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4Q 2018 and FY 2018 passive income.

Saturday, December 29, 2018

It has been a pretty long break since my last blog.

I have also been spending a lot less time engaging readers both in my blog and on Facebook.


I know that many readers are not used to this.

However, this will continue to be the case as I devote a lot more time to other activities.

This was something I talked about before and it is the new normal.

So, please don't be surprised if you do not hear from me for weeks (or months) at a stretch in 2019.

Now, with that out of the way, I shall wrap up 2018 with a blog on my full year passive income.








Mr. Market went into a depression in 4Q 2018 and made me too many tempting offers.


Spoilt for choice, with my limited resources, I added to my investments in several stocks in 4Q 2018 even as I sold my entire investment in First REIT.

To understand why I sold my investment in First REIT, please refer to related post at the end of this blog.




Stocks (with hyperlinks to my earlier blogs where available) which I added in 4Q 2018:


1. Accordia Golf Trust.

2. Centurion.

3. ComfortDelgro and SingTel.

4. OCBC.

5. APTT






Due to the fact that I sold my investment in First REIT as its unit price bounced up when it went CD, my 4Q 2018 passive income from REITs reduced.

Readers who have been following my blog for many years might remember that I didn't share details of my passive income from non-REITs until it became a more significant percentage of my total passive income a few years ago.




As my passive income from REITs have steadily declined in recent years as a percentage of my total passive income, I will consolidate the numbers for both REITs and non-REITs, henceforth.

4Q 2018 passive income (REITs and non-REITs):

S$ 38,884.64






As I have blogged about the reasons why I added to my investments in Accordia Golf Trust, Centurion and ComfortDelgro in 3Q 2018, I will not repeat myself.

I also did an update on APTT as its unit price plunged and also explained more in detail during "Evening with AK and friends 2018" the rationale for buying at what I thought was a distressed price.

In the list of stocks above, I have hyperlinked those blogs for anyone who might be interested in reading or re-reading.






As APTT's unit price plunged under 13 cents a unit after it went XD, I took another bite.

Accepting an offer from what I believe was an overly pessimistic Mr. Market, it was quite simply a price I would not have sold at.

Readers who have been following my blog for many years would know how I size my more speculative positions.

With this last purchase, I would stop increasing my position in APTT as I keep it at a size that my passive income could cover within a year or less.

If you do not know what I am talking about, please read this blog from 2014:

How to size our more speculative positions?




Now, I will briefly explain my decision to add significantly to my investment in OCBC.


With interest rates rising, logically, banks will do better.

Already invested in DBS and OCBC at lower prices two years ago, I have been waiting for another opportunity to increase my investments.

In 4Q 2018, I increased my investment in OCBC significantly.

Why OCBC?








OCBC's stock experienced stronger selling compared to DBS and UOBs'.

A back of the envelope calculation indicated that OCBC was trading at a much smaller premium to NAV while DBS and UOB were trading at a richer premium to NAV.

The same back of the envelope calculation indicated that OCBC's dividend payout ratio is about 40% which is very undemanding and is the lowest of the 3 banks.




OCBC also had the lowest PE ratio.

So, I took several bites of OCBC as its share price plunged in 4Q 2018.

The funds from the sale of my investment in First REIT certainly came in handy.


Of the three banks, OCBC just seemed to be a better value for money offer at the time.






Some people asked me for a forecast of what 2019 has in store for the stock market.

Honestly, I don't know.

I cannot predict.

I can only prepare.

Remember?

However, what I can say is that, a bit more or a bit less, I will probably be receiving a meaningful amount of passive income from my investment portfolio.




Regular readers know I really am more concerned with receiving a meaningful stream of passive income from my investments than whether stock prices are moving up or down.

As long as my investments continue to pay me, I am usually quite happy with holding on to them.

The best investments could be those that I don't ever want to sell because they are able to pay me year after year.


Peace of mind is priceless.







How much did I receive in FY 2018?

FY 2018 passive income (REITs and non-REITs):

S$ 188,735.86

On average, about $ 15,727.00 per month.

I was also fortunate to have more capital gains than losses in 2018.


So, 2018 has been a pretty good year for me and I hope 2019 will be kind to me too.





Remember this if you choose this path.

I do not know if stock prices are going up.

I do not know if stock prices are going down.

However, I do know that I am collecting more dividends and the total amount has increased year after year.







Finally, remember that the best time to start is always now.

It is never too late to start walking the path to financial freedom.

If AK can do it, so can you!

Watch this video on what Gurmit Singh has to say about his income and what he would have done differently:






Related posts:
1. 3Q 2018 income from non-REITs.
2. Sold First REIT.

15 comments:

aL said...

Hi AK,

Just curious, for you to earn about $0.19M, have you invested amount 8-15x of that?

AK71 said...

Hi aL,

Regular readers who have been following my blog for many years would have an idea although I would never give the answer on a silver platter. ;)

Laurence said...

Alamak, AK laughing all the way to the bank while the rest of us are in the Red this year. :(

B said...

Hi AK

Congrats for a very well deserved performance 2018 and even though you managed to sell a lot of your core holding Reits this year such as First Reit, you still ended up a massive gigantic $180k in dividend this year.

Please continue to share and have a great 2019 ahead.

30YearOldInvestor said...

Huat Ah AK. Always an inspiration to read your sharings. May you have a Huat 2019!

Mr Chua said...

Hello AK

This question may be out of this post context but I think it is important! What happened if you are not around anymore, what will happen to the shares and dividends? Is it like CPF where there we can nominate our loved ones to receive it automatically? Please provide your answers in non-technnical terminologies. Thank you. DC

Ben said...

Hi all,

My take is that it does not matter how much the invested amount is in the details. Circumstances differs in each individuals. The most important thing is to get started and enjoy the journey. Even if one reaches FIRE, it is only part of the chapter of life. There are so many things to experience in life.

My two cents worth of views.

Ben

Kelvin said...

Hi AK,

Look like the OCBC link on your blog was broken?

AK71 said...

Hi Laurence,

That is the beauty of investing for income.

Whether the market is up or down, we will have some return on our investments. :)

AK71 said...

Hi B,

I will miss First REIT's income distributions.

It should translate to a lower total passive income from my investment portfolio in 2019.

Thanks for the encouragement and may you have a great 2019 too. :)

AK71 said...

Hi 30YOI,

That is what my blog is primarily good for, a source of inspiration.

Be inspired because if AK can do it, so can you!

May you huat in 2019 too! :)

AK71 said...

Hi Mr. Chua,

Everything will go to my beneficiaries and how they deal with the wealth is up to them.

That is what a will is for.

I am not going to worry when I am underground. ;p

AK71 said...

Hi Ben,

Yes, I am just sharing my story to inspire others on a journey to F.I.R.E.

What is more important is for readers to pen their own stories. :)

AK71 said...

Hi Kelvin,

There isn't a previous blog on OCBC per se.

I only made a passing mention together with DBS back then.

So, no link. :)

AK71 said...

Yu said...
Hello ak!
as of today the share price is 0.131,
do you think its still worth a bite?


AK said...
Hi Yu,
You might have missed this blog of mine:
https://singaporeanstocksinvestor.blogspot.com/2018/12/4q-2018-and-fy-2018-passive-income.html
You decide. ;)

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