samedi 21 juillet 2018

Relative wealth (part 1)

Last thursday, I've reached the amount of money that I planned to have in my portfolio for my 40th birthday (about 10 months from now).

I realized that, now, a nice trip to another country represents about 1% of my portfolio. So, my savings have to be substantial to have an impact on my portfolio. 

If you read this and you're 20, 25 or 30 years old, stop everything you're doing and open an account to save and invest your money now. OK, the market is a bit expensive these days and we reach new heights every day. But today is time to develop the reflex to save and invest.

Mainly, for two reasons:

1- Invest money will make you wait for tomorrow. I've spend most of my life worrying about the future, hating the idea of getting old, disliking the way things turn with time. Money doesn't change the world we live in, but at least, we're excited about the next results of the businesses we own. And we come to believe that tomorrow, we're a little richer than today.

2- If tomorrow, you're a little richer than today, you can make some choices to make your life more exciting. For instance, in 2018, I have four trips done or planned. The first in Florida, the second in China, the third in Central America and the last in Europe. Before 2008, I had never left north america. Ten years later, I'll visit four countries and three continents over a 7 months period. OK, I own an old car, I don't spend my money on many things and my mortgage isn't that hard to pay. But I nonetheless can visit three fucking continents.

Reaching the point I've set for next year, I realized that, since february 2013 (5 years and a half), my portfolio has quadrupled.

OK, some mofo would tell that there has been a massive increase in the PE ratio of the market over this period. Right, but don't forget that I've also made some terrible mistakes and losses during that period (for instance, Valeant, or Bausch and Lomb if you believe that a change of name can turn shit into something else). I've lost almost TWO YEARS of performance because of Valeant and, to a lesser extent, Concordia. My mistakes hurted me more than the increase of PE ratio helped me.

So, start now and one day, you'll be able to go to Easter Island. That's seriously the place I was looking to go to this summer.

When you'll reach that point, you'll be able to fully concentrate on all the other worries of existence.

2 commentaires:

  1. That's awesome good for you, when I read your articles, I feel like your similar to me. I am 49 years old, my portfolio also quadrupled in the last 5 years or so, pretty much changed my life, in terms of not having to worry about my financial future. I have two revenue properties that provide me with regular income and now thinking about where I should venture out and explore the world with my financial freedom. What was your favorite destination so far in your travels, I need to gets some ideas!