Investing for income to financial freedom. (Dividend Machines creation in 2019.)

When I blogged about my decision to take a long break from public appearances, I also said that I would continue blogging but less frequently.

I know that I am a social media influencer and I have readers who appreciate my blog.

One reader then said:

"Most so called social media influencers I read about pitch/sell products.

"I would say you are some kind of pseudo (not psycho!) influencer who don't sell products (except 'Neverwinter') who talks about how to live your life prudently and be financially free 😉"

That is true.

I hardly sell anything in my blog.





If I find something is good, even if I am not paid to do so, I simply blog about it.

This is the case with "Neverwinter".

This is also definitely the case with the CPF system.

Of course, regular readers know that I am spending a lot more time in "Neverwinter" these days as it is something I enjoy.

They also know I wish for everyone to achieve financial freedom and that all of us will eventually work because we want to and not because we have to.




This is because I truly feel that having to exchange our precious time for money, working because we have no choice but to do so is depressing.

Wage slavery is a terrible thing.

Regular readers know that an important thing that I did which freed me from the shackles of wage slavery is investing for income.

What is investing for income?

Invest in income producing assets and we will enjoy passive income or, as Buffett says, "make money while we sleep".

Remember my earlier blog?

Special dividend from VICOM and financial freedom.

Of course, this is only one of my investments.





If you are new to investing for income, you should attend Dividend Machines.

Although many bloggers are promoting Dividend Machines now, I was the first to do so when it was introduced many years ago.

After so many years, I still believe that the course provides value for money especially if you are relatively new to the world of income investing.

.........

Who are the trainers?

Readers who have attended "Evening with AK and friends" will be familiar with both Victor and Rusmin.

Brilliant investors and good people.

They believe in keeping education very affordable.

So, you don't have to pay an arm and a leg to attend Dividend Machines.

Or else, AK would not be promoting it.

Want to learn how to invest in REITs and non-REITs for income?

If your answer is "yes", sign up for 2019's Dividend Machines: HERE.

Limited places available, as usual.

Unlike "Neverwinter" or CPF, this is a paid advertorial but, quite frankly, I would have promoted Dividend Machines anyway even if I were not paid to do so because I believe it is 100% worth promoting.

To achieve financial freedom, most of us have to create Dividend Machines. 

If AK can do it, so can you!


Sign up: HERE.

Special dividend from VICOM and financial freedom.

I just received a letter from LTA that my car is due for an inspection.

Wow!

Has it really been three years?

Time really flies.

This is something older people feel more keenly than the younger ones.





The younger ones think that they still have time to plan for retirement and they are probably right.

However, if they think that they can kick the can down the road, this could result in them regretting when they are older.

Many older people do regret not planning earlier for retirement.

Time and tide wait for no man. 

Before we know it, we are 55 years old.





We have but one life to live.

Take ownership.

Don't blame the system.

Don't blame fate.

Don't blame anyone else.

We should only blame ourselves if we cannot retire well in Singapore.





Anyway, when I was making payment to have my car inspected in VICOM, I noticed that the price has gone up but I was quite ZEN about it.

Why?

VICOM is paying for my inspection, after all.

I know.

Bad AK! Bad AK!





Regular readers know that I have a larger smaller investment in VICOM ($50,000 to $100,000) and receive regular dividends.

The fact that VICOM declared a final dividend of 23.17 cents and a special dividend of 8.62 cents means more passive income for me.

However, it is also good on another level as the largest shareholder of VICOM is ComfortDelgro and I have a relatively large investment in ComfortDelgro which also pays me dividends.





VICOM and ComfortDelgro together are probably bigger than my investment in AIMS AMP Capital Industrial REIT or similar in size.

They are all important passive income generators in my investment portfolio and they are pretty predictable ones too.

To all my readers on the investing for income path, keep at it because financial freedom is not a dream.

If AK can do it, so can you!

