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Wah! So much mail from the broker!
AK must be trading a lot!
I receive quite a few emails from readers.
Among them, some are encouraging and some are depressing.
I usually share the more encouraging ones here in my blog but not the depressing ones.
No point, right?
Well, in case you are wondering, the depressing ones are usually along the line of how they make so little money in their day jobs and how they cannot save enough.
So, they can't put much money into investments and for those who did, they get so little dividends that it seems meaningless.
What do I have to say in reply?
It takes time to build a strong income producing portfolio.
It is not going to happen overnight.
It is usually not glamorous.
It is definitely not exciting like promises of fast money.
So, what is needed?
Time.
Now, you have an idea what those envelopes contained.
Readers who have followed me for a while and who have put some of my strategies into action would be able to attest to how their financial health has improved if they have been disciplined.
With extra money coming in regularly, how could it not be a good thing?
A reader told me how his passive income has improved from just a two figure sum so many years ago to the five figure sum it is today.
Impressed?
I know I am.
So, for those who are already on the path to financial freedom, stay the course.
For those who are just starting, remember that it is always toughest at the start.
Related posts:
1. If we are not rich, don't act rich.
2. Do the right things and we could transform our lives.
3. Seven steps to creating passive income from stocks.
4. The best insurance to have in life.
5. First REIT: AK reveals size of investment.
Bloggy Award
29 comments:
It is darkest before dawn. It is for this reason that the Jewish Sabbath starts in the evening. In the dark, one confronts the Truth, overcomes the fear and the dawn breaks out with Hope.
Persevere with thoughtfulness and Success follows.
Thanks a million to AK for sharing. There are few samaritans in one's life. When I meet a 贵人, I am thankful.
When ppl tell me they can't save due to low paying day job, i always take it with a pinch of salt. Coz my first permanent job was only 1.3k per mth abt 14 yrs ago. After my university, my first job was only 2k per mth. I was so busy learning on my job, upgrading myself, etc etc....I have no time to spend money. By late 20s/30, i have a modest amount of savings for investment. Around 50 to 60k.
Its not much as i am not a die hard saver. Its also not little. I could have more money if i invested earlier but i wasn't interested.
Just a couple of years after, i cant say i do very well at investment. But I still do well at my job such that i can put down deposit to a 600k hdb flat comfortably as a single.
Hi dorshii,
It is definitely darkest before dawn. Thanks for the nice analogy. :)
I would also say that sometimes the journey towards financial freedom is like walking in a tunnel that seems endless. It helps if we are able to see the light at the end of the tunnel or if someone who has seen the light is able to give us a bit of reassurance along the way. I know the feeling. :)
Hi pf,
Well, we should take it with a pinch of salt or two. We know that it is how much we save that will determine if we become richer and not how high our earned income is. :)
You are a good role model. You should really write a guest blog for ASSI. Please, pretty please. ;p
I woke up 6 months ago, at 49 I started a frugal life and saving more than I spend. Been accumulating Reits since April. I will have about $14K of dividends by Mar 2015. It was tough at the beginning especially when I need to convince my wife and 4 children. While my peers are enjoying themselves going to exotic places for holidays. I arm with 2 powerful weapons - necessity and contentment. Now I find life easier as I am turning around. I am making up for lost time working harder to accumulate but it is not too late.
Hi Siew Mun,
You are a great role model for someone approaching the big 5. Good on you! :D
I have more elderly readers who sometimes wonder if it is too late for them to start. I always tell them they are just starting later. They are not starting too late. ;)
At the same time, I will caution them that the environment for REITs now are not as advantageous as they were 2 or 3 years ago. So, although they remain relevant investments for income, don't throw in everything including the kitchen sink. :)
Thanks AK for the great advice. I maintain a war chest of about 20% in cash as you encouraged :-)
Hi Siew Mun,
No advice was given. Not allowed to do that. Just telling horror stories. I am allowed to do this. ;p
I would like to be 50% invested at all times but I am closer to being 70% invested now. Will be building up my cash position again in the next 12 months, barring unforeseen circumstances. ;)
Eh....i dunno what to write abt.... lol
Hi pf,
What about your working life up till now? Also your beliefs when it comes to personal finance and investment?
I have a feeling that it will make for interesting reading and it should also serve to inspire some people in your age group. You will be doing a lot of good with a guest blog. :)
Hi Ak,
Perhaps you would like to consider inviting readers of your blog to share their life experiences on how, despite initially earning modest or even low salaries during the early working years of their lives, have perservered in their investment journey and started reaping the fruits of their labour later on in their lives.
Believe that such stories can be inspiring and your blog will be a suitable platform for such stories to be shared. Remember your blog posting on the story of STE back in August 2013?
Hi Sun,
The invitation is always open. I would definitely like to have more people coming to share their success stories to inspire others as long as they have no ulterior motives for doing so. ;)
Yes, I do remember STE's story. Very inspirational! In fact, I shared it again on my FB wall recently. :)
AK,
Blame it on the instant gratification culture. Nothing is ever easy except for the fortunate few. Success for most of us requires 95% sweat. Look at what can be done to increase the savings instead of complaining it is slow and may not be achievable. You are the only one who can make it successful or the one who is always complaining about how difficult it is. Afterall, who are you doing it for anyway?
