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4Q 2023 passive income: Why the smile?

Wednesday, January 10, 2024

In my first blog post of the year, I said that 4Q 2023 passive income should come in weaker.

This is because OCBC and UOB only pay dividends in Q2 and Q3.

So, missing these major contributors, it is only reasonable to expect lower passive income numbers for me in Q4 2023.

Also, I expected Q4 2023 passive income to be lower, year on year.

This is because my investments in REITs and property developers were generating less income for me in 2023 compared to the year before.

High interest rates are pretty challenging for some entities.

Fortunately, DBS pays dividends quarterly.

Being another substantial investment in my portfolio, hopefully, this would provide a bit of a cushion.

This is especially when DBS increased their dividend per share not too long ago.

My persistence in building and strengthening a T-bill ladder in an environment of higher yields should also help.

All of that went on in my head.

So, how did things turn out?

Total passive income generated by my investments in 4Q 2023 was:

$ 24,849.44

This is some 2% lower, year on year.

It was $25,331.81 in 4Q 2022.

Hmm, the decline was not unexpected.

Still, like the title says, I smiled because it wasn't too bad.

2% decline on a relatively smaller sum.

Not too damaging.

Thanks to strong Q2 and Q3 numbers, full year 2023 registered an improvement.

Q2 and Q3 saw larger percentage gains on relatively larger numbers, after all.

Everything taken into consideration, pretty decent.

Full year 2023 saw a 12% increase in income generated by my investment portfolio, year on year.

Total amount: 


This compared to $205,999.73 for full year 2022.

To new readers of my blog, this is probably all very impressive.

However, readers who have been following my blog for many years would know that blog posts like this is more to inspire than to impress.

If AK can do it, so can you!

I am not just saying this.

I mean it.

It is about being prudent with money.

It is about keeping our needs simple and our wants few.

It is about being patient and getting rich slow.

It is about being pragmatic and staying invested in bona fide income generating assets.

If it all sounds very boring, well, it is.

It is all about staying grounded and marching towards that pot of gold we know is waiting for us to unearth.


That sounds like work.

Yes, it is.

There is no free lunch in this world.

It is not about going after what could be there but what we know is there.

So, what is my strategy for 2024?

More of the same, really.

I expect my investment portfolio to continue generating income for me this year, barring earth shattering events.

If another pandemic strikes or if war happens on a global scale, expect income generation to slow down or stall.

I can only hope that sanity prevails and that more people in power are willing and able to avoid war on a larger scale.

War is fully avoidable unlike pandemics.

Unfortunately, many human beings are selfish and narrow minded.

When they are put in positions of powers, they could then influence the gullible to do the unthinkable.

This is not a problem exclusive to less developed countries or politically less stable regions in the world, of course.

I am spending some time to talk to myself about this because compared to economic challenges, this is a bigger problem.

Where economic challenges are concerned, high inflation has been tamed or so it seems.

Expectations are for interest rates to start declining sometime this year and there are some experts who think that the Fed will bring interest rate down to under 3% in order to ensure a soft landing.

This is good news for REITs, especially those which are highly leveraged as well as those which have a big part of their debt on floating rates.

For banks, it would mean moderating earnings as rapid interest rate hikes end a strong tailwind.

Still, banks have proven again and again that they have been able to deliver earnings growth over time.

So, staying invested is what I will do.

Before I end this blog post, I will remind myself of the following.

"There will come a day when my passive income generated exceeds my earned income doing what I do.

"If I have always been prudent with money, that is probably the day I become financially free.

"That is when I no longer have to work for money."

No more unearthing to do.

So, believe me when I say this.

If AK can do it, so can you!


ace3256 said...

Dear AK, just wanted to hear any "self-talk" you may have on Wilmar following my previous comment a few posts back - is approximately 3.40 - 3.50 a good price to enter? I note that at this price range the yield will be about 5%, paid half yearly (which is as good as some REITs), and that it will be paid out of earnings (unlike REITs, which pays out of cash flow).

Your solid $200+k passive income is truly inspiring! I intend to adopt your "get paid while waiting mindset" and slowly build up my passive income stream :)

gagmewithaspoon said...

What is your view on Reits now? Your video with fifth person was made prior to Feds talking about slowing down the interest rates right? Do you see things moving differently soon? Mrs Spoon here.

walkoutofthedark said...

Hello AK! Happy New Year, and i am loving this title! so cute !!

