Investment Notebook: Opportunity Fund Part II

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.

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Updated: November 9, 2019 — 2:09 pm

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