How to get $200K dividends yearly? Simpler than you think.

The sequel to the podcast I did with The Fifth Person last month is here.

I just watched it and I thought it would be good to tie up a few loose ends.

If viewers should spend some time ruminating on what I said in the follow-up podcast, they would not need to read this blog post.

So, this blog post is more for my benefit since I have a need to talk to myself all the time.

AK is mental.

1. My response to a viewer who said most regular folks would have to speculate in order to generate sufficient capital to get a $200K dividend annually from investments.

There is no need to speculate although we could certainly do it and in the podcast I shared my view on that.

There are other ways to make more money and regular readers know I did some trading and I also had side hustles to make more money.

I also blogged about how we should not wait until we have a larger amount of money before we start investing for income.

Dividends made in the early days, no matter how small, would grow our wealth, and could be used to invest for even more income.

2. Possible to make $200K dividends annually with $2M and how to get $2M in capital?

In the podcast, I said that my capital wasn't $10M, $5M, $4M or $3M.

It could have been closer to $2M.

And that is giving me $200K in yearly dividends now?

How is that possible?

Elementary, my dear Watson.

A lot of what I bought was bought during crises, when Mr. Market was suffering from severe depression.

By now, my experience with AIMS APAC REIT should be quite well-known.

It is one of my largest investments and probably my oldest one.

It generates a distribution yield of more than 10% on cost for me, year after year.

As I got into it in a big way during the Global Financial Crisis, it is a major contributor to my yearly passive income. 

Of course, my investment has been free of cost for many years too.

I have recovered my capital and I am still receiving income from my investment.

So, of the $200K in dividends received last year, a big chunk of it was actually free money.

It is money generated from nothing.

How did this happen?

Time happened.

It is possible to get higher dividend yields during crises if we invest in the right businesses that would survive the crises.

Of course, we could choose to sell these investments if their stock prices should recover later on.

I used the examples of Lippo Mall Trust and First REIT in the podcast.

Regular readers of my blog would know there were others like Saizen REIT, Croesus Retail Trust and Accordia Golf Trust as well.

Selling for significant capital gains grew my wealth.

It gave me more capital to invest with.

We could also choose to sell a portion of our investments like what I did with Old Chang Kee and Hock Lian Seng.

I sold half of my investments in them when their share prices doubled.

So, whatever I am still holding now is free of cost.

And they are still paying me dividends, year after year.

More free money.

This brings me back to the earlier point on speculation.

Why is there a need to speculate in order to grow wealth?

Simply wait for the next opportunity to make significant investments for income like what I did during the Global Financial Crisis.

Invest in good businesses which are able and willing to pay us.

That opportunity came in the form of the COVID-19 pandemic not too long ago.

Of course, regular readers would know that I emptied my war chest during the pandemic and got into UOB at $19 a share.

That is one of my largest investments today.

It is rewarding me with a dividend yield of almost 9% per annum now.

I also talked about how I started buying into DBS at $13 and $14 a share back in 2016.

At $13 a share, the dividend yield is almost 15% per annum today.

Now, coupled with free money I get from AIMS APAC REIT and some other stocks, do you see why I say the capital deployed isn't as much as what some people say it is?

What I have done over the years isn't simply putting some of my monthly salary in fixed income instruments unless we count the CPF.

If that was my method, then, yes, to generate $200K yearly in dividends now, I would need around $4 million in capital today.

I agree this would be insurmountable for most regular folks.

So, I remind myself of what I did over the years and how I made what seemed impossible happen.

This might be a lot for some people to take in.

There is also the fact that my skill as a wordsmith has regressed in recent years.

So, maybe, read this blog post a few times.

Ruminate on it.

I know I had to.

AK is talking to AK here, after all.

Please don't let people tell us what AK has achieved is not possible for regular folks because the capital required is enormous.

It is simply not true.

This blog post is the truth.

Go share this with people you care about and tell them this.

AK is a regular folk too.

If AK can do it, so can you!

