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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. 


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.

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.

I am not at all surprised that Sporean are highly interested in passive income.. One of the most popular blog with more than 12 million pageview by AK71 aka ASSI claimed he has collected more than 1 million dollar in passive income in less 10 years.. more than the average income typical Sporean can make from their salary! 

I hope u are not here advertising or spamming blog post ? 
Such a lousy written article that taught me nothing new, u dare to post here. Let me see the Lambo, richard mille or the MBS penthouse then consider real pls.

Source: HWZ.

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.


K said...

Hi AK,

Since you are making voluntary contribution to your CPF, I assume they are not tax deductible? I am unemployed but have a small rental income. I intend to continue to make voluntary contribution to my CPF. Any way to get some of the tax deduction for the voluntary CPF contribution?


Sillyinvestor said...

Lol, just when I thought your break is quite short.


Cory said...

Hey AK, glad you joined the Aquarium rank !

Visit my Shu Yu blog. This fish species is quite fun especially match with right planted scenario.


WTK said...

Hi AK,

It helps by taking a break from blogging. Sometimes, it will give new insights and topic for you to work on your next blog post. Keep the blog ongoing with interval break. Don't stop and give up.


AK71 said...

Hi K,

You will only get tax relief for MS Top Up to the CPF-SA or contributions to your CPF-MA. The other way to get tax relief is to contribute to your SRS account.

Of course, if you are 55 or older, you can get tax relief by topping up your CPF-RA.

AK71 said...

Hi Mike,

Haha... Still feeling lazy and just want to relax. ;p

AK71 said...

Hi Cory,

I kept an aquarium in the past but it was neglected after a while. Now that I have a lot more free time, I hope to do better. :)

AK71 said...

Hi Ben,

If I should blog these days, I think it will be about food, gardening and aquariums. LOL. ;p

STE said...

Hi AK,
Welcome back ,,, after long two weeks ,,, :). From healthy diet to gardening and now aquarium,, wow !! What's next ? Consider some kind of zen and meditation like Yoga ? Hahaha
Cheers !๐Ÿ‘๐Ÿ‘

AK71 said...


I am still on a break. Next blog post is likely to be more than a fortnight from now. ;)

I did Yoga for a couple of years. I tried to do it again a few months ago but having to commute to the studio was a pain. So, I only do exercises which I can do at home or within walking distance from my home now. ;p

Ricky said...

Hi AK,

just curious, how much dividends do you get annually?

K said...

Hi AK,

My in-law in 71 years old and has $180k in cash. Do you feel it is better for her to deposit the money into the CPF Retirement Account (RA) or join CPF life (standard or basic)? I know for RA, 1st $30k@6%, next $30k@5% and remaining @4%. This is much better than placing it in the bank. I know that in RA, the monthly payout is more and it is be depleted in 9 years.

Assuming the few hundred in payout is not a major consideration, would you recommend RA, CPF life (standard), CPF (basic) or leave it out of CPF?

Thanks for you view.


AK71 said...

Hi K,

If we believe that an annuity that pays for as long as we live is one of the best ways to have predictable regular retirement income, then, CPF Life is the best option there is now. It is simply unbeatable. I think you already know what is best for you in-law. :)

AK71 said...

Hi Ricky,

You will find the answer in the right side bar of my blog. Look for the box labelled "Passive income: A journey." ;)

AK71 said...

I like this bit from a reader's comment on my FB wall:

"... to let the mind and attention focus on what is happening now rather than always projecting into the future. Deriving joy and pleasure in the here and now rather than anticipation of future."


Unknown said...

You are truly inspirational to all of us. Kudos to you :)

AK71 said...

K says:
This is the scenario: I am 56 (unemployed), CPF-RA has sufficient funds for ERS, I have some funds left in both my CPF-OA and CPF-SA. I have passive income from my investments.

I would definitely continue to do VC. It is like 2 "savings account" for me at 2.5% and 4% interest. Noted that only a small part of VC will go into the CPF-SA.

