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$12,000 Dividend Per Year: Here’s How Much You Need To Invest!

3 min read

Your 5Cs Singaporean Dream? Outdated.

There might just be a new definition for the Singaporean dream. Forget the typical 5Cs (car, cash, credit card, condominium and country club membership) that was commonly used to determine how successful someone is in life, and allow me to present to you the cold hard truth. 5Cs is too old school.

The new Singaporean Dream is, TO JUST SURVIVE!

With crazy car prices, expensive property prices, an outdated country club definition of wealth, Singaporeans’ evolved goal in life is to:

  • Retire early
  • Generate enough passive income to allow the early retirement to happen.

Retirement Age vs Years of Good Health

The official retirement age of Singapore does not take into account the number of years which Singaporeans are still able to enjoy retiring. Retirement age is a number decided alongside policies on what is beneficial for the country and it may not necessarily benefit individual Singaporeans.

Here are some reasons why the official retirement age may not equate to happy Singaporeans:

  • The decision on the retirement age might have taken the life expectancy of Singaporeans into account, instead of the average age of Singaporeans in good health.
  • While retirement age can be constantly pushed backwards, the average age where Singaporeans have their good health cannot be changed.

Hence, retiring early is totally up every individual Singaporean to start planning early.

With that, building a dividend income portfolio is one of the many ways Singaporeans can achieve financial freedom before the prescribed retirement age.


TL;DR – How much you need to invest to have a sustainable dividend income portfolio?

Portfolio size and dividend yield per year


What Is A Dividend Income Portfolio?

What exactly is a dividend income portfolio, and what is all the hype about?

Dividend stocks are stocks that give dividend payouts based on their profits over the year. Should an investor invest in a dividend stock, he receives income in form of dividend given out by the stock.

The rule of the dividend income portfolio building game

Imagine this: Your stocks portfolio gives you enough every year to a point where you no longer have to depend on your salary for your expenses.

That is the goal of every investor and this is how to build a dividend income portfolio:

  • Certain stocks give dividend payouts based on their profits over the year.
  • Investors can use his prefered method to identify and screen out solid stocks and investment instruments to invest in.
  • From there, investors will build his investment portfolio.
  • The objective is to build an investment portfolio which can replace your expenses and salary.
  • Once that objective is achieved, financial freedom may not be too far away!

Dividend Investing – How much should you be investing in total?

Back to the rule of building an investment portfolio which can replace your expenses or salary, we work backwards to find out the portfolio size required to achieve it.

From here, we can all plan ahead and hopefully, retire early.

I’m thinking of a holiday to celebrate this milestone at the Maldives before the age of 40 years old. How about you?

Set a target.

Identify how much you want your investment portfolio to fetch you every month.

Monthly DividendTotal dividend required each year
$500$6,000
$1,000$12,000
$1,200
(Monthly expenses for Singaporeans after retirement)
$14,400
$2,000$24,000
$3,089
(Median take-home salary of Singaporeans)
$37,068
$4,699
(Median household spend per month)
$56,388
$10,000$120,000

Here are some of the numbers we use for better estimation of the amount we need for retirement:

  • Basic monthly expenses for Singaporeans after retirement is at $1,200 per month.
  • Median take-home salary of a typical Singaporean worker at $3,089 per month.
  • $4,699 is the median household spend per month.

With the total dividend one aims to achieve each year, we worked backwards to find out the percentage of dividend yield and the total amount of the portfolio.

What is the dividend yield?

The dividend yield is the percentage of a company’s dividend compared to its share price.

It can be calculated using:

Dividend Yield = (Annual Dividend)/ Share Price

How much does your portfolio need to be?

For better illustration, we are looking at a dividend yield of more than 3%.

Anything below the interest rate of Singapore Savings Bond (SSB) makes no sense for the risk that the investor will be taking.

