No Money Lah Freedom Fund 2022 Monthly dividend income update

[Freedom Fund] 2022 Monthly Dividend Income Update

In this post, you'll see my monthly dividend income updates for 2022. 

My goal is to invest a portion of my funds to build a RM1,000/month passive income portfolio (and eventually RM4,000/month).

Through this journal, you'll see my progress month by month - and I wish you will find inspiration to start your dividend investing journey too! Let's go!

Related Post: If you like reading my journey, I'm sure you'll like the posts below as well:

If you enjoy following my dividend investing journey and would like to learn more, subscribe to my FREE newsletter and I'll be sending you the most updated content every week! 

p

November 2022 Dividend Income Update

Time flies and we are almost coming to the end of 2022! With this, let's check out my November 2022 dividend income update!

As a whole, I received RM256.70 in November 2022, which is a decent increase over RM15.09 last year! Key contributions come from the final dividend payment from my REIT investments for the year.

 

Stocks/ETF Ticker Dividends Received Dividends Received (RM)
Atrium REIT 5130 RM31.64 RM31.64
Axis REIT 5106 RM72.97 RM72.97
IGB REIT 5227 RM57.17 RM57.17
Syfe REIT+ SGD4.89 RM15.89
Harvest Brand Leaders Plus Income ETF HBF CAD4.59 RM15.28
Harvest Tech Achievers Growth & Income ETF HTA CAD4.93 RM16.42
Purpose Bitcoin Yield ETF BTCY CAD1.96 RM6.53
Purpose Ether Yield ETF ETHY CAD1.96 RM6.53
Harvest Tech Achievers Growth & Income ETF (USD) HTA.U USD4.76 RM21.32
Fidelity US Quality Income UCITS ETF FUSD USD2.89 RM12.95
Total Dividends Received RM256.70

[Note] Rotate your screen if you cannot view the full table in portrait mode. Dividends are considered received as per dividend ex-date.

Exchange Rate: 

  • USD1 = RM4.48
  • SGD1 = RM3.25
  • CAD1 = RM3.33
  • HKD1 = RM0.57

Dividend breakdown by month & year:

Dividend breakdown by currency:

New additions:

Added to my existing holdings as I seek to increase my exposure in the US stock market.

  • SCHD: One of my favorite dividend ETFs to buy & hold long-term. Managed to add more units of SCHD prior to price pushing back to near all-time high this month. With a solid history of dividend increments every year for the past 10 years, SCHD is a no-brainer for long-term dividend investors. Check out my newly released SCHD review HERE.
  • HTA.U: Added to HTA.U for the attractive yield in USD as tech still looks very attractive to me.

You can check out my latest Freedom Fund portfolio HERE.

Nov 2022 Wrap-Up + Thoughts:

Personally, I am pretty happy with my progress in 2022. I continue to build my portfolio despite the market selldown and fears & noise in the market.

  • Dividend Income (Nov): RM256.70
  • Dividend Income (2022): RM1853.21

October 2022 Dividend Income Update

 

 

View this post on Instagram

 

A post shared by Yi Xuan | No Money Lah (@yixuan_chin)

October 2022 dividend income update is back!

This month's dividend is slightly toned down as I've received my many quarterly payouts last month. As always, the goal is to continue building the dividend portfolio - focus on the long-term game and process!

 

Stocks/ETF Ticker Dividends Received Dividends Received (RM)
Syfe REIT+ SGD0.56 RM1.86
Harvest Brand Leaders Plus Income ETF HBF CAD4.59 RM15.88
Harvest Tech Achievers Growth & Income ETF HTA CAD4.93 RM17.06
Purpose Bitcoin Yield ETF BTCY CAD2.68 RM9.27
Purpose Ether Yield ETF ETHY CAD2.52 RM8.72
Harvest Tech Achievers Growth & Income ETF (USD) HTA.U USD3.66 RM17.28
Total Dividends Received RM70.07

[Note] Rotate your screen if you cannot view the full table in portrait mode. Dividends are considered received as per dividend ex-date.

Exchange Rate: 

  • USD1 = RM4.72
  • SGD1 = RM3.33
  • CAD1 = RM3.46
  • HKD1 = RM0.60

Dividend breakdown by month & year:

No Money Lah Freedom Fund - Monthly Dividend Income by month

Dividend breakdown by currency:

Oct 2022 - Dividend Income by Currency

New additions:

Added to my existing holdings as I seek to increase my exposure in the US stock market.

  • SCHD: Despite having to incur a 30% dividend withholding tax (WHT) for all US-domiciled ETFs, SCHD got really attractive in line with market selldown - hitting a yield of over 3% in October. Combined with a solid history of dividend increments every year, SCHD is a no-brainer for long-term dividend investors.

You can check out my latest Freedom Fund portfolio HERE.

Oct 2022 Wrap-Up + Thoughts:

  • Dividend Income (Oct): RM70.07
  • Dividend Income (2022): RM1633.39
p
Napoleon’s definition of a military genius was:
 
“The man who can do the average thing when everyone else around him is losing his mind.”
 
It’s the same in business and investing.
 

September 2022 Dividend Income Update

 

 

View this post on Instagram

 

A post shared by Yi Xuan | No Money Lah (@yixuan_chin)

We are back with September 2022 dividend income update! *DRUM ROLLS*

Despite the market being in the red this month, I actually received my highest dividend income for 2022 (so far) of RM395.43 ($86)!

The highest contribution comes from the bi-annual distribution of 3110, a dividend ETF from Hong Kong. This is followed by dividend income from Syfe REIT+, my go-to way to invest in Singapore REIT.

 

Stocks/ETF Ticker Dividends Received Dividends Received (RM)
Syfe REIT+ SGD24.86 RM80.55
Maybank 1155 RM56.28 RM56.28
Global X Hang Seng High Dividend Yield ETF 3110 HKD300 RM177
Harvest Brand Leaders Plus Income ETF HBF CAD4.59 RM15.38
Harvest Tech Achievers Growth & Income ETF HTA CAD4.93 RM16.52
Purpose Bitcoin Yield ETF BTCY CAD2.68 RM8.98
Purpose Ether Yield ETF ETHY CAD2.52 RM8.44
Harvest Tech Achievers Growth & Income ETF (USD) HTA.U USD3.66 RM16.98
Schwab US Dividend Equity ETF SCHD USD1.78 RM8.26
SPDR S&P US Dividend Aristocrats UCITS ETF UDVD USD1.52 RM7.05
Total Dividends Received RM395.43

[Note] Rotate your screen if you cannot view the full table in portrait mode. Dividends are considered received as per dividend ex-date.

Exchange Rate: 

  • USD1 = RM4.64
  • SGD1 = RM3.24
  • CAD1 = RM3.35
  • HKD1 = RM0.59

Dividend breakdown by month & year:No Money Lah Freedom Fund - Monthly Dividend Income by month

Dividend breakdown by currency:

Sept 2022 - Dividend Income by Currency

New additions:

Nothing fancy in September. Added to my existing holdings as I seek to increase my exposure in the US stock market.

  • HTA.U: Now generating a yield of over 10% with a track record of stable dividend payout.
  • FUSD: Track record of growing dividends in the past 3 years.
  • Syfe REIT+: Automated monthly investment.

You can check out my latest Freedom Fund portfolio HERE.

Sept 2022 Wrap-Up + Thoughts

  • Dividend Income (Sept): RM395.43
  • Dividend Income (2022): RM1539.58

One of my biggest decisions in 2022 is when I finally decided to commit to dividend investing.

Why so?

Due to certain family issues this year, I’ve come to realize that cashflow is crucial.

As such, I aim to automate my income so, in 15 to 20 years, I have the choice to focus on what’s important in life without having to worry about actively working for income.

Knowing the context behind WHY I go for dividend investing helps massively because I’ll not be affected by short-term market swings, and other people’s opinions on dividend investing.

For friends who are reading this, I encourage you to figure out your investment goal/direction. Knowing your WHY will help you filter out a lot of noise and stay consistent in your journey.


August 2022 Dividend Income Update

 

 

View this post on Instagram

 

A post shared by Yi Xuan | No Money Lah (@yixuan_chin)


Hey hey! Despite heavy market sell-off, we are back with the dividend update for August! In August, I received RM284.04 in dividend income!

The dividend in August is the highest of the year so far since I got my quarterly payout from my REIT holdings alongside monthly dividend payout from my ETFs.

As for new addition, I've added the USD version of Harvest Tech Achievers Growth & Income ETF (HTA.U) as I'd like to focus on more dividends in USD moving forward.

You can check out my latest Freedom Fund portfolio HERE.

 

Stocks/ETF Ticker Dividends Received Dividends Received (RM)
Syfe REIT+ SGD12.37 RM39.71
Atrium REIT 5130 RM38.48 RM38.48
Axis REIT 5106 RM75.84 RM75.84
IGB REIT 5227 RM57.38 RM57.38
Harvest Brand Leaders Plus Income ETF HBF CAD4.59 RM15.74
Harvest Tech Achievers Growth & Income ETF HTA CAD4.93 RM16.91
Purpose Bitcoin Yield ETF BTCY CAD3.4 RM11.66
Purpose Ether Yield ETF ETHY CAD2.99 RM10.26
Harvest Tech Achievers Growth & Income ETF (USD) HTA.U USD2.21 RM9.88
Fidelity US Quality Income UCITS ETF FUSD USD1.83 RM8.18
Total Dividends Received RM284.04

[Note] Rotate your screen if you cannot view the full table in portrait mode. Dividends are considered received as per dividend ex-date.

Exchange Rate: 

  • USD1 = RM4.47
  • SGD1 = RM3.21
  • CAD1 = RM3.43
  • HKD1 = RM0.57

August 2022 Wrap-Up

  • Dividend Income (August): RM284.04
  • Dividend Income (2022): RM1150.05

July 2022 Dividend Income Update

 

 

View this post on Instagram

 

A post shared by Yi Xuan | No Money Lah (@yixuan_chin)


We are back with the dividend update for July! In July, I received RM53.10 in dividend income!

July closed on a positive note after months of bearish sentiment. That said, I don't think the market is clearly bullish yet. Inflation is still high and interest rate hikes have not proved effective in pushing inflation down.

For the month, I've added more units of HTA, alongside 2 Ireland-domiciled dividend growth ETFs - FUSD and UDVD to the Freedom Fund. These ETFs:

  • Provide exposure to the US market at a lower dividend withholding tax (WHT) at 15% instead of 30% from typical US-listed equities.
  • They also have a history of growing dividends and should serve as a great long-term holding to the portfolio.

An interesting note on FX rate. So far in 2022, our beloved MYR has:

  • Dropped more than 4% against SGD.
  • Lost close to 5% against CAD. 
  • Lost over 6% in value against USD.

If any, investors should absolutely consider diversifying their income into different major currencies (eg. SGD, CAD, USD) to hedge against a weak MYR. A dividend portfolio with foreign exposure is certainly the easiest way to do so.

You can check out my latest Freedom Fund portfolio HERE.

 

Stocks/ETF Ticker Dividends Received Dividends Received (RM)
Harvest Brand Leaders Plus Income ETF HBF CAD4.59 RM15.97
Harvest Tech Achievers Growth & Income ETF HTA CAD4.93 RM17.16
Purpose Bitcoin Yield ETF BTCY CAD3.4 RM11.83
Purpose Ether Yield ETF ETHY CAD2.34 RM8.14
Total Dividends Received RM53.10

[Note] Rotate your screen if you cannot view the full table in portrait mode. Dividends are considered received as per dividend ex-date.

Exchange Rate: 

  • USD1 = RM4.45
  • SGD1 = RM3.22
  • CAD1 = RM3.48
  • HKD1 = RM0.57

July 2022 Wrap-Up

  • Dividend Income (July): RM53.10
  • Dividend Income (2022): RM869.50

June 2022 Dividend Income Update

 

 

View this post on Instagram

 

A post shared by Yi Xuan | No Money Lah (@yixuan_chin)

We are back with the dividend update for June! In June, I received RM97.96 (update: RM106.48) in dividend income!

June was a pretty tough month for the market as a whole. We've entered a bear market, inflation is hitting hard across the globe, and measures to raise interest rate did not seem to be effective in cooling things down.

I was quite busy with some research and work in June, so I did not do anything crazy other than adding additional 2 units of SCHD.

That said, I've probably made a mistake with buying SCHD from the start due to dividend withholding tax reasons (where non-US residents are taxed 30% of their dividend income) - which makes the long-term prospect of this US dividend ETF less attractive.

