Tuesday, 20 November 2018

Singapore Dividends for Financial Freedom - Marxists in the SGX, Pleasing Others and The Zombie Apocalypse



How are you all tonight? 

As you probably know, Sunday morning is my usual time to let my mind run amok and deliver you all a generous slice of my thoughts. But, here we are on Tuesday, and I find myself drawn inescapably to my Blogger account. What is going on? 

Am I witnessing the early signs of a massive breakdown? 

Is my life going to implode and spiral embarrassingly out of control? 

Am I becoming a social deviant? 

LOL! I think not.

All this frantic typing could has its roots in more fertile soil (or so I hope). Perhaps sub-conscious desires to become a better writer or, even, a better person, are pulling me ever more frequently towards the keyboard, for it's from here I spill my inner thought onto the 'page' for you to read. 

If you enjoy my spontaneous outbursts, I reach out and shake your hand. If you think my blog is about as useful as a Marxist in the SGX, then that's OK, too. 

For me the process of writing blog posts is purely for fun. If I can make a few people smile along the way, then that's super. 

However...

As the poet John Lydgate brilliantly wrote...

“You can please some of the people all of the time, you can please all of the people some of the time, but you can't …” … please all the people all of the time” 

My goodness, have truer words ever been spoken?

Anyway, in the spirit of self-reflection and desire to write a post worth reading, let's see if I can give some advise to would-be investors or early-stage investors. 

You know the types I'm talking about. People who still can't quite decide what investment style they want to commit to (growth/income etc.)

From the beginning of my investing mission (I refuse to use the word journey here for cliche reasons -other bloggers please take note) I've always been interested in income. By this I mean receiving a dividend from my investment at regular intervals. For me, the thought of having the majority of my stock investments in growth stocks/indexes that don't pay a juicy chunk of return regularly is a bit freaky. 

Imagine all your hard-earned capital gains zapped my a big crash close to retirement or in the middle of it. This would have a devastating effect on your financial well-being, and potentially, could make you ill. I know you could re-balance your portfolio annually, increasing you bond allocation to your age in years as a percentage etc. But sometimes people don't bother, and when the time comes, the effect is like a guard's stick in the kidneys. Wack!  From this point, it's tears on the pillow and sobs so deep and loud you become a public nuisance, and possibly a social misfit (think Crime and Punishment here). Ouch!

Because of this, I choose to invest in dividend paying stocks. The cash I receive from the investments is re-invested into the same counters or any others trading at a reasonable price. I try not to over-complicate the process and just make sure the companies are solid financially and will be around in the the medium to long term. 

This is essential as you want to make the most of the time you have to let compounding's magic fingers do their thing (Note - once again, I'm going to spare you an Einstein quote on the powers of compound interest here - bloggers take note) 

Although you just dodged an Einsteinian moment, this Ben Graham quote sums up compounding beautifully:

'The real money in investing will have to be made – as most of it has been in the past – not out of buying and selling, but out of owning and holding securities, receiving interest and dividends, and benefiting from their long-term increase in value.'

I'm with Ben on this point, but of course we could both be proved wrong when the zombie apocalypse comes along.

Please feel free to say your comments etc. below in the comment box. I'd love to hear from you.

Have a nice evening. Over and out.

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5 comments:

  1. Hi there, its my first time here. I am a financial blogger based in Indonesia. Well, I have an idea to make a community in South East Asia that consists of financial blogger or vlogger. I think its fun.

    Nice to meet you.

    Best,
    https://diskartes.com

    ReplyDelete
  2. Replies
    1. For sure, dividend growth is important. It's always difficult not to simply chase yield. There are some cool dividend growth stocks out there. For example, see Thaibev, SAT and Sheng Siong for starters.

      Delete

FIRE and my Discontents (part 1)