Tuesday, October 26, 2010

Growing Networth -- My Journey so far

A reader of my blog sent me an email:
I'm working on a framework to allow a fresh grads to generate more passive income ( through dividends investing ) than their monthly expenses and my current spreadsheet shows this as being possible by age 31. The caveat is that the grad has to save 75% of take home pay.

You clearly broke all my financial assumptions on my spreadsheet so I'd like to understand more about your own personal ideas.
This blog post serves to answer his questions, and at the same time, help me to consolidate my thoughts.

My email reply was:
The only thing that can possibly thrash the financial assumptions you had is to me self-employed income. Assumptions in this case could usually be correct only if we are talking about income from employment because that follows market rate. Self-employed is in itself spoiling the market. Do it right and returns will also be spoiling the market. Don't you agree?

I teach tuition not purely for the sake of extra income, but also because I like interacting with my students. The upcoming A levels stresses me just as much as it stresses my students. It's a joy, and a passion, to see As on papers. I'm lucky in this sense that I get to enjoy, yet profit at the same time, from this passion and joy of mine.
I also mentioned that
As for me, I wouldn't recommend anyone to replicate what I have done because it requires tremendous amount of time and sleep sacrifice.
Well, I slogged hard, super hard, like a cow, a horse, for the year of 2010 for my dual income. On the outside, I appear a super motivated, super hardworking person. However, deep inside, I do know that this isn't the way to go in the long run. Much like how Boxer in Animal Farm works.... hard.... At the end of the day, when age starts to catch up, one won't be able to maintain the intensity and pace of work. YET... one does need hard work in the initial stages to achieve a boost, a strong foundation, a power-packed launching pad, to bring one to higher heights in the future.

And that's one reason why I decide to work so hard, both in building my networth and in achieving my dreams to help students achieve their dream results.

The following is a small list of blog posts I had on how I have travelled along this journey so far.

On building income streams and networth
How I build my income streams

My Maths Equation to Increasing Networth!

On management of my life and money
Rich Dad's CashFlow Quadrant for me

My Money Allocation

Importance of Cash Flow

On my dividend strategy
Dividends Reinvestment Strategy Calculations

Passive Dividend Investing

On my journey to reach my first 100k
My First 100K -- a long journey

How I progress from here, how I alter my strategy and time management, depends on situations and circumstances. I don't want to fix myself; being too fixated on a plan can sometimes lead to stubborness and a reluctantance to change. It's better to adapt and learn as one goes, and change plans and strategies accordingly.

And that's why, I have this blog to help me chart my journey, help me rationalise and think through clearly what I'm doing and what I really want, and at the same time possibly help and motivate others to do better than me.

Thank you for your time in reading this post.


  1. Chris here. ( I was the dude who wrote to JW )

    I don't think the Boxer analogy is apt. Boxer did not retire a young stud.

    BTW, I'm way older than you at 35 and currently live on my dividend flow of about $27,000 last year. Had I known you, I would not have only skimped and saved as before, I would have tried harder to monetize my time by giving tuition, maybe even joined a part-time start-up.

    At the rate you are going, you'll probably be out of the rat race before you're 30. The rest of your life can be spent working and travelling to different parts of the world on your own terms or you can do something for a cause.

    Sure, some people might accuse you of being workaholic but compound interest will prove that the folks who work on money the most in their 20s will be the ones who will care the least of their money at old age.

    The freedom you will have at age 35 will be something your peers can only dream of.

    Take it from someone who is way slower than you in wealth accumulation, your peers will not like you once you reach a stage whereby you can retire anytime.

    Hope you can find a partner who shares your work ethic and frugality.

  2. Hi Chris,

    my main aim was that Boxer worked slower and slower till he cannot work any more. An older Boxer could not provide the same amount of drive and hard work as a younger Boxer. Hence, there's a maximum limit one can go in terms of pure hard work. In that sense, we need to use our brains more as we age further in order to maintain our productivity.

    I don't think I can be out of the rat race before 30 as I still have the following to consider:
    1) Housing. It will be a big commitment.
    2) Kids. More commitments.
    3) Parents. While they are still young and can take care of themselves, time spares no one, and eventually, the responsibility and onus is on me to take care of them too.

    With all these, my current networth is grossly insufficient.

    To me, wealth accumulation is not about speed, but about the methods and the mindset. To me, true financial freedom does not come solely from the dividend income > expenses, but from the ability to generate income whenever we need it.


    As for myself, I'm in no way very frugal. I believe one should not be a millionaire scrooge.


    It's just in my nature to like things that cost less :)

  3. Hi JW,

    Active income sources are the first building blocks on our journey to financial independence. You are doing all the right stuff. :)

  4. Hi AK,

    thanks for your encouragement! Long way to go for me :)


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