Will decide what I'd do with this soon but it's a good lesson nevertheless. You can check out my latest Freedom Fund portfolio HERE.

 

Stocks/ETF Ticker Dividends Received Dividends Received (RM)
Syfe REIT+ SGD14.59 RM46.10
Harvest Brand Leaders Plus Income ETF HBF CAD4.59 RM15.70
Harvest Tech Achievers Growth & Income ETF HTA CAD4.25 RM14.54
Purpose Bitcoin Yield ETF BTCY CAD3.4 RM11.63
Purpose Ether Yield ETF ETHY CAD2.34 RM8.00
Schwab US Dividend Equity ETF SCHD USD1.97 RM8.69
Total Dividends Received RM104.66

[Note] Rotate your screen if you cannot view the full table in portrait mode. Dividends are considered received as per dividend ex-date.

Exchange Rate: 

  • USD1 = RM4.41
  • SGD1 = RM3.16
  • CAD1 = RM3.42
  • HKD1 = RM0.56

June 2022 Wrap-Up

  • Dividend Income (June): RM106.48
  • Dividend Income (2022): RM804.17

May 2022 Dividend Income Update

 

 

View this post on Instagram

 

A post shared by Yi Xuan | No Money Lah (@yixuan_chin)

In May, I received RM255.65 in dividend income!

May is generally a nice month for dividends as quarterly distributions from REITs come in.

While MYR weakened against other currencies, dividends from foreign currencies also increased in MYR terms.

If you live in Malaysia, it is important to expand your income streams into stronger currencies (eg. USD, SGD) and dividend investing is a great way to go.

Took the chance to add SCHD, a US-listed ETF into the Freedom Fund as well. 

 

Stocks/ETF Ticker Dividends Received Dividends Received (RM)
Syfe REIT+ SGD3.99 RM12.73
Atrium REIT 5130 RM37.62 RM37.62
Axis REIT 5106 RM71.65 RM71.65
IGB REIT 5227 RM37.62 RM37.62
Harvest Brand Leaders Plus Income ETF HBF CAD4.59 RM15.79
Harvest Tech Achievers Growth & Income ETF HTA CAD4.25 RM14.62
Purpose Bitcoin Yield ETF BTCY CAD6.38 RM21.95
Purpose Ether Yield ETF ETHY CAD6.55 RM22.53
Total Dividends Received RM255.65

[Note] Rotate your screen if you cannot view the full table in portrait mode. Dividends are considered received as per dividend ex-date.

Exchange Rate: 

  • USD1 = RM4.38
  • SGD1 = RM3.19
  • CAD1 = RM3.44
  • HKD1 = RM0.56

May 2022 Wrap-Up

  • Dividend Income (May): RM255.65
  • Dividend Income (2022): RM708.12

April 2022 Dividend Income Update

 

 

View this post on Instagram

 

A post shared by Yi Xuan | No Money Lah (@yixuan_chin)

In April, I received RM73.32 in dividend income!

April is generally a slow month despite many REITs announcing their earnings. Reason being, the dividend ex-date for my MREIT holdings (Atrium REIT, Axis REIT, IGB REIT) is happening in May. 

 

Stocks/ETF Ticker Dividends Received Dividends Received (RM)
Syfe REIT+ SGD0.33 RM1.04
Harvest Brand Leaders Plus Income ETF HBF CAD4.08 RM13.87
Harvest Tech Achievers Growth & Income ETF HTA CAD4.25 RM14.45
Purpose Bitcoin Yield ETF BTCY CAD6.38 RM21.69
Purpose Ether Yield ETF ETHY CAD6.55 RM22.27
Total Dividends Received RM73.32

[Note] Rotate your screen if you cannot view the full table in portrait mode. Dividends are considered received as per dividend ex-date.

Exchange Rate: 

  • SGD1=RM3.15
  • CAD1=RM3.40
  • HKD1=RM0.54

April 2022 Wrap-Up

  • Dividend Income (April): RM73.32
  • Dividend Income (2022): RM448.69

March 2022 Dividend Income Update

This month, I received RM152.78 in dividend income! 

I revamped my dividend portfolio by adding in new dividend-paying stocks & ETFs (3110). Unique Covered Call ETFs (HBF, HTA, BTCY, ETHY) that pay monthly dividends were also added. 

As a whole, this month’s dividend income is a fantastic 142.7% increase over March 2021 (RM62.94). That’s RM71.84 more dividend income than last March - not a lot by absolute means, but progress is progress!

 

Stocks/ETF Ticker Dividends Received Dividends Received (RM)
Maybank 1155 RM60.00 RM60.00
Syfe REIT+ SGD5.46 RM16.93
Global X Hang Seng High Dividend Yield ETF 3110 HKD22 RM11.88
Harvest Brand Leaders Plus Income ETF HBF CAD3.06 RM10.28
Harvest Tech Achievers Growth & Income ETF HTA CAD3.40 RM11.42
Purpose Bitcoin Yield ETF BTCY CAD5.74 RM19.29
Purpose Ether Yield ETF ETHY CAD6.84 RM22.98
Total Dividends Received RM152.78

[Note] Rotate your screen if you cannot view the full table in portrait mode. Dividends are considered received as per dividend ex-date.

Exchange Rate: 

  • SGD1=RM3.10
  • CAD1=RM3.36
  • HKD1=RM0.54

March 2022 Wrap-Up

  • Dividend Income (March): RM152.78
  • Dividend Income (2022): RM375.37

March is when I decided to concentrate more funds to build up my passive income portfolio. Various incidents in my family led me to realize the importance of consistent cashflow - and dividend investing is one, if not the best way to build consistent cashflow. 

I will continue to focus more funds to build this Freedom Fund so you'll certainly see more growth down the line!


February 2022 Dividend Income Update

In February, I received RM211.71 in dividend income. 

Since it's Chinese New Year break, I took the chance to 'slim down' my REIT portfolio by letting go of all my individual Singapore REITs (SREITs) and several Malaysia REITs (KIP REIT, Sentral REIT). For Malaysia REITs, I only sold them off after ex-date so I am still eligible for the dividends. 

I've been wanting to slim down my REIT portfolio as I have no capacity to manage individual REITs and now I finally got it done!

As a replacement, I transitioned to Syfe's REIT+ portfolio, which is essentially something like a REIT ETF that tracks a basket of SREITs. I truly like the ease of automatic dividend-reinvestment without the hassle to deal with corporate actions (eg. rights issue, DRIP) etc!

 

Stocks/ETF Ticker Dividends Received Dividends Received (RM)
Atrium REIT 5130 RM82.62 RM42.00
Axis REIT 5106 RM12.16 RM12.16
IGB REIT 5227 RM50.81 RM50.81
KIP REIT 5280 RM17.59 RM17.59
Sentral REIT 5123 RM43.51 RM43.51
Syfe REIT+ SGD1.62 RM5.02
Total Dividends Received RM211.71

[Note] Rotate your screen if you cannot view the full table in portrait mode. Dividends are considered received as per dividend ex-date.

Exchange Rate: 

  • SGD1=RM3.10

February 2022 Wrap-Up

  • Dividend Income (February): RM211.71
  • Dividend Income (2022): RM222.59

February is usually a high dividend month as most Malaysian REITs announce their Q4 dividends in late January with the following month as the ex-date. Now that I've sold many of my individual REITs, things may change a little moving forward. 


January 2022 Dividend Income Update

As a REIT investor, January has been a relatively slow month for me. All in all, I received RM10.88 from Keppel DC REIT, a small Singapore REIT (SREIT) holding in my portfolio.

I've received my dividends from many of my Singapore REIT holdings late last year and most Malaysian REITs have yet to pass their dividend ex-date after their Q4 2021 earnings report - hence the quiet month.

 

Stocks/ETF Ticker Dividends Received Dividends Received (RM)
Keppel DC REIT AJBU SGD3.51 RM10.88
Total Dividends Received RM10.88

[Note] Dividends are considered received as per dividend ex-date.

Exchange Rate: 

  • SGD1=RM3.10

January 2022 Wrap-Up

  • Dividend Income (January): RM10.88
  • Dividend Income (2022): RM10.88

SCHD ETF review dividend investing

SCHD Review: 3 reasons why this is my favorite US Dividend ETF to hold long-term!

The beauty of dividend investing is we continue to receive dividends regardless of market conditions.

What if there’s something better? What if your investment pays you MORE dividends as time goes by?

With dividend ETFs such as Schwab US Dividend Equity (SCHD), this is certainly possible.

In this post, let us look at SCHD, and 3 key reasons why it is my favorite dividend ETF to hold for the long term in my Freedom Fund!

--

p.s. Looking to learn dividend investing? My ultimate guide to dividend investing is coming REAL soon! Sign up HERE to be the first to know when it is ready and enjoy extra perks & discounts!

p.

Quick Recap: What is an ETF & why dividend ETF?

Exchange-Traded Fund (ETF) is essentially low-cost funds listed in the stock market, where you can buy and sell just like stocks.

Simply put, ETFs are funds that track the performance of a basket of assets (eg. Stocks, bonds, commodities).

As such, dividend ETFs are ETFs that track a basket of dividend-paying assets, such as stocks and bonds.

ETF is an amazing investment choice for beginners and experienced investors alike.
ETF is an amazing investment choice for beginners and experienced investors alike.

Why invest in dividend ETFs?

Dividend ETFs make it easy for investors to gain diversified exposure to a basket of dividend-paying stocks (or other assets), without having to pick individual stocks.

The diversified nature of ETFs significantly reduces the impact should a single company perform badly.

LEARN MORE: Introduction to Exchange-Traded Fund (ETF)


What is SCHD?

Schwab US Dividend Equity (SCHD) is a dividend ETF listed in the US stock market since 2011.

SCHD tracks the Dow Jones U.S. Dividend 100 Index, which measures the performance of fundamentally solid US-listed companies with a track record of consistent dividend payment.

Key info:

  • ETF manager: Charles Schwab
  • Holdings: US-listed stocks
  • Expense Ratio: 0.06% per annum
  • Dividend payout: Quarterly

 


3 key reasons why I invest in SCHD

#1 SCHD has a strong track record of growing dividend payout

Since its inception in late 2011, SCHD has recorded a 10-year streak of increasing distribution (even as Covid broke out in 2020!).

 

Even more impressive, despite a challenging 2022, SCHD managed to grow its distribution per unit (DPU) compared to the prior year:

 

 

Why is SCHD’s growing dividend payout so attractive long term?

Assuming that you invested a $1,000 one-off in SCHD in January 2012, the annual dividend that you’d receive would grow from $31.30 in 2012 to $113.88 in 2021. (Considering dividend reinvested)

 

Why is this significant?

Because if we were to translate the dividend amount ($) to yield on cost (%), this means your dividend yield from the $1,000 investment would grow from an initial 3.13% in 2012 to 11.39% in 2021!

 

[IMPORTANT] It is important to note this discussion is a reference to the past, and past performance is NOT indicative of future returns.

 

#2 Solid Overall Performance (SCHD vs S&P500)

SCHD not only shines with its impressive track record of growing dividends. With a 10-year annualized return of 13.40% (as of 31/10/2022), SCHD’s overall performance has also been also solid for the past decade.

In fact, SCHD's return slightly outperformed the S&P500 (which represents the largest 500 US-listed companies) which achieved a 10-year annualized return of 13.10%.

SCHD vs VOO annual return (Oct 2022)
SCHD vs S&P500 (VOO) Annual Return since 2012 (as of 31/10/2022) [Source: Portfolio Visualizer]

p.

#3 Relatively Low volatility

On top of both key reasons stated above, SCHD also produced returns at relatively lower volatility than the stock market (S&P500).

Beta measures the volatility of a stock in comparison with the market (usually the S&P500) as a whole.

As of 31/10/2022, SCHD recorded a 10-year beta of around 0.9 (source: Yahoo finance), which means SCHD is about 10% less volatile than the S&P500 (beta: 1.0) in the past 10 years.

In other words, investors that invested in SCHD enjoyed better returns without experiencing swings as volatile as the overall market in the past 10 years.

SCHD vs VOO drawdown comparison
SCHD vs S&P500 (VOO) Drawdown Comparison. [Source: Portfolio Visualizer]

SCHD Holdings

SCHD’s relatively stable volatility nature has a lot to do with the type of stocks that it held. How does it know which stocks to include?

SCHD tracks the Dow Jones U.S. Dividend 100 Index. Essentially, stocks are filtered based on the following criteria:

  • Dividend payout: Minimum 10 consecutive years of dividend payments.
  • Size of the company: Minimum Float Adjusted Market Cap of $500 million.
  • Liquidity: Minimum three-month Average Daily Volume of Trading of $2 million.

