Background & Goals

 

About My Parents

My parents are middle-class Singaporeans living in Singapore, nearing retirement in the next 5-10 years. They live a frugal lifestyle and have mostly invested in bonds and insurance plans since they started working with little investments in the stock market. It was not easy to invest in the stock market in the past, where you would have to contact your broker to purchase stocks and have limited access to online information regarding the stock market. Now that they are nearing retirement age, they wish to transform their investment portfolio to a passive income investment fund where they can preserve their capital and live off the stable dividends. They have entrusted this process to me. 

My Strategy

Singapore is the perfect country for a dividend investor. There are no taxes on dividends earned and the Singapore stock market consists of mainly Banks and REITs which pay out stable, relatively high yield dividends. 

My strategy for my parents is simple. I will use the funds from their matured insurance policies, bonds, and CPF ordinary account to purchase stable and relatively high-yield REITs and Bank stocks. 

My criteria for purchasing a REIT is as follows:

1. Strong Sponsor (CapitaLand, Frasers, Mapletree) 

2. Long dividend history of >10 years 

3. Reliable dividend payouts 

4. Portfolio occupancy rate >90% 

5. Healthy debt gearing ratio 

6. Dividend yield of at least 5.8% 

Ultimate Goal

My ultimate goal for my parents is to have an investment portfolio of a minimum of $2,000,000 with an average yield of 5.8% by 2032 with an average monthly payout of at least $9,500. This would allow them to retire comfortably without ever needing to worry about their finances.