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Chitchat discussion: passive income
- Thread starter SNTCK
- Start date
$120k a year until my kids graduate from uni and join the workforce.
so what is your portfolio size? 3 million?
My passive portfolio is a mixture of rental income, stocks, bonds, perp securities. It's a good back up plan in case my business fails or I don't wish to work full time anymore. Size is confidential. But I would need $120k a year to meet expenses without touching the salary I draw from my business. So far so good.
i can probably live on 2k a month,in singapore or australia,minimalistically,frugally and happily.but i want to build a passive income of 500k to 1m a year just for the hell of it.so far the only legitimate Singaporean investor i know with a passive income of over 200k a year is AK71,whose been saving and investing for over 20 years.his passive earning power is mind boggling,20 years of frugal living,discipline saving and investing has clearly paid off.the amount of money pouring in from his dividends every quarterly is insane.he even has 400k in his ordinary CPF account and 200k in his special account,his passive income is in the top 5 or 10 percentile earners in singapore and his networth is probably in the top 1 or 0.5 percent.hes in his 40s now,i think by the time hes 60 his networth is probably going to hit 10 or 20 million at least.....all these from working two jobs and a average middle class income of 5 to 8k a month.didnt mention exactly how much but he said he used to work two jobs and earned mid to high 5 figures a year.
most amazing part about being financially free and a capitalist controlling large amounts of capital like warren buffet,how easy ur life looks,u can sit at home all day in ur home office in comfort,and read all day,finance and investment and economics books and prospectus and financial reports,and follow up on the news,and blog on ur investment blog and talk about investing and business,make a couple of trades a month,and watch the money pour in every quarter.what can be better than that?doing what u love and making a shit ton of dough profit.that is the power of capital......money makes more money,his 200k passive income is going to build more passive income,his capital is going to grow and grow from compound interest,its already large now but its going to be massive,i estimate his networth to be around 3 to 5 million now,if he continues what hes doing,in 20 years time when hes sixty something,he will be worth 16 million to 28 million,if he lives until 85 like warren buffet,i estimate his networth will be as high as 161 million.that is the power of capital and compound interest.like albert einstein said,compound interest is one of the most powerful forces in the universe,he who understands it earns it,he who doesnt pays it.
most amazing part about being financially free and a capitalist controlling large amounts of capital like warren buffet,how easy ur life looks,u can sit at home all day in ur home office in comfort,and read all day,finance and investment and economics books and prospectus and financial reports,and follow up on the news,and blog on ur investment blog and talk about investing and business,make a couple of trades a month,and watch the money pour in every quarter.what can be better than that?doing what u love and making a shit ton of dough profit.that is the power of capital......money makes more money,his 200k passive income is going to build more passive income,his capital is going to grow and grow from compound interest,its already large now but its going to be massive,i estimate his networth to be around 3 to 5 million now,if he continues what hes doing,in 20 years time when hes sixty something,he will be worth 16 million to 28 million,if he lives until 85 like warren buffet,i estimate his networth will be as high as 161 million.that is the power of capital and compound interest.like albert einstein said,compound interest is one of the most powerful forces in the universe,he who understands it earns it,he who doesnt pays it.
http://singaporeanstocksinvestor.blogspot.sg/2016/06/brexit-and-1h-2016-income-from-s-reits.html
BREXIT and 1H 2016 income from S-REITs.
Monday, June 27, 2016
My income from S-REITs in 1Q 2016 received an enormous boost from Saizen REIT's distribution which was partially a return of capital. I said I had mixed feelings about the matter and, actually, it has created another issue for me.
Cash as a part of my portfolio is now quite large.
Is this a problem?
Of course, keeping some excess money in savings accounts and fixed deposits is always a good idea. These are our war chests.
However, too much cash (earning too little) and we won't be able to keep up with inflation which is one reason why we invest for income. We want to beat inflation or, at least, keep up with it. We don't want to see our wealth eroding.
To be quite honest, I am in no hurry to re-invest all the distribution received from Saizen REIT in 1Q 2016.
Approximately, I received 8 years worth of "dividends" (in the guise of capital gain) at one go. So, I have quite a bit of time to wait for good investment opportunities.
In the meantime, some of my cash is in OCBC 360 and UOB ONE, with most of my cash getting 0.8% to 1.9% in interest income from savings accounts and fixed deposits which are virtually risk free.
However, being mortal (and fallible), I couldn't help but nibble a bit at some S-REITs in 2Q 2016.
1. Cambridge Industrial Trust. I have been holding to a much reduced position in this REIT for many years and in 2Q 2016 decided to make a small addition to my position at 52.5c a unit.
