Wednesday, 7 October 2015

Dividend Income (Passive) is a Fairytale?

Investing in stocks for Passive Income = Misleading?

First of all, I must commend GiraffeValue for applying active critical thinking and his willingness to challenge and verify for himself some of the platitudes out there when it comes to investing. 

The strength of youth is you don't know what cannot be done! 

Normally, I would not poke youths since I would rather do cheerleading - who doesn't?

But how boring life would be without some exceptions!

This post is motivated by the "weak" challenges to what GV has written.

I mean, you don't go "you have not proved that dividends are not passive income" when GV has written a whole bloody long thesis on his views already! Duh!

It is you, the challenger, that have to provide the counter arguments to demolish GV's position! 

Thinking like a land owner 

When you are a business owner, it doesn't matter whether you pay yourself a salary, consulting fee, or dividend, in the books, its considered you have taken capital out from the business.

Now imagine you are a business owner, and your business is self-generating so you don't need to add new capital into it other than that first capital injection of yours.

You "reward" yourself with a 5% dividend yield every year.

After 20 years, we would have gotten our capital back.

Will the business collapse or disappear now that you've got your initial capital back?

What do you call those 5% dividend yields you'll continue to get from 21st year onward? 

Passive my foot! 

If you think I have your back all you yield hogs out there, you have another thing coming!

My only critique of GV's post is he is not twisting the bayonet hard enough... You're too gentle!

What Passive Income? 

And what's with all that apologetic preamble anyway?

Good job GV!

Income passive or active not the most critical; having an active mind is!

Friday, 2 October 2015

Medishield Life and Integrated Plans

Last night, I attended this Medishield Life presentation given to Union leaders and activists at NTUC. 

At the reception and registration, I was a bit taken aback when everyone was calling each other "brother" and "sister"?

Is this how unionists call each other?

I would have preferred "comrade". That would put a left wing socialist vibe to the address which I think suits better. 

The presentation started at 7:03 pm when its stated on the programme 7:00 pm - not too bad. Can excuse with my clock and your clock not synchronised mah! I can live with that.

But participants were still strolling in by 7:10 pm... Union leaders? Hmm...

OK, I better stop trolling, least I won't be invited back for the free meals...

Everything you want to know about Medishield Life 

Here you go: Medishield Life 

What? You didn't expect me to spoon feed you, did you?

Don't you find it strange many retail investors like to rely on 2nd hand or 3rd party summaries - when they can go to the source directly?

Isn't it better to do your own homework, form your own opinions, then have a meaningful 2 way discussion with others (preferable just as informed as you), where needed?


You don't bitch about the increased premiums if you... 

Here's something to have fun with.

If you have colleagues or friends that like to bitch about the senior citizen cleaners at Changi airport, hawker centres; old folks collecting cartons and beer cans by the roadside, etc; see if they'll complain about the increased premiums for Medishield Life...

No, don't poke them.

Smile knowing they are "bleeding hearts" just as long as others pay. 

What you really cared about is what happens to your Integrated Plans right? 

Makes a lot of sense.

Especially when it was revealed in the Straits Times that 6 in 10 people with an IP for private hospitals opted for a public hospital when they needed hospitalisation!?

And this is even more depressing - 7 in 10 who bought IP for public hospitals A and B1 wards chose lower ward classes when seeking treatment!!!???

Now make a wild guess on these "downgraders" - did they purchase their IPs after doing their homework, or were these IPs sold to them?

Are you one of them?

Take this opportunity to press the reset button and start from zero-based.

Do your own homework on Medishield Life, reassess your needs and circumstances, and especially your financial situation. No one knows them better than you.

Of course I want to travel first class - who doesn't? But can you afford it?

Imagine paying premiums for first class tickets, but when the time comes for you to do the actual travel, you discover you can only afford budget airlines... All those past premiums paid down the drain...

Little lies we tell ourselves are one thing. But lying to yourself costs money when it comes to buying IPs we don't need!

Now armed with what you know, have a talk with your insurance agent.

It could be an opportune time to assess whether your agent is more interested in his own needs or yours.

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