68% expects downturn! CPF POFMA! Distressed REITs!

I have three things to say.

Since I am lazy, might as well put them all in one blog post.

1. Two thirds of Singaporean consumers expect an economic downturn.

There is plenty that is not well in the world and this is probably not unexpected.

However, if we end up just feeling worried about how life could get tougher, then, that is a waste of energy.

I would shore up my cash position even more aggressively.

Make sure I have an adequate emergency fund.

Fill up my war chest and be prepared to buy from Mr. Market when he feels depressed.

I have blogged about such topics many times before and many blog posts are consolidated in this one blog post:

Survivability and opportunity in times of distress.

2. Fake news on CPF!

A Tik Toker has been spreading fake news about the Singapore election system and the CPF system.

POFMA has been served to him twice.

Yet, he is stubbornly sticking to his views.

If he is looking for fame, this isn't the way not only because he harms himself and possibly his family.

He is also harming ignorant Singaporeans who watch his clips and believe what he says.

I like to help people but some people are beyond help.

Like what I said before in this blog post:

A river called CPF and stubborn horses.

3. I made a lot of money buying distressed REITs before.

I recently published a new video on how Manulife US REIT could possibly be an opportunity to make a lot of money.

It reminds me of the time when I bought Saizen REIT and AIMS APAC REIT when they were in distress donkey years ago.

If you are not subscribed to my YouTube channel, here is the link to the video.

How to make money buying distressed REITs?

Be prudent, patient and pragmatic!

If AK can do it, so can you!

AK sold SATS and Centurion? More T-bills for AK?

For readers who do not follow my YouTube channel, I produced a new video yesterday.

It was a video about investing for income.

I covered a few things in the video like what to focus on when investing for income?

I also gave a brief explanation on why I sold my investment in SATS and Centurion Corp.

You might want to subscribe to my YouTube channel for free and timely notifications.

This is the link to the said YouTube video, produced and voiced by AK himself. 

AK's YouTube video:

Do you want PASSIVE INCOME?

Another 6 months T-bill auction closed today.

Cut-off yield is 3.73% p.a.

Can't complain.

This is much higher than what DBS, OCBC and UOB are offering for their 6 months fixed deposits.

I increased the quantum in my non-competitive bid and I am pleased to get 100% of my application filled.

Getting some income from risk free and volatility free fixed income investments isn't a bad idea.

This is especially when interest rates have become much more interesting in the last year and a little more.

I am sticking to my plan to stay invested in income producing businesses while also strengthening my income producing T-bill ladder.

This way, I continue to get paid even as I wait for Mr. Market to go into another depression.

AK cannot predict when Mr. Market might go into another depression.

However, AK can certainly prepare for it, and fill up his war chest in the meantime.

If AK can do it, so can you!

ComfortDelgro to pay 2.9c DPS as profit fell!

A feeling of deja vu?

The title of the blog sounds like the one for Wilmar published recently?

Some people might just take a look at the title and run screaming for the hills.

Not AK the mental investor for income!

AK takes a look at the title and runs towards ComfortDelgro!

I have said for a long time now that, unlike Grab, ComfortDelgro is a profitable company.

So, ComfortDelgro actually has a PE ratio unlike Grab.

I make it sound funny but, of course, it really isn't a joke.

It isn't a secret that I think Grab and friends are just doing green washing and burning investors' money.

So easy to burn money when it is not our own.

Anyway, just like with Wilmar, I just zoom in on what matters to me as an investor for income.

I first look at what's the reason for a 31.9% drop in interim earnings?

Oh, last year, there was a one-off gain.

Then, there is the fact that the British Pound and the Australian Dollar depreciated against the Singapore Dollar over the last one year.

Taking all these points into consideration, ComfortDelgro actually did quite well.

What I really want to see is sequential improvement and I was not disappointed.

1H 2023 saw PATMI or profit attributable to company shareholders increased 35.9% from 2H 2022.

Pretty impressive.

