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2011 full year passive income from S-REITs.

Saturday, December 10, 2011

On 7 Dec, income distribution from AIMS AMP Capital Industrial REIT was received. It was also the final income distribution to be received from my portfolio of S-REITs this year.

Total income distribution received in 4Q 2011:
S$ 29,040.65.

Add this to S$ 75,785.49 received in the first three quarters of 2011, the grand total for the year 2011 is S$ 104,826.14.



I received more income this quarter because I made use of the weakness in the stock market to accumulate more units in selected S-REITs.

I have imperfect knowledge definitely and I can only try to do the best with what I know. I don't spend time asking questions which I cannot reasonably find answers for.

As many may already know, it was after much deliberation that I decided to share in dollar terms the passive income I am receiving from my investments in S-REITs. From the flood of comments I received in my last blog post on the subject, I guess readers do appreciate this candid sharing.

However, I doubt such a blog post serves any other purpose than to show what is achievable if we put our minds to it. The message is really simple and it is meant to inspire.

So, don't be surprised if I do not do another blog post like this in 2012 since I do not believe it would be more useful than this or its predecessors.



Once again, if you need a little encouragement, remember, if AK71 can do it, so can you! Bookmark this page if you think it helps. Add oil!

Related post:
$120k annual passive income from S-REITs next?



127 comments:

Hwang said...

AK, the number is IMPRESSIVE!

Sure you can retire without headache anytime now :)

AK71 said...

Hi Hwang,

Generating an amount of passive income that is as much or more than our earned income is just the first step to a possible retirement, I have discovered.

There are other obstacles to retirement from active employment besides not having enough money as no man is an island and decisions made will affect others around us.

I must admit also to wondering whether my passive income is really enough to retire on. I have to care for my parents too.

Recently, I wonder what would I do after retirement. I know people who retired rather young in life before they turned 40. Boredom is one thing they had to deal with. I have an idea what I might want to do but how sure am I?

So, headaches don't go away but take on other forms. This could be something for another blog post when I do retire. ;)

KT said...

haha my passive income for the year is barely $2000 from dividends..still not enough to cover my capital losses!

AK71 said...

Hi KT,

If we are invested for income, just make sure we get in at a fair price, sit back and collect. If prices should weaken, everything else remaining equal, look at possibly adding to our investments.

This is one reason why for a long time now I am no longer bothered by paper losses. They are meaningless to me as I am investing for income. They will only mess up my emotions if I dwell on them. ;)

Temperament said...

Hi AK71,
To me you are indeed a brave soul. My portfolio invested in Equity only amount to 30-33%. i presume you have a larger portfolio in equity. If not you are already a multi-millionaire. Now , don't be modest. Ha! Ha!
Cheers & Shalom!

Anonymous said...

AK,
$100K of dividend is gross! hehe
so much so that it is more than my yearly income.
Congrats and keep it going.
Rgds,
Rookie

la papillion said...

AK,

Ak ah Ak, you better wear fire retarding clothing because you might get flamed over such a post :) I can already smell the volatile fuel all over your post :)

I'm just 70% joking :) Aside from that, I think you did a great job :) If you can do it, so can we!

Serendib said...

Hi AK, congratulations are in order. Earning a passive income of six figures -and free of tax / CPF too! Would you care to give some idea of what % yield this is? just curious as I figure that a dividend stock portfolio would yield about 6-7% pa on average.

AK71 said...

Hi Temperament,

With the recent LMIR rights issue, I am more than 50% invested, for sure. I am probably closer to 70% invested now.

I look forward to LMIR being a major contributor to my passive income stream in 2012.

LMIR now joins AIMS AMP Capital Industrial REIT and Sabana REIT as my biggest investments.

I am not likely to make any big moves in equities in the near future unless I see compelling value to add to my long positions.

With the latest property cooling measures by the government, I am also looking to possibly buying a private residential real estate within the next 2 or 3 years at a much lower price. I will need to have cash on standby. :)

AK71 said...

Hi Rookie,

Thanks but nothing is set in stone. I can only do my best. :)

AK71 said...

Hi LP,

Will I get flamed for having such a blog post? I have absolutely no idea. I am just an innocent blogger, a frog in a well and a myopic one too. ;p

I guess this blog post is similar to your B.I.A.S. type of blog posts. I bochap the flames lah. Chill! ;)

Thanks for the encouragement. I appreciate it. :)

AK71 said...

Hi Serendib,

Thank you. :)

The distribution yields on cost vary from 7% to 17% per annum for the different REITs in my portfolio, depending on my entry prices and the DPU of the REITs.

Please excuse me if I would not reveal how much in average is the distribution yield for the entire portfolio. ;)

Yes, having tax free passive income is rather pleasing. :)

Serendib said...

Hi AK, no worries at all :-) the yields you are getting are impressive, looks like you timed your purchases well!

Anonymous said...

I'm speechless...

Drizzt said...

you may want to share the yield on cost of your major holdings and average price. I think most will be interested to know.

Alex said...

Hi, AK.

I presume that the capital needed to create that kind of passive income would be in the range between 500-800k?

Temperament said...

Hi AK71,
You are indeed brave. For me i am getting old already. Chinese saying: When you aged, you shrink. Physically it's definitely true. Our backbones do(Why? loss of calcium maybe)
When i first started at the age of 40, i put almost 90-95% of my money in equity. i told you before, i fall in love with the MR. Market.
Those were the days my friends.
i am still in love with Mr. market but in a "mellowed" way.
Shalom.

