Wednesday, October 17, 2012

2013 target: Building Assets to create more passive income streams

I was thinking back on the times when I just graduated in May 2008. That was when I finished university exams and started work as an engineer, almost 4.5 years ago.

Fast forward to 2012 now, I resigned from my engineer job and went into tuition full-time. Seriously, I still wonder if it was the correct move. But as my girlfriend told me, look forward and don't look back. It's never easy to strike out solo. [On hindsight, my previous company is freezing the pay of its employees a second time since 2008 due to losses.]

Without the security of a stable income, and with a little more time on my hand these days, I begin to think of how to how to bring on more income streams to supplement the meagre tuition income I'm receiving. My main consideration now is not to just bring on more business for tuition, but to build value and assets out of this business.

In essence, I need to build assets as much as I can. Asset rich cash poor strategy. The areas I will be looking at....

1) Building Paper Assets, i.e. equity portfolio.
In 2012, I have made some changes to my portfolio. The main strategy is to sell stocks with lower dividend yield while realising the paper gain. This include GLP, CMA and Capitaland, and this will boost my war chest as well as improve liquidity. I will be analysing and be more focussed on quality dividend counters (there is none that is interesting now).

As of today, I have received $11.1k from my equity portfolio. With dividends still coming from SPH, REITs and telcos, I will comfortably cross $12k in dividends this year.

However, it is worthy to note that without a stable income, building this will only prove more and more challenging. Which means I have to look at other streams as well......