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1Q 2023 passive income: Plodding along.

Friday, March 31, 2023

This is my first passive income update for 2023.

I will talk a bit about what has happened in the fixed income space first.

As expected, the latest 6 months T-bill auction closed with a higher cut-off yield of 3.85% per annum compared to the previous issuance which had a "shockingly low" cut-off yield of 3.65%.

A couple of weeks ago, I produced a video which shared my thoughts on what a further interest rate hike by the Fed would mean for certain assets.

You can watch or listen to it here:

The latest Singapore Savings Bonds offer which closed on Wednesday was oversubscribed.

A higher 10 year average yield of 3.15% per annum attracted Mr. Market's attention, no doubt.

3% per annum 10 year average yield, I believe, is the threshold to watch.

The Singapore Savings Bonds which were undersubscribed earlier in the year offered lower 10 year average yields of 2.97% and 2.9%.

As long as the 10 year average yield is above 3% per annum, it makes more sense to me to put money in Singapore Savings Bond than to do voluntary contribution to my CPF account.

CPF or Singapore Savings Bond?

A week ago, I shared my updated fixed income strategy and if you missed it, read it here: 

Fixed Income Strategy.

My application for the latest Singapore Savings Bond with $16,000 of money which would have been earmarked for CPF voluntary contribution in 2024 was fully allotted. 

After this, I would have another $22,000 from future dividends to deploy to either Singapore Savings Bond or CPF for the rest of the year.

Total amount of money to be deployed this way in 2023 is $38,000.

Not to rehash too much, I am providing links to two blogs about changes to my portfolio in the months of January and February here:

1. Changes to portfolio in January 2023.
2. Changes to portfolio in February 2023.

In March, I put more money to work in 6 months T-bills. 

I also added to my investment in OCBC as the price of its common stock sank below $12 at one point. 

So, how much did I receive in passive income in 1Q 2023?


I am quite pleased with this although it increased year on year by only 2%.

In 1Q 2022, my passive income was $40,697.68.

Back in 1Q 2022, my investment in IREIT Global was a star performer.

Income received from IREIT Global in 1Q 2023 declined 11.5%, year on year.

A combination of higher operating expenses and the cessation of its sole tenant in its Darmstadt asset dealt a double whammy.

However, readers who have been following my blogs on IREIT Global would understand why I remain invested.

I like investing in bona fide income generating businesses with strong balance sheets.

I like them even more if I am able to get them at a discount to their true value.

To me, IREIT Global fits the bill.

IREIT Global: Buying more?

Pertaining to this idea, if you do not follow my YouTube channel, you might want to watch or listen to this video which I released recently:

As IREIT Global contributed the lion's share of passive income a year ago, I was expecting passive income in 1Q 2023 to see a decline.

So, you can imagine why I am pleasantly surprised to see it increasing 2% year on year instead.

I must have done something right along the way.

What did I do differently?

I gave it some thought and decided that I have only done things which I would have usually done.

I have been putting more money to work in income producing assets.

My investments in Sabana REIT and IREIT Global are larger now than they were a year ago.

That mitigated the reductions in their DPU.

I received some income from T-bills in 1Q 2023.

I didn't have this a year ago.

So, I have been saving more money with the belief that cash is not trash and that it has become a relatively rewarding asset class to hold.

Then, all else being equal, income from some investments actually increased, year on year.

Higher income received from some of my larger investments in 1Q 2023, year on year, made an impact.

The following deserve mention:

1. Ascott Trust
3. CapitaLand China Trust

You might want to watch or listen to a YouTube video I produced on AIMS APAC REIT here:

CapitaLand China Trust's much higher DPU was surprising because I remember reading somewhere that their DPU reduced.

I checked and apparently, there was a 2 cents per unit entitlement declared.

If not for this, DPU would have been much lower at 1.4 cents instead of 3.4 cents.

OK, they give, I take.

If things do not improve significantly from here and if I do not put more money to work, then, year on year, I could see a decline in passive income in 1Q 2024.

Of course, what I receive in passive income for the whole year is more important than what I receive in a single quarter.

If 1Q 2024 should turn in a lower amount of passive income, hopefully, 2Q and 3Q in 2024 could help make up for it.

In the same vein, I am looking forward to passive income in 2Q and 3Q this year as, for me, their numbers are usually much bigger compared to what 1Q and 4Q bring to the table.

Having said this, my portfolio's 1Q 2023's performance is not too bad. 

It is the result of putting more money to work and also the higher income generated by a few of my investments.

To be honest, it definitely benefitted from a splash of luck too.

It is important to remind myself that luck is unreliable and we should always be prepared for crises.

Pertaining to this point, you might be interested in this YouTube video I released recently:

Finally, an update on "Evening with AK and friends 2023."

I received a message from Kenji a few days ago that 80% of the tickets were sold.

At the time, there were about 60 tickets left.

So, if you were unsure if you could make it on 10 May, you might want to make a note on your calendar. 

Some tickets might still be available closer to the event date and you could get your ticket then.

Ticketing link: HERE.

Till the next blog, remember, financial freedom is not a dream.

Investing in bona fide income generating assets, especially if they are undervalued by Mr. Market, will help us along the way.

Watch or listen to this latest video on how AK is getting free money for life from Hock Lian Seng:

Hope you like most of my YouTube videos so far.

Literally, it is eavesdropping on AK talking to himself.

Remember to subscribe to my YouTube channel if you want timely notifications.

In closing, I should remind myself that what I have done as an investor is nothing amazing.

Just plodding along.

Unless severely disadvantaged, anyone can do it!