Then, qualified stocks are further ranked as per the following criteria:

  • Dividend yield
  • 5-year dividend growth rate
  • Company’s financial health (ie. Free cashflow vs debt)
  • Return on equity (ROE)

As a result, companies that are qualified and have higher weightage in SCHD holdings are usually companies with strong financial health that have a solid track record of dividend payout.

Top 10 holdings of SCHD:

As of 31/10/2022, SCHD holds about 103 stocks. The top 10 companies make up >40% of SCHD holdings:

Top 5 Sector Exposure of SCHD

In addition, SCHD filtering method also means companies that qualified are commonly found in more stable sectors, such as the financials and industrial sectors.


2 Things/risks to know while investing in SCHD:

At a glance, SCHD is a pretty balanced dividend ETF with 103 holdings across different sectors. That said, here are 2 key things we need to know while investing in SCHD:

#1 Geographical risk

SCHD offers 100% exposure to US-listed companies. This means any domestic/international US-related events & conflicts will influence the performance of SCHD.

 

#2 Dividend withholding tax (WHT) for non-US residents

For foreign investors that invest in US-domiciled ETFs such as SCHD, there is a dividend withholding tax (WHT) for dividend payouts. As an example, there is a 30% dividend WHT for investors from Malaysia and Singapore.

Example: 3.5% dividend yield – 30% WHT = 2.45%

Personally, while this is not ideal, I still find SCHD’s solid track record of increasing dividend payout outweighs the dividend withholding tax factor. It is the only US-domiciled dividend ETF that I wouldn’t mind investing in.

LEARN MORE: A guide to Dividend Withholding Tax (WHT) - all you need to know! 


Who should invest in SCHD

SCHD is a dividend ETF with a solid track record of growing dividends, while providing respectable growth opportunities at the same time.

In my opinion, SCHD would fit well with:

  • Long-term investors (>10 years of time horizon) looking to invest for a steady & reliable stream of dividend income.
  • Dividend investors with portfolios in Malaysia and/or Singapore stocks and are looking for diversified & stable exposure to the US stock market.

How to invest in SCHD?

Investing in SCHD is easy as there are many brokers that offer access to the US stock market.

Malaysian investors can consider Rakuten Trade, a regulated broker in Malaysia that offers access to the US stock market.

READ MORE: Rakuten Trade US Stock Trading Review

Trade US and Malaysia stocks on Rakuten Trade
Trade US and Malaysia stocks on Rakuten Trade

🎁 Rakuten Trade Referral Link for New Users

Rakuten Trade Referral Link

If you are keen to open a Rakuten Trade account, consider using my referral link below! For that, you'll get:

  • 1000 Rakuten Trade (RT) points worth RM10 to offset your brokerage fee.
  • + 150 RT points when you deposit a min. of RM5,000 within 5 days.
  • + 150 RT points when you transfer your shares from other brokers to Rakuten Trade.
  • + 1x brokerage fee rebate when you place your 1st trade within 30 days after your account is activated.

Aside from that, Rakuten Trade users get +1 RT point for every RM2 brokerage paid! Click HERE for the full T&C on RT points

Open a Rakuten Trade Account Today!


No Money Lah’s Verdict

So, how do you like SCHD?

As a dividend investor with about 15 – 20 year time horizon, I think SCHD is a gem thanks to its track record of increasing dividends (even more so in a challenging 2022!).

I hope this review has been helpful!

If you like to learn more about dividend investing, I am excited to share that my ultimate guide to dividend investing is coming REAL soon! Sign up HERE to be the first to know when it is ready and enjoy extra perks & discounts!


Disclaimers

Any of the information above is produced with my own best effort and research. 

This post is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.

This post may contain promo code(s) that afford No Money Lah a small amount of commission (and help support the blog) should you sign up through my referral link.


Versa Cash Review: A Great Alternative to Fixed Deposit (FD)!

Fixed Deposit, or FD, has always been people’s go-to way to save or deposit extra cash. The problem is, it locks your money in for a long period of time, or requires a high initial deposit to start with.

In this article, let’s look into Versa Cash, a great alternative to FD in Malaysia. Personally, I've been using Versa Cash since 2021 and I absolutely love it! In this post, let's explore if Versa is for you! 

[NEW: Get 4% promo return rate with Versa Cash starting 1/11/2022! Find out more at the end of this post!]

p

Highlights of Versa Cash

Established in 2021, Versa Cash is a digital cash management service that provides users competitive returns like FD, but without the troublesome restrictions:

  • Regulated: Versa is regulated by the Securities Commission (SC) of Malaysia.
    p
  • Competitive Return: Through Versa, users can earn a projected rate of 2.5% interest per annum, which is on-par with the rates of Fixed Deposit (FD).
    p
  • Low Risk: The underlying fund of Versa is the Affin Hwang Enhanced Deposit Fund. It is a money market fund that invests users’ money in highly liquid & low-risk cash instruments.
    p
  • Flexible & Low Barrier of Entry: Malaysians aged 18 and above can start saving or investing via Versa from as low as RM1. Withdraw anytime without being charged penalty fees.
Versa Cash 4% promo rate
Get 4% on your savings with Versa Cash - limited time only!

How does Versa Cash work?

So, how exactly is Versa Cash able to deliver returns that are on-par with FD?

This is possible because Versa helps invest users’ cash into money market funds (MMF). MMFs are funds that invest in Fixed Deposits and highly liquid, short-term cash equivalent instruments called Money Market Instruments.

Essentially, Money Market Instruments are short-term debts issued by banks in order to accumulate short-term cash-pile to make up for the shortfall in their daily deposit reserve. Simply put, MMFs are lending money to banks when they buy these Money Market Instruments.  

These instruments are relatively low-risk as they are backed by the banks. Moreover, they are highly liquid with short maturity periods. Through regular redemption of matured Money Market Instruments, it allows MMF to provide a similar rate to FDs without having to lock up users’ capital.

For Versa, the underlying MMF that they invest in is the Affin Hwang’s Enhanced Deposit Fund. It is a low-risk MMF by Affin Hwang Asset Management.

In short, through Versa Cash, you can earn a similar rate to FD through low-risk MMF without having to lock up your funds, unlike conventional FDs. It is a great choice if you are looking for a competitive and flexible alternative to FDs.

Versa Homepage
Versa is a new digital cash management app that gives competitive returns on par with FDs. (Source: Versa's website)

Is Versa Cash Safe to Use?

When it comes to regulation, Versa is regulated by the Securities Commission (SC) of Malaysia. This ensures that Versa is always operating in Malaysia as per the guideline from the local authority. 

As for the safety of funds, the cash deposits from users are held by a third party (trustee), which is HSBC (Malaysia) Trustee.

In other words, your deposits to Versa are separate from Versa’s company finances. As such, this ensures no deposits can be used for fraudulent purposes and you will always have full access and claim to them no matter what happens to Versa.


Versa Cash Fees & Charges

As a digital cash management platform, Versa Cash does not charge a fee to users. That said, the underlying MMF, Affin Hwang’s Enhanced Deposit Fund, does charge reasonable annual fees, as shown below:

% per annum
Management fee per annum

-0.30%

Trustee fee per annum

-0.05%

Projected net return per annum (AFTER fees)

2.50%

Next question: Are there any fees on fund withdrawal via Versa?

Unlike FDs, there are no charges when you withdraw your funds from Versa. Withdrawals are expected to be reflected within 1-2 business days depending on the time of withdrawal (ie. before or after 2:30pm during business days).

At this point, perhaps a question that you have in mind is “So how does Versa make money?”.

Aside from Versa Cash (which is free to use), Versa also offers investment services via Versa Invest. Through Versa Invest, Versa will charge a small management fee which is their key income source. 

READ MORE: Versa Invest Review


3 things I like about Versa Cash

#1 Performance on par with conventional Fixed Deposits (FDs)

Through Versa, interests are compounded daily and interest payout is made every month, which is re-invested into user’s fund.

All of this combined, through its underlying Affin Hwang Enhanced Deposit Fund, Versa projects about 2.5% return per annum (AFTER fees) for users.

Versa Cash returns (updated 2022)
Versa Cash offers a projected annual return of 2.5% net of fees.

p

#2 Flexible & Low barrier of entry

2 amazing features about Versa are:

  1. Low barrier of entry: You can start investing or saving with Versa from as low as RM1. Even better, using my exclusive referral code VERSANML3, you can get RM10 credited into your Versa account when you make a minimum deposit of RM100!
    p
  2. Flexible: There are no charges to open a Versa account. In addition, you can withdraw your funds anytime and there are no fees on withdrawal.

Combined, both these features make a compelling edge against conventional FDs. Reason being, FDs usually have higher minimum deposits & they tend to lock in users for a period of time (and charge a penalty for early withdrawals).

p

#3 Simple & clean user experience (suitable even for my retired mom!)

Perhaps my favorite experience with Versa is their simple and clean user interface.

As a simple digital cash management platform, I enjoy the design of the app that clearly shows the capital invested and payout.

In fact, when my retired mom was looking for a better FD alternative to save her idle cash, I recommended Versa without hesitation. This is because I know she can totally navigate the app with clarity & confidence.

Versa UI 2
Versa provides a simple and intuitive user experience that anyone can understand easily.

Risks + What You Need to Know Before Investing in Versa Cash

In this part, let’s look at 3 things that you need to be aware of while investing your money with Versa:

  1. Market risk

While being a relatively stable investment, investing in Money Market Fund (MMF) via Versa still presents exposure to market risk.

One such risk is the fluctuation in interest rate. As an example, if Bank Negara Malaysia (BNM) increases interest rate, MMF is likely going to generate higher returns. On the flip side, if BNM reduces interest rate, it’ll also affect the returns of MMF as a result. 

p

  1. Not protected by PIDM

While investing in Versa, it is important to remember that your fund is not protected by Perbadanan Insurans Deposit Malaysia (PIDM).

PIDM is an organization that protects deposits kept in banks and financial institutions that are a member of PIDM. Conventional bank FDs are usually protected by PIDM.

p

  1. Not shariah-compliant

In addition, Versa’s underlying MMF, Affin Hwang Enhanced Deposit Fund is not shariah compliant.

Hence, this is something that you need to be aware of prior to investing with Versa.


Improvement: ONE Feature Versa HAS to Add

As a Versa user myself (also having opened an account for my mom), there is one handy feature that I think Versa Cash lacks: Automatic Scheduled Transfer.

Being a digital cash management platform, I think having the convenience for users to automate their deposits every week/month should be a fundamental feature.

While I enjoy using Versa, I think this improvement will make Versa a more complete financial app.


Eligibility + Is Versa Cash for You?

Versa is open to Malaysian citizens who are 18 years old and above with an NRIC/MyKad. This means that even young Malaysian adults can start building good financial habits by saving/investing from their phones – neat!

That said, is Versa for you?

To answer this question, it is best to first know what Versa is NOT:

  • Versa Cash does not invest in stocks/equities (ie. Higher risk assets). Hence, do not expect mutual fund/robo-advisors-like returns.
  • Versa Cash does not guarantee returns. Even though it invests in low-risk MMF, returns are still subjected to market fluctuation.

Hence, in my opinion, Versa Cash is great for:

  1. People looking for a flexible alternative to FD & typical savings account for general savings
  2. People looking to save for a specific goal (eg. house, car, wedding)
  3. People with extra cash and want to save it for the short-term

Versa Promo Code: VERSANML3

In collaboration with Versa, No Money Lah is bringing an exclusive deal for new users that are keen to start saving or investing with Versa!

Use my dedicated Versa referral code – VERSANML3, and you will get RM10 credited into your account* when you successfully make a minimum deposit of RM100 or more. That’s an instant 10% return on your investment.

Open a Versa account today!

Versa Promo Code


How to open a Versa Account

Creating a Versa account is simple and straightforward:

Step 1: Click HERE to install the Versa app.

Remember to apply referral code 'VERSANML3' for an exclusive RM10 account-opening reward!

Open a Versa account today!

Step 2: Start your account opening process by keying in the necessary details such as a new display name, email address, and password. 

Versa Account opening
Versa Account Opening process is simple & straightforward

Step 3: You’ll go through a simple identification process where you’ll be asked to verify your mobile number, IC, and personal details. This is a required process by the regulators to make sure it’s the real you that’s opening an account.

Step 4: It’ll take about 2-3 business days to verify your account. Once that’s done, you can start investing in Versa by making your first deposit!

Versa Deposit
Once your account has been verified, you can start depositing funds to Versa!

Versa or StashAway Simple or KDI save?