Total dividend required each yearPortfolio size with X% dividend yield
3%5%6%7%8%
$6,000$200,000$120,000$100,000$85,714.29$75,000
$12,000$400,000$240,000$200,000$171,428.57$150,000
$14,400$480,000$288,000$240,000$205,714.29$180,000
$24,000$800,000$480,000$400,000$342,857.14$300,000
$37,068$1,235,600$741,360$617,800$529,542.86$463,350
$56,388$1,879,600$1,127,760$939,800$805,542.86$704,850
$120,000$4,000,000$2,400,000$2,000,000$1,714,285.71$1,500,000

Few things to take note of, when dividend investing :

  • Company with the highest dividend yield may not necessarily mean that it is the safest stock.
  • The above demonstrates that to achieve that amount of dividend, one needs to have a good amount of savings.
  • The faster one managed to achieve the above where his dividend yield income every year exceeds his expenses, he achieves financial freedom!
  • We cannot emphasize the importance of starting early and making use of the power of compounding interest to achieve this ultimate dream faster.

The Magic Of Compound Interest


Further reading: Some example of stocks and their dividend yield

The total dividend yield of your portfolio depends on the amount one invests in each stock and the dividend yield of these stocks.

To list down some of the stocks and their dividend yield.

For stocks in SGX with a dividend yield of 3-4%:

Company NameCodeP/EDividend Yield
(%)
P/BV
ABR Holdings Limited53335.7233.29%1.6
AEM Holdings LtdAWX6.8183.15%3.13
Asia Enterprises Holding LimitedA5532.0063.13%0.583
Aspial Corporation LimitedA3010.8243.79%1.122
Boardroom LimitedB1014.033.14%1.768
Boustead Singapore LimitedF9D11.2053.7%1.215
Bumitama Agri Ltd.P8Z9.9583.83%1.743
CapitaLand LimitedC319.7463.54%0.756
Captii LimitedAWV9.6483.21%0.326
China Aviation Oil (Singapore) Corporation LtdG928.7493.68%1.05
CITIC Envirotech Ltd.CEE9.9423.26%0.64
Datapulse Technology LimitedBKW1.4653.57%0.755
G. K. Goh Holdings LimitedG4123.1953.33%0.648
Genting Singapore LimitedG1317.4543.21%1.721
Goodland Group Limited5PC11.5953.57%0.369
GuocoLand LimitedF1712.3433.78%0.507
HC Surgical Specialists Limited1B120.9683.42%5.023
Ho Bee Land LimitedH135.6483.24%0.51
Hotel Grand Central LimitedH1830.5523.65%0.762
Huationg Global Limited41B2.9483.24%0.358
Hwa Hong Corporation LimitedH1944.1673.45%1.001
Indofood Agri Resources Ltd.5JS48.1093.03%0.274
Jackspeed Corporation LimitedJ176.8413.5%0.856
Jardine Cycle & Carriage LimitedC0718.553.24%1.76
Kimly Limited1D013.2373.92%3.189
Low Keng Huat (Singapore) LimitedF1E22.0873.64%0.625
LY Corporation Limited1H823.653.13%1.68
MoneyMax Financial Services Ltd.5WJ7.1933.4%0.718
OKP Holdings Limited5CF11.2613.41%0.526
Olam International LimitedO3212.5593.89%0.969
Old Chang Kee Ltd.5ML17.3283.97%3.28
Oversea-Chinese Banking Corporation LimitedO3910.2613.35%1.18
Oxley Holdings Limited5UX5.853.7%0.967
Pan-United Corporation LtdP5221.9383.33%0.889
PEC Ltd.IX211.8673.51%0.635
SATS Ltd.S5821.7023.53%3.543
SBS Transit LtdS6112.1594.04%1.995
Sheng Siong Group LtdOV823.1683.15%5.954
shopper360 Limited1F011.8833.97%1.051
Singapore Airlines LimitedC6L33.1413.87%0.949
Singapore Post LimitedS0820.2383.59%1.286
Singapore Press Holdings LimitedT3914.8133.64%1.122
Singapore Shipping Corporation LimitedS199.1323.65%0.986
Singapore Technologies Engineering LtdS6321.8924.02%5.461
SingHaiyi Group Ltd.5H016.1153.16%0.619
Spindex Industries Limited5646.1223.45%0.895
Stamford Tyres Corporation LimitedS2939.7093.33%0.58
Straco Corporation LimitedS8515.4653.33%2.33
SUTL Enterprise LimitedBHU14.193.08%1.046
TalkMed Group Limited5G326.6433.74%11.699
Teckwah Industrial Corporation Ltd56110.7153.57%0.642
The Hour Glass LimitedAGS6.9563.1%0.845
Tianjin Zhong Xin Pharmaceutical Group Corporation LimitedT149.143.25%1.006
Union Gas Holdings Limited1F29.6673.92%2.549
United Global Limited43P13.9463.84%3.119
United Overseas Bank LimitedU1111.4383.68%1.17
UOB-Kay Hian Holdings LimitedU1011.6993.9%0.689
Wee Hur Holdings Ltd.E3B6.5953.33%0.532
Wilmar International LimitedF3411.4163.18%0.984
Yangzijiang Shipbuilding (Holdings) Ltd.BS68.3233.14%1.008
YHI International LimitedBPF9.4283.53%0.495