I am also trying to increase my dividends per month and yield. not easy
Hi Matt,
Oh, I agree with you very much and you know I have blogged about it so many times before too. So much that I thought readers might get sick of reading my blog. -.-"
Hi FoodieFC,
Oh, investing for income is simple enough to understand but to do well at it, like many simple things in life, is not easy. However, if we have the ability and the will, we can do it. :)
Hi AK,
Read in your posts that you plan to reduce your share exposure to 50% from the present 70%. Are you planning to sell some of your reits since it may no longer be advantageous to hold on to them after the recent price run up. If so, which ones ?
Hi Les,
Yikes! I think you might be over-reading. ;p
I could be accumulating cash so that my investments form 50% of my portfolio too, right? I think that was what I said.
AK,
A 50K compounding at 6% return, without any injection of capital will mean you amount invested will be 200 K in 25 years.
It does not mean you port value will be200k, it could be higher or lower than that, but your 6% return in terms of dividends will be 12 K per year then...
Hi Mike,
You are Mike, right? Your nickname looks a bit different. ;p
I may sound a little thick but I am not sure if your comment is in response to anything I might have said here. I am trying hard to make a connection but I think I am failing. :(
Please enlighten me.
Aiyo AK,
First thing, I am Mike, I going over to blogspot. I wanted to see if I can get some kopi money from advertisement.
Second. Here is the link:
Talking about depressing email, where people do not start, correct? Talking about finding it meaningless?
I feel that way too, especially when I look at the portfolio of bloggers, some of them even younger than me, but have portfolio of 3-4 times my size???
I am trying to say, how difficult is it to amass a 50K portfolio like me, I am already 35, I have one kid, and is not a saver, I have cars etc.
Any Tom and DICK can have a portfolio like mine by the age of 35.
But lets assume someone is able to just save his bonuses for investment and his otherwise income go into emergency fund and insurance etc.
How about only $5k a year? 10 years later you will have a 50K portfolio.
Huh... 10 years only have 50K can fly kite liao....
But once you have that, and is able to invest for income with yield 6%, it will be double every 12 years.
If you allow capital injection, the sum will grow even faster.
Nearing to the end of your retirement, you will get at least 1K per month to supplement your CPF annuity plan.
We always thought we have to keep saving and injecting fund for investment, and didn't take the compounding effect into calculation.
If you can keep up with capital injection of 5K for 25 years, Volia. you will get almost half a million
Hope I answer your question... Hey, I not those troll ok, never read anyhow wack... heheh
Hi Mike,
LOL! You are definitely not a troll! Thank you for the clear explanation. :)
Definitely, if we are determined enough, we can make sure income investment becomes a cornerstone of our retirement plan and like you have illustrated, even with modest beginnings, it could be a meaningful contributor to retirement adequacy.
I will have to update your link in my blog. I go take a look. ;)
Can do. U let me hv a topic? I hv no idea what to write otherwise
Hi pf,
OK, a few essay topics for you. ;p
"From graduate to working adult: Some lessons."
"Hunting for a HDB resale flat: Points to note."
"Thoughts on investing to help ensure retirement adequacy."
These are the topics I think you could blog about based on what I can remember from our frequent exchange of comments here. ;)
Email your blog post to me like how you would write an email. No attachments, please. I have trouble opening files sometimes. ;p
Email:
ak71@sillypore.com
Thank you very much for obliging. :D
This reminded me of the time when one of my friends asked me how to invest and get passive income.
I told her the first step is to save a portion of her income every month and she can do so by thinking of getting additional income or reducing her expenses. She replied that it is impossible because she has many commitments. Then she asked me for step 2.
The funny thing is usually the first step for financial freedom - saving money, increasing income and reducing expenses is the most basic step which will reap the most results but it does not appeal to people.
People are looking for that secret get rich quick scheme. :D
How do i start investing?
Hi Rusty,
Someone recently told me he went digging through my blog hoping to find a way to make money quick but was disappointed when he realised that hard work was still needed. ;p
It is always hardest at the beginning but where is the place to start? The beginning, of course.
Your friend could possibly learn how to trade the market instead but that is a whole different ball game and if she is very good, she could make a lot of money as a trader with a much smaller capital. :)
Hi Larry,
You might want to read the books mentioned in the section titled "Food for thought" in the right side bar of this blog to start with.
And you might want to read a 2 parts guest blog by Solace too:
Getting ready for investment.
Reader says...
Income investing works for you because you already have so much money.
AK says...
Well, if we invest more money, one possible result is making more money.
This is true for any type of investing.
I know for a fact that investing for income can improve the financial health of ordinary people.
If we have, say, $20,000 in spare cash, investing for a 5% yield would give us an extra $1,000 a year.
If we keep at it, investing more over time, it will add up.
I keep saying that a very important element is time.
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