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Building an income portfolio is like building a house.

Saturday, June 7, 2014

After blogging for so many years, I have received a fair number of emails and comments. 

I have no way of telling how many emails I have received in total thus far but BlogSpot makes it easy to see how many comments have been published.

As I make an effort to reply to all emails and comments, half of the comments published should be my replies. 

I have, by now, received more than 10,000 comments from readers.

As I blog about money management and investing for income frequently, it is no surprise that I should receive emails from readers with questions related to these topics. 

Of course, in my replies, I am mindful to tell readers that I am not a financial advisor and I am just sharing what has worked for me. 

I always say that, in my blog, I am just talking to myself.

Although I have received enthusiastic emails from readers both young and old who were thinking of investing for income for a more secure future, I have also received some which had more pessimistic tones although they were willing to give income investing a try.

Even though it would take a bit more work to encourage these people, I was happy because the writers, despite the pessimism and, maybe, scepticism, decided to take that next step in an effort to possibly improve their lives.

As the saying goes, we can lead horses to water but we cannot make them drink. 

If a horse which was suspicious at first decided to taste the water, we should be happy. 

The proof is in the pudding and, in all likelihood, the horse would then drink.

Today, I received a letter from an institution which I invested money in many years ago. 

It is one of those investments that I almost forget that I have. 

I am reminded once a year of its existence when it is time to receive dividends. 

I remember saying this about Hock Lian Seng as well.

You will see that the amount is not big but I have had this investment for so many years. 

So, it adds up. 

The same goes with many of my other investments.

Although how much we receive from each investment is important, how persistent we are in building our income generating portfolio is even more important.

There are many analogies which I like to use when I talk to people about investing and regular readers are probably familiar with the one about grasshoppers and ants. 

The one I am going to share today is about building a house. 

Building an income generating portfolio is like building a house.

When we make our first investment with the intention to build an income generating portfolio, we have taken the first step in building this metaphorical house. 

Over time, as we make more investments, we are putting in the floors, the walls, the windows, the doors and other things which make the house functional.

When the house is complete, our mission is accomplished. 

We could choose to move in and enjoy the house as it is or continue to add features to make it more comfortable or, even, luxurious. 

We might want to put in a gazebo or, maybe, even a swimming pool, for examples.

What we want in a house is quite subjective. 

Similarly, how much we want in passive income will differ from person to person. 

However, what is not different is the need for time in order to build a dream house, to have a portfolio that generates income which we feel is sufficient for our needs and, maybe, wants.

The Chinese people have a saying: 


Even skyscrapers start from the ground up. 

Don't ask me about the basements though.

For regular people, our first investment for income might not yield much but make more investments over time and we will see how it all adds up. 

Patience is required.

Like they say, all in good time. 

However, time can only be good for us if we do the right things.


Related posts:
1. To be a happy peasant.
2. Save 100% of take home pay.


mrtamjiak said...

Huat ah! What ntuc product is that?

Anonymous said...

Ha! Ha!
AK 71 is there really no short cut meh to building a house?

AK71 said...


All the information you need is found here: NTUC Income shares.

AK71 said...

Hi temperament,

Yikes! You would need to ask a real civil engineer on that one. I am a fake. -.-"

pf said...

Thanks for the great tips!

Now I am also thinking of how to build a nice "house", taking into consideration that I would spend a lot of money next year when I buy my first home. :)

AK71 said...

Hi pf,

Oh my. Where are the great tips? I don't see any. -.-"

You are going shopping for your own pad next year? That is always exciting! Have fun but don't get carried away. ;p

Investopenly said...

Great metaphor! I am starting to lay the ground now ;-)

AK71 said...

Many years ago, when I was planning for early retirement, I told a friend that I could probably go into semi-retirement once I had $500,000.

Friend said...
$500K where got enough?

AK said...
What about $50K a year? Enough?

Friend said...
$50K a year? $500K will last you only 10 years lor.

My friend missed my point and I had to explain that $50K a year was passive income, what it meant and how it could be achieved.

We do this brick by brick.

WTK said...

Hi AK,

At that point of time, what did you intend to do in semi-retirement?


AK71 said...

Hi Ben,

Spend more time doing what I want to do in retirement, of course.

Only difference between semi and full retirement is that I have even more time to do it now. ;p

Remember this?

If we are not prepared for retirement, even if we are financially able to do so, given a choice, it might not be a good idea to retire.

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