KT said...

Hi Ak, I bought Sabana during IPO, Aims when it was at 22 cents and STI ETF when it was at 3200 points. I have only $100k capital and already 35% invested. Unlike your war chest, I am skeptical abt Dollar averaging now when market looks like it could still go down further next year? I don't have much bullets la...

What's your thots into my situation? Appreciate any form of insights...thanks!

KT said...

Hi AK,

Congrats! Its indeed a great achievement to be getting >$100k in passive income from your investments!

May i just ask, how long it took you to achieve your goal? And if you have any tips for someone that's just starting out on the same journey.

Thanks!

Cheers,
KT

Ray said...

Hi AK, your avid readers will have guesstimated your portfolio worth so no worries abt not disclosing. What we are probably more curious is how you achieve this. You did disclose how the last crisis helped your assets worth but I m wondering is your day job paying very well or are you a average wage earner? I'm just wondering what else I need to do or change to do better. :)

Newbie said...

Hi AK,

Just curious, does this portfolio consist all of your stock counters or only the REIT holdings?

Anyway, congrats, the numbers look really good! Do you think there may be a risk of over-concentration in the REIT/property sector? Have you considered whether it is good to add counters from other sectors (e.g. telco, banks etc) to your portfolio?

Look forward to your views!

Anonymous said...

Hi AK,

Congratulations from a fellow REITs lover :)

Victor

INVS 2.0 said...

Hi Ak71,

As much as I am in a deep shock, I sense more comments will start flooding this entry of yours. :)

For $100k per year, I can use that to buy a Mercedes-Benz S-class on 5-yr loan and there are still many changes left to cover my personal expenses. :D

INVS 2.0 said...

...continued

Please continue to write more of such post in the future. Don't worry, we won't rob you. :D :D

It serves as an inspiration to spur us into action.

Compare to my little $1.5k per year, yours is like a mountain. :)

AK71 said...

Hi Serendib,

In a crisis, we could get very high yields on quality assets. I bought more first REIT at 42c and LMIR at 18c in the last crisis. I also bought heavily into HWT (now privatised) at 30c.

At one time, I also bought heavily into Suntec REIT at 90+c and divested most of the investment as it rose towards $1.50.

When MI-REIT recapitalised, instead of shunning it, I bought more at 20.5c and also took part aggressively in its later rights issue. I was awarded a large chunk of excess rights at 15.5c per rights unit.

That's all I can remember off the top of my head. Very high yields all.

You are right to say timing helps. With Sabana REIT and AIMS AMP Capital Industrial REIT now offering distribution yields in excess of 10%, I also added to my long positions.

I would like to add to my investment in Cambridge, First REIT and Cache Logistics Trust as well. Just waiting for a better entry.

LMIR's recent rights issue created a weakness which I believe to be temporary and I made use of the weakness to add to my long position as well. At 36c, it offers a distribution yield in excess of 9% and with low gearing to boot, DPU is more likely to increase than not.

AK71 said...

Hi Anonymous,

Thank you. :)

AK71 said...

Hi Drizzt,

I have never calculated the average prices of my investments. I record them as transactions. So, I could have bought into Sabana REIT 10x for example and each time would have its own distribution yield.

For Sabana REIT, I waited for 93c and 92.5c before I became vested. Distribution yield on these purchases is about 9.46%.

Sabana REIT: Initiated a long position.

I bought more as prices declined. Lowest price I paid for Sabana REIT is 86.5c for a distribution yield of 10.17%.

For AIMS AMP Capital Industrial REIT, initial purchases at 20.5c (now $1.025) has a yield of 9.75%. The rights units at 15.5c (now 77.5c) has a yield of 12.9%. I bought more recently at 95c for a yield of 10.5%.

For LMIR, those I bought at 18c have a yield of 18.1% now. The recent rights units at 31c have a yield of 10.5% while most of purchases over the years are between 23c to 42c thereabouts for yields of 14.17% to 7.76%.

I could go on but these three are my largest investments in my portfolio of S-REITs now.

AK71 said...

Hi Alex,

If you are lucky enough to buy some good quality, high yielding assets at rock bottom prices, yes, a $500k investment could possibly give you $100k in passive income a year but such occurrences are probably very rare. The last crisis was one such rare occurrence.

Depending on the kind of yields you are able to get, the initial capital would vary to give us $100k of passive income a year. ;)

AK71 said...

Hi Temperament,

I am forty this month. I have become more conservative and primarily invest for income now.

I depend on regular income distributions from my investments to "survive in the market".

I believe we have more in common than you think. ;p

AK71 said...

Hi KT,

For sure, I cannot tell you if the market has bottomed. If I can tell it has bottomed, I would be 100% invested. ;)

Since there is no way we can tell if it has bottomed, I would buy at major supports in case it has bottomed. However, I won't throw everything in, including the kitchen sink. That's the way I look at it. :)

AK71 said...

Hi KT,

Thank you. :)

You might want to read this:
Excuse me, are you an investor?

As for tips, I shared my thoughts in various blog posts before. Go to the right sidebar and look for the box that says "Passive income journey".

touzi said...

Congratulations...and Happy Birthday.

AK71 said...

