Saturday, November 19, 2016

Interview With "Living Free" from Living A Free Life Today

It is encouraging to see many young retail investors-cum-bloggers popping up in the local personal finance blogging scene. I thought it is a good way to detail down our investing journey in writing as I am pretty sure that a couple of years later, when you look back, you will be surprised how much you have learnt/experienced/grown throughout all these years. 

If you are keen to know which are the new kids on the "blog", the most convenient way is to check out our friendly financial blogs aggregator, The Finance Sg.

It has been a while since my last post on the Interview With Fellow Investors series. Today, I am honored to share with you the investing journey from one of the young part-time investors who is also the owner of "Living A Free Life Today" blog. Just call him Living Free!  

Without further ado, let's get started...

Q1 : Can you give us a brief introduction about yourself?
A1 : I’m a blogger who writes about finance and my personal philosophy on life. I guess that makes me a personal finance writer. Oh, I’m also Singaporean by the way.

Q2 : Are you a full time or part-time investor at the moment?
A2 : I’m a part-time investor, part-time trader, part-time Airbnb host, part-time house-husband, and part-time blogger.

Q3 : When (at what age) did you start investing in shares and who has influenced you the most?
A3 : Back in the days, we used to have a TV program called tele-text, I think that’s what they call it. So my parents love to spend hours upon hours staring at a black screen with colorful numbers and texts. They were pretty emotional whenever the numbers on the screen changed. Clueless yet fascinated, I was determined to learn more about my parents’ obsession. Being the annoying kid that I was, I started questioning and irritating my parents. Their replies were always, “Aiya this kind of things children don’t know one. You just go and study la.” I thought investing in stocks was an adult thing to do. Now, I don’t want to wait to grow up so I can invest. Since they were unwilling to teach me, I set a goal to learn it myself. I’d say my parents sparked my curiosity to invest.

Over the years, I accumulated more knowledge through books. My reading diet consisted of: Rich Dad, Poor Dad; Think and Grow Rich; etc. I also played around with FX demo account on a platform called eToro. Not particularly different from anyone else. Once I reached 20 years old, I opened my very first trading account with the guidance of my parents. At that time, people were constantly talking about Blue Chips. So I did my research and bought my first stock: CapitaMall.

Q4 : Do you view yourself as long-term (holding shares in years), short-term investor (holding shares in days/months) or mixture?
A4 : I had quite a bad experience in the stock market. Initially, I made some money with CapitaMall. It was about 2k of profit on an approximate 10k investment. I took about 3 months to make that 2k. That was all my money accumulated over years working as a cashier and a tutor. Furthermore, I saved all my pocket money and angbao so I could invest. Crazy right? I know. Fueled by greed, I invested aggressively. This time, however, in penny stocks. Then I proceeded to win and lose some money. It was frustrating because my portfolio went up and down and there was nothing I could do.

So I liquidated my stocks and invested in a logistic company called OttoMarine. Now, it was the 2008-2009 era, and everything was priced so low. Since Warren Buffet is so well known for his long term investing, I decided to do the same. I bought the stocks and went to university. I totally ignored the portfolio that I had since there were more interesting things to do, like learning. 5 years later, I came back to Singapore and reviewed my portfolio. (I managed to liquidate the stock before the company threatened to file for bankruptcy, pure luck!)

My portfolio remained virtually unchanged over 5 years, which made me question whether being a long-term investor truly works. I think in every portfolio, there should be long and short-term strategies. How you play such strategies really depend on your risk tolerance and capacity. So whether I’m a long-term or short-term investor, I’d say I’m both.

Do I invest in stocks? Yes, but not in the SG market. I’m holding US stocks because they are more liquid and they allow me to trade with options.

Q5 : What is your basis of selecting the shares to invest (e.g. basing on fundamental analysis, technical analysis or other methods/sources [share a little bit more details if it is the latter])?
A5 : I hate to break the news to the people around me. There are so many moving parts with fundamental and technical analysis, and it’s so hard to predict and control. Even CEO and CFO cannot forecast their own company’s results with 100% accuracy. So fundamentally, there’ll always be a room of error. For technical analysis, there are so many indicators.

