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Real gold no scared crucible fire - 2020: An Aspiring FIREr's Stress Test

Rude awakening is how I will describe 2020. 

At one point, my REIT-heavy portfolio was down nearly 600k and the only way I could deal with it emotionally was to disconnect entirely.  No checking. No reading. And clearly no writing.

All in all, i thought i handled it fairly well (no i didn't). 

Some months back, I joked to a friend that my unrealised losses were sufficient to fully pay off a 5-RM HDB in a mature estate, and then laughed hysterically in a concoction of horror and self-pity. Which only led to questions as to whether Covid was affecting my sanity.

Alas, it is too early to call recovery. And some of my "investments" (hahahaha, assuming one could still call them that) are mostly likely gonna be write-offs.  In this regard, I would like to extend my greatest of fuck-yous to:  Eagle HTrust and First REIT.  Other notable nominees in this category may include Singtel and Starhill.  Thank you guys, has been a great ride, mostly at my expense.   But as they say, caveat emptor. No one to blame except ownself for a comical lack of analytical skill and foresight.

At the point of writing, my portfolio has not recovered to pre-covid levels. Although perhaps somewhat lifted by the sporadic buying of DBS, OCBC, and UOB from April onwards.  Projected dividend income for the whole of 2020 is estimated to be about 75k, which is up around 7% from 2019, but a far cry from the 100k goal i had set for myself.  I guess I should be counting my lucky stars that there was still modest growth in the passive income level. 

Perhaps covid came at an opportune time. Just as I was approaching what seemed to be an "adequate" portfolio size for FIRE, covid has made me re-examine certain assumptions in my retirement modelling.  

Indeed, we should not be so naive to think that covid will be the last stress test on one's retirement adequacy. Before calling it quits, one should really think about whether his/her retirement portfolio can withstand yet another global crisis. 

For instance, if your passive income falls by 30-50%, can you still go on business-as-usual without compromising lifestyle quality? If you cannot, then perhaps your retirement portfolio is inadequate. Slog a few more years and build that much needed buffer.  

Make no mistake, the next crisis looms just ahead. As much as i despise cliches, it is really "not if but when". 

Onward to FI my friends.





Comments

  1. Super RingJanuary 20, 2021 at 8:41 AM

    Thanks for the update...have been a close follower as we have the similar portfolio. For a year, I have to hear other brag about their Tesla and bitcoin investment. Have cut loss at the bottom and will never be back. Take care bro.

    ReplyDelete

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