How much are you earning per annum?

Originally Posted by Unregistered

1. Dividend Warrior

This guy is an attention whore and basically does nothing whole day but spams all the investment forums daily with useless one-liners and try to get them to visit his blog. His whole strategy is nothing but buy all the SGXD listed high yielding stuff.

Performance appears impressive because for the past 5 years there is desperate demand for anything that pays good yields, but once the trend dies down performance will be sub-par.

agreed, he is just a one trick pony... anyone who bought a ppty would have outperform him..

Originally Posted by Unregistered

You did a few things right here:

1. Recognising where you stood financiallly with respect to the others.
2. Counting your blessing with what you have (a job, adequate salary, a good country and government)
3. Being contented and not be stressed by things you want but dont have

However it would be a terrible mistake to totally ignore progress taking place around you. Ignorance is not bliss here. It is good and I think necessary to always take stock and see where you can further increase your skill / employability and thus salary. In a dynamic and open society like Singapore, standing still is the same as going backwards.

Another thing everyone needs to do is to start financial planning for retirement - the earlier the better.

I have come across various blogs of singaporeans that have embarked on the path of establishing passive income stream quite successfully. You might want to visit these blogs to get some ideas (just google the below).

1. Dividend Warrior
2. Createwealth8888
3. A Singaporean Stock Investor (or AK71)
4. Investmentmoat

In my opinion, the best one is AK71, a 41 yr old single who claimed to have achieved over $100K annual passive income from investment.

Annual passive income 100K? But using how much capital base? If you are are using stocks dividends and REITs and assuming that the dividend rate is 5%, then you need $2 millions capital base to generate $100K passive income.

Owning property and rent out. At present rental rate, most of the return rate is less than 5%. Then you need to be owing a property worth more than $2 millions at market price to generate $100K of passive rental income.

Originally Posted by Unregistered

Annual passive income 100K? But using how much capital base? If you are are using stocks dividends and REITs and assuming that the dividend rate is 5%, then you need $2 millions capital base to generate $100K passive income.

Owning property and rent out. At present rental rate, most of the return rate is less than 5%. Then you need to be owing a property worth more than $2 millions at market price to generate $100K of passive rental income.

Income does not mean profit.
Just using the property example, 100 k a year means rental income of about 8000 a month. Not terribly difficult. Assume this is from rental of 2 condos at 4k each. At a rental rate of 4.8%, this means each property costs $1 mil.
IF bought before all the cooling measures, the upfront investment is only $400 k (200k each as downpayment for the condos).
But as I said, 100k income does not mean 100k profit. Most of that 100k will go towards covering the mortgage etc.
Still, for a 400k investment, you will get 100k passive income a year.

Originally Posted by Unregistered

Annual passive income 100K? But using how much capital base? If you are are using stocks dividends and REITs and assuming that the dividend rate is 5%, then you need $2 millions capital base to generate $100K passive income.

Owning property and rent out. At present rental rate, most of the return rate is less than 5%. Then you need to be owing a property worth more than $2 millions at market price to generate $100K of passive rental income.

From a quick reading of some of his posts, it seems that most of his passive income is from REITS which he bought after the financial crisis when REITS took a severe beating. A lot of the REITS have since recovered in price so his capital base may be well below $2m.

Originally Posted by Unregistered

Income does not mean profit.
Just using the property example, 100 k a year means rental income of about 8000 a month. Not terribly difficult. Assume this is from rental of 2 condos at 4k each. At a rental rate of 4.8%, this means each property costs $1 mil.
IF bought before all the cooling measures, the upfront investment is only $400 k (200k each as downpayment for the condos).
But as I said, 100k income does not mean 100k profit. Most of that 100k will go towards covering the mortgage etc.
Still, for a 400k investment, you will get 100k passive income a year.

1. That is not realistic as most people have to work very hard even just to sustain one HDB flat.

2. a $2 million (for simplicity, we just give it an aggregate number, whether you own 2 properties, $1 million each or one $2 million, or three properties $680K each isn't that important) property at market price will cost you alot more if you take a loan for $160K. Taking that into account, one cannot take pure income as $100K per annum. On top of that, condo has very expensive maintenance fees which you have to deduct away. What about electrical bill? Maintenance fees? property tax? 4.8% yield is at the high end...most property don't yield so high. In fact, HDB flat has higher yield.

3. After, careful consideration, all the above mentioned ways of generating passive income isn't at all that reliable and stable.....and think....a person who can generate that much passive income relying solely on rental or REITs yield are already quite rich to start of with.

Originally Posted by Unregistered

From a quick reading of some of his posts, it seems that most of his passive income is from REITS which he bought after the financial crisis when REITS took a severe beating. A lot of the REITS have since recovered in price so his capital base may be well below $2m.

That means he has taken advantage of a unique opportunity that allows him to reach the present status.

That point aside, you are not him, if you want to built a passive income of $100K, you still need at least $2 millions today. To have bought the REITs when it was cheap, is WHAT that made him the wealth, not the passive income actually. mentioning of the passive income is really a distraction and pure myopic view that miss the whole picture completely.

Interesting discussion. While some people bought REITs at their lows during the 2009 crisis, I bought two condos at fire sale prices. These condos are now fully paid up since they were so cheap. Today, I earn a net rental income (minus maintenance fees and property taxes) of $6k in total every month from these condos. I have decided to retire at the end of the year since I can earn an income of $72k per year and has no other liabilities. I'm 48 next month. Time to take a good rest after working so hard, day and night slogging, in the corporate world for more than 20 years. Time to exercise more and smell the roses.

Sorry but I would like to highlight on all above, earning 4% of 1million a year is just enough to cover up for inflation, your 1million would be worth lesser by 4%.

Eg. 2013 - 1 Million

10 years later, 10 x 4% = 40% x 1M = 1.4M, 10 years later many things would have gone up,
In any case if your property doesn't appreciate in value, congrats smart people, the 0.4million you had just spend away collected from your property.

Originally Posted by Unregistered

Sorry but I would like to highlight on all above, earning 4% of 1million a year is just enough to cover up for inflation, your 1million would be worth lesser by 4%.

Eg. 2013 - 1 Million

10 years later, 10 x 4% = 40% x 1M = 1.4M, 10 years later many things would have gone up,
In any case if your property doesn't appreciate in value, congrats smart people, the 0.4million you had just spend away collected from your property.

What about those people without 1m ??

Originally Posted by Unregistered

Sorry but I would like to highlight on all above, earning 4% of 1million a year is just enough to cover up for inflation, your 1million would be worth lesser by 4%.

Eg. 2013 - 1 Million

10 years later, 10 x 4% = 40% x 1M = 1.4M, 10 years later many things would have gone up,
In any case if your property doesn't appreciate in value, congrats smart people, the 0.4million you had just spend away collected from your property.

Don't say I say, but I find many posts here not constructive. There was a post earlier on learning from the blogs about building up a separate & passive source of income, but the post brought many negative comments without better alternatives.

People need to take the first baby steps to financial independence. AK71's early days of investing may be like what Dividend Warrior is doing now.

Also it is easier to invest in stock than in properties especially when your annual pay is below $60K.

Living in high cost Singapore is difficult, so any ideas to help sustain a reasonable quality of life during retirement would be welcomed.