Saturday, September 17, 2011

Do you really love money?

I do not love money. There. I said it. 

All of you must be thinking that Dividend Warrior has lost it. How can someone not love money? o_O

Dun worry. I am still sane. My Dad's recent medical crisis sparked off some thoughts in me. I do not want to work until my 60s when I will be too old to pursue my dreams and interests. At the end of the day, a job is just a job. There is no reason for me to slog and sacrifice my youth over a "job". 

Cash is just paper. I do not love it. This paper has value because the government says so. Instead, I crave for the two most valuable things money can provide me. No, not super cars, private jets, condos etc.  Money can provide me freedom and time. I am craving to have the freedom and time to do whatever I want, wherever I want, whenever I want. 

All the Freedom and Time in the world!
Hopefully, my dividend re-investment plan will help me gain more freedom and time by the time I reach mid-thirties. 

Feel free to comment below. ^^

Peace Out
Dividend Warrior

Saturday, September 10, 2011

My First Cheque from Nuffnang!

Yesterday, I received a cheque from Nuffnang. Even though the amount is small, I still feel a sense of satisfaction because I had put in quite a lot of effort and time into my blog. After eight months of blogging (from Nov 2010 to Jun 2011), I earned S$51.06 as shown in the cheque. In other words, I earned about S$6.40 per month from my blog. I hope to eventually achieve S$10 per month.

Next, I will like to thank Nuffnang for their efficiency. Their staff actually called me to confirm my name and address before sending the cheque. Wow! I did not expect that. 

Finally, I will like to thank all my readers for the support and encouragement. Thank you all for visiting my blog. ^^ 

Peace Out,
Dividend Warrior

Wednesday, September 7, 2011

Sep 2011 Dividend Portfolio Update

Average Price
% of Portfolio
F & N
Capitamall Trust
Suntec REIT
Frasers Centrepoint Trust
CACHE Logistics Trust
First REIT

Portfolio Breakdown:
Green: Telcos (44.3%)
Blue: Conglomerates (29.42%)
Orange: REITs (22.93%)
Red: Transport (3.35%)

Total dividends collected     (since Jan 2010)
Total Invested Capital
Annual Dividend Yield (%)
6% - 7%
Dividends per month
Realised capital gain/loss
(since Jan 2010)
S$5, 607
Unrealised capital gain/loss
(since Jan 2010)
S$6, 463
Investment Funds

I decided to post my portfolio update earlier because I do not think I will be making any changes this month. For the month of September, I received S$300 from Starhub. Dividends per month dropped a little to S$388.80 as Starhub is the only company in my portfolio that paid dividends in September. Total investment funds increased slightly to S$3, 100.

Thanks to some suggestions from my readers, I have added some new data to my update. Firstly, the breakdown of my portfolio according to various economic sectors. Secondly, my realised and unrealised gain/loss since January 2010. 

Looking Forward:
Nothing new, really. I will continue to build up my investment funds while monitoring a few blue chips closely. If the prices become really, really attractive (>30% drop from its 52-week high), I will consider adding to my portfolio again. October will be an unusually lean month for me as no company in my portfolio is paying out dividends. T T

Peace Out,
Dividend Warrior

Sunday, September 4, 2011

The Magic of Compounding Dividend

In the past, I would spend my dividends on food, clothing and entertainment. My initial investment aim is to create a dividend portfolio that generates enough passive income to cover my daily expenses while preserving my capital. However, a fellow financial blogger advise me to re-invest more of my dividends. Therefore, I have moved towards a new investment aim.

"To generate enough passive income to live off on and still have money left for investment. Make my money work harder for me."

Compound Dividends:
In order to fulfill my investment aim. I decided to use the power of compounding as Albert Einstein once said that it is the most powerful force on Earth. If you think the effect of compound interest is great, then compound dividends is like "compound interest on steroids". Without further ado, I shall share 2 compound dividends plans below.

Version 1:

Year Capital (S$) Capital + Dividends (S$) Dividends (S$)
2012 107,000 114,490 7,490
2013 114,490 122,504 8,014
2014 122,504 131,080 8,575
2015 131,080 140,255 9,176
2016 140,255 150,073 9,818
2017 150,073 160,578 10,505
2018 160,578 171,819 11,240
2019 171,819 183,846 12,027
2020 183,846 196,715 12,869

*Calculations are done based on an annual dividend yield of 7%.

Version 1 is a pure dividend re-investment plan. I will only use the dividends received every year to re-invest in dividend stocks. I do not need to fork out a single cent from my pockets. Therefore I can maintain a larger cash buffer. However, this process is rather slow. I will only reach S$12K in annual passive income at 36 years old!  

Version 2:

Year Capital (S$) Capital + Dividends (S$) Dividends + Capital Injections (S$)
2012 107000 122000 15000
2013 122000 137000 15000
2014 137000 152000 15000
2015 152000 167000 15000
2016 167000 182000 15000

*Calculations are done based on an annual dividend yield of 7% plus capital injections.

Version 2 is an accelerated form of the first. I will combine the dividends received with my own funds in order to reach S$15K for re-investment. This will speed up the compounding effect. By the end of 2016, I will achieve a dividend portfolio size of S$180K, at an age of 33 years old. However, this version requires me to be more disciplined in my spending and more aggressive in my savings. Secondly, I will have a smaller cash buffer. 

Version 1 is slow but safe. Version 2 is faster but riskier. I am leaning slightly towards Version 2 because I do not own a car or property, therefore no loans and mortgages to service. I believe I am not a spendthrift either. Therefore, spare cash will be available for investment. Of course, another way is to find higher yielding stocks. However, it is difficult to find blue chips that are yielding consistently above 7%, except Starhub. 

So, if you are in my shoes, which version will you choose? Or you have a better plan than my ones? Please comment below. ^^

Peace Out,
Dividend Warrior