically back and forth, while your excitement built – slowly settling down and stopping at one number – anyone remember those?

Too often, I feel like we (well, me at least) try to make decisions in life by looking at that old needle on our ‘scales of life’ before it’s settled on an answer. [Read more...]