Milestone: Achieving $100 in passive income per month

Milestone-Dividend of sgd 100 per month.png
Projected monthly dividend income of SGD 122.91

I recently did a calculation and realized with the addition of Singtel during the February “correction”, I am on track to achieve at least SGD 100 per month. (I would like to place a disclaimer and mention that the projected dividends is calculated based on the dividend per unit from last year and is thus forms no guarantee of this year’s performance, but nonetheless, it is extremely gratifying to see something come out of 2017).

Though the overall unit value is small, this is still considered an achievement for my portfolio and a step towards my objective of saving 100% of my earned income. A rough calculation reveals that on average my expenses for 2017 was about SGD 700 per month. I am thus hoping to be able to reach this target before the house comes in 2021.

Some points of improvements.

1) Yield projection at 5.42% is relatively low – I attribute this to still retaining some legacy stocks which pay poor dividends, I have since changed my portfolio strategy after reading Kevin O’Leary’s book. The other reason, is that due to some recent contrarian plays I have bought into newer counters at distressed levels. As these stocks are facing cyclical headwinds today, I hope that they will have an opportunity to increase dividends in future.

2) Savings matter more than investments – At this early stage of the wealth building process, I realized that saving quantum’s do matter. As I wanted to keep my brokerage cost as close to 1% as possible, my average lot sizes generally kills off a month’s savings with every trade. Being unable to save more than SGD 3K a month is definitely hampering my ability to invest and thus I need to be even more strategic in my portfolio allocation.

Looking back at this journey, I know that it has been paved with sacrifices. Looking forward I know there are many more such sacrifices to endure. What keeps me motivated are small wins like today and my dedication to give my best.

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