As an investor for income, I am also pleased to see that ComfortDelgro has operating profit improved 18.5% from 2H 2022 to 1H 2023 too.

Not bad.

Why do I look at these numbers?

I am interested in profits generated by its core operations as this is recurring and will determine if the company is able to continue paying a dividend.

Even during the pandemic, ComfortDelgro was still paying dividends despite their businesses taking big hits.

They were able and willing to do it because they had a strong balance sheet and believed shareholders should be rewarded.

Investing in ComfortDelgro is to invest in a company with a very strong balance sheet.

Investing in ComfortDelgro is to invest in a company that is shareholder friendly.

The chairman said, "We believe in rewarding our shareholders."

I said some time ago that I reduced my investment in ComfortDelgro at $1.35 a share and booked a loss.

That was to raise funds to increase my investment in OCBC and UOB.

That was sometime in Q4 last year, if I remember correctly.

Unfortunately, I was pacing my purchases too slowly and their share prices shot up too quickly.

When ComfortDelgro's share price went to $1.15 some time later, I plonked the money on hand back into the business.

At $1.15 a share, I thought it offered fairly good value for money.

ComfortDelgro is still one of my largest investments although I am unlikely to increase exposure.

This is because my war chest is pretty exhausted and I have yet to achieve my goal of making my investments in our local lenders form 40% of my portfolio.

ComfortDelgro continues to bring home the bacon and I am looking forward to it.

As usual, AK is just talking to himself.

If AK can do it, so can you!

Wilmar to pay 6c DPS as 1H2023 profit down 10%!

This is like what we see in some Chinese drama.

"I have good news and bad news. Which one do you want to hear first?"

Yes, I know!

Bad AK! Bad AK!

As usual, I just zoom in on what matters to me.

Regular readers know that AK is too lazy to do complete analyses.

In my defense, I would say that it is like putting together a jigsaw puzzle.

We do not need to have every single piece to be in place to see the picture.

We just need to put the most vital pieces of the puzzle together.

In the case of Wilmar, I mostly focus on their operating cash flows and the capital expenditure or CAPEX.

Why?

Wilmar is still growing its businesses.

Yes, in the plural.

They have many businesses which are growing and they are constantly investing in them.

So, if they have strong operating cash flow but use all the cash in CAPEX, there would be nothing left to pay dividends.

See why I look at operating cash flow and CAPEX now?

As a retiree investor for income, dividends are vital to me.

In 1H2023, Wilmar generated US$3.19 billion in operating cash flow while CAPEX was US$1.16 billion.

They also used US$142.2 million for the acquisition of subsidiaries, joint ventures and associates.

So, if we do the sums, Wilmar could easily pay a dividend even though its profit reduced 10%.

6c DPS amounts to US$542.6 million.

After all this, Wilmar is still free cash flow positive!

Any investor would love to see this.

As Wilmar is one of my largest investments, I am looking forward to the dividend which would be paid on 30 August.

Huat ah!

If you are curious how much my 3Q 2023 passive income is going to be, you are not alone?

If AK can do it, so can you!

P.S. A new YouTube video I produced today will go LIVE at 7pm this evening. 

You can go to my YouTube channel and set a reminder under "Notify Me" if you would like to watch the video together with me.  

AK's YouTube channel: AK71SG.

IREIT Global and T-bill ladder strategy.

IREIT Global reported lower net property income for 1H2023.

I remind myself that if the current weakness is temporary in nature, then, staying invested is what I want to do.

Portfolio occupancy has improved from 87% to 88.7% as 25% of the vacated Darmstadt asset was taken up by the German government.

However, together with the rent free periods for newly signed leases in Bonn Campus, Munster Campus and Sant Cugat Green, contribution to property income will only be visible in 2H2023.

There is also the fact that the REIT has more units in issue after the recent rights issue while the funds raised have yet to be utilized.

The acquisition of out of town retail parks leased to B&M will make a meaningful contribution to property income when it is completed.

All these point to a higher level of distributable income in 2H2023.

