Dividend Magic

Saving and Investing towards Financial Independence in Malaysia

Dividend income

Dividend Income – June 2019

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Dividend Income

We’re at the halfway mark everyone! I took a long hard look at my portfolio the Freedom Fund. It’s time to trim and spruce the fund up a little in the coming weeks. I’ll also be updating the figures next week to reflect Q2.

Moving on – Dividends. I received a total of RM1,783.04 for the 6th month of 2019 from a total of 5 companies – Axis REIT, IGB REIT, Sunway REIT, Scicom and Cypark.

Compared to June back in 2018, I received 10.48% more in dividend income. The 6 months cumulative total for 2019 also came in higher compared to 2018’s. RM8,925.76 vs RM8,003.52. Big Whoop!

The current 2019 dividend yield of my portfolio is at a nice 2.39%.

Axis REIT

June 2019 Dividends – RM221.71
June 2018 Dividends – RM362.63
Total 2019 Dividends –  RM709.19
Dividend Yield (so far) – 2.68%

IGB REIT

June 2019 Dividends – RM647.04
June 2018 Dividends – RM667.52
Total 2019 Dividends –  RM1,259.73
Dividend Yield (so far) – 3.10%

Sunway REIT

June 2019 Dividends – RM322.59
June 2018 Dividends – RM298.11
Total 2019 Dividends –  RM604.11
Dividend Yield (so far) – 3.04%

Scicom Berhad

June 2019 Dividends – RM112
June 2018 Dividends – RM224
Total 2019 Dividends –  RM280
Dividend Yield (so far) – 1.25%

Cypark Resources Berhad

June 2019 Dividends – RM479.70
June 2018 Dividends – RM459.20
Total 2019 Dividends –  RM479.20
Dividend Yield (so far) – 2.71%

A look at 2019 so far

5% Dividend Yield

The most important goal of 2019 for the Freedom Fund is to achieve a 5% yield. Looking at how it is at the halfway mark, we look to be heading in the right direction.

Markets are on the up again and I’ve been slowly building up my net cash position. I’ll be adding stocks to the portfolio soon when the markets go down.

Accumulate Dividend Aristocrats (Malaysian version)

This is a new goal and target of mine.
Let me define a Dividend Aristocrat – The Dividend Aristocrats are S&P 500 index constituents that have increased their dividend payouts for 25 consecutive years or more.

That’s the US version of a dividend aristocrat. Now you’ll be hard pressed to actually find a handful of companies on the KLSE that have been operating for more than 25 years, let alone one that have increased their dividend payouts consecutively.

Sadly, as a Malaysian, I’ll define Malaysian Dividend Aristocrats as Companies listed on the KLSE that have increased their dividend payouts for 5? consecutive years.
Or should it be 10. Lemme get some buddies together and do some research.

End.

We are at a total dividend income of  RM8,925.76 . Giving the Freedom Fund a yield of 2.39% now. 

Freedom Fund as at June 2019
Dividend Income (June) –  RM1,783.04
Dividend Income (2019) –  RM8,925.76
Dividend Yield – 2.39%

I hope everyone else’s portfolios are doing well as we close Q2.

Dividend Income – May 2019

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Dividend Income

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.

Malayan Banking Berhad

May 2019 Dividends – RM1,052.16
May 2018 Dividends – RM1,040.64
Total 2019 Dividends –  RM1,052.16
Total 2018 Dividends –  RM1,853.64
Dividend Yield (so far) – 3.92%

Received a total of RM1,052.16 as dividends. Some in the form of shares via Maybank’s dividend reinvestment plan. Full details of the DRIP are hERE.

Nestle Malaysia Berhad

May 2019 Dividends – RM280
May 2018 Dividends – RM270
Total 2019 Dividends –  RM280
Total 2018 Dividends –  RM550
Dividend Yield (so far) – 2.09%

End.

We’ve broken the 2% dividend yield mark. Should hit 3% in a month or two. June is gonna rock!