However, only Mr. Bean can do this.






Related posts:
1. Invested in ComfortDelgro.
2. Invested in VICOM.
3. Passive income all gone!

Year of the Pig!

It is my year!

Yes!

AK is a pig!

Oink! Oink!

We are very lucky that in Singapore financial freedom is not a dream for most of us.

"P" is for pig.

"P" is also for prudent, pragmatic and patient.

By being prudent, pragmatic and patient, we can achieve financial freedom and we should.

If you are new to my blog or need a refresher, read the related post at the end of this blog.







Did you say something?

What 4D to buy?

Alamak.

OK.

My 2018 CPF MA interest minus 19 cents.

See: 

CPF interest earned in 2018.

I anyhow say but you don't anyhow buy, ok?





May the Year of the Pig bring all of us good health, good cheer and good luck!

财神到!! 恭喜发财!!

HUAT AH!

Related post:
3 attributes of a wealthy peasant.
(Be prudent, pragmatic and patient.)

$1.5m in CPF savings by doing nothing henceforth.

Reader says...
"I know you think of CPF as bonds in your portfolio and you want to grow it to reduce portfolio risk and volatility but what if you are unable to do it one day? 

"Do you have back up plan?"

AK says...
"Although I feel that I should be able to continue to do Voluntary Contributions to my CPF account yearly to reach the Annual Contribution Limit, there could be a year or two or a few when I might not be able to do so.

"After all, we cannot know what might happen in future and there could be times when my passive income takes a hit or when my expenses spike for whatever reason.

"It is a situation that I would have to accept but it is not a situation that I would need a back up plan for.

"I will blog about this and you can have a read."

Why did I say it would not be a situation I would need a back up plan for?

Well, assuming that I am unable to make Voluntary Contributions to my CPF account henceforth, how much do you think I would have in my CPF account by the time I hit age 65?

Remember my CPF accounts by end of 2018?

OA:
OA:
$538,878.

SA:
$250,783.

MA:
$55,713.




To arrive at an estimate, I shall ignore the effect of the extra 1% interest on first $60K of our CPF savings as well as the additional 1% interest on the first $30K once we reach 55 years of age etc. 

So, I would approximately have the following in my CPF by age 65 if I were to stop Voluntary Contributions from this year on:

OA:
$840,465.

SA/RA:
$508,040.

MA:
$117,378.

Remember, this is surely inaccurate and only serves to give me a rough estimate.




So, total CPF savings by age 65:

$ 1,465,883.

Or almost $1.5 million and this is all by doing nothing from now on.

This is the beauty of compound interest and having a relatively large base makes it even more beautiful.




Compound interest.

He who understands it, earns it.

He who doesn't, pays it.

It might seem magical but it is really just math.




My CPF savings is my back up plan for in case things should go terribly wrong with my investments.

It has probably reached a critical mass where it can take care of itself to do the job I expect it to do.

Unable to do voluntary contributions to my CPF account henceforth?

I don't think it is a situation I would need a back up plan for.




Related post:
AK responds to HWZ on CPF savings.

This guy has 800K in his CPF. (AK responds to HWZ Forum.)

A reader pointed me to a thread in HWZ Forum which discussed about my CPF savings being more than $800K.

He wanted to clarify certain questions and comments made by some people there.

I am amazed that there are more than 10 pages of comments and I am even more amazed by some of the comments made.






There is plenty of ignorance in that thread.

There is also so much "jelly" that HWZ can start a dessert shop.

What about HWZ starting a grocery since there are plenty of grapes too but they are of the sour variety and might not sell well?

So, how like that?

Read:
Jin jelly or jin buay song my CPF?






If only people bother to find out the facts instead of reading fiction. 

Either way, we are spending time.

Want to spend time reading something useful or something useless?

If they did find out the facts, they would realise that the CPF is here to help ALL members to achieve a basic level of retirement funding adequacy.

