It has been a while since I did a post.
1) Portfolio & Passive income
I have been keeping up with the recent Hamas-Israel war, and wondering if it would escalate further. Would it be another Kuwait/Iraq war? For the time being, markets have yet to be spooked much by it, and have been holding up well. As I don’t really have any oil counters or don’t really track oil prices, I have not been observing much volatility.
For the months of Sept and Oct (up till now), I have added to my positions in CK Asset Holdings, BOC Hong Kong, Sun Hung Kai Properties, Link Reit, and CapitaLand Ascott Trust. As well as buying into a new counter – Baidu.
In retrospect, I still believe in the long-term growth story of Hong Kong/China. The Hang Seng has been on a relentless downtrend for the most part 2023. Many of my existing counters are at their 52-week low and yields are relatively high.
Although the dividend yields of Singapore bank stocks (for some) have reached somewhat appealing levels, perhaps it is the recency bias, I still think that the stock prices (eg. DBS) are somewhat high. Instead, I added to CapitaLand Ascott Trust. Next time perhaps – Hong Leong Finance, SGX….
To be frank I haven’t been buying stocks for most part of 2023 and have only been more active in recent months. In other words, I have not been feeding my dividend income machine.
I watched the recent Money Mind episode on dividend investing where they interviewed Christopher Ng Wai Chung (blogger from the blog Growing your tree of prosperity). If I remember correctly, he has a portfolio of around $2.2mil and has retired in his 30s. Live a simple and frugal lifestyle with no fancy travel and no car. Was rather disappointed that the segment inclusive of the interview was so short…. oh well.
I guess I still have a long way to go to retire comfortably.
Anyway back to my tracking.
For the year of 2023, I should be on track to get around $3,040 of passive dividend/bond interest per month. In the month of Oct 2023, I should get around $2,200.
Besides investing in dividend stocks, I also did some covered call options and cash-reserved put options selling. Mostly covered calls selling.
My strategy has always been to opt for very far-out strike prices and an expiration period of 1 to 2 months. The premiums typically are not high due to far-out strike prices. Moreover, since I mainly sell covered calls, I only trade with ‘what I have’, so I don’t buy many lots. With the expiration duration being a month (or two), I also cannot buy very frequently. Above are my closed positions so far.
I have a few positions which are ‘In the Money” eg. the stock prices went beyond my strike prices. In the case of the Put Option of Baidu, I am happy to own the stock (which is why I bought it and kept it). In the case of Pinduoduo (PDD), although the share price of PDD went above the strike price (actually on the day of the expiration), the prices quickly came back down within a week, and I netted a gain of around USD 2,000+ profit (by buying back the stocks). I guessed it is because I misjudged the earnings report date of PDD, the reason for the sudden surge in PDD’s stock price was its exceptionally good earnings report.
Option selling is not as passive as dividend investing. It really depends on the volatility of the stock. If the market did not open positively for that day, premiums for call options might not be that attractive for me to sell (call options). I also have to be aware of the earning call dates of the stock, Fed Reserve scheduled interest rates announcement dates, etc… and try to time the expiration dates of my options before these so as not to get sudden volatilities near to or on these dates (well, I try…. haha).
I guess with time and more stocks, I can slowly add more lots to my purchases. Ultimately it is to find this ‘comfort zone’ for myself, and not get panicky when prices spike or drop suddenly and my positions become in the money (ITM).
One key point is to really buy options on stocks that you really want to own. Not the most interesting strategy, but it works for me.
2) Work
I am still in my first month in my new job/new company. So far work has been ok. The colleagues are great.
The work place is really near the place where I stay and near my in-law’s place (I can literally walk to my in-law’s place after work). So yeah, it really saves on transport costs and I can have more time for breakfast in the morning.
3) Health
You know the book “I will teach you to be rich’ by Ramit Sethi.
Ramit Sethi: “The 85 Percent Solution: Getting started is more important than becoming an expert. Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t. There is a limit to how much you can cut but there is no limit to how much you can earn.”
Actually, there are a lot of financially well-to-do bloggers/members in Investing Notes / Facebook Group like Seedly BIGS World, etc. Some with 5 figures (or 6 figures) monthly passive incomes.
I often wonder what they do after reaching that ‘comfort’ level. What’s next? Well, AK does a lot of gaming…; Or aim for the next level eg. after 4 figures passive income, aim for 5 or 6 figures passive income (after all, the sky is the limit)…
Ramit talks about this dial, that with more money we can turn up the dial on what we like to do/love more.
Personally for me, well at least for now, I spend more on the food I eat. Well, as I am past my mid-40s, I think I have to be mindful of what I eat. Recently I have been eating healthier foods like sweet potatoes, avocadoes, oats, yogurts, fruits, chia/flax seeds, macha, etc, and cutting down on processed foods, sugar, glutton, etc. Felt better, skin also felt better (I’ve got oily skin). Bought sunblock, going to try some retinoid/AHA night routine.
