Don’t get me wrong, I love my dividend stocks.
I mean, I love the passive income that comes from all the profit surplus that I inject into dividend stock investing, and in Singapore, not only dividends and capital gains are tax free (thank you Singapore) but the dividends are wired straight into my bank account (see my passive income reports)
This is passive income in its purest.
Of course, there are quite a few shortcomings:
- It truly takes money to invest in dividend stocks to get the passive income. Personally, for me to be 100% on dividend passive income living, I’ll need to have at least SGD$ 2 million invested, and based on an average 5% return per annum, that’d mean I’ll get $100K per year. SGD$ 2 million is far away at this point in time, but it’s doable over a period of say 20 years.
- The yields range between 2.6% to 12%, the lower the yield the more stable but slower, and the higher the yield of course the fluctuation is higher, so it depends on your risk.
- You will have to research the companies that you want to invest in, to ensure that they’re defensive and safe and strong in the country and industry for a period of time; and keep updated but not that often (either monthly, quarterly, bi-annually or yearly)
A 5% yield from $100 is only $5, and that’s insufficient no matter how I look at it. For dividend stocks investing, yes, it’s a long term game for me, but that’s also why we need to accelerate our income by first building passive income businesses that increases our income flow for investing and daily use.
Then we take the additional profit surplus and plow it into the dividend stock investing, so instead of investing a couple of thousand per year, we can invest $10K or more per year, accelerating the process.
No matter how I look at it, building an online business on the side is very important to not only have extra income to use or invest, you also learn more skills, and you then are protected from a 1-income-1-job situation, so whatever happens to your job, your side business will sustain and keep you going.
For me I believe in building a passive income internet business that will work for me day in, day out; serving readers and customers profitably and delivering value 24/7, and only one program taught and help me create a money making website, and it’s the only program I feel very comfortable and confident in sharing: Wealthy Affiliate.