On mad hatter-billionaire-cryptocurrency denialists

And in other news, Howard Marks who co-chairs Oaktree Capital which boasts $99 billion in assets under management, has declared:
“In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it”.

See the full article on BusinessTech here.
Astounding! I guess Howard must really, really value the little pieces of paper that governments the world over print numbers on, which somehow results in them having intrinsic value?
“But they’re not real”, he goes on:
“People tell me these currencies are solid, because (a) they’re secure against hacking and counterfeiting and (b) the software used to generate them strictly limits the amount that can be created. But they’re not real,” he reiterated for a third time. ” Nobody has been able to make sense to me of these currencies.”
Ah. You can't make sense of them, so they’re not real. Wonder what he'd …

On the initial effect of my radical personal economic transformation

Its nearing the end of the 1st month after I plucked up the courage to actually implement all kinds of "radical personal economic transformation" ideas that had been brewing for months. For the main details of my practical implementation, see my post "On how to invest an extra R88,000 per year".
So is it working? Well, I thought I'd share this chart of my saving rates per month over the past year. For those who are interested, I track this kind of thing almost effortlessly in the single most useful financial freedom tool I have - 22seven.

In fairness, my July saving do include my SARS tax refund. Its critically important to reinvest, rather then spend, your tax refund. I'll do a detailed post on it later, but if you spend it, you pretty much wipe out the single biggest benefit that comes from the tax-free nature of retirement funding investing. Where are these savings going? See the post "On what ETFs I'm currently buying". Some savings will als…

On what ETFs I'm currently buying

Quick update today. Thought I'd share what ETFs I'm currently buying, and in what ratios, in my "conventional" and tax free portfolios. My plan is to later "profile" each ETF, and spend a little time explaining each ETF's role in my portfolio.

As you will see, I buy the MSCI World Index (DBXWD) as a part of both my conventional and tax free accounts. This "duplication" is intentional as I use the DBXWD as my primary "offshore" exposure vehicle and I want to target a combined 40% of my investments into the fund.

But I do need to admit a "tricksy secret" ... as a DIY investor, I rely heavily on what I consider is expert advice. I did not choose the portfolios myself...
My "conventional" portfolio is actually modeled on the Just One Lap "risky" tax free portfolio, but with the weightings adjusted slightly to reflect my preference (and confidence) in property. And to off-set my exposure to general top-40 indexe…

On the incredibly versatile emergency fund

Not everyone is in favour of an emergency fund, or at least not one in the traditional sense where you keep a fairly sizable lump of cash in an account that allows immediate access.  There are some valid arguments in favour of several alternatives - or simply not having one at all. If I recall, Mr Money Mustache wrote a post on how people worry far too much. I'll try and find it. 
One such alternative (which I'm a huge fan of if it suits your situation) is to plow any excess cash into your home loan (assuming your bank allows you to easily withdraw it again). This makes a lot of sense. You'll receive a guaranteed saving on interest on that money at a rate (usually prime+) that you could never match in a savings or money market account. And you have immediate and easy access to it. And if you never need it, you're killing your bond just that bit quicker.
Another alternative is to simply park any excess money in your unit trust or ETF accounts. In other words, basically jus…

On active vs passive investing

A short update to day, inspired by a recent article BizNews.Com

According to the article, as of the end of June 2017, the total assets held in South African ETFs come to just under R80 billion. That's just 5% of the unit trust industry, and, get this, considerably smaller than just one unit trust - the Allan Gray Balanced Fund which has assets worth R131 billion.
Yet during the first half of the year equity-based ETFs mirrored the JSE All Shares Index by returning 3.4% - 0.5% more than the biggest unit trust, which manged 2.9%. Yup, a buy-it-and-forget all-equity EFT effortlessly and cheaply outperformed SA's doyen of all unit trust funds. A fluke! You shout. Those expensive management fees that I pay for an expert to manage my funds pay off in the long run. After all, you get what you pay for, right? My expensive managed unit trust is obviously going to do better than your almost free el-cheapo ETF in th…

On how to invest an extra R88,000 per year

So the original purpose of this blog was to chart my accelerated financial independence journey. So time to dive into some of the good stuff.
The theory behind becoming wealthy is actually ridiculously simply. To paraphrase JL Collins, you only need to do three things: Earn as much as you can, but you don't need to be an oil sheikh. An ordinary middle-class salary will do very nicely.Spend less than you earn. This is the biggie. Preferably spend a lot less than you earn. In an ideal world, try and spend at most half of what you earn.Invest the difference in very low-cost index funds. Definitely nothing exotic (remember, if it seems too good to be true, it almost certainly is).It really is that simple. Do this over for a decade or two from the time you start earning, and you can be financially independent by your mid thirties...

My own personal savings rate was about 22%. That's pretty good - the "financial experts" estimate that you need to save at least 15% of your tot…

On investing in bitcoin

I am an enormous fan of JL Collins. I'm also a huge fan of Robert Kiyosaki and Pete Adeney (aka Mr Money Moustache). Together, these three people have defined my outlook on investing, management of personal finances and financial freedom. I happily credit Rich Dad for my modest success in property, Mr Money Moustache for inspiring my [reverse] midlife crisis and recent radical [personal] economic transformation agenda, and JL Collins for essentially defining my investment strategy (although this is somewhat still a work in progress).

So what has any of that go to do with bitcoin (yes, it’s supposed to be in all lower case)? Well, they are all, but especially JL Collins, advocates  of “don’t try and time the market”, “buy and hold”, and “Rand averaging”. I promise to come to the bitcoin bit soon. Bear with me while I lay the foundation.
Don’t try and time the market.
Nobody, and I mean nobody, can time the market. I'd be surprised if that's not a direct quote from Warren Buffe…