I am in the midst of restructuring my portfolio. At first I was about to buy a couple of US stocks which I can leave alone and let them run for 10 years. But after I started blogging, I started to connect with other fellow investment bloggers who are highly-focused on building passive income through dividends. You can check out their blogs in my tab ‘Friends, Affiliates & Partners’.
At first I did not see the power of dividends. 3%, 4%, 5%, per year… what’s the point? I want to catch a ride on 10-20 baggers no matter how lofty that dream may be! I want to watch a small investment balloon into a huge sum through compounded capital gains – BAM!
But after a discussion with an investor mentor of mine, he said this, “If I had one thing I would have done differently in 2009-2010, I would have bought more dividend stocks.”
This was coming from a man who was already holding 2 ten-bagger stocks, and several other 4-6 bagger stocks. He holds mostly growth stocks that pay out very little dividends.
“Why?” I asked. Here I am, wanting to be the guy who own ten-baggers, while there he was, talking about buying conservative, stable, dividend paying stocks.
“Erm… you get cashflow to add more positions to your portfolio. Imagine, if you have a substantial dividend income stream, you could be using that money to buy up stocks during a recession.”
That simple realisation hit me right smack in my face. Of course! Dividends will give me the cash on hand to buy up beaten-down stocks in times of a recession, when most of my capital will be stuck in my 10 year-holding-period-stocks. But in order to do that, I must start building a dividend income stream NOW.
Actually, I have already started doing that. But my dividends have only been paying for short holidays with the Gf and my insurance policy every year. This time, FY2015, I am formulating a strategy to have a portfolio focus 40% on resilient, dividend paying stocks to tide me through financially tough times. ( I have volatile income!) It will also act as a defensive fort in times of a market crash. Collect dividends, buy up more undervalued stocks!
A Dividend Income Strategy
It seems several other bloggers have already gone for a strong dividend income investing strategy. AK of A Singaporean Stock Investor, revealed that he made about 120k per year through dividends. The writer of ‘Lady, You Can be Free’ collected about 60k of dividends last year. The blogger at MusicWhiz also collected about 14k worth of dividends in 2012….hmmm… I wonder how much he collects now?
What these bloggers did was simply to invest in dividend stocks, receive the dividends, and plow it back into more dividend producing assets.
I am no investment expert. But I know some friends who are pretty good. They are from the Fifth Person and they are now offering a dividend investment course here. From what I see, the course fees are really insignificant…you will easily earn it back from your dividends. I really suggest that instead of going for that expensive date at a Michelin star restaurant, you and your darling, eat cai fan for a few days, and use that money saved to go for the Dividend Machines course. From the course, use the knowledge you gain to buy good dividend stocks, get dividends, reinvest those dividends, and build up your own Dividend Machine! After that, you can eat at all the Michelin Star restaurants you want. ( Course seats are running out pretty fast though, when I last checked, I still saw 120 seats remaining…)
The Bf Gf Portfolio
Despite the sweet allure of passive income through dividend investing, I am still not willing to give up my dream of owning 10 bagger stocks. I am still in the midst of researching and planning to restructure a Set-it-and-Forget-it portfolio with stocks I can hold for 10 years or more. But oh boy, I see the power of dividends now, and I am definitely going to incorporate some resilient dividend-paying stocks into my portfolio. Dear readers, I hope you see it too…
Stay tuned as I will be revealing some of the stocks I am adding to the Bf Gf Portfolio. In the meantime, seriously, go invest in your knowledge. Click the image below to learn how to build your Dividend Machine.
Oops! The Dividend Machines Course is closed. Don’t worry, the Fifth Person still have a main course called the Investment Quadrant. This is a comprehensive guide to value-investing in stocks. So if you are looking for some wicked capital gains (just like me), or wish to learn how to pick value stocks, you can still sign up by clicking the image below: