lördag 23 januari 2016

Target: 60% monthly savings rate

While living a life with an interesting (but sometimes frustrating) job, great food, family and a few friends I am able to save from my take home pay each month.

For the year of 2016 the target is to save away more than 60% of my net salary (i.e. after tax). This should enable me to reach my ambition of financial freedom (simple life based on a 4% withdrawal rate from saved/invested money) well before the day I turn 65.

There are of course tables defining how fast you would be able to reach financial freedom with such a savings rate. My ambition is to be able to quit work latest 9 years from now. Let's see if the wife agrees and supports...

So, another ego-target to my list of targets:

Area Starting point Target When
Monthly savings rate 50%(?) 60% Average monthly savings rate during 2016.

I'll come back on how it's going and how far is left until the moment of financial freedom.

Tennis elbow - hurtful for the Ego(n)!

Yours truly, the strong Egon(n) has a weakness. It seems that after multiple sessions of tennis (after a life in quiet fat accumulation) the elbow has decided to not play along fully anymore.

I have always thought that tennis elbow is something untrained and unfit people get. Now I know that is true! :-)

The fight to get fit again has now received more fuel in form of motivation.

103.5 kg on the scale this morning. Down around 2.5 kg:s since the start of a more healthy life almost  a month ago, but I have somehow lost the discipline, which will from now be implemented again.

fredag 1 januari 2016

Index investing, boring but effective and efficient

There will always be a number of people who claim success in picking stocks successfully. One of these are Warren Buffet, but apart from that I am not aware of too many others who can successfully do this over time - not even with my ego!

As my name implies (EGOn) I thought I was a real stock picking guru, but when I one day sat down and critically analyzed all the effort going into this stock picking, buying and selling I realized that I would have been batter off putting my money into a fund which simply followed index (in my case the index of 30 largest companies on Stockholm exchange, i.e. OMXS30). It is possible to track this index using very low cost (free!) funds from two at least providers in Sweden, Avanza and Nordnet.

Admittedly this is a bit boring compared to the thrill of picking stocks and following their ups and downs, getting a dividend etc. I have actually come to the conclusion that investing should actually be boring - as opposed to speculation which can be very exciting (but disastrous).

What I do now if that I have a base portfolio in which I purchase different (low cost) funds on a monthly basis. My idea is to keep doing this as long as I have a paid job and re-balance once per year. Any additional money is put into a separate portfolio in which I have carefully picked a few stocks into which I intend to keep "forever" unless I really need the money somewhere else.

How do you invest?