The Need to Diversify From REITs

This entry is actually a reminder to myself to diversify away from REITs. True, REITs do give a much higher yield than most dividend yielding stocks... but still I feel this innate need to diversify away from REITs to some blue-chip stocks so as to not place all my "passive income" eggs into one basket (REITs listed in the Singapore Stock Exchange).

Alternative Source of Income #1: Blue Chips or Dividend Yielding Stocks

I have been looking at blue chips in the Singapore Stock Market though I am not closed to the idea of investing into other markets too.

Stocks that I am looking for are ideally those with boring businesses that can tide through any economic crisis as well as a history of good dividends. This is to avoid buying into companies that are not able to pay out dividends regularly. The key is to buy companies instead of buying companies for the sake of their dividends alone. This will help me diversify my sources of income to attain my financial freedom goal of $2800 per month by 2022.

Alternative Source of Income #2: Adsense

Another stream of passive income that I have been looking into is Adsense. However, I realised that this has been very difficult and certainly not "passive" as I have to put in extra hours after work to improve upon my blogs, create new postings,etc. Still, it provides me with an alternative source of income. After becoming more active in blogging, I have also seen my daily adsense earnings rise steadily. To see my daily adsense earnings, click here. I just started recording it and it is definitely nothing spectacular. The amount I earn a day is not even enough to buy coffee. But what this record shows is that it is possible for one to earn money from Google's Adsense.

In the month of Sep 08, I will work at increasing my passive income from this 2 alternative sources of income since I have already attained my passive income goal of $200 per month for this year.

Financial Freedom Goal (Half Month Review)

In my first post in this blog, I articulated my Financial Freedom Goal by the year 2022 of earning $2800 per month in passive income. As it stands now, I am currently at $207 per month passive income. Half a month after articulating my plan of increasing my monthly passive income by $200 each year to $2800 per month by the year 2022, I can safely say that I am on my way to achieving my financial freedom goal.

So often, one reads about the need to achieve financial freedom through multiple sources of passive income. Very often, what people often forget or neglect is to have a plan to make this work.

This was the very purpose of this blog. It was to remind me of this goal and to lay out a plan that would help me achieve this goal.

Too often, I had found my investing habits to be sort of haphazard.

When I first started out working 3 years back, I wanted to invest in blue chip stocks that would provide me with a steady stream of income. Looking back after 3 years, I had not acquired a single blue chip or dividend yielding stock. Instead, my greed for quick gains has resulted in me holding a portfolio of stocks that have neither given me a steady stream of income or any quick capital gains to speak of.

That was when I decided that enough was enough. It was time to write a financial plan that will make sure all my investment and financial decisions are aligned to this plan.

The difference between 3 years back and now is that I have articulated a clear plan and will review this plan before making any financial decision.

Since the penning down of this financial plan, I have managed to increase my passive income by close to $16 per month. Of course this is nothing great to boast about but it definitely beats all the procrastination that I have been doing for the past few years that I have been working.

On top of that, I have also become much clearer about my monthly expenditure and am trying to find ways to reduce it.

I hope to be able to share my journey with others once I attain my Financial Freedom Goal 2022.

In my next post, I will explore the various streams of income that I hope to attain by the year 2022. Do bookmark this blog and return soon

Updated Passive Income 2008 (2 Sep)

1. 11,000 x Ascott REITs (DPU = 4.52 per half) = $82.87 per month
2. 16,000 x First REITs (DPU = 1.91 per qtr) = $101.87 per month
3. 1000 x Suntec REITs (DPU = 2.79 qtr) = $9.30 per month
4. Maybank iSavvy Deposit = $13 per month

Total passive income per month now stands at = $207.04

The amount listed of course is dependent on the distribution of the various REITs for the future quarters. This might increase or decrease. As such, I am trying to diversify my holdings as far as possible. That is why I bought Suntec REITs which I believe should be able to steadily increase its distribution.

Increasing My Passive Income Through REITs

REITs listed in the Singapore Stock Exchange provide a steady and stable source of passive income that suits my needs and goal of achieving financial freedom by 2022.

I have queued to purchase 1 lot of Suntec REITs and 1 lot of First REITs today. If purchased, it should drive my passive income up to around $200 per month thus hitting my goal for passive income that I have set this year.

Car Monthly Expenditure

Owning a car is truly an expensive thing. No wonder they call it a liability rather than an asset.

The amount of monthly expenditures that I am paying for my car amounts to over $1000 monthly. This includes petrol, installments, road tax, parking and insurance.

Buying a car was definitely one of the worst financial decisions in my life and has truly slowed down my aim to achieve financial freedom.

For those who have yet to purchased a car, remember this:

" A Car is A LIABILITY!"

Earning Money Online Through Adsense

In a previous post dated 16 August, I mentioned that I wanted to increase my passive income from Adsense to $1 per day. I have been exploring ways to earn more money online.

This is a breakdown of my report for the amount that I have earned from Adsense since May 2008:

Jun 08= $0.41
Jul 08 = $0.38
Aug 08 = $4.44

I have manged to increased my passive income from Adsense by nearly 10 times within 1 month! This is part of the overall strategy to increasing my passive income through various avenues. In the coming month (Sep 08), I will be significantly busier at work. As such, I do not expect to be able to achieve the same success as I managed in Aug 08. However, I will attempt a target of $5.00 for the month of Sep 08. I will also be exploring dividend yielding stocks, high interest rate bank deposits or REITs to increase my passive income.

I have dedicated another blog that will explore my financial freedom journey on making money online. Do visit it here.

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Dividends Recieved for Aug 08

Ascott REITs (28 Aug) = $497.20
First REITs (29 Aug)= $286.50

Total for the month: $783.70

This money will be reinvested into some other dividend yielding stock or REITs. Will be looking out for stocks that are giving out dividends for the months of Sep, Oct and Nov.