Thriving in My Fifties: Financial & Life Plan for the Next Decade

There were much reviews done this month, coinciding with the culmination of two key milestones: the fifth anniversary of the current investment portfolio and the projected endpoint of a financial independence journey initiated nearly two decades ago.

Stepping into my fifties, I embrace the exciting and unknown path ahead. This won’t be a drastic overhaul, but a gradual evolution as I strive for a purposeful decade, maintaining financial independence and achieving personal fulfilment.

Financial Roadmap

Net worth recently reached an all-time high, a significant milestone despite not having a regular job for the past two years. While this provides a strong foundation for the next decade, I remain mindful of the precarious stock market and the fact that my expenses will remain substantial during this period.

As a result, I am committed to my investment goal of achieving an annualised return of 10% over the ten years. This will not only ensure continued growth in my net worth but also provide a stimulating challenge for my investment hobby

In the event that I fall short and just achieve only a 5% annualised return, the impact of the anticipated 30% decline in net worth would be manageable.

Given their success over the past five years, I will continue to utilise these strategies.

1. Budget and track my expenses. It’s not just about savings but prioritising limiting resources for my needs and wants in my life. In another word, scrimp on what doesn’t matter but spend on those that does.
2. Maintain liquidity for three years of expense. Funded by dividends, interests and draw down from portfolio, this will provide the buffer during marking downturns. This will prevent the need for forced selling of stocks, ensuring a more stable and sustainable investment strategy. This liquidity buffer will be extended to five years when I have access to my CPF savings.
3. Maintain a 60% income and 40% growth portfolio. To be clear, this is not the bond to equity ratio, but the allocation of stocks in my equity portfolio. I am hopeful that this approach will allow the portfolio to grow, even as it partially fund my expenses.
   • Income counters will include Singapore REITs but this will be kept within 30% of the portfolio.
   • Growth counters might include small caps or micro caps but this will be kept within 10% of the portfolio.
   • SG market will take up about 70% of the portfolio and the remaining will be invested in US market.
4. Write to myself regularly. In the process of articulating my thoughts, I am forced to be clear. I gain deeper insights and build stronger conviction in my action.

These strategies are meant to be flexible, not rigid rules. Just like navigating a ship at sea, it’s crucial to set a course while remaining adaptable to unexpected currents and weather patterns. Therefore, I’m prepared to adjust my approach as needed to navigate life’s unexpected challenges.

Beyond Finance

It’s interesting how a long-term mindset can be applied to more than just investments. I’ve found that setting goals for the next ten years makes it feel more achievable to learn a new discipline or acquire a new skill compared to focusing solely on the next year.

While I prefer to keep my non-financial goals somewhat open to allow for spontaneity and serendipity, I still want to plant some seeds in my mind now to increase my awareness of potential opportunities in the years to come.

1. Explore Neuroscience, Psychology and Philosophy. Intrigued by how our capacity for creative thoughts and imagination have advanced humanity, I am eager to learn more about the human brain and mind.
2. Explore the Universe and the Spiritual Realm. These areas are interconnected with the above disciplines. While not religious, I believe we are part of a larger cosmic tapestry. This pursuit, even without definitive answers, promises profound enrichment.
3. Cherish relationships. By fate, we became family and friends. They have enriched my life immeasurably, and I look forward to continue to nurture them in the years to come.
4. Pick up new skills. I will go with the flow on this. As much as I wanted to learn this and that, I would let my desires pull me towards specific pursuits.
5. Write a book? I don’t have a burning urge but recently some ideas piqued my interest. So perhaps someday.
6. Enjoy a slow life. I really love the quote I saw during my recent visit to Claude Monet exhibition at Gardens by the Bay.

Let us slow down and appreciate our beautiful world. I look forward to a fulfilling decade ahead, and I hope you will find inspiration in your own journey.

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