The month of May has always been a favourite month for proponents of cashflow and investors piling on a dividend investing strategy because that’s when most companies pay out their final dividends based on the previous financial year result. What this means for investors is a direct income received through owning part ownership of the companies you are vested in that you can use to spend on anything that catches interest to you, be it shopping or travelling. Even if nothing interests you, you are able to top up your emergency funds or reinvest the dividends to purchase more ownership stake in order to get higher dividends the following year.
I have always been a proponent of dividend investing strategy because of my preference for cashflow. When I first started the strategy back in 2010, I became almost quite excited by what I found to be a very robust strategy. The tangible benefits of dividends are obvious. They are hard cold cash that you can almost immediately spend on anything and they are usually paid through earnings that the company has generated for the past year. As investors, the difficulty lies in trying to figure out the sustainability of the dividend payouts paid through the earnings of the company, especially in times when the economy is not very kind to businesses.
As minority shareholders, the dividend income we get are usually not as significant to what the other big players do. But we are wrong if we simply discount it the way we did earlier. Small pieces of dividend incomes do add up over time, especially if you are vested in multiple businesses that consistently pay out sustainable dividends over time. Think of it from a snowball analogy rolling down the hill. The snowball started as small when you roll them at the beginning but it becomes larger as it rolls a few times. This is exactly what the power of compounding is all about.
I have received quite a fair bit of dividends this month, which I'm sure it helps tide around one way or another. Without further ado, these are the amount of dividend income I will be receiving in the month of May:
| Counters | Dividends (S$) |
|---|---|
| China Merchant Pacific | 2,415.00 |
| FraserCenterPoint Trust (FCT) | 296.00 |
| FraserCommercial Trust (FCOT) | 261.00 |
| Vicom | 1,095.00 |
| ST Engineering | 440.00 |
| Total | 4,507.00 |
The total amount of dividends received (to be) amounted to $4,507. This is almost as significant it can get because they can cover a whole lot of expenses for the month and free up more cashflow for other use. At the same time, I've also received a bonus share (sort of dividend in specie) of 3,450 shares from CMP after the company issued a bonus consolidation of 20 for 1 share. From a market value point of view, they are worth around $3,830 so I''ll take it as if it's a dividend in specie and will include them in this month portfolio updates.
Dividend investing continues to play a big part in my plans to move away from the corporate world one day and the longer these snowball rolls, the faster I am probably able to reach that stage. As always, the purpose of these updates is to provide a transparency and motivations to myself more than anything else. It is also to allow others to understand that these are feasible options that anyone can start with whatever amount they've got at start.
The traditional rules apply. Save. Research. Invest. Repeat them consistently and we'll probably see the fruits of our labor reaping pretty soon.
The traditional rules apply. Save. Research. Invest. Repeat them consistently and we'll probably see the fruits of our labor reaping pretty soon.
In the meantime, Happy month of May and enjoy the fruits of those dividends for fellow investors!!!
What about you? How is May coming along for you?
What about you? How is May coming along for you?