Read:
A cornerstone in retirement funding.







Fortunately, there are also voices of reason in that forum and I am very happy for them.

Honestly, many rich people I know would like to park more of their money in their CPF accounts but they are not allowed to do so as the CPF is not a system created to make the rich richer.

Unfortunately, often, people who should be making use of the CPF system more in order to retire more comfortably are the ones keeping their distance.

Read:
Purpose of the CPF is to make the rich richer?






Complaining is not going to help us understand the system.

Complaining is not going to make the system work for us.

Instead, find out more about the system and see how it could possibly work to our advantage.

It is really about helping the system to help ourselves.





HWZ Forum says:

Is AK really blogging about his CPF savings to show off and because he has no life?

I blur.

I don't know why some people are laughing at my CPF savings.

Really, I blur.

However, I know I am laughing because I have my CPF savings.

The CPF will help us secure a measure of retirement funding adequacy because we will retire with

1. an investment grade bond (excess beyond prevailing Full Retirement Sum can be withdrawn at age 55)

and

2. a lifelong annuity (CPF Life) that pays us monthly from age 65.










I blog about the CPF and my journey with CPF extensively.

If anyone is willing to put in the effort to read, they will find the answers here.

Of course, I understand that it requires less effort and it is probably more thrilling to take potshots and in the dark too.

I hope for the sake of these thrill seekers that they are not throwing boomerangs at me.





Related post:
My 2018 CPF savings.

2018 CPF savings in a pie chart. (Growing CPF savings.)

There is always some risk when it comes to investing in stocks and there will always be some degree of price volatility.

Not everyone is able or willing to take risk when it comes to their money and not everyone is able to stomach price volatility well.

Some get sick from the volatility and some even die from it.

This is why we are fortunate in Singapore to have the CPF.







CPF members should take full advantage of this risk free and volatility free instrument that pays reasonably attractive coupons.

Yes, I say coupons because I look at my CPF savings as the risk free and volatility free investment grade bond component of my investment portfolio.






Having a meaningful amount of CPF savings will give most of us peace of mind as we cannot reasonably expect every year to be a good year for our investments.

In my retirement, lacking mandatory contributions to my CPF account, I have been voluntarily contributing to my CPF account and here is what it looks like at the end of 2018:

$845,373 at the end of 2018 and that was at the ripe old age of 47 too.

By age 55, more likely than not, my CPF savings will be in excess of $1 million.

To the very rich, $1 million might not be a lot of money but to the vast majority of us, I am sure it will make a meaningful difference in funding our retirement.

This is why I share my CPF story.

Unless we are handicapped in some way, I believe that if we put in enough effort, we can become CPF millionaires.






If you are a CPF member and have yet to max out the benefits of your membership (think FRS and BHS), read this blog:

CPF is all we need unless we are very rich.


Many or most Singaporeans do not realise what a good thing the CPF is.

Haven't reached the prevailing Full Retirement Sum (FRS) in your CPF account and thinking of buying a bond fund?

If you have yet to hit the Full Retirement Sum, why bother with bond funds?









Want a financially more secure retirement?

It is really as easy as ABC, er, I mean as easy as CPF.

Believe me when I say:

If AK can do it, so can you!




If you haven't listened to the song, listen, there is a hidden message.





Related posts:
1. Voluntary contribution to CPF MA (2019).
2. CPF interest earned in 2018.
3. Financial security plain and simple.

CPF interest earned in 2018.

Regular readers know that AK is lazy.

Lazy AK loves to pluck low hanging fruits as they require very little effort to pluck.

Not requiring him to climb high up into the trees to pluck, they are also relatively safe to harvest.








The name of the low hanging fruit here is "CPF".

What is the scientific name?

Too long.

Don't bother.

Told you AK is lazy.








Don't bluff.

I know you are not interested in the scientific name either.

You are more interested in knowing how much low hanging fruit did AK harvest in 2018.

