Tuesday, 26 April 2016

Monthly passive income hits S$1,000

I have been tracking our monthly dividend and interest income since 2015 and only started posting the figures from Jan 2016 on this blog. This is exciting for me to write because I just realised our monthly passive income has exceeded S$1,000 in Apr 2016. First milestone reached! 

We received a coupon payment from one of our corporate bonds and dividend income from our index ETFs and shares in one of the telecommunication services companies we are invested in. Together with the interest income from our bank accounts, our monthly passive income has hit S$1,000 for the first time.
I have been tracking our average monthly passive income for 2016 and it might end the year at S$800. I guess the second milestone would be for this to reach S$1,000 as well by 2017. Currently, our average monthly expenses (taking into account all types of costs) is about S$6,000. I just realised we have to increase the average monthly passive income by S$500 every year for the next decade for it to be able to cover our average monthly expenses (assuming this does not increase) by the time I hit 40 years old.

That will require a more aggressive allocation to our ETF and share portfolios for this to happen. It also assumes sufficient cashflow for investment every year with minimal cashflow drain from possible life events like having children, job loss, medical and other emergencies. Even just writing this assumption out makes me question how workable it is.

Which is why it helps for me to record all these down. We are testing this theory of financial independence over a long enough time frame of 10 years. If it is a success, I want us to know how we achieved it from this starting point. If it is a failure, we will have another 10 years to learn from our mistakes and make it work the second time round.    

16 comments:

  1. TFS,

    congrats!

    only 1 year, and your passive is 1k/mth, thats impressive!

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    Replies
    1. Thanks! I have been investing a little while working in Australia but most of the passive income then was interest income from the Australian bank accounts. It's actually been 6 years of building up this passive income so it has taken quite a long time to get to 1k/mth!

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    2. i just noticed your interest income.

      considering that banks , even by aussie bank standards, give say, 2-3%?
      your holdings in the banks must be quite hefty to generate 3 digit interest!

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    3. Yes, the current interest rate on online saver accounts is about 2.50%. We do keep quite a bit of our cash holdings in the Aussie bank accounts. After all, we head back almost every year to visit our friends and use that as spending money. More importantly, it's our lifeline outside of Singapore if things go badly here for us!=)

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  2. Impressive! very fast progress. $10,000K milestone should be unlocked

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    Replies
    1. Thanks! With the dividend cuts in 2016, I reckon we might be just shy of S$10,000 as passive income for the year. Will be interested to know the final figure when I close the accounts on 31 Dec 2016!

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  3. May I know if you have any paper losses? If yes, what is the net return?

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    Replies
    1. Yes, I definitely have overall paper losses from the hammering of my investments in the Oil & Gas and related industries. I did a rough calculation and my overall paper losses is about S$5,000 as of today. I reckon my net return is about negative 2% after including dividend income received.

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  4. May I know which counters you have invested in other than STI etf?

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    Replies
    1. I have decided against revealing the counters I am invested in but most of them are part of the STI constituents. I started investing in these stocks directly to get a higher return but turns out I'm not doing much better than just investing in the STI ETF!

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  5. Always exciting to achieve some milestones. So shiok to receive substantive sums of dividends/coupons. It's almost like a 2nd salary yah?

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    Replies
    1. Yes! It is almost like another salary income. Nowadays, the job life cycles in most industries are getting shorter and it's becoming easier to be retrenched. If it's this difficult at our age, I can't imagine how tough it would be when we get older. Shows how important it is to diversify our income sources!

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  6. May I know what is the size of your portfolio? I understand different counters declare different dividends. I'm new and I'm interested in having a rough gauge of the portfolio size (STI counters) to have such a return. Thanks in advance.

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    Replies
    1. I have a "Portfolios & Asset Allocation" page that shows the sizes of the ETF and Share portfolios. As at 31 May 2016, the value of the ETF portfolio is S$37,308 and the value of the share portfolio is S$111,564. Cheers.

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