In terms of offering, Versa’s closest competitor is certainly KDI Save and StashAway Simple. Both offer users flexible and low-barrier access to MMF that pays competitive FD-like rates.

I think this comparison deserves a full article on its own so I’ll attach a link HERE when I come out with a comparison article real soon! 

Personally, I use both Versa, KDI Save, and StashAway Simple to save for different purposes and I am happy with them as an alternative to FD (I think you will, too!).

READ: The Ultimate FD-Killer Showdown: StashAway Simple vs Versa vs KDI Save vs TNG Go+ vs BEST Invest!


[LIMITED-TIME PROMO] Get 4% return on your savings via Versa Cash!

Looking to get more out of your cash? From 1/11/2022 - 31/1/2023, all Versa Cash users are eligible for a promotional rate of 4% on their cash!

How it works:

  1. Versa Cash's 4% promotional rate is applicable to all new & existing Versa Cash users.
  2. The promotional rate is automatically applied to the first RM30,000 in your Versa Cash account. Any subsequent balance above RM30,000 will continue to earn Versa Cash’s base net return rate of 2.5% p.a.
  3. Promotional period: 1/11/2022 - 31/1/2023
  4. Refer to the full T&C for more info.

I think this is GREAT news if you are looking for a higher rate for your savings! Remember, there is no lock-in period for Versa Cash and you are free to withdraw your funds anytime!

Open a Versa account today!

Versa Cash 4% promo rate
Get 4% on your savings with Versa Cash - limited time only!

No Money Lah’s Verdict

So there you have it, my review on Versa! If you are looking for an FD alternative to invest/save your cash, Versa is a platform that I can wholeheartedly recommend you to try.  

Personally, I enjoyed using the platform and I think you will, too! 

Open a Versa account today!


Disclaimers

Investment in a money market fund is not the same as placement in a deposit with a financial institution. There are risks involved and investors should consult a financial planner before making any investment decisions.

This post contains affiliate links/code that afford No Money Lah a small amount of commission (and help support the blog) should you sign up through my affiliate link/code.


StashAway Simple Review

StashAway Simple Review: The Fixed Deposit (FD) Killer?

Fixed Deposit, or FD, has always been people’s go-to way to save or deposit extra cash. The problem is, it locks your money in for a long period of time, or requires a high initial deposit to start with.

In this article, let’s look into StashAway Simple, a great alternative to FD. Personally, I’ve been using StashAway Simple since mid-2020, and in this post, let’s explore if StashAway Simple is for you! 

p

Highlights of StashAway Simple

StashAway Simple (or 'Simple') is a cash management offering from robo-advisor StashAway. It provides users competitive returns like FD, but without the troublesome restrictions:

  • Regulated: StashAway Simple is regulated by the Securities Commission (SC) of Malaysia.
    p
  • Competitive Return: Through Simple, users can earn up to 3% interest per annum, which is comparable to the rates of Fixed Deposit (FD).
    p
  • Low Risk: The underlying fund of Simple is the AmIncome Fund from AmFunds Management Berhad. AMIncome Fund invests in a mix of money market funds and short-term corporate bonds.
    p
  • Flexible & Low Barrier of Entry: Malaysians aged 18 and above can start saving or investing via Simple. There is no minimum on how much you need to save with Simple. Withdraw anytime without being charged penalty fees.

[Update November 2022] With the increase in interest rate by the central bank lately, StashAway Simple has also raised the returns from 2.9% to 3% per annum. 

StashAway Simple Review - Get up to 3% p.a. on your savings with StashAway Simple!
StashAway Simple Review - Get up to 3% p.a. on your savings with StashAway Simple!

How does StashAway Simple work?

So, how exactly is Simple able to deliver returns that are on-par with FD?

All of this is possible because Simple invests users’ cash into money market funds (MMF). MMFs are funds that invest in Fixed Deposits and highly liquid, short-term cash equivalent instruments called Money Market Instruments.

Essentially, Money Market Instruments are short-term debts issued by banks in order to accumulate short-term cash-pile to make up for the shortfall in their daily deposit reserve.

Simply put, MMFs are lending money to banks when they buy these Money Market Instruments. These instruments are relatively low-risk as they are backed by banks. Moreover, they are highly liquid with short maturity periods.

Through regular redemption of matured Money Market Instruments, it allows MMF to provide a similar rate to FDs without having to lock up users’ capital.

For Simple, the underlying MMF that they invest in is the AmIncome Fund from AmFunds Management Berhad.

In short, through Simple, you can earn a similar rate to FD through low-risk MMF without having to lock up your funds, unlike conventional FDs. It is a great choice if you are looking for a competitive and flexible alternative to FDs.

StashAway Simple Review 2022
Get up to 3% p.a. on your savings via StashAway Simple.

Is StashAway Simple safe to use?

When it comes to regulation, Simple is regulated by the Securities Commission (SC) of Malaysia. This ensures that Simple is always operating in Malaysia as per the guideline from the local authority.

As for the safety of funds, your funds in Simple are held by a third party (trustee), which is Deutsche Trustees Malaysia Bhd. In other words, your deposits to Simple are separate from StashAway’s company finances. As such, this ensures no deposits can be used for fraudulent purposes and you will always have full access and claim to them no matter what happens to StashAway.


StashAway Simple Performance, Fees & Charges

StashAway Simple does not charge any platform or service fee to users. That said, the underlying MMF, AmIncome Fund, does charge reasonable annual fees, as shown below:

 

% per annum

Annual Management Fee

- 0.75%

Annual Trustee Fee

- 0.05%

Net Annual Projected Return after fees & rebate

3%

A thing worth noting is that StashAway does get fee rebate from AmFunds Management, likely due to the size of capital that StashAway Simple can channel to the fund (p.s. just my opinion). As such, when AmFunds Management rebates StashAway, they’ll re-distribute this full rebate to users.

SA Simple Rebate
StashAway channels the fee rebate that they get from the fund managers back to the users.

Next question: Are there any fees when you withdraw your funds from StashAway Simple?

Unlike FDs, there are no charges when you withdraw your funds from StashAway. Withdrawals are expected to be reflected within 3-4 business days.


4 things I like about StashAway Simple

#1 Returns on par with conventional Fixed Deposits (FDs)

Through Simple, returns are compounded daily and interest payout is made every month, which is re-invested into user’s fund.

All of this combined, through its underlying AmIncome Fund, Simple projects about 3% return per annum (after fees) for users.

[Update November 2022] With the increase in interest rate by the central bank lately, StashAway Simple has also raised the returns from 2.9% to 3% per annum. 

SA Simple Projected Return
StashAway Simple Projected Return

p

#2 Flexible & low barrier of entry

There are 2 things that I absolutely love with Simple:

  1. Low barrier of entry: There is no minimum amount to start using Simple. Meaning, you can start investing or saving with Simple with any amount you want.
    p
  2. Flexible: There are no charges to open a StashAway Simple account. In addition, you can withdraw your funds anytime and there are no fees on withdrawal.

Combined, both these features make a compelling edge against typical FDs. Reason being, FDs usually have higher minimum deposits & they tend to lock in users for a period of time (and charge a penalty for early withdrawals).

p

#3 Integration with StashAway main investment ecosystem

Another reason why I enjoy using StashAway is its seamless savings (StashAway Simple) and investment (StashAway) integration.

So, let’s say you have RM50,000 in cash and would like to invest them. However, you do not want to invest the whole RM50,000 at once and would like to spread it over time (dollar-cost average).

Through StashAway app, you can place your funds in Simple (low-risk + earn stable interest), then automate a weekly or monthly transfer from Simple to your main StashAway investment portfolio.

I think this is a brilliant feature from StashAway, which makes it the most versatile robo-advisor at the moment. 

SA Simple Transfer from Simple to main Portfolio
Users can shift funds flexibly from Simple to their main StashAway investment portfolio.

p

#4 Intuitive user experience

As an app catered for the general public, StashAway is really simple to use.

Even if you need any help, StashAway’s customer support is one of the best I’ve ever experienced when it comes to financial products.

SA Simple in the app
Simple can be accessed easily from the StashAway app.

Risks + What you need to know before investing in StashAway Simple

In this part, let’s explore 3 things that you need to be aware of while investing your money with Simple:

1. Market risk

While being a relatively stable instrument, investing in Money Market Fund (MMF) via Simple still presents exposure to market risk.

One such risk is the fluctuation in interest rate. For instance, if Bank Negara Malaysia (BNM) increases interest rate, MMF is likely going to generate higher returns. On the other hand, if BNM reduces interest rate, it’ll also affect the returns of MMF as a result.

p

2. Not protected by PIDM

While investing in Simple, it is important to remember that your fund is not protected by Perbadanan Insurans Deposit Malaysia (PIDM).

PIDM is an organization that protects deposits kept in banks and financial institutions that are a member of PIDM. Conventional bank FDs are usually protected by PIDM.

p

3. Not Shariah-Compliant

Futhermore, Simple’s underlying MMF, AmIncome Fund is not shariah compliant.

Hence, this is something that you need to be aware of prior to investing with Simple.


Improvement: 2 Improvements Needed for StashAway Simple

Having been a Simple user since its launch, I think there are 3 improvements needed for Simple to compete with competitors like Versa:

1. Automatic scheduled transfer

One thing that puzzled me with StashAway is, I can schedule a routine transfer to my normal StashAway investment portfolio from my bank account, but I cannot do so for Simple.  

I think having the convenience for users to automate their deposits every week/month into Simple should be a fundamental feature.

While I enjoy using Simple, I think this improvement will make StashAway a more solid financial app.

p

2. Withdrawal speed

StashAway Simple has a 3-4 business days withdrawal speed. While this is reasonable, it falls behind competitors like Versa that has a 1-2 business days withdrawal.

I think this is a space that StashAway can improve on as well.

READ: Versa Review: A Great Alternative to Fixed Deposits (FD)!


Eligibility + is StashAway Simple for you?

The minimum age required to open an account with StashAway is 18 years old. Meaning, even young Malaysian adults can start building good financial habits by saving/investing from their phones – neat!

That said, is StashAway Simple for you?

To answer this question, it is best to first know what Simple is NOT:

  • Simple does not invest in stocks/equities (ie. Higher risk assets). Hence, do not expect mutual fund-like returns.
  • Simple does not guarantee returns. Even though it invests in low-risk MMF, returns are still subjected to market fluctuation.

Hence, in my opinion, Simple is great for:

  • People looking for a flexible alternative to FD & typical savings account.
  • People looking to save for a specific goal (eg. house, car, wedding)
  • People with additional cash and want to save it for the short-term
  • People with a stash of cash looking to invest, but would like to spread the investment across time. (StashAway & StashAway Simple is perfect for this)

StashAway Simple or Versa or KDI save?

In terms of offering, StashAway Simple’s closest competitor is certainly KDI Save and Versa. Both offer users flexible and low barrier access to MMF that pays competitive FD-like rates.

I think this comparison deserves a full article on its own so I’ll attach a link here (it's up!) when I come out with a comparison article real soon! 

Personally, I use StashAway Simple, Versa, and KDI Save to save for different purposes and I am happy with them as an alternative to FD (I think you will, too!).

READ: The Ultimate FD-Killer Showdown: StashAway Simple vs Versa vs KDI Save vs TNG Go+ vs BEST Invest!

StashAway Simple vs KDI Save vs Versa Cash returns (updated Nov 2022)
StashAway Simple vs KDI Save vs Versa Cash returns (updated Nov 2022)

StashAway Referral link

No Money Lah is working with StashAway to bring new users an exclusive 50% off your fees for the first RM100,000 invested for 6 months.

Since it is Simple is free to use, this deal is applicable if you eventually use StashAway robo-advisor portfolio to invest.

To be eligible for this deal, sign up for your StashAway account through my referral link HERE. (or HERE if you are from Singapore)

Start Investing with StashAway Today!


EXCLUSIVE: Use my referral link to get 6 months FREE management fee up to RM100,000 invested!
EXCLUSIVE: Use my referral link to get a 6-month FREE management fee up to RM100,000 invested!

 


No Money Lah’s Verdict: Simple is the New Breakthrough

With the rise of innovations in the financial solution space, it is refreshing to keep seeing new, innovative products from robo-advisor platforms like StashAway.

In many ways, in the financial services industry, Simple is indeed the new breakthrough that consumers need. With Simple, everyday consumers can enjoy returns on par with FD without the typical restrictions. 

Personally, I have always enjoyed using StashAway, and I highly suggest you to check it out too!