Right or not?

OA interest:

$ 13,087.18








SA interest:

$ 10,198.00

MA interest:

$ 2,162.19

Total interest received:

$ 25,447.37


Thank goodness for low hanging fruits (and vegetables)!

So, do you want to pluck low hanging fruits too?

If AK can do it, so can you!





For those who are able and willing to do so, please remember to do VC to your CPF MA which will also enjoy income tax relief.

See the related post at the end of the blog.

We can do it easily online too:

See:
How to do online contribution?






If your mandatory contributions (from employment) will hit the annual CPF contribution limit ($37,740.00), you may choose to ignore the related post.

To all my readers, here is wishing everyone a

VERY HAPPY NEW YEAR!

HUAT AH!





Related post:
VC to CPF MA in 2019.
(MA limit in 2019 is $57,200.)

4Q 2018 and FY 2018 passive income.

It has been a pretty long break since my last blog.

I have also been spending a lot less time engaging readers both in my blog and on Facebook.

I know that many readers are not used to this.

However, this will continue to be the case as I devote a lot more time to other activities.

This was something I talked about before and it is the new normal.

So, please don't be surprised if you do not hear from me for weeks (or months) at a stretch in 2019.

Now, with that out of the way, I shall wrap up 2018 with a blog on my full year passive income.







Mr. Market went into a depression in 4Q 2018 and made me too many tempting offers.

Spoilt for choice, with my limited resources, I added to my investments in several stocks in 4Q 2018 even as I sold my entire investment in First REIT.

To understand why I sold my investment in First REIT, please refer to related post at the end of this blog.




Stocks (with hyperlinks to my earlier blogs where available) which I added in 4Q 2018:

1. Accordia Golf Trust.

2. Centurion.

3. ComfortDelgro and SingTel.

4. OCBC.

5. APTT






Due to the fact that I sold my investment in First REIT as its unit price bounced up when it went CD, my 4Q 2018 passive income from REITs reduced.

Readers who have been following my blog for many years might remember that I didn't share details of my passive income from non-REITs until it became a more significant percentage of my total passive income a few years ago.




As my passive income from REITs have steadily declined in recent years as a percentage of my total passive income, I will consolidate the numbers for both REITs and non-REITs, henceforth.

4Q 2018 passive income (REITs and non-REITs):

S$ 38,884.64






As I have blogged about the reasons why I added to my investments in Accordia Golf Trust, Centurion and ComfortDelgro in 3Q 2018, I will not repeat myself.

I also did an update on APTT as its unit price plunged and also explained more in detail during "Evening with AK and friends 2018" the rationale for buying at what I thought was a distressed price.

In the list of stocks above, I have hyperlinked those blogs for anyone who might be interested in reading or re-reading.






As APTT's unit price plunged under 13 cents a unit after it went XD, I took another bite.

Accepting an offer from what I believe was an overly pessimistic Mr. Market, it was quite simply a price I would not have sold at.

Readers who have been following my blog for many years would know how I size my more speculative positions.

With this last purchase, I would stop increasing my position in APTT as I keep it at a size that my passive income could cover within a year or less.

If you do not know what I am talking about, please read this blog from 2014:

How to size our more speculative positions?




Now, I will briefly explain my decision to add significantly to my investment in OCBC.

With interest rates rising, logically, banks will do better.

Already invested in DBS and OCBC at lower prices two years ago, I have been waiting for another opportunity to increase my investments.

In 4Q 2018, I increased my investment in OCBC significantly.

Why OCBC?







OCBC's stock experienced stronger selling compared to DBS and UOBs'.

A back of the envelope calculation indicated that OCBC was trading at a much smaller premium to NAV while DBS and UOB were trading at a richer premium to NAV.

The same back of the envelope calculation indicated that OCBC's dividend payout ratio is about 40% which is very undemanding and is the lowest of the 3 banks.




OCBC also had the lowest PE ratio.

