My $1 Million FIRE Goal by 35: Year 3 Ikigai update

Summary

In this video update, the creator reflects on their ambitious goal of reaching $1 million in their investment portfolio by the age of 35. Despite setbacks from market crashes, global events, and personal decisions, they have made significant progress, now at 75% of their goal with $750,000. The creator emphasizes long-term investment strategies, such as holding diversified index funds, while balancing active income growth through business ventures. The video shares insights on the challenges, rewards, and philosophy behind the pursuit of financial independence, using a practical mix of financial discipline and personal passion.

Takeaways

• 😀 The goal of reaching $1 million in investments by age 35 was set in 2021, but external factors like market crashes and global events (such as the Ukraine-Russia war) have affected progress.
• 😀 By June 2023, the investment portfolio was at 45% of the goal ($450,000), but by November 2024, it has grown to 75% ($750,000), representing significant progress in 1.5 years.
• 😀 The key investment strategy focuses on long-term growth, particularly in diversified index funds, which have performed well after the market recovery in late 2023 and 2024.
• 😀 The goal of $1 million is framed as the first milestone toward financial independence, not the end goal. The focus is on creating long-term wealth through consistent, strategic investing.
• 😀 The portfolio excludes real estate, CPF Special Account, and Medisave balances, as these are not considered liquid or market-driven assets for the purpose of the $1 million target.
• 😀 While aiming for financial independence (FIRE) is popular, the personal goal is about 'Ikigai'—a life purpose that aligns doing what you love, what the world needs, and what makes you money.
• 😀 Diversification is key in building a successful investment strategy. The focus is on a combination of cash, stocks, bonds, CPF OA, and SRS investments, while also exploring other asset types as the portfolio grows.
• 😀 A major lesson emphasized is the importance of holding investments long-term and not chasing quick profits from individual stocks or high-risk assets.
• 😀 Active income, whether from a job, business, or side hustle, is vital for growing wealth. The advice is to shift focus from just saving to also boosting income through career growth or entrepreneurship.
• 😀 The journey towards $1 million is not without challenges, and even if the goal is not reached by age 35, it's important to stay committed to long-term financial goals and adjust timelines as needed.

Q & A

Why did the user set the goal of achieving $1 million by age 35?

The user set the goal to build an investment portfolio worth $1 million by 35 as part of their path towards financial independence. They aim to achieve $40,000 per year in income through a 4% withdrawal rate, which would allow them to live a semi-retired life, mainly focusing on content creation.

What factors hindered the user's progress toward their goal?

Global events such as the 2022 stock market crash, the Ukraine war, and supply chain disruptions had a significant negative impact on the user's investment progress, especially in the earlier stages of their journey.

What was the user's progress towards their goal as of June 2023?

As of June 2023, the user was only 45% of the way to their $1 million goal, with a portfolio value of $450,000.

What is the user's current progress towards their $1 million goal?

As of November 2024, the user has made significant progress, reaching 75% of their goal, with a portfolio value of $750,000.

How did the user achieve a 30% gain over the past 1.5 years?

The 30% gain came primarily from the recovery of their stock and ETF portfolio, which benefited from a bullish market in the second half of 2023 and into 2024.

What investment strategy does the user believe is the best for long-term growth?

The user advocates for long-term investing in diversified, broad-based index funds like the S&P 500 or MSCI World Index. They believe this approach minimizes risk and maximizes growth potential over time.

What is the user's view on the FIRE (Financial Independence, Retire Early) movement?

While the user initially set a goal akin to FIRE, they emphasize that their ultimate goal is not early retirement but achieving 'Ikigai'—a fulfilling life centered around doing work they love, are good at, and that generates income.

What does 'Ikigai' mean, and how does it relate to the user's financial goals?

Ikigai is a Japanese concept that means 'a reason for being.' For the user, it represents a balanced approach to life where they focus on meaningful work that brings personal satisfaction and financial stability, rather than just aiming for early retirement.

What advice does the user give to others about achieving their financial goals?

The user advises others to focus on both passive income (through long-term investments) and active income (through career growth or entrepreneurship). Diversifying investments and staying committed to long-term goals are key to financial success.

Why does the user exclude certain assets from their $1 million goal calculation?

The user excludes assets like their primary residence and CPF Special and Medisave accounts because these are not considered liquid investments. They only count investments in stocks, bonds, CPF OA, and SRS portfolios that are exposed to market forces.