I was invited to give a talk at an event that happened earlier today. It was called "Breakthrough Conference" where every speaker was given 15 minutes to deliver one key idea on diverse topics such as communications, marketing, beauty, business, real estate and stocks.
Naturally, I was to talk about investing in stocks although I tried to convince the audience that I could be a candidate to talk about beauty as well since I blogged about hand moisturisers before. Don't believe me? See these blog posts: here. Say "no" to paper cuts.
I was given a lot more time than the other speakers because the organisers know that I am very long winded. They even gave me some time for Q&A. Overall, I was given almost an hour as the last speaker of the day.
Anyway, as my memory of the event slowly fades, I should quickly make a few notes on what I said at the event for readers who might want to know:
First, an introduction. AK is a blogger. AK is a retail investor. AK is a regular salaried manager who made a mid to high 4 digit monthly salary (not anymore because AK is semi retired).
I shared my journey and how I wanted to retire at age 45. See blog post: here. I realised that for a person like me, I must listen to Warren Buffett and “Never depend on single income. Make investment to create a second source.”
I referred to a free "e-book" which is really a compilation of some blog posts which the audience could read in my blog. Click on: Retiring before 60 is not a dream. Just AK talking to himself, of course.
Investing in income generating assets is what helped me achieve financial freedom and because the organisers said in the ticketing website (i.e. Eventbrite) that the audience will learn "how to build a portfolio of stocks that pays year after year" from AK, I had to share something to that effect.
I hope the audience were not disappointed with what I shared.
|AK with his FREE pre-owned iPad.|
Credit: Ho Khinwai
Then, I shared three points:
1. Be patient. Remember what Charlie Munger said about the big money being in the waiting. See: Revisiting AK's simple strategy with Charlie Munger. Go take a look when there is blood on the street.
2. Always have a war chest ready. Unless we are born with a silver spoon in our mouth, we need to save money and build our war chest. If we do not have a war chest ready, how are we going to fight a war? Without a war chest, we won't be able to take advantage of opportunities. See: If we want peace, be prepared for war. I also made a point on how money in the war chest is not the same as our emergency funds.
3. Know what to look for as an income investor. Ask 2 questions that matter: How is the income being generated by the proposed investment? Is the income generated sustainable? I also said that asking these questions would very likely help us avoid investment scams. The second question is probably more difficult to answer than the first and I used two examples to help illustrate my thought process: Old Chang Kee and QAF Limited.
During the Q&A, I answered two questions. The first one was on SembCorp Industries and the second one was on REITs and how a rising interest rate environment would impact REITs.
Here are a couple of blog posts which I hope would be useful to the gentleman and the lady who asked the questions: 1. SembCorp Industries: Partial divestment and 2. How should we approach REITs as investments for income now?
Investing for income, depending on our circumstances, some might achieve financial freedom earlier and some later. However, if we remember to do all the right things which I hope I have neatly encapsulated in my talk, then, there will come a day when we work because we want to and not because we have to.
Of course, as always, remember that I am only sharing what has worked for me but remember that if AK can do it, so can you. Gambatte!
1. Journey to financial freedom is not a race.
2. Don't depend on wage increases for higher income.
3. Nobody cares more about our money than we do.