Related: Read my full review on StashAway HERE


No Money Lah by Yi Xuan blog

15 Career & Life Lessons I Learned as a Self-Employed Blogger for 5 Years

No Money Lah turns 5 this year!

If you were to tell me that someone you know is making a living running a blog many years ago, I’d be rolling my eyes in front of you.

In fact, this was what actually happened when my mom told me about the son of her colleague that makes his living through blogging.

“This is absurd. Is it sustainable? Why not go get a proper job?”

But fast forward to the present: I’ve been self-employed running my blog, No Money Lah for close to 5 years, writing all things personal finance and investing.

In this post, I want to share some reflections on the career & life lessons that I’ve learned in the past 5 years.

I hope you find this a good read as much as it is a good reflection for me!

p.s. If you like what you read, consider subscribing to my free weekly newsletter as I will cover more quality content on personal finance and investing!

p.

How are you doing?

“Can you make money blogging?”

When it comes to making a living, I consider myself very fortunate & lucky as I actually managed to make a relatively okay (not a lot, but OK) living out of my blogging income.

That said, the first 2 years of my self-employed journey were challenging.

I left my first full-time job which paid me RM4.5k/month. I wasn’t able to earn much from blogging (I wasn’t even sure how). I had to become a part-time table tennis coach on the side to supplement my income.

But with time, with strokes of luck, and by actually staying long enough in the game (+ learning along the way), breakthroughs & opportunities finally came in my 3rd year:

Annual Income as a self-employed
Annual Income as a self-employed

So, for friends that are curious, I am doing alright. Not wealth-breaking, but good enough for me to sustain my investment and savings routine while having extra left to spend on people and things that matter to me in life.

Yi Xuan @ No Money Lah
Time flies and I am heading to the last few years of my 20s now!

Now, on to the lessons that I’ve learned (and still learning) in the past 5 years:


On business & career

  • Instead of tell, show. If you are good at something, show the world your work instead of spending time telling people how good you are. Most can talk, few can execute.
  • Pursue curiosity, not passion. The ability to be intrigued and curious is what makes life interesting. Screw finding your passion – start with what makes you curious. What are some problems in your life that you are intrigued to solve?
  • Don’t be shy, show your work (and progress). Your first few projects will suck and it is alright. No one gets it perfect at the start. One B+ article is always better than the A+ idea that stays in your head. (reminder to self)
  • Be a specialist – you win nothing when you try to get everyone as your customer.
  • Ethics above everything else. Be honest + transparent upfront. Be clear on what you can or cannot deliver.
  • Good read: Linchpin by Seth Godin.

On falling behind in life

  • Define your self-worth or the society (eg. Instagram, friends & colleagues, bosses, family members) will do it for you.
  • What we see on social media is the curated version of people’s lives, not the whole of them. The more you want your life to resemble what others are showing on social media, the more miserable you are in real life.
  • When overwhelmed, spend less time on social media. The mental peace you gain from a social media diet is massive.
  • It’s never about catching up in life because there is nothing to catch up on. It’s about finding peace with where you are now, and the thrill of pursuing your full potential as a person. Changing how we look at life is so important.

On money & wealth

  • Can you be happy with less? The ability to find satisfaction in simple, little things in life is a superpower to sustainable happiness that many do not have.
  • Having the foresight to plan ahead in life is crucial. From buying your first car, planning for a family & kids, aging parents, and your own retirement, to unexpected incidents such as retrenchment – there are so many expenses in life that’d catch you off guard if you are not prepared ahead.
  • One of the worst feelings in life is to be at the mercy of others. The best feeling in life is knowing that you have choices. Proper financial planning can give you both dignity and freedom in life.
  • The biggest measure of wealth is not having luxury cars or watches. It is the ability to do what you want, when you want, with who you want, for as long as you want. It is the highest dividend money pays.
  • Good read: The Psychology of Money by Morgan Housel.
Having choice is the highest dividend that proper financial planning pays.
Having choice is the highest dividend that proper financial planning pays.

On time & priority

  • Time is more precious than money. We all know this, but isn’t it crazy how we think twice (and thrice) when people try to borrow money from us, yet be so generous when people ask us for ’10 minutes of our time’? Definitely something to ponder about.
  • When we say ‘Yes’ to someone's agenda, we closed up the doors to something else. Likewise, when we say ‘No’, we opened up the doors for us to explore something else. Set your priorities right in life (eg. family, health, career, relationship, etc) so you have a clearer guide on what to and what not to dedicate time to.
  • Good read: Atomic Habits by James Clear

james clear say no


On the biggest challenges that I face

  • With everything written above, let me be clear that I am still internalizing these lessons and I still mess up every now and then.
  • (Bad) Routine & Habit: In my self-employed journey, I find it the hardest to maintain a disciplined routine. I still find it difficult to sleep early at night which always causes me to become unproductive in the morning. I don’t like my overreliance on binging Youtube as an escape whenever I am stressed or faced with problems at work.
  • Feeling guilty for not working: As a self-employed, I always feel guilty whenever I am not spending time on work. Ironically, I get burnout a lot whenever I overwork and this causes my productivity to go down as I use Youtube as an escape during work.

No Money Lah’s Verdict

So there you have it – the lessons I learned & the challenges that I face in my self-employed journey.

I hope you find this post helpful as I did while reflecting on my journey!

If you like what you read, consider subscribing to my free weekly newsletter as I will cover more things on personal finance and investing!

p.


How to write a will in malaysia

My will-writing experience in Malaysia

So, I’ve decided to create my own will at 28.

The idea of dying is a scary one – but it’s the only certain thing in life.

In this post, let’s explore will writing in Malaysia:

How does a will work? Is will-writing complicated? How much does it cost? What do you need to know while looking to create your own will?

Let’s find out!

p

Useful terms used in will-writing:

  1. Estate: Property and assets of a person after he/she passes away
  2. Executor: The person that you appoint legally to execute your will

What is a will?

A will is a legal document where you decide what happens to your assets (or ‘estate’) once you pass away.

Essentially, through a will, you get to legally appoint someone as an executor of your will to ensure that your assets go to the appropriate people.

“Haiya, I don’t own a lot of things so I do not need a will.”

“I am still young so I do not need a will yet.”

Regardless of how many assets you own or your age, a will is still an important document to own. This makes sure that your assets get distributed smoothly to the people you care for after you pass away.

In Malaysia, there are 2 types of will: Wasiat for Muslims and Will for non-Muslims.  For this post, I will focus namely on my research and personal experience on will-writing as a non-Muslim. Feel free to find out more about Wasiat HERE.  

Will-writing in Malaysia: cost and process
All thanks to Stev, my financial planner for guiding me through the whole will-writing process!

Why I write my will at 28 (+ when you should write a will)

From the surface (or from movies & dramas), writing a will seems to be done by the super-rich people with a lot to pass down. 

In fact, writing a will is such a taboo in Asian families. I recalled a story where my grandparents (when my grandfather was still alive) were actually angry when the topic of will-writing is being raised in the family. 

Ironically, writing a will isn't so much for the people that write it. It's for the people that they care - where they do not have to go through sh*t in order to distribute the assets of the deceased (more on this in the next section).

Personally, I am by no means super rich. But I am lucky to have accumulated some assets from my working years so far. 

Hence, it's only responsible that I have my own will so my family does not need to go through the trouble (mentally + legally) to get my assets if I die one day. 

So, when should you write a will?

Just like investment & retirement planning, writing a will is part of personal finance. It is an aspect that you should not ignore - not for yourself, but for the people that you care for.

As such, the best time to write a will is when you start to own assets like cash, stocks, properties, business, and so on.

More so, you should seriously consider creating a will if you have a family that depends on you. 

when should i write a will in malaysia


Why is a will important? (+ what if we die without a will)

A will is important because it acts as a legal document that determines how your assets get distributed.

Without a will, a combination of all of the scenarios may happen after your demise:

#1 Family members fighting over the inheritance of your assets 

A legal will help avoid any potential family feuds or drama upon your demise.

tvb drama
Get a will and avoid drama! (Source: TVB's Heart of Greed)

#2 You don’t get to decide on the inheritance of your assets

If you die without a will, your assets will be distributed according to the Distribution Act 1958 (refer to the table below). This means you will never get a say on how your assets get distributed.

Malaysia Distribution Act 1958
Malaysia Distribution Act - a default for deceased without a will. (Material provided by WealthVantage Advisory)

#3 It will take a LONG time for your assets to be distributed to the people you care

Without a will, it may take years for your assets to be distributed due to all the additional legal procedures involved. This will be a problem especially if you are the breadwinner of your family and your dependents are not able to access your assets.


Where to write a will?

Method #1: Write a will on your own for free (not recommended)

You do not need special qualifications to write a legally-binding will on your own.

The Malaysian Wills Act 1959 has very simple requirements for a legal will. Namely, it must be signed by you and two witnesses who cannot be beneficiaries. However, unless you have extremely simple wishes, it may not be easy to clearly list all the ways you may want to distribute your assets.

You can also write a will for free via the templates provided on sites such as Tokio Marine. Again, this is more suited if you have a very simple requirement.

Also, bear in mind the legal technicalities that your executor will need to go through to execute your will. In addition, this method does not provide you with the facility to store your will.

tokio marine will writing
Tokio Marine provides will-writing service for free.

Method #2: Write your will via will-writing services

Will can also be created via will writing services. This is a good choice if you plan to create a more detailed will. Many will-writing companies will also guide you through the will-writing process. 

In addition, will-writing services usually come with the option to appoint a professional will executor and custody to secure your will at additional charges.

Examples of will writing services in Malaysia are:

  1. Rockwills
  2. Maybank Trustee Berhad
  3. CIMB Trustee Berhad
  4. Amanah Raya Trustee

To be honest, I have no idea which will-writing service is the best for my needs. Price is one consideration, but the quality of service is also crucial. Hence, I moved on to Method #3 when I plan to write my will. 

rockwills
Rockwills is certainly the brand that many of us would relate to when we talk about will or estate planning.

Method #3: Will writing guidance from Personal Financial Planner

With so many will-writing services available, which is the best for you? How can you create a will that meets your needs, yet fulfills your budget?

If you need non-bias guidance in estate planning (including will writing), engaging a financial planner can be highly helpful.

Personally, I've gotten guidance from my financial planner from WealthVantage Advisory, Stev when it comes to creating my will. The benefits of creating my will with the guidance of my financial planner include:

  1. Unlike agents, financial planners are not attached to a single will-writing company. Hence, they can help clients to search for the most suitable will-writing service that best serves the needs of clients.
  2. Financial planners are also licensed in estate planning, which includes will-writing. This means they have all the knowledge to guide clients through the will creation process.
  3. Since my financial planner, Stev, has been working with me on all aspects of my finances, he’ll have a clearer idea of my financial situation (eg. My goals, assets, liabilities). This makes it much easier for us to work on the will creation.

Through Stev’s guidance, I’ve decided to create my will via Rockwills. 

We are in the midst of getting my will done so I'll update this article as it goes! 

[FREE PERK] Get a FREE financial consultation session today and see how a financial planner can add value to your financial journey - including will-writing! Scroll till the end of this article for more info! 

Will writing with a financial planner in malaysia
Stev guided me through the whole will-writing process.

Will-writing process (UPDATED: My overall experience now that I am done!)

In this section, let's explore the step-by-step process of will creation. Under the Wills Act in Malaysia, anyone with the basic requirement below can write a valid will:

  • At least 18 years old at the time of writing the will.
  • In a sound mind.
  • A will that is produced in writing and signed.

Step 1: Identify assets to be distributed and your beneficiaries

Firstly, identify the assets that you own. Assets can be things like:

  • Movable assets: money, stocks, PRS, and EPF.
  • Immovable assets: properties or land.
  • Alternate assets like cryptocurrencies.

In the meantime, you should also consider how you wish for the assets to be distributed. Identify your beneficiaries and collect their names & IC numbers.

[Side note] Since cryptocurrencies like Bitcoin don’t leave a trail, it is best to include instructions on how to access them in your will.

 

Step 2: Appoint your executor

Next, appoint a legal executor of your will. An executor’s role is to make sure that your will is carried out accordingly.

An executor is anyone that is 18 years old or older. You can appoint up to 4 executors, though that is not necessary.

Specifically, an executor will need to:

  • Identify and locate your will
  • Apply for grant of probate from the court. When a person is granted the grant of probate, he/she is legally allowed to administer your assets upon your death.
  • Identify the list of your assets.
  • Pay off any of your debts/liabilities & taxes.
  • Distribute assets as per your will

Throughout this process, your executor will also take the role of a trustee. Essentially, a trustee is responsible to hold your assets (and keeping a proper record & account of them) on behalf of your beneficiaries until the distribution is completed.

