onsdag 26 april 2017

Market Timing vs. Dollar Cost Averaging


It's been a while since I wrote about my financial views, but now when markets around the globe are going strong and doomsday prophets shout that you should sell all now to avoid the inevitable down-turn I thought I'd write a little bit on how I think about market swinging up and down over time.
As with all other posts on this blog, the time frame of my investments is long 15+ years. If you need your money for things in the near future, you may need to follow another plan.

So, what is market timing?

Market timing is the ability to foresee a market swinging up or down and buying or selling accordingly to maximize the profits. Sounds good right? To be able to sell just before a market fall and then buy again at the lowest. This is the movie and Wall Street version of how the stock-market works, the ideal that many stock-brokers and money managers strive to do. And from time to time they get it right and they are the golden child, investors pour more money on them. The thing is that it is hard to time the market continuously, the pressure added if you did it once plays along but also the fact that it is not possible to foresee the future.

What is dollar cost averaging

Dollar cost averaging is the act of buying shares over a period of time, to prevent investing a large lump sum at the once and then seeing it go to nothing as the market crashed. Instead, you buy at the highest point (if the same crash scenario) with say a fifth of the total investment, and then continue to buy once each time period, say a month, until the money is spent.
In the case of a crashing market, the price per share is lower each time resulting in more shares bought for the same amount of money. So in the end you end up with more shares then if you bought them at once and then saw the market crash.
But the same goes the other way as well, you buy at the lowest and you would receive less shares then if you invested it all at the lowest point.
The idea is, that if you are a long term investor you do not care about the volatility of the market and just continue to buy in ups and downs. When the market goes down, you get more shares, when the market goes up you get less shares.. In the long run it evens out.
For me, I do not have a lump sum to spend so my monthly investment is basically a continuous dollar cost averaging scheme.

Numbers on a single share.

After reading the Forbes article Busting The Myth Of Market Timing, I decided to try to map the data myself based on a Swedish bank (SEB, or Skandinaviska Enskilda Banken AB) looking back a 10 year period.
2007-04-25 – 2017-04-25
The starting point is at the middle of a down turn, i.e. share prices are dropping.


Say that you have 1000 to buy with each month and continue buying for 10 years.
So when the share hits rock bottom at 18 SEK, you buy 54 shares as the share is on sale.
At the end of the 10 year period, you have received 1253 shares.

So how to simulate thinking like a market timer? As the share is dropping at the beginning of the scenario, lets think that you try to look at signs for things to change, criteria will be 2 months of gains until you enter and 2 months of dropping price and you leave. Otherwise you hold. (don't know if this is accurate but just bear with me)
End result, 954 shares... 299 shares less then the buy buy and buy more approach.


In reality
  • Each share pays out dividend.. 
  • Each transaction costs money
  • You pay taxes when you sell for profit (at least in Sweden)
  • Change is transferred to the next month, 
  • you receive a bigger paycheck and can invest more or do something actively to increase the amount spent each month
All this leaving you with a lot more shares then the example and even less shares if you market time. This is just one example, that happens to reflect my point of view but there is a lot of research done in this area and gurus like Warren Buffet think that market timing is a hoax.

But don't trust me, do your own research and find out more yourself. In the end, knowledge leads to better decisions. : )

Until next time: Work to Live, Don’t Live to Work

Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.




fredag 7 april 2017

My current plan, 2017 April



This is a day of sorrow, this is the day when Sweden got targeted in a terror attack.
I do not have words, got the information around 1530 when I was leaving work. Apparently a truck rammed a busy shopping street (walking street) and. 15 hurt and 4 dead as we speak.
Svd published a lot of pictures that tell stories.

Currently following the events unfold on live TV.

My biggest fear is that this will boost the racist trolls that are taking over in Sweden. There are extremists in every society, country, political wing and religion. Don't fight refugees, fight extremism.
I do hope that the Swedish government acts in a calm way.

As this is my planned 'My current plan' I have to do this update as well as during my lunch break (3 hours before the attack) I followed my original plan and bought more shares in my favorite candy shop. This time the buy was boosted by this years dividend payouts. The dividend payout was 3 times more then last year. A good result but it is dimmed by today's events and I really do not want to think about economics today.

My thoughts are with the families of the victims of the attack. Be strong!
Be sure to follow #openstockholm on twitter where people are helping each other, actually genuine caring. Warms my hearth.

