The Peeps Fund is my own private “hedge fund” and these quarterly updates are where I track my progress. In the second quarter of 2017 I topped off my CD position and made some stock purchases.
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 the quarter but will stop adding after this since I have enough to maintain my goal of 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 Walt Disney Co (DIS), Johnson and Johnson (JNJ), British American Tobacco Plc (BTI) and Becton Dickinson and Co (BDX) in this quarter. I still have quite a bit of cash above my buffer amount here and am looking for opportunities to deploy.
Alternative Investments – The alternative space is for private investment deals that I can make which I consider based on the risk to reward ratio. I have deployed capital in another urban mining investment this quarter. This should conclude in the next quarter and I am hoping to add to this investment then. The funds I had at the last quarter for alternative investments, I ended up putting it in my capital market portfolio. Although all the cash is not depleted I have managed to increase some holdings as seen in the previous chapter.
For Q2 of 2017 cash and capital markets are moving in the wrong direction 😐 I need to go back to the plan of allocating investment capital to the alternatives section. I need to start doing some serious research to find instruments to invest this money into so it does not sit idly in the account and get allocated to another area again.
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 second quarter of 2017, the fund earned US$1,409.84. This was a mixture dividends from stocks and ETF’s, interest on a maturing CD and a small amount 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 53.6% of my FI number. I have passed the half way mark significantly now. I am hoping the fund starts to contribute more to help on the journey since it has been said the second half is usually easier than the first. Only time will tell so we will see how it goes.
How are you doing at the mid year point on your 2017 financial goals?