The email address in "Contact AK: Ads and more" above will vanish from November 2018.



Featured blog.

1M50 CPF millionaire in 2021!

Ever since the CPFB introduced a colorful pie chart of our CPF savings a few years ago, I would look forward to mine every year like a teena...

Past blog posts now load week by week. The old style created a problem for some as the system would load 50 blog posts each time. Hope the new style is better. Search archives in box below.


"E-book" by AK

Second "e-book".

Another free "e-book".

4th free "e-book".

Pageviews since Dec'09

Financially free and Facebook free!

Recent Comments

ASSI's Guest bloggers

How did AK create a 6 digits annual passive income? (How did AK achieve financial freedom?)

Monday, June 8, 2015

(Be better savers sooner.)

The original title for this blog post was:

"How did AK create a 6 digits annual passive income after almost 20 years with a mid to high 4 digits monthly salary? Secrets revealed."

I decided it was too long and, perhaps, too dramatic.

This was the email that started it all:

Hi AK,

I am a new follower of your blog. I have questions which are a bit sensitive if you don't mind. If you do not answer, I understand.

You said you make mid to high 4 figure monthly salary. 

I estimate $60,000 to $100,000 a year. 

Over 20 years, if you don't spend money, you have $1.2m to $2m. If we invest for income, at 5%, it will give $60K to $100K of passive income a year. You managed more. How?

I am even more confused because you have a war chest which is spare money. 

So, it means you have even more money on standby. It seems impossible. 

Please enlighten me how you do this with your salary?

I ask because my salary is like yours and I am in my mid 30s. 

I cannot imagine I can do what you have done.


Money magic?

My reply:

Hi LL,

Welcome to my blog. I guess the easiest thing for me to do is to ask you to comb my blog for the answers and, trust me, the answers are there in past blog posts. 

However, I know navigating my blog is like walking in a labyrinth. That's my fault. -.-"

OK, this is going to be a long email. 

Here goes:

1. It is difficult but not impossible for anyone who has the kind of earned income that I have to achieve what I have achieved financially. 

The most important thing to remember is to be careful with our money. 

A penny saved is a penny earned. Try to make some extra money on the side (e.g. tutoring) in our free time

As we make more money, don't spend more, save more.

Don't say I say one.
2. Do not wait 20 years before investing for income. Like you said, if we saved all our earned income and not spend a single cent, with my kind of earned income, 20 years later, investing for a 5% dividend yield would give us (only) $60K to $100K in passive income. 

Of course, it is impossible not to spend a single cent in those 20 years!

3. Start investing in the stock market early (once all the basics have been taken care of). Don't just leave money in our bank accounts. 

The earlier we start, the earlier we will enjoy another stream of income, passive income. The idea is to have our earned income supplemented by passive income

Have a war chest ready so that we can invest more in years when Mr. Market is feeling particularly depressed. 

So, doing this, in effect, my total income grew year after year.

4. I am also lucky. I was lucky enough to win a car in a lucky draw a few years ago. So, my car is actually free. 

I am also lucky that my parents don't need financial support from me. I am lucky that my health is not too bad. I am lucky that I came to my senses very early in life to be prudent with money. I am lucky I don't have any children

Well, at least I think I don't have any. All these meant that I avoided wealth destruction.

5. Expanding on the above point on luck, I did a fair bit of trading in the stock market before and I was lucky that I made more money than I lost. 

I bought a couple of private properties at the right time too. I sold them a few years ago, making some hefty capital gains. 

So, I was lucky when it comes to wealth creation and not just in avoiding wealth destruction. Most of the money made went into my war chest. 

I have shared my experience and insights on real estate in Singapore in my blog too, if you are interested to know more. 

It is important to recognise opportunities and not restrict ourselves to any one asset class.

6. The last thing I want to say has nothing to do with your questions but I feel that it is important to make a point that there is always a place for a risk free and volatility free instrument in our portfolio

If we believe that investment grade bonds have a place in our portfolio, then, we won't be wrong to look at money in our CPF accounts as the bond component of our portfolio. 

We should let the government help build our retirement fund. 

Why reject highly rated assistance?

So, in summary, for anyone who wants to achieve what I have achieved,

1. Be financially prudent.

2. Monetise spare time.

3. Don't spend more as you make more money.

4. Start investing early.

5. Invest more during bear markets.

6. A bit of luck helps.

7. Accept help from the government.

I hope you won't think of what I have achieved for anyone with a salary like mine as an impossibility anymore. 

It is not easy, I will admit, but it is not impossible.

Best wishes,

Other related posts:
1. 9 wealth building blog posts.
2. Be prepared for war.
3. Retire by age 45.


pf said...