Hi Ray,

That is a very good question and certainly more sensible than asking "Do you think everyone has the kind of capital you have?" ;)

Revenue:
I am an average wage earner, making mid 4 figures salary. I used to work very much harder and was rewarded with big bonuses. I also worked in the evenings and weekends in other capacities at one time. I was a very productive Singaporean. :)

Expenses:
I am also lucky in that my family does not need me to contribute in a compulsory fashion. I made a decision very early on in life to remain single and childless. I was, for many years, very frugal to a fault. Have tea with AK71 and read about the stuff I own and you will see why I say this. ;p

Investment:
Investing in properties and equities at the right prices helped.

Basically, I ran my life like I would run a business: increase revenue and reduce expenses and invest for higher returns.

Unlike a business which is to grow indefinitely, however, I am working towards winding up (i.e. retirement).

In the last two years, I have become less uptight when it comes to spending money. :)

AK71 said...

Hi Ray,

You might be interested in this:
Do you want to be richer?

Ray said...

I'm sure many of your readers will agree with me that u seem like a really nice guy. Its a loss for the female species that you decided you're not going to make urself available :)

AK71 said...

Hi Newbie,

Thank you. :)

This blog post is about income distributions I have received from S-REITs in 2011. Dividends and income distributions from other investments are not included.

S-REITs are easily 85% of my entire portfolio in Singapore equities now. Definitely, there are risks involved.

I have shared in various blog posts my thoughts regarding risks and you might be interested in this:
Risks, risks and risks.

Will I always be so heavily invested in S-REITs? I don't think so. There might come a time to divest.

Yes, I am looking at possibly becoming a shareholder of the three local banks. I am waiting for better entry prices. :)

AK71 said...

Hi Victor,

Thank you very much and I hope REITs will be good to us for another few years at least. ;)

AK71 said...

Hi INVS 2.0,

A Mercedes Benz S class? Not a Lamborghini anymore? ;p

No, I am happy with my Mazda2. Gone are the days when I was enamoured with expensive cars. Yes, the Mazda2 is the smallest car I have ever driven. Reliable and economical. Good enough. :)

The main reason why I did not want to share in dollar terms until recently was because I did not want to shock readers. However, as many kept asking, I gave in, for what it is worth.

The following blog post I did in May 2010 is still one of my favourites and is more meaningful, I believe, as it divulged my passive income as a proportion of my earned income:
Create more passive income with limited capital.

We should aim to create passive income to equal our earned income, ultimately. We should set our own pace and not be intimidated or demoralised by nay sayers.

If we want something bad enough, we will work towards it. :)

AK71 said...

Hi touzi,

Thank you. :)

Please visit my sponsors. That would be a great birthday gift for me.

Sorry, couldn't resist it. ;p

Wong mg said...

A very handsome figure that many are eagerly to pursue.

Wishing u continue to generate good money and health for the coming years and don't forget to share ur insight with us.

Thanks & Congrats

AK71 said...

Hi Ray,

Looks can be deceiving and that's not saying anything about people we "meet" in cyberspace. ;p

I am available but just not available for marriage. 8-D

AK71 said...

Hi Wong,

Thank you for the encouragement.

I will continue blogging as long as I still have the time and inclination to do so. Of this, I am certain. :)

Ray said...

1) Its ur bday today?Happy birthday!

2) Well, you are a very eligible bachelor then! :D

3) I echo the sentiments of other readers, pls continue to share your insights, most importantly foresight so we readers can benefit too :D

AK71 said...

Hi Ray,

1. Not today but very soon this month. Thanks. Visit my sponsors hor? ;p

2. Depends on how you define "eligible". Haha.. ;)

3. Hindsight, I have plenty. Foresight is rather iffy. ;p

INVS 2.0 said...

Hi Ak71,

Yep, you are qualified for a lambo at this figure. :) At $120k means your passive income is $10k/mth, a wishful sum for many average employees.

Well, well, I am glad my NS has ended. Time to look for a decent job and start feeding my portfolio some real $ before I go Uni. :)

AK71 said...

Hi INVS 2.0,

I thought you were the one thinking of a Lamborghini. ;p

I don't like Lamborghinis. Anyway, if I were to buy a car in the same price bracket as a Lamborghini, my annual passive income has to equal the price of one for me to feel comfortable enough about buying one. I don't think that will ever happen. ;)

Yes, now that you remind me, you have not even completed your studies. That you already have $1.5k in annual passive income from equities is impressive, therefore. I didn't have that when I was your age.

I didn't even know what was passive income. "Income can sleep one meh?" hahaha... You have an advantage over most of your peers, I dare say. :)

Anonymous said...

Hi AK,

Thanks for your post. It's an inspiration to folks like me :)

I guess I have no choice but to get my butt off the chair and start doing something about my future too, as you have shown that it can be done!

Merry Christmas to all!

Tree

AK71 said...

Hi Tree,

If you are inspired, then, this post has achieved its objective. :)

Yes, if AK71 can do it, so can you. Merry Christmas! :)

Anonymous said...

Zoole:

Hi AK, I've been an avid reader of your blog for a long time, and have always found your thoughts on REITs sound and wise advice. But now I feel you're inspirational!

AK71 said...

Hi Zoole,

I try to share sound ideas and I also hope I am wiser as I turn 40. There is no guarantee, however. So, please don't take anything I say as the Gospel truth. ;)

I am glad you feel inspired and I wish you the best as you work towards financial freedom. :)

INVS 2.0 said...

Hi Ak71,

My $1.5k is after 90% invested and only on 2 REIT counters. How risky it is! But I guess that's how I should go and slowly spread my money into more REITs when my portfolio grows. :)

AK71 said...

