Daily personal finance observation, musing and decisions in a journey toward financial independence by 36 with at least a million dollars.

Total news: 312
Last news: January 1, 1970 00:00:00

Stock markets continue to set new records, and so does our net worth. With over $26,000 gain in our diversified portfolio, coupled with strong cash flow production from Money Manager Co. and Perfect Future Publishing Co. but offset by some increased tax exposure, our bottomline improved by 30 grand in the month of May alone. In another record, for the ...

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Approximately one year ago, there was a time when I was glued to the social personal lending site Prosper.com every morning, seeking and funding good loan proposals. In a matter of a few months, I underwrote 163 loans with a total of $14,880 at an average interest rate of 17.6%. I was hoping to make double-digit returns on my cashpile ...

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Let me start this months installment of portfolio update with the announcement of changed format. As you can see below, the new design brought a few important changes: 1) Grouped by asset class (domestic equity, foreign equity, cash, etc.), instead of investment type (mutual fund, stock, cash, etc.) to better represent asset allocation 2) Improved breakdown of month-to-month changes; now ... (5 comments)

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A booming stock market is behind the stellar performance of our household finance in the past month. With over $38,000 in portfolio gains in the month, and continued cash flow generation from my day job and sideline business, our net worth broke into the 700s. The monthly improvement of $45,748 is the second best in record, only behind October 2005 ... (10 comments)

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One of the commentators to my last monthly portfolio update rightfully pointed out that Im not using the right benchmark to measure my portfolio performance. Given that Im positioning my portfolio for a sizable exposure to international equity, it is unfair to use S&P 500 as the benchmark. To fix this, Im going to construct a meaningful benchmark for my ... (9 comments)

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Back to 2003 when I started this blog, I wrote a post "Is $1,000,000 enough?" Then, I crafted a statistical model to argue that if I spend thrift and invest wise, one million dollars can be a good goal to support a happy retirement at 40. At that time, I just purchased our first house and started the American Dream ... (23 comments)

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My portfolio performed quite well in the month of March. The monthly gain of $13,120, or 1.9% of the portfolio size, is almost a full percentage point above the S&P 500 gains. The gain is helped by my sizable foreign equity exposure, and an opportunistic gain in a particular stock position. Below is the breakdown of my portfolio at the ... (9 comments)

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The dip in our net worth in February is, as I correctly predicted in last months summary, no more than noise in our march toward financial independence. Helped by a rebounding stock market and a surge of business income, our assets grew more than $24,000 in March. This also concludes the first quarter of 2007, in which our net worth ... (3 comments)

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I am either the best customer of Citibank, or the worst, or both. You might have learned from Wall Street Journal that big sharks like hedge funds are running the carry trades by borrowing Japanese Yen at almost-zero interest and investing outside of the island country with much higher returns. Similarly, if you regularly read this little blog, you already ... (15 comments)

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In my daily job, I navigate different avenues of corporate finance and manage hundreds of millions dollar of annual budget. Outside of work, I read and research extensively about personal finance and play with my gold pot that will hopefully reach 7 figures in a couple of years. Corporate finance and personal finance by definition are very different disciplines, but ... (4 comments)

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After several months of astronomical growth, we have a sudden change of luck in February. Our net worth loss of over $7,500, primarily resulting from a loss in our employee stock option account, ended our streak of eight months of back-to-back net worth growth for a total of $210,000. Still, we believe this month is no more than an aberration ... (7 comments)

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February for the most part was actually pleasant. I spent some hardly-found time to carefully review my options in reengineering my portfolio, and speaking of investment performance, everything in my portfolio had been enjoying a good ride. Of course that is unti February 27th, where the global sell-off conveniently set me back by $24,000. I was hit particularly hard in ... (3 comments)

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The Shanghai Stock Exchange had never made Wall Street Journal headlines, until yesterday, where a 9% sell-off prompted a butterfly effect on all major stock exchanges across the world: Yesterdays plunge in stock prices around the world, including the steepest percentage decline in the Dow Jones Industrial Average in nearly four years, signals that investors may finally be re-evaluating their ... (3 comments)

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The pending roll-over of my 401(k) plan assets to traditional IRA truly allows me to examine my mutual fund strategy holistically. As I mentioned in my earlier posts, my primary objective in mutual fund investing is to build my foreign equity positions, and some domestic equity positions that complement my large-cap stock picks. The selection of mutual funds in my ... (7 comments)

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I have to give some credit to our benefits department for taking an active role in maintaining a good 401(k) plan. Over the last couple of years, they sacked the ill-performed Fidelity Magellan fund, negotiated a lower expense rate on the money market fund, and introduced a series of Barclays LifePath lifecycle fund. Overall, they provided good service in delivering ... (8 comments)

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Over time, I realize the art of selling is as crucial as the art of buying for a profitable investment experience. So, below is my current adaptation of how I will manage an acquired position over its lifecycle. Maintenance of Intrinsic Value My research process before acquiring a stock also generates an initial estimate of intrinsic value of the stock ...

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As I explained in previous posts, I plan to devote about 30% of my portfolio to individual stock picks in the U.S. market, primarily focusing on large-cap companies. While this will certainly require a lot of time investment to do it right, I do expect to derive a lot of satisfaction by learning different businesses, crunching the numbers and achieving ...

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So, how should I build my portfolio using tools like mutual funds, ETFs, stocks, bonds and money market accounts to achieve the asset allocation plan I desire? Many financial columnists advocate, for good reasons, that once the asset allocation of a portfolio is determined, one can simply purchase passively managed index funds for each asset class. The reasoning? Majority of ... (4 comments)

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The exact percentage one should devote to each asset class is something that will and should change over time based on ones updated assessment of relative attractiveness of each class. Wall Street portfolio strategists constantly change the recommended mix between equity, bond and cash, and I expect to do the same on a not-to-infrequent basis -- Im thinking abut revisiting ... (5 comments)

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WHAT DOES ASSET ALLOCATION MEAN TO ME? My earlier pursuit of CFA certification did teach me a lot about asset allocation. In short, I believe in the two principles of asset allocation: - Each asset class brings unique return and risk patterns. - By properly mix different asset classes, one can reduce risks (defined as volatility of portfolio) while maintaining ...

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