Bao Jiak !
Most of the Year 2022 dividends have been collected so is a good time to reflect. Since embarking dividend strategy 9 years ago, the strategy has slowly accumulated into a strong foundation to the portfolio cash flow.
The portfolio is make up of Reits, Trusts, Bank, Transport, Basic Essentials and Growth stocks. With Reits usually more than 50%. And Growth stocks hardly provide any dividends.
The Logic of Bao Jiak
Year 2022 Annual Dividend Received $69,222. A large jump from last year due to a small dip in Year 2021 as capital gains prioritized before ex-dividend. On Cumulative Logic the dividend received crossed half a million dollar mark. This is expected as is just Maths. Bao Jiak !
The Portfolio Dividend Growth Rate using XIRR is 9.1% whereas average growth per year 14%. Contrast it to average dividend yield of 5.5% in current market stocks. So getting compounding logic into our thinking is important. The compounding effect from fund injection over the decade basically builds it up from small. So don't belittle the small fund size as it will grow very quicky from constant compounding of growth, dividends and Injection.
At this Rate of Strong Growth for this 10 years, a dividend portfolio realistically may not be able to maintain the rate using just capital injection as it will outgrow salary and expense needs. Exception applies from capital gains or as in some cases privatization. Is a good problem to have as this mean we have mostly optimize resources that we are willing to risk into the market and likely we have past our prime anyway.
In current high interests environment, the plan is to continue to fund fixed returns in SSB, T-Bills, FD Promo and Multipliers. This will provide stronger foundation to support base line income with capital protect and flexibility needs. So Equity dividends growth maybe limited in further growth next year.
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Articles in this Blog is personal take and sharing purposes only. Reader should seek their own professional help when making financial decision and be responsible for their decision.