Could I be doing better than I am now?

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Cyath
Posts: 12
Joined: Thu Jun 16, 2016 7:30 am

Could I be doing better than I am now?

Post by Cyath »

Very basic summary of life and finance situation. I am not a USA citizen, I live in Asia, and as such, I cannot purchase many of the products I see advertised online and in money forums. I have a basic level of financial literacy, which I gained by self-study in my twenties. (Motley Fool, Investopedia, various books) I'm in my late 30s, I expect to live a long and healthy life. (hopefully past a hundred!) I have no dependents or spouses. I am currently single but don't plan to be forever. I never want children.

I would expect any prospective partners to pull their own weight financially, or the reverse (my last partner earned more than me, I am ok with being a househusband as long as my contributions to the household are recognized as legitimate)

My last drawn salary was between 4k-6k per month, I am currently unemployed as the last few job offers I have gotten were either way below what I normally earn, or downright flaky and unresponsive. (There are both good and bad clients!) I would not go below a certain sum unless the benefits were considerable, I'm aware of the market rates in my field.

My combined savings are over 500k. I keep a little in the bank and invest the rest, in keeping with a strategy I read in Rich Dad, Poor Dad (I don't agree with everything in the book but I found it a good basic text) I use an investment firm with a relationship manager to help me invest, since I think he can do a better job than me at present. I've been satisfied with the returns so far, which are in the 6-9% PA range. I lose money sometimes, of course, but I make more than I lose. I have some passive income from these investments.

I have attempted a few investments of my own, (doing my own due diligence etc) which have resulted in a few hundred dollars here and there (not much I know!) mainly from a crowdfunding platform specializing in promissory notes. While I have some financial knowledge, it's not really my passion and I would rather do something else for a living, however, I do need to manage my finances!

I recently did a mini-review and some of the numbers are not adding up (granted, I do not look at my finances all the time, generally only a few times a year) so I am wondering if I could be doing much better with my time and knowledge. I'm aware that there are many different kinds of things one can do (ranging from day trading to FOREX) but each has their own risk and rewards.

tldr; can I do better than 6-9% PA? Would I be better served by managing my finances on my own than using a 2nd party?
z3r0c00l
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Re: Could I be doing better than I am now?

Post by z3r0c00l »

You could possibly do better but tinkering with forex and other risky investments are really more likely to make you do worse, that is you could lose a lot of money by gambling.

"I use an investment firm with a relationship manager to help me invest, since I think he can do a better job than me at present."

Doubt it, unless they keep you from gambling, they are probably just taking a fee off the top and doing what you could do on your own.

Maybe start by naming the country in Asia you live in and perhaps some here have better knowledge of the options there.
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aristotelian
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Re: Could I be doing better than I am now?

Post by aristotelian »

Impossible to know without more info about what you are invested in and what options might be available. US stocks have done better than 6-9% but also went down by 30% in March 2020 and 20% in December 2018. If you are getting steady 6-9% I'd say that's pretty good. Of course there are individual stocks and cryptocurrencies that have gone up way more. It's always tempting to look back and ask how rich you'd be if you had chosen a high risk investment and hit. That doesn't mean you should change your strategy.
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Wiggums
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Re: Could I be doing better than I am now?

Post by Wiggums »

6-9% return is a good return. You did not mention your investments so it’s hard to say what you can tweak, if anything. Fee’s definitely have an impact on your investment returns. Lower fees sre slways better.
Investors need to be better informed about the costs they pay. “High fund fees can be hazardous to your wealth in the same way that high calories can be hazardous for your health.”
wetgear
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Re: Could I be doing better than I am now?

Post by wetgear »

You'll get better and more complete advice if you post all the information in this format: viewtopic.php?t=6212

It's also a great exercise in beginning your own lower cost self managed investment journey.
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Sandtrap
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Re: Could I be doing better than I am now?

Post by Sandtrap »

Although there's a lot of writing in your post, there's not enough information for comprehensive useful suggestions.

