Despite the stock market downturn, it appears that fundamentals are still sound and the stocks I am holding are actually earning profits that can be used to pay dividends. Therefore, my passive income has risen to $13k. I would have to admit that my spending went up a little bit in 2022 due to inflation but at least the increase in my passive income is more than the inflation rate.
The purpose of this post at the start of the New Year is for me to reflect on whether I would do anything differently with the increased passive income. At the moment, I do not plan any major changes. In 2022, I started spending a bit more money on healthier foods and will continue to do so. Apart from salads, I am replacing red meat with fish from reputable sources (fish prices have been hit by inflation). Diet alone is not enough of course, and I will continue my gym/swimming exercise routine during work from home days. Apart from better quality of life, I hope that good health will reduce healthcare expenses in the future 😄
An increased passive income might lead some to consider property upgrading because the passive income can help to service the loan. However, I do not plan to get into debt anytime soon via the property upgrading path. I am perfectly happy with my current condo which is a spacious 2000+ sqft. I have friends that have "invested" in building their dream houses (buy and rebuild semi-D to 3-4 stories with lift, 4000 sqft+) and their houses are really beautiful. But I'm aware they invested a lot of their time into the project in order to achieve their vision. Apart from a lack of interest due to a general satisfaction with my current condo, I don't have the time at the moment to build a "dream" home. Home is where you hang your hat, as the saying goes.
In terms of investing strategy, I will continue to prioritise World ETFs (both FTSE all world, and FTSE all world high dividend ETFs). I plan to continue my regular small RSP of China ETFs with FSMOne as well. Finally, I plan to sell all those Sembmarine shares that I bought at $0.08 during the rights issue. Thanks to the oil price rally, they are currently nearly $0.14.
I end with a chart comparing Vanguards All World ETF to its All World High Dividend yield ETF. The dividend strategy outperformed the All World counterpart by 10%. I would add that its not the "dividends" but the fact that most companies in a dividend index are "value" stocks with good cash flow and profitability. These stocks will do well in a rising interest rate and inflationary environment compared to a growth stock that finds its cost of borrowing increasing.
😺
2022 Edition
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