CASE 1 cont'd part 2

Divide out your funds into three portions: 1 Active ie you working income. This should support your current lifestyle, ie pay your mortgage, car, kids' school fees, insurances policies, allowances etc 2 Passive, decide how much to set aside, and commit that this is the amount that you are not going to touch. You probably have 15 more years of active working, and by 60years old, likely your children would have gained or be in the process of gaining some independence off you. 15 years is not that long frame of time for investments, but certainly things can get done. Think long term, think big names, think of what companies or products will be (likely) around when you children kids reach your age. Look at the past 10-20year history and you might have some good clues to this. (I am not placing any names or making any recommendations here). CAGR of 15% i believe is achieveable if you believe in your convictiona and follow a set system. Crises will come and go. But we still see MCD, colgate, ST ENG, SATS, OCBC and even smaller caps like taisin, nam lee. Surely they must have something which allows them to withstand the "shocks". Let's give your CAGR a discount, say you do 10%, which IMHO is still respectable, from 45years to retirement of 62, your seed funds grows 5x. In other words, 200k becomes 1M, with no further input. The returns are higher, if you can afford to channel some active funds to you Passives to grow more Passives. And when you stop full-time work, the passives are there to supplement you lifestyle. 3. Emergency funds of 6-12 months use.