You can edit your original post to this "format" using the "pencil icon".
Like this:
Asking Portfolio Questions
https://www.bogleheads.org/forum/viewt ... =1&t=6212


(*suggest "deleting" the "kiyosaki book and seminars, etc" and reading this for starters.)
Dave Ramsey “7 Baby Steps” (personal finance)
https://www.ramseysolutions.com/dave-r ... gLHgfD_BwE

Reading for you:

GETTING STARTED
https://www.bogleheads.org/wiki/Getting_started
Bogle Philosophy
https://www.bogleheads.org/wiki/Bogleh ... hilosophy
Here are links to the wiki's "Getting Started" and "Investing Startup Kit" pages:
https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Bogleh ... rt-up_kit
Define General Investment Goals and Objectives (what is your plan?)
https://www.bogleheads.org/wiki/Invest ... statement

You can likely do a whole lot better in your reading and information with this list:
Suggested Reading List
https://www.bogleheads.org/RecommendedReading.php
Forum Library of Investing Advice with links
https://www.bogleheads.org/wiki/Main_Page

Again, much better and more comprhensive and constructive actionable suggestions can be inputted if you format your original post as noted in the above link.
Without more information, there will only be generalized input.

** Your goal is to have a solid well thought out long term comprehensive personal financial strategy on paper.
After you format your post and add the needed data, there can be that help.

PM me as you wish.
Do1 Ze6 (多謝)
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TedSwippet
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Re: Could I be doing better than I am now?

Post by TedSwippet »

Sandtrap wrote: Tue Nov 23, 2021 8:51 am Reading for you:

GETTING STARTED
https://www.bogleheads.org/wiki/Getting_started
Bogle Philosophy
https://www.bogleheads.org/wiki/Bogleh ... hilosophy
Here are links to the wiki's "Getting Started" and "Investing Startup Kit" pages:
https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Bogleh ... rt-up_kit
For a non-US investor, the non-US variants of the above wiki pages are more appropriate links: And for a full overview of non-US investing topics: Outline of non-US domiciles - Bogleheads
TedSwippet
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Re: Could I be doing better than I am now?

Post by TedSwippet »

wetgear wrote: Tue Nov 23, 2021 8:40 am You'll get better and more complete advice if you post all the information in this format: viewtopic.php?t=6212
More relevant to a non-US investor: My portfolio: seeking advice - Bogleheads
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Sandtrap
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Re: Could I be doing better than I am now?

Post by Sandtrap »

TedSwippet wrote: Tue Nov 23, 2021 9:58 am
Sandtrap wrote: Tue Nov 23, 2021 8:51 am Reading for you:

GETTING STARTED
https://www.bogleheads.org/wiki/Getting_started
Bogle Philosophy
https://www.bogleheads.org/wiki/Bogleh ... hilosophy
Here are links to the wiki's "Getting Started" and "Investing Startup Kit" pages:
https://www.bogleheads.org/wiki/Getting_started
https://www.bogleheads.org/wiki/Bogleh ... rt-up_kit
For a non-US investor, the non-US variants of the above wiki pages are more appropriate links: And for a full overview of non-US investing topics: Outline of non-US domiciles - Bogleheads
Good catch!

aloha
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andrew99999
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Re: Could I be doing better than I am now?

Post by andrew99999 »

In the long term, 6-9% isn't bad, but 6-9% p.a. is not good compared to just using a simple, easy-to-manage index fund over the last 10 years, which have been on a massive heater.

6-9% p.a. is around 5-6% after inflation.

On top of that, let me guess, you are paying 1% asset-based fees, eroding your returns by about 15-20% (per year)?

Investing is not difficult. It is made to seem that way by all the marketing lies out there. Read the bogleheads wiki and ask questions here, and you will find out very quickly how easy investing is.
Topic Author
Cyath
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Joined: Thu Jun 16, 2016 7:30 am

Re: Could I be doing better than I am now?

