Before I start doing other stuff today, I decided that I would quickly talk to myself about my 2Q 2023 passive income, and also what I plan on doing for the rest of the year in the investment space.
When I talked to myself about my 2Q 2022 passive income, I titled it "Stronger with changes."
In 2Q 2022, total passive income received was about S$63,980.
It was an impressive 42% year on year increase.
Since then, I have continued to re-allocate resources although on a smaller scale.
This exercise has proven to be fruitful as 2Q 2023 passive income came in at $79,774.61.
This is an almost 25% year on year increase.
Hence, the unimaginative title for this blog.
"Stronger again!"
Higher dividends from the following entities did most of the heavy lifting:
1. DBS
2. OCBC
3. UOB
4. Wilmar
5. ComfortDelgro
6. AIMS APAC REIT
These are some of my largest investments.
So, the higher dividends from them have an outsized impact which more than compensated for the reduced dividends from some of my smaller investments for income such as Ho Bee Land and VICOM.
To be fair, not all of my smaller investments for income reduced dividends.
Raffles Medical Group and Hock Lian Seng paid higher dividends, for examples.
Passive income in 2Q 2023 also benefitted from contributions by Singapore Savings Bonds and T-bills.
These were missing in 2Q 2022.
I will continue to re-allocate resources in my investment portfolio for the rest of the year.
This means moving funds into investments which I feel would generate meaningful income for me while maintaining relatively strong balance sheets.
I would also inject fresh funds into my portfolio whenever circumstances permit.
While re-allocation of funds is for increasing my investments in businesses like OCBC and UOB, the injection of fresh funds is probably going to the strengthening of my T-bill ladder.
This strategy will help to ensure that I maintain a more meaningful exposure to quality fixed income which is relevant to a person with circumstances like mine.
I am more interested in having a stronger base for my investment portfolio which ensures stability.
If I have should have more excess funds to deploy, I would increase exposure to Wilmar if its common stock should decline to $3.50 or even $3.00 a share.
The same goes for ComfortDelgro if it should ever decline to $1 a share or lower, all else being equal.
As I did not participate in AIMS APAC REIT's recent rights issue, I must expect a reduction of approximately 10% in my passive income from the REIT in future.
Even if I did participate in the rights issue, I would still experience a reduction in my passive income from the REIT unless I applied for more excess rights so that the total number of rights units was 3x that of my entitlement.
Of course, I would have to be successful in getting those excess rights as well.
I have instead decided to channel more funds to IREIT Global's rights issue to apply for more excess rights which would generate more passive income for me.
To be realistic, I am unlikely to get all that I have applied for.
Even if I should be unsuccessful in getting any excess rights, as IREIT Global's fund raising exercise does not have a private placement component which I am not invited to, I would not see any dilution which would lead to a lower DPU.
If I should be successful in getting even some excess rights, it would mean having a bigger share in some attractive properties which are already generating income.
Having said this, any injection of fresh funds is likely to be a slow trickle as I have limited excess funds after taking into consideration my commitments.
I think that is all for now.
Until the next time I talk to myself, remember this.
If we are interested in achieving financial freedom, investing in bona fide income producing assets can only be a good thing.
If AK can do it, so can you!
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