Saturday, January 13, 2007

Looking Back - 10 years ago

The Festival of Under 30 Finances up at The Finance Journey asked the question "Where do you see yourself financially in 10 years?"

It started me thinking about my financial position and goals ten years ago (when I was about 30). 1996/1997 was an interesting time. Like the rest of ex-Japan Asia Hong Kong was experiencing an economic boom. Well paying jobs were plentiful. Housing prices were rising to levels never seen before (or since) and the share market was setting record highs. Hong Kong's reunification with the PRC was approaching.

At the time I was a young man in a hurry and feeling that I was watching the world pass me by. I purchased my second property (a small flat - not in Hong Kong fortunately) and thought that it would be nice to buy one a year so that I would have an even 10 by the time I was 40 (with mortgages to match). Ten was a nice round number - not something based on a properly modelled financial plan. I despised cash in the bank ("cash is trash" was a popular saying at the time) and kept all my spare money in the share market. Like many others I had dreams of making enough money to be able to quit my job and make a living from my investments. Exactly how I expected to beat the market and the professionals was not something I gave much thought to.

The Asian crisis did not put an end to my objectives. However, it did delay their implementation. It also lead to me spending a great deal of time thinking about my finances and my financial objectives in more detail. In effect the severe economic downturn (declining asset values, worries over unemployment) made me much more disciplined about my finances. Having got through the Asian crisis and done reasonably well since 1997, I also have a great deal of confidence in my ability to survive difficult economic conditions.

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