Friday, April 13, 2018

In line with my annual financial independence goals for this year I pressed on with the reading list. “the smartest Guys in the room” is about rise and fall of Wall street  darling an  American corporation called “Enron”, which took down auditing company “Arthur Andersen”.
      At its peak Enron shares were worth $90.75 and on December 2, 2001 (when it filled for bankruptcy) were trading at $0.26 . The company was chasing dream of deregulation through the vast network of political donations (former Secretary of State Heinz Alfred Kissinger (naturalized USA citizen as of 1943, son to German Jews) served as advisor, along with  James Baker  and many others).
       Here is some interesting quotations from the book: “…When people describe Skilling they don’t just use the word “smart”; they use phrases like “incandescently brilliant” or “the smartest person I ever met”…He could instantly simplify highly complex issues into a sparkling, compelling image.
…Skilling also had tendency to oversimplify, and he largely disregarded – indeed, he had an active distaste for – messy details involved in executing a plan. What thrilled Skilling, always, was the intellectually purity of an idea, not the translation of that idea into reality.

Tuesday, April 3, 2018

March 2018 update ($495,459 -$9,025 or -1.8%)

GBP is up to USD by 2.9% or  $408
Grand total additions: $408

Emerging Markets Stock Index Fund is down by $3,909 or 2.8%
Eurozone Stock Index Fund is down by $2,440 0r 2.0%
US 500 Stock Index Fund is down by $2,023 or 1.8%
Global Small Cap Index is down by $1,052 or 0.9%
FTSE U.K. All Share Index accumulation is up  by $9 or 0.1%
Grand total losses $ 9,433
Financial independence performance March 2018 - real life journey

Saturday, March 10, 2018

Financial Advice on an Index Card

    Being an avid reader of Financial Independence books and blogs, somehow I missed a remarkable advice given back in 2013.
    A professor at the University of Chicago said that: "The best financial advice for most people would fit on an index card". One of the readers commented on his post : "What *is* this simple free best personal finance advice that fits on a card? It's kind of a tease to say its so easy and then not go ahead and spell it out in twenty seconds.
    Here what the professor responded, by hand writing it on an index card:
  • “Max your 401(K) or equivalent employee contribution
  • Buy inexpensive, well-diversified mutual funds such as Vanguard Target 20XX funds (Note: I tried that but expense ratio is higher for them. Target fund is 0.14% vs. 0.04 S&P500).
  • Never buy or sell an individual security. The person on the other side of the table knows more than you do about the stuff.
  • Safe 20% of your money.
  • Pay your credit card balance in full every month (Note: I say do not use them at all. Its a gamble).
  • Maximise tax-advantaged savings vehicles like Roth, SEP and 529 accounts.
  • Pay attention to fees. Avoid actively managed funds.
  • Make financial advisor commit to a fiduciary standard. 
  • Promote social insurance programs to help people when things go wrong (Note: Its capitalism we are living in, not communism)”.

Saturday, March 3, 2018

February 2018 update ($504,484 -$16,535 or -3.3%)

↑ FTSE U.K. All Share Index accumulation is up  by $262 or 1.9%
↑ GBP is up to USD by 1.5% or  $200
Grand total additions: $462

↓ Emerging Markets Stock Index Fund is down by $2,879 or 2%
↓ Eurozone Stock Index Fund is down by $5,083 0r 4.1%
↓ US 500 Stock Index Fund is down by $4,419 or 3.8%
↓ Global Small Cap Index is down by $4,620 or 4.1%
Grand total losses $ 17,001
Financial independence from the very begining February 2018 update

Friday, February 2, 2018

January 2018 update ($512,019 +$38,753 or +8%)

Emerging Markets Stock Index Fund is up by 4 % or +$5,313
Eurozone Stock Index Fund is up  2.2 % or +$2,732
US 500 Stock Index Fund is up by 5.2% or $5,954
Global Small Cap Index is up by 4.2% or $4,699
EUR is up to USD by 3% or $6,450 for my portfolio.
Grand total additions:  $25,149
Additionally, I invested accumulated cash into one of the pension fund schemes (roughly $13,604).
Financial independence - January 2018 update

Wednesday, January 10, 2018

Principles of Corporate Finance by Brealey Myers and Allen

As part of my continuous commitment to develop in-depth knowledge I started going through “Principles of Corporate Finance” by Brealey Myers and Allen 11th edition (ISBN-13 978-0-0771-5156-0).
This will take a while as the book is over 800 pages long and has plenty of problems sets, at the end of every chapter, which I am committed to solve. The interesting questions, worth discussion or an additional attention will be posted here.
To check myself I also bought  Solutions Manual forPrinciples of Corporate Finance (Eleventh edition) prepared by Peter Crabb (ISBN 978-0-07-750247-8).
All solutions described here are by no means complete or correct. So any use will be at your own risk, although I would appreciate alternative solutions or discussion on the subject.

Friday, January 5, 2018

2018 Financial Independence Goals

Financial goals.
- Accumulate $10 K a year, with $4k of them towards long term house maintenance.
- Portfolio – no changes. Keep investing in the pension/retirement fund.
- Develop additional income source in full, potential reward about $2,000 a year. Target sites to be developed in full this year.

- Regular monthly updates.
- To cover 6 themes on financial independence, including  30 year forecast scenario.
- Read 12 books from the list.
- Publish the books reviews.
- Corporate finances to study in detail.

Family Budget:
- As long as the savings goal is made I do not mind the rest. Aim to stay under previous year budget.
- Be happy.  Run 1,000 miles during the year. BMI at 26.3 by December. Loose 2.5 pounds a month.