Just curious, what are your thoughts about AIMS and First Reits based on current stage ? Or do you still plan to invest more in RIETS in considering things might shift when FED drops its interest rates?

AK71 said...

Hi ace,

My opinion of Wilmar has not changed.

Deeply undervalued and it pays us while we wait for value to be unlocked.

It has to because it could be a long wait.

So, investors for income who like a bit of asset play thrown in, Wilmar seems like a good fit to me.

I see natural supports at $3.50 and $3.00 a share and Mr. Kuok seems to agree as he has bought at those levels before many times. ;p

AK71 said...

Hi gagmewithaspoon,

There are so many experts giving their opinions as to where interest rates are going in 2024.

I really have no clue what is going to happen.

It does look as if high inflation has been tamed which allows central bankers to loosen up a bit on interest rates.

If interest rates do come down, it is good news for REITs.

However, what I said in the interview still stands in that interest rates would likely remain higher in 2024 than it was almost 2 years ago when the series of hikes started.

AK71 said...

Hi walkoutofthedark,

I sold my investment in First REIT many years ago when it was still $1 per unit.

No interest in buying in again.

As for AA REIT, I am quite happy to hold on to what I have but not adding as well.

I think they have a perpetual bond callable in 2025 and I would like to see what happens then.

Not adding to my investments in REITs.

I lightened exposure to REITs over the years because I felt low interest rates couldn't last forever and they didn't.

Even if interest rates should decline this year, it is improbable that they would go to almost zero like they were almost 2 years ago.

I am still looking at possibly increasing my exposure to the local banks which have proven themselves resilient even during bad times.

Akgw said...

Hi AK, tried emailing you but somehow the email bounced so I decided to hijack this post for my question.

I'm Aaron, a new investor starting out. And would like to ask if you could share your thoughts on Singapore Airlines.

I've come across Singapore Airlines and it seems like, in my opinion, an under-rated stock that no one seems to talk about, relative to banks these days.

Right now from a financial point of view, it has:

Decent P/E of 7.31
Healthy cash flow of 5.6b
Net margin of 12%
Debt/equity of 0.85
Dividend yield of ~5.8%

Basically Singapore Airlines is stronger than ever, but it sentiments seems to show otherwise. And this is making me having 2nd thoughts buying in to SIA.

The reason why I'm looking at SIA is because I currently have a small sum of money in my SRS account which I would like to deploy. Considering the limitations of the number of stocks I can purchase, that's the reason SIA comes into mind. PS, I already have banks in my portfolio and would like to diversify.


Wentworth Scofield said...

Hi AK. Great article and passive income as always!! would you also be talking to yourself regarding Keppel Corp at current valuation.. pls.. :)

AK71 said...

Hi Aaron,

There is a notice at the top of my blog that says the email address is not longer working.

I forgot how to remove it. ;p

Decided not to share another email address because I was spending too much time replying to emails.

It felt like I was back in the office working. -.-"

As for Singapore Airlines, there are good reasons why value investors avoid it.

Warren Buffett famously said he would not ever invest in airlines because they had terrible business models and even very good managers could not get fantastic results from them.

Of course, we now know that he lost billions of dollars cutting losses on airline stocks when he went back on his words a few years ago.

That is all I have to say in general.

I rather not invest in businesses which require huge CAPEX continually and have more fragile business models which could see their cashflow drying up within a short time for whatever reason.

AK71 said...

Hi Wentworth,

Glad you enjoyed the blog post. :)

It takes a lot of time to analyze or even partially analyze stocks and my plate is quite full now, unfortunately. :(

mitchell said...

Hi ak
Your any thoughts on CLCT? Badly managed or are the winds not in their favor looking at how things in China is right now

AK71 said...

Hi mitchell,

CLCT shows the risk of being 100% invested in a single country.

The REIT is not badly run.

Just wrong place, wrong time.

Wxr said...

Great to read your generous sharing. Do you mind sharing your thoughts on ESR LOGOS REIT? It seems to be moving towards new economy assets and divesting older assets for capital recycling. However, it also seems to do fund raising frequently.
Thanks for any sharing.

AK71 said...

Hi Wxr,

I have blogged about ESR many times before.

Some notable blog posts were regarding their adventures with VIVA Industrial Trust and Sabana REIT.

I might have blogged about the one with ARA Logos as well.

Anyway, I didn't have a good impression of them and have been giving them a wide berth.

When in doubt, I stay out.

That's just me, of course. ;)

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