Saturday, October 8, 2016

Little Target, Tiny Target

China's richest person, Mr. Wang Jian Lin, chairman of Wanda group, in a recent high-profile interview, advised young Chinese to set up a little target of earning 100m RMB first when being asked of his success recipe to be a billionaire. This obviously created a big social hoo hah in the media. Many jokes were created since then.

Well, but I'm inspired and motivated at least.

I decided to set up my target, but not a little,  just a tiny target first. 

My tiny target:
I'll try to achieve an average ~15% CAGR of my net asset over the next 8 years, via calculated investment in CN, HK, SG and US market, to reach next stage of my financial freedom.

Why this target
- Based on my current net asset value, assuming a 3% dividend yield on these asset,
- Based on my current annual cost of living, and a 2% inflation, 
- Based on adhoc expenses in the futures, such as: medical cost, edu cost, etc.

Is this target achievable
My previous years‘ investment history shows that my average return:
- compounded from 2004~2015 is 16~17% in CN market(1st account), CN was going thru a rapid development stage during that period, GDP growth % is commonly 10+%, until slowed down to 7~8% from the later stage of 12th five-year.
- compounded from 2010-2015 is 8~9% in CN market (2nd account),  XIRR result is dragged down due to a big amount of cash is transferred from 1st account to 2nd account when I closed my 1st account in 2015.
- compounded from 1999-2013, roughly 3+% in SG market, a very disappointing return rate, with two excuses from myself and for myself: a) I just started stock investment and I'm just an ordinary person, everyone has such a learning period, and I no longer followed SG market shortly after 2009's GFC(what a mistake); b) I'm a bit dumb, it was more speculation than investment, I thought I was doing value investment, but I was actually doing (static) low PE investment(very dogmatic, isn't it).

It took me 15 years to finally obtain some skills of survival in stock market. So obviously an average 15% CAGR over 8 years is a very tall target to me, such result if w/o any leverage, could put anyone into the master league in the investment world, considering that whole world is facing the great challenges of inner growth , upon which fundamentally determines intrinsic values of the investment products, upon which greatly influences the return of these products.

Can I achieve it? My bottom line is 10~12%(my cash will not be depleted when I reach 90 even with an average 5~7% CPI inflation) , but I need a challenging target.

Let TIME be my witness of this wonderful journey.

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