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The AK passive income strategy after making $1m.

Thursday, October 20, 2016

It has been a fortnight since I announced that I was taking a break from blogging. Time flies.

Does this blog post signify the end of my break? No lah. I am still on a break. AK is lazy.

This is just a short note to say AK is lazy but still alive. (Wink, wink.)

The first thing I want to do is to share a very thoughtful message from a reader. I could tell that it is from the heart and not just lip service:

Thank you for the empathy and well wishes. I truly appreciate it and will (try to) take good care of myself.

After all, why have passive income if we don't spend more time doing the things we want to do?

I should be working because I want to and not because I have to. Right or not?

Warren Buffett said this about the importance of having passive income before:

"If you don't find a way to make money while you sleep, you will work until you die."

There is no way in the world lazy AK wants to work till he dies.

Hmmm... OK. How does this sound? 

I have been enjoying myself watching K-drama, spending time pottering around in my planter, tending to my aquariums, eating right (most of the time) and exercising (but not as frequently as a few months ago). 

My shrimp tank.

Yes, economically not very productive. Terrible!

Bad AK! Bad AK!

What? Investments?

I haven't done anything, really.

For a while, I was loading up mostly on DBS but since my last blog post, I have kept the status quo in my world of investments.

Easy thing to do, doing nothing, you think? With the help of anti-itch cream on itchy fingers, maybe so.

For me, it might be easier to do nothing than most because I have an anti-itch cream called "ample dividends".

Not just "dividends" but "ample dividends". Well, I think it is ample to someone like me, anyway.

I have such a cream because most of my investment portfolio built over the years is made up of investments for income. 

Unlikely to give me a heart attack, these investments generate regular and meaningful income for me. Enough to cover my routine expenses and more, they allow me to go about my business of being lazy with less worry.

What? Being lazy is not a business? OK, you win.

My fish tank.

So, does AK really have no plan at all when it comes to investments?

Well, I honestly feel that I don't have to do anything to grow my passive income further.

Of course, I cannot buy a Richard Mille watch or a Ferrari car at the drop of a hat (Why would I want to do that, anyway?) but I am financially quite comfortable now, I feel.

Source: HWZ.
Singaporeans are the most interested in passive income...

However, if I want to grow my passive income further, it should not be growth at any price which is a mistake many people make, including moi. It should be growth at the right price. 

Now, what is the right price? 

Uh oh, that sounds like quite a bit of work, doesn't it?

An easy way to get around having to do more work is to buy on a dip or a correction in prices. All else remaining equal, there will be greater safety buying on the back of a 10% or 15% decline in prices. Right or not?

I don't know. 

I anyhow talk to myself.

If prices don't decline, it is OK for me too. I will just accumulate more cash in the meantime. 

Remember what Charlie said? 

There are worse things to do than to sit on plenty of cash.

Finally, I plan to max out the CPF Annual Contribution Limit in the next 10 years (till I turn 55) by doing more Voluntary Contribution as I no longer have significant Mandatory Contribution.

This will ensure that the risk free and volatility free investment grade bond component in my portfolio stays at a meaningful percentage.

With a focus on passive income generation, mine is a strategy that gives me peace of mind and it makes me happy.

Related posts:
Made $1m investing for income.
2. Revisiting a simple strategy.
3. Instant gratification of yield.
4. AAA rated sovereign bond.
5. Having peace of mind.

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