Staying invested in IREIT Global for income also gives me peace of mind unlike being invested in some other REITs like Elite Commercial Trust, Manulife US REIT and Prime REIT because of its very strong balance sheet.

Gearing level will be at around 34% post acquisition of the B&M portfolio.

Even if the value of properties in their portfolio should see a decline of 10%, gearing level would not exceed 40% unlike some of the other REITs mentioned above.

IREIT Global also has almost 100% of its debt on fixed interest rate which is at around 1.9% p.a. and they do not need refinancing until 2026.

I particularly like their Berlin asset which recently saw an extension of its master lease till end of 2024 at a significantly higher asking rent.

This confirms reports that that the said asset is under rented.

Although there could be a vacancy period if the master lease is not extended beyond 2024, I expect that it would be more quickly backfilled than the Darmstadt asset.

IREIT Global seems to be suffering collateral damage as well due to Mr. Market's pessimism about some overseas REITs.

However, when I look at the details, IREIT Global is in a stronger position.

I keep saying to myself that during tough times, having a strong balance sheet will ensure survival.

This could be lost on Mr. Market. 

So, opportunities to buy IREIT Global even cheaper could present themselves.

This brings me to the next point of this blog post, T-bills.

Regular readers know that I have a T-bill ladder which was completed in April this year.

I have not only been maintaining the ladder but I have also been strengthening it whenever I could.

I would add a thousand dollars or two to my application in every T-bill auction.

Only an extra thousand dollars or two?

Yes, AK is a retiree without a lot of spare cash. Sadness.

I also talked about when I might dismantle my T-bill ladder.

Well, if Mr. Market should become even more irrational than usual, I might just have to dismantle my T-bill ladder to buy more of IREIT Global.

The next T-bill auction is happening on 17 August which is just next week.

I will be putting in a non-competitive bid using money from a T-bill which matured plus some spare cash on hand, as usual.

No need to think hard about how much to bid competitively unless I am using CPF-OA money.

Of course, this is just me talking to myself.

If AK can do it, so can you!

Reference:
T-bill ladder is attractive.

Lean F.I.R.E. and Barista F.I.R.E. World of Warships!

During my recent podcast with The Fifth Person, Adam asked me if I knew about F.I.R.E.

I told him I only learned about F.I.R.E. after I did it!

And there are so many versions of F.I.R.E. since the time I found out about it.

Of course, if you have been reading my blog regularly, you would have read my piece on Lean F.I.R.E. which I published not too long ago.

I didn't think it was a good idea.

Basically, it meant having only enough financially to fund a very simple early retirement lifestyle.

Lean F.I.R.E. leaves little or no room for error.

Without any buffer, if we should have a situation where inflation increases rapidly and stays persistently high, we could be forced to rejoin the labor force, and when we are much older too.

Of course, if we depend on some passive income to fund our Lean F.I.R.E. plan, we would have to depend on the reliability of such passive income too.

Rejoin the labor force when we are older because we have no choice but to do it?

Not a pleasant thought.

Being a worrier, I cannot live like that and would probably not be able to sleep at night.

I remember some people saying I could have retired earlier.

Why did I wait till I was 45 years old?

For one thing, my plan was always to retire at 45.

OCD.

Another thing, I was worried I might not have enough, and having more money is always better.

Yes, I was building a buffer.

Some might even say I was building a buffer for my buffer.

Or was it a buffer for a buffer that's for another buffer?

Whatever we might call it, it's all good.

During the COVID-19 pandemic, we had an acid test for all F.I.R.E. practitioners.

Not everyone could stay retired as we saw some rejoining the workforce.

I think they would have been mostly people who practiced Lean F.I.R.E.

Anyway, this is just my view.

I am not demonizing Lean F.I.R.E. or anything.

I just feel strongly that if we are planning for Lean F.I.R.E., we must be aware of the potential pitfalls.

Then, I recently read about "Barista F.I.R.E."

That name conjured for me a Bohemian image.