Hi INVS 2.0,

I remember a comment from you in one of my older blog posts where you eloquently defended your investment in REITs. ;)

With a small capital base, how diversified could you get? Haha.. I am a realist. I don't get drunk on theories. ;p

INVS 2.0 said...

Hi Ak71,

Yep, I still stand by my decision because my REITs are not risky, but the size of my investment vs available savings for emergency. :/

They say don't put eggs into 1 basket, how about 2 baskets? :)

Singapore Man Of Leisure said...

I happy for you AK!

Not many local "gurus" who charge "sharing" fees can match your passive income ;)

I am drawn towards your practical, feet on the ground, speak in simple english kind of sharing.

You don't talk above or down at me.

And to return the favour, I treat you the same whether you are earning $50,000 or $100,000 in passive income.

I will still poke you if you fall asleep at the wheel.

LOL!

Yihhtan said...

Hi ak71,

Congrats. I,m also 40 same as you but my passive income is just about 9k this year. Hope to catch up with you.

Keep up your blog.

Hapy birthday & Merry x'mas!

Ray said...

Hi between AIMS, First and LMIR reits, which one do you reckon is currently a good buy? I think First is not cheap while the other two are ok. Can share your thoughts? Cheers

AK71 said...

Hi INVS 2.0,

Well, it would depend on your definition of "basket".

Some would say that S-REITs belong to one basket. Haha.. ;p

AK71 said...

Hi SMOL,

I remember Cory telling me in LP's cbox before that if we have a good career, we do not need to have passive income.

What is a good career? Perhaps one that pays $300,000 a year? That would just qualify for the UOB Infinite Card. ;p

I don't know about the "gurus" you are referring to but perhaps they make $300,000 or more every year from their seminars, book royalties etc. Adam Khoo has more millions than I could dream of and he is younger than me too. :(

I am glad to have your stamp of approval in the way I am sharing my little big ideas. My desire is to reach out to as many people as possible through my blog, encouraging them to work towards financial freedom.

I want to impress upon anyone who is skeptical that it is possible to be financially free and although it might seem daunting, they have to start somewhere. Now is as good a time as any.

To anyone who is already on their journey towards financial freedom, I am just a fellow traveller. All of us might be taking different routes but we have the same destination in mind. It is always interesting to compare notes. :)

Yes, if I should fall asleep at the wheel, poke me. I appreciate timely wake up calls. ;p

AK71 said...

Hi Yihhtan,

All of us have different circumstances. We have our own challenges and advantages.

So, all of us should set our own pace. The important thing is to keep at it and not give up.

Thank you and Merry Christmas. :)

AK71 said...

Hi Ray,

I like all three. There, the ball is now in your court. ;p

I think First REIT's fair value is about 80c. So, 76c is OK. I would like to buy more at 75c and 74c but if I were not vested already, I would buy some at 76c.

AIMS AMP Capital Industrial REIT in my opinion is undervalued at 95c but so is almost everything in the stock market now. ;p

LMIR, I recently had a blog post which says that it is currently too cheap to sell. You know what I say about selling at a price you would not buy at and buying at a price you would not sell at?

Anyway, it is your call and you have to be comfortable with being vested in these REITs. That is important. You must also be mentally prepared that prices could go lower.

If you are not comfortable, then, it is probably wrong for you. :)

Calvin said...

Hi AK71,

Great numbers. Like you, I have been pondering if I should release my actual numbers for the year. Readers have been asking me how much rental and dividends I get monthly/yearly.

Anyway, great stuff, its a combination of shrewd savings, investments in properties and stocks which got you to where you are today.

Very good encouragement for everybody to know anybody can do it!

Calvin
http://www.investinpassiveincome.com

SnOOpy168 said...

Congrats AK & happy birthday (that makes 2X december babies here).

Seriously, it will be nice for the wow factor to publish the dividends in $ sense. Up to your comfort levels and we do appreciate this and your frequent blogging.

To the few others who felt miniturized by AK's dividend income figures. Don't be and I am in your shoes too. He started over 10+ years ago, I start almost 2 yrs ago. With different start up budgets and savings rates.

Already within this humble period, I have seen my div income rose from a mere tens to almost 10k. I have AK to thanks for the insights and blogs, of things that my broker wouldn't have told me otherwise. (he is always complaining the REIT has no liquidity - that becoz he can benifit only if I trade, not via dividends incomes).

I do find this phase amusing and true ".....single and childless." Very true.

Huat ah & Happy belated birthday.

AK71 said...

Hi Calvin,

Personally, I am a very private person and very few people know my real identity. Even so, it took me a long time to finally do this.

You have revealed who you are in your blog. So, you might have more at stake and whether you would reveal your passive income in dollar terms would depend on how comfortable you are with the idea, of course. :)

If I were to make a guess, I would say your passive income is much more than mine since you are collecting rent from property investments and like you said, the leveraged yield is much higher than REITs'. You are definitely savvy in using leverage to your advantage. In comparison, I use leverage sparingly and currently, I have zero gearing.

If you should decide to reveal the numbers to your passive income, I would be interested to see them. :)

Musicwhiz said...

Wow 62 comments!

AK71, I was right not to tell you the stocks I was looking at....imagine if you decided to buy with your cash, then I got no chance to buy liao! Kidding haha.

Seriously, that number is very impressive. Considering you are about 5 years older than me, I still don't think I can achieve even half of that passive income number in five years time. My current is about $14,000 a year and the target is to reach about $24,000 in 5 years time, which should be "comfortable" though far from ideal.