Be strong!

fredag 31 mars 2017

Update, week 11 of pulmonary embolism recovery


For the full story see:
An abrupt reminder of mortality.
Update, week 3 of pulmonary embolism recovery
Update, week 4 of pulmonary embolism recovery
Update, week 5 of pulmonary embolism recovery
Update, week 11 of pulmonary embolism recovery

This will be my last update in this series if nothing major happens. This post is just for wrapping up things and sharing my training plan and progress for motivation for others. : )


So been a while since last update but things have moved to the better and I think I am back to normal now and starting to get a routine on the xarelto medicine. It is starting to become part of life.
This is a picture of my training calendar for the first 3 months of 2017. I've color coded it to show the time schedule from when I first noticed that something was wrong, to the hospital stay and the recovery period afterwards. When the color coding ends I was able to do a pretty hard workout on a trainer.
This week, went lunch cycling with my team and made a personal best on a hill climb. Did not see that coming.
garmin fenix 3 hr, showing run at 5:16/km pace

Also, mid Mars I started to run again to get more intensity on the lungs and as you can see, the pace has increased in a nice fashion even though this weeks run was maybe a little too much. Not far, just 1.3K but nice progress.



2 months ago, I did not think the progress would be this fast. The doctors told me 3 months recovery until I would be back to normal but I guess it depends on the person and what state you were in before and how determined you are on getting back. Make it a goal and gradually increase the training intensity. Don't forget to rest when your body says so and stop when needed. Little by little, progress will be made and you will be back in no time!

Why I write this

I don't write this to feel sorry for myself or whatever. Just to share an experience, maybe ease for someone else that has the same diagnosis. You don't have to be old to get this, I am myself 33. I've always categorized this as something to look forward to when I get older. But life is full of surprises and luckily we humans are capable of adapting :)

Until next time: Work to Live, Don’t Live to Work

fredag 10 mars 2017

My current plan, 2017 Mars

Another month has passed and this week we had a third winter during this winter here in Sweden. I.e. another snow-storm and now it has melted away.

I haven't really paid any attention to the outside world the past weeks, been busy at work and focusing on rehab training.
So, this will be another issue of stick to the plan for our financial goals but as always there has been some smaller hiccups that needs to be handled.
Evidently I really picked the wrong field in university, should have gone to law school. We had to hire a lawyer for a estate split and man, they know how to earn.
Luckily, we have a buffer to take from so it is not actually affecting our day to day economy but for some other parts involved, not as easy. We'll see how to handle that, but for once it feels good that being a little bit boring pays the bills at the end of the month.
When this is all over, we need to sit down and figure out if we need a regular lawyer and start paying for one in advance to mitigate a little. Need to look at some figures to see if it is the smart move. But currently, not really the time to do it.

On the investment side of things this month ended up buying into my favorite bank once again. I was a little nervous some months ago if I would have the strength to keep buying in a rising market but seems like I will stick to the plan. Last year was a down year and at the end buying in both ups and downs will gain more shares in the companies and a bigger part of the dividends per year. Not counting our future on any market timing schemes, just continuing to buy and buy in established dividend paying companies.

Until next time: Work to Live, Don’t Live to Work

Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.

söndag 26 februari 2017

The grass is greener on the other side

picture of a girl taking a picture over the fence as the grass is greener on the other side

I think it is only human to think that it must be better somewhere else but here. Right? Is it based on the fact that you know the amount of work that needs to be done wherever you are right now and that it is easier to underestimate the workload elsewhere?

Currently looking at my current situation, worked at the same place for 6 years. Of course there are days when I think that things are hard, and look at the fence and think that maybe it is better on the other side? But then again, I've worked at other places and I know that there are positive and negative to be said of pretty much every job.

So, should I take a risk and jump to something new or stay and put in the workload needed to optimize the current situation. I know that a lot of people advocate a job-change every x months but I'm starting to disagree. Of course if you want a big jump in your salary that is probably the only way to go, but there is so much more to life than just money. A little strange to write that sentence on a blog focusing on investing etc, but hear me out as its not that contradictory in the end.
What I've been advocating is for people to stabilize their economy, start paying themselves first, paying off debt and start to save and invest for themselves. It has in the end not that much to do with getting rich, if that is what you want then by all means jump jobs and maximize that paycheck. But what I am after is quality of life, I want security and in the end be able to retire much earlier then 65. And for that you don't really need to maximize the paycheck, even if that would help.
If you work hard on getting on top of your personal finances, that debt you paid off will result in a bigger return per month then most job-changes and after that it will just escalate when that cash flow is put in investments instead.

In the end of the day, a bigger paycheck but lack of discipline will not get you closer to richness.

Of course there are things out of our control that can change the path that we are on, there are situations that would make me change my job, but at the moment it is not the pay (always open for suggestions tho :))

The same goes for investing, I am currently focusing on 2 companies and they are doing great. But from time to time, I get the feeling that I should own other companies as well. But my current strategy involves a focused portfolio and I really haven't found anything else that fits so well. So lets not rush into something that cannot be controlled and keep to the strategy that is in place.

In conclusion, don't rush into change, the workload is the same if not bigger on the other side. But if you have worked your butt off to maximize your current situation and there is nothing more to gain, then by all means go look over the fence for additional challenges that could improve your situation.