Quite an attractive image, to be honest.

I found out that Barista F.I.R.E. basically meant semi-retirement, or at least that is what people my age would call it.

We would continue to be in the workforce but we would be working part time in Barista F.I.R.E.

So, this means we have more time to do the stuff we like.

For people who are tired of working full time, this is certainly an option.

A viable one too.

For people who want to be a full time gamer like AK, of course, this is not an option.

OK, I know.

Bad AK! Bad AK!

Talking about games, this is my latest warship, the Tier 9 Roon, which is a German cruiser.

In my blog dated 28 July, I shared a photo of my warship then which was a Tier 6 German cruiser.

This being a public holiday, if you should be interested in a free to play video game, try World of Warships on the Asian server. 

I am having a lot of fun and have not spent a single cent.

Use my referral link and both of us will get some freebies in game.

We can both F.I.R.E. at some enemy warships!

World of Warships. (AK's referral link.)

On a serious note, I think that Barista F.I.R.E. seems like a safer choice compared to Lean F.I.R.E. for people who wish to retire earlier with less money.

Barista F.I.R.E. means never leaving the workforce which means staying connected and probably more employable.

In more difficult times, people who have left the workforce for some time might find it hard to find a job, especially when they are much older, and their skill sets might no longer be as relevant.

So, Barista F.I.R.E. allows more room for error.

There are many ways to crunch the numbers for Barista F.I.R.E.

If I were to do it, I would estimate how much I might need for 40 years if I would like to retire by age 45.

This is because the average lifespan for males in Singapore is 85 years old.

Of course, I am being very cautious here because I would invest for income and not just have the money sitting in a savings account to be drawn down.

However, in an extremely unthinkable situation where passive income froze, then, I would have to draw on my savings.

Then, after estimating how much I might need for 40 years, I would need to estimate how much my part time job would pay me in those 40 years.

Subtract that expected income from the expected expenses for 40 years and I would know how much money I must have by age 45 before I could execute Barista F.I.R.E.

Of course, if we factor in the expected passive income from our investments, then, the amount of money required before we could enjoy Barista F.I.R.E. would be reduced.

Anything to add?

I will say that for Barista F.I.R.E. to be quite comfortable and worry-free, we should still keep an emergency fund.

We must be ready for the possibility of not only our passive income slowing to a trickle or drying up completely (if we have been wise enough to invest in some income generating assets,) we must also be ready for the possibility of losing our part-time job.

Peace of mind is priceless.

Don't just say it.

Make sure we have done enough to truly have peace of mind.

Neither Lean F.I.R.E. nor Barista F.I.R.E. is for me.

They are watered down versions of the original concept of F.I.R.E. but they could be what some people want.

Quite possibly, some people might even need them.

Have to be fair.

To be sure, I am not judging anyone for choosing these forms of F.I.R.E.

It is never my way or the highway.

As usual, I am just talking to myself.

If AK can talk to himself, so can you!

Happy National Day!

Visit AK's YouTube Community page: 

https://www.youtube.com/@A.Singaporean.Stocks.Investor./community

References:
1. Retirement drawdown strategy.
2. Avoid Lean F.I.R.E. and struggling with higher costs.

Buy stocks of DBS, OCBC and UOB in August?

If we have been investing in Singapore equities long enough, we would be familiar with the talk that August is a seasonally weak month.

Of course, there is always some hope for a National Day Rally.

What about AK?

If there is a correction, and if prices hit my target buy prices, I might buy some.

Usually, Q3 is pretty good in terms of passive income received from my investment portfolio.

So, I should be able to take advantage of any market weakness in August.

My plan is still to add to my investments in DBS, OCBC and UOB so that, together, they form 40% of my portfolio.

Looking at the charts, I see the following supports which could be tested in case of a correction.

DBS.

At what seems to be a neckline at $31.87 per share and if that were to break, we could see $30.00 per share again.

With DBS common stock's rich premium to valuation, I am not in a hurry to increase my investment in DBS.