Eh AK, as much as u (and many ppl) think of passive income to safeguard against crisis (which I take to mean loss of job, as I noticed most ppl refer to that)...there is no foolproof solution. What is ppl were not as lucky as you?

I never won any lucky draw b4. The only time I won something (a book), I was not present. So there was a redraw. I have to support my parents, etc etc.

There is as much risk in going for passive income as reliance on job. The probability most times is a 50-50, right? What if ppl invested for passive income and then the economy tanked and companies cut dividend payout? Or what if economy took off and companies cut dividends for their own investments?

So, it's great to see that you advocate monetizing your spare time now. Think it's quite rare. Most of the time you said you're lazy (but you spend time to find cheaper options). Whahaha...

I think it's best to adopt the 中庸之道。Don't go into extremes. Lol...

Unknown said...

1) Why stop at 5% yield ? 6% yield would give 72k, 7% yield would give 84k and 8% yield would give 96k instead from $1.2million. I feel 6-8% is still achievable for the average person in today's economy, but maybe harder for 10% or more yield.

2) Don't forget the magic of compound interest. 60k at 5% yield compounded over 20 years would give $2.08million and 30k at 5% yield compounded over 20 years would give $1.04 million. As compared to investing $1.2million at one go.

Well now I guess its time for me to try and earn as much as you guys :(

Rebel said...

" I am lucky I don't have any children. Well, at least I think I don't have any. "

LOL . . . That is kinda scary

AK71 said...

Hi pf,

I wasn't always lazy, you know. LOL. ;p

Once upon a time, I had 3 jobs and worked 7 days a week. Reality is unless we are born with a silver spoon in our mouth, we have to exchange our time and energy for money. That is reality for most of us. -.-"

I am certainly not advocating that everyone follows my way. I have always emphasised that there are many roads leading to Rome. People have to decide for themselves which way they want to use. It is never my way or the highway. :)

AK71 said...

Hi Janson,

Well, I believe that there will always be opportunities to make more money. This is why I always say that there is nothing wrong with being an opportunist. ;)

You certainly have the right spirit. Gambatte! :)

AK71 said...

Hi Rebel,

It is, isn't it? Sometimes, I wonder... -.-"

Nah... ;p

SamzelG said...

Hi Janson,

Wondering if there's an error with your calculation or if it's mine...

"Don't forget the magic of compound interest. 60k at 5% yield compounded over 20 years would give $2.08million and 30k at 5% yield compounded over 20 years would give $1.04 million. As compared to investing $1.2million at one go."

60k @ 5% over 20yrs = $159,197.86
30k @ 5% over 20yrs = $79,598.39

The above is calculated based on compound interest of 1 time per year.

Where did you get the millions from?

mike said...

Hi AK71,
I read your post regularly.
Recently I received ARE to subscribe to preferential units of Keppel Infrastructure Fund by this week. Formerly known as Cityspring.
Seeking your advise on this. I am not sure to subscribe for a bigger number of units or less.

INVS 2.0 said...

I can't be saving the same rate as you. :/ If I can reach like $3k per mth in passive income, I am satisfied. :)

Unknown said...

Yes and I forgot to add we should not be too fixated on numbers like what you have mentioned in your blog before.

Even if we are unable to achieve a 6 figure passive income, but just $60k a year, that would already be an additional $5k a month which can really help a lot.

Even an extra $1k a month would make a lot of people's lives better

Kim said...

 "60k at 5% yield compounded over 20 years would give $2.08million and 30k at 5% yield compounded over 20 years would give $1.04 million"

I dont believe the above :(

AK71 said...

Hi Mike,

I was a shareholder of both CitySpring and KGT at different times in the past. I sold my stake in CitySpring because: CitySpring Infrastructure Trust: Divestment.

I sold my stake in KGT because: Keppel and CitySpring Trusts: Unequal marriage.

I have not looked since.

AK71 said...

Hi INVS 2.0,

$3K a month in passive income is definitely nothing to sniff at. That would be an admirable achievement for anyone with a monthly earned income in the mid to high 4 digits, especially for the married with children. :)

AK71 said...

Hi Janson,

That's the spirit! I agree with you. :)

When I tell people that they could get an annual income of $500 if they were to invest just $10,000 in companies like SPH, the response sometimes would be "Aiyoh, so little." Many, unfortunately, are rather myopic. -.-"

I like blogging because I could nag all I want but nagging at someone in person could attract immediate negativity which I would rather avoid. :(

anon said...

"I like blogging because I could nag all I want but nagging at someone in person....."

ha, ha, AK, nag away !!! ;)

PSTan said...

SamzelG & Kim,

I believe that what Janson meant is to invest 60k annually + reinvestment of 5% return received for 20 years.


Anonymous said...

Even a dollar of passive income is a bonus. Why complain? Haha. AK is indeed a role model of many. *applause

starlight said...

