The Peeps Fund is my own private “hedge fund” and these quarterly updates are where I track my progress. In the first quarter of 2017 I continued to add to the CD position and also made some small stock purchases. I also increased my allocation to alternative investments in this quarter.
The Peeps Fund is separated into three broad based segments –
Cash and Equivalents – Cash and equivalents are CD’s only. I continued to add to the CD’s in regular increments over the quarter. My goal is to have a 20% allocation to cash and equivalents in the fund.
Capital Markets – The capital markets section is divided into stocks, bond and the cash I have set aside to make these investments. I managed to increase my stake in BP Plc (BP) in the quarter and also add a new position – British American Tobacco Plc (BTI). My cash was reduced a bit in this quarter but I still need to do some further work on reduction there.
Alternative Investments – The alternative space is for private investment deals that I can make which I consider based on the risk to reward ratio. The second urban mining investment concluded in this quarter. I have allocated the funds from the concluding investment to re-invest in the upcoming quarter along with adding a bit to principal. I have increase my position to this category by adding my available cash to increase this segment in the portfolio.
The first quarter of 2017, I was able to reduce my allocation to cash and capital markets by allocating most of my new investment capital to the alternatives section. In the short term I will continue to add capital to the alternative investing space to increase my exposure.
Income is generated by the investments in the Fund. I track the income generated even though it is all reinvested. It is presently comprised of dividends and interest and while it is not huge now I expect it to grow significantly over time. All the reporting on income is done net of fees and taxes – only what I actually receive into my account.
In the first quarter of 2017, the fund earned US$1,233.13. This was a mixture dividends from stocks and ETF’s, alternative investment payout net of fees and a small amount of interest on uninvested cash.
Progress towards FI
Based on wikipedia financial independence is the state of having sufficient personal wealth to live, without actively working for basic necessities. My financial independence is not just for necessities but my personal lifestyle choices which is a bit more than a basic necessities budget. With that in mind and based on the rule of the 4% withdrawal rate, I have created a minimum number for me to consider myself financially independent. This is the minimum my Peeps Fund needs to achieve.
My progress towards FI is moving in the right direction. In this quarter I managed to reach 50.7% of my FI number. I am super excited to be at the half way mark. It has been said the second half is not usually as hard as the first half so I will be able to experience for myself and draw my own conclusion. I am prepared to work my way to the other side it does not matter how easy or hard the second half of the journey will be.
How was your first quarter of 2017, how are you doing on your financial goals?