I don't really know if any of the above made any sense. It is getting late, 0125 in the night and I am watching the Oscars. So I'll blame my ramblings on that :)
Until next time: Work to Live, Don’t Live to Work

Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.

Update, week 5 of pulmonary embolism recovery

picture of my training room setup, update week 5 of pulmonary embolism recovery
Picture of my training room setup. Bike, trainer, computer for Netflix etc.
For the full story see:
An abrupt reminder of mortality.
Update, week 3 of pulmonary embolism recovery
Update, week 4 of pulmonary embolism recovery
Update, week 5 of pulmonary embolism recovery
Update, week 11 of pulmonary embolism recovery

So up to 100% work week this week. It went pretty good actually. I think I was a little extra tired on Monday to Wednesday, but other than that it went pretty good.

On Thursday everything felt good until I sat in the car back home when I started to get a little pain in the lungs, most probably thanks to grocery shopping moments before. I had planned a cycling session for the day so I was in a really bad mood when I came home. First bad mood based on the situation, so far everything has gone quite smooth so I was not expecting a hiccup. After 2 hours of rest I did the cycling session anyway. And it went well. Up to 16 km/h for 15 minutes.

On Friday, I decided to do another session, this time with a little bit higher effort level. Ended up breaking sweat and 18 km/h for 20 minutes.

On Sunday, the first 60 minute session. Average speed 12, but anyway. Feels good.
Bought compression socks this week, and using them after each session as I feel that blood has a little harder to move up from the legs. Maybe that was the cause for this all after all even if they didn't find anything at the hospital. So taking the precautionary route.

All in all, week 5, according to plan. I still try to take it quite easy, not pushing anything because I don't really want a relapse.


Why I write this

I don't write this to feel sorry for myself or whatever. Just to share an experience, maybe ease for someone else that has the same diagnosis. You don't have to be old to get this, I am myself 33. I've always categorized this as something to look forward to when I get older. But life is full of surprises and luckily we humans are capable of adapting :)

Until next time: Work to Live, Don’t Live to Work

fredag 17 februari 2017

Update, week 4 of pulmonary embolism recovery


For the full story see:
An abrupt reminder of mortality.
Update, week 3 of pulmonary embolism recovery
Update, week 4 of pulmonary embolism recovery
Update, week 5 of pulmonary embolism recovery
Update, week 11 of pulmonary embolism recovery

Back to work then. This week at 50%, meaning I can go home at lunch and take a nap. Something that I really needed to do every day. So, I am happy that the doctor wrote 50% on this week. Next week I guess will be even harder when it goes up to 100%.


Had some real progress this week. Sat 15 minutes on the trainer on Tuesday, average speed up on 11 km/h compared to 9 the week before and 20 at the same pulse interval normally.
I.e. the limit I have on myself is less than 105 bpm and get off when it starts to feel any tiredness at all.
Normally I use this for endurance training, for at least 2 hours as current endurance level according to strava is < 113bpm. This has probably changed a little now, hence 105. But compared to normally I only manage about 15-20 minutes before I feel something, normally I could go on for hours as it doesn't put any real load on the body.
Other progress is that I don't get out of breath, but too much load causes pain.

Wednesday, went for a walk to the third road sign (about 600m) and back. Did not have to stop, had some pain afterwards so body is not OK but its on the right path.

Thursday, on the trainer again. Up on 12 km/h for 15 minutes at the given pulse interval until I start to feel a little. The feeling originates from my back around the lung area. Not pain, but tiredness, hard to describe.

So a lot of progress this week. Slowly going forward. Next week is back at work 100%, hopefully I'll manage :)

Put my beloved mountain bike on sale this week as well, so if you live in southern Sweden go have a look.


Why I write this

I don't write this to feel sorry for myself or whatever. Just to share an experience, maybe ease for someone else that has the same diagnosis. You don't have to be old to get this, I am myself 33. I've always categorized this as something to look forward to when I get older. But life is full of surprises and luckily we humans are capable of adapting :)

Until next time: Work to Live, Don’t Live to Work

torsdag 9 februari 2017

Difference in how companies handle a CEO leaving

woman taking a photo of mountain, difference in how companies handle a ceo leaving
During the last 12 months some Swedish companies have changed their CEO. It's normal, and it happens. One would think that companies have a plan on how to handle a situation like this but it seems a little different depending on the company. Lets look at some examples

Atlas Copco

On January 16th, 2017, Atlas Copco announced that they will split their business and moments later that their CEO Ronnie Leten will leave the company and be replaced by Mats Rahmström.
To me it seemed like the board of directors had a plan, the current CEO didn't like it and left and the board found a replacement and the announcement was made as a whole. Total time for shareholders to wonder about management of the company? 0 days.

