Increasing bond exposure on higher yields.

In my last blog post, I shared how much passive income I received in the first 9 months of 2023.

My investment portfolio is still bringing home the bacon.

However, there is more variety to the bacon now.

Why do I say this?

Over the years, I have been very consistent in saying that I want to maintain a meaningful percentage of investment grade bond in my portfolio.

For a long time, I said that I treat my CPF savings as the investment grade bond component of my portfolio.

Risk free and volatility free, there really isn't a better option for a person like me.

I have a blog post titled "Unless we are very rich, CPF is all we need" to share my perspective on the matter.

This is the link to that blog post: HERE.

Of course, I share my CPF numbers at the start of every year, showing how much interest income is paid to me.

This interest income is not included in my quarterly passive income update.

Why?

The CPF interest generated is not immediately available for withdrawal to be used in any way we like.

We will be allowed to withdraw any CPF savings in excess of the Full Retirement Sum and the Basic Healthcare Sum when we turn 55 and not earlier.

My quarterly passive income report has always been about income generated by my investments in the stock market.

This year, however, my investment portfolio also includes bonds.

In the last one year or so, with bond yields much higher, I have also been buying Singapore Savings Bonds and T-bills.

So, my quarterly passive income report this year has another flavor.

A sprinkling of fixed income.

With bonds being much more rewarding now than 1 year ago, I am going to continue strengthening my T-bill ladder and, hence, enlarge the bond component of my portfolio.

I am a lazy fellow and would always go for low hanging fruits first.

Taking advantage of the CPF-SA and the CPF-MA was an easy decision so many years ago.

Taking advantage of the higher bond yields now is another easy decision for me.

To be sure, the coupons received from bonds will not make an earth shattering difference to me even as they nudge my quarterly passive income a little higher.

However, if we focus on this difference, we are missing the point.

What's the point then?

This is risk free and volatility free.

There is assurance that we will get paid during good and bad times.

This is very comforting to me.

Having such a component in my investment portfolio helps to smooth out rough patches which are bound to appear from time to time.

All else being equal, I will continue to increase exposure to this asset class in 2024.

If AK can do it, so can you!

2023 passive income. Banks & REITs.

I keep a written record of my passive income.

It isn't an Excel sheet as I still very much enjoy using pen and paper.

I spend so much time on the computer daily that spending some time writing on paper is a nice break from staring at the computer screen.

Anyway, I recently published my passive income figure for 3Q 2023.

That came in some 12% higher compared to a year ago.

Thus far, passive income this year has come in relatively strong.

I have said that increasing exposure to the banks since 2016 has been a good move.

For readers who do not follow me on YouTube, I produced some videos recently on investing in banks and REITs.

Here are the links:

Should I invest in REITs now?

This REIT is a MUST BUY but...

Key RISK for Singapore banks!

Remember that AK is not a guru and I am just talking to myself as usual.

All of us have our own beliefs and circumstances.

We should have our own plan.

Do what we are able and willing to do.

As long as we are moving in the right direction, we should do alright.

At our own pace and all in good time.

I am just here to inspire.

I am not here to instruct.

Having said this, I decided to see how much passive income I have received so far in 2023 from my investment portfolio.

$206,645.75

This is slightly higher than full year 2022's passive income received which came in at 

$205,999.73

So, even if I do not receive any passive income in 4Q 2023, I will be OK.

I remind myself that as an investor for income, I should aim for reliable and meaningful passive income generation.

Preferably, income generating tools should generate predictable passive income too.

Always be prudent and stay pragmatic.

This was a recent video on reducing risk without reducing income:

Respect what we don't know!

Not everyone is rich but everyone can be richer.

If AK can do it, so can you!