OCBC.

We could see a gap covering at $12.45 a share and this is also where many moving averages are bunching up which should provide a strong support.

If this were to break, we could see a pessimistic Mr. Market selling down to the next gap at $12.20 per share. 

I would probably buy some if that should happen.

UOB.

We could see $28.00 per share again, give or take few cents.

If that were to break, we could see the share price going a lot closer to $27.00 a share. 

That is where I might buy some if it should happen.

I would not go in with all guns blazing in case there should be extreme pessimism in the market for some reason.

With limited resources and with Q4 being usually a weak month for me in terms of dividends, it is better for me to err on the side of caution.

Before I sign off, if you do not follow my YouTube channel, I produced a new video today and you might be interested in watching or listening to it.

If AK can do it, so can you!

Subscribe to my YouTube channel for free and timely updates regarding new videos: AK71SG.

$200K in dividends podcast. To inspire and encourage.

Everyone should probably know by now that I did a podcast with my friends at Fifth Person two weeks ago.

Apparently, it has turned out to be a blockbuster!

I so stunned like vegetable!

If you have not seen the podcast yet, here it is.

For readers who have been to "Evening with AK and friends" or who have been listening to me talking to myself for years, the stuff I said in the podcast wouldn't be anything new.

I have said many times before that I am not allowed to give financial advice.

I am just sharing my story and what has worked for me.

It is also important to remember that I have not always been right.

However, like Peter Lynch said, we cannot be right all the time.

In this business, if we are right 6 times out of 10, we are doing OK.

Not in those exact words but you get the idea.

It is OK to have a couple of investments in our portfolio which are not doing as well sometimes but as long as they are fundamentally sound investments, the day will come when they shine.

I remind myself from time to time that in the short run, the market is a voting machine.

There are many people who are more interested in prices and they make money trading in the market which gives rise to volatility.

Nothing wrong with that especially if they are good at it.

When we are investing, we are weighing machines as we are more interested in valuations.

We want to buy stocks of businesses when they are undervalued or at least fairly valued.

Depending on what kind of investor we are, we would look at different things.

However, in the end, it is all about searching for value.

As an investor for income, I am more concerned with whether my investments are able and willing to pay me as expected.

So, during market meltdowns, I am usually pretty calm because I am not using borrowed money to invest with.

There is no need for me to sell at depressed prices to meet obligations as I am not using money meant for something else in life.

What I have achieved as an investor for income took many, many years of time and effort.

Totally worthwhile as I mostly do nothing most of the time unlike the days when I was more active as a trader.

I always say "If AK can do it, so can you".

I really believe this.

As an average income earner, if we are prudent financially and patiently invest for income, we can become a millionaire too.

To invest, we need capital.

It is all going to come from our earned income in the early days, unless we have been lucky.

So, I talked to myself about how to save 100% of our take home pay.

It sounded funny but it wasn't a joke.

If you search my blog or my YouTube channel, which is still a baby, you would find the content.

My YouTube channel: AK71SG.

When the dividends we receive are able to pay for our lifestyle, we can save 100% of our take home pay.

Simple.

Of course, we shouldn't be saving for the sake of saving.

The money saved can be used to invest for more income when the time is right.

So, wealth creation continues.

When people see "$200K in annual dividends", some think maybe AK had a $4 million inheritance or maybe he struck TOTO or something.

A 5% dividend yield on a $4 million investment would give $200K in annual dividends, after all.

When I started my journey, I only had a few thousand dollars and my monthly salary was only $3,000 a month.

Those were hard times.

Long time readers might remember my blog on how I bought my first lot or 1000 shares of ST Engineering at $1.55 a share.

That was more than half of my monthly salary.

I still have those shares today.

What is my dividend yield on those shares today?

Of course, a more recent example would be my investment in AIMS APAC REIT which I bought mostly during the Global Financial Crisis.

At a post consolidation price of less than $1 per unit and a distribution yield of more than 10% per annum on cost, my investment has been free of cost for many years.