Ericsson

On July 24th, 2016, Ericsson announced that they kicked out their CEO Hans Vestberg on the day and that  Jan Frykhammar would be interim CEO.
On October 26th, 2016, announcement was made that Börje Ekholm would be the replacement. 3 months of unease for anyone holding Ericsson.

Cloetta

24 August 2016: David Nuutinen steps down as CEO and that Danko Maras would be interim.
Danko Maras is still at writing moment the interim CEO. So where is this going?

SEB

16 Jan 2017, SEB announced that Annika Falkengren would leave the company within 6 months.
08 Feb 2017, the announcement came that Johan Torgeby would step up and replace Annika. Total time, 3 weeks and during that time the old CEO still continued to work on.

Conclusions?

Some companies are prepared and have started looking at things already before they happen as the case seems to be with SEB where rumors say that the grooming had already started a while back on Johan Torgeby. So when the announcement came that Annika Falkengren would step down, it was no big stretch to find a worthy successor.
In the case where the board wants to make drastic changes, and they prepare it and the current CEO humbly steps down as he's not committed to the plan and the board finds a replacement before the announcements begin. Cudos. Nice work.
For the companies that have it rougher, Ericsson in this example, just did not seem prepared.
And Cloetta in this case, it seems like I don't know. Is the interim CEO doing a so good job that he will be the next CEO? Or can't they really find any replacement? It leaves a lot of questions on how the management environment really is at the company. They give a really polished look outwards, but all public companies do that. I guess we will have to wait and see.

Until next time: Work to Live, Don’t Live to Work

Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.

Update, week 3 of pulmonary embolism recovery

girl with headphones look down the road, week 3 of pulmonary embolism recovery

Third week at home, thought I'd write an update.
For the full story see:
An abrupt reminder of mortality.
Update, week 3 of pulmonary embolism recovery
Update, week 4 of pulmonary embolism recovery
Update, week 5 of pulmonary embolism recovery
Update, week 11 of pulmonary embolism recovery

The first week

First week went to napping and reading about OpenGL, something that I've tried to write a little about on my coding page. I was really tired and out of breath. Daily walks to the closest road sign (about 200 meters) and back. Really slow walking, out of breath when going just a little too fast. Back home, had to take it easy for a period to get back to normal. Overreaching results in blood taste and pain in back/lungs.
Had a long talk with a nurse from the hospital about Xarelto and how it is supposed to work. Evidently I get a higher dose the first 3 weeks and then it lowers a bit. Really nice to talk about it with someone that actually took their time to explain.

Second week

Had a revisit at the hospital on Tuesday, really out of breath and a little blood taste walking from the parking lot to the doctors office.
Asked my doctor and he said that I should try to activate myself but keep it under the limit of overreaching. Easy to say, hard to do as that wall comes with no warning. One step is OK and the next is out of breath alternatively pain. He extended the sick leave with 1 week 100% and then another week 50%. Told me to not take amlodipine anymore and go check blood pressure again next week.
End of week 2 I managed 2 walks per day to the first road sign.

Third week

Things are starting to go better. On Monday I decided to sit on the bike (on the trainer) for 10 minutes. Really really really slow, like pulse around 100 bpm. 

Wednesday, off to check blood pressure (evidently you have to book a time slot in Sweden to do this). 120/85 compared to 160/110 when I got the medication at the hospital. So off those pills at least.
20 minutes real slow on the bike. Felt good. Not overreaching. Still tired but, a lot better. Nice to see progress.

Today (Thursday) I walked 3 times longer then last week. so 600 meters and back (3rd road sign). It wasn't fast and had to stop 200 meters from home as I felt pain and out of breath. So even slower home, but I made it. Tired now afterwards, probably lie down a bit. Lets see if there will be a penalty for this later today or tomorrow.

On Saturday Xarelto will lower to once per day, so I guess its a bit less risky to get papercuts from there on :)

Plan for next week

Back to work at 50% for one week and then 100%. At the time of writing this sounds doable, the original plan to go back 100% on week 3 would have ended in a disaster.

Why I write this

I don't write this to feel sorry for myself or whatever. Just to share an experience, maybe ease for someone else that has the same diagnosis. You don't have to be old to get this, I am myself 33. I've always categorized this as something to look forward to when I get older. But life is full of surprises and luckily we humans are capable of adapting :)

Thanks for reading

måndag 6 februari 2017

When I upgraded my Scott Speedster 30 from Tiagra to 105

Scott Speedster S30 105 converted, POC helmet and Haglöfs Corker backpack

One year ago exactly I found a nice price for a Shimano 105 group (60% sale) and decided it was time to upgrade my Scott Speedster from the Tiagra that had gone 7000 km.
So I thought 'how hard could it be' and placed the order. Luckily I had almost all the tools needed to perform this operation.

