This post is an update for the year 2021. The focus of my financial journey is to accumulate cash generating assets that will grow in value and cut down on liabilities, which eventually results in a higher networth.
NETWORTH
The simple figure I have in mind now is $400,000 and I am still pretty far from it. It is a moving goal post and the figure will change as I move into different life stages. It is still as important to keep in mind that networth is not a direct reflection of self-worth. Enjoy the journey and experience life as much as possible.
INCOME
All my income came from the salary of my job. I didn’t take up any side projects at all this year. As I am focusing on picking up some skills. This is done with the thought generating income from these skills in the future. It is important to think of new years to generate additional income in 2022, be it from job or side projects.
EXPENSES
My saving rate is usually in the 40% range, I’m definitely not spending excessively. However, I did notice there are times when I buy too much things from Shopee due to the convenient. This is one area I need to keep some discipline on. Anyway, I didn’t buy any sort of luxury item at all. And there are no big ticket items bought at all.
INVESTING & SPECULATING
An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Intelligent speculating is the taking of a risk that appears justified after careful weighing of the pros and cons.
This is a definition by Benjaman Graham and is something I always remember where it comes to investing. My style is pretty simple, put some money to work every month, invest in businesses that I think have good and long runway. And I have used more CPF-OA money to invest into the global stock market as well (time horizon is 30 years).
I did not do any form of speculating this year but this may change in 2022.
FINAL THOUGHTS
Debt/Networth Ratio: 8.16%
Investment/Networth Ratio: 56.55%
Networth Year On Year Growth: +23.02%
Debt is still manageable and I have no long term, high interest debt and that is awesome. Investment/Networth Ratio has been increasing and I would like to have this above 60%. Networth Year On Year Growth is slowing down and this is not surprising. The simplest way to ramp up is to increase income but yet this is not as straightforward. Increasing Income will be one of the main goal for 2022.
I foresee more inflation to come as many countries around the world have been pumping money into the system to hold up their economy. Prudent spending is required for the coming year.
Thanks for reading.
Disclaimer: www.engboonhow.com is an opinion based website. I am not a financial advisor, and the opinions on this site should not be considered as financial advice.