Start following your blog.
Thank you.

AK71 said...

Hi jojo,

Alamak. You also think I am nagging in my blog har? -.-"

OK lor. Since you don't mind. ;p

AK71 said...

Hi FD,

We have to start somewhere and there is nothing wrong with starting small. In fact, that is the way most of us would start. :)

Alamak, I am not a role model lah. Dun liddat say. -.-"

AK71 said...

Hi starlight,

Welcome and I hope you enjoy my blog. ;)

qook said...

AK, what you have achieved is truly impressive. I don't have kids either and have been saving and investing for 10 years now, or half of your time, but I am nowhere near getting half of your passive income. My passive income is only 4 digits! Trying to work hard to boost that now but I think I'm not doing things right as progress seems to be really slow...

SamzelG said...

Thanks bro PSTan,

Now becoming a millionaire at the age of 40 looks possible. :)

pf said...

But in your blog you are advocating your way mah...haha...

Think u also do quite a lot of work (aka study/monitoring) for your "passive" income. 钱难赚。

I'm impressed that you can nag so much for an uncle.

Whowillbe said...

Hi AK71,

It's been a long time since I commented.

I understand where your reader is coming from.

Perhaps if you are able to strip away the amount that arose from the gains which you made through the properties and present how much the passive income would be, then it might be slightly easier for your readers to digest.

Why I said this is because I'm assuming that the boost to your net worth was really the gains that you made from the properties. Correct me if I'm wrong.

For my wife and I, we have been working for on average 12.5 yrs per person. Both grads and salaries moved from low to mid to high 4 digit salaries over the years.

Based on our combined savings, we saved about half a million over the years. The initial years, the savings wasn't much. But it got easier as our paychecks increased but not our expenses.

Whowillbe said...

It also helped that our first born came 4 yrs later than what we would have liked. Cause during that 4 years, we saved enough to put a down payment for an overseas property. Something that I doubt would be possible if our first born came early. But don't get me wrong, I am not advocating late parenthood. We wanted to start early but somehow the first born did not come and when he came, we were in a stronger financial position.

Actually raising a kid need not be that expensive. We were able to save up enough to make down payment for a second overseas investment 2 years after the first investment and in between our first born came.

And shortly after the second investment, our second one came.

Now we have a third one.

Yup based on yr 2015, we have 3 kids aged 4 and below.

I can understand how expensive raising a child can be in Singapore. My wife and I have discussed about it and we shuddered at the amount of money that goes into childcare monthly.

What worked for us is that we placed our kids in a religious based childcare centre which is very affordable. 2 x full day childcare + 1 x full day infantcare = total $1700 after subsidies.

Now our mindset wasn't one that goes for the cheapest, in case people thinks that we are cheapskates. But rather we do not see the value of paying a lot more for the established brands such as Pats Sch House, Mindchamps etc... We view childcare service as one to simply help us mind our children while we work so we do not mind the lack of experiential learning that these other established brands offer because we as parents should be the ones to be hands on with our kids.

In our case, our work does allow us to be more hands on with our children. We do recognize that many of our friends are working in jobs that do not offer such possibility such they would very much prefer to leave their children with the most establish centers and I can understand their position too.

We also do not hire any domestic help. Neither do we have the support of our parents. The only luxury we have is to have a part time cleaner who help us do some chores fortnightly.

We also did not upgrade our 1.5 jap sedan to a MPV.

We believe that as parents, what's more important is that we know our own fears, examine our assumptions and question the popular parenting practices.

Very often many of the current parenting practices are based on fear of their children losing out.

We do not want to follow blindly.

We recognize that all children are born different and as parents, it's our job to understand them and know what makes them tick. This takes time and intentionality. We are already prepared to 'henta taki' in our jobs because there's no way that we can climb the ladder and still spent that amount of time with our children.

Also we want our children to discover themselves, have time to daydream and explore. It's okay if they do not get into top schools. Just be of good cheer and of upright conduct, always giving their best shot would be good enough.

We would want to arm them with skills that count, such as people skills, make wise decisions in areas such as relationships and finances, critical thinking.

A lot of these can be done if we parents are willing to start with ourselves FIRST.

We need to stop throwing money to solve problems in raising our children.

Okay sorry for the big digression.

Coming back to my original point. While we have managed to save about half a mil, a major contributor our net worth was the gains made through our property investments. For the same amount invested in equtities, the gains made in properties was 5 times more as of today.

But as all seasoned investors would know, returns from properties investments are magnifier due to leverage, thus one really needs to know what he is doing and cover his grounds well before taking the plunge.

Sanye ◎ 三页 said...

Hi AK,

That is indeed a good summary of your way to your financial success. Congrats!