The stripping of a work horse

Scott Speedster S30, without wheels in repair stand
Scott Speedster S30, without wheels in repair stand

This part went pretty fast. Some parts were quite stuck and needed a little extra work with the help of a rubber hammer on the tool, especially the pedals. As you can see I should have replaced the bar tape ages ago.

Scott Speedster S30, frame and handlebars only
Scott Speedster S30, frame and handlebars only
Totally stripped bike. Only the frame, handlebars and front fork is left. Time to clean it up, really rub away all the dirt that was stuck.
I actually hadn't replaced the chain either during those 7000 km, so the cassette and chain rings were quite married to it at this point.

Build it up again

So, now that all the old stuff was removed it was time to assemble the new components.
The shifters really took some time to figure out and a lot of youtubing, evidently they had changed the design a little and until I found a clip that described how to do it... Well, after I found out how I really felt stupid, it was quite simple in the end. Shimano does not seem to ship assembly instructions with their components, only a paper that a certified mechanic should do the assembly. So when you get stuck, it takes some time to find the correct instructions. This happened mainly for the shifters.

First issue
The front derailleur that was included in the kit was not the type that can be clamped around the tube. So needed to order a replacement. A week went by.

Second issue
Tube cutters (cable housing cutters), really, buy the specially designed tool for this, otherwise.... Well its just easier with the correct tool. Ended up with a cheap one for €5 and they do the job. So much easier then trying to use normal wire cutters.

Third setback
How did I miss this? I went from a 10 speed group to a 11 speed one and didn't think of the cassette fitting the rear wheel. So, when I tried to mount it there was 1.8mm missing on the body. So it was time to upgrade the rear wheel. Sadly I had bought the old wheel just 6 months earlier. But, oh well. Sometimes you just have to pay for your own stupidity.
Placed the order, expected delivery 4 days. But for some reason DHL decided to ship the wheel to Norway and it got stuck in customs there for 5 weeks until they sent it to the correct country. At this point the spring season was starting up and I really wanted my bike ready to be able to cycle to work instead of taking the car every day.

Finally when it arrived I was able to assemble the rear wheel, get the rear derailleur working. Something extra that I recommend is to fit in a barrel adjuster for the front derailleur, otherwise you end up needing tools every time you need to tighten the tension, something that happens with new wires.
Scott Speedster S30, converted to Shimano 105 drive train
Scott Speedster S30, converted to Shimano 105 drive train
I really like how the black Cinelli Mike Giant Handlebar Tape fit the build, and the stylish black chain ring and crank arms.

All in all what I thought would be a weekends work turned out to be 7 weeks with all the delays. But in the end, it was worth it. The feel of the 105 drive train is just so smooth. Even now one year and 2 chains later it is just the best. I promised myself to take better care of this new setup so now I change the chain every 1000 km and cassette every third chain, so cassette replacement is coming up in a month or so.

Useful videos


Cat tax

Thanks for reading, here's a picture of a very tired Prime (10 month kitten).

Until next time: Work to Live, Don’t Live to Work

torsdag 2 februari 2017

My current plan, 2017 February

Woman holding a smoke flare and smiling

A lot has happened since my last plan update in January.
So how to tackle this all, by not doing a single thing other then following my plan. And still, my plan holds. This month I was tested as the bank stock was at its highest since I started buying, but as the plan states I shall buy shares every month until something better comes along... That is what I will do. But yes, this month it was a small psychological battle. But good to see that I made it :)

The news about the world being in turmoil should not affect my plan other then give opportunities and forward I will look at the report period that is coming to see if anything catches my eye. I.e. being better then the two I already hoard.

So my sick-leave was prolonged to 3 weeks in total and 1 week halftime after that. So I will have all the time in the world to read reports and look at that kind of stuff.
Also, I've been thinking a lot on mortality, and unexpected things happening and wrote a little about keeping all the paperwork up to date in case something happens.

On a happier note, the dividend payout from the bank and candy manufacturer is up to 1 extra deposit per year after 2 years. Meaning that if I put away say $20 per month (fictive number), the dividend payout for this year is $20. And that feels great, there is actually some progress in this. Last year it was a third of that.

Lets finish this post off with a video of one of our cats, Pixel (2.5 year female) playing in the sofa.


Until next time: Work to Live, Don’t Live to Work

Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.

The importance of paperwork

Woman holding mobile phone over paperwork on a table

Dreaded paperwork. Why do we need it?

Mostly you do not. But when things go bad in life, a partner that leaves, a business partner that tries to maneuver you out or a death in the family.

I've experienced all three either personally or from the sidewalk when it happened to someone close to me and boy did I/they wish that the paperwork was in place when things started to roll in an unexpected direction.

