My Decade-Long Journey To Five Million

My Decade-Long Journey To Five Million

5 Million Dollars. 10 Years. This is the story of my journey.

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Plan For CFA Level 1 Exam Updated

As I mentioned in my previous post, not all chapters are created equal. I’ve decided to prioritize my schedule accordingly. Consequently, I have to update my plan as well. You can see the latest version here.

Also, I’ve created a Google group for our email study group for June 2009 Level 1 exam. Please feel free to email me for membership by clicking this link! See you there!

Which CFAI Volumes Give You The Biggest Bang For The Buck?

When I just started with my study for CFA Level 1 (June 2009), I thought I would go through the CFAI textbooks in order, saving Ethics for the very end of my study. 

After seeing the CFA exam result (not mine) though, I’m thinking of, er, rethinking my strategy. The exam result looks roughly like this:

As you can see, we have a total of 240 questions for CFA Level 1 Exam. There are 36 questions on Ethical & Professional Standards. That’s a BIG chunk of the exam, especially considering that Ethics only take up 160+ pages of the CFAI Book 1, including many pages of optional materials, whereas Economics (24 questions) is one whole Volume 2 by itself with around 480 pages!

Conclusion: not every topic is created equal. Ethics is the lowest-hanging fruit of the bunch. Definitely one to read through first!

The rightmost column in the table below tells you which chapters give you the biggest “bang for the buck”; that is, the most number of questions covered by reading the least number of pages :)

I’m thinking that after finishing Ethics (just left with GIPS now), I’ll go to either Volume 4 (covering 32 questions), or Volume 5 (covering 52 questions). I’ll skip Economics for now–there are simply too many pages (480+) with relatively too little number of questions covered!

(And somehow I find that Economics is very, very boring. Some people may find this a surprise–but I find Ethics and Quants a LOT more interesting than Economics. Oh well.)

CFA, How Ethical!

(EDIT: Originally this is a navigable Java applet–I removed it because it’s not working reliably enough.)

(Click here if you’d like to download the image.)

Running In Place

I absolutely love salary.sg. They just launched their latest annual salary comparison tool here! Somehow, it’s like the whole Singapore is getting richer, compared to the year before

I found that I should increase my basic salary by about 4.4% if I want to keep my position in the rat race, compared to 2007. How the race never ends! Since I didn’t get a 4.4% increase in my salary, my position in the rat race has worsened :-)

(Having said that, note that the report for 2008 is based on people’s income in 2007, which was something like a booming year in Singapore. I suspect the next year’s salary tool–which is gonna be based on Singaporeans’ income in 2008–will be lower somehow…)

Just Found Myself a Role Model

Grace Cheng has shown me the way. She’s a 28-year old Singaporean, who has found the way to be travelling round the globe for a year while still doing her work

IT WAS a trip around the world many dream about but few accomplish.

 

But foreign-exchange trader Grace Cheng and her husband did it - with a twist.

 

“We achieved our dream of travelling the world without missing a single day of work,” said the National University of Singapore marine-biology graduate, who has been trading currencies online for five years.

 

While travelling, she could manage her New York-based finance site, DailyMarkets.com, thanks to the Internet.

 

Cheng, 28, a Singaporean, and her Spanish husband, Mr Pedro Pla, 27, spent close to a year - from September last year to August this year - touring five continents and 14 countries.

THAT is what I’ve always wanted to do. Man, how awesome is that? Grace Cheng rocks. Read more about their travel here.

Study Notes For CFA Level 1 Posted

This will be a living, growing document. So far the notes for Reading 5 and 6 have been completed. See it here, and let me know what you think!

Plan For CFA Level 1 Exam Posted

I’ve posted the plan that I’ll use to prepare for the CFA Level 1 Exam in June 2009 here. This plan will be updated daily. At the end, I’m hoping to record how much time I will have spent preparing for this exam–it’d be interesting to see whether it gets anywhere near the 250 hours figure–my guess is it’s probably gonna be a lot higher. 

The Excel sheet (well, Zoho sheet) is part of my overall strategy: it’s smart enough to expand or shrink the plan, depending on whether I underestimate or overestimate the time it takes to finish an activity. That way, as I update the plan, I always get immediate feedback on how the update is going to affect my schedule.

“It’s Not About How Much Money You Make”. Yeah, Right.

WRONG.

Well, it depends. If we’re talking about living a good, comfortable life, then yes, past a certain point, it’s not about how much money you make, but more about what you do with that money, and how you manage your expectation. 

But if we’re talking about becoming a millionaire, then it’s a whole another discussion altogether. This whole “it’s not about how much money you make” thing just doesn’t cut it anymore when what we’re talking about is becoming a millionaire.

Becoming a millionaire means that we’re dealing with a hard, objectively measurable number, and with it comes the assumption that we’re talking about becoming a millionaire rather soonish. Sure, we’ve all heard about personal finance authors doing the “save X% of your income for 40 years invested at Y%” thing. Hey, given 40 years, it doesn’t take a Warren Buffett to be a millionaire. Anyway, in 40 years, 1 million dollars now will worth a lot less. (Try plugging in the value of 1 million in 1968 and see how much it’s worth today.) 

But again, if what we’re talking about is becoming a millionaire and retire in your 40s or 50s, this whole “what you earn doesn’t matter” bit is just wrong. Especially if you’re a 30-something like me, and only have about a decade or so to reach the status. 

It’s like this: if what you want to have is a nice, pleasant drive, then past a certain point, what car you have doesn’t really matter.

But if you’re racing to a defined finish line, saying “what you earn doesn’t matter” is like saying that in a race, it doesn’t matter whether you’re driving a Renault 4 or Dodge Viper, because, after all, if the Dodge Viper is running with 3 flat tires, the Renault 4 will still do better… right? (If it sounds absurd and silly, it’s because it is.)

Let’s put it this way: if you are smart with your money and personal finance, making double of what you make now will bring you there twice as fast. As simple as that. (And you don’t become suddenly stupid with your money just because your income doubles, yes?)

(Image courtesy of Jeff Belmonte @ flickr)

Morgan McKinley APAC Sep 2008 Salary Survey

See the APAC Salary Survey by Morgan McKinley here

The one for Singapore specifically, can be downloaded here.

It’s nice to see some upside potential there… although depending on how things go, everything can become moot anyway in the next 1 year or so. Sigh! 

For now I’m just thankful to have my job.

Roadmap Update: Year 1, October

Since the last update, there have been a few changes:

  1. The business has been going slowly unfortunately. Load at work has been unbelievable.
  2. Thanks to the economy, I think it’s quite realistic to say that my target of getting a 6-month bonus for 2008 ain’t gonna happen :(
  3. The market has been so volatile, I’ve decided to wait with some money ready on the side–taken from the safety net. I’m planning to build back the safety net to around 80k by February 2009.
  4. I’ve registered myself for CFA Level 1 Exam in June 2009!
  5. I’m in discussions for other potential income streams. Hoping they all go well and provide more security for my family in this uncertain times.
Uncertain times

Uncertain times