Your blogs are inspiring and educational for those who wish to achieve financial independence, though certain things you do (or don't do) appear kind of extreme and may not be for everyone. People who read your blog should know that they should follow the principle of how you treat money, and not try to "clone" you.

"6 figure annual passive income" - that's my goal too. 加油!

AK71 said...

Hi qook,

We have to remember that everyone's circumstances are different. So, although some blogs or websites seem to dictate methodologies, I am never dogmatic about what we should do in order to achieve financial freedom.

I am just sharing how I have done it and, hopefully, it inspires people to take steps towards greater financial well-being. As long as you see an improvement in your financial health over time, you know you are doing the right thing and moving in the right direction. :)

qook said...

Whowillbe, thanks for sharing your journey. It does indeed seem more plausible that achieving half a million is possible by mid-30s but a heavy dose of luck is needed to catch the property market. I have missed the property market and have felt quite disheartened that despite my best efforts, I was not achieving anywhere near you or AK's achievements as I was basing on savings alone. It also helps that your wife is fully on board with you and a significant contributor too. Congrats on all you have, especially your beautiful family

AK71 said...

Hi pf,

树老根深,人老话多. Hmmm... -.-"

I must say that I am not advocating my way. I am simply sharing my story, talking to myself. Honest. ;)

I am careful to always say that everyone's circumstances are different and each person will have to find his or her own way. I am also careful to say that the journey to financial freedom is never a race. ;)

AK71 said...

Hi Sanye,

Alamak, clones? That is a more frightening thought than whether I might have children I don't know of. -.-"

As for this blog post being a good summary, yes, I suppose it is much overdue. I have revealed over the years in many different blog posts what I did to get to where I am today. Although readers who have been following me for a long time know the story, for new readers, it could be a challenge to search for the pieces in my blog.

So, thanks to this new reader of my blog, I decided that this blog post is the right thing to do instead of the easy way out. If I were conducting a course in wealth creation and management, I would have done it sooner, I guess. LOL. ;p

Yes, it is important to be reminded that it is never my way or the highway. :)

AK71 said...

Hi Whowillbe,

Thoroughly enjoyed reading your comments. As usual, I think they should be a guest blog so that many more people will read them. ;)

You and your wife are good parents and my blog needs to hear views like yours to balance mine. You are also financially prudent, savvy and very pragmatic. You are good role models. I say this with much sincerity.

As for sharing more details regarding my investments in properties and equities, I am very hesitant to do so. I have shared much in my blog and I wonder if sharing much more would be productive at all. There is also the matter of personal comfort as I have stepped out of my comfort zone in many instances to share very personal data including how much I have amassed in my CPF accounts. Of course, if I have misunderstood and this is not what you were suggesting, please ignore this. -.-"

I think it is important for readers to find out certain things for themselves and if my story has inspired them to do so, I am happy enough. :)

AK71 said...

Hi qook,

I am glad you read Whowillbe's comments. I hope many more readers read them too. Very inspiring. :)

Definitely, financial freedom should be a family affair and we should instil good habits in children as early as possible. Financial well-being should never be an afterthought and should be of primary importance in modern societies like ours.

Achieving financial freedom is a family affair and we should also remember that Your children will become what you are. :)

Whowillbe said...

Hi AK71,

I understand your concerns. Wasn't asking you to be detailed but maybe something like this eg.

Currently annual 120k dividends. But if take away the dividends that's associated to the gains made through properties, then the annual dividends which is due to regular savings and buying of equities is only 24k.

Ah then perhaps readers will see that a large part of your dividend came because you had a massive warchest that came from the liquidation of your properties.

Why I'm suggesting this, is because for the medium term, your readers will at least have a better gauge of how they are doing through their savings and regular investments in equities. N hopefully they will feel a bit more optimistic

But again, I'm assuming that a very large percentage of your network came from ur gains made through properties. Again correct me if I'm wrong.

AK71 said...

Hi Whowillbe,

Use AK as a yardstick? Alamak... Don't want lah. Shouldn't. -.-"

OK, without revealing specifics, I would estimate that my current portfolio of equity investments is about 25% funded by past capital gains from my properties. The rest (i.e. 75%) is from deploying earned income saved, capital gains from stocks and dividends reinvested over the years.

There is a portion of my investment portfolio that does not generate income. So, it is harder to say how much of my passive income from equities is funded by past capital gains from selling my properties.

Whowillbe said...

Hi AK71,

Can't help it mah cause many are looking to you as their role model and I think they are scratching their head, finding it almost impossible to reach where you are (not that this was your intention).

Anyway don't feel too bad if there are people are looking to you as a role model and yet feel lousy about themselves when they compare themselves to you. No fault of yours.

Based on ur figures, I would say that my assumption that most of your gains came from properties was wrong.

