Earlier today, I was checking on the total amount of dividend I received over the past 12 months.
Upon a simple calculation, I have received a total of S$2000+ in the past 12 months, on a cost of S$43000 if I exclude the purchases over the past 3 months.
That translate to a 4.5% portfolio yield.
While the additional dividend income is exciting for some, but when I look at my bank account or in terms of net worth, the dividend income doesn’t move the needle.
To be honest, it is a bit disheartening.
So the question is, how much is enough?
What figure should our dividend portfolio return us in order for us to feel happy?
Perhaps when the portfolio returns me S$5,000 a month in dividend, enough to cover our living expenses with some to spare, then we will finally be able to enjoy the fruits of investing.
Having S$5,000 in monthly dividend, or S$60,000 in annual dividend, using current 4.5% yield, will mean that we need at least S$1.33 Million in our portfolio.
Currently we are only at S$70,000 in our Singapore portfolio, and we are only at 5% into our journey!
With that figure in perspective, it seems like that is so much more to do.
Investing really is a slow and painful marathon.
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Don’t be disheartened, the journey is definitely more rewarding than it seems. For starters, u didn’t factor in the effect of compounding from your annual dividend and with a healthy level of leverage from margin accounts, you could be already 10% there in terms of time to financial security.
Jia you! Don’t give up! 🙂
A random young investor.
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Hi Fish!
For sure – this is a life long journey. 🙂 Yeah and also didnt account for capital gain too. Thanks for dropping by!
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Depending on the quantum of your intended portfolio, it may take years to build. To have all of $1.3m in only all shares investment portfolio is suicidal. When market turns, this all-shares investment portfolio will be greatly impacted. Warren Buffet mentioned that higher % yield is easily acquired when the quantum is small. When you have a base of $1.3m, and diversify it over wider spectrums, the yield will be lowered. Take our STI, it bounces between 3000-3600 range for more than a decade now.
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Hi Fred,
You are absolutely right. For us we have our CPF as our bond portfolio, and for equities that’s further divided into REITs and normal stocks. We will also be looking into bonds but that’s an area that we are quite unfamiliar with for now.
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Dividend investing is capital intensive strategy.
Where and how to accumulate this 7 digits capital before FIRE or retire?
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Gotta build it up slow and steady. 🙂
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Keep in mind that your dividends will grow every year if you pick good companies. A stock might cost $100 and pay $1/quarter now (4% yield) but that payout could easily be $3/quarter in 10 years. Now all of a sudden your $100 investment is producing $12/yr in passive income and you have a 12% yield on cost that is only going to get better with time. Today’s yield is just the starting point! Once your whole portfolio gets up to a 10% yield on cost it’ll be spitting out $50,000/yr in passive income on a $500,000 total input. Obviously investing $500,000 is no easy feat but that’s very doable over time.
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Hi Reitdude!
yes you are right. 🙂 But DPU increases are not as often as we want them to haha. But yes time will reward patience so we can only continue to do what we can.
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