Good to consider:

Now that you understand the role of an executor, it might not be a good choice to appoint your family members or best friend as an executor.

Why?

Because dealing with the work of an executor is a real burden when you consider that the people close to you would be grieving when you pass away. Furthermore, the work can be complex, and not everyone has such expertise to handle the tasks.

As such, it might be a better choice to appoint a professional executor from a will-writing company (eg. Rockwills) as they have the expertise needed to deal with the workload of an executor.

[Side Note] For completion’s sake, an executor can also be the beneficiary of your will. However, as mentioned above, it might not be a good choice to appoint someone close to you as an executor due to emotional and expertise reasons.

 

Step 3: Appointment of guardian

If you have children under 18, you will have to appoint a guardian for them. This person will take care of your children in the unfortunate event that both you can your spouse pass away until they turn 21 years old.

If you don’t appoint a guardian, it will be up to the court to name someone that they think is appropriate.

 

Step 4: Create your will + Appoint 2 witnesses

Now that you gathered all the information needed, you can proceed to create your will through online will-writing services or a trust company (eg. Rockwills).

If you engage a financial planner like myself, they will provide you with an unbiased opinion on which will-writing company to go with. 

Once your will is created, you will have to sign the will in the presence of 2 witnesses. A witness must be anyone 18 years old and above who is NOT your spouse or beneficiary.

[Side Note] From my understanding, due to the pandemic, this process of will-signing with witnesses around does not need to happen in a physical setting and it can happen virtually.

Will-writing malaysia: Appoint 2 witnesses
Getting my 2 friends to become witnesses as I sign to formalize my will.

Step 5: Keep your will in a safe place

That it! Now that your will is created and signed, keep your will in a safe and secured place. Also, you should let your appointed executor know where you place the will.

Normally, if you go with any will-writing services (eg. Rockwills, Maybank Trustee), you'll be given the option to store your will safely under the custody of the company. I'd recommend doing so, as you'll ensure that your will is safe from being damaged or tampered. 

Will-writing Malaysia: Process and cost
Done with writing my will!

What happens after you die with a legal will?

Curious about how a will is executed in the event of your death? Here’s how:

What happens when I die with a will
Material provided by WealthVantage Advisory

When you pass away, your assets will be frozen. With a legal will, the executor of the will then has to go on with the following steps:

  1. Identify and locate your will
  2. Apply for a grant of probate from the court. When a person is granted the grant of probate, he/she is legally allowed to administer the assets of the deceased. This is the key to speeding up the process of asset distribution to your beneficiaries.
  3. Identify the list of your assets.
  4. Advertise in Gazette (ie. Posting on newspaper/social media)
  5. Pay off any of your debts/liabilities & taxes.
  6. Distribute assets as per your will

As you can see, if you die without a will, there will be no legal executor to apply for grant of probate. This results in a long and tedious process in an effort to get your assets distributed.


The cost of writing a will (UPDATED: How much did I spend?)

There is no one fixed cost for will-writing as everyone's needs/wishes are different. 

rockwills will-writing fee
A table of Rockwills will-writing fees that I found online.

Below are a few elements that go into the cost of will-writing. Do note that this is a rough estimation based on my observation – please refer to the respective source for the most accurate pricing:

Cost #1: Creating a will

Creating a will is free if you use platforms like Tokio Marine or write your own will.

That said, I'd highly recommend that you consider going with will-writing services. Price usually starts at RM300+ via will-writing services depending on the number of clauses. Rockwills, for example, starts with a basic 9 clauses package. Then, the more clauses you have, the higher the cost.

 

Cost #2: Custody service to store a will

You can certainly skip this cost by keeping your will in a place where you feel safe (from being damaged or tampered).

Otherwise, will-writing services like Rockwills and Maybank Trustee would normally offer lifetime custody of your will at about RM900 – RM1000+. 

 

Cost #3: Appointment of a professional will executor

You are free to select anyone as an executor.

However, due to the complex legal work that an executor needs to do, I'd highly recommend going with professional executors like the ones offered directly by will-writing companies. 

Usually, it's a one-time payment, starting from RM100+.

 

How much did I spend?

After taking into account all the costs above, I spent a total of RM1620 for my will.

Me and my financial planner, Stev decided to go with RHB Trustee instead of the likes of Rockwills due to better value for money.

Will writing cost in malaysia
My will-writing cost

Will-writing FAQs

Where should I keep my will?

Will-writing services would usually offer additional custody service for your will at an additional charge.

Otherwise, you should look for a safe place to store your will – make sure to let your executor knows where you are placing your will!

Can I change the details/clauses of my will?

Yes, you can change the details of your will anytime. That said, if you use will-writing service, there is usually a charge depending on how many clauses you are changing within the will.

Can a will become invalid?

You can revoke your own will whenever you wish. A will is revoked/become invalid when:

  • A new will is written, whereas the old will is going to be revoked automatically.
  • Alternatively, you can revoke a will without writing a new one by making a written statement in the presence of 2 witnesses.
  • Marriage or remarriage. Divorce does not automatically revoke a will.
  • A will is physically destroyed by you with the intent to revoke it. Do note that accidental destruction by a third party will not revoke a will.
  • A non-Muslim who converts to Islam, his/her will becomes invalid. Reason being, estate distribution will automatically follow the Faraid distribution method.

Get Your First Financial Consultation Session Today – FREE OF CHARGE!

Personal finance is a huge topic. It includes investment, savings & retirement, insurance, and yes, estate planning like will-writing.

If you are planning to get guidance in all aspects of your personal finance, this is for you:

I am working together with Wealth Vantage Advisory to bring a FREE Financial Consultation Session to all No Money Lah’s readers!

When you sign up for this FREE consultation session, you will learn more about your overall financial state. Not only that, you can gauge if a Financial Planner is going to add value in the pursuit of your financial goals.

Regardless, it is 100% FREE and you have zero obligations to take up the service if it is not suitable for you. Plus, you are doing your finances a favor for the year to come!

You can sign up for your FREE financial consultation session by clicking on the button below.

Sign Up for Your FREE Consultation Session Here!


Disclaimers

This article is made possible through a collaboration with Wealth Vantage Advisory. Special thanks to Stev and the team for making this collaboration such an impactful one.

Wealth Vantage Advisory did not receive copy approval rights on this article – that means they are reading this article for the first time, right alongside you. 🙂

p.s. This post contains affiliate links, which afford No Money Lah a small referral if you sign up for any paid services.


KDI Save Review - 3.5% p.a. return on your cash!

KDI Save Review: Get 3.5% return on this FD killer!

Are you looking for a better alternative to save your money other than conventional Fixed Deposits (FD)?

In this post, let’s explore KDI Save – the latest and best alternative to FD in town!

As always, if you like this post, consider subscribing to my FREE newsletter and be the first to receive updates on my content! 

[UPDATE: As of October 2022, KDI Save has raised its promotional rate from 3% to 3.5% Effective Annual Rate (EAR). Definitely the best choice to save your cash right now!]

 

Kenanga Digital Investing (KDI Save) Review & Promotionp.

What is Kenanga Digital Investing (KDI)

KDI is a new suite of services offered by Kenanga Investment Bank. There are 2 key offerings, namely:

  • KDI Invest: A new 100% AI-powered new robo-advisor that helps you invests in Exchange-Traded Funds (ETFs) based on your risk preference.
  • KDI Save: A flexible cash management fund that places your money in low-risk instruments to generate returns on-par to FD.

I’ll cover both offerings separately. In this post, let’s focus primarily on KDI Save.


Highlights of KDI Save

If you are looking for a flexible alternative to FD, KDI Save is a great choice:

  • Returns: KDI Save offers a promotional return rate of 3.5% Effective Annual Rate (EAR) up to RM50k, followed by 3% (>RM50k to RM200k), and a base rate of 2.5% thereafter. Interests are paid out and compounded daily.
  • Fees: FREE – no charges on your deposits.
  • Low barrier of entry & Flexible: Low initial deposit of RM100 (min. RM10 thereafter) + No lock-in period, withdraw anytime without penalties.
  • Regulation: Kenanga Digital Investing (KDI) is a financial initiative from Kenanga Investment Bank. It is regulated by the Securities Commission Malaysia (SC).

KDI Save Highlights


How does KDI Save work?

So, how exactly is KDI Save able to deliver returns that are on-par with FD?

All of this is possible because KDI Save invests users’ money in short-term Fixed Deposits (FD) and Money Market instruments.

Essentially, Money Market Instruments are short-term debts issued by banks. This helps banks to accumulate short-term cash-pile to make up for the shortfall in their daily reserve. Doing so, banks pay out a small interest to the party that invests in their Money Market Instruments.

These instruments are relatively low-risk as they are backed by banks. Moreover, they are highly liquid with short maturity periods. Through regular redemption of matured FD and Money Market Instruments, it allows KDI Save to provide a similar rate to FDs without having to lock up users’ capital.

 

KDI Save Review


KDI Save Features & Returns

#1 Fixed 3.5% Effective Annual Rate (EAR)

The 3.5% EAR from KDI Save is certainly the most attractive aspect of KDI Save.

Reason being, the rate is highly competitive compared to conventional Fixed Deposits. In fact, it is (much) higher than Maybank’s 60-month FD rate!

That said, do note that the EAR is tiered, as of below:

Deposit amount Effective Annual Rate (EAR)
First RM50,000 3.5% 
> RM50k – 200k 3.0% 
> RM200k

2.5% 

The promotional rates are valid only for a limited period of time, though there is no mention of when it'll end on KDI's website. I've written in and confirmed that there is no specific end date for this promotion for time being.

 

#2 Withdraw anytime without penalty charges

Even better, with KDI Save, you have the flexibility to withdraw your money whenever you want – without any charges. This is unlike conventional FD that locks in your money, imposing penalty charges if you were to withdraw earlier.

 

#3 Low barrier of entry

The minimum initial deposit for KDI Save is RM100. Then, the subsequent minimum deposit is RM10.

As a whole, this made KDI Save a solid choice if you are looking to save your money at a competitive rate, without sacrificing the flexibility on when to use the money.


KDI Save Fees

Here’s another good news:

It is 100% FREE to save your money on KDI Save. Meaning, there are no management fees or sales fees that we commonly see in unit trusts.

In other words, you get the full 3.5% promotional rate return without additional cost.


Regulation & Safety of funds:

Regulation:

When it comes to regulation, KDI Save is regulated by the Securities Commission Malaysia (SC). This ensures that KDI Save is always operating in Malaysia as per the guideline from the local authority.

 

Safety of Funds:

As for the safety of funds, the cash deposits from users are held by a third party (trustee), which is Pacific Trustee Berhad.

In other words, your deposits to KDI Save are separate from KDI’s company finances. As such, this ensures no deposits can be used for fraudulent purposes and you will always have full access and claim to them no matter what happens to KDI.


Risk + What you need to know before investing in KDI Save

In this part, let’s look at 3 things that you need to be aware of while investing your money with KDI Save:

#1 Market risk

While being a relatively stable investment, investing in Money Market Instruments via KDI Save still presents exposure to market risk.

One such risk is the fluctuation in interest rates. As an example, if Bank Negara Malaysia (BNM) increases interest rate, KDI Save is likely going to generate higher returns. On the flip side, if BNM reduces interest rate, it’ll also affect the returns as a result.

Of course, this is applicable after KDI Save’s 3.5% return rate comes to an end on 31st December 2022.

 

#2 Not protected by PIDM

While investing in KDI Save, it is important to remember that your fund is not protected by Perbadanan Insurans Deposit Malaysia (PIDM).

PIDM is an organization that protects deposits kept in banks and financial institutions that are a member of PIDM. Conventional bank FDs are usually protected by PIDM.

 

#3 Not shariah-compliant

In addition, both KDI Save & KDI Invest are not shariah compliant.

Hence, this is something that you need to be aware of prior to investing with KDI.


Eligibility + Is KDI Save for You?

KDI is open to Malaysian citizens & PR who are 18 years old and above with a Malaysian bank account.

That said, is KDI Save for you?

To answer this question, it is best to first know what KDI Save is NOT:

  • KDI Save does not invest in stocks/equities (ie. Higher risk assets). Hence, do not expect mutual fund/robo-advisors-like returns.
  • KDI Save does not guarantee returns. Even though it invests in low-risk Fixed Deposits & Money Market Instruments, returns are still subjected to market fluctuation.

