Recently, while planning my retirement plan, somethings have come across my mind which is generating passive income for retirement. Understand that many of the reader here have plan using dividends from stocks as part of their passive income, some even put them as the main source of passive income when retirement.
I also had this plan as well, but something strikes me is that what if the company that I invest goes boom. My money will be gone and there goes my passive income. What if I am still in my 40s when I retire and the dividends that I rely on goes boom? Will I be stuck in the middle whereby I have not enough passive income and my working skills become obsolete? Because you never know what will happen in the future right?
Is my though on such scenario a realistic thinking or I am scaring myself?
Some people suggest going for blue chips because it is safe. But no matter blue chip, or whatever chip, there is still a certain amount of risk, anything can happen. How will you guys prepare for such scenarios?
I also thought of buying properties as investment in Singapore, but it will still have the same concern as shares, what if foreign talents are moving to other countries like Vietnam, Bangkok and etc. since these place are moving towards the first world country/city, how will Singapore rental property fare in the future? So is relying on property a good suggestion as well?
What are your views in such scenarios? What will you do to maintain your passive income?
Diversify your portfolio across sectors/industries and ALSO diversify your entries and exits over market timing and cycles. We can survive!
ReplyDeleteYea diversify is good but what if things happen when you retire already but suddenly market crash. It leaves you little to no passive income for survival. Is there any way to tackle such issue?
DeleteAsk those old birds who have retired across the past market cycles how did they survive? Go and take a look at my diagram on Building sustainable retirement income for life
ReplyDeleteI read many blogs and saw many bloggers showing their portfolio focusing on Singapore stocks and also properties as well. I am trying to learn bit by bit and trying to understand the risk as well. Of course I am coming from the very very negative point whereby there is a super huge crash in Singapore economy, maybe worse than 2008/2009, what is their contingency plan?
DeleteDiversify is one of the option but diversify within Singapore or go out of Singapore?
I dont know any experience people who have come across several market cycle as most of my friends are quite young, so I rely on blogs to get more information. However bloggers and news all paint beautiful pictures that if investing in shares, they will have stable passive income, without mentioning what is their contingency plan other than diversify to other means like properties, or stocks in other sector.
Quote : " However bloggers and news all paint beautiful pictures that if investing in shares, they will have stable passive income, without mentioning what is their contingency plan other than diversify to other means like properties, or stocks in other sector."
DeleteOld man like myself lives long enough to know the real world of investing and economy so I don't want to just depend on investment income to survive. It is a strategy of getting much lower investment return but trade off by having certainty of other sources of cash flow for survival.
Read? Save more than 60%. No need to invest??? (6)
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