Saving and Investing towards Financial Independence in Malaysia
Author: Leigh
I am a certified financial planner with the Financial Planning Association of Malaysia, a passionate investor looking for financial independence as well as hoping to educate Malaysians on financial literacy.
Aiming to become financially independent by 35 years old, I enjoy living a frugal lifestyle (with the occasional lavish spending) while meticulously adding to my portfolio of dividend growth stocks. I’m here to show you what real investing is really like, and that anyone can invest.
There will be losses, there will be gains, I aim to be 100% transparent in my investment journey, documenting all aspects of it. This is my promise to you.
Do join us on FACEBOOK.
Also, our our FB Group where we hope to have some more enlightened discussions on investing.
Onwards and upwards!
Took a pretty long break during the Raya holidays, hence the kinda late post. I received a total of RM1,332.16 for the month of May.
Only two companies contributed to my dividend income last month – Malayan Banking Berhad and Nestle Malaysia Berhad.
Compared to the same month last year, I only collected RM667.52. That’s a 69.51% increase in dividends. Total dividends stand at RM7,142.72. Dividend is at a healthy 2.04% so far.
Maybank’s Dividend Reinvestment Plan Online Application
No more going to the post office to subscribe dividend reinvestment plans (“DRP”) guys and girls. FINALLY.
Tricor has rolled out online applications and it is so convenient. Here, I’ll show everyone how it’s done. Step-by-step.
Tricor’s Online DRP Application
Step 1 – Register and Login
First, head over to Tricor and obviously, you’ll have to go through the motions and sign up for an account.
Proceed to login to your account.
Step 2 – Selecting the Corporate Exercise
As highlighted in the image above, select the corporate exercise you as a shareholder wishes to take part in.
In this case, Maybank’s Dividend Reinvestment Plan. Click ‘Next’.
Steps 3 & 4 – Terms and Conditions of the DRP
The next step brought me to the T&Cs of the dividend reinvestment plan. Read through, check the box and click ‘Next’.
Maybank is giving out shares in lieu of cash dividends. The shares will be issued at RM8 per share.
The lower the figure, the better. Because I’ll get more shares.
Step 5 – Declaration
Declare that you’re fit to participate in the corporate exercise. Check the box and click ‘Next’.
Step 6 – My Dividends
So, this is how a DRP works. First, the price for one Maybank share is hovering around the RM8.9 and RM9 region.
Without the DRP, I stand to receive RM1,052.16 in dividend income. Cash.
By electing to receive my dividends in Maybank shares instead of cash, I’ll receive 69 Maybank shares and RM493.20.
How did I get 69 shares you ask? That’s RM558.96 / RM8 per share. RM8 being the issue price mentioned earlier.
Why DRP?
So, the why is simple. I stand to receive RM1,052.16 if I took it all out in cash.
Maybank is giving me some of it in shares, at RM8 per share.
The market price for one Maybank share is RM8.90. That’s a 11.25% premium. So if the price holds, I’ll gain 11.25% on my 69 shares.
However, you do not want to opt for a DRP if:
1. The issue price is ABOVE the share price (duh) 2. The issue price is really close to the share price.
First, no one in their right mind will opt for Maybank’s DPR if say, the market price for a share is RM7. This usually happens when a stock’s prices are in a freefall.
For number 2, we have to pay to participate in corporate exercises. In this case, see Step 7.
Step 7 – Payment
Followed the instructions and made my payment. RM13 in handling fees and stamp duty.
An extra RM3 in handling fees. Heck, I’d pay RM10 to save my time.
End.
So there you have it. I’ve been participating in Maybank’s DRP ever since I owned the bank’s shares. And it has been rewarding.