The private partner part

Not the most romantic discussion with the person that you want to share your life with, but being open about the possibility of things ending (for various reasons) should be part of a successful relationship. And in the end it should mitigate a long lasting court battle if the end is not on good terms.
Also, if things end, make sure that you directly update paperwork on your part that your partner is no longer your partner. This is something that people tend to forget and things can take a quite ugly turn depending on life situations etc. Especially if you happen to die. It is no fun feeling if an old ex tries to get part of the inheritance by saying that they were still together when you died.

The death part

Another topic that people try to ignore. We are all mortal and are going to die one day. It could be today or in 80 years, no one knows for sure. And that is the reason you should think of this already when you are starting out in your twenties. Make sure you have documents on who should inherit the few belongings that you have managed to get. And then to revisit this documentation at a given interval and at bigger life-changing events for example marriage, divorce, having children etc.
Another topic to have in writing is how you want your funeral to be, if you have a vision, write it down, write down what songs should be played what coffin you want. Do you want a tombstone? Be burried or cremated? If you do not write it down, your family will have to guess and in worst case there will be a battle of wills and people will become unfriendly.

One thing that is sure is that when someone dies, all old sins come into play. Unknown children appear, people find out they have more siblings then they thought. A lot of tension can build up and at this point, finding paperwork on how you wanted things to go will really help.

The business partner part

In short, I was young and naive and people tend to take advantage of that. I put in 16 hour days to deliver product for a company and I was promised a lot but no papers were signed.
Once the product was developed, the tone of my business partners changed and they would rather not share the profits with me.
So in the end, not the best deal in my life. Probably the worst and I learned a lot.
Even if you are at your workplace, if the management starts to ask you to put in a little extra to get whatever perks they are offering, make sure that it is in writing before you commit. In the end it shows your management that you want to do this, but you also want a commitment from their side before you start. If they are hesitant in doing so, then maybe you should be hesitant in doing the extra for free as well.
If you are in a startup, especially with a partner or two, hire a legal counselor to put the deal in writing so that there are no hiccups later on. If things go good, you know how to split the profits, if things go bad you should also know what is expected of every partner at that point.

Conclusion

Boring as it sounds, you should do the paperwork and make sure that it is in place before committing yourself to anything. Good paperwork should allow you to sleep well at night knowing that you are secure if your work situation changes and that your family and kids are taken care of if something should happen to you.

And make sure you get a legal counselor to look at and validate whatever documents you are about to sign, just to make sure that they are written in a way that conveys the message that you want to tell.


Until next time: Work to Live, Don’t Live to Work

Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.

fredag 27 januari 2017

How to pay off debt

Woman taking a picture of sunset at sea with her smart phone

This is a follow up on my previous post 'Reasons to avoid Debt'.
Say that you already are in debt and want to start taking care of it to get a little peace of mind, but don't really know how to do it. Here's some ideas that might help you.

Start paying off the smallest debts first

This way you will get rid of them fast, and also free up cash that in turn can be used to pay off the next smallest debt that you have.
I think that many people want to get rid of the big debts first as they are the ones that hurt the most, but it is hard to pay off more than you already do on them as the rest of your money is going to other loans.

Lets picture a scenario

Random person X has the following debts at the moment, not taking into account interest rates etc. Just calculated on X months left and how much it costs per month.
Appartment
Study loans
Car
Samsung Curved 65" 4K
iPhone 7 128 GB
€300000 €5000 €18000 €2000 €750
€800/375 months €60/83 months €350/52 months €166/12 months €62/12 months

As we can see, the living expense is the highest per month. After that comes the car. First ask yourself the question do I need to live in this expensive appartment or drive this expensive car?
If for any reason you answer no to any of the debts you have, get rid of the item. Buy a cheaper one, or not at all? DO you need a TV? :)

If you feel that you could downgrade:

  • Sell the item
  • Buy a cheaper one
  • Use whatever money is left to pay off the loan
  • Continue to pay off whatever is left on the loan.
Hopefully this tactic has cut of a couple of months on your payment plan.

If you need the things but want to pay them off quicker

Ok, So somewhere you need to get the extra cash to start paying off your cheapest loan, in this scenario the cellphone. If you can muster an extra €60 per month for a while by cutting other expenses you will have paid the phone in 6 months.
After 6 months, you have learned to live without that €60, and also freed up another €60 so you have €120 extra per month to pay off another debt.
Next small fee per month would be the study loan, but it has so long term left. At this point 77 months so lets focus on the TV.
The TV has 6 months left, but with the extra €120, you can pay it off in 3.5 months, so 4 months.
After that you have €286 per month to work with and we are 10 months in.
Apartment
Study loans
Car
Samsung Curved 65" 4K
iPhone 7 128 GB
€292000 €4380 €14700 --
€800/365 months €60/73 months €350/42 months - -

At this point you start to get options. I would recommend you to start setting up a savings account if you don't already have one, say €50 per month as a started, you still have €236 to pay off next debt with. So lets continue our scenario.
Study loans in 15 months or Car 25 months. Lets look at both

Option 1, pay the study loans first
After 15 months, you would up your paying power to €316 and then be able to pay the rest of the car in 14 months. Total of 29 months.