As of the month of May, my total dividend income so far is 4% higher compared to 2018. In simpler terms, my dividends are increasing.

We are at a total dividend income of  RM7,142.72 . Giving the Freedom Fund a yield of 2.04% now.

Freedom Fund as at May 2019
Dividend Income (May) –  RM1,332.16
Dividend Income (2019) –  RM7,142.72
Dividend Yield – 2.04 % 

Dividend Income – February 2019

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Dividend Income

My February wasn’t all fine and dandy. I received only RM1,099.48 in dividend income from two companies – IGB REIT and Axis REIT. As compared to RM1,732.06 in 2018.

That’s a 36.52% drop in dividends compared to the same month last year. The main reason being – Homeritz declared in February last year, but I received their dividends in March instead, in 2019.

Also, if you’ve been following me on Facebook and Instagram, I’ve actually sold half my holding in Axis REIT after receiving their dividends.

IGB REIT

February 2019 Dividends – RM612
February 2018 Dividends – RM1,007.99
Total 2019 Dividends – RM612
Total 2018 Dividends – RM2,865.43
Dividend Yield – 1.51%

A huge 39% drop in dividends from IGB REIT.

Axis REIT

February 2019 Dividends – RM487.48
February 2018 Dividends – RM186.17
Total 2019 Dividends – RM487.48
Total 2018 Dividends – RM1,359.45
Dividend Yield – 1.42%

A 162% increase in dividends for Axis REIT.
The REIT is back on track and I foresee future growth in share price. My reason for disposing of half of the stock is because the yields are still below par for my portfolio.

End.

Freedom Fund as at February 2019
Dividend Income (February) – RM1,099.48
Dividend Income (2019) – RM2,129.48
Dividend Yield – 0.58%

Dismal dividends for the first 2 months of 2019. Still optimistic for the rest of 2019 though!

Onwards and upwards. How has everyone’s portfolio performed?

Dividend Income – December 2018

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Dividend Income

The last month produced RM1,111.65 in dividends for me. A 14.78% dip compared to last year’s RM1,304.48. TENAGA paid out its dividends in October this year.

Also, I received AirAsia’s special dividend of RM5,320 just in time for the New Year.

I’ll refrain from adding that into my dividend yield for 2018 as that may skew and mislead you. 

Sunway REIT

This Month’s Dividends – RM310.35

Total 2018 Dividends – RM1,179.94

Total 2017 Dividends – RM1,204.55

Dividend Yield – 5.95%

A small drop in dividends from Sunway REIT this year. Still a solid 6% yield.

Axis REIT

This Month’s Dividends – RM437.30

Total 2018 Dividends – RM1,359.45

Total 2017 Dividends – RM1,619.51

Dividend Yield – 3.96%

Bad, bad performance from Axis. The price has slightly rebounded but I’ll continue to monitor their dividend payments for the first half of 2019.

 

Nestle Malaysia Berhad

This Month’s Dividends – RM140

Total 2018 Dividends – RM550

Total 2017 Dividends – RM540

Dividend Yield – 4.11%

A slight increase in dividends from Nestle. We should see stronger yields next year as the share price has shot up to RM147 per unit right now.

 

Scicom (MSC) Berhad

This Month’s Dividends – RM224

Total 2018 Dividends – RM1,008

Total 2017 Dividends – RM756

Dividend Yield – 4.52%

A surprise coming from Scicom this year. Their share price has tanked.

I believe that it is trading at a huge bargain right now.

 

End.

2018-  RM18,072.25 (4.92%)
2017 – RM15,705.71 (4.69%)

Gross Investment – RM367,168.13
Market Value – RM443,435.79

A good year in terms of dividends. But with the current situation of the market, the Freedom Fund is actually making a slight paper loss this year.

PS. I decided against adding AirAsia’s special dividend into the fray. But just so you know, the yield would have come up to 6.37% if I had.

Here’s to reaching that 5% mark in 2019. 