Which one do you choose? Again, there’s a chance that you might be wrong and you’ll lose money. If you pour money into something that will not work in the long run, eventually, you will implode. It’s hard to scale that way.

I prefer to trade options because statistically stocks don’t move up and down by more than 10% a day. Most of the time, stocks don’t move at all. However, if you place your trades at the end of the bell curve, you are most probably going to be right. In order to scale this strategy, you have to keep trading and increase the number of occurrences. What this technique does is it doesn’t allow you to trade big. So you make many small gains. If you do fail, you’ll fail small too.

You’ll probably say, I’m paying high transaction fees to open and close trades. Yes, but that’s the cost of doing business. Trading becomes a business. If you cannot handle losing money and the nature of the business, it’s okay. Just don’t invest. You’ll be better off placing your money in a fix deposit. If you don’t agree with what I’m saying, you can come to my blog and we’ll have a discussion.

Q6 : What is your targeted and achieved annual rate of returns (%) so far?
A6 : I don’t have a target. I don’t think you can force a rate of return. Investing is not like getting a fixed salary. Currently, I’m underwater in my experimental option/stock investment so far, but I’m seeing promising results.

My philosophy is not to be overly concentrated by a fixed number, but to really focus on what gives you cash flow. Essentially, you want to diversify your income stream to have money coming in every month.

The economy is cyclical and we need to change accordingly. The last thing you need is to be left high and dry when the market changes. The best way to protect your portfolio is to have many other backup plans. But if you find something lucrative, you should go all-in. Otherwise, be conservative and stay small. I don’t want to give false expectation that everyone has a Midas touch. It’s just not realistic.

Q7 : What is your most recommended online investing resource (site or blog) to share with our readers?
A7 : There are many things you can learn online for free. But, I’ll blow my own horn here. Come to my blog: livingafreelifetoday.com and have a discussion with me. Don’t just stick to stocks. You can invest in real estate, business, crowd funding, etc. You can start your own blog or website and sell your services. You’ll have better control over what you are doing. There’s no such thing as a passive income. Most passive income requires you to do the work today so you can reap the benefits later.

So come to my blog and be engaged.

Q8 : Besides shares, what other investment are you involved in (e.g. Real Estates, Bonds or REITs etc)?
A8 : Yup, I’m venturing into overseas real estate at the moment. I have some friends looking to start businesses in various parts of the world. My brothers are also looking to create something and I’m interest to be a resource to them too. If you have any ideas and you are willing to put the effort, time, and money, don’t hesitate to talk to me. I’d like to learn more from you and help you.

Q9 : What is your current Shares Investment portfolio size (in range, no need specific)?
A9 : I like to work as a team with my wife since she’s the one financing many of my projects. Personally, we have 20% of our net worth in shares, 40% cash, and 40% in real estate. We are comfortably levered in real estate given that the interest rate is super low. To me, it makes sense to borrow money in order to generate cash flow. If we do meet with an unfortunate event, I’ll make sure that we’ll be able to pay off all our debt obligations and remain solvent.

I’m looking to deploy some money to start businesses that are low cost. In some parts of the world, there are some businesses you can start for as low as 1k to 2k. They are certainly not easy, and it takes lots of active work. However, everyone has to start somewhere and that means taking the time to learn and make mistakes.

Q10 : If the readers what to get in touch with you, how to get hold of you? (Sharing of your website/blog/social media profile etc..)
A10 : You can simply come to my blog at livingafreelifetoday.com. Cheers!

Last but not least, if you are a retail investor and would like to be featured in my "Interview With The Fellow Investors" blog series, please feel free to email me at investopenly@gmail.com.

Also, for the complete list of my interviewees and their posts, check it out here.

Cheers!

1 comment:

  1. Wow! Amazing and fun ideas all ready to go. I can imagine how the would love those for sale by owner hobart. Thanks for sharing.

    ReplyDelete

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