To be quite honest, I feel that AIMS AMP Capital Industrial REIT is probably a more attractive investment. The two REITs have comparable yields but AIMS AMP Capital Industrial REIT has a stronger balance sheet and a business strategy that leaves less to the imagination.
However, I decided to go with Cambridge Industrial Trust this time because my investment in AIMS AMP Capital Industrial REIT is already quite big.
2. I-REIT Global. I only became an investor after some time from the IPO which I thought wasn't attractively priced enough and I added to my investment in the REIT last August at 65.5c a unit.
I decided to nibble at 71c a unit in 2Q 2016 because even at that price, the distribution yield is still pretty attractive. I also like the REIT for its portfolio of German freehold office properties and their high quality tenants.
If BREXIT should spark a contagion, I would become a lot more cautious in adding to my investment in the REIT as its income is in Euros although having real estate in Germany, arguably Europe's strongest economy, I feel that there is some degree of stability.
3. Soilbuild REIT. I decided to add to my investment in the REIT which has seen a large decline in unit price due to issues with one of their tenants, Technics Offshore Engineering, which did not pay their rent.
The REIT has since been paid the firm's bank guarantee of $11.85 million by UOB. This is equivalent to 18 months of rental and it will give the REIT time to search for a new tenant.
In arriving at a price which I am more comfortable to buy at, I noted that the rent payable by Technics is almost $8 million a year which is about 10% of the REIT's revenue of $80 million a year.
Assuming the REIT is unable to find another tenant after 18 months, without taking into consideration other costs, DPU would decline by 10% accordingly. So, happy with the distribution yield at 73c a unit back in December 2015, with the latest development, I decided that I would only add to my investment at 66c or so a unit.
Together, these nibbles used up less than 10% of the distribution I received from Saizen REIT in 1Q 2016. I think it is important to put them in perspective. They are really only nibbles.
S-REITs are leveraged income instruments. So, it won't be wrong to say that I remain wary as to how rising interest rates in the future could impact distributable income negatively, all else remaining equal.
There isn't anything retail investors like me can do but to be more conservative when it comes to debt and investments which depend largely on debt to bring home the bacon especially if growth is not particularly promising.
However, thanks to BREXIT, interest rates are likely to remain low in the near future and the most disadvantaged in the financial world are probably still the savers. In the search for higher yields, S-REITs are natural beneficiaries.
So, how much bacon did I receive from my investments in S-REITs in 1H 2016?
S$ 397,294.28
S-REITs remain relevant instruments for the income investor and I will continue to keep an eye on them, buying more of the ones I like if Mr. Market should go into a depression.
BREXIT and 1H 2016 income from S-REITs.
Monday, June 27, 2016
My income from S-REITs in 1Q 2016 received an enormous boost from Saizen REIT's distribution which was partially a return of capital. I said I had mixed feelings about the matter and, actually, it has created another issue for me.
Cash as a part of my portfolio is now quite large.
Is this a problem?
Of course, keeping some excess money in savings accounts and fixed deposits is always a good idea. These are our war chests.
However, too much cash (earning too little) and we won't be able to keep up with inflation which is one reason why we invest for income. We want to beat inflation or, at least, keep up with it. We don't want to see our wealth eroding.
To be quite honest, I am in no hurry to re-invest all the distribution received from Saizen REIT in 1Q 2016.
Approximately, I received 8 years worth of "dividends" (in the guise of capital gain) at one go. So, I have quite a bit of time to wait for good investment opportunities.
In the meantime, some of my cash is in OCBC 360 and UOB ONE, with most of my cash getting 0.8% to 1.9% in interest income from savings accounts and fixed deposits which are virtually risk free.
However, being mortal (and fallible), I couldn't help but nibble a bit at some S-REITs in 2Q 2016.
1. Cambridge Industrial Trust. I have been holding to a much reduced position in this REIT for many years and in 2Q 2016 decided to make a small addition to my position at 52.5c a unit.
To be quite honest, I feel that AIMS AMP Capital Industrial REIT is probably a more attractive investment. The two REITs have comparable yields but AIMS AMP Capital Industrial REIT has a stronger balance sheet and a business strategy that leaves less to the imagination.
However, I decided to go with Cambridge Industrial Trust this time because my investment in AIMS AMP Capital Industrial REIT is already quite big.
2. I-REIT Global. I only became an investor after some time from the IPO which I thought wasn't attractively priced enough and I added to my investment in the REIT last August at 65.5c a unit.
I decided to nibble at 71c a unit in 2Q 2016 because even at that price, the distribution yield is still pretty attractive. I also like the REIT for its portfolio of German freehold office properties and their high quality tenants.
