1) if you look at the performance charts with dividends reinvested, you may get a rising performance over a certain period. But,..

2) if you look at the performance charts purely on the nav value, the tendency is you will get a falling nav over the same period.

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The right growth chart or performance chart is as what you described in (1), with the income distribution reinvested. With the distribution/dividend included, it shows the actual value of your holdings, and thus its total growth/performance in percentage.

There are some sites showing charts on the nav price as you described in (2). As stated, the chart is based on the daily nav price. It may shows the daily increments of the nav price (which is equivalent to the "performance of the fund"), but this is accurate until the next distribution.

After each distribution, the nav price drops. Over a long period with many distributions, over multiple years, the chart based on the nav price would be relatively flat within a narrow band.

The chart in (2) is only good for a short period until the next distribution and not useable over a long period of several years. Best is to simply ignore and disregard these nav charts.

Do take note that the performance chart as in (1) may show a sudden dip after a distribution, but in the following days, the chart will be adjusted to show the correct daily increment/decrement after the distribution is factored in.

There 2 separate performance or returns that one should be aware of - investor's returns and fund's returns.

The investor's returns/performance is your personal performance, which as you had noted is influenced by the timing of the purchase into the fund and also its withdrawal.

On the other hand, the fund's performance is not affected by your purchases or withdrawals. So whether you partially withdraw by taking out the dividends or not, the fund's performance/returns remain the same.

(Unless of course you are a giant big whale and your purchases or withdrawals can affect the normal operation of the fund!)

Yes, from the 4th qtr of last year till a few months ago, some bond funds' effective interest rate were easily above 10%.

Here's a different thought to consider... are you ready to make it happen regardless whether you achieve the targeted figure or not.

Life style can be slightly adjusted to suit the financial means.

If solely focusing on a certain amount of money to reach, one might get cold feet to quit the working life especially if the income is good and the job is something you could perform with ease. Easy money, why closed the tap and stopped the flow?

The Art of Doing Nothing.

This post is not for everyone, especially those who are having an active lifestyle and finds sitting down boring.

So what is the living cost of being sedentary and one who dislikes doing anything as it is too much of a bother? Close to zero.

It is similar to asking what the fuel consumption of a gas guzzler when it is only driven 2 or 3 times in a month. Very low fuel consumption.

So the living cost of a retiree can be very low… if he is debt free, the only basic living cost is food (and his medical needs). When he was working, his expenses are mostly on the transport to his place of work, his car and house instalments, and his lunch, if it is not provided by the company.

The bulk of the monthly expenditure is on the car and the house. Once these loans are settled, the monthly expenditure is greatly reduced.

So to strive for early retirement, at an earlier age of 45 or 50 instead at age 60, everyone can to it if they set their minds to it. It is important to know your own true self and what you want. Do not let others determine the living cost.

Others may set a higher figure since the maintenance fee on their condo unit can be no less than two thousands, and then there are club memberships and other bills that they have to foot every month.

Their cost of their car’s wash and wax can even be higher than what I spend on food.

Once again, don’t ever ask how much it takes to retire. Determine the figure on your own. If you have to ask because you are indecisive… well, grow some balls and figure it out on your own.

Otherwise, you can select not to retire early and work till the mandatory retirement age.

By mandatory retirement age, I am writing for those “tah kung chai” or wage earners who are not running their own businesses or practises.

Needless to say, to retire, you need to be financially independence first. You are debt free and have savings to last you a life time.

My advice would be keeping your financial plans as simple as possible. Easy to comprehend, without needing an accountant to figure what are the assets, what are the liabilities and what are net savings.

Don’t be too taken up by the marketing talk of flexi housing loans and choose to finance your house 30 or 35 years. Keep it simple. If you want to retire by age 45, choose a loan tenure that you can fully settled by age 45 or several years earlier.

Be prudent in using loans. They come with interest. So borrow only what you need to close the shortfall. Don’t over borrow… as you will be paying more unnecessary interests.

In personal finance, there is no such thing as “leverage”. Leave this business jargon to where it belongs, in the business world.

To have savings or leftovers from the monthly salary, live within your means. Better still, be frugal and spend only a small fraction of your salary. The bulk of the spending should be only on the car and housing loans.

Live well below your means to have more savings. If the car and house is by any means a status symbol, set the status 1 or 2 notches lower.

Be reminded that the mandatory retirement age is set by society at large, not by you. It used to be 55, and it changed to 60 recently. You should set this retirement age as it is your life.

I find it abhorrence in not being able to retire as and when I wish to. The words “mandatory retirement” is an abhorrent as if we are robot ants born to perform a duty for the society to keep its economy and welfare ongoing.

And especially if you are one of those suffering tah kung chai in dead end jobs who have to act and respond accordingly to their employers’ whims and fancies, it is a wonderful unrestraint feeling of freedom to know that you are financially independence and debt free, and can walk away any time.

Do aim to have financial freedom as early as possible. Set yourself free from work.