I have recently been looking at my portfolio and realizes that the amount that I have already invested does not look very comforting. Knowing to achieve my goal of financial freedom, with my target of $90,000 annually from dividends/distributions, I would require to have at least $1.8M invested (based on 5% dividend yield).
With the market value of my investments currently at around $8,800, my currently portfolio is only 0.49% of my final goal. Even if I do manage to squeeze $10,000 annually to invest, with the dividends reinvested and annual capital gain of 3%, I would require 36 years to reach the $1.8M invested amount. Well, not even sure if I would still be around then to enjoy the fruits of my labour.
After thinking about it for some time, I came up with my own conclusion: I would need either more cash to invest annually or try to increase my annual capital gain.
The formal option seems more logical. If I can invest more annually, it will effectively mean that I am spending lesser and thus I can even bring down the total investments. This will make my goal easier to manage.
However, the latter option is more tempting to me. Knowing myself, having to put aside another $500 monthly can be quite challenging. I am a big spender and at current state, I do not think I would want to change my lifestyle too much. So, now the question becomes “How to increase my portfolio?“.
To increase my portfolio, one of the ways is to invest in equities that allows me to increase the annual capital gain. In Singapore itself, most equities are sold by lots of 1,000 shares and thus, to be able to invest for capital gain, the invested sum must be at least $100,000 before you will be able to see a substantial return from your investment. Furthermore, the counters listed on the Singapore Exchange does not seem to be move at all.
I am currently looking at investing a portion of my investable amount in US stocks, hoping to bring the annual capital gain to 10%. At the same time, I will try to reduce my monthly spendings and see if I can invest $13,000 annually. By exercising these two options concurrently, I am hoping to see that my invested portfolio will reach my goal of $1.8M in 23 years. Just in time for retirement.