Option 2, pay the car first
After 25 months, debt paying power is up to €586. Study loans paid in 5 months. Total of 30 months.

So, I guess we will go with study loans first. So after a total of 39 months, 3 years plus some change you have paid all your loans but the apartment and should have 1450 on your savings account, not to mention the extra €646 per month that you can use to build up your buffer and start investing. You could also use it to pay off a bit on your apartment to minimize the risk if the house prices should turn down.


Be sure to read my series on how to stabilize your economy:

Step 1: Stabilize your economy
Step 2: Expectations and mindset
Step 3: Index funds

Until next time: Work to Live, Don’t Live to Work

Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.

måndag 23 januari 2017

Abrupt reminder of mortality

Woman holding headphones outdoors with green grass in the background

For the full story see:
An abrupt reminder of mortality.
Update, week 3 of pulmonary embolism recovery
Update, week 4 of pulmonary embolism recovery
Update, week 5 of pulmonary embolism recovery
Update, week 11 of pulmonary embolism recovery

So last week was interesting.
2 weeks ago, Friday I felt really bad. Didn't have any go in the body at all and got really breathless walking a few hundred meters from my car to the office.
I didn't think much of it, once at the office everything went almost as normal. A little out of breath but nothing that stopped me.
In the afternoon when I walked back to my car, the same out of breath situation came up. So I decided to take it really easy over the weekend.
Saturday, couldn't walk the stairs at home without getting out of breath.
Sunday, the same thing.
Monday, decided to stay home from work. Felt a little better.
Tuesday even better, a little out of breath still. Was able to climb the stairs without any bigger issues. Decided to go to work the next day.

Wednesday, totally out of breath walking from the car to the office. Halfway (halfway is around 100 meters...) I thought about giving up. Somehow I still managed to get to the office and decided to call a doctor. Got a time the same afternoon. Sitting still in my chair was no problems. Walking to the coffee-machine turned out to be a big challenge.
At four in the afternoon I drove to the doctor, who in turn sent me to the bigger hospital for x-rays of my lungs and papers that told me to stay at the emergency room afterwards to wait for the results. The first pictures didn't tell anything, the doctor at the emergency room decided to run a CT scan of my lungs as well. They decided to take me in over the night and rigged me up with mobile ECG unit. At around 1 a'clock in the night a nurse tells me that I have pulmonary embolism in both my lungs and that I was to receive a fragmin shot to prevent future clots. Needless to say I didn't sleep that much that night, at an age of 33 this was not the thing I thought I'd get. Maybe later but not at this moment.

Thursday, not much happens. Talk to a doctor, he tries to get a time for another CT scan but it has to wait a week. Need to stay at least another night for monitoring.

Friday. Get rid of the ECG unit and can move a little more freely.
Walk up and down the corridor really really slow. Get information that I need to start eating a medicine called Xarelto, for 6 months to start with and then they will do a study and decide if I need to eat it for the rest of my life. At least I can continue to work-out normally.
Need to stay another night, doctor prepares papers so that the weekend doctor can send me home during the weekend.
In the evening during routing check, nurse asks me if I tend to have high blood pressure and I told her maybe? Most times when they check I have over. Turns out I'll get pills against that as well, starting immediately..

Saturday, start with Xarelto . Doctor sends me home. On sick leave for 2 weeks.

So.. I don't know. Just feels like a really abrupt reminder of mortality. I don't think that I've managed to process the implications of this fully yet but for starters I need to decide if I'll continue riding my MTB or to sell it. Evidently head injuries are really really bad when eating blood thinners so probably not worth the risk. Maybe buy an adventure bike instead, just stay clean of the single-tracks from now on.

But first. 2 weeks of reading books, sleeping a little extra, taking it easy and posting cat videos online.

Thanks for reading, here's some cat-tax:

For an update after 3 weeks go here.

Until next time: Work to Live, Don’t Live to Work

söndag 22 januari 2017

Get out of your financial comfort zone

Woman with heads on her head in the desert during daytime

this is where the magic happens.

When training and you stay in your comfort zone, the gains you gain will not be anything but average. But when you make that extra effort and move outside of the comfort and into the pain then the results follow automatically.

And it is the exact same thing with your personal finances as well.
If you always do whatever you always do, the results will be the same as your previous results. It takes a little extra effort to start building financial freedom. But when you do take those steps outside of your comfort zone, the results will start to follow.