For stocks in SGX with a dividend yield of 4-5%:

Company NameCodeP/EDividend Yield
(%)
P/BV
Avarga LimitedU0910.0314.76%0.911
CapitaLand Commercial TrustC61U13.0394.63%1.021
CapitaLand Mall TrustC38U12.4544.77%1.196
Centurion Corporation LimitedOU810.514.94%0.736
Chasen Holdings Limited5NV4.6854.94%0.446
ComfortDelGro Corporation LimitedC5217.7114.32%2.013
Dutech Holdings LimitedCZ46.8314.62%0.418
Excelpoint Technology LtdBDF6.1474.83%0.726
Far East Orchard LimitedO1024.9344.84%0.439
Frasers Property LimitedTQ56.774.97%0.675
Frencken Group LimitedE286.8334.15%0.656
GP Industries LimitedG2014.975%0.79
GRP LimitedBLU21.0374.95%0.27
GSH Corporation LimitedBDX29.1694.17%1.492
Hock Lian Seng Holdings LimitedJ2T7.8255%0.922
Japan Foods Holding Ltd.5OI20.9774.57%2.399
Keong Hong Holdings Limited5TT5.2214.76%0.555
Keppel Corporation LimitedBN411.8384.08%0.984
Keppel REITK71U28.0214.52%0.851
Kingsmen Creatives Ltd.5MZ9.9234.76%0.877
KSH Holdings LimitedER011.1454.19%0.889
Lian Beng Group LtdL034.6794.59%0.362
Megachem Limited5DS10.264.38%0.918
Miyoshi LimitedM035.3914.26%0.428
Nordic Group LimitedMR79.0294.65%1.724
Parkway Life Real Estate Investment TrustC2PU11.114.61%1.485
Samudera Shipping Line LtdS5616.2834.19%0.392
Shinvest Holding Ltd.BJW7.0124.11%0.434
Sing Investments & Finance LimitedS3510.474.55%0.686
Singapore Exchange LimitedS6822.4574.5%8.694
Singapore Kitchen Equipment Limited5WG22.7955%0.949
Singapore O&G Ltd.1D818.1344.79%3.796
Singapore Reinsurance Corporation LimitedS4923.3554.56%0.693
Sinwa Limited5CN8.9434.39%1.137
SK Jewellery Group Limited42G7.1584.76%1
Sunningdale Tech LtdBHQ11.0164.87%0.783
Tat Seng Packaging Group LtdT124.34.69%0.807
ValueMax Group LimitedT6I7.4274.5%0.795
Venture Corporation LimitedV0312.414.97%2.065
Yanlord Land Group LimitedZ252.9884.77%0.545

For stocks in SGX with a dividend yield of 5-6%:

