The sequel to the podcast I did with The Fifth Person last month has been released. I just watched it and thought it would be good to address a few remaining points. If viewers have spent time considering what I said in the follow-up podcast, they may not need to read this blog post. Therefore, this blog post is more for my benefit as I often have the need to talk to myself. AK is mental.
1. A response to a viewer who said most regular folks would have to speculate to generate enough capital for a $200K annual dividend from investments. Although speculation is an option, I shared in the podcast that there are other ways to make more money. As regular readers know, I have engaged in trading and side hustles to increase my earnings. I have also written about the importance of starting to invest for income, even with a small amount of money. Dividends earned in the early days, no matter how small, can grow our wealth and be used to invest for even more income.
2. Is it possible to make $200K in annual dividends with $2M in capital? In the podcast, I mentioned that my capital wasn’t as high as $10M, $5M, $4M, or even $3M. It could have been closer to $2M. And yet, it is still generating $200K in yearly dividends. How is this possible? Well, much of what I bought was purchased during crises when the market was in a severe downturn. My experience with AIMS APAC REIT is a well-known example. It is one of my largest and oldest investments, providing a distribution yield of over 10% on my original investment. As I bought into it heavily during the Global Financial Crisis, it has become a major source of my passive income. Moreover, my initial investment has been recovered and I am still receiving income from it. A significant portion of the $200K in dividends I received last year was essentially free money that resulted from the passage of time and a high dividend yield during crises. Selling investments that appreciated significantly, such as Lippo Mall Trust, First REIT, Saizen REIT, Croesus Retail Trust, and Accordia Golf Trust, has also contributed to growing my wealth. By selling a portion of my holdings in companies like Old Chang Kee and Hock Lian Seng, I have been able to hold on to the remaining shares for free while still receiving dividends. These examples demonstrate that it is possible to grow wealth without the need for speculation. Instead, one should wait for the next opportunity to make significant investments for income, as I did during the Global Financial Crisis and the COVID-19 pandemic.
Looking back at my journey, it is clear that my approach to wealth accumulation was not limited to putting a portion of my monthly salary into fixed income instruments. If that were the case, it would indeed require around $4 million in capital to generate $200K in yearly dividends. This would be unattainable for most regular folks. Therefore, I urge readers to consider my journey and how I overcame seemingly insurmountable challenges. The idea that regular folks cannot achieve what I have accomplished due to the large capital required is simply untrue. Share this blog post with those you care about and remind them that AK is a regular person too. If AK can do it, so can they!
