Tuesday, May 20, 2008

Income CAGR

There is an interesting article over at Free Money Finance on income growth.


It suggests a strategy for growing your income, based on the authors twenty years of experience. The strategy can be summarized as follows

  1. Get a professional qualification.
  2. Actively manage your career.
    1. Ask for raises
    2. Promote your work and contributions, especially to your bosses
    3. Outside of work, expand your skills and contacts
    4. Switch to higher paying jobs
    5. Don’t settle for the initial offer in any negotiation
  3. Turn your hobbies into income
  4. Spend less than you earn and utilise the power of compounding growth.
I was pleasantly surprised to find that, without any specific intention, my strategy over the last ten years, has been almost identical to the authors. The only minor differences being in professional qualifications (Mine is a CISSP not an MBA) and CAGR (Mine is 24% not 13.78, although mine is measured over 10 years and not 20).

Though I did not have the specific intentions his strategy suggests, I did have the goals of retiring early, earning a "large" salary (which I eclipsed three years ago and replaced with a new goal) and now my more ambitious goal of attaining NZD 1,000,000,000!

My strategy can be summarized by this simple statement.

Set goals and when you reach them, set new and more ambitious ones.

If you enjoyed this post Bookmark it at del.icio.us

Wednesday, March 05, 2008

Net Worth - March 2008 + $138,201.15

I have been incredibly remiss in updating this blog. The only excuse I have to offer is that since January 2007 I have been planning (and saving) for a wedding! I have still been tracking my Net Worth and my plan to get to 1 Billion NZD is definitely still on track, although I forsee rocky times ahead unless I fine tune my strategy.

Discretionary Funds NZD 9,651.17
Credit Cards/Loans NZD 21,165.22
Loaned NZD 1,193.28
Wedding NZD 13,015.30
Mortgage NZD 1.00
Bond NZD 2,697.38
Holiday NZD 7,423.98
Car Value NZD 18,559.95
Sub Total NZD 31,376.84


Buffer NZD 38,760.68
Gold NZD 2,684.21
Property Equity NZD 2.47
Stocks NZD 65,376.94
Sub Total NZD 106,824.31


NZD 138,201.15

As you can see below I have met and indeed exceeded my goal to grow my existing capital by 20% each year. However this target this is going to become exponentially harder to hit as my capital grows, and my income contributions shrink in relative terms, as for now my investments aren't growing at a sufficient rate to meet my goal.

However all is not completely bleak, as I have manged to grow my capital a healthy 117% from December 2006.

If you enjoyed this post Bookmark it at del.icio.us

Socialise This