I guess from what I've read so far, you and Calvin Yeo really know how to use leverage to your advantage, and the results have been spectacular! Sometimes I just wished I was not so overly-conservative and could dare to leverage up to buy multiple properties, but it's somehow just not my style and does not make me comfortable. Then again, it seems like a good "shortcut" to getting rich!

Any advice from you would be appreciated, on how to grow my wealth. Perhaps my current method just based on salary/bonuses, savings and equities is a little too old-fashioned haha!

Regards,
Musicwhiz

Ray said...

Seeing these astronomical numbers can either make readers feel:

1) woah, im so motivated to be like them.

2) damn, i'm years old and im still so far away...

haha, its a double edged sword.

Singapore Man Of Leisure said...

AK,

It's so fun to play word games with you.

I threw a stone, and you threw a jade back ;)

Yes, I was hinting that the "gurus" would of course beat you in active income via seminars and books. Passive? I not so sure. LOL!

Hmm, you have a thing about people younger than you. Not the first time I've heard you mentioning it.

May I recommend SKII? Boink! Boink!
Finger tapping on face ;)

Kelvin Tan said...

Nice impressive figures for all of us to aim at.

With the prediction of Singapore going through tough times in 2012, its indeed tough to buy in even when many of the Reits seem to be undervalued.

AK71 said...

Hi SnOOpy168,

You are probably one of my earlier readers and I thank you for your words of encouragement. :)

Yes, don't benchmark our performance against anyone else's. Set our own pace and try to do better each year. Be realistic and be pragmatic. Believe that we can do it if we put our minds to it.

I am really happy to learn that your annual dividend figure has progressed from just tens to almost 10k in the last two years. That is commendable.

Brokers hate people like us. ;p

Thank you for the timely birthday wishes. Huat ah! :)

AK71 said...

Hi MW,

I have great admiration for the work you do and your blog was one of the earliest I came across.

I am actually very conservative too when it comes to property investments and using leverage.

If I were less conservative, my personal balance sheet would not see zero gearing now.

If I were less conservative, in the current low interest rate environment, I could possibly be enjoying 50% more in passive income than I do now. I would perhaps have pledged my stocks to a bank instead of leaving cash in my savings account. ;p

We walk different paths but our destination is probably the same. Do what you are comfortable with. Peace of mind is priceless. :)

AK71 said...

Hi Ray,

Yes, a reader told me the same thing before that he felt motivated but at the same time he was demoralised!

The intention of such blog posts is definitely to inspire by showing that it is possible to generate passive income from the stock market equal to or in excess of our earned income. The effectiveness, however, probably varies from reader to reader.

AK71 said...

Hi SMOL,

Oh, I see. I am somewhat dense and didn't get your hint. Thanks for spelling it out so clearly this time round. ;p

SKII? Don't want. So expensive.

AK71 said...

Hi Kelvin,

REITs are able to deliver consistent income distributions even in a zero growth environment and I blogged about it before. With predictions for 2012 being a year of low growth, I am not really worried.

So, I will remain invested as the circumstances will continue to be benigh for REITs. :)

qinzheng said...

Hi AK!

Very Impressive! Mission impossible for me even when I have reach your age.... envy!

Anyway Happy holidays! Merry Merry n A happy new year!

AK71 said...

Hi qinzheng,

Work towards what you feel is possible first and when you are there, perhaps, you could push the boundary a bit. ;)

It is also possible that you might not need as much as me to feel that you could retire comfortably. So, apart from setting your own pace, it makes perfect sense to have your own target. :)

Merry Christmas and Happy New Year! :D

bummy said...

Hi AK,

Congrat’s on crossing the $100k dividend mark, it is an incredible figure and a well deserved reward for your sheer hard work, patience and a levelled mind to make good timely decisions.

After bobbing about in the market for years without any significant headway, my decision four years ago to gear up on reits and to par down non reits is bearing fruit nicely.

Thank you for inspiring me and giving me the confidence to stay on this track. While there may be distracters to reits, it works well for me

Hope you have a splendid birthday

FoodieFC said...

Hi AK71

Amazing amount of dividends. Nice of you to share more next year.

AK71 said...

Hi bummy,

It has been very rewarding to be invested in REITs for almost three years now. However, circumstances will change and it is just a matter of time. So, I suspect that I might not always be so heavily invested in REITs.

There will always be detractors. People have their own beliefs and experience which steer their decisions in life. I won't say that they are wrong. They are just different. After all, what is wrong now could be right in future and vice versa. ;)

Thank you for your well wishes. One year older but I am not sure if I am any wiser. ;p

AK71 said...

Hi FoodieFC,

Thank you. :)

I will have to decide next year whether I would still do blog posts like this one because I seriously doubt their usefulness other than to inspire.

bummy said...

Hi AK,

Yes there will be a time to par down our holdings in reits.

I must learn not to be sentimental about it especially those in my SRS account. This is one battle that I have not overcome

AK71 said...

Hi bummy,

Being sentimental about investments is definitely a limiting factor in wealth generation. Investments, of course, are not restricted to equities. ;)

Over the weekend, I spoke with two people about their properties. They are similarly sentimental although initially it seemed like they were not. Humans have a great power to rationalise things away.

EK said...

Hi AK

My hubby and I read your blog regularly.

It's great to know that $100K of paasive income is possible! We are working towards that!

AK71 said...

Hi EK,

Yes, it is possible. :)

There are many ways to generate passive income and my way might not be the way for everyone. If I have been able to provide some encouragement, I am glad. :)

Set your target and pace. Stay the course and you will arrive one day. :)

Ray said...

