blueboat
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Is that Gurmit Singh's number?
Passive income options
- Thread starter MoDiE
- Start date
Is that Gurmit Singh's number?
Hi Kebinu, just to be sure I understand... are you referring to the GurmitSinghEvent posts?
MoDiE
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hi bro.. i have heard of friends mentioning this before... world venture..
why you say not sustainable? any comments on this?
thanks for sharing...
MLM aka Ponzi scheme
holysmokes
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A scalable biz?
Passive income doesn't necessarily mean zero effort. It usually means the effort is less than a 9-6 job.
Based on this, if u start a biz and it matures to the point where your presence can be minimal, it's as good collecting rent or div.
My cousin started his steel processing company in his early 20's. After 20 yrs, it has reached a pt where he can start work at 11 & knock off at 4. The biz still grows.
He doesn't invest heavily in anything else except his biz.
Passive income doesn't necessarily mean zero effort. It usually means the effort is less than a 9-6 job.
Based on this, if u start a biz and it matures to the point where your presence can be minimal, it's as good collecting rent or div.
My cousin started his steel processing company in his early 20's. After 20 yrs, it has reached a pt where he can start work at 11 & knock off at 4. The biz still grows.
He doesn't invest heavily in anything else except his biz.
Dividends Wizard
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buy dividend stocks .
see my blog for investing ideas .
see my blog for investing ideas .
Dividends Warrior
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Hyphos
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Well I am currently focused on dividend stocks for passive income to build up my capital.
2 years from now once my CPF hits 50K I intend to buy private property for investment. Hopefully the rental will be able to provide passive income after paying off loan, maintenance and other monthly liabilities.
No interest in investing in business, unless the friend has a really good idea, did his market analysis well and is close enough to me to trust.
2 years from now once my CPF hits 50K I intend to buy private property for investment. Hopefully the rental will be able to provide passive income after paying off loan, maintenance and other monthly liabilities.
No interest in investing in business, unless the friend has a really good idea, did his market analysis well and is close enough to me to trust.
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found this from IM$avy from CPF website.....
Much has been written in The Sunday Times Invest pages about investing for yields in these uncertain and inflationary times. Based on the performance of Reits and high dividend paying stocks like the telcos and utilities, it appears that local investors need no further convincing.
However, buying a stock for its high dividend payout is only half the story. To make an investment work as well as it ought to, a good investor must complete the other half of the story.
And that is re-investing the dividend.
Re-investing income from an investment, be it dividend, coupon, interest or rent, is a simple concept but it takes a strongly disciplined investor to abide by it.
Many ordinary investors tend to be lax about their investment income. If you don't believe me, ask yourself this question: How closely do you track the interests and dividends that you receive? Even if you do track them closely, what do you do with them?
For some, investment income is treated as bonus money to be spent. A friend, J, who has a rental property, tells me that she uses the rent she collects from her tenant to pay for her overseas vacation.
As she is a wage earner, she considers her rent money as extra spending money.
Don't get me wrong. I'm not saying that investors must live like a scrooge in order to maximise returns or that J is wrong to splash cash on an expensive holiday.
The point I want to make is that expenses should not be premised on the belief that investment income is spare money. It is not.
This is because the value of our principal is constantly being eroded by inflation. The dividend cheques that come our way are nominal returns, that is to say, they are not adjusted for inflation.
So if you spend all the returns, your financial position will be worse off than a year ago because inflation would have reduced your buying power.
Ideally, J should peg her annual holiday expenses to her annual wages to ensure that she does not spend more than she earns.
This may seem pedantic - after all, money is fungible, so does it matter that it comes out of the investment account instead of from one's salary?
But I will argue that the distinction is important, particularly if your expenses are perilously close to your earned income.
When expenses equal earned income, there is zero savings. And if you have to dip into your dividend income to fund further spending, you are whittling down your reserves even if the principal remains untouched.
That is why the Government is very careful in tapping the Net Investment Returns (NIR), which reflects income from the investments of Singapore's reserves, in a sustainable way.
Although computing the returns under the NIR framework is far more complex than my own simple illustration, the underlying principle remains the same, that is, preserving one's wealth is more than just maintaining the principal.
It bears reiterating that re-investing one's dividend is key to preserving wealth.
The other benefit of re-investing is to harness the power of compounding - which can be likened to a snowball rolling down a hill.
Compounding allows your investment to grow at a quicker pace as a result of the interest or dividend you earn not only on your principal but also on the accumulated interest and dividend payments.
