Saturday, 29 December 2018

Singapore Dividends for Financial Freedom - How I earned $37,000 in Dividends in 2018 (Part 2)




Part 1 of this series talked about three ways that enabled me to grow my 2018 dividend income to over $37,000. So, if you haven't already read the post, go back and give it read.

Part 2 of is a continuation. 

My purpose of this series is not an exercise in ego, it's simply to show how it is possible to build up a sizable dividend income without being a financial genius. Thus, I hope you will stick with me throughout this post and if you want to read more about how I got here, please go back and check out my earlier posts.

I began investing in 2015 at the tender age of 35. This may shock a few people, but if you had known me before this point you would understand why. In order not to blacken my squeaky clean image, I'll spare you the grizzly details.

Thats said, prior to 35, I spend most of my free time avoiding thinking about money or any literature connected to it. In fact, I would feel nauseous when I saw the financial section of the newspaper and discard in a basket used for window cleaning. 

I've never been rich in my life, but I've always avoided being poor as well. I suppose this is partly thorough luck and partly through never getting stuck in an undesirable rut.

Being poor has never been high on anyone's bucket list, but it's never far away for most. Have you heard the maxim: 'Your never more than two salary payments away from sleeping on the street?'

The words of this quote drove my wife and I to open our first business together in mid to late 2000s. I won't go into details, but let's just say the business flopped. 

Deflated but not beaten, we decided to go and live half way across the world and try again, this time more determined and battle-hardened from our first experience. That was 2009 and we are still involved in the same business which has now grown bigger than anything we could have imagined. 

More on this story in a future post, for I feel one of my digressions coming on. Excuse me.

Let's get back to the main thrust of the post: How I earned $37,000 in Dividends in 2018 

3. Don't chase big wins

This is important advice for all investors both young and old. Be careful folks. 

I remember a few years ago being on business in a foreign city. I was sharing a condo with some random people and an old business associate. One morning, I was sitting at the breakfast bar reading financial blogs and eating breakfast. Is there anything better? Perhaps not... Anyway, after some time, I felt a presence behind me, so I turned around and a teenager, probably about 17 or 18 standing behind me.

'Have you ever traded on margin?' the fresh faced boy said smiling.

'No, I haven't',  I replied taken aback by the young fella's question

What was this spotty kid doing peeping over my shoulder in a random condo located in the middle of a random city? 

I scratched my head and spoke.

'How old are you?'

'18'

'Are you an investor? You're very young.

'Yes, I am. In fact, I only trade on margin. You get double when the market goes up and when i goes down...'

He trailed off in mid-sentence and giggled.

'What's so funny?' I asked stony faced.

'Why do you not invest on margin? You can make money quick, you know?. My dad knows a guy who hit it big when he...'

I felt myself pulling away from his conversation.

Here was a boy with all his investing life ahead of him, gambling with what little money he had in an attempt to become a superstar. I'm sure he's been badly burned since our conversation, and I hope he learned from the experience.

As tempting as it is, I try not to chase big winners. I was so tempted - as still am - to take a bite of Asian Pay Television Trust when it tanked a month or so ago. Any why not? There's nothing wrong with some healthy speculation - if you can afford it. The spotty teen most certainly hadn't the means to gets whacked on margin; I am sure of that.

I know there are a million and one gurus out there on You-tube waffling on about how they made a million on gold/property/margin bla bla bla, but...what's the rush? 

Why not sit back, chill out and read a little? Why do you think Warren Buffet famously reads for most of his day? 

Arm yourself with knowledge rather than credit.

I think it was B Franklin who said something along the lines of...

'An investment in knowledge pays the best interest.'

These are words to live by folks. So before you jump on the next hot tip or watch 'How I made a million traded gold futures' go to your local book shop and pick up a book. Read it, critically evaluate and cherry pick the juicy bits and grow not only as an investor, but also a human being.

Have a Happy NY you crazy cats!!

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5 comments:

  1. how did you manage to increase dividend payment so significantly over the past few years which is very impressive? are you accumulating 200k of savings/investment annually?

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  2. Doing business and watching my spending. How far are you towards financial freedom? Happy NY by the way.

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  3. Amazing. I'm far from you in terms of net worth although our age is quite close. Control spending is no doubt important but if there isn't a strong underlying income, one could not even imagine saving 200k annually like yourself. Given your income level, you are easily top 1% of the Singapore population. Congrats on your business and wishing you more prosperity in the New Year!

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  4. Have a great NY and I hope to see you back at the blog soon!

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  5. LOL, I don't earn that much. I just had some cash tucked away for a rainy day.

    ReplyDelete

FIRE and my Discontents (part 1)