Actually the comment about liquidity has some truth in it.
These few days I have been queuing for AIMS AMP at 9.45.
Even though it open and close at this price, I realize the volume is extremely low.

AK, what do you make of it?

AK71 said...

Hi Ray,

When price tests historic lows with very low volume, I think of low volume sell downs. Technically, this means that sellers lack conviction.

The longer this situation goes on, the stronger is the support at 94.5c. Like yourself, there will be more who would put in buy orders at that price.

A stronger support is not an invincible barrier but it does mean that downside pressure has to be much stronger from now before a new low could form.

With the current sentiments, there is actually a greater interest in REITs which are now very much undervalued and their stable income distributions are very attractive in an otherwise bearish environment.

I did buy more at 95c a few sessions ago. I could possibly buy more if price should flatline at this level give or take a cent over the next few days.

For anyone thinking of short term trades, we could also see the REIT's units price rise in anticipation of its income distribution announcement next month.

INVS 2.0 said...

Hi Ak71,

Thanks for the lengthy explanation above. I have learnt something new. :)

Given AIMSAMPI's little or zero volume for the past few days, there is a little chance for its price to drop further? Hence, $0.945 would probably be the bottom line and a very strong support for now. Hope I am getting it right. :D

Alex said...

Hi, AK.

500k is a substantial sum and it could do many wonders if one know how.

Personally, I only have 20% of it.
And I would leverage it and achieve at least 50% passive income if the coming crisis do materialize in the near future.

Best Wishes and Regards,
Alex

AK71 said...

Hi INVS 2.0,

I see the word "bottom" in your comment and I got worried. Haha.. I am definitely not calling a bottom here. We can't tell if it has bottomed until it is over, unfortunately.

What we can say is that AIMS AMP Capital Industrial REIT's unit price could have found a floor, if not the bottom. ;)

AK71 said...

Hi Alex,

50% yield from $100K would give you $50K a year. That is pretty impressive. So, I guess you would have to gear up at least 5x to achieve that if what you are investing in gives you an unleveraged dividend yield of 10%.

Yes, I have been told by quite a few people that if only I would introduce even a conservative amount of leverage, I could be getting a lot more in passive income than what I am getting now. :)

INVS 2.0 said...

Hi Ak71,

Wasn't going to mention about AIMS bottoming out, considering it has lower recorded prices than the present one. :) But well, I believe it has bumped into a hard floor like you said. ^^

My average div yield is about 8% and that would take me a little more than a million-dollar to get the same amount as yours. Gosh! I don't think I can work so long to feed that amount into it. :/

But there are always recessions here and there in our life cycle to exploit the market. You get what I mean. :D

AK71 said...

Hi INVS 2.0,

Yes, I know what you mean and I did my bit of exploitation in the last crisis. ;)

This time round, it does not seem like we would have anything resembling the last crisis but we can never be too sure. :)

Don't use me as a benchmark, you could be doing yourself a great disservice. ;)

Ray said...

Yeah, using AK as the benchmark is like a high-jump athlete setting the high jump pole as high as Mt Everest. Might as well don't jump. ;)

I think the first realistic benchmark is to have a annual passive income the same as annual salary of your day job.

AK71 said...

Hi Ray,

Compared to Mt. Everest, I am only Bukit Merah. Haha.. I know how modest my results are and I am being honest here. There are many people who have done a lot better but are just not as talkative as I am. ;)

Yes, aiming to create as much passive income as our earned income is, in my opinion, a great way to start. It benchmarks our progress against our own earning capacity. It is more realistic.
:)

Ray said...

AK, if u are bukit merah, I will be a valley.

AK71 said...

Hi Ray,

Choi!

Hills = Some passive income.

Level grounds = No passive income.

Valleys = "Negative passive income".

Choi!

INVS 2.0 said...

Hi Ak71,

I believe our common role model is George Wang who has more than 3 million worth of shares. A $0.05 increase to AIMS will give him a big red packet that we medium and small players can only dream of. :D

AK71 said...

Hi INVS 2.0,

George Wang? Not in my wildest dreams. That guy is simply amazing.

As long as George Wang's interests are aligned with the unitholders of AIMS AMP Capital Industrial REIT and as long as the management continue to deliver the goods, I am happy. :)

INVS 2.0 said...

Hi Ak71,

Ahhh, you are a humble and down-to-earth person. Good job!

And I just got another bit of AIMS at $0.945 this morning :) $0.920 is the next strongest support? Hmm.

I wish for a prosperity 2012. :D :D

AK71 said...

Hi INVS 2.0,

I got some at 2 bids below support today. 93.5c. Couldn't resist it. ;)

Volume is relatively high today. It seems Goldman or someone with a Goldman account is selling down.

Ray said...

Hi AK,

You can see who is doing the buying and selling?

Goldman = Goldman Sachs?
Isn't that a BB? any concerns if a BB start selling?

INVS 2.0 said...

Hi AK71,

Should have waited for $0.935. Didn't expect price to move below $0.940 when I dropped a buy order last night. :(

Anyway, thanks to Goldman and whoever out there who sold their lots to us, we can get to enjoy nice payouts next year. :D

AK71 said...

Hi Ray,

Yes, just check the counterparty for your trades. :)

I broke up my buy orders at 93.5c. Each time, it was Goldman that sold to me. So, it is just a guess that they are the big seller today.

