Building an income portfolio is like building a house.

After blogging for so many years, I have received a fair number of emails and comments. 

I have no way of telling how many emails I have received in total thus far but BlogSpot makes it easy to see how many comments have been published.

As I make an effort to reply to all emails and comments, half of the comments published should be my replies. 

I have, by now, received more than 10,000 comments from readers.





As I blog about money management and investing for income frequently, it is no surprise that I should receive emails from readers with questions related to these topics. 

Of course, in my replies, I am mindful to tell readers that I am not a financial advisor and I am just sharing what has worked for me. 

I always say that, in my blog, I am just talking to myself.





Although I have received enthusiastic emails from readers both young and old who were thinking of investing for income for a more secure future, I have also received some which had more pessimistic tones although they were willing to give income investing a try.

Even though it would take a bit more work to encourage these people, I was happy because the writers, despite the pessimism and, maybe, scepticism, decided to take that next step in an effort to possibly improve their lives.

As the saying goes, we can lead horses to water but we cannot make them drink. 

If a horse which was suspicious at first decided to taste the water, we should be happy. 

The proof is in the pudding and, in all likelihood, the horse would then drink.





Today, I received a letter from an institution which I invested money in many years ago. 

It is one of those investments that I almost forget that I have. 

I am reminded once a year of its existence when it is time to receive dividends. 

I remember saying this about Hock Lian Seng as well.

You will see that the amount is not big but I have had this investment for so many years. 

So, it adds up. 

The same goes with many of my other investments.

Although how much we receive from each investment is important, how persistent we are in building our income generating portfolio is even more important.





There are many analogies which I like to use when I talk to people about investing and regular readers are probably familiar with the one about grasshoppers and ants. 

The one I am going to share today is about building a house. 

Building an income generating portfolio is like building a house.

When we make our first investment with the intention to build an income generating portfolio, we have taken the first step in building this metaphorical house. 





Over time, as we make more investments, we are putting in the floors, the walls, the windows, the doors and other things which make the house functional.

When the house is complete, our mission is accomplished. 

We could choose to move in and enjoy the house as it is or continue to add features to make it more comfortable or, even, luxurious. 

We might want to put in a gazebo or, maybe, even a swimming pool, for examples.





What we want in a house is quite subjective. 

Similarly, how much we want in passive income will differ from person to person. 

However, what is not different is the need for time in order to build a dream house, to have a portfolio that generates income which we feel is sufficient for our needs and, maybe, wants.

The Chinese people have a saying: 

万丈高楼平地起

Even skyscrapers start from the ground up. 

Don't ask me about the basements though.

For regular people, our first investment for income might not yield much but make more investments over time and we will see how it all adds up. 





Patience is required.

Like they say, all in good time. 

However, time can only be good for us if we do the right things.

...





Related posts:
1. To be a happy peasant.
2. Save 100% of take home pay.

Free medical insurance in our old age?

On 14 December 2013, I blogged about how we could possibly get free medical insurance in Singapore. 

I shared my own experience and how things have worked for me. 

The beauty about the method I shared is that it is risk free and, therefore, stress free.

You don't know what I am talking about? 

Then, you might want to read this first:
How to get free medical insurance in Singapore?






Of course, there is some concern with how the annual premium which we pay for our H&S (hospitalisation and surgical) insurance will increase as we grow older. 

This means that the cost of coverage will become more expensive over the years with annual cost exceeding $2,000 as we age into our 60s in some cases.

This is one reason why I am quite happy to have the government increase the limit for the Medisave Account (CPF-MA) which pays 4% per annum, risk free. 

Having more money in my CPF-MA means receiving more in interest payment.

Last year, I received $1,760.35 in interest payment for money in my CPF-MA. 

The year before that, I received $1,654.48. 

That is an increase of more than $100. 

However, withdrawal to pay for my H&S insurance remained at $665.00. 

So, I have some surplus.





If the MA ceiling is raised year after year, I should have more surplus in my MA year after year too. 

This means that funds in my MA earn more interest to pay for the higher insurance premium that is bound to come as I enter the next age bracket and the next and so on.

So, the argument that even this method will not ensure that we get "free" medical insurance in our golden years is weakened. 

In my 60s, I would probably have to pay more than $2,000 annually for my H&S insurance. 

Last year, I already received $1,760.35 in interest payment. 

With the MA's ceiling raised annually, could I see more than $2,000 in interest payment eventually? 

I cannot say for sure but, everything else remaining equal, I think so.





Of course, by having the maximum allowed in my MA now while I am younger, I will enjoy plenty of surplus as I receive the maximum in interest payment while paying relatively lesser for my H&S insurance. 

The surplus amounts to a few hundred dollars each year, in fact. 

It is like receiving more money now to pay for the higher cost of insurance in our old age.

If you worry about the high cost of health care in Singapore, you should get yourself covered with a good H&S insurance policy. 

If you worry about the cost of insurance escalating as you age, you might want to max out your MA, letting time and the government help you accumulate the funds to give you free medical insurance that so many say we do not have in Singapore.





Related post:
Enhanced Incomeshield (H&S) for my mom.