Hence, in my opinion, KDI Save is perfect for:

  • People looking for a flexible alternative to FD & typical savings account for general savings
  • People looking to save for a specific goal (eg. house, car, wedding)
  • People with extra cash and want to save it for the short-term

KDI Invest Referral Code: 101183

KDI Invest Promo Code

In collaboration with Kenanga Digital Investing, No Money Lah is bringing an exclusive deal for new users that are keen to start using KDI Invest!

Use my dedicated KDI referral code – 101183, and you will get RM10 credited into your KDI Invest portfolio* when you successfully make a minimum deposit of RM250 on KDI Invest.

*Note: RM10 credit will be made within 30 days upon successful verification & deposit.

Open a KDI account today!


How to open a KDI Account

Creating a KDI account is simple and straightforward:

Step 1: Search and install the KDI app via Playstore or Appstore. Alternatively, you can also install KDI Save via my referral link by clicking on the button below:

Kenanga Digital Investing Account Opening

Open a KDI account today!

Step 2: Start your account opening process by keying in the necessary details such as email address, and password.

Remember to apply referral code 101183 for an exclusive RM10 account-opening reward!

KDI Invest Promo Code

Step 3: You’ll go through a simple identification process where you’ll be asked to verify your phone number, email, IC, and personal details. This is a required process by the regulators to make sure it’s the real you that’s opening an account.

Kenanga Digital Investing Account Opening

Step 4: When you register for a KDI account, you’ll have access to both KDI Invest and KDI Save. Select a risk profile for your KDI Invest portfolio – don’t worry you can always change your risk profile anytime after account opening.

Kenanga Digital Investing Account Opening

Step 5: It’ll take about 2-3 business days to verify your account. Once that’s done, you can start investing in KDI Save or KDI Invest by making your first deposit!

Kenanga Digital Investing Account Opening


KDI Save vs Versa vs StashAway Simple

In terms of the offering, KDI Save’s closest competitors are certainly Versa and StashAway Simple. Each platform offers users flexible and low-barrier access to Money Market Instruments that pay competitive FD-like rates.

KDI Save is certainly an attractive offering with its EAR of 3.5%.

For a detailed comparison (deposit/withdrawal speed, fund comparison), check out my full comparison article below!

Personally, I use all platforms to save for different purposes and I am happy with both of them as an alternative to FD (I think you will, too!).

READ: Comparison - KDI Save vs StashAway Simple vs Versa

StashAway Simple vs KDI Save vs Versa Cash returns (updated Nov 2022)
StashAway Simple vs KDI Save vs Versa Cash returns (updated Nov 2022)

No Money Lah’s Verdict

So there you have it, my review on KDI Save! If you are looking for an FD alternative to invest/save your cash, KDI Save is a platform that I can wholeheartedly recommend you to try.

Personally, I enjoyed using the platform and I think you will, too!


6 Personal finance strategies to prepare for recession and layoffs

Recession & Layoffs: 6 Personal finance strategies for 2023

2022 has thus far been challenging and we are beginning to feel the pinch.

So, I’m sure you have seen news of massive layoffs from Shopee lately.

Shopee massive layoff

In fact, retrenchments (or at least a slowdown in hiring) is now happening globally as companies look to cut cost in this uncertain time.

Companies like Shopify, Robinhood, and Snap have reduced their workforce by at least 10% in the past few months.

us layoffs

In this post, let's explore 6 personal finance strategies that I think we should be prepared/mindful of in this uncertain time.

Are we good? What can we do to prepare?

Personally, I am inclined to believe that most Malaysians are still financially sound – judging from the car sales figure from Proton.

proton sales figure (Sept 2022)
Proton hitting new sales figures despite challenging market conditions in 2022.

However, I think the risk of more retrenchments coming in Q4 2022 & 2023 is getting higher as time goes by.

Question is, what can we do to prepare?


Play strong defense

#1 Have an emergency fund

Stash up cash to weather through at least 6 to 12 months of period without income.

Personally, I'd recommend putting your cash in very low-risk money market funds such as Versa Cash, KDI Save, or StashAway Simple. They offer interest on par with Fixed Deposit (FD), yet the flexibility to deposit & withdraw anytime without penalty - perfect in case of unexpected incidents.

Versa Cash 3.2% promo rate
Get 3.2% on your savings on Versa Cash - limited time only!

#2 Protect your cashflow

Food for thought - Protecting your cashflow comes not from your current employment, but from knowing that you have the skills to make a living regardless of where you go.

Now’s a good time to reassess your edge in the workforce.

 

#3 Keep expenses low

With interest rate hikes not stopping anytime soon, it is crucial to keep our commitments (loans, debts) & expenses manageable.

This means taking into account of potential interest rate hikes + chances of short-term unemployment before taking up additional commitments.


Be aggressive (once your defenses are built)

#4 Invest

If you have extra gunpowder (ie. Cash), now’s a good time to start accumulating quality assets.

Since the stock market tends to rise with time, I’m decently confident that we’ll all reap the reward as a long-term investor.

I genuinely think that this is the time of our generation – be sure not to miss it!

LEARN MORE: What is S&P500 & how to invest in it?

The S&P500 thrived through crises and pandemic
The S&P500 thrived through crises and pandemic

#5 Start a project/business

Got a project or business idea that you always wanted to try?

You have nothing to lose if you begin – lay the foundation now, survive this challenging period, and watch it flourish with time.

 

#6 Learn/upskill

Never a bad thing to improve and equip ourselves with new skills, right?


Finding your edge in the workforce in challenging times

What is edge?

I think there is a misperception that having a Professional paper/Masters/PHD means one has an advantage over the others, and hence deserves higher pay.

The thing is, it is never about your academic qualifications. It is about how much VALUE you can bring to the table by having these qualifications.

Especially in challenging times, this USUALLY refers to how you can bring in more opportunities and/or profits to the team.

Let’s consider the paragraph above as we reflect on our role and contributions to our team & organization.


Highly recommendation books

3 books I’d highly recommend from our discussion today:

  • Linchpin by Seth Godin

A book talking about how to become indispensable in your career.

  • So Good They Can’t Ignore You by Cal Newport

A book on the mindsets and approaches to building a great career.

  • The 4-Hour Workweek by Tim Ferriss

A book that’ll change your perspective on conventional employment and career path.


No Money Lah’s Verdict

With the outlook becoming more uncertain with time, I think it is crucial for us to always be financially prepared for unexpected bumps in the months to come.

I am of the firm belief that every crisis offers us a chance to become a better person – be it in our career or finances.

We just need to prepare ahead.

As always, I hope you enjoy the read and if you have any questions, I am just a comment or email away!


Disclaimers

This post is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.


Guide to invest in Singapore REIT (SREIT)

Guide to invest in Singapore REIT (S-REIT) – All You Need to Know!

If you are investing for consistent dividend income, Singapore REITs (S-REITs) offer an investment option that you should not miss.

In this post, let’s explore S-REITs, and why it is such a great choice, especially for investors looking to build a stable dividend income portfolio!

RELATED POSTS:

p

What is S-REIT?

Singapore Real Estate Investment Trusts (S-REITs) are listed companies in Singapore that own and/or manage local and global properties such as malls, hotels, warehouses, data centres, and more.

Through rental income from these properties, S-REITs generate yield for investors looking for consistent dividend income.

S-REITs are an important part of the Singapore stock market. With 43 listed REITs and a total market cap of around S$110 billion, S-REITs make up around 13% of the whole Singapore stock exchange.

Effectively, this makes the REIT industry in Singapore the largest REIT market in Asia (excluding Japan) and is increasingly becoming an international REIT hub.

SREIT vs other REIT markets
S-REIT is one of the most established REIT markets in Asia. (Source: REIT Association of Singapore)

4 reasons why I invest in S-REITs

#1 Earn attractive dividend yield at low volatility

Generally, one of the main reasons why S-REITs are favoured by investors is due to its higher-than-average dividend yield.

Based on the latest 12-month yield (as of July 2022), S-REITs generate an average dividend yield of 6.3% – which is higher than Singapore’s key Straits Times Index (STI) and government bond respectively.

SREIT dividend yield vs other asset classes
S-REIT dividend yield vs other asset classes (Source: SGX)

In addition, investors are able to enjoy these attractive dividend yields at relatively low volatility.

When compared to major global markets, both S-REIT indices (which represent the performance of S-REITs) have been able to produce competitive yield at significantly lower volatility:

SREIT volatility and dividend yield
S-REIT generates yield at relatively low volatility (Source: SGX)

#2 Grow your passive income in SGD

Investing in S-REITs is also a great way for investors to grow a dividend income stream in SGD.

SGD to MYR
SGD to MYR (Source: Google)

From RM2.25 to RM3.20, MYR has lost value against the SGD in the past decade. As such, investing in S-REITs can be an attractive move, especially for dividend investors looking to protect themselves against a weakening currency.

SGD to MYR (2007 - 2022)
SGD to MYR (2007 - 2022). Source: TradingView

#3 Competitive overall growth

In addition to dividend yield, S-REITs have been producing a decent long-term total return relative to other REIT markets globally.

From the comparison below, the FTSE ST REIT Index (which reflects the average performance of S-REITs) delivered a 5-year total return of 69% (2017 – 2021). This means it outperformed key REIT markets from Australia (ASX), Japan (TSE), and the US.

SREIT outperformed other established REIT markets in the past 5 years
S-REIT outperformed other established REIT markets in the past 5 years (Source: REIT Association of Singapore)

In a challenging 2022, S-REITs continued to display low volatility compared to other markets:

SREIT performance vs other markets
Highlight: SREIT's 2022 performance vs other markets (Source: SGX)

#4 Global exposure to quality real estate & sector diversification

The S-REIT market also allows investors to have a very respectable exposure to the global real estate scene.

To be precise, over 85% of S-REITs own and/or manage properties outside Singapore.

SREIT provides exposure to quality real estate globally
S-REIT provides exposure to quality real estate globally (Source: REIT Association of Singapore)

In addition, within the S-REIT industry itself, there are REITs that focus on various business sectors. As an example:

  • Retail REITs: Mapletree Pan-Asia Commercial Trust (SGX: N2IU) owns Vivocity, the biggest mall in Singapore; CapitaLand China Trust (SGX: AU8U) mainly owns malls in Tier 1 cities in China (eg. Beijing).
  • Specialized REITs: Keppel DC REIT (SGX: AJBU) owns data centers around the globe.
  • Office REITs: Manulife US Trust (SGX: BT0U) owns office buildings in the US.
  • Industrial REITs: Ascendas REIT (SGX: A17U) owns logistics and industrial properties in Singapore, UK, Australia, and more.
  • Aside from that, there are also Healthcare, Hospitality, Residential and Diversified REITs as well. For more details on different S-REITs, click HERE.

All in all, as an international REIT hub, S-REITs allow investors exposure to quality global real estate, with the option to diversify their REIT investments across different sectors – neat!

READ MORE: 6 different REITs and their pros & cons

Different types of REITs in Singapore
Breakdown of different types of REITs in Singapore (Source: REIT Association of Singapore)

How to invest + Best performing S-REITs & S-REIT ETFs

There are 2 main ways you can invest in S-REITs:

Method 1: Invest in individual S-REITs

The first way to invest in S-REITs is by investing directly in individual S-REITs listed on the Singapore stock exchange (SGX).

Below are the best-performing S-REITs based on the 3-year annualized total return for your reference (Source: SGX, as of August 2022):

  • Parkway Life REIT (SGX: C2PU)

    • 3y Annualized Return: 20%
    • Dividend Yield: 3.0%
    • Parkway Life REIT is a healthcare S-REIT that owns & manages 56 healthcare facilities (eg. hospitals & nursing homes) mainly in Singapore & Japan.
Parkway Life REIT performance
Parkway Life REIT performance & dividend yield (Source: SGX)
  • Frasers Logistics & Commercial Trust (SGX: BUOU)

    • 3y Annualized Return: 12.7%
    • Dividend Yield: 5.4%
    • Frasers Logistics & Commercial Trust is a diversified S-REIT that owns more than 100 industrial & commercial properties (e.g. Warehouses, factories, offices) across five major developed markets – Australia, Germany, the United Kingdom, Singapore, and the Netherlands.
Frasers Logistics & Commercial Trust performance & dividend yield
Frasers Logistics & Commercial Trust performance & dividend yield (Source: SGX)
  • Mapletree Industrial Trust (SGX: ME8U)

    • 3y Annualized Return: 11%
    • Dividend Yield: 5.1%
    • Mapletree Industrial Trust is an industrial S-REIT that owns industrial properties and data centres in Singapore & the US.
Mapletree Industrial Trust performance & dividend yield
Mapletree Industrial Trust performance & dividend yield (Source: SGX)

Method 2: Invest in REIT ETFs listed in Singapore

The 2nd way to invest in S-REIT is by investing in REIT Exchange-Traded Funds (ETFs) listed on the Singapore stock exchange (SGX).

