The business is progressing well but we are facing an uphill task in scaling the business. We had a new customer test our sample and immediately placed a large on-going monthly standing-order. We were elated and made all arrangements to be able to fulfil the on-going monthly standing order. On the day the first order was dispatched, the customer let us know that they found an alternative (not the same product but different product that does the job for them) at cheaper price and that they will not be needing our product at all. We were devastated but we have to move forward.
Vangaurd account is now fully empty, we are diverting a tiny portion of our savings (i.e. 5% of our after-tax savings) towards our Betashares Direct auto-pilot account. The rest of the after-tax savings is still going into IBKR. I was quite positive about my trading account in my last networth update post, however that was April! In the next two months, NVDA short blew my account into smithereens raking up double-digit negatives for two consecutive months, returns posted in the image below. It was painful but it was entirely of my doing. Following the blow-out, as a cathartic exercise I decided to reduce size of many shitcos I was bagholding including the BBUS and BBOZ.
I had to take stock of the situation and slowed down. And started the process of re-building which also involved letting my partner know that I screwed up big time. Progress is slow; hopefully I will maintain this rhythm and momentum. I am quite far away from re-couping the losses (returns posted below) but capital preservation and rhythm is important. I am also long VIX and IWM with December expiry.
I was trying to diversify into another boutique fund based out of Europe. We were unsuccessful earlier in the year and went on the waiting list. Early September, slots opened up again and this time we were successful. I wanted to rebalance funds from two different boutique funds to make way for this third fund. I learnt through this experience that withdrawing from any boutique fund is a lengthy process involving atleast 10 working days. And that access to ready cash is very helpful when you need that “bridging” when re-balancing with time constraints.
Below is our networth index chart. Compared to a year ago (i.e. October 2023), the index has grown from $2246 to $2531, a modest 12% growth.
For reference, our portfolio consists of,
I had not realised this, but our networth has been growing at the rate of approx. 30% 1 year on year. This is not trading returns but growth of our networth due to our savings from yearly income, returns from our investments, etc. That is surprising to me because we have not done anything ground-breaking to achieve this. All we did was, tracked our spending, savings and investments, ensured we don’t spend more than we earn and finally saved as much as we can, thats about it. The power of KISS principle (“keep it simple stupid”), I suppose.
Self – sustenance ratio
Our self-sustenance ratio is on track to reach 100% by July 2025. The drop you see in March 2024 is because of adjustment to living expenses to account for inflation and rising costs. For readers who are not familiar with the ratio, I have explained and introduced the concept of self-sustenance ratio in one of my previous blogs.
Until next time.
- I am expecting YoY growth % to keep decreasing in the future due to law of large numbers. We can sustain this level of growth-% only if we can somehow increase our income at a faster growth-% YoY, which is highly unlikely. ↩︎