Post by Cyath »

Thanks for your kind replies to my original post. I agree that investing is not difficult, like most fields, it simply requires you to learn. And I love to learn :)

Country of Residence: I am currently based in Singapore,

International Lifestyle: I plan to migrate to the USA if possible.

Emergency funds: I have this

Debt: None.

desired Asset allocation: 50 % bonds and the rest stocks

aTax Filing Status: Single. I have never paid taxes though, as I have never earned enough to qualify for a tax bracket.

Age: 39

To clarify some of the points above :

a) 6-9% is after brokerage fees and the like.
b) My portfolio is 500k. It is broken up into various sectors such as ETFs, tech stocks, blue chip etc. I don't touch high risk investments such as junk bonds or FOREX. The firm I am with rebalances every few months (taking profits out and reinvestin)g
It would be a huge wall of text to provide eevery investment
Topic Author
Cyath
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Re: Could I be doing better than I am now?

Post by Cyath »

Sorry there was some messed up formatting with the previous post that I couldn't erase. Continuing here.

I do not plan to have children or ever retire, so that's worth mentioning. I aim to be able to live off my passive income at the very least (I believe it's known as FIRE)

I will be spending today reading up on the links provided, thanks again. I have encountered some of this material before.
jg12345
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Re: Could I be doing better than I am now?

Post by jg12345 »

Hi Cyath,

Well done to you and your broker for delivering 6-9% per year after fees (and after tax I suppose, as you say you never paid any). Thanks for the additional information.

Few points:
1) You may want to stay with the broker! My mum probably would and that's ok. She's a bit older, and just cannot grasp much of the concepts however simple they are. So that is not necessarily a bad idea. But she has me giving a look at her stuff too. So you have to have yourself giving an honest look to your broker work. Asking here is a good start, but I don't think we have enough info yet. Don't be afraid of posting a wall of texts. You can at least group them in some ways as you described (ETF, blue chips), and provide detail for all holdings above 5% of portfolio. Otherwise it's hard to provide suggestions. Your broker is making it a wall of texts exactly to justify the fee.

2) most people here would suggest portfolios made of 1-4 ETFs. Then there is "a wall of shares/bonds" in the ETFs, but that is the whole point of passive investing. So it is likely people here would suggest to ditch the broker, sell your single stock assets, and rebuy a MSCI ACWI or FTSE all-world ETF.

3) the cost of the broker may be a very good idea of "how much better you could do" and should be included in the information provided

4) as for reading, you probably now have an idea of what an Investment Policy statement is

5) Since when is the 6-9%?

Best
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JoeRetire
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Re: Could I be doing better than I am now?

Post by JoeRetire »

Cyath wrote: Wed Nov 24, 2021 9:29 pm I do not plan to have children or ever retire, so that's worth mentioning. I aim to be able to live off my passive income at the very least (I believe it's known as FIRE).
Most would conclude that you DO plan to retire. The word "Retire" is part of "FIRE".
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Topic Author
Cyath
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Re: Could I be doing better than I am now?

Post by Cyath »

I am "technically" retired in the sense that my current passive income covers my expenses. However, that requires me to live well below my means, and also with my mother. As I am 39, I would like to leave the nest and make my own way in the world, which includes moving to California (which is not the cheapest place in the world...) I do actually like most of the occupations I have been involved in, and I seek to make money and have fun doing it.

Well done to you and your broker for delivering 6-9% per year after fees (and after tax I suppose, as you say you never paid any). Thanks for the additional information.

>THere is no capital gains tax on the broker I use in Singapore to my knowledge.

>My broker was sourced with quite a lot of effort, so I am reluctant to move for no reason. The wrap fee he charges is 1%, which I am aware is below >the industry standard of 3%. He does pretty ok, he has a research team behind him and he is able to give me a clear rationale for any buys and sells.

>I can get the wall of text for you in a while, if you don't mind :)

2) most people here would suggest portfolios made of 1-4 ETFs. Then there is "a wall of shares/bonds" in the ETFs, but that is the whole point of passive investing. So it is likely people here would suggest to ditch the broker, sell your single stock assets, and rebuy a MSCI ACWI or FTSE all-world ETF.

