They chose financial independence over home ownership.

This is somewhat extreme but watch how this Canadian couple chose financial independence over home ownership.  They are in their 30s and,...

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"E-book" by AK

Second "e-book".

Another free "e-book".

Pageviews since Dec'09


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Reader has 4 questions for AK.

Monday, July 18, 2016

Hi AK,

I am 29 this year, need some advice for building up passive income.

I have been in contact with financial reading on and off about investing and stocks and stuffs, but i always find that i dont have enough knowledge and skills to actually invest. I made a few investments from insurance agents and banking relationship managers which in the end made me realise they are all functioning for their own personal interest and i learnt the hard way as of course. I trust them too easily.

1.       As such I am thinking what can I do to gain the knowledge that you have to help me make decent decisions. Is there any specific steps that you take when you first started?

2.       What amount of initial capital that you start investing with? To be able to have $50k in 2011 required at least a start up of $500,000 with a 10% ROI.

3.       What do you think of alternative investments? Such as land banking or peer to peer lending?

4.       What if currently I can only come up with $100,000 in initial capital and monthly basis maybe $3-4k, what could and should i do with them to move towards what you are getting?

Thanks a lot for your time!


Hi W,

I am glad that you have discovered that no one cares more about our money than we do. :)

In reply to your questions:

1. Read, read, read. Of course, it is important not just to gain knowledge but also to cultivate the right temperament.

2. I started investing 20 years ago when I was still an undergrad. Probably had $20,000 or less then.

3. Highly speculative, I will avoid.

4. I don't think anyone should use me or anyone else as a yardstick. As long as we are taking steps to improve our financial well-being (and investing in good income producing assets is one such step), we are moving in the right direction.

Gambatte! :)

Best wishes,

Related posts:
1. How did AK create a 6 digit passive income?


veronika said...

Ultimately, the purpose in all this is to achieve financial independence.
To create a separate source of cashflow besides employment income.
Cashflow becomes the very core during retirement. It would be prudent to start
learning, building from an early stage of adulthood.

I am not good at mathematics, statistics, even percentages! I dont have O level maths.
But I have prepared for retirement by building up cashflow from dividends.
And I dont read a lot about companies except from newspaper articles, and headlines.
I am not trained to decipher annual reports, calculating ratios, price earnings,debt ratios etc. Sure, one can read online at Investopedia. But in practice, annual reports can be presented in so many varied ways, accounting terminologies can send you into deep mental trauma.

As AK alluded: temperament is important.
Test it at the casino. Place a bet on red or black at the roulette table.
How much money lost or won will reveal temperament.

Each one has their own values, tolerance to risk. It needs to be determined.
Buy UOB at $18.75. Next year it drops to $15.20. Sell? Buy more? decisions!
Examine the original purpose of buying UOB.
Examine the original reasons why buying it at $18.75 made so much sense.

What if the share goes up to $25.65? Happy? buy more? sell? decisions!
This is where reading, following the news is important.

For me, I am more of a macro investor... somewhat following the index.
Unlike other investors like AK who is much more micro, focused and detailed.
The approach may differ, yet the goal is similar... though AK's returns are far more superior!

But I am not jealous. He deserves his just rewards as I, mine.
Understanding self, understanding our own goals is key. Not everyone can be a Warren Buffet. But everyone can plan their own retirement... just be satisfied if the results are what you planned for.

Thanks AK, for all your sharing, you're a good man!

AK71 said...

Hi Veronika,

Always enjoy reading your comments. It has been a long time since the last one. Thank you so much for taking the time and effort to share your thoughts again. :)

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