You are really a very strong and discipline saver and equities investor!

Not many can do what you are doing. To build a 1 mil portfolio that yields 5% is doable. But to build a 1 mil portfolio that yields > 8% is not something many of us can do.

Whowillbe said...

Hi qook,

The thing I like about AK71 is his altruistic nature. He's those type, when he found a good hawker store will try his best to share with others cause he wants more people to have what he experienced.

Same as AK71, the last thing I would want you to feel is of discouragement because of my sharing.

What's important is that you get your fundamentals right which is to be a stronger saver, build up your investment understanding and be patient.

Also there's an element of serendipity involved. At least that's what I believe in and AK71 too.

Example, I bought my humble abode in 2003 when properties were very much more affordable. I did it not because I am good at timing the market but it's because I'm going to get married in a couple of years' time. That serendipity.

My ex-gf then was flipping through the newspaper when she saw a project and she sounded me out. I told her that I wasn't interested because we would have to take a bank loan as it isn't a HDB and I wasn't comfortable. But later I decided to surprise her by bringing her down to see the showflat. We liked what we saw and we bought it the next day. That's serendipity.

But what made us decide to take the risk of buying a non HDB for our first flat even though we were barely out of uni was because the price differential between a HDB and a condo of similar size and location wasn't very big. It was only about 100k and the risk seems worth it to me. So to me it was a no brainier. This part is about applying logic.

Did I buy expecting the price to increase by 140%. No. But I knew that my downside was more or less covered. So to have it appreciate so much is a bonus. Again serendipity.

So a large part our net worth is due to the rise in our home value but so did many other people. So in that sense if was really no big deal here but I do pity my friends who got married later.

Not so much that they failed to experience that gain in the value of their home but rather they have to spent so much to buy their homes now. Which leaves them with less savings to plough into their investments but then again, they can choose to still go the HDB route which would still cost cheaper than the condo that I bought 12 yrs ago. So a couple can still diligently save over the years.

With the amount saved, you will have the ability to make that investment when it makes sense to do so. Just be patient.

AK71 said...

Hi Whowillbe,

I know what you mean. I hope to inspire but I have been surprised on a couple of occasions when people felt depressed after visiting my blog instead. So, you have made a valid point. -.-"

I would say that the money in my war chests (i.e. the money in my CPF-OA, FDs and a portion of my SRS account) are from the capital gains from selling my properties in 2011 and 2012. So, for anyone who wonders how I manage to have so much in my war chest(s), well, this is the answer and, if you think about it, it makes sense why I have so much in my CPF-OA now. This is also something I shared in my blog before.
See: How did AK amass so much money in his CPF-OA?

Making money from selling properties is a pretty recent event for me but I have been in stocks for a much longer time and I have been rather frugal for almost as long. See:
1. The mystical art of wealth accumulation.
2. An essential habit to becoming richer.

As for the relatively high yield my portfolio of equities get on average, it is about picking up more dividend paying stocks in bear markets when their prices are beaten down. It really isn't a mystery how it is achieved and it is something all of us can do if we have a war chest ready. ;)

Ray said...

I wonder if the era of earning from property where they are cheap and affordable and can gain more than 100% in price is over. People still flock to showrooms and many still buying multiple properties but at the expense of high leverage. Too risky in my opinion.

AK71 said...

Hi Ray,

In an environment of rising prices, it is common to hear "If I don't buy now, the prices could be even higher later." So, many threw caution to the winds and I worry for those who bought investment properties in the last 2 or 3 years. So, when some say that the very low interest rate environment is causing asset price inflation because people are taking big risks, it is true. I have to keep reminding myself of this and it is good to keep The Rule of 15 in mind to help us stay grounded.

Whowillbe said...

Hi Ray,

I wouldn't touch local properties at all now.

Regarding capital growth, I find that comparison to the past is actually a distraction and also focusing on a fixed % gain too. Cause I feel that it's bothering on speculation, who can predict what will be the % drop or gain. No one.

I rather crunch the numbers and ask whether it makes sense as an investment and also abiding by certain guidelines which are of good sense. Rule of 15 is one good example.

Whowillbe said...

Hi AK71,

Exceptional gains can only be made when the market is feeling really depressed.

I think many of your readers forgot that much of your gains are made from depressed markets.

And now that they are surrounded with current market conditions, they are wondering how can they achieve what you achieve. And they have also forgotten that they have not gone through the emotions of a depressed market.

Perhaps it's good that they just save aggressively now and only come back to your blog when the markets are in pandemonium so that they can take courage from your example.

AK71 said...

Hi Whowillbe,

Very sensible advice but I always remind myself that Mr. Market could feel selectively pessimistic and I got my hands on some bargains that way too, both in stocks and real estate. Of course, it is much easier to get our hands on bargains when Mr. Market is simply feeling depressed generally. -.-"

Another old blog post:
When to be fully invested in the stock market?