Happy New Year everyone! Don’t drink and drive.

The Freedom Fund has been updated as of December 2018. The full list of dividend yields from my shareholdings can be viewed there.

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Investing in Malaysia – Your 7 Investment Options

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What can I and should I do with my savings and excess funds? What are my investment options in Malaysia. That ought to be the question in the back of our minds, constantly.

My train of thought has always been as follows.

Savings – Investment – Passive Income – Reinvestment – Financial Independence

I know, Dividend Magic is almost always about Dividend Investing. And, I’m aware it can be somewhat intimidating for most of you to start dabbling in the stock market and investments in Malaysia.

In light of that, allow me to introduce the 7 viable, long-term investment options in Malaysia that might suit your needs.

When I say investing, I mean investing and not speculating. The difference?

Investors seek to generate a satisfactory return on their capital by taking on an average or below-average amount of risk. On the other hand, speculators are seeking to make abnormally high returns from bets that can go one way or the other.

The list is arranged from safest to riskiest.

Fixed Deposits (“FDs”)

Returns per annum: 3 to 4%

CIMB Unfixed Deposit
CIMB’s Unfixed Deposit

Let’s start with the simplest of them. Fixed deposits or FDs if you will.

Now, I wouldn’t even classify fixed deposits as investments. They’re more of a financial instrument where you place your money while waiting for investment opportunities.

Most of you may have heard of fixed deposits but I know for a fact that most Malaysian youths have their money in savings accounts. And they leave it at that. So instead of earning 3-4%, they earn that miserable 0.1 – 1% provided by most savings account.

And yes I know M2U savers gives you 2%.

Where can you place FDs?

I’d suggest going to your own bank and opening an online FD account. It is important to have an online account as it will save you time. You’ll be able to handle all fixed deposit placements and upliftments through the click of a button without having to be physically present be at a branch.

Treasury Notes and Bonds

Returns per annum: 4 to 6%

Before everyone starts making a fuss about how bond returns can go up to 8-9%, let me remind you that this article focuses on long-term and calculated investments in Malaysia, for the masses.

And the term used for high-risk, high return bonds is Junk Bonds.

Moving on, treasury notes are actually safer in comparison to fixed deposits because they’re issued by the government. However, they’re usually issued in the millions and not for most of us.

Bonds, if you don’t already know are a fixed income investment in which you, as the investor loan your money to a company. In the event that the company goes broke, you as the bondholder gets paid first, before the company’s shareholders.

In the past, the way I invested and put my money into bonds was through mutual funds via Fundsupermart. I’ve been told that they’ve recently started offering bonds right off the bat broken down into lower values ie. RM10,000. This makes it easier for the average Malaysian to get a piece of the bond action.

Gold and Silver

Returns per annum: N/A

Look, there’s no way I’m going to give you an estimate on the returns of trading in precious metal. One thing holds true, however, during times of uncertainty, the price of gold and silver goes up. They, therefore, serve as a good defensive asset.

If you time it correctly and buy them during economic booms, you’ll have an investment that will see you through the decades ahead.

Silver Coins

Personally, I chose to invest in silver years ago. The way I invested was by buying and collecting silver coins offered by various governments around the world. My favourite is the American Eagle and Canadian Maple coins. The Chinese Panda coins are also part of my collection.

My coins cost a total of RM2678 back when I purchased them in 2013 and in 2015. They’re now worth about RM2975. About RM95 each. Cheapest I found on Malaysian sites.

That’s about a 10% gain for me over 5 years. It’s nothing to shout about but I’ve seen my silver increase to 50-100% during recessions. Still, I don’t plan to dispose of them anytime soon.

Stocks

Returns per annum: 3-10%

Welcome to my neck of the woods.

Investing in stocks in Malaysia has always been viewed as a risky business. Why? Because Malaysians confuse investing with speculating.

In my personal, honest opinion, Dividend Investing is a really safe and sound way to invest and achieve financial independence.