Concerns? Hmmm.. I don't know why Goldman or its client is selling. Technically, however, we could see price being pushed lower if the pressure keeps up.

If 94.5c should be recaptured as support, then, this could just be a big whipsaw. Otherwise, next support is at 92c.

AK71 said...

Hi INVS 2.0,

Well, hindsight is always perfect. I know mine is. ;)

Pace ourselves in our purchases. This is something I am still learning to do better. :)

Ray said...

Saw the price dropped to 9.35 but thought the volume looks low so was wondering if I would queue in vain that that price so queued at 0.94 instead and got it. Was quite happy for a moment until I realize the price dropped to 0.93. :( :(

Even my hindsight still not perfect. That shows how poor my vision is. :(

Regarding counterparty, it just seem to me is the brokerage firm that the counterpary account is opened with e.g. CIMB or Phillips or uobkayhian. I may be wrong.

AK71 said...

Hi Ray,

Hey, if you are emotionally affected by that 1 transaction of 4 lots done at 93c thus far, pinch yourself. OK, enough said. ;)

Yes, some biggish unitholder with a Goldman trading account could be doing all the selling today. Who knows? Interesting distraction over a cup of afternoon tea, perhaps. No real significance. :)

Anonymous A said...

Some banks may unload on the tougher Basel 3 rules, which limit their discretionary investments. Any amount above the limits attract punitive capital consumption. And due to the more stringent Basel 3 rules, they could be unloading simply to shore up capital. Still make a profit, but they simply need the capital and liquidity boost.

I sure hope there are no other ominous reasons...

AK71 said...

Hi Anonymous A,

Yes, I also blogged about how eurozone banks could recall funds from Asia to meet new Tier 1 capital requirement. Given that they account for some 20% of available credit in Asia, it is definitely a concern.

If there should be a mad sell off of quality assets in the process, it would be time for us to roll out our warchests. :)

jason said...

Hey AK71, happy 40th in advance, mine was just abt 3 weeks ago...
Very impressive set of numbers!! Well on your way to financial independence!
The shipping industry will be due for a huge shakeup - European banks are the biggest financiers in shipping! (DB/DnB Nor/Nordea/ DVB etc) The wave of bankruptcies and consolidations are imminent, so be warned!When recapitalisation goes underway, there will be hell to pay and firesales! Keep ammo!
Happy Xmas n 2012!!

AK71 said...

Hi Jason,

My birthday was on the 12th. ;)

Thanks for the heads up on the shipping industry. I have investments in FSL Trust (but I read they recently refinanced successfully), Courage Marine (which I believe has zero gearing) and NOL. These counters together form maybe 2% of my portfolio. Nothing I would lose sleep over.

That said, my warchest is always ready. ;)

Happy belated birthday to you. :)

tong said...

Hi AK
100k passive dividend is indeed impressive. Base on 10% return, i think one would need at least 1 mil of base capital to get 100k per year. Care to share with us what is your occuption??

AK71 said...

Hi tong,

I am a business development manager which is a high class salesman. ;p

Alex said...

Hi, AK.

I was thinking, given your analytical skills on the TA aspect, my fair guess is that you should be aware that another round of financial crisis is likely to materialize in the year 2012.

Have you ever consider to sell off all your existing holdings to retain cash so as to put it to better use when the market bottoms again?

Regards,
Alex

AK71 said...

Hi Alex,

There are two camps now.

One says that there will be a full blown financial crisis and that the eurozone might break apart. Asia will go down as well as we are export driven.

The other one says that the eurozone will find a way. U.S.A., China and the IMF will not want to see a meltdown in the eurozone. Asia will shuffle along in 2012 and avoid a recession.

I know people from both camps. Those who believe that everything is crashing are now in 100% cash.

Personally, I am suspicious of my foresight, if any. Hindsight is perfect but useless. So, I remain partially invested. I am about 70% invested now, up from 50% because of heavy participation in LMIR's recent rights issue.

Finally, my TA skills are really rudimentary. I am merely a novice. I won't take my TA skills too seriously. ;p

jason said...

Was just reading the ABN AMRO Q1 2012 outlook, i will stay with the less pessimistic scenario - that is Eurozone goes into a recession but world GDP doesnt sink together with them i.e US still sustains its small n steady growth while emerging economies slow down but not to the point of killing global growth. The Eurozone issue is a huge hole and current solutions are just plugging the lobangs in the dam.....

AK71 said...

Hi Jason,

Is cheap money the solution? It was the last time but would it work this time? We can probably talk about this all night. ;p

I read in today's Business Times that economists are forecasting a 3% GDP growth for Singapore next year. However, this does not factor in the worst case scenario which is a meltdown of the eurozone which would send shockwaves through the world economy.

We are just retail investors and the only thing we can do is to ensure that we will gain, whichever way it goes. I don't believe in being bullish or bearish. I believe in being pragmatic. :)

BP said...

hi AK71, your passive income is indeed impressive. I believe the value of your portfolio must be very huge in order to generate this kind of amount. If I presume 10% div, to generate $100k will mean an investment of $1m. I don't think many of us small timer have that kind of $$$ to pump into the market :)

AK71 said...

Hi BP,

We all have to start somewhere and most of us will start small. I started small too. ;)

It has taken many years to grow what I have now. I do not believe that my way is the way for everyone, of course. Each person has to explore and settle for the way which suits him best. :)

Ling said...

happen to come back here.. Hi AK71, why didnt you start a investing course? not those typical expensive commercial-like courses out there, but very unique and your own way, affordable. your investment style and results can help alot of people.