Isn't this better than keeping my funds in a DBS savings account, if the interest rate at CPF-OA is better than the DBS account?

Why would you want to stop VC at 55?


AK says:
That is what I have been saying for a while now and my parents were quite happy to continue contributing to their CPF accounts in their 60s. They are both above 70 now. :)

If things remain the way they are, I will very likely continue to contribute to my CPF account beyond age 55. However, I don't know if things will remain the way they are. So, I shall decide when the time comes. ;)

See also:
Deposit for 5 years 11 months for higher returns.

WTK said...

Hi AK,

I understand that you have retired from full time employment. Can you share on some insights which you may have from your retirement lifestyle? An example is that do you have the urge to return back to full time employment due to boredom?

Appreciate your inputs.



AK71 said...

Hi Ben,

You would be interested in this blog:
Preparing for early retirement.

Bored? Never. ;)

AK71 said...

Someone from HWZ said...
Do not follow AK because his own investment return is not high so he also voluntarily contribute to CPF SA and even OA (and he uses cash instead of CPF OA to pay his property instalment!)

AK says...
Obviously, he doesn't understand my strategy well enough.

AK71 said...


AK71 said...

Josephy Goh says...
I agree with your strategy. No one gives guaranteed investment grade return like CPF (2.5-4% is fair enough for inflation). The rest is own investment portfolio Liao ๐Ÿ™‚

Alan Yap says...
After reading your sharing for the past one year, i regretted as i did not take early action to made the best out of CPF saving. Your indepth sharing on CPF policy, allow me to understand better and after doing my math and reviewing the long term benefits, i decided to adopt your strategy to max out both CPF special and MA account. As i feel this is the best option for me, to make the best out of the CPF saving. By maxing out the SA & MA, with the effect of compound interest @ 4% for my next 15 years, i can see limelight at the end of tunnel ๐Ÿ˜ƒ๐Ÿ˜ƒ๐Ÿ˜ƒ Thx v m for your wise and transparent sharing.

AK71 said...

Jimmy Ng says...
same feeling as you. but at least we recognized the issue and take action. Being on sail is better than waiting @ dockside

Alan Yap says...
Absolutely, Jimmy Ng. We have to plan and take charge of our future. Our government policy cannot help every single one as the capabilities of each individual is different. One thing quite certain FRS is set to rise every year at a conservative rate of approx $5k each year. The projected FRS when i reach 55 years old (i am 40yrs old now) shld be approx $241k.

Wah, huge amount! Many will complain and blame the system. Eventually, lost faith and give up. However, if you decided to made a different (has to be within your ability) by maxing out the SA at $171k in 2018 and based on 4% compound interest for the next 15 years.

The amt will roll to approx $307,961(This amt does not take into any annum addition - high probability you will still be working and contribute to SA if you are a typical working class). Only we can help ourself, the longer the procastination, the less you will gain.

AK71 said...

Siew Mun Kwan says...
I will take note. Cos if I turn 55, employer/employee will reduce quite a bit. Hence i got room to do a voluntary cash top up
At 55, 15% still is quite a bit at 4%

AK says...
Yes, the ratio to SA drops from age 55.

Siew Mun Kwan says...
Now I know your strategy. Part of your Reits and Non-Reits returns are fed into your CPF to generate stable returns. Thereby creating a wealth eco-environment which is self growing and has stable returns.

AK says...
Nothing new, really.
I shared this 2 years ago. ;)

AK71 said...

Kok Liang Ng says...
Curious to know if he becomes unemployed can he still do cash VC at 37.7k per year?

AK says...
I am unemployed and that is what I am doing now. :p

AK71 said...

Reader says...
What’s your money source for CPF voluntary contributions since there’s $0 income?

AK says...
It is true that I have $0 earned income.
But I do have $XXX,XXX passive income.
You might be interested in this blog. ;p

AK71 said...

Darren How says...
Best of both worlds.
Earning cpf interest and no need pay income tax. :)

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