Ray said...

Thanks both. For your advice. I think many readers here know to wait for low price and blood in the streets but most people are waiting for a t long time for this recession but it hasn't come yet. Allah properties prices are very resilient in the last few crisis.

I don't have the guts to invest in overseas property. Because unsure of the rules in other countries.

Whowillbe said...

Hi Ray,

Then these investors are not very experienced I would say. They are lacking in patience.

Let me offer you another perspective. Would you want to have $100k or $200k in your warchest when market is depressed?

$200k right? Then wouldn't we want to have a bit more time to save up?

AK71 shared before that his main problem during the GFC was that he did not have enough resources to buy more.

Also regarding overseas properties. I must clarify that the city which I invested in is a global city with stable political system, huge talent magnet, demand outstripping supply, currency was weakened and region was in crisis. The rental income was within the rule of 15. So it made sense.

I did not invest in areas such as Bangkok, HCMC, Myanmar etc...

However I will not be investing in that global city again in the medium term cause prices has shot up 50-60% since I invested and have gone beyond the rule of 15.

Unknown said...

Where can we start accumulating knowledge on overseas property investing?

AK71 said...

Hi Lazypig,

The rules and regulations are different from country to country. Depending on where you are thinking of investing in, you want to search the internet for more information on these. You also really want to be familiar with things on the ground and not just buy after watching some video presentation or reading a brochure. When in doubt, it is better to stay out.

Ray said...

Hi Whowillbe,

hope your overseas investment reap profits! :)
And I hope it's not Iskandar ? ;)

AK71 said...

Hi Ray,

If I were to hazard a guess, I will say Whowillbe's overseas properties are in some big city in the USA or UK. Definitely not Iskandar. ;p

Whowillbe said...

Hi AK71,

Your point about selective depressed markets is very valid too.

I made the mistake by saying the exceptional gains can ONLY be made during ....

I should have not used the word ONLY.

What I meant was for the general investing public. For readers who are much more advance and employs FA and TA, they don't have to wait for such depressed conditions.

However I'm not that industrious. I find it easier to just buy a reliable blue chip during depressed conditions. Best, don't even have to consider which of the 3 local banks. Just any one of them will do.

Same thing for properties. Any property one bought from 2002-2006 will have made good gains now.

Was it possible to get one in the last 3 years. Yes. But got to do a lot of homework and legwork.

See. I told you that I wasn't too industrious.

Whowillbe said...

Hi Ray,

Gee I didn't know Iskandar fit the criteria that I mentioned, other than the rising prices.

AK71 is 50% right...

Ah I do have a story about a US investment which I aborted.

Whowillbe said...


Actually for very established markets such as Manhattan and London, information is freely available through the Internet. You can even call up different realtors to request for information.

This might come as a surprise, but you can learn a lot from exhibitions too. However must ask the right questions since the exhibitors are there to sell.

Again, my experience was one of serendipity. I noticed that there were paper adverts of apartments in a particular city. We decided to visit one such exhibition. Heard what the agent shared, ask my questions, did searches online. Went back the next day to purchase.

Apartment was completed almost 2 years later and the rental return was almost 20% higher than what was projected during the exhibition.

Actually I find that investing in properties, at least from my experience, is much more straight forward.

Identify a good location, buy at depressed prices and your investment is most probably going to last you for a long long time. Just need to set aside some money for repairs and sprucing up from time to time.

qook said...

Whowillbe, let me guess. The city you invested in has 6 letters and 2 vowels? We may have investments in the same city :)

This post has been thoroughly educational for me. Thanks v much to AK for putting it together and for sharing your knowledge so generously. Also thanks to all those who commented, it really does help to see multiple perspectives and to learn how people have achieved things in their own way

AK71 said...

Hi Whowillbe,

Oh, I am generally not very industrious too. I second your approach. LOL. ;p

However, I have a watchlist of stocks which I am more familiar with. So, if opportunities present themselves, bear market or not, I would know to move. :)

As for real estate, I did buy a condo in D9 in 2009 and sold it in 2011. Made 20%. Not too bad considering the fact that all I did pay was the 20% downpayment as the project offered IAS.

Then, it became harder to good deals. My current place which I bought in 2012 was an example of a rare good deal then. I believe I was lucky too. I got to know about the pricing of this condo because of a casual remark a friend made when we were having a chat.

Having a feel for the market then, I thought it was slightly undervalued which gave the then homeless me a chance to become a home owner once more with the margin of safety I always look for. ;p

So, when I say I am lucky mostly, I really do think so. :)

Whowillbe said...