AK71 said...

Hi Ling,

I have been asked that question so many times before.

I share freely my experience and knowledge, what little there is, here in my blog. If anyone has benefitted from my sharing, I guess I am happy enough. :)

I really don't know what they teach in those expensive courses. Having to part with $X,XXX is quite a bit of money for an average working adult.

I guess if readers who have found my sharing useful would spread the word and get their friends and family to visit my blog, that would be fantastic for everyone.

This is the real reason why I started this blog: to reach out to more people, keeping my ideas in easy reach 24 hours a day and all for free. :)

Drizzt said...

i don't think its free. u still want them to click on things unrelated to investing which is why u set up this site in the first place.

AK71 said...

Hi Drizzt,

I do not charge readers anything for visiting my blog. So, I am sharing with them my ideas for free. This is quite simple to understand.

Recently, I was invited by another blogger in Malaysia to be part of an effort to set up a members only blog on Singapore REITs. It would not be a free site. However, I declined.

I have ads in my blog which provide me with some income. Frankly, it is just pocket money. If I were to use the time I use in blogging to give private tuition, I assure you I would make many times more money.

If you think I "want (readers) to click on things unrelated to investing which is why (I) set up this site in the first place", you are mistaken. It is just a bonus if they do click on ads.

I could stop blogging tomorrow. It is no loss to me and I have expressed this idea before but I have been asked to continue blogging.

Anyway, enough said.

la papillion said...

Hi Ak,

I don't think anyone in the right mind would set up a financial blog in S'pore to blog for the 'passive income' that it supposedly brings in. It's just too much work, too little gratitude, too much negativity and generally not time well spent.

You can see where all the hard working bloggers went after some years in sharing. They went away or reduced their blogging frequency tremendously. Perhaps they are disillusioned, perhaps they just find it pointless to share.

I think that most people who does longevity blogging in this niche topic are people who can't sleep well until their thoughts are either well thought out and written out or people who are not really earning a lot of money out of this. I seriously doubt the second one, at least I've not have the honour to meet someone who is a celebrity blogger in the financial blog-o-sphere.

AK71 said...

Hi LP,

I have just published a rather long blog post. I have decided to take a sabbatical from blogging.

I don't know if you know it but you will always be the blogger I look up to. You are the man. Many things you have warned me about have happened. :)

Ray said...

I knew about the negativity that bloggers have to endure, but never really felt them much here.

But if it helps to "ease" the negativity, for every 1 negative reader, there must be 9 positive and grateful supporters out there. I'm one of them! :)

AK71 said...

Hi Ray,

LP told me this once when I said I never did expect gratitude for my blogging efforts: "Readers do not have to be grateful but I do not expect them to be ungrateful."

What would make me really happy is to know that my blog has made a positive difference in the lives of readers, that they have taken charge of their finances and are enjoying greater financial security. With a goal in mind and strategy in place, they feel confident about being able to achieve financial freedom in time.

I would be happy if readers feel this way after reading my blog as that would be the greatest achievement of my blog. :)

Ray said...

No one person can please everyone. Even the perfect God has His fair share of criticism (whether fair or not). How I deal with these things? Obviously to go away from the negativity is very tempting because its so frustrating. But I would think proving them wrong would be a better way. Imagine how my haters may gloat if I back away? I'm too much a hard ass to do that lol. Hope you find sense in my thinking process and come back soon with a vengence! ;)

SnOOpy168 said...

Hello AK

Happy belated birthday leh. ^-^

With AIMS dividends in on 20/12, i guess it is close of the year for me, as a newbie member of the "Dividend Income" group & the world of stock ownership.

Would like to take this opportunity to thank you & all other readers for the valuable insight and discussions posted here. Without this blog, perhaps I would still be loss in what to do.... especially when all around me are buy/sell stock punters.

May I brag something here ? <> From 2010, the do nothing income grew 6X, hitting the 1/5 of my gross pay yardstick. Yield on cost is about 8+% (i had a few red counters lor). Still light years away from getting anywhere near yours. ^-^ Perhaps I should be contented like DW. But then, since when we ever have enough of $ leh ? heheheh.

Donated 1/3 of this month's income to 2 charities, on my birthday last week. 感恩

Goal for 2013 ?

i.Reduce my spending (seriously, I think it is those little cheap stuff that done me in).

ii. increase my holidays and outdoors activities to burn more fats. Don't have to be 5 star hotels et all....

iii. Save as much as i can, to load up more of my good counters. No specific targets here.

iv. Reinvest 90% of the dividends received. The remainder, some fixed bills to pay and a bit of treat for myself leh. ^-^

Merry Xmas & Happy New Year to everyone.

Huat ahhh....

AK71 said...

Hi SnOOpy168,

Thank you for sharing with us your results since you started investing for income. Also, thanks for sharing with us your plans for 2013. :)

I have another income distribution coming in from First REIT next week before I close my books this year. Going by the poll results so far, it seems that I will have to blog about my 2012 passive income from S-REITs. By popular demand. :)

Yes, even as we build our wealth, we should help the less fortunate. I have about half a dozen charities which I support annually:

NUS Annual Giving
Singapore Children's Society
Singapore Heart Foundation
Singapore Cancer society
Children's Cancer Foundation
Leukemia and Lymphoma Foundation
Kidney Dialysis Foundation

I hope all who can afford to do so would help the less fortunate in society. Help make this world a better place for everyone. :)

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