I am trying to make a complete personal investment dashboard for myself. Not sure if there are products out there, but I prefer one that I can personalize. Nothing fanciful in terms of look and feel, but one that can help me see almost all aspects of my investment the way I want it. I know a bit of Python coding, so I am looking at creating it through some Python magic for the purpose of scenario planning.

Here is the big idea. Thinking and penning it down as I clarify my thoughts.

The pain point? My investment is everywhere. Not that they are substantially large, but they are just bits and pieces everywhere. I have a spreadsheet that I can manually update the details. The main gist is that I know how my wealth allocation is like across different risks factors. More low risk and very little high risk. This way, even if there is a dip in crypto, for example, I won’t panic sell. Just stay chill and let market recover.

But that is not enough. I need to systematically know how far I am away from my target. Some of you who read my past posts know that I set USD 10000 a month as a retirement sum to withdraw every month ten years from now. That is a lofty target for myself. But I think it is a worthy goal to pursue.

And planning is important.

So I first start with that figure and calculate how much is needed to accumulate. Something like $10K = Total asset value divided by 20 years x 12 months, as a simple calculation of how much I will need to reach, supposing I live for another 20 years and I draw $10K every month. I will need to have $2.4 million in 10 years’ time.

That seems daunting. But we need to save for a time when we have no income. So there is no looking away.

Next, figure out how much is the total asset value as of now, and list down where they are invested. There is also a need to estimate how much of fresh funds through work will be put into this pool of wealth. Plenty of messy data, but we need to get a handle on them.

Then there is an issue of projecting how these values will unfold over time, over the next 10 years. Tracking monthly should be sufficient.

Let’s think through the process through some plotting of values.

Assuming current asset size of $600K, a total of $2.4 million would mean that it is compounding at 14.87% yearly interest.

This is assuming I can find an investment tool that yields 14.87% on a yearly basis for 10 years. Probably a far shot.

But don’t forget the income through my day job which I can commit to save say $1000 monthly to be put into investment or savings. With no annual interest, my growth of the pot looks like the one in green.

If we assume a 4% interest yield per year, even with the $1000 monthly savings, it is not enough to reach even half the 2.4 million target in 10 years as shown on the red line.

As it turns out, the kind of ROI needed to reach 2.4 million in 10 years is 12.87% with the monthly savings of 1000 injected.

With these different scenarios plotted. It is clear that I need to find investment that can help me reach 12.87% per year, and/or save more than $1000 per month.

The workings on paper will help me decide how to allocate my risks to increase my chance of reaching the final goal.

More on the thought process of the risk allocation next time!

#inleo @leofinance

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