If AK can do it, so can you!

Related post:
1Q 2022 passive income.


SgFire said...

Hi Ak

Good sharing and all the efforts are well worth the time

AK71 said...

Hi SgFire,

I would have been quite happy if things had continued chugging along like they did before.

That would have allowed me to do nothing.

Unfortunately, the only constant in life is change. -.-"

Chenheyuan87 said...

Hi AK, if you are buying some shares now, will you use your cpf oa to make that purchase? and the cash that was meant to buy shares initially, can put into ssb? since e interest earned in cash is much higher than 2.5%? thanks!

AK71 said...

Hi Chenheyuan,

I treat my CPF savings as the investment grade bond component of my portfolio.

I moved my CPF-OA savings into T-bills earlier in the year as they offered higher yields than 2.5% p.a.

CPF and T-bills are both risk free and backed by the Singapore government.

I believe we need risk free and preferably volatility free fixed income components in our investment portfolio.

Your plan sounds viable too if you want more exposure to equities without using too much of your cash on hand.

For me, I used my CPF-OA money to get T-bills and cash on hand to get SSBs.

The Dreamzola Traveller said...

My cousin got the ticket, she will be coming to see you on 10 May.
I am sure she will learn something useful from you. Huat ah!!!:)

AK71 said...


I am not sure if she would be learning anything useful from me.

However, I am sure she would have a few good laughs. :D

garudadri said...

Dear AK
Nice to get stimulated after seeing your returns for Q1
If I remembered right, last year you had managed around 17500 per month equivalent and that was very commendable. Please do correct me if I understated this!
I added more CLCT last week at 1.12, having recently added at 1.13, 98, 99 and 1.04 in last few months. The prospects after all their AEI plus diversification into logistics and business parks seems reasonably a safe thing to bet on in the PRC
I bought Capitaland Ascendas India trust for the first time , emboldened by my paper gains with other SG stocks to increase my passive income. Interest rates are at peak or almost there. The SG REITS are up in terms of looking forward 3-4 quarters ahead as it is almost certain that rates will fall.
Banks in the US report in less than 2 weeks. Cautious outlook statements plus loan loss provisions might be the case. If so, the markets will drop and I am fairly certain that our trio will follow suit, at least partially, in sync and in sympathy!
Will then nibble again hopefully as DBS OCBC and UOB will retest 32, 12 and 27 maybe or even go lower
Overall, fixed income options will become less attractive over the next few quarters and equity will receive allocations as there is a lot of cash on the sidelines still looking at money supply data globally
A barbell approach alternately loading on banks and REITS, will net at least a 5% yield plus another 5-10% capital appreciation
The SG REITS have already run up in anticipation as the forward looking markets are optimistic about rare cuts at least by early 2024 if not Q42023
If something breaks like a credit event or so, rate cuts will happen earlier and this will hasten the process albeit with temporary market pain
Cash levels have to be kept higher and I sold some of my US holdings to top slice trading profits to position for the next dip
Fingers crossed
Best wishes

AK71 said...

Hi Garudadri,

Average passive income per month in 2022 was about:

S$17,166 per month.

I don't have a good memory.

I looked up the blog, copied and pasted. ;p

That is what my blog is good for, to inspire!

How readers plan to generate passive income could be different from person to person. :)

Thank you for sharing your strategy here as I am sure it will provide food for thought.

Personally, I am mostly just building up my cash position to prepare for a crash which I think might be coming.

What is coming next could be some form of credit event.

I certainly hope it won't be at the level of a crisis but it could well be.

If I am wrong and if the bear decides to go back to sleep, it isn't a big deal since I am already substantially invested.

I think we have similar strategies. Not the same, for sure, but similar.

Good luck to us all. :D

effervescence of life said...

Hi AK,

Inspiring readers with your passive income, you surely did!

I am a very late reader of your blog and also a very late stock investor (in my 40s) but discovering your blog 2 years ago certainly changed my perspective/strategy in investing. Yes, I am evesdropping on your self talks all the time!

Within 2 years, I have build up a passive income of about $2k a month. This is nothing compared to lots of investors but it means a lot to me to build a passive income. Thanks again AK!


AK71 said...

Hi effervescence of life,

Being able to build a portfolio which generates $2K a month in passive income within 2 years is no mean feat!

It speaks volumes of your determination as an investor for income! :D

Comments like yours let me know that talking to myself after all these years might still be worthwhile. :)

Gambatte! :D

coven said...

Thank you AK for your selfless sharing. It has been an inspiration to me :)

AK71 said...

Hi coven,

Your name is familiar.

I think you have commented in my blog or on my FB wall before.

Or I could be wrong. ;p

Didn't know you have a blog.

Going by the web address you have included in the comment, let me congratulate you on hitting your target passive income! :D

Thanks for letting me know my blog has been an inspiration to you.

Comments like yours let me know talking to myself all these years has been worthwhile. :)

coven said...

Hi AK, I might have commented once or twice over the many years of reading your blog :P

Guess with the passing of CW8888, it gives me more courage to express my appreciation to the tireless work of writing a financial blog (Singaporeans tend to be the shy type)

Do keep on writing and be a blessing to the investing community :)

AK71 said...

Hi coven,

Oh dear. I didn't know CW8888 has passed away.

I am shocked as he should still be relatively young.

If I remember correctly, he retired from work at about the same time I did which was around 7 or 8 years ago and he was maybe 60 years old.

I do hope he passed away peacefully and without any pain. Rest in peace.

Blogging is a hobby to me and as long as I still enjoy it, I will do it. :D

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