If BREXIT should spark a contagion, I would become a lot more cautious in adding to my investment in the REIT as its income is in Euros although having real estate in Germany, arguably Europe's strongest economy, I feel that there is some degree of stability.
3. Soilbuild REIT. I decided to add to my investment in the REIT which has seen a large decline in unit price due to issues with one of their tenants, Technics Offshore Engineering, which did not pay their rent.
The REIT has since been paid the firm's bank guarantee of $11.85 million by UOB. This is equivalent to 18 months of rental and it will give the REIT time to search for a new tenant.
In arriving at a price which I am more comfortable to buy at, I noted that the rent payable by Technics is almost $8 million a year which is about 10% of the REIT's revenue of $80 million a year.
Assuming the REIT is unable to find another tenant after 18 months, without taking into consideration other costs, DPU would decline by 10% accordingly. So, happy with the distribution yield at 73c a unit back in December 2015, with the latest development, I decided that I would only add to my investment at 66c or so a unit.
Together, these nibbles used up less than 10% of the distribution I received from Saizen REIT in 1Q 2016. I think it is important to put them in perspective. They are really only nibbles.
S-REITs are leveraged income instruments. So, it won't be wrong to say that I remain wary as to how rising interest rates in the future could impact distributable income negatively, all else remaining equal.
There isn't anything retail investors like me can do but to be more conservative when it comes to debt and investments which depend largely on debt to bring home the bacon especially if growth is not particularly promising.
However, thanks to BREXIT, interest rates are likely to remain low in the near future and the most disadvantaged in the financial world are probably still the savers. In the search for higher yields, S-REITs are natural beneficiaries.
So, how much bacon did I receive from my investments in S-REITs in 1H 2016?
S$ 397,294.28
S-REITs remain relevant instruments for the income investor and I will continue to keep an eye on them, buying more of the ones I like if Mr. Market should go into a depression.
so now you in Australia or Sg? i maximum only 20k dividend per year.
sg of course,iv barely just started,only got 16k in my portfolio.
what stocks are u invested in?
sgx, ste, dbs,ocbc, HL finance, singtel,UOI, semb corp, keppel corp, sti etf, comfort delgro, PEC, thai beverage, stamford LD,capitaland.
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US shares all very expensve now. wait for they drop first
sg stocks are not known for their capital gains but are strong dividend payers.so if u can find a couple of strong sg reits with solid balance sheets and good cashflow to sustain their dividend payouts and a decent dividend yield,u got a good cashcow and a keeper for the short to intermediate term.p/bx is a good indicator for when to sell for capital gains.
That's quite a big portfolio......
What he does isn't rocket science. What baffles me is the low numbers of sinkies who are doing something similar to what he did, especially the educated ones. I have talked to some friends and co-workers about passive income, and they usually brush me off, saying that they are not interested or are too busy with work. I am not an insurance salesman or selling them anything. I was just telling them that they should buy some stocks that they could collect regular dividends from. Now, some of them regretted it because they are stuck in jobs they hate but they can't quit because of mounting family expenses.
PAP has been helping sinkies with passive income for years with CPF. But that won't do much good if sinkies keep wiping out their cpf accounts to pay housing loans, instead of taking advantage of the power of long-term compound interest provided by the cpf.
Many years ago I recommended Apple shares to a friend, back then it was something like US$100 to $150. Gradually the price increased to US$700 & then split by 7 & now Apple is paying dividends. You would have enjoyed capital appreciation and dividends. So what appears "expensive" is actually reflecting the potential of a share
Apple is an extreme case but people who are investing $ in US stocks do make money. It is of course harder now with the recession.
Other things to consider are market liquidity & strength of SG$. During the financial crisis there was panic in the market & you couldn't sell any Spore or Malaysian share because people chose to hold onto cash. However in the US market there were still people buying & selling.
I'm not sure whether the current foreign exchange value of the SG$ can be sustained by the weak economy?
Many years ago I recommended Apple shares to a friend, back then it was something like US$100 to $150. Gradually the price increased to US$700 & then split by 7 & now Apple is paying dividends. You would have enjoyed capital appreciation and dividends. So what appears "expensive" is actually reflecting the potential of a share
Apple is an extreme case but people who are investing $ in US stocks do make money. It is of course harder now with the recession.
Other things to consider are market liquidity & strength of SG$. During the financial crisis there was panic in the market & you couldn't sell any Spore or Malaysian share because people chose to hold onto cash. However in the US market there were still people buying & selling.
I'm not sure whether the current foreign exchange value of the SG$ can be sustained by the weak economy?
i bought and sell my Bank of America and apple and facebook share before.
very volatile and not much dividend.
Maybe in the past things were ok, but Spore is getting too expensive. So REITs that rely on Spore properties are probably going to suffer.
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