Work because you want to and not because you have to.

Recently, I had a chat with someone on my preference to invest for income and how I am now able to work because I want to and not because I have to.

He said he would like very much to quit his job and focus on making money from the stock market.

He asked when would he be able to do that if he should follow my methods?

I told him that it really depends. 

For some, it could take just a few years. 

For some, like me, it could take almost 20 years. 

For some, it could happen by the time they retire at age 62. 

For some, it might never happen.





He wasn't impressed and told me that a couple of presentations he went to told him that he could retire within a few months if he should follow their methods. 

I said that I am aware of such courses and claims out there but I really cannot comment much on these apart from saying I would exercise caution.


To his credit, he did not walk away but instead he asked when I said "it really depends", what did I mean?







Well, following my philosophy, how soon a person can choose to work because he wants to and not because he has to depends on:

1. How much money does he need in life?

2. How much money is he saving (not making)?

3. How much money are his investments making?

We went through his answers to these questions and he was shocked to find out that he probably would not be able to stop working till he is in his 60s. 





I reminded him that it is actually not too bad. Some people cannot stop working even in their 70s.

He said he would like to stop working in his 50s although if he could stop working before he hits 50, it would be better. 

What should he do? 

Well, the answer is in those 3 questions mentioned above again.







1. How much money does he need in life?

Are the needs really needs?

After all, we only need so much money in life and the rest is for showing off, someone said.






2. How much money is he saving?

To save more money, he has to increase his income and reduce expenses.

It is quite simple. Find legitimate and ethical ways to do so.





3. How much money are his investments making?

If he is leaving the bulk of his money in savings accounts, he is doing himself a disservice. He has to make his money work harder.

One way is to make use of weaknesses in the stock market to accumulate some good stocks that will generate good income.





When we parted ways, he said he had plenty of thinking to do.

I do not know if he would become an income investor or if he would take up courses which would allow him to retire in a few months. 

The choice is definitely his.





Related posts:
1. How much do we need?
2. Common advice on saving money.
3. To protect our wealth, we have to take risk.
4. Retiring before 60 is not a dream.
5. How to have a comfortable retirement?

Save money and have a good dinner for $1.75?

It has been quite a while since I shared photos showing how I prepare my meals.

Regular readers know that such sharing sometimes invite rather big reactions from people, both positive and negative, but I guess that is what makes society interesting, isn't it? Diversity!

As long as we are all civil about it, I think it is definitely OK to disagree.

Anyway, what did I have for dinner this evening?

Chop up some fresh cucumber.

Shred up some ham.

Add a small can of baked beans and mix it up.
(Wouldn't be complete without baked beans, would it?)

A cup of hot green tea.

An orange for vitamin C and fibre.

Cost of the main course: about $1.00.

Cost of drink: about $0.15.

Cost of orange: about $0.60.

Total cost of dinner: about $1.75.

Related posts:
1. Be $48,000 to $60,000 richer in a decade.
2. Have a free lunch with Roy Ngerng.
3. Yummy yum yum (60c) breakfast.
4. Have restaurant quality ramen at home.
5. Prepare a healthy, low cost meal.

Why was my comment not published?

I have said this before but I guess I should say it again.

My blog makes a bit money in the form of advertising income and to be fair to myself and all paying advertisers, I cannot allow attempts by commercial entities to have free advertisements in my blog in the comments section.

So, if you have left comments in my blog with a link or a reference to a website (especially one that I know you have a vested interest in) that provides goods and services, financial or not, don't be surprised if you do not see your comment published.

Tsk, tsk, tsk.

You might have a great comment and I might want to publish it but if you have included a link or a reference to a commercial website, I am not able to delete the link and publish the rest of the comment. 

It is not possible. 

At least, I do not know how to do it.

So, for those people who have been affected by this house rule, if you would like to comment again, I would be happy to publish your comments as long as they are relevant and do not advertise your business ventures, whether directly or indirectly.

Please note that attempts to draw me into a discussion on the issue will be ignored.