Take a person earning an 8 per cent annual rate of return on $10,000 and putting his dividends in a savings account that pays a measly interest.
At the end of 20 years, his money will have grown to slightly more than $26,000. But if he had re-invested the dividends at the same 8 per cent rate of return, the value of his initial $10,000 will have more than quadrupled to $46,610.
If your investments are managed professionally as part of a pool - such as insurance products or unit trusts - dividend re-investment is not an issue as the fund manager has economies of scale in re-investing cash dividends in shares.
However, dividend re-investment is problematic if you own shares directly because so few companies on the Singapore Exchange offer scrip dividend as an alternative to cash dividend.
To be sure, one can always take the cash to buy shares in the market, similar to what a fund manager does. But it is not a good idea as the transaction costs for small share purchases are prohibitive.
It is no wonder that scrip dividend is popular with small investors as reflected by a participation rate of well over 80 per cent at OCBC Bank when this option was offered to shareholders.
It's a pity the bank suspended the scheme in its last two dividend issues, saying that it has adequate capital.
In today's liquidity-flush climate, profitable companies will find it cheaper to pay their dividends in cash rather than in new shares that will dilute future earnings.
This is a short-sighted approach. Shareholders who elect to take their dividends in scrip are usually in for the long haul. Surely, these are the kind of shareholders that companies want.
Much has been written in The Sunday Times Invest pages about investing for yields in these uncertain and inflationary times. Based on the performance of Reits and high dividend paying stocks like the telcos and utilities, it appears that local investors need no further convincing.
However, buying a stock for its high dividend payout is only half the story. To make an investment work as well as it ought to, a good investor must complete the other half of the story.
And that is re-investing the dividend.
Re-investing income from an investment, be it dividend, coupon, interest or rent, is a simple concept but it takes a strongly disciplined investor to abide by it.
Many ordinary investors tend to be lax about their investment income. If you don't believe me, ask yourself this question: How closely do you track the interests and dividends that you receive? Even if you do track them closely, what do you do with them?
For some, investment income is treated as bonus money to be spent. A friend, J, who has a rental property, tells me that she uses the rent she collects from her tenant to pay for her overseas vacation.
As she is a wage earner, she considers her rent money as extra spending money.
Don't get me wrong. I'm not saying that investors must live like a scrooge in order to maximise returns or that J is wrong to splash cash on an expensive holiday.
The point I want to make is that expenses should not be premised on the belief that investment income is spare money. It is not.
This is because the value of our principal is constantly being eroded by inflation. The dividend cheques that come our way are nominal returns, that is to say, they are not adjusted for inflation.
So if you spend all the returns, your financial position will be worse off than a year ago because inflation would have reduced your buying power.
Ideally, J should peg her annual holiday expenses to her annual wages to ensure that she does not spend more than she earns.
This may seem pedantic - after all, money is fungible, so does it matter that it comes out of the investment account instead of from one's salary?
But I will argue that the distinction is important, particularly if your expenses are perilously close to your earned income.
When expenses equal earned income, there is zero savings. And if you have to dip into your dividend income to fund further spending, you are whittling down your reserves even if the principal remains untouched.
That is why the Government is very careful in tapping the Net Investment Returns (NIR), which reflects income from the investments of Singapore's reserves, in a sustainable way.
Although computing the returns under the NIR framework is far more complex than my own simple illustration, the underlying principle remains the same, that is, preserving one's wealth is more than just maintaining the principal.
It bears reiterating that re-investing one's dividend is key to preserving wealth.
The other benefit of re-investing is to harness the power of compounding - which can be likened to a snowball rolling down a hill.
Compounding allows your investment to grow at a quicker pace as a result of the interest or dividend you earn not only on your principal but also on the accumulated interest and dividend payments.
Take a person earning an 8 per cent annual rate of return on $10,000 and putting his dividends in a savings account that pays a measly interest.
At the end of 20 years, his money will have grown to slightly more than $26,000. But if he had re-invested the dividends at the same 8 per cent rate of return, the value of his initial $10,000 will have more than quadrupled to $46,610.
If your investments are managed professionally as part of a pool - such as insurance products or unit trusts - dividend re-investment is not an issue as the fund manager has economies of scale in re-investing cash dividends in shares.
However, dividend re-investment is problematic if you own shares directly because so few companies on the Singapore Exchange offer scrip dividend as an alternative to cash dividend.