Dividends are like the gift that keeps on giving because as the company you invest in grow and increases its profits, the dividends they pay out increases every year subsequently.

But guess what? You would have still paid that same RM10K initial capital and your dividend yield will continue to increase every year. A quick look at my portfolio – the Freedom Fund would show that sweet increment in dividends.

Of course, to enjoy these kinds of returns and yields, you’ll have to get some legwork in and pick only financially sound companies to invest in. And you’ll have to invest for the very long term. Think 10 – 30 years.

I’ve compiled a list of the Best Dividend Stocks in Malaysia here for your perusal.

Blue-Chip Defensive Stocks

Now, blue-chip defensive stocks like NESTLE are stable stocks you can hold for the rest of your lives. You’ll receive increasing dividends every year without ever having to work for it.

And because blue-chip companies are huge and stable by themselves, they won’t be as affected by the volatility of the market.

Another fine example would be investments in Malaysian banks. My  RM26,527.86 investment in Maybank alone since 2016 has brought in a total of RM4,685.36 in dividends alone. That’s a 17% return in passive income for me. I’m enjoying a 7% yield this year with Maybank and hope to see this value increase in the near future.

Real Estate Investment Trusts (REITs)

Another type of stocks that I always encourage beginners to invest in Malaysia are Real Estate Investment Trusts.

My all-time favourite Malaysian REIT right now is IGB REIT. They’re mainly in charge or Mid Valley Megamall and The Gardens.

The dividend yield from IGB REIT has skyrocketed to RM2,865.43 which translates to 7.09% for me this year.

My gross investment is RM40,417.74 (at RM1.3563 per share).

Market value (as of 9 Dec’18) is RM50,660.00 (at RM1.70 per share).

My capital gain is RM10,242.26 or 25.34%.

A comprehensive review of the company can be found hERE.

Real Estate

Returns per annum: 3-10%

Property. This is a tricky one for Malaysians.

The current mentality of Malaysians is to purchase your first residential real estate right off the bat. If your monthly salary is RM5K, get a home that’ll cost your RM4k in monthly repayments. They’ll tell you to hold on to that and in 10 years time, sell it and double your money.

This isn’t investing. This is speculation. A savvy investor would look to a property that can not only cover your monthly repayments but give you a positive net income every month.

And from what I’ve seen and from personal experience, the only two types of real estate that can give you positive returns right now are low-cost residences and commercial properties.

If you’re looking to buy and hold and bank on the real estate’s value skyrocketing, you’re better off purchasing a piece of land.

Low-cost Residences

I personally own 2 low-cost flats. How I manage and my returns are all detailed hERE.

TLDR: They net me a positive income every month. But they’re giving me a headache in terms of maintenance and tenant management. I’d rather have invested my money in REITs.

Commercial Real Estate

Specifically, shop lots and offices. Having companies and registered businesses as tenants is a much less risky affair compared to low-cost residential tenants.

The cons. You’ll have to fork out a huge sum to get yourself a commercial lot.

Unit Trusts and Mutual Funds

Returns per annum: 1-5%

I am for all intents and purposes anti Unit Trusts and Mutual Funds here in Malaysia. Why? Read this article here and you’ll come to realize how the exorbitant fees charged by funds in Malaysia will impact your financial wellbeing.

Private Retirement Schemes (PRS)

Nevertheless, I’d recommend investing and putting your money in Private Retirement Schemes. If you’re a Malaysian youth, you get an extra bonus from the government. If not, there’s always that extra tax-deductible afforded when you put your money into PRS. More on PRS hERE.

Robo-Advisors

You’ll also want to check out Stashaway. You pay much less fees compared to Unit Trusts and Mutual Funds. And you get access to the global markets.
Less fees!

More on Stashaway hERE.

P2P Lending

Returns per annum: 10-12%

Funding Societies

I’ll never recommend investments and services I wouldn’t use and/or purchase myself. I’ve put up some of my own funds and tried P2P lending with Funding Societies.

