Dividend Update : 1st Qtr 2017




All Roads Lead to Rome :


Dividend Income Investing may not suit everyone as it is more passive and slow way of investment strategy. Some may opt for more aggressive or growth type of investment as their core strategy but I think many ways or route to achieve the ultimate goal of financial independence.

As retiree  someone without active income , this might be the best strategy for me although I do understand that some may argue that holding so much of REITs and Biz Trust may not be good in term of asset diversification and also will be affected when interest rate start creeping up .



<Image credit: Linkedin.com>


For me , the “recurring income “ is more important as I do understand the worry part of asset value’s swing day by day due to market volatility . Every investor would find themselves feeling uncomfortable about short-term losses in their investment. After all, nobody likes to lose money, and a double-digit loss in your portfolio could have negative implications for your long-term financial plans. In order to successfully build wealth, we have to learn to stop worrying about short-term losses. Remembered what the renowned economist John Maynard Keynes  ever said “The long run is a misleading guide to current affairs. In the long run we are all dead.”

A common problem for “non-active income earner “ is the income derived from dividend / interest could not be used as “source of income “ for loan application since it is non-taxable and your IRAS assessment will be showing as zero if you doesn’t have any other active income. ( Well , this might be a “ Good problem “ if you live in a simple lifestyle and spend within your mean , not to indulge in luxury items with minimum debts requirement.)



<Below quoted from HDB’s Website on Loan Eligibility Application >

Income Guidelines and Other Documents
To process your HLE application, we will require valid income documents for all persons listed in the flat application. If the documents are incomplete, the HLE application cannot be processed. We might also request for other documents to be submitted for our credit assessment.

If you are working overseas, please submit additional income proof such as your employment pass, work permit, business documents, or overseas income tax returns. An official English translation is required if the documents are not in English, Mandarin, Malay or Tamil. 
The following types of income/allowance are not considered for credit assessment:

  • Rental income
  • Interest from fixed deposit/ savings account
  • Alimony allowance (divorce cases)
  • Bonuses
  • Dividend income
  • Director fees
  • Overtime
  • National Service allowance
  • Claims/ reimbursement/ expenses
  • Overseas allowance for scholarships
  • Occupier’s income


<Image Credit: Financialsumo.com>





Dividend Update : 1st Qtr 2017 :

I will be getting $36,603.55 as my dividend income in 1st Qtr 2017 and it is slightly lower as compared to 1st Qtr 2016 of $38,490. This is mainly due to divestment of some REITs and switching to Banks/ Telco and Conglomerate in early 2016 and also partly because of lower DPU from most of the REITs and Business Trust.

<Image credit: SeekingAlpha.com>
I am expecting higher dividend in 2nd and 3rd Qtr as most of the banks/ telco and blue chips are paying dividend during these period, but as a whole in 2017 , I am projecting much lower dividend due to lower DPU from REITs/Business Trust and lower payout from Telco/ Conglomerates , may be Banks shall remain unchanged ( excluding the 20 cts special dividend from UOB on the celebration of their 80th Anniversary in 2016 ).

As I mentioned in my earlier blog post , dividend payouts is not guarantee and subject to up and downs’ fluctuation , one will really need to do the “stress test “ on how much you could stand for income loss due to lower payout in times of uncertainty.


Base on below from : Investopedia , which type of investment styles fit you ?

6 Investment Styles: Which Fits You? ( here )



Cheers !




“A stock dividend is something tangible — it’s not an earnings projection; it’s something solid, in hand. A stock dividend is a true return on the investment. Everything else is hope and speculation.”
–Richard Russell










Append below dividend detail for 1st Qtr 2017 and summary chart:



< Dividend detail >











Comments

  1. Investing in s-reits for income is no issue if one can keep up with their right issues

    ReplyDelete
    Replies
    1. Hi Uncle CW,
      Yah,, this is one of the characteristic of REIT investment... one will need to hv spare cash to cater for right ,, also,, sometimes , we may take advantage on the over-reaction of market after the right announcement ..Cheers !! :-)

      Delete
  2. Actually MAS allows it but don't know if bank will.

    I wrote about mas 645 before

    http://sgdividends.blogspot.sg/2014/05/total-debt-servicing-ratio-tdsr-for.html?m=1

    Don't know if still applicable

    ReplyDelete
  3. Replies
    1. Thanks Bruce,,, I like the way you analyze stocks in your blog,, :-)
      Cheers !!

      Delete
  4. Hi SGDividends,

    Thanks for the info... that will be great if we could use our stock's portfolio value as part of the gross income calculation ... :-)
    Cheers !!

    ReplyDelete
  5. Hi STE,

    As long as the strategy works for you and you are comfortable with the returns, plus peace at heart all times, why not. Congrats!

    ReplyDelete
    Replies
    1. Hi WY,
      Yah! U are right,, as long as the strategy suit us and have peace of mind,,,, thanks,,
      Cheers !!

      Delete
  6. Hi STE
    Just read this post.
    The chart you posted says that directors' fees are NOT eligible for credit assessment....
    Is that only for HDB?
    Cos I recently did a pre approval with some private banks. Their credit assessment is only based on the IRAS income tax for the past 2 years.
    And that does include director fees.
    In fact, if you rent out a property, it should include rental income as well.
    So just trying to figure out is it only HDB's requirement?
    Great post once again.

    TTI

    ReplyDelete
    Replies
    1. Hi TTI..,
      Oh I C..yah this is base in HDB's requirement...bank msy hv different set of rules or criteria..as what SGDividens mentioned...MAS actually allow part of dividend be taken as income assessment.... dependent on risk profile..bank may accept..may need to check with them separately..
      Cheers ! :-)

      Delete

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