(15-09-2011, 10:19 AM)yyt Wrote: [ -> ]Q: Describe your current portfolio.
A: 90% invested in various REITs counters, 10% cash.
Of that 70% is borrowed on a one-year loan from a bank.
My savings is still a small amount at the moment.
My perference of equities is however is not in REITS, I'm just using it as a vehicle to give me a relatively more assured positive cashflow vs the bank loan I'm holding for the year. If all goes reasonably well, I'm a happy man.
Testing the idea of a safer leverage for people starting out like me.
Interesting. May I know are you getting sufficient returns/yield from REITs to cover the interest payments of your loan? And is your loan a personal loan? Maybe it is a good idea to explore now when the interest rates are low. I have not done any due diligence just based on the impression from your case.
Most of the time, I know people who leverage on equities via margin financing.
(15-09-2011, 10:19 AM)yyt Wrote: [ -> ]Financial goal : +ve cash flow of $8,000/mth in today's terms, by 55.
Is it passive +ve cashflow??
I think you are young and so I suppose you have another 30 yrs to reach 55.
$8,000/mth now is equivalent to $34,575/mth after 30 years
So, the annual passive income required is $414,900.
Assuming a 5% dividend yield rate, the required investment amount is $8,298,000.
Of course, if the capital can be drawn down, the required amount is less.
(15-09-2011, 11:51 AM)yeokiwi Wrote: [ -> ] (15-09-2011, 10:19 AM)yyt Wrote: [ -> ]Financial goal : +ve cash flow of $8,000/mth in today's terms, by 55.
Is it passive +ve cashflow??
I think you are young and so I suppose you have another 30 yrs to reach 55.
$8,000/mth now is equivalent to $34,575/mth after 30 years
So, the annual passive income required is $414,900.
Assuming a 5% dividend yield rate, the required investment amount is $8,298,000.
Of course, if the capital can be drawn down, the required amount is less.
Yeap, that's right, +ve cash flow, at a compounded 5% inflation rate, i'll probably have to churn $34,575/mth in 30 years.
That's the goal.
I might not hit it, but I wanna work towards it, I believe it's possible.
$8,000/mth now at 5% yield would mean the req investment amount would have to be ard $2m.
I believe many people would have already hit that target as of now.
After that..., maybe full-time philanthrophy.
(15-09-2011, 11:37 AM)mrEngineer Wrote: [ -> ]Interesting. May I know are you getting sufficient returns/yield from REITs to cover the interest payments of your loan? And is your loan a personal loan? Maybe it is a good idea to explore now when the interest rates are low. I have not done any due diligence just based on the impression from your case.
Most of the time, I know people who leverage on equities via margin financing.
Yeap it's a personal loan at 6%pa.
So, getting a 9%-10%pa return from a REIT for a year will cover the interest and provide a 3-4% return.
Since the loan amount is small, the returns are small, but the lessons learn is disproportionately larger.
I did think abt margin financing, but it annualized out to be 20+% pa.
On top of it, you might need to service the margin if the market takes a dive, which I do not have the $$ to do so.
Hello YYT,
I am using the same strategy as you - but via shares margin account and CFD trading route. They have the same 6% margin interest as your personal loan interest of 6%.
http://singaporemanofleisure.blogspot.co...r-bad.html
I admire your attitude as you have to "try" leverage yourself before you know whether leverage works for you. When starting young, it's the lessons that's more important! Money will come once you have paid your "school fees".
Having said that, I must share that I blew up my first margin account... But the "expensive" lessons learnt were also invaluable to me.
Best wishes!
Hi Guys,
I have been trying to register on this Forum with my username Qiaofeng which I had used in the Old CNA forum; but have been repeatedly rejected as the message says I am a spammer!
So I after some attempts I decided to put an asterisk in front and finally got thru.
The New CNA forum is quite a pain, when it comes to posting as I have got entire threads deleted w/o an explanation. Also many of my posts can't even get past the moderators.
I have always tried to stay apolitical and even my posts cannot pass muster.
Anyway, guys, I wanted to join this forum becos I invest and dun trade. I have viewed the forum and find the participants knowledgeable and like minded in their investment approach. But, alas lethargy made me reluctant to go join another forum, earlier
For those of U whom I have met at the old CNA forum, hello and greetings!!
Hi *Qiaofeng,
Sorry for the inconvenience caused by the spam plugin. I can change your username to Qiaofeng if you like. What do you think ?
Gee, thanks!!
Appreciate that very much!
Cheers!
wow qiao feng finally join vb
(05-10-2011, 07:46 PM)Drizzt Wrote: [ -> ]wow qiao feng finally join vb
I should have done so, much earlier.
Guess too much inertia and laziness earlier.
But, now there is a change (forced) and I must adapt.
Btw, I read your blog and I think you have put in a great deal of
effort in every post.
Thanks.