Route to Achieving Financial Independence and my paradox ways
I always enjoy reading stories of ordinary folks, who manage to accumulate a multi-million dollar fortune by a certain age. One such investor is Ronald Read, a janitor who secretly amassed an $8 million fortune and left most of it to his library and  hospital. 
As one-time Vermont-based janitor and gas station attendant Ronald Read demonstrated, you can reach the seven-figure mark on a modest.
Unbeknownst to everyone around him until he died at age 92 in June 2014, Read had quietly amassed an $8 million fortune, thanks to smart spending and investing habits.

Even Read's family was "tremendously surprised" upon finding out about his hidden wealth. "He was a hard worker, but I don't think anybody had an idea that he was a multimillionaire," Read's stepson Phillip Brown told the Brattleboro Reformer in 2015.

The portfolio was generating close to $20,000 in monthly dividend income on average.This portfolio was a result of frugality, hard work, and ability to buy stocks to hold for decades, while patiently reinvesting dividends.

Ronald Read didn't have a finance degree, nor an MBA, but was an ordinary Joe who managed to save and invest for the long term. The story is appealing to me because it shows that investors who pick quality blue chip stocks to hold for decades, and reinvest those dividends patiently, can accumulate a sizeable portfolio over time. 

The important trait is patience and he exhibit several of the characteristics behind successful dividend investors. 

• Invest in what you know
• Keep it simple
• Buy companies with competitive advantages
• Be a patient long-term investor
• Live within your means
• Live life to the fullest 

Look, I am not going to bore you with conventional wisdom, Grandpa wants to talk about what if the above do not fit your style. During my journey to FI, i made some tweaks to my system. I evolved!

I do not have an emergency fund, i use credit card.
Most financial experts advise you to keep 6 months of monthly income. I remember after i graduated, i manage to land a job quickly and my immediate mission is to pay off the student debt. Being new to investing, i started piling on cash residing in savings account. As I watched that cash doing nothing while i am hard at work. All I could think about was how it was wasting all of its potential. I began questioning what i am doing is correct and how can i do better. 

From that moment onwards, I decided against the emergency fund altogether. But i made a small tweak, just like what i do for bodybuilding where i track my macros for fats, carbs and protein, i track my expenses. I will set aside the amount required (including insurance premiums) plus another $500 every month for just in case. The rest goes into stocks.

I have been thru marriage, child raising (one), less than a dozen of funerals and i discovered that most of the time, creditors do not need you to pay upfront cash. Even for funerals, the "white gold" comes in faster than you expected, for my case. My worst incident i had was when i knock into 3 stationary cars on the extreme right lane in CTE while talking to my kid.
The total damage works out to be $21k (you do not pay for the car you knock, last car pays all). I claim insurance, increased the insurance premium the following year, lost my NCD, BUT i still survive.

Credit card works very well for a person who has a high probability of keeping their job. If the company is making money, and your horse sense tells you that you should be safe, ride along.  Earn cashback and pay in full always. In fact, using my Amex or StandChart card, i sign in every few days to pay it off. This is just one situation where I decided that the conventional wisdom just wasn’t right for me.  I will just say everyone has a different situation, do things that makes sense to you rather than blindly follow.

I am always vested.

Its simple, it appeals to me and i do not like to market time. Buy and hold requires little intelligence, skill, or serious effort.
I have low earning power when i started and this creates sensitivity for any type of fees. My 1st stock happens to be Johnson & Johnson in year 2000. When ever i exchange SGD to USD and transact, there are fees involved and it hurts me when cash is tight. This applies too if you sell. I also set my mind to receive dividends in cash, rather than reinvest them automatically. With every dividend I receive from a company and together with my month end pay check, i decide which is the better company in my watchlist to buy at that point in time.

I also set out to hold on to a company for as long as possible. This is very hard, because every day something will tempt you to do something. Stock price fluctuation, experts telling you to take the profit off the table or news that make you react to sell to cut your losses. Now, i am very good at ignoring these noises and just keep holding. Multiple studies have shown that those investors who routinely switch in and out of stocks end up trading good companies for poor ones, pay unnecessary fees, commissions and time in the process. My take is buying, and holding is the recipe for success. I have seen very successful traders, just not my cup of tea. I enjoy spending time with my family, going gym, interaction with physical friends and just chilling. Time should be better spent rather than looking at charts.

I never trade my Reits.

I am not advocating buy and forget. I believe that practicing the art of dividend investing is a skill that you will improve over time, what i call domain expertise. 
When purchased at attractive valuations, it will help provide a substantial amount of income during your retirement. Most serious investors do not invest in Reits for quick and sizable capital gains, as one might seek to do in technology, biotech or natural resource stocks. Reits are best suited for those seeking dividend income and modest price appreciation, over time, corresponding with increases in cash flows and asset values and they have only modest correlations with other asset classes.

The investors who do best with Reits are those who have the most patience, are willing to ride out the occasional bear markets and are not expecting to hit home runs. 
As i know trading do not suit me, my strategy is to focus on how to find quality company, at what approximate prices to consider them and at what set of circumstances should you consider selling. My end goal is to build a portfolio that sends out cold hard cash to pay the bills. 

I am not a saver.
This may come as a surprise, i started out working as a thrifty young man, eating the cheapest available food and wear the cheapest available clothes for work. I think as long as it is trim and proper, not dirty, can already. This lasted 5 years and i start pondering, how come i am still getting miserable pay despite having a good degree and working very hard. Things need to change fast. I started investing in something call "social currency". From wearing quality tailor made clothes at a price i can afford, travel more often and "show up" at more functions. These minor changes created more "conversational" topics for me to build "connection" with people. Its a lot of hardwork, but its critical especially if you are starting out.

"You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you." - Dale Carnegie, How to Win Friends and Influence People

Without real life experience (Chinese saying 话不投机), sometimes it is very hard to connect. Indeed, i landed in a better role through introduction and allow me to make more significant progress in my career ladder.

Hope you enjoy this true story! (being oxymoronic). Enjoy your weekend.
K, Thks, Bye. Grandpa.



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67 likes 151 comments
Reo_Reo

great inspiring read grandpa lemon!!

as a student and a young person it really helps and is really comforting to hear about the stories and journeys of those who were once in a similar position. thanks for sharing :)

bart23

Nice sharing.. As for me, life get more casual as I grow older.. I don't really have to worry about my image because I have enough FU money. I dress very sloppy ..people always think I am some poor bloke but it really doesn't matter to me anymore

GrandpaLemon

Reply to @bart23 : yes, is different between homeground and field. Mark Zuckerberg also suit up when he visit China. Is also a form of respect when one dress up for the occasion, i think u get what i mean :)

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wellhandy

Another epic. Your recent narratives are showing off your writing ability!

GrandpaLemon

2018 – a list of lists regarding the macro investment outlook - by Shane Oliver
Head of Investment Strategy and chief economist, AMP Capital

http://www.ampcapital.com.au/article-detai...

Four reasons why global growth is likely be strong
• The post-GFC hangover has faded with high levels of confidence helping drive stronger investment and consumer spending. Self-sustaining growth has returned.
• Global monetary conditions are still easy. While some fret about a flattening US yield curve, this is unlikely to signal a growth downturn because it’s been driven by rising short rates rather than falling long rates, high demand for long bonds as a portfolio diversifier and continuing QE in Europe and Japan holding down global and hence US bond yields.
• Fiscal austerity has faded, with the US seeing stimulus.
• We have not seen the excesses – massive debt growth, overinvestment, capacity constraints or excessive inflation – that normally precede recessions.

Three reasons why a grizzly bear market is unlikely
Shares are overdue a decent correction and even a brief (or gummy) bear market (where shares fall 20% but are back up a year after) is possible. But a deep (or grizzly) bear (where shares fall 20% and a year after are even lower) is unlikely:
• A recession is unlikely with growth more likely to accelerate. Most grizzly bear markets are associated with recession.
• Short-term sentiment measures are bullish but longer-term sentiment and positioning suggests investors are far from euphoric. (Some of the euphoria may have even been siphoned off to schemes like Bitcoin!)
• The liquidity backdrop for shares is still positive, with low rates still providing an inducement to allocate to shares.

kc2024

Nice sharing. Especially on networking to create opportunity. Not easy for an introvert.

kc2024

Reply to @BrennenPak : Totally agreed with you. Not do much about being trained but willingness to go for it.

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duckie

Another good point is I am not a saver.

For me, I don't even buy new clothes during Chinese New year since my poly days. As I feel its a waste of money even when my mother keep bothering to buy new ones. Keep wearing triple-S combination. T-Shirt, Shorts and Slipper.

Coming to university, I realise first impressions do count alot. Even if you are not academic well or sportsperson, the clothes you wear do make lots of difference.

No matter how well you did afterwards, it's hard to change a person impression of you.

duckie

Reply to @albertkwok : Wow, how you know I used to play noble?

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HugTheBear

Wow..read yr previous post..never know you can share so much..good read.

duckie

Good writeup and deep thoughts.

I also 100% equity but have 500 dollars cash.
Then again I am a student...

PS. So many fake grandpa and oldman around

Sporeshare

Nice sharing! Is important to manage your own financial means . Stick to somethings that works well for you and a peaceful situation that You would like to achieve . Don't borrow to play in stock of which nothing is guaranteed . I think The two risks free investment is CPF ans SSB (Singapore Saving Bond)

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