Company NameCodeP/EDividend YieldP/BV
Ascendas Real Estate Investment TrustA17U17.4955.68%1.271
Brook Crompton Holdings Ltd.AWC8.0815.92%0.956
CDL Hospitality TrustsJ8517.5675.9%1.028
Chip Eng Seng Corporation LtdC299.2715.76%0.553
Elec & Eltek International Company LimitedE168.3385.52%0.684
Ellipsiz LtdBIX44.0115.95%0.597
Fortune Real Estate Investment TrustF25U3.0715.38%0.573
Frasers Centrepoint TrustJ69U12.4835.23%1.103
Frasers Logistics & Industrial TrustBUOU13.7365.95%1.234
Geo Energy Resources LimitedRE47.0185.46%1.098
GP Industries LimitedG2014.975%0.79
Hi-P International LimitedH177.0515.08%1.494
Hock Lian Seng Holdings LimitedJ2T7.8255%0.922
Hong Leong Finance LimitedS4110.2995.19%0.651
ISEC Healthcare Ltd.40T17.4035.48%2.162
Keppel DC REITAJBU12.8985.01%1.366
Lum Chang Holdings LimitedL196.9685.14%0.564
M1 LimitedB2F14.8115.46%3.642
Mapletree Commercial TrustN2IU8.8535.11%1.201
Mapletree Industrial TrustME8U11.9186.05%1.345
Mapletree Logistics TrustM44U9.4115.77%1.092
Micro-Mechanics (Holdings) Ltd.5DD14.2355.49%3.87
Multi-Chem LimitedAWZ12.2965.69%0.7
Nam Lee Pressed Metal Industries LimitedG0I9.0745.48%0.619
SIA Engineering Company LimitedS5915.8975.13%1.763
Singapore Kitchen Equipment Limited5WG22.7955%0.949
Singapore Telecommunications LimitedZ7415.9755.83%2
SPH REITSK6U18.7785.43%1.08
Suntec Real Estate Investment TrustT82U17.975.23%0.905
Sysma Holdings Limited5UO9.1945.37%0.714
Tiong Seng Holdings LimitedBFI6.3625.66%0.445
Uni-Asia Group LimitedCHJ6.4515.42%0.309
Valuetronics Holdings LimitedBN28.6175.12%1.527
VICOM LtdV0115.675.85%3.679

For stocks with a dividend yield of 6-7%:

Company NameCodeP/EDividend Yield
(%)
P/BV
Accordia Golf TrustADQU16.6646.7%0.624
Ascendas Hospitality TrustQ1P48.856.91%0.88
Ascendas India TrustCY6U5.7426.08%1.279
Ascott Residence TrustA68U19.2896.28%0.811
Avi-Tech Electronics LimitedBKY15.0936.1%1.049
Ban Leong Technologies LimitedB266.2296.48%1.075
Far East Hospitality TrustQ5T13.5666.2%0.733
Frasers Commercial TrustND8U9.3526.44%0.941
Frasers Hospitality TrustACV22.0666.48%0.911
Manulife US Real Estate Investment TrustBTOU15.2636.69%0.999
Mapletree Industrial TrustME8U12.16.08%1.338
Memtech International Ltd.BOL9.3396.18%0.763
New Toyo International Holdings LtdN0833.236.81%0.62
OUE Commercial Real Estate Investment TrustTS0U10.5376.96%0.7
OUE Hospitality TrustSK718.0456.93%0.955
Starhill Global Real Estate Investment TrustP40U15.0616.33%0.783
Tai Sin Electric Limited50011.1126.92%0.829
Telechoice International LimitedT4116.4176.96%1.546
UMS Holdings Limited5587.3456.67%1.596
Challenger Technologies Limited5739.3256.02%1.933
Pacific Century Regional Developments LimitedP1514.9786.03%0.699
PNE Industries LtdBDA13.2346.02%0.862

For stocks with a dividend yield of 7-8%:

Company NameCodeP/EDividend Yield
(%)
P/BV
AIMS AMP Capital Industrial REITO5RU14.387.29%1.022
APAC Realty LimitedCLN7.0987.14%1.431
BHG Retail REITBMGU16.1447.81%0.893
CapitaLand Retail China TrustAU8U11.0187.05%0.915
China Jinjiang Environment Holding Company LimitedBWM7.6777.27%0.93
Dynamic Colours LimitedD6U11.1688.05%0.906
First Real Estate Investment TrustAW9U11.6948.11%0.962
Fu Yu Corporation LimitedF1313.6737.62%0.966
IREIT GlobalUD1U7.1217.64%1.076
Keppel Infrastructure TrustA7RU59.777.37%1.851
LHT Holdings LimitedBEI4.656.99%0.75
Mapletree North Asia Commercial TrustRW0U6.3097.6%0.95
mDR LimitedA2714.2868%0.309
Sabana Shari'ah Compliant Industrial Real Estate Investment TrustM1GU6.697.4%0.749

We did a quick extraction of the data from the Singapore Exchange Limited (SGX) website, using the dividend yield filter.

source: www2.sgx.com

Start building your portfolio today to give you recurring income over time.

We strongly recommend one arms himself with sufficient knowledge before building his portfolio. Dividend yield itself is not the best indicator, it is important to read up more and have a better screener before proceeding to do so.

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