In my previous posting, “Investment Notebook: Opportunity Fund”, one of my readers posed this question to me “how many percentage of my net worth coming from the return of my stock investment, would I consider it has made me rich”.
This is a very interesting question and it has set me pondering hard for several days. One thing for sure is that I did not have a clear cut answer to that question but nevertheless, I shall try my best to reply.
Rate of returns VS net worth yield
When I invest in anything, normally I look at the potential rate of return on my investment capital. For example, if I rent out a HDB flat I would set a yield target of 10 -15%. Likewise, when I invest in stock, my target is value appreciation of 10-20%.
For example, when I activated my “Opportunity Fund” in 2008, I made a return of about 17% from my stock investments of S$20,000. Setting return target based on personal net worth is another matter altogether. It requires one to consider their personal income, fixed assets (housing, CPF,etc), insurance policies, investments (gold, shares, property,etc) at that point of time.
Furthermore, one’s net worth changes all the time, subjected to economic situation. For example, we may get retrenched and lost our sole incomes due to downturn. So I would say it is not easy to determine one’s net worth.
My best investment
If I have to consider the percentage of net worth coming from my stock investments that I think will make me become “rich”, I would say it has to be at least 1000%.
When I obtained my degree in 2005, my father helped to pay the student loan of $22,000. I had since repaid him back several years ago and “recouped” the investment. I must say my education was my best form of investments as it had opened many doors for me, allowing me to be gainfully employed for the last 7 years.
You may sign up to become a member of SG Wealth Builder. The full benefits and privileges of SG Wealth Builder Membership:
- Access to the latest premium articles of SG Wealth Builder
- Email notifications of latest blog articles
- Request for coverage on stocks, insurance and other personal financial topics
- Comment in articles
- Participate in campaigns
- Future network opportunities
Monthly Subscription Plan
You may sign up for the monthly subscription for only $19.99 per month! You can choose to cancel the subscription after one month with no penalty.
This plan is ideal for readers who wish to try out SG Wealth Builder Membership for a limited time. Thereafter, you may choose to upgrade to Lifetime Membership for a one-off payment. Email me ([email protected]) to find out more about the Lifetime Membership.
Note: After payment is made, you will be prompted with registration form to create your user-id and personal password.