On Winning Survivor and Portfolio Construction

For those who don’t follow me on Twitter you may not be aware, but in April I was announced as the winner of Australian Survivor, and the $500k prize that comes with it. Obviously this was an incredible honour, and it’s hard to express how completely life changing this is for me. In the space of a few months I made almost 10x my annual salary, while also catapulting myself to D-list celebrity status with the opportunities that come with it. I’m extraordinarily lucky that I got into investing 4 years ago, as it’s positioned myself to be able to hopefully best utilise the winnings and set myself up for long term financial freedom with the right decisions. With regards to the Substack, I like to consider it an investing journal of sorts, a way for me to track my ideas and decision making while getting feedback from readers such as yourself. I figured here more than ever it would be worthwhile to present my both financial and life plan going forward, along with how this life changing money will and won’t change how I invest.

Life Plan

What’s incredible about this win is the double whammy effect of the opportunities that gaining this notoriety/fame open up, along with the financial security to pursue potential passion projects. I love finance, I enjoyed my job as a financial analyst but obviously like any 9-5 it’s a slog. I found myself frustrated by a lack of time and energy to pursue my many hobbies (music, sports, investing, writing, etc.). I’ve now been unemployed for 6 months and can comfortably say I have not gotten bored and I am loving it. Now I don’t plan to be unemployed forever, but I now have a lot more flexibility around my path forward, and am focusing on prioritising time and happiness over money.

So what’s my actual plan then? In the short term I’m hoping to focus on potential media opportunities. Whether it be another Survivor returnee season, or another TV show (or some other opportunity) I am hoping that I showed enough on my season as an entertaining character to potentially generate those sorts of opportunities. Any opportunities in this area would likely be highly income generative relative to time, but obviously very inconsistent. The second aspect of this plan is being able to focus a lot more time and energy on investing. With around $550k in savings, if I can generate a 10% annual return off that (a fairly conservative target that I would like to do much better than ideally) I can essentially work off a base of $55k pre tax. While obviously I want to be letting that money compound as opposed to using it to get by, as a base against annual spending of around $35k I would be very comfortable. My hope is to in the short term treat investing as my main focus, and supplement investment income with other fun potential opportunities.

As far as the medium to long term, it’s entirely dependent on how the first part of this plan goes. Maybe I’m able to get some sort of consistent media work and that becomes my long term career. Maybe I’m able to generate good (15-20%) returns on my money and I’m left in a position where I can live off it comfortably further down the line as a full time investor. I’m not banking on either of these two possibilities, but it’s fun to speculate. In reality I’ll probably go back to some sort of full time further down the line, but with reduced pressure to make a lot of money I will be able to focus on finding a job that maximises happiness.

Financial Plan

So what’s my financial plan from here? There has been a key shift in my mindset from wealth creation to wealth preservation. As much as in theory I should keep the aggressive investing style that has been proven to work for me, in reality I have life changing amounts of money and I think that demands a change in mindset. Firstly, for those wondering, I am looking to potentially purchase property, however I’m waiting for the Australian government ‘Help to Buy’ shared equity scheme to come in, as it significantly improves the returns for a potential first home buyer by essentially providing a 30% discount to the purchase price. Secondly, any property purchase I do make will have to make financial sense. I’ll be looking for properties with a base yield above the cost of capital (not including price increases, as you can’t eat unrealised capital gains) so I don’t need a lot of aggressive assumptions to make a reasonable return. This might seem tricky in a frothy Australian property market, but with the help to buy scheme I believe I can make it work assuming the property market doesn’t rise significantly in the next few months before the policy begins. The main question here is around financing, as I’m not currently working and don’t plan to, so obtaining financing will be tricky in spite of having enough assets to buy outright (buying outright isn’t an option as I don’t see IRR’s as strong enough relative to stocks. I’m only interested in property using debt).

As far as my portfolio I’ve put a lot of thought into portfolio construction. My main focus needs to be avoiding permanent loss of capital. However I need to balance that with not straying too far from my core style, and being able to make big swings with conviction when I find incredible opportunities. The balance I’ve found is a 10% cap on position sizing, with that position sizing based on downside risk. I will probably only look to have 1 or 2 stocks around that size if any, and most other stocks will sit under 5%. I also plan to have the majority of my portfolio pretty diversified, currently holding around 60 ideas in a broad range of geographies, sectors and styles, and actively looking for more. The important thing to note is that I’m not targeting aggressively high returns, a safe 10% would be totally satisfactory (though obviously my hurdle rate is much higher, more like 15% for most ideas).

While I’ve only deployed around half of my capital so far, to get an idea of my mindset I’ll share some of my positions. My largest positions are Volvereand Singapore Shipping Co at 10% holdings. I’ve detailed why I like these positions on Substack and Twitter, but I see both as incredibly cheap, with limited downside and in Volvere’s case a fantastic management team. I have multiple companies at a 3- 5% position size including Halyk Bank, an unnamed Singaporean Microcap I’m currently writing up, BGEO and CGEO (which I consider 1 position), and CCLDO (Cloudcare Preferreds). CCLDO is a great example of the type of ideas I want to hold, as a fairly safe 10% yield combined with a reasonable chance of being taken out 25% above cost. Some other ideas include my Japanese SAAS and deep value baskets at 5% each, a shipping basket at 3%, long/short Fossil Group notes and common stock at 3%, UK blinds company Colefax at 3%, and 1-2% positions in Taiwan Semi, Seritage Growth Preferreds and Net Lease Office Properties. These are all parts of a portfolio that I do believe offers attractive, above market returns in the long term with broad diversification. If you have any attractive ideas please reach out because I’m all ears at the moment.

Investing is one of my core passions, and one of the things I’m most excited about with winning Survivor is the increased time and money I can put towards pursuing this passion. I hope to be able to churn out more ideas over the next year so keep an eye out in your inbox, while I am excited to be able to spend more time enjoying my hobbies. Please reach out to me if you have any thoughts, advice or new investing ideas. I’m still only 24, and in a whole new world I never could have imagined, but I’m so glad I’m here.a