Here comes the snapshot of our Total Net-Worth for Dec 2023.
Net-Worth increase from last month: +32K SGD, -0.19KG Gold
Despite the rally, my portfolio recovered just a little, because I have pretty heavy position in Tencent, which was hammered badly by China’s new gaming regulation right before Christmas.
Further losses from my wife's portfolio was also counted in this update. Her portfolio is mainly Chinese stocks. So not surprisingly, another year of pretty significant loss.
Gold prices increased a lot in the past month. And that wiped out our net-worth increment measured by Gold.
I started posting our Monthly Net-Worth Update from Nov 2019. It has been 4 years and I am glad to report that I have not missed one update and I will continue posting.
Over the past 4 years, our journey to accumulate Net-Worth has been bumpy, to say the least.
Hugely unfortunate event
Unemployment due to offer retraction at the beginning of Covid
Not getting paid for my freelancer work for almost a year
Had to “Chicken out” and accept pay-cut due to financial challenges after one year of earning nothing
Significant loss on my flat
Huge loss in stock market
Painful transition back to Consulting
…
Financial impact? Easily more than our Net-Worth now, which is as high as it has ever been!
In all these struggles, books and a few good blogs have been really good companions for me.
Inspired by them, my mindset has evolved too. And some of that evolvement is demonstrated here by the two major updates I am going to introduce in this entry.
With the major update in tracking practice, the numbers this month will not be comparable with previous months, but almost surely I will blow my 40/40 target this year.
Therefore, I have upgraded it to 80/40.
This is another mindset change from my good companions:
Story was complicated, but I did not have to pay that “debt”.
Legally, there was no obligation whatsoever
Morally, I lost ~100K SGD (4x the debt) because I did not get paid for the work I delivered during Covid, for which my “Creditor” was partially responsible
Logically, it was not really “debt” because I never received the money promised to me
Expectation wise, I was sure that my “Creditor“ did not expect me to pay him back
Cleared FAMI, IVR, PRSO, ROOT, VANI. Pumped 26K into it and got 1K back.
Huge losses. But compared to some of my other counters, this is peanut. Compared to some other stupid things I have done, the total loss in stock market is peanut. Putting things in perspective helps sometimes.
Painful exit. But I figure now is as good a time as any. If anything, I should exited much earlier. Or I should have never bought them.
Compared to PAIN, CONFUSION is even a more serious problem, because it directly impacts the actions I take.
CONFUSION 1: How to get past the past?
I realize three reasons why I cannot get past the past:
It is hard to ignore the heavy losses — I would have hit my retirement numbers if not for these mistakes
I do not want to take easy on myself — I would like to retain these as painful reminders so that I learn
I have not got rid of my legacy portfolio — Honestly, I am not sure what to do with them.
Part of me wants to clear them and start over. These are individual stocks that I do not know and I do not have interest in researching them either. Also, they are not generating returns.
On the other hand, if I clear them, paper loss will turn into actual loss. And even though they are not generating returns, they are not tanking much further either. I have lost 98% of the value for some stocks. How much further down can they go?
Also, I do not know if I clear them and invest the money elsewhere, the return would be better. Actually, I am secretly hoping that some of these will bounce back, hopefully faster than the world index. But I understand hoping is not a strategy.
Closing my eyes and following my gut, I guess I am a little inclined to clearing them and investing the money in World index. After all, I can hold world index for 20 years. I do not know how many of those individual stocks I currently have will still exist in 20 years.
But it is much harder to pull the plug than logically expected.
If you are reading this article and have advice for me, I would be grateful.
CONFUSION 2: What is the right way to build wealth?
I am struggling to keep up with my yearly target on Total Net-Worth growth, which I set a few years back before Covid. And that was a very conservative target.
Our expenses largely stayed within our estimates. So the problem is the income.
Our salary income has grown faster than planned, partly due to inflation. But the investment losses are really holding us back.
As you can see from my monthly updates, investment losses just erased our monthly salary for some months.
Needless to say, I am still very far away from my 40/40 goal.
So I am not exactly doing well here.
And I am not sure what the right way is. Investment outcome is just so out of our control. I can see no path to wealth with enough certainty.
I thought of taking investment courses, but I do not want to spend the efforts and I do not really trust them — part of the reason we are in this deep loss was due to my wife taking some of these courses and following some of those “experts”.
The three things I can figure out for now that might work is:
Work hard for promotions and pay raises — Still out of my control, but less so than investments I would say
Cut expenses — This does not make me feel good. We are always frugal people. Sometimes, I do feel that my family and I deserve better. What’s worse, the expenses saved is nothing compared to investment losses
DCA into World index — Outcome is out of control, but activity is controllable. This time, I will stick to it — I do not have any better ideas anyway.