OK, I should include a smiley emoticon here to show that there are no hard feelings. There. :)




Related post:
Do you want to be richer?
"If you have some really good ideas, please feel free to share with us but please keep the comments genuine.  Any effort to advertise should be emailed to me and should not go into the comments section.  Having some advertising revenue is one way I make some money from blogging. "

Marco Polo Marine: The matter of letters and FY2014.

I receive emails from a handful of readers from time to time regarding Marco Polo Marine's share price and some wonder if I am still a shareholder.

Well, I did reduce exposure many months ago and I blogged about my reasons for doing so. Since then, I have held on to my remaining long position and have done practically nothing as I wait to see how things pan out with the purchase of the jack up rig from SembCorp Marine. There should be greater clarity in the next 9 to 15 months.

I received another email from a reader when the share price plunged to an intraday low of 29c a share in the last trading session. The reader was concerned about her ballooning paper loss. Well, although 29c is below my entry prices, I am not concerned about the paper loss. Why? There is nothing we can do with how Mr. Market feels and what prices he might offer on a day to day basis.

I am more concerned with whether the business is doing what I expect it to do. If not, has the situation deteriorated to a point where it is no longer a worthy investment. So, I go back to my reasons for investing in the business and the reasons for the reduction in exposure later on.

Remember that the main attraction for investing in Marco Polo Marine was the rosy outlook for its OSV chartering business and how it was protected by Indonesian Cabotage Laws. I liked its relatively low gearing level and the decision to start rewarding shareholders with meaningful dividends.

Then, later, there was the decision to buy a new jack up rig from SembCorp Marine. This was not in my initial investment thesis. It would increase gearing level and finance cost. Although the terms of the purchase are actually very good, the fact that there is not going to be any income from the rig in the building stage is simple common sense.

So, earnings would be impacted negatively and I said that I would not be surprised if no dividends were to be paid for a while. The framework in asset allocation that I use requires that I reduce my exposure to the stock.

To stay invested was to believe that Marco Polo Marine would continue to grow as a business. To stay invested was to believe that the existing businesses would continue chugging along and that they would have no trouble in servicing the heavier debt burden. Although the tugs and barges business segment underperformed and caused massive losses, Marco Polo Marine is still profitable, overall.

Even though, year on year, EPS has reduced some 54.6% from 6.56 to 2.98 cents, Marco Polo Marine is still growing. NAV per share is now 49.4c. As I expected, no dividend was declared and, I believe, this is prudent, given the big financial commitment that is the jack up rig.

At 29c per share, that is not a price I would sell at unless I should believe that Marco Polo Marine is worth less than that. It is a 41.3% discount to NAV. Imagine knocking off 41.3% in the prices of everything that Marco Polo Marine owns and taking over.

Of course, one could argue that Marco Polo Marine's assets are worth money only if they are utilised and generating earnings. With an EPS of 2.98 cents, at 29c a share, we have a PE ratio of 9.73x. By the standards of their industry, this is not cheap. However, to latch on to this PE ratio is to believe that the business in future will stay very much the same as the last 12 months. This is where a judgement call has to be made.

Given the CEO's foresight in transforming the company from just a tugs and barges owner to becoming an OSV builder and owner, I would like to think that his bold decision to purchase a jack up rig with advanced specifications to be delivered just as Indonesian Cabotage Laws expand to cover such rigs at the end of 2015 is another right move. Of course, only time will tell.

So, what do I do? Give them time.

I am comfortable with holding on to my investment in a business that is still growing but at a slower pace. Investing only for growth and no income in the meantime, I am comfortable with a much smaller long position, following my asset allocation framework that is the pyramid. I am not bothered by the daily movement of prices because, overall, I believe the business to be sound.

Of course, I don't profess to know what readers who followed my decisions and actions might have thought or are thinking. This blog post is simply to share my thought processes and I hope that it is helpful to some people in sorting out their own thoughts.

See:
Marco Polo Marine Full Financial Year ended 30 Sep 14.

Related posts:
1. Marco Polo Marine: A price I would not sell at.
2. Marco Polo Marine: Reason for price weakness.
3. Marco Polo Marine: Drilling for higher income.