If you feel that you want to make a kick-start into your financial future, then look at what to cut away from your daily/weekly/monthly spending habits.
Even if you only cut the things for a couple of months, the extra momentum you gain will pay of in the long run (by the power of compounding)

So, just to get started. Try cutting some of the following for some months and automatically transfer the cash to your investment/savings instead and see for yourself what happens.

Some ideas of things that might be worth cutting
SEK
Spotify 100
Netflix 100
HBO 90
Amazon Prime 60
XBOX Live 80
Lotteries 120
Daily News Paper 250
Cable TV 400
Strava Premium 85
Total 1285

The prices above are in SEK as that's what is visible to me. But USD and EUR estimates are just a division by 10 away.
We have some of the things above, some people that we know have them all and they don't know where their money go.

So, try cutting some of the items above, maybe you don't need all of Cable TV, Netflix, Amazon Prime and HBO at the same time?
Can you cut out the lotteries for some time so that you can actually save some money so that you can start investing instead?
And do you read your daily news paper, or could you do it online just as well?

In the end, it does not look like a lot of cash but if you have the daily news paper for a year it goes to 3000 SEK. (roughly $300)

But you want to watch TV, right?
Your choice, stay in your comfort zone or do something drastic to start seeing results. :)

And when you start to see results, it may be OK to back away into your comfort zone again. But who knows, it might be in a new place.

Be sure to read my series on how to stabilize your economy:

Step 1: Stabilize your economy
Step 2: Expectations and mindset
Step 3: Index funds

Until next time: Work to Live, Don’t Live to Work

Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.

tisdag 17 januari 2017

Your problems are yours to solve

woman holding led lamp net in front of her face

A little rash title but really. They are your and yours only to solve.... :)

How often have you heard a dialogue that goes something like this:

Person 1: I have this big problem that stresses me out and no one is doing anything about it
Person 2: OK, have you tried to...
Person 1: No, it's no use... Because this and that prevents me.

I am really tired of hearing these kinds of reasoning from people and nowadays I tend to just walk away. I don't want to get dragged into the negative spiral.

Don’t waste your energy on things you can’t change. Walk away from toxic people and hopeless situations.

So what can you do to prevent yourself from being that lost cause that people walk away from?
Some steps to follow in situations like the above:

Create a Plan

Create a plan on how to tackle a problem, if it is a bigger problem then break it into smaller sub-goals. Once you see that the step to start making progress is small, it becomes easier to take it.

Act on the plan

When you start to work on the problem, people around you will react, you will start to receive feedback. Both positive and negative.
By nature, feedback is always good. If you want to do something great you need to listen on the feedback you get and make decisions on how to respond or not to respond.
If the reactions are negative, but you are sure on your thing. Ignore them.

The reason why feedback is good is because it means that people are noticing that whatever it is that you do, is changing something that impacts them.

Re-evaluate your goals

Actively evaluate the effort you put in towards the end goal.

If the struggle is still worth it 

Continue with your plan.
Winged words from a video game meme:
If video games have taught me anything, it's that if you encounter enemies, you are going the right way

If it is not..  

It is OK to stop. In that case you have tried something, learned a lot and gained experience. So in the end you walk away with gains that can be used in your next project.

The key here is to stop wasting energy on the issue if you cannot change it. Don't blame it one someone else.

Let go gracefully and focus on your next project.

Workplace

If the issue is at your workplace, initiate a dialogue with your manager. If your manager is the one that is negative towards your goals... then you have the choice to work elsewhere. This is your choice and you can make it. There is nothing more toxic then working at a workplace where you do not have your own manager holding your back. Just find something that suites your goals better. 

Cat tax bonus

Thanks for reading. I hope this helps someone out there. 

Until next time: Work to Live, Don’t Live to Work

tisdag 10 januari 2017

My current plan, 2017 January

cat lies down and relaxes, furry paws
Happy New Year!!!

A really lazy start of the year, as it should be...
The holidays are over, work is back to normal and this months investment went into my favorite candy company.
Why the candy company? It just felt that right...
My choice each month is either the bank or the candy company or find something more profitable. For the last few months the choice has been the bank, and now it was the candy company's turn just to keep some resemblance of balance between the two.

Last year was a good year, the money invested during the year also managed to grow 9,95%. So now to look forward to this year.

In a few weeks the annual report season starts (at least for me, some companies I guess have already started). Be sure to read up on my Annual Report series for ideas to keep in mind while reading the reports.. You are reading the reports yourself and not just some speculative analysis? Right?


Lets start the year with a video of 2 of our cats fighting or playing.. hard to tell sometimes..
At the time of the video, Prime (female) was 6 months old and Tiger (male) 2 years.. They love to fight each and every day.. Sibling love.
Since the video, we have renovated that room as well, so no more yellow wallpaper. The header image of this post shows the new wallpaper, and Tiger.. : )

Until next time: Work to Live, Don’t Live to Work

Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.