A lazy and fool proof way to investing for income?

Reader says...

I attended your AK with friends on Friday (15 July) and came away a bit disappointed. 

Not because you did badly (in fact you were the most impressive of the 3 presenters), just that I went into the session with certain expectations of what I could potentially learn from you which was met only partially. 

I didn't expect it to be a Q&A forum (this is my first AK session) and a session about specific stock/REIT question after question. I was hoping that there was a more in-depth discussion about underlying concepts or a mindset to approaching investments/income investing. Yes there were sprinkles of that but it's probably safe to say the session was dominated by the "what is your view of Centurion, or Sembawang, or Soilbuilt REITs....". You get the drift.

My goal is, like a lot of people, comfortable retirement and maintenance of my current lifestyle with a predictable stream of income. 

Objective - As I have a day job, and I suck at investing, I want to achieve my goal above by having a dummies methodology to invest in REITs or other income generating investments without a lot of decision-making (I'm lazier than you). I'm not looking at super returns, around 5-6% or so would do as long as they are predictable (more or less). 

Seriously, I am not suited to do investments and I have made a lot of investor mistakes (loss aversion, recency bias etc). What is in my favor is a fairly solid investment foundation and from there, I want to build on it by making a reasonable amount of return with reasonable predictablity, and without needing to make a lot of decisions.

That's why REIT investing appeals to me. My sense is the analysis for REITs is lesser than that of a stock such as DBS (which you mentioned quite extensively on Friday). I was hoping to narrow down the time and effort to do analysis on REITs.

I will continue to focus on your REITs related blog posts (especially those on the right hand side bar) but have already benefited from your advice on CPF (I'm going to top up my mum's CPF RA to earn a blended 4.45% returns and maintain some liquidity by drawing a monthly sum from her account over 5 years.) 

AK says...

Oops. Yes, "Evening with AK and friends" is Q&A. I assume that the audience are all my readers and that they know my approach to achieving financial freedom. "Evening with AK and friends" is for further interaction, face to (masked) face. ;p

If you are a lazy guy like me, yes, make good use of the CPF which you have started doing. That is as good as it gets when it comes to fixed income instruments. It is really a AAA rated sovereign bond with an annuity thrown in.

REITs? Well, it isn't as simple as you think. Investing in REITs looks simple now because conditions are relatively benign for REITs. Of course, for the income investor, REITs are still relevant instruments. 





Keep reading. Keep learning. 

I am still learning too. :)

You might want to consider regularly socking away some money in an ETF that tracks the STI. ASSI guest blogger, Matthew Seah, blogged about this strategy before and you will find his name in the left side bar of my blog. Click on his name and you will see all his blog posts.

Investing for income, focus on the business and its ability to generate income and willingness to share that income with you. Try not to be (too) emotionally affected by price volatility.

Start investing but keep a war chest ready to buy more if Mr. Market goes into a depression. Do this and, given enough time, you will do well enough. :)





Related posts:
1. Risk averse? STI ETF, REITs or stocks?

2. Create another stream of income with $500K?

3. Retire with an investment grade bond and annuity.

4. How younger members can get 6% interest from CPF?

5. Reader's insights into AK the investor.