4Q 2024 passive income. Prep for 2025.

Happy New Year!

Another quarter is behind us and it is time for another update.

If you are following me on YouTube, you might have seen the update I provided in my YouTube community recently:

My dad is still in hospital.

I have yet to read the comments I have received in recent days on YouTube as I am not feeling very sociable.

However, recognizing the signs of oncoming depression, I decided to do some blogging.

Blogging is therapeutic to me.

I am sure there are many readers who are very concerned for me and would ask me not to worry about updating the community.

Don't worry.

I am doing this as therapy for myself.

So, 2024 has ended and on the investment front, it has been kind to me.

The stock prices of DBS, OCBC and UOB have outperformed.

As they form more than 45% of my portfolio, this has a big positive impact on my portfolio's market value.

The gains more than make up for the losses in IREIT Global and CLCT.

Of course, all of these are just on paper.

So, just saying as I am sure some readers, whatever their reasons, would be interested to know.

All positions are still generating income for me.

Some have asked me what should they do with their investment in Centurion Corp as the share price has shot through the roof.

It would seem like I have made a mistake by selling my investment in Centurion Corp and using the money to add to my investments in the local banks so many moons ago.

Well, I cannot and don't want to give advice but the reasons I gave for selling back then are still valid.

Centurion Corp suspended dividends during the pandemic and was slow in restoring dividends even though they emerged from the pandemic with a stronger balance sheet.

However, they had no trouble with immediately rewarding their directors generously.

So, I decided to add to my investments in the local banks instead as they have a long track record of rewarding shareholders during good and bad times.

Their very strong balance sheets in comparison to Centurion Corp's help to ensure that their dividends would not be suspended if we should see another pandemic.

Our local banks have shown themselves to be more shareholder friendly too.

They are able and willing to reward shareholders fairly, if not generously.

Always revisit our reasons for investing in a certain entity and if the entity is unable to deliver anymore, it is time to let go.

So, sell, hold or buy would depend, to a large extent, on our motivations.

I thought I would end 2024 without making any purchase but I ended up buying more of Wilmar and also nibbled at Alibaba.

I talked about this in my last blog post and if you are interested in finding out more, have a read. 

I made a video about this too:

Not a big deal, really.

My investment in Alibaba now forms less than 0.5% of my portfolio.

My focus is still on passive income generation and Alibaba doesn't quite fit the bill.

As a retiree who depends on dividends from his investments for a living, Alibaba is an interesting and somewhat speculative position.

Nothing more.

I talked about this my YouTube community not too long ago as well,

If Alibaba should see its stock price decline 5% to 10% from here, I would probably add to my investment but it would remain a very small investment.

In my last blog post, I identified a weak uptrend with a gently rising support line but if that were to break, Alibaba's share price could go lower.

A retest of HK$72 support level is not impossible since we could be seeing the formation of a head and shoulders pattern which would give us an eventual downside target of HK$72 or so.

My charting skills are a bit rusty.

So, beware of tetanus.

Now, the numbers:

Q4 2024: $28,734.99

FY 2024: $ 234,439.46

This is more or less the same as FY 2023 which delivered $231,495.19

Despite having sold most of my investment in Sabana REIT in 1H 2024, passive income on a portfolio level did not reduce in 2024. 

DBS, OCBC and UOB really did all the heavy lifting in 2024 as they paid higher dividends.

In 2025, I expect passive income to come in lower due to a much smaller investment in Sabana REIT and also the expected 25% reduction in DPU from IREIT Global as they reposition their Berlin asset.

A 4% or 5% reduction in 2025 passive income on a portfolio level would not surprise me.

Of course, we could see higher dividends from DBS, OCBC and UOB in 2025 as they have excess capital which could be returned to shareholders.

Could be special dividends which means they are non-recurring but that would be good enough to provide some relief.

Once IREIT Global gets their Berlin asset up and running again in 2026, income generation should receive a leg up as the property has attracted 2 tenants so far offering to pay 100% higher rent than the master tenant which vacated the property.

Oh, I will also have to remember to top up my CPF MA before the end of the month.

That's $4,000 to be set aside.

Risk free return of 4% p.a. and the interest earned pays for my medical insurance.

Of course, if you have been following me for many years, you would know all about this.

Let the government pay for our insurance.

Finally, I will maintain my T-bill ladder and strengthen it whenever I have spare cash on hand.

I will only dismantle it when I see Mr. Market being overly pessimistic and offering to sell stocks of businesses I like on the cheap.

All of us can be and should be financially more secure.

If AK can do it, so can you!