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A simple way to calculate much dividends/month you want in 10 Years time




I hope everyone is keeping well
during this season of circuit breaker. Though Phase One has just started and I
can’t wait for to Phase Two to kick in.
During the months of circuit
breaker, while I am (still) stuck at home, I am happy that my time is well
spent on making some positive changes- to wake up early and exercise, improving
my cooking skills, read more self help books and more quiet time daily.

I have been spending less time at
work but more time on planning. As most of my time is spent at home with less
travelling, only occasionally drive out to buy groceries, I have more time for
myself to set goals, and think about how do I want to see myself in the next
3,5 and 10 years- in terms of health, career, and wealth.
In terms of my finances, I managed
to finally set aside time to look at my spending, and how much I am saving to invest
in stocks and shares. In terms of my investment, I think did reasonably well
this year. To me, investment performance isn’t measured by absolute percentage
returns, but about how well you beat the index. I am glad that I started
investing in US stocks last year and having the courage to hold them and add
more positions during the Covid-19 during times of fear, and it really paid of
well. The stocks that brought down my overall returns are generally SG and HK stocks,
and I sold off a few stocks which didn’t fit into my investment objectives anymore.
I sold Raffles Medical Group at $0.84, UOL at $6.67, CapitaLand at $2.91 and
injected the cash into US stocks and SG Reits. Moving forward I will be
investing in US stocks primarily for Growth, SG and HK stocks for dividends, except
for Tencent Holdings, PingAn Insurance and Xiao Mi.
Stocks Cafe
 I have finally updated my
blog last month after stopping for more than six months- check out my analysis
on Mapletree NAC Trust here. I realize that I spent too much time on writing every
single blog post. Every post is quite lengthy and involves a lot of analysis
hence I lacked the time to do very in-depth research when work gets busy.
Blogging consistently really requires self-discipline and the motivation to do
so. My goal moving forward is to blog on a weekly basis (or at least 2 blog
posts/month when work really gets busy, or when I am taking a break overseas).
I read somewhere online which states that one of the ways to find motivation to
blog is to ‘Remind Yourself Why you get into Blogging’ in the first place. To
me I started this blog in mind to have the discipline to search for good stocks
and share my research and my views and also learn from inputs by other
financial bloggers/viewers. Blogging also served as sort of an online ledger as
I build my financial foundation towards the path of financial freedom. I have
never thought of making money through blogging. It’s more of a hobby rather
than a revenue generating machine. From now on, I will make it habit to blog on
a weekly basis just to keep the momentum going but keep my blog posts shorter.
Recently, one of the financial
goals I have set for myself is to have $10,000/month in dividends in 10 years’
time. If we assume a 5% inflation, monthly dividend is $16,288.95. That
translates to $195,467.40 And I would like to share with you one of a simple
excel chart I did to breakdown the 10 Year goal into a yearly goal.
A few questions to ask yourself
before you crunch in the values.
Type of stocks to hold (during the 10 years)
There are many strategies to achieve
$195k of annual dividends through stocks & shares. One of the ways is to invest in growth stocks all the way and
focus on the capital growth for the next 10 years and convert the basket of
growth stocks to dividend playing shares on the 10th year.
Another way is to hold on to a basket of
high dividend paying stocks/reits, and consistently reinvest the dividends and
achieve $195k of dividends in year 10.
Or to have a
mixture of both dividend paying stocks and growth stocks. 
For my case is abit more unique. I will be adopting a mixture of both growth and dividend stocks for my portfolio even after the 10th year and yet still yield me
After 10 Years, what would be your dividend yield for
the stocks you will be holding?
I use StocksCafe to track my stocks
and the average yield is around 3.8% due to a significant proportion of growth
stocks in my portfolio. My dividend stocks are yielding an average of 7%. If the
market is bullish on the 10th year and interest rates stays very
low and with the growth stocks I will still be holding, I may not be able to get an average of 7% yield. In my case I would assume a 5% dividend
yield (it’s really up to you, but I recommend somewhere in the range of 4% to
Perceived Inflation?
Inflation has been at low levels
the past few years with last year’s core inflation was 1.4%. It is measured
using a basket of goods, and there are certain consumer goods that inflate more
than others. When doing budgeting for myself, I won’t be using 1.4% because it
doesn’t reflect my spending habits or the way I spend money. I have a soft spot
for travel and good food, and in my case, my perceived inflation is 5%.
What is your desired monthly dividend in 10 years’
In my case, I want to enjoy $10,000
dividend/mth in today’s value. My suggestion is to set a higher goal and
motivate yourself working towards achieving it. There are many ways to achieve
it: you can read up on investing and research on undervalued stocks, or even
force yourself to save more to invest. If you are stuck in a job that you don’t
like and isn’t paying you well, then find another job that pays you well or a
career that you are passionate about. There are many full-time employees doing
part time freelancing to supplement their income as well which you can consider.
What is your starting portfolio value?
Your current portfolio may not be
your starting portfolio value to achieve $10k/month. If you have plans to
liquidate part of your portfolio for child’s education in a few years’ time, or
even to buy a house, you should exclude the amount from starting portfolio. It
should be set aside untouched for 10 years, only money in & no money out.
Let time do the magic for you.
I have two portfolios, hence will
use one of my portfolios for this exercise. If you have liquid cash which to be
injected into the portfolio you can include that amount as well
So with the above assumption, we
have the following information:
Type of stocks – growth and dividend paying stocks
Dividend Yield on the 10th year onwards – 5%
Perceived Inflation – 5%
Desired monthly income in 10 years’ time (present
value) –$10,000
Starting portfolio Value- $343,000 (stocks) + $20,000
(cash) (as of May 2020)
I have decided to withdraw rest of
my cash to clear off my car loan, and pay off my income tax at one go, hence
will start with $20,000 of cash. It’s not the best use of money with the low interest,
but just want to get all these liabilities off my mind.
Future Value of $10,000 in 10 Years’
time= $10,000 X 1.0510 = $16,288.95
Annual Dividend= $195,467.50
To calculate how much growth in
dividends per year, we take

In my case, it would be
It means my dividend
growth per year has to be 26.829%
Annual dividends
compound at 26.829% per year.

Year 1, Annual Dividends
=           18,150* 1.26829               = $23,020
Year 2 Annual Dividends  =           18,150*
1.26829^2           = $29,196
Year 3, Annual Dividends =           18,150*
1.26829 ^3          = $37,028

between Annual Dividends and Portfolio Value

Dividends/Dividend Yield= Portfolio Value.
In my case Portfolio Value * 5% = Annual Dividends
If you would like the excel sheet, drop me a message on my Facebook Page or leave a comment on this blog post with your email address and  I will send it to you!
Lastly take care and stay safe! Hope you will make good use of this time to make some positive changes to your life!


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About Kelvin

Join me on the journey to FIRE by 40! I share insights on investing, smart money habits, and achieving financial independence. Let's reach our goals together!

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