Perhaps when my daughter gets older, I will have more free time to exercise. I kept to my once-a-week swimming schedule. Recently increased to two.
Thank you for reading.
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A Pen Quotes 
Hi, I noticed a lot of similarities in this post with what I have been discussing with others.
(1) Capland Ascott – since the rights issue was $1.025, I thought it would be good to start averaging down from $1… and of course the price continued to plummet. I guess I should continue to average down… it generates a lot of non-S$ revenue and might be a useful hedge against S$ depreciation.
(2) Health – agree 100% – its worth it to spend on healthy food (vs health ‘supplements’ which I am in two minds about). I also include fish from Europe/Australia in my diet even though it costs more.
(3) Exercise – running for me is the easiest way to get into the aerobic zone (170-180 heartrate, depending on age). Running faster rather than slow and super long distances will also reduce wear and tear. After a run, a swim in a pool is a great way to warm down. My swimming ability is not that good and I can’t swim fast enough to reach aerobic levels (just end up splashing water around if I try to speed up)
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1) My take on CapLand Ascott’s net income has been steadily improving after the pandemic. The gearing is still acceptable at around 40%.
As earnings is often lagging, I think the hospitality sector is still recovering so there is still some upside.
Price has gone done in recent months, dropping below $1.00 and dividend yield looks attractive at more than 6%.
Well… rates might stay high for long, but I don’t think rates hike can keep going up for long. So am slowly adding to some Reits and property counters.
Would do the same if the financial stocks’ prices start getting attractive.
3) Exercise – One good thing about running is I can do it almost anywhere and almost anytime. Unless it rains.
However, am not much of a runner. Somehow keep reading articles that says that running long distance age a person – not sure if true or not. And as one age the knee joints give us problem esp if we always pound on them (if running on hard ground). Some ppl prefer to cycle (but that one does not burn as much energy).
But yup, it is good to have the heart rate up, and feel breathless once in a while.
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Hi there Apenquotes,
Nice write up as always.
In regards to what to do after attaining your “comfort” level, I would say it depends a lot on your circumstances, particularly your age and financial commitments.
When you are still young (47 is still young), you still have untapped potential. At 47, with young kids, you still have financial commitments. Also are you a sandwiched generation? Many curve balls can and do come our way. We need to be prepared for them (financially & psychologically). To not work and depend only on dividend income is not wise.
A good passive income must fulfill the following criteria:
1. Must be of meaningful amount
2. Must be reliable (dependable year after year)
3. Must be stable (not fluctuate wildly year after year)
4. Must not have single point failure (thus better to have multiple sources of passive income)
5. Must be able to keep pace if not be ahead of inflation
6. Must enable you to grow your networth
We attained FI in 2016 at 55, when our passive income for the year was $150K which just covered our annual expenses. At that point we started to save 100% of our salaries. We continued to work and augment our passive income streams / taps. Combined with wife & I we have six taps altogether and ranked them as follows:
Gold taps (most stable & reliable)
Gold tap #1: Interests from our OA & SA = $68K pa
Gold tap #2: CPF Life payout to start at 70, = $72K pa
Silver Taps (next most stable / reliable)
Silver Tap#1: SRS drawdown over 8 years = $53K pa
Silver Tap#2: Medisave = use when needed
Bonus taps (most unreliable, most unstable)
Bonus Tap#1 : Dividend = $88K pa
Bonus Tap#2 : Rental = $42K pa
We design our retirement lifestyle based only on incomes from the gold taps. The incomes from the bonus taps are bonus to us to pamper ourselves such as buy car, long holidays and gifting and reinvestment. We can live without them.
We have not yet need to turn on any of the taps as I am still working. The passive incomes are reinvested each year.
You can read my sharing here: https://t.me/CPF_Tree
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Hi Patrick,
Thank you. Glad u read and like my post.
I remembered the above reply before either in my blog post or Facebook.
Think you and your wife are doing very well financially.
I note that bonus tap (rental plus dividend income) is around $130k per year in total.
So far I reckon I have been talking about my bonus tap in my posts in general. This is not combined with my wife’s.
I reckon that it is not a meaningful amount yet. But it is good to start dialling up on what I love to do while being still gainfully employed and earning active income. And yes I am in the sandwich generation with kids to take care of and old parents to care for. So full retirement wasn’t never in my mind.
There is a saying ‘we can’t fit a wheelchair in a lamborgini’… not saying I am going to buy a car or a lambo at that, but we shouldn’t wait until our passive income is well above our goal and am totally retire to start making small adjustments in our life. Or Warren Buffet might say “saving sex for old age.”
Will still work towards building my not that impressive passive income, hope to be more competent in selling options.. Changing my job to find a better fit, work hard at my job…but at the same time do more of what I like for my health, spend a bit more money and time there if I can. Spend more time with my kids, etc. Oh yeah, I like the jap concept of ikigai
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