Time is your friend. Patience is a virtue. How true this is.
I set my financial sight to equities during 2008 sub-prime crisis, scooping up dirt-cheap shares of a prominent blue-chip Developer at less than S$1.50. In Jan 2015, I sold my Keppel Land shares at S$4.55 per share due to the privatization offer from the parent company, Keppel Corporation. That gave me more than 120% net returns, excluding dividends. Indeed, it was a hefty bonus for me! Being prudent, I channelled majority of the realized gains to my Emergency Fund.
Forward-looking vision - in 2016, I aim to build a pathway to semi-retirement. I call it “Project Silver Milestone”, a late chapter in my Book of Life. By the age of 50-55, I should have a comfortable mix of monthly four-figure net dividend and business returns that’s able to sustain my day-to-day lifestyle – neither extravagant nor meager. Most importantly, pursue something that I like to do such as personal coaching, travel and outdoor nature.
It’s crucial to envision a long term goal while implementing measures in short term. For Project Silver Milestone, the time period is 10 years. A portion of it is to:
Grow my Emergency Fund
I decide to increase my Emergency Fund to mid-level 6 figure amount in 10 years’ time. It’s to cover any medical bill shocks. Not to forget sudden lapses in financial judgment (of people that concern you the most) due to traditional money beliefs. I guess relationship matters most in life than just dollars and cents. My dividends from shares and Singapore Savings Bond, plus one off profit gains, would be the key contributors.
Increase my Average Monthly Dividends
There will be a point in time that I will like to receive more cash inflow. In simpler terms, what I get must be more than what I pay. Gunning for 10 years’ time frame, I will expect my Average Monthly Dividends to sit comfortable in the mid-range 4 figure sum. Henceforth, I plan to add more shares in companies that have an excellent track record and Reits that have a regular payout. For instance, I bought into Nera Telecommunication several years ago. Granted past performances can’t guarantee future returns, the historic records are still able to offer a reasonable benchmarking analysis.
Management inclining towards the interests of minority shareholders would be part of my holistic assessment. Thus, there will be yearly progressive revision in my dividend target till the quota is reached within my allocated time horizon.
Diversified Business Interests
These days, you can’t depend on a single pay check. So, I am a strong advocate of having multiple revenue streams. One of the ways is to buy assets to create wealth. Within 10 years’ time frame, I must be able to develop an excellent foundation, term it as "4 pillars of income." I have defined two of them – one is dividends and the other is my scope of work - full time job + personal coaching in career and sales development.
I hope you have put some thought on your long term financial project. It will take some effort of work, discipline and focus but if you do it well, you can be hugely rewarded.