A moment of sharing.

Inspired by our local blogger MoneyHoney , i had donated part of my dividends to Singapore Children's Society .

 

Christmas is a time of feasting and gifts exchanging as well as a moment of sharing to people who are in need.

Wishing All a Merry Christmas and Happy New Year ! 

3Ds Plan . No more no less !

Do you find yourself  at times no plan ( bo chup? ) or over plan ( chup ka liao ?) Both would create results that are undesirable in reality .

Here are the 3Ds to guide you along

Dream it 

Having an idea of what you need/want is always important.For a warrior to start a journey to the destination , you need food , weapons  and know what kind of situation a warrior will face during the journey. Now the warrior is set to go !

Design it 

On the journey , the warrior faces a dragon and he is going to fight it . The warrior needs to know not only the weakness and strengths of the dragon , but also his own weakness and strengths. Then coming out with a strategy to fight the dragon to his advantage with the arsenals he had on hand . 

Deliver it 

Of course , the dragon is not a wood dragon that is going to let what the warrior do what he wants. The warrior is facing the reality of the dragon is much bigger size than him , just a hit from the dragon will take him down , just a puff and the warrior will turn into ash . The warrior needs to deliver what he can inorder to kill the dragon.

Similarly in life , we need to deliver what we ought to deliver . No ? See this. 

Can't beat Market ? Just stay faithful .

Goh Eng Yeow came out with an article on September 28, 2014  with Dollar-Cost Average  investing through plans offered by POSB , OCBC , POEMS for long term to reap returns that can outpace inflation.

What is Dollar- Cost Average ?

In my context  , Dollar -Cost Average means purchasing shares with certain fixed amount of money on a regular basis ( every monthly and almost the same date ) regardless of share price. Thus more shares are bought when share price is low and less shares are bought when share price is high .

An example would be Capitamall Trust (CMT) which i have been accumulating  with POEMS Share Builder Plan  as shown :

You could see the shares difference bought  between April and May 2013. Highlighted yellow would be the dividends reinvestment made with purchase. ( Do note that Poems Share Builder Plan makes the purchase every 18th of the month, if the date falls on a weekend or public holiday , it will be on the next working day . You will normally be able to see how much you shares bought given a few working days ( 2 to 3 working days.)  after the purchase has been made.)

For Dividends Reinvestment wise , it will be added with your fixed amount onto your next month of purchase . One example would be the recent Aug 2014, the Dividend payable date for CMT on Aug 2014 is 29th . Share Builder Plan activate its buying on every month 18th , Thus the Dividends Reinvestment will accumulate on with the next buy , which shows the sudden increase of shares on Sept 2014.

What are the Pros and Cons of Dollar-Cost Average ?    

Pros

• You do not have/need to time the market, just leave it to your brokerage or firm. 
• You can invest with minimum of $100 per month to accumulate you shares. 
• You may amend your amount of money  along the way.
• You may reinvest your dividends to accumulate more shares thus compound effect.( DRIP)
• Your average price are likely not to be highest compared to the highest point of the share. 

Cons

• You can't time the market. ( the job becomes  your brokerage or firm.)
• You need lots of patience, stay faithful to your conviction and ignore scaremongering from news , friends and family.
• Your average price are likely not to be lowest compared to the lowest point of the share.
• There are  administrative , dividends or other charges normally for such plans .
• The account is normally held by brokerage /firm/banks custodian instead of CDP ( The Central Depository) which you may not be able to attend AGM ( Annual General Meeting ) , receive ARs ( Annual Reports ) , Dividends may not be credited on time ( share payable date) into your bank account.  

  

What is DRIP ? 

Drip means Dividends Re-Investment Plan. It is a plan that is offered by corporation , firm that allows you to reinvest your cash dividends to get additional shares on the payment date.

Drip is like a pail collecting drips of water. Though it is a slow process , but for every drip of water into the pail , the pail becomes fuller . You want to make sure the frequency of drip is constant or more , so that the pail becomes fuller with lesser time . There comes with the quality of water drip which is another story. 

Bruce Lee mentioned in his quote " Empty your mind . Be formless , shapeless . Like water . You put water into a bottle , and it becomes the bottle . You put into the teapot , it becomes the teapot . Water can flow , or it can crash . Be water , my friend ! " 

What i say ? " Drink more water , my friend ! "