First US Stock for my Dividends Portfolio

Updating my passive income portfolio

My updated portfolio for passive income for Mar 2009 is as such:

1. 12,000 x Ascott REITs (DPU = 4.28 per half) = $85.60 per month (decrease in DPU)
2. 17,000 x First REITs (DPU = 1.94 per qtr) = $109.93 per month (increase in DPU)
3. 1000 x Suntec REITs (DPU = 2.858 qtr) = $9.52 per month
4. 3000 x NOL (estimate 8 cents per year*) = $20.00 per month
5. Maybank iSavvy Deposit = $8 per month
6. 50 x PenWest Energy Trust = $13.50 per month

Total avg monthly passive income = $246.55 (Mar 09) versus $224.59 (Oct 08)

$1071.98 in Passive Income for February 2009

Looked at my bank account today and was pleasantly surprised to discover that I have received quite a bit of passive income for the month of Feb 09.

Total amount was $1071.98 and comprised dividends from First REITs, Ascott REITs and SUNTEC REITs as well as the $200 Goods and Services Tax Credits that I received. Details as follows:

27 Feb 2009 GC S$200.00

27 Feb 2009 CDP CDP-FIRST RE S$266.90

27 Feb 2009 CDP CDP-FIRST RE S$30.60

27 Feb 2009 CDP CDP-FIRST RE S$32.30

27 Feb 2009 CDP CDP-ASCOTTRE S$313.20

27 Feb 2009 CDP CDP-ASCOTTRE S$51.60

27 Feb 2009 CDP CDP-ASCOTTRE S$148.80

27 Feb 2009 CDP CDP-SUNTECRE S$0.81

27 Feb 2009 CDP CDP-SUNTECRE S$19.17

27 Feb 2009 CDP CDP-SUNTECRE S$6.13

27 Feb 2009 CDP CDP-SUNTECRE S$2.47

In my blogging efforts, I managed a paltry US$8.29 from Google's Adsense. But I am not including that into my passive income yet since it is money I will not receive for sometime.

Busy now with filling my tax returns and trying to see what are the tax reliefs and tax rebates I can get.

In these depressive and uncertain times, I have posted some funny videos here to cheer everyone up =)

NOL announces dividends

So NOL announces 4 cents dividends. Not bad since I have 3 lots of it. Should be able to collect a small sum of $120 as my first dividends for the year.

Apologies for not writing much the past few weeks as I have just been too bogged down at work (as well as looking for a new job)

Dividends for the Month of November and the meaning of investment

Collected a small sum of dividends for November:

$326.40 from First REITs
$28.54 from Suntec REITs

Yup, that is all I am reporting for my dividends for the month of November. For December, I will probably be making some small investments into the stock market again. Both to increase my passive income as well as to buy stocks that are currently undervalued.

Just some thought about investments. Nothing educational really. Perhaps more philosophical.

What is investment really about? If someone (e.g. a layman without much knowledge about investment) was to ask me that question, I think my reply would go something along this line:

Investment is basically just delayed gratification. If I have $50,000 in cold hard cash today, I could buy a car straightaway. On the other hand, I can choose to delay this gratification, invest the money, and hope to earn some returns from it that would justify the length of delay in my gratification.

For example, I could take this $50,000 today and buy a normal 1.6L Mitsubishi Lancer (no sports rim, etc). So if somebody asks me to delay my gratification say for 1 year, I will have to ask myself.... "If I can only buy a car one year later, what do I expect?"

Some might expect the exact same car model perhaps with sports rim. Some might say... "Huh??? You want me delay one year?? Then I will have to rely on public transport for one whole year... no way!! If you want me to delay by one year, I want a BMW 3 series..

This then defines the "reward" that the person is looking for in turn for the delay in their gratification. The person who only wants the additional sports rim is looking for a smaller reward versus the one who wants the BMW 3 series.

As reward is tied to risk... I could then tell the first person to simply put the $50,000 into a bank deposit account that gives 1-2% interest per annum and assuming that there is no inflation for the year and prices remain the same... he could easily afford the exact same model of car he wants with sports rim. This is basically a low risk investment.

For the other person who is expecting a BMW 3 series, I would tell him to invest it in the stock market now.. only problem is that there is no way I can guarantee that in 1 year's time, his $50,000 will turn to $150,000. Instead of becoming $150,000 , it might become $10,000 or worse still...nothing.

On hearing this, he might have to fine tune the reward that he expects based on the risk level that he is able to accept. Basically, the higher the reward from the investment, the higher the risk.

Wiki's Definition of Passive Income

A Brief Introduction to Passive Income

Passive income is a rent received on a regular basis, with little effort required to maintain it. It is advocated by some authors, especially by Robert Kiyosaki.

Some examples of passive income are:
Repeated regular income, earned by a sales person, generated from the payment of a product or service that must be renewed on a regular basis, in order to continue receiving its benefits - also called residual income.

Rental from property;

Royalties from publishing a book or from licensing a patent or other form of intellectual property;

Earnings from internet advertisement on your websites;

Earnings from a business that does not require direct involvement from the owner or merchant;

Dividend and interest income from owning securities, such as stocks and bonds, are usually referred to as portfolio income, which can be considered a form of passive income;
Pensions.

Passive income is usually taxable. The American Internal Revenue Service defines passive income as "any activity... in which the taxpayer does not materially participate." Other financial and government institutions also recognize it as an income obtained as a result of capital growth or in relation to negative gearing.

The Interent Revolution

Edward de Bono in his book Handbook for the Positive Revolution states that "at some point value must be created in order to be distributed and enjoyed." [2] There is a lot of real value on the Internet, and a lot of it is free to any websurfer. There is value in free information, free education, free entertainment, free socialization, and social interaction platforms. Since the beginning of the commercialization of the Web, entrepreneurs have been trying to find viable business models of selling the web content and services. [3] Some of the problems of selling the online content can be attributed to high cost of software, high cost of qualified labour, expensive equipment, office space etc. These can be minimized in one person operations which use free software and have very small business overheads. In such cases, even a relatively modest income, together with frugal lifestyle, might be sufficient enough to form a basis for a viable passive income model.

An Emerging Industry

With the advent of Web 2.0, the concept of a passive income became a nucleus of an informal grassroots, (bottom up) movement and an emerging cottage industry of loosely coupled, independent individuals, who use a combination of their life story, personality, interests, and practical knowledge, to produce an engaging content and an alleged passive income. Appearing honest, transparent, and promising nothing, these individuals report in their blogs, podcasts or websites, their income sources, methods and strategies they use, to any reader or listener, without any additional requirements. There are no registration, subscriptions, or any other kind of fees. They claim to obtain their income mainly through advertising, remuneration for referrals and recommendations, and through donations from appreciative readers. Steve Pavlina represents but one example of such activities; although, it is not clear how long a passive income generated in such manner can remain so without any interventions, addition of new material, or site maintenance. The long tail effect could partly explain survival potential of such one person or family businesses.