So, I took several bites of OCBC as its share price plunged in 4Q 2018.

The funds from the sale of my investment in First REIT certainly came in handy.

Of the three banks, OCBC just seemed to be a better value for money offer at the time.






Some people asked me for a forecast of what 2019 has in store for the stock market.

Honestly, I don't know.

I cannot predict.

I can only prepare.

Remember?

However, what I can say is that, a bit more or a bit less, I will probably be receiving a meaningful amount of passive income from my investment portfolio.




Regular readers know I really am more concerned with receiving a meaningful stream of passive income from my investments than whether stock prices are moving up or down.

As long as my investments continue to pay me, I am usually quite happy with holding on to them.

The best investments could be those that I don't ever want to sell because they are able to pay me year after year.

Peace of mind is priceless.







How much did I receive in FY 2018?

FY 2018 passive income (REITs and non-REITs):

S$ 188,735.86

On average, about $ 15,727.00 per month.

I was also fortunate to have more capital gains than losses in 2018.


So, 2018 has been a pretty good year for me and I hope 2019 will be kind to me too.





Remember this if you choose this path.

I do not know if stock prices are going up.

I do not know if stock prices are going down.

However, I do know that I am collecting more dividends and the total amount has increased year after year.






Finally, remember that the best time to start is always now.

It is never too late to start walking the path to financial freedom.

If AK can do it, so can you!

Watch this video on what Gurmit Singh has to say about his income and what he would have done differently:





Related posts:
1. 3Q 2018 income from non-REITs.
2. Sold First REIT.

What should mom do with $200k inheritance?

Reader says...
My mum was given an inheritance to the tune of $200k.

Not knowing what to do with the money, my mum deposited it in the bank without our knowledge and of course, she was “invited” to speak to a bank’s representative and...






I experienced some difficulty convincing her to put a significant portion of the remaining sum into her CPF as she is apprehensive that the money will thereafter be “locked up” for life and she can only get a small portion of it every month.

I do not think the sum in her CPF RA is anywhere near the BRS.






Unfortunately, every individual is only limited to a maximum of $100k in SSB.

What do you think are good alternatives for someone like my mum (62 this year) to park her remaining sum?

I take it upon myself to find out more about the most logical way to optimise the growth of this sum of money while still keeping it safe for her later years.





AK says...
I think you have to explain to her the importance of an annuity and CPF LIFE.

We will not always make the most prudent financial decisions in our old age.

Having a dependable monthly income for life in her golden years will provide peace of mind for her and the family.


"What if I live longer than expected?"







Related post:
Retirement adequacy for late bloomers 101.

Voluntary contribution to CPF MA in 2019.

Reader says...

AK sifu.. Wah next year MA up to 57200...

Excited siah..

Can top up again to get tax relief.

Can I ask u if the interest from the existing MA for 2018 will flow back to MA to meet the 2019 BHS?

If yes then sian.. Cos I cannot top up in cash in Jan 2019 to MA.

Many ppl said why increase nearly 5%..

I think if they don't increase..

Health care inflation in Singapore will eat up our BHS eventually.

I do welcome such increase. Give me a chance to earn more interest n tax relief. 😂






AK says...

Interest earned this year in MA will go to SA if MA is full and will go to OA if MA and SA full.

So, beginning of 2019, you can top up the MA $57,200 - $54,500 = $2,700 😀


Reader says...

Song song Gao jookoon

It's your fault..

Make me so excited every Jan lol








AK says...

Sorry for giving your heart stress. 😛

Bad AK! Bad AK!


Reader says...

I also say.

Nvm I got sufficient MA to do body checkup and buy free insurance 😂






So, do you want free medical insurance in Singapore?

If you still don't know how, read the related posts at the end of this blog.

If AK can do it, so can you!




Related posts:
1. Medisave voluntary contribution in 2018.
2. How to get free medical insurance in SG?