Tag: retirement

Portfolio news – August 2016 additions

A bit late as I an busy taking more time off and balancing my energy, more on that in another post. The addition of August.

Only one addition this month, and yet again a extension of an existing position, namely Microsoft. It was a position that was not in line with the rest of the portfolio so it had to be adjusted. Most of the tech positions in the portfolio are performing well and I think Microsoft has more potential on the upside. The company is producing good results and while this may not be the best way to take investment decisions I love windows 10, it’s an excellent OS , fast and stable. And a lot of people agree. Also their development tools are great and they are doing a lot in the way of education and making people familiar with the software.

I think this can only get better, more and more people getting involved in tech will make for more innovations. Hopefully not only in just another app but also in research and other tech fields where you are bound to need software. All in all I am positive about Microsoft. Next month , well this month in the coming week I will get a brand new position. For the September addition.

Portfolio news – June/July additions

My latest additions are Dow chemical and Unilever, both were on the buy list for some time and with the new month coming both were bought. Apart from the obvious dividend payments they both are very well established in their markets. Dow has been paying out dividends for decades now and recently increased a buy back program. In the meantime they went ex dividend so the first dividends should roll in shortly.

Unilever has been on the list for a while now , solid and a bit boring company maybe.

The markets are never boring however and today proved it, lot’s of Greece stuff taking the markets down a notch. But that’s not too bad since you can buy stocks with a bit of a discount. Currently I am working on a nice way to show my portfolio on this site. Maybe I’ll start simple with just an overview. For now have a good day.

Now what, step 3

After thinking about my retirement plan some more , I started to look around the internet and found some interesting websites. One of them was Mr money mustache

It’s a blog and community on reaching your retirement, i.e. being financially independent as soon as possible. Well that’s interesting. Started with the first series of blog posts and got a bit carried away reading. And thinking, what if this actually works. What if I can generate nough passive income to work a day or two less. Finally I’ll be able to train more, run more races and even do some more travelling.

Ok ok hold on, not so fast. The basic idea is to consume much less, and cut your montly cost base. But hey I like consuming. Maybe I don’t buy as much unnecessary crap as most people, but I do enjoy a good restaurant, night out and a bit of luxury now and then.

I continued reading and found more interesting info. It is possible to reach financial independence between 5 and 7 years. That’s very fast indeed.

I already started but with a much longer time frame in mind, what if this is possible for me. I think I am going to crunch the numbers a bit more.

Retirement gap

There is such a thing as a retirement gap. The experts claim this is due to insufficient pension build up. Recently it came up as I was checking my personal finances. So there it is a potential financial gap in the future.

Question is, how big is this gap?

I can’t really figure this out. Because I don’t know what monthly income my current pension funds will buy me the moment I retire. How come ?

Well from what I understand , it has everything to do with the interest rates. And more importantly the interest rate the moment you (or I) in this case retire.

The moment I retire, the saved money in the retirement funds will become available to purchase a retirement income.

Which gives me a income based on the calculation “Amount of money in retirement funds * interest rate”. Which is good if the rate is 12 % and very bad if it’s 2%. I might oversimplify it at the moment , but this is what I understand so far.

OK here comes another part of the gap, problem is the interest rate which we calculate the amount of money to put in the pension funds with nowadays is 4%. Well we all know what we get in our savings account. Closer to 0,9%.

Which adds another gap to the gap. So I already save too little for an income of which I don’t know or I can’t calculate how high (or low) it will be.

So lot’s of confusion. This got me thinking, basically I have no way of determining how high my pension will be in the future or how much I will have to save in my pension fund for a nice cosy retirement.

Next question , what is a pension ? No expert here, but it seems to me we can define it as: Income without the need to work for it.

Sounds good to me, why wait for it until I retire ? Let’s start now.

Which I did, I will elaborate on this in another entry.