>How about index funds?

6-9 is p.a return.

I've finished reading some of the books recommended, some info is new and some is not. I would maybe consider diversifying some of my funds into index funds since they take care of rebalancing and diversification by their nature. I think what I took away from the research is that there is no one size fits all as everyone's financial situation is unique, and investing styles differ as well.
jg12345
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Re: Could I be doing better than I am now?

Post by jg12345 »

Thanks.

For the purposes of FIRE, an index fund tracking global stocks and an ETF tracking global stocks have no difference, unless you have different transaction fees for ETFs vs. funds. I cannot see your point about rebalancing and diversification: an ETF with FTSE all-world and an index fund with FTSE all-world would both do that. If I say "ETF MSCI ACWI" and you ask about index funds rebalancing and diversifying, I suggest you consider reading a bit more about ETFs and passive investing.

FYI: MSCI ACWI returned 13.2% for the past 10 years. assuming your broker returned 7.5% (middle between 6-9%), you have lost about 6% per year if you had started investing 10 years ago.

Is that enough reason to move away from the adviser? You can only know how much that is worth to you.

Also, to be frank, and to address your comment of "no one size fits all"... ok fair enough but for the purposes of FIRE and for 95% of people... I am not sure how a decent financial adviser would suggest stock-picking, unless they charge fees for AUM, so they would suggest that for their own interest. If you really want an adviser, why not get one where you pay for the advice you get only (Rick Ferri type)
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Hyperborea
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Re: Could I be doing better than I am now?

Post by Hyperborea »

Cyath wrote: Mon Nov 29, 2021 1:51 amI would like to leave the nest and make my own way in the world, which includes moving to California (which is not the cheapest place in the world...) I do actually like most of the occupations I have been involved in, and I seek to make money and have fun doing it.
If you do end up going to the US then you need to rearrange your investments before you go. There are tax issues with holding non-US domiciled investment funds while a US tax resident (look up "PFIC"). That will mean needing to sell any currently held non-US based funds or ETFs though individual stocks should be ok to hold.

Also, since you pay no income tax on capital gains in Singapore if you sell them while still a Singapore resident you won't have to deal with US capital gains tax on any gains you already have. If you wait until you become a US resident then the US will tax you on any gains in those investments from before you were a US resident. So, at that time sell everything shortly before you leave Singapore and then reinvest after you become a US resident.

The other side is if you plan to leave the US at a later date then you need to worry about the US's exit tax. It will come into effect for anybody with over US$2 million in assets. Considering that you already have US0.5 million then depending on how long you are there and how much you make you could very well go over that limit. The limit is not indexed to inflation. I wonder if it would be possible to put your current assets into some sort of trust structure before you go to the US to keep them from being legally in your hands while in the US so as to keep them from the US exit tax calculation?
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Cyath
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Re: Could I be doing better than I am now?

Post by Cyath »

Thanks for your assistance once again. In the interest of complete transparency, this is what I am using ATM :

https://www.ifastcorp.com/ifastcorp/aboutus/index.tpl

it's a fintech corporation with wealth management in built. I used them after I went to several banks searching for financial instruments to invest in - they all used this platform, so I figured why not cut out the middleman?

They charge a 1% wrap fee per annum, and have a research team behind them. I'm not sure I would consider that market timing or not. Individual other investments are charged on a per-transaction basis. I can speak to my adviser free of charge most of the time, but if I actually buy and sell anything outside of the wrap fee there will be a charge.

It is precisely because I have read up on index funds that I am considering changing my portfolio. I have been slowly garnering financial knowledge since the mid 2000s (it is not my main field) but I decided to go with a broker because I wasn't as certain as myself then as I am now.

As for the information about the USA, thank you for the heads-up! I have confirmed this with my adviser who is aware of my plans. While I do intend to become a USA resident, that is quite far in the future, and I will definitely do as you advise (there will be a window of time to plan, citizenship applications are not processed that easily) in that eventuality.
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