My experience and the review can be found hERE.

All you need to know about Peer to Peer Lending and Funding Societies can be found there. My annualised returns have reached 13.12% per annum.

Which actually beats the returns from my stock portfolio last year. Go figure.

The risk with P2P lending here in Malaysia isn’t high at all contrary to popular belief. It ranges in the 0.1 to 0.5% right now. The key is to diversify and place RM100 in 100 different loans, as opposed to RM1,000 in 10 loans.

End.

I’ve personally invested in all 7 of the aforementioned investment options here in Malaysia.

I’m sure many of you will have additional investments not listed above that you’ve put your money and faith in; Do drop me a comment letting me know what they are and why you think they’re investments worth considering.

I’m both excited and eager to hear what Malaysians invest in.

As always, due diligence on your own part is required when deciding to invest. I urge you again to invest and not speculate. Invest for the long term and invest in the fundamentals.

This has been a particularly long one. That’s what she said.

As always, thank you for reading! Follow me on Facebook and Instagram for weekly dividend updates!

Onwards and upwards!

Dividend Income – November 2018

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Officially 1 more month till the end of 2018.

What with the news of the bonus RM0.40 dividend per share announced by AirAsia last night, I am in an upbeat mood as I write this today.

The dividend income for November 2018 came up to RM1,806.62, compared to RM1,438.87 the same month last year. A 25.56% jump in dividends!

And of course, an equal 25% jump in satisfaction on my part.

Contributing partners to the dividend income: Malayan Banking Berhad (better known as Maybank), Aeon Credit Service Berhad and IGB REIT.

Maybank

This Month’s Dividends – RM813

Total 2018 Dividends – RM1,853.64

Total 2017 Dividends – RM1,761.72

Dividend Yield – 6.99%

A 7% dividend yield from Malaysia’s largest bank is no easy feat. This amount materializes firstly from my low buy-in price and also from the bank’s financial performance.

The dividend yield has also increased, with the additional shares from Maybank’s dividend reinvestment plan taken into account.

If and when the share price dips to low levels again, I’d suggest investing here. Instead of the constant, tedious chase for 4% promo rates.

 

Aeon Credit

This Month’s Dividends – RM378.25

Total 2018 Dividends – RM718.25

Total 2017 Dividends – RM359.21 (comparison with RM378.25 as I bought end of 2017)

Dividend Yield – 3.18%

Give Aeon some time, the growth of their loan portfolio is strong for 2018 and I only see them moving forwards. That said, 3.18% ain’t too shabby.

 

IGB REIT

This Month’s Dividends – RM615.37

Total 2018 Dividends – RM2,865.43

Dividend Yield – 7.09%

My all-time favorite REIT right now. (Sunreit is a close second)

I’ve always believed that IGB REIT is a no-brainer and investors new to dividend investing should drop some dough into this counter.

Bought at the right price, you’ll get a nice starting yield of maybe 5%? Hold it for a few more and a 7-8% yield is right around the corner.

A tip: Mall REITs like IGB REIT derive their income mainly from 2 sources – Rentals and parking. IGB has a huge waiting list of tenants and their parking bays are always full.

 

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For those of you who’ve followed me on Instagram, thank you all for the responses, likes and follows. I’m loving Insta and we will be reaching 1k followers soon!

More updates and content I promise.

Also, my photography skills have been improving. If you’ve noticed. =D

End.

Happy with the performance and yield from all 3 companies.

To summarize,

Freedom Fund as at November 2018
Dividend Income (November): RM1,806.62
Dividend Income (2018): RM16,960.60
Dividend Yield: 4.62%

We’ve surpassed and shattered last year’s record 4.28% dividend yield. Officially. My yield is on a 4-year increasing streak. 5% this year? With the AirAsia bonus dividend, definitely.

Check the Freedom Fund out!

Onwards and upwards! Save and always stay invested.

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