To be sure, one can always take the cash to buy shares in the market, similar to what a fund manager does. But it is not a good idea as the transaction costs for small share purchases are prohibitive.
It is no wonder that scrip dividend is popular with small investors as reflected by a participation rate of well over 80 per cent at OCBC Bank when this option was offered to shareholders.
It's a pity the bank suspended the scheme in its last two dividend issues, saying that it has adequate capital.
In today's liquidity-flush climate, profitable companies will find it cheaper to pay their dividends in cash rather than in new shares that will dilute future earnings.
This is a short-sighted approach. Shareholders who elect to take their dividends in scrip are usually in for the long haul. Surely, these are the kind of shareholders that companies want.
Dividends Warrior
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The power of compounding dividends is great. The growth of passive income is exponential.
Buy dividend stocks, reinvest dividends and buy more dividend stocks.
More dividends stocks will give u more dividends to re-invest and buy even more dividend stocks.
Rinse and repeat over 10 - 20 years.
The only challenge is to come up with the initial capital to start the ball rolling and to save aggressively.
I started with around $20k in 2009. Made some sacrifices along the way. No oversea vacations, no car, no fancy restaurants etc.
Buy dividend stocks, reinvest dividends and buy more dividend stocks.
More dividends stocks will give u more dividends to re-invest and buy even more dividend stocks.
Rinse and repeat over 10 - 20 years.
The only challenge is to come up with the initial capital to start the ball rolling and to save aggressively.
I started with around $20k in 2009. Made some sacrifices along the way. No oversea vacations, no car, no fancy restaurants etc.
20years.. I really envy your diligence and achievement.
Is it too late to start now that I will be 35 years soon?
Well, I know ppl will say I have to start somewhere still, but how do pple like me begin?
Hope you can enlighten and suggest.
For others who are smart alec, no need to reply and keep comments to yourselves if you are really smart.
Looking for constructive suggestions here thx.
Is it too late to start now that I will be 35 years soon?
Well, I know ppl will say I have to start somewhere still, but how do pple like me begin?
Hope you can enlighten and suggest.
For others who are smart alec, no need to reply and keep comments to yourselves if you are really smart.
Looking for constructive suggestions here thx.
The power of compounding dividends is great. The growth of passive income is exponential.
Buy dividend stocks, reinvest dividends and buy more dividend stocks.
More dividends stocks will give u more dividends to re-invest and buy even more dividend stocks.
Rinse and repeat over 10 - 20 years.
The only challenge is to come up with the initial capital to start the ball rolling and to save aggressively.
I started with around $20k in 2009. Made some sacrifices along the way. No oversea vacations, no car, no fancy restaurants etc.
Futureskid
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Wow your tone sounds harsh...
u have already closed your doors to many others who maybe able to help u.. then u should just pm Dividend Warrior for his advice, and see if he can help u since his method is what u prefer.
A beginner should always be open minded and willing to listen to comments and ideas yourself, then analyze yourself if it's contructive or useless comments. U must know in this world, most ppl think themselves as smart alec, and most successful ppl are smart alec as well! Remember: there are many different paths to achieve your financial goals
kebinu
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First post in this thread and you are asking people not to post in the thread? I don't see anything not constructive here.
Property, dividend, trading, MLM, business, car pool, advertisment on our cars are really some way of passive income.
Agreed. No matter how absurb a suggestion or an opportunity may sound, we must still listen, analyze and see if it's feasible.
Go ahead if it's feasible and sustainable.
Drop it if otherwise.
Geez.. I didnt see that my post is viewed as harsh to most here. It wasn't meant to sound like like that and get off on the wrong foot..I am sorry if anyone felt offended by it.
But indeed I am here to learn how to get my financial life on track by picking up some constructive tips.
But indeed I am here to learn how to get my financial life on track by picking up some constructive tips.
kebinu
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A lot of advices are constructive. Which are suitable for you? None of us know your personality, your current financial situation, liabilities, cash flow etc.
Hence, no advice will be constructive here for you because if you have to ask, you don't know which is the better option for you.
Dividends Warrior
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Yup. I am still going to say what you expect to hear. It is never too late to start.
If dividend investing is too long for you, I am sure you can find an investment most suitable for you.
Cheers!
whats your blog's link?
A lot of people lose money in a market crash. To me it is a transfer of wealth from current investors to opportunists like yourself.
It is how those who are capital-rich get richer in a way, by snapping up assets at a discount. Buy when everyone is selling and sell when everyone is buying.
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