3Q 2023 passive income: Stronger yet again!

For readers who have been following my blog consistently, the title of this blog post might invoke a feeling of deja vu.

It is rather similar to the title of my blog post 3 months ago in which I shared my 2Q 2023 results.

That said "Stronger again!"

This says "Stronger yet again!"

AK is so creative!

Well, jokes aside, I really couldn't think of anything more impactful and accurate at the same time.

For those who follow my YouTube channel, this video might look familiar:

Yes, for the first time in a long time, I shared some numbers before the quarter was up.

With that kind of number after only 2 months into the quarter, I could tell that 3Q 2023 would probably beat my passive income received in 2Q 2023.

In the third month of 3Q 2023, income distributions from my investments in many REITs came in.

Although there was a decline in income received from REITs as a whole which was not unexpected given that three of my largest investments in S-REITs paid less, overall passive income for 3Q 2023 still came in higher.

This is thanks in a large part to the much higher dividends paid out by DBS, OCBC and UOB which are all in my list of largest investments in my portfolio.

Decision to increase exposure to OCBC and UOB from time to time since the pandemic has been very rewarding while the decision to stay invested in IREIT Global has not been as rewarding.

Still, I am of the opinion that IREIT Global has room to grow its revenue and that the REIT is in the process of transformation.

There could be some bumps ahead and investors might want to buckle up.

IREIT Global is undervalued if the 6 months lease extension at a 45% higher asking rent for its Berlin asset is anything to go by.

Unlike some REITs like Manulife US REIT, IREIT Global is not in distress even though its unit price suggests that it could be so.

Unfortunately, the aggressive and rapid hikes in interest rates are not friendly to REITs, especially with the "higher for longer" narrative gaining traction.

Still, with a relatively strong balance sheet, substantial sponsor interest and a capable management, I am willing to wait while I am being paid.

This will be short blog post as I do not want to rehash stuff I have said about my investments before.

Oops.

I almost forgot.

So, what is my 3Q 2023 passive income?

In the video I shared at the beginning of this blog post, I said that 3Q 2023 passive income would probably exceed $80,000.

The actual number is:

S$ 84,942.36

This is almost 12% higher than the $75,989.50 in 3Q 2022.

I think I have beaten inflation in 3Q 2023.

Back in 3Q 2022, I said I was stunned like vegetable, and I feel the same way one year later.

What am I doing, going forward?

The next 6 months will see much lower passive income being received without contributions from OCBC, UOB and many other investments.

So, I am going to be extra careful with money.

What about the investment front?

I am staying invested because I cannot tell if the market is going up or down.

Staying invested in bona fide income producing assets means being paid while I wait.

Filling up my war chest for when Mr. Market becomes depressed again.

This is even as my war chest will grow much slower than before as more of my passive income will be consumed from this year on.

I cannot predict but I can most certainly prepare.

If AK can do it, so can you!

References:
1. 2Q 2023 passive income.
2. 3Q 2022 passive income.

SSB 3.32% p.a.: Higher for longer!

When I blogged about last month's SSB which offered 3.16% p.a. 10 year average yield, I said I would probably be buying some.

And I did.

Just a modest sum of money as I was "borrowing" the money from 2025.

It was money which I would otherwise have earmarked for voluntary contribution to my CPF account in 2025.

2025 would be the year I turn 54 years of age.

Now, I see this month's SSB offering 3.32% p.a.

What am I doing?

I will be buying again, I suppose.

Again, it would be a modest sum of money.

Although I am sticking to my strategy of growing the investment grade bond component of my investment portfolio, there might no longer be a hurry to lock in higher yields for the longer term now.

I recently produced two YouTube videos on the likelihood of interest rates staying higher for longer.

This is the current day narrative and it seems to have gained traction.

This is probably why the last T-bill auction surprised us with a cut-off yield of 4.07% p.a. too.

Much higher than many expected.

If you have not watched the YouTube videos yet, here are the links:

1. This could be BAD! Why look at bond yields?

2. Reason why it could be a lot WORSE!

The yield curve is still very inverted with the shorter durations being more rewarding.

So, strengthening my T-bill ladder would be more rewarding.

Still, reinvestment risk exists with the T-bill ladder.

I tell myself not to complicate things and simply stick to my plan.

1. Maintain and strengthen T-bill ladder for another source of recurring income.

2. T-bill ladder can be dismantled gradually to buy stocks during a recession.

3. Buy SSBs with money meant for VCs to the CPF as long as SSBs' 10 year average yield is higher than 3% p.a.

There is no way I am going to make all the money in the world.

If AK can talk to himself, so can you!