Even more recently in 2016, I started investing in DBS at $13 to $14 a share.

Some readers might remember this.

What is my dividend yield on those shares today?

Of course, it would be a mistake to think that it is all just buying and holding as long time readers of my blog would know that I have sold many of my investments over the years too.

Some like Old Chang Kee and Hock Lian Seng, I sold half when their stock prices doubled which means that what I have today is free of cost.

I kept 50% of my original investment as I continued to like them and the dividends they paid.

Who doesn't like free money?

Some of my investments like Lippo Mall Trust and First REIT, I reduced exposure significantly or sold completely for some hefty gains after some years of extraordinarily high distribution yields.

Why did I sell?

Bad vibes.

The same could be said for my investment in Sabana REIT many years ago and also Soilbuild REIT.

Then, there was a string of divestments after many years of receiving good income like Saizen REIT, Croesus Retail Trust, Accordia Golf Trust etc.

In all cases, I had good outcomes not only because of the dividends received but also because I invested in them when they were undervalued.

We cannot always count on a good selling price, after all.

Buying undervalued stocks gives us a better chance of having a good result.

Of course, the capital gains help to give me more ammo to fire when Mr. Market went into a depression again.

I bought about $200K worth of UOB's common stock during the COVID-19 pandemic.

Where did a retiree like AK who depended on passive income for a living get the money from?

AK is so very long winded and almost lost his train of thought.

This is why I prefer blogging to talking because I can see what I was talking to myself about and how to continue.

Very good especially when my brain power is not what it used to be.

Anyway, what I want to say is some of what I have achieved is from "buy and hold" but if I was just purely buying and holding, I would not have what I have today.

Not when I started with only a few thousand dollars and a monthly salary of $3,000 a month.

Yes, I had a couple of side hustles and I was also fortunate enough to make some money as a trader for a few years.

These helped to give me more capital to invest with.

However, they are not the main reasons why I have what I have today.

All of us have different circumstances but we can all have the same philosophy.

If we stay true to that philosophy, we can all achieve success although in varying degrees.

There will always be naysayers out there.

"Alamak! $200K dividend income needs a few million dollars in capital lah! Walao! Where to find that kind of money?"

Well, if they keep thinking like this, they will never find the money.

Don't let negative people tell us that we cannot achieve financial freedom.

We have to believe that we can and I believe that is half the battle won!

I truly believe it when I say if AK can do it, so can you!

Have a good weekend!

References:
1. Passive income as much as earned income.
2. Peace of mind as investors.

3. Three words starting with "P".

SSB 3.06% p.a. T-bill 3.75% p.a. OCBC 40c DPS!

1. Singapore Savings Bond is offering a 10 year average yield of above 3% p.a. again.

Like I said in the past, this means it makes more sense for me to buy Singapore Savings Bond than to make voluntary contribution to my CPF account.

This is because the average interest rate I get from CPF for my age group is about 3% p.a.

This takes in the allocation to OA and SA as prescribed by the CPF.

Nothing into the MA as my MA has hit the prevailing Basic Healthcare Sum.

However, since I have already used all my funds meant for CPF voluntary contribution in 2023 and also 2024, I would be tapping in 2025's funds if I were to buy this Singapore Savings Bond.

This is not a bad idea since bond yields could fall later in 2024.

Well, problem is my war chest is complaining after my recent large withdrawal for IREIT's rights issue.

A hungry war chest is an angry war chest.

Must replenish war chest first.

2. The recent 6 months T-bill auction saw a cut-off yield of 3.75% p.a.

Not fantastic but not too shabby either when compared to what a 6 months fixed deposit offers.

Happy that my non-competitive bid was fully filled.

Looking forward to the next auction happening on 17 August.

I would probably be increasing the application quantum for that auction too as I continue to strengthen my T-bill ladder.

I will do this by using some of the dividends received from AIMS APAC REIT, adding to funds returning from a maturing T-bill.