Hi qook,


I believe that your investment has been doing well, as long as you have bought it pre 2014.

Leopard said...

Hi AK71,

Probably not many readers will see this but still am going to comment.

I don't think it is as difficult as the reader or the above comments described. I think people tend to forget that yield on cost could be much higher than market yield because dividends will also grow. If i were to hazard a guess, a lot of your counters have yield on cost much higher than 10%. (I guess those compensates the counters you have that don't distribute dividends; or the level 4s and 5s in your pyramid.)

I think if people start doing their own homework and properly analyze the businesses; like looking for sustainable yields instead of trailing 12month, or yields declared in ARs, (something which i learnt well from your posts), valuing business conservatively and taking up a position only when that value is offered by Mr Market; getting 6 figure annual dividend income from mid to high 4 figure salary is definitely achievable. I would even put my neck out and say that it is not that difficult too.

It's really not just reading what AK71 nibbled on and follow along at a close enough price, but to learn how and why AK71 did what he did and try to apply it yourself.

I must say AK, your posts influenced a lot the way i take my positions in the market as a newbie of only 2 years. Just for the record, i am a fresh grad when i started investing, and i am going to hit 1k in dividend income within the next 6months. So growing that snowball is not difficult even without mid - high 4 figure salary. I know you always disclaim it, but thank you for all the sharing of your skills. I had, and hopefully will continue to have, very positive results from learning your skills.


AK71 said...

Hi WJ,

You are very perceptive. It is true that quite a few of the investments for income I have in my portfolio have yields on cost of close to 10% or more than 10%. This also include stocks such as STE and SPH, not just REITs. I really cannot claim much credit for my results. Time did most of the work both in offering opportunities and also letting returns grow.

I am not blogging as much about what I buy and sell in the stock market these days because I have grown more afraid of readers simply following what I do. What is comfortable for me might not be so for others. Not all readers understand this.

I will take this opportunity to say that I could sometimes be taking calculated risks which require rather longer term perspectives too such as my investments in Wilmar, Marco Polo Marine and some rather undervalued property developers.

Position sizing relative to the size of our portfolio is one of the keys to investing with peace of mind. So is self knowledge, knowing what strategy suits us and whether a certain action fits that strategy. Depending on the size of our portfolio, the top of my pyramid is best to be avoided for some.

Your thoughtful and well written comment has put things into perspective for some readers who might still be feeling doubtful, I am sure. However, I do think you have stuck your neck out a bit too much by saying what I have achieved is not that difficult on a mid to high 4 digits monthly salary but, hey, it's your neck. ;p

qook said...

Wei Jian,

I really don't think achieving 6 figure passive income from stocks is that easy. Kudos to you to achieving so much in just 2 years from graduation, but I would dare say that you probably have above average discipline and intelligence to save and invest to make this possible. I dare say that you also probably have above average income as well, possibly in the mid to high 4 figure range? A lot of people only reach that after 10-20 years of hard work ;) still, while you yourself may feel that it was easy (to you), it is still an impressive achievement at your age. I wish that I had your mindset when I graduated years and years ago. Keep it up and I'm sure you will comfortably achieve financial independence in no time at all

AK71 said...

"Not everyone has the same aspirations. If someone has no career aspiration, is he a failure? You define success and find your path to success."

John Tan: "This investment guru sounds like a quack. Is that why he goes around wearing a mask all the time? Or he's Batman?

If this guy is as talented as you claim, he shouldn't only be earning $5-7k per month for the past twenty years. He should have been promoted to some high-flying director or started his own business by now..."

Siew Mun said...

I started 2 years ago in 2014. First year absolute return is $15K yield on cost 7-8%. Second year is $14k yield on cost 7-8%. Third year - 2016 return expected is $35k taking bumper harvest of Saizen into consideration. For 3 years all add up to $64K. Looks pretty good to me. All returns will be reinvested will snowball overtime. ;-p

AK71 said...

Hi Siew Mun,

The numbers are very encouraging. Keep up the good work! :)

INVS 2.0 said...

Hi Ak,

I only started following your blog in 2012. My investment journey started in 2010 when I was still in NS. However, the peanut army allowance did little to build up my passive income and the same happened for the rest of my uni life until this year. Thankfully, the market overreaction in Jan/Feb 2016 have enabled me to enter the market and bought a load. I will joining the workforce next month and will be earning a full-time salary. That is where the real journey to financial freedom will begin. ;)

AK71 said...

Hi INVS 2.0,

Has it been 4 years? Wow! Time does fly, doesn't it?

Yes, we need capital to be investors. The faster we build up our capital, the better. Gambatte! ;)

AK71 said...

"Hi AK, I am a new follower on FB. Did you really win a car or were you joking?"

"This was many years ago. Yes, it's true. I blogged about it before. I have been mostly lucky on the road to financial freedom."

