One’s investment plans depend upon one’s stage of life.

 Take me – reasonably fit and certainly enjoying a state of health way beyond what I deserve; with a nickname in my business life of ‘Sir Lunchalot’, that probably says it all.

 So, at 71, I am not interested in long term growth. My actual horizon is 10 years because by then I will either be playing ‘rugby in heaven’ or have lost interest/contact with ‘hands on investing’.

 But I am blessed with enough shekels in the bank to generate enough return to cover day-to-day expenses, plus enough spillage to take good holidays, if I am prudent. And that is my investment goal along with capital preservation which also takes inflation into consideration.

 Expanding on this, I need to generate stable income which accommodates the cycle of the market, and that means some diversification.

 With that said, short term share price fluctuations in the marketplace are immaterial to me, provided that, I am invested in companies which

·       have a true market,

·       are generating cash profits and not paper profits,

·       who are well led and

·       are not over-indebted (which my definition is net debt to equity of 25% or less).

 Plus, because I can live on the dividend stream, I am never required to sell shares (at possibly an adverse time) to fund lifestyle.  

 Yes, one needs EPS growth to equate or better the inflation rate (I assume 5%) and with companies paying dividends required for my yearly income model, I also look for a retention of a minimum of 25% of the earnings per share. Over time the market will recognize this increase in book value, and so capital preservation is almost assured. The kids and grandkids will, of course, approve of this.

 This rambling is probably only of interest to me, but those who are younger than me understand that, as surely as the train will make the final station, you are following me.

 I’m now able – with the benefit of age and some experience – to determine the stages of one’s life.

 There are the ‘young years’ – followed by the ‘selfishness and vanity of youth’ (and they are bloody good and fun), then one gets married and is immediately in ‘Struggle Street’ with kids etc. Over time one experiences success and easy money and so the ‘Wanker Years’ have begun where spending is capricious and usually on the toys of life. Good grief, if I had learnt the lesson that a car is simply an A to B proposition irrespective of the car, I would have saved hundreds of thousands of dollars! But, I was a boofhead!

 Then one retires and enters the ‘Less is More’ phase of life where one contemplates the silliness of the excessive Wanker Years and appreciates the simplicity of the abundant beauty which is to be found everywhere and surprisingly it doesn’t cost that much. It’s a good place to be, though no one takes any notice of you, whatever your success in a past life.