3. OCBC announced results!

Dividend per share of 40 cents declared!

This is much higher than last year's 28 cents!

As my investment in OCBC is much larger than my investment in either UOB or DBS, this is going to have a huge impact on my passive income for 2023.

Still feeling giddy from my recent blogs on UOB and DBS.

Now, I feel even more giddy.

So, I shan't say anything else about OCBC.

I give you a picture instead.

Click to enlarge.

I remind myself that OCBC is only paying out half of its earnings as dividends.

This means that the common stock of OCBC is growing more valuable over time.

Congratulations to all fellow shareholders!

Financial freedom is not a dream for most of us in Singapore, and investing for income can only help.

If AK can do it, so can you!

Huat with DBS! Profit up 48%! Dividend up again!

Was feeling a little tired after a morning of activities.

Medical appointment followed by grocery shopping.

Lost some blood and still had to carry heavy bags.

After settling down at home, I read the news and I suddenly felt energized!

DBS increased their dividends to 48 cents a share per quarter!

Huat ah!

The decision to invest in DBS back in 2016 at $13 to $14 a share and continuing to accumulate over the years whenever Mr. Market felt depressed is paying off handsomely.

Annualizing 48 cents a share, annual dividend per share is $1.92 which means the dividend yield on my initial investment is in excess of 14% per annum!

Of course, with DBS being one of my largest investments, this is probably going to have an outsized impact on my passive income for the year.

I so stunned like vegetable!

What is even more impressive is that the higher dividend is probably sustainable.

DBS revealed that the expected catch up in funding cost has not been as bad as feared.

In fact, net interest margin saw a further increase of 12 basis points, quarter on quarter.

Net profit grew 48% year on year and 5% quarter on quarter!

I have said before that DBS is able to trade at a juicy premium to book value because of its very impressive return on equity or ROE when compared to UOB and OCBC.

DBS saw its ROE hit a new quarterly high of 19.2%, up from 13.4% in the same quarter last year!

DBS has a CET1 ratio of 14.1% which is in excess of what it feels is optimum.

So, we could possibly see higher dividends to come if DBS has no better use for the money.

DBS could, of course, simply hold on to the money for a rainy day.

Whatever the case might be, DBS is a rock solid investment for both income and growth.

Yes, just like what I said about investing in UOB, we can have our cake and eat it too.

OCBC should deliver good results tomorrow too.

I am feeling so giddy now, I need to go lie down for a bit.

If AK can do it, so can you!

Reference:
DBS fair value per share?
Transcript of my YouTube video @AK71SG.

Huat with UOB! Will I buy more OCBC now to huat again?

In my last two blog posts, I said that I was giddy with joy.

I expected a higher dividend from UOB and I was not disappointed.

The much higher dividend than expected was a very nice surprise!

With the stellar performance by UOB, the market is now expecting similar performance from DBS and OCBC.

DBS will be announcing results on 3 Aug while OCBC will be announcing results on 4 Aug.

Like I have said in past blog posts, OCBC is able to pay a much higher dividend because of its very high CET1 ratio.

Of course, whether they would pay higher dividends or not is anyone's guess.

OCBC's stock price has been relatively strong this year and less volatile compared to UOB and DBS.

However, in recent trading sessions, its stock price has been pushed up pretty aggressively.

Makes me happy since OCBC is my largest investment.

However, I remind myself that if we are focused as investors for income, we would not chase rising prices and we would not fear falling prices.

This is because our focus is on income.

So, I won't be adding to my investment in OCBC now.

Looking at the chart, I see similar signs of "pump and dump" when comparing to the run up in February last year in 2022.

The MFI shows that OCBC is overbought.

Volume is also declining as price tries to push higher.

Both are red flags.

We could see $13.50 a share retested but I would not be surprised to see a pull back to support currently at $12.40 a share or so.

No point paying $13.50 a share to get a 40c dividend only to see price declining by $1 or so back to immediate support.

If AK can talk to himself, so can you!