AK71 said...

From my FB wall:

Tong Xiang Yap:
"Yesterday I share a link of a typical financial blogger sharing dividend investing for passive income. His capital around 350k with 5% yield.

"When I show that to my fren, the first thing they ask is not how he do it but he did it becos he has got a large capital base.

"Human love to find reasons when they are unable to do it. Thus I don't bother to explain anymore. In my personal view, it is definitely doable with proper planning."

cyclist89 said...

Hi AK,

I am turning 28 this year and will be able to squirrel away 200k of networth soon. I have started saving and investing before i graduated and have never spent a single dollar of my take home income because i do tutoring on weekends to cover my expenses and even top up on my savings. However, i find this quite tiring and although i enjoy seeing my networth grow far beyond the imagination of my peers, i still cannot help to wonder as a young person if i am sacrificing some life experiences by limiting my expenditure in this way. Please share your thoughts!

THank you

AK71 said...

Hi cyclist,

Our lifestyle choice is very personal. If you are beginning to feel that you are missing out on something, maybe, you should think about whether you should cut yourself some slack and how you might want to do that. :)

You might be interested in this blog:
Did I work too hard in my younger days?

Cindy said...

Hi AK,

Thanks for your sharing. I've learned such a lot from your blog.

I'm in my early 30s and financially free. I gained more than 500% in the stock market this year and I've been investing more and more in REITs recently.

I'm quite happy with my passive income at the moment, but I wonder if it'd be better to sell the REITs and invest in bonds instead before a crash comes (i kinda feel that it will happen in one or two years).

It'd be much appreciated if you could give me some advice. Thank you in advance. Have a good day~

AK71 said...

Hi Cindy,

I don't have a working crystal ball, unfortunately. -.-"

I always say that I cannot predict. I can only prepare. ;)

AK71 said...

I hope to have passive income like u instead of dragging to work.

It takes time, hard work and some luck. 🙂

AK71 said...

how did you amass a huge portfolio?
were you a high income earner?
im just curious speaking from a student POV because most professionals older than you dont even have such a good stream of passive income...

Why do people older than I am and who earn more money than I did have less passive income than I have?
Well, everyone's circumstances are different but I think it is safe to say that many still think rich people are those who earn a lot of money.
Actually, it is how much money we save that determines if we are rich and not how much we earn. ;)

AK71 said...

AK said...
I think it is important not to be married to our jobs.

Tong Xiang Yap said...
Nearly thought you are saying ... "it is important not to be married ..." 😂
In some aspect of financial freedom, it is true. Lol

Siew Mun Kwan said...
Married is fine.. Having children is another downside to wealth reduction

AK71 said...

Lee Jiahui said...
It could have been "it is important not to hold wealth destructing assets"

Tong Xiang Yap said...
The only problem is that the 'asset' we acquired via marriage, might or might not be a destructing assets and in some cases, it might be a liability.

Ray said...

having children is never about investing in human and looking forward to them repaying. being childless or child-free as some would prefer to call it, is definitely better in terms of having more money and more time to yourself. but imagine the society impact if everyone don't have kids.

AK71 said...

Hi Ray,

For sure, all of us have some things we spend money on.

If it is not on children, it is on something else.

It is just different forms of consumption. ;)

AK71 said...

What is our attitude towards having children? 钱最重要的!

AK71 said...

Alan Seow says...
Based on the history of your blog. I think you made the first few large capital gains from property first.

AK says...
Nope. Not true.
Read point no. 5 in this blog.
Making money from real estate, however hefty, came later.
Investing and trading in stocks came first.

AK71 said...

Alan Seow says...
Thank you. You give hope to generation Xers which had missed the real estate boat (and are currently missing more of it with the new measures).

AK says...
Property market goes through cycles. I don't know when the next property market bust is going to happen but it will happen. Matter of time. The boat will come back. Act then. ;)

AK71 said...

Alan Seow says...
Thank you for the advice. Your blog has truly been motivational, and not in the rose tinted "I will make you rich" kind of way. Holding down 3 jobs with no weekends, surviving a large drawdown in the financial crises, and coming back stronger on your TA and FA. Gives hope to people without that silver spoon - if Yan can cook so can you.

AK says...
Hehe... I see you remember Yan can cook. :p
Can we do it? Yes, we can! :D

AK71 said...

betta man said...
When I saw the article below, it reminded me of your blog. I was thinking if this senior manager is financially free, meaning he can choose to work or not to work, he won't be so mentally tormented. Simply report the case and resign the following day.

AK said...
All of us want to be happy and having the freedom to choose whether we want to work or not can only be a good thing. :)

Monthly Popular Blog Posts

All time ASSI most popular!

Bloggy Award