S-REIT ETFs allow investors to gain exposure to a basket of Singapore and/or global REITs.

An S-REIT ETF is a great choice for investors that seek diversified REIT exposure and do not want the hassle of managing a portfolio of individual REITs.

Below are 5 SREIT ETFs listed on the SGX (Source: SGX, as of August 2022).

For your reference, I’ve also covered all S-REIT ETFs in detail in a separate post, which you can check out below:

LEARN MORE: How to choose the best S-REIT ETFs for dividend income! 

  1. Phillip SGX APAC Dividend Leaders REIT ETF (SGD: BYJ | USD: BYI)

12-Month Dividend Yield: 3.47% 

The Phillip SGX APAC Dividend Leaders REIT ETF is an ETF that tracks the iEdge APAC ex Japan Dividend Leaders REIT Index.

It reflects the 30 highest dividend-paying REITs in the Asia Pacific.

Phillip SGX APAC Dividend Leaders REIT ETF
Phillip SGX APAC Dividend Leaders REIT ETF Overview (Source: SGX)
  1. NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (SGD: CFA | USD: COI)

12-Month Dividend Yield: 4.74% 

NikkoAM-StraitsTrading Asia Ex Japan REIT ETF is an ETF that tracks the FTSE EPRA Nareit Asia ex Japan REITs 10% Capped Index.

It tracks the performance of qualifying REITs from China, Hong Kong, India, Indonesia, Malaysia, Pakistan, the Philippines, Singapore, South Korea, Taiwan, and Thailand.

NikkoAM-StraitsTrading Asia Ex Japan REIT ETF
NikkoAM-StraitsTrading Asia Ex Japan REIT ETF (Source: SGX)
  1. Lion-Phillip S-REIT ETF (SGD: CLR)

12-Month Dividend Yield: 4.86% 

The Lion-Phillip S-REIT ETF is an ETF that tracks the Morningstar Singapore REIT Yield Focus Index.

It is an index that invests purely in high-quality Singapore REITs (S-REITs) screened by Morningstar.

Lion-Phillip S-REIT ETF Overview (Source: SGX)
Lion-Phillip S-REIT ETF Overview (Source: SGX)
  1. CSOP iEdge S-REIT Leaders Index ETF (SGD: SRT | USD: SRU)

12-Month Dividend Yield: 4.75% 

CSOP iEdge S-REIT Leaders Index ETF is a S-REIT ETF that tracks the iEdge S-REIT Leaders Index.

It tracks the performance of the largest and most liquid REITs listed on the Singapore Stock Exchange (SGX).

CSOP iEdge S-REIT Leaders Index ETF Overview (Source: SGX)
CSOP iEdge S-REIT Leaders Index ETF Overview (Source: SGX)
  1. UOB APAC Green REIT ETF (SGD: GRN | USD: GRE)

12-Month Dividend Yield: 4.06% 

The UOB APAC Green REIT ETF mirrors the iEdge-UOB APAC Yield Focus Green REIT index, which aims to allow investors to invest in environmentally-friendly REITs.

UOB APAC Green REIT ETF Overview (Source: SGX)
UOB APAC Green REIT ETF Overview (Source: SGX)

Risks of investing in S-REITs

Risk #1: Interest Rate Risk

Since REITs distribute over 90% of their income as dividends to investors, most REITs will usually take up loans to finance their property acquisitions.

As such, REITs are generally sensitive to interest rate fluctuation.

Simply put, any rise in interest rates will increase the operating cost of REITs as their interest repayment will become higher.

Risk #2: Subject to market fluctuation

Just like other stocks, the price of REITs is also affected by the overall market fluctuation - though S-REITs are usually less volatile.


Are S-REITs for you?

Investing in S-REITs can be a solid choice if:

  • You are looking to build a reliable dividend income stream.
  • You are seeking to diversify your stock portfolio to assets that are less volatile.
  • You are looking to expand your dividend portfolio to earn dividends in SGD.

Best broker to invest in S-REIT: ProsperUs by CGS-CIMB

This educational post is sponsored by ProsperUs by CGS-CIMB.

ProsperUs by CGS-CIMB is a regulated broker from Singapore that gives investors access to 30+ exchanges in more than 8 countries (US, Hong Kong, China, Japan, UK, Singapore, Malaysia, Europe, and more)!

In fact, from just 0.06% - 0.10%/trade (no min. trade value required), ProsperUs offers the most affordable brokerage fee for investors to invest in the Singapore stock exchange!

Exclusive ProsperUs Referral Code – MONEY20

 

ProsperUS referral code

If you are thinking to give ProsperUs a try, here’s something exclusive to No Money Lah readers – you will not find this anywhere else!

From today till 31/12/2022, key in my exclusive promo code ‘MONEY20’ while you register, and get a FREE SGD50 cash top-up & up to RM300 e-wallet credits when you open a ProsperUs account:
p

RewardsHow to qualify
#1 One-time top up of SGD20 into your ProsperUS accountInitial funding of SGD500 within 30 days of your account opening. To qualify, you should not withdraw the SGD500 for at least 30 calendar days.
#2 A further top up of SGD30 into your ProsperUS accountExecute at least 3 trades by 31/1/2023
#3 Up to RM300 in Grab or T&G e-wallet credits RM120: Initial funding of SGD1000 within 30 days of your account opening + 3 trades by 31/1/2023.

RM180: Initial funding of SGD3000 within 30 days of your account opening + 3 trades by 31/1/2023.

RM300: Initial funding of SGD10,000 within 30 days of your account opening + 3 trades by 31/1/2023.

To qualify, you should not withdraw the initial funding for at least 30 calendar days.
Note: A deposit in other currencies of equivalent value will also qualify you for the rewards. eg. Initial funding of ~RM1600 or ~USD400 is equivalent to SGD500.

p.s. Please check for the latest exchange rate accordingly.

Click HERE to view the full T&C of this referral reward.

Open a ProsperUs Account Today!


No Money Lah Verdict

So there you have it - an in-depth guide to invest in S-REIT!

I hope this guide has been useful and if you have any questions, feel free to leave your comment in the comment section below!


Disclaimers

This article is brought to you in collaboration with ProsperUs by CGS-CIMB.

Any of the information above is produced with my own best effort and research. 

This post is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.

This post may contain promo code(s) that afford No Money Lah a small amount of commission (and help support the blog) should you sign up through my referral link.


What is Dividend Reinvestment Plan (DRIP/DRP))

[Sponsored] Introduction: Dividend Reinvestment Plan (DRP/DRIP) & Example Calculation

Dividend Reinvestment Plan (DRP/DRIP) is a programme that allows investors to reinvest their cash dividends in the form of shares.

For investors, DRP is a convenient way to automate the compounding process of their investments, without having to manually reinvest their dividends every time they are paid out.

In this post, we’ll dive deep into DRP, its benefits and downsides, how to use DRP efficiently – and more!

RELATED POSTS:

p

What is DRP + Why DRP?

DRP is a programme that certain companies will open for their investors when a dividend is announced.

Instead of paying investors in cash dividends, a DRP reinvests investors’ dividends by purchasing additional shares of the company.

Through DRP, investors are able to compound their dividend returns over time by turning them into additional shares. In return, these shares will then pay out more dividends to them.

What is Dividend Reinvestment Plan (DRP/DRIP)

If an investor merely receives dividends without reinvesting them, there’ll be a huge difference in return in the long run. Consider a simple comparison below:

  • Context: $10,000 investment with a 5% annual dividend over a period of 30 years.
  • Simple return: Dividends are not reinvested. Turns into $25,000 in 30 years.
  • Compounded return: Dividends are reinvested. Turns into $44,677 in 30 years. 
Simple vs Compounding return
Simple vs Compounding return

Another huge benefit of DRP is that it automates the dividend reinvesting process. As a result, it lifts the manual effort away from investors and leaves the compounding process uninterrupted.


How to calculate DRP

As an example, if you own 1,000 shares of Company X and it announces a DRP for its upcoming dividend payout.

For this example, the DRP details are as follows:

  • Distribution Per Unit (DPU): $0.20
  • DRP units issue price*: $11.00

[*Issue price: It is common to see companies offer DRP units at a discounted price from the market price to entice investors to join the programme.]

Without DRP, you would receive $200 in cash dividends (1,000 shares x $0.20). What happens if you enroll in DRP?

  • Step 1: If you choose to enroll in DRP, you will receive 18 additional shares at $11.00 share price (18 x $11 = $198). This increases your total holdings to 1,018 (1,000 + 18) shares in Company X.
  • Step 2: Now, recall that your initial cash dividend is $200 and only $198 was used for the additional shares. What will happen to the remaining $2?
  • Step 3: Since the remaining $2 is unable to purchase a whole unit of share ($11), it will (usually) be paid to investors in the form of cash dividends. That said, certain brokers may allow for fractional shares in DRP (ie. Shares smaller than 1 unit), which will convert your $2 dividend into 0.18 units of shares.

DRP Calculation Examples

#1 CapitaLand China Trust (SGX: AU8U) Dividend Reinvestment Plan

AU8U is a Singapore-listed REIT that offers investors exposure to retail properties in China (eg. malls). Here's how we can make our DRP calculation from the announcement below:

(1) Distribution per unit (DPU) SGD 0.0315
(2) DRP issue price SGD 1.157
p
Assuming we own 500 units of AU8U shares, how many DRP units can we get?
  • Step 1: Calculate the dividends that we are going to receive without DRP. In this case, we'll be receiving SGD 15.75 in dividend payment.
500 units x SGD 0.0315 = SGD 15.75
  • Step 2: Find out how many DRP units we are eligible for. Divide the dividend payment by DRP issue price and we are eligible for 13.6 units of shares.
SGD 15.75/ SGD 1.157 = 13.6 units
  • Step 3: Since AU8U does not have shares in units less than 1, we are eligible for a maximum of 13 units of shares from this DRP (instead of 13.6 units). 
  • Step 4: If we opt for the maximum of 13 units for this DRP, any dividends that are not reinvested will be paid to us in the form of cash dividends. In this case, we will be getting SGD0.019 in cash dividends.
0.6 units x SGD 0.0315 = SGD 0.019
Singapore REIT DRP calculation
Source: SGX

#2 Maybank (KLSE: 1155) Dividend Reinvestment Plan

Maybank is the largest Malaysia-listed bank. Here's how we can make our DRP calculation from the announcement below:

Distribution per unit (DPU) RM0.30
(1) DPU that is eligible for DRP RM0.075
(2) DRP issue price RM8.28
p
Assuming we own 500 units of Maybank shares, how many DRP units can we get?
  • Step 1: Using the portion of DPU that is eligible for DRP (RM0.075/unit), calculate the dividends that we are going to receive from that portion. In this case, we'll be receiving RM37.50 in dividend payment.
500 units x RM0.075 = RM37.50
  • Step 2: Find out how many DRP units we are eligible for. Divide the dividend payment by the DRP issue price and we are eligible for 4.53 units of shares.
RM37.50/RM8.28 = 4.53 units
  • Step 3: Since Maybank does not have shares in units less than 1, we are eligible for a maximum of 4 units of shares from this DRP (instead of 4.53 units). 
Maybank DRP calculation
Source: Maybank

When should you consider DRP + How to opt for DRP

You should consider opting for DRP when you are invested in a solid company and the company offers a DRP on its dividends.

Through DRP, you get to acquire additional shares in the company (most of the time, at a discounted rate), and this compounds your returns automatically.

Normally, you will be notified by your broker whenever you are eligible for a DRP after a dividend is announced. If you are eligible for a DRP, just proceed to log in to your brokerage account and agree to the DRP accordingly.

When to opt for DRP?


Benefits of DRP

  1. DRP allows you to automatically reinvest your dividends in the form of additional shares without interrupting the compounding process.
  2. Usually, companies will offer DRP units at a discounted price compared to the share price. This allows investors to acquire shares at a lower price than the market price.
  3. Moreover, when companies offer a DRP, investors usually do not have to pay additional brokerage fees/commissions to acquire the DRP units. As such, the cost of owning these additional units becomes lower.

Downsides of DRP

While there are many benefits to DRP, it is not all perfect and may not suit certain investors. Here are a few downsides to DRP:

#1 Fractional shares can be hard to sell

Investors that opt for DRP may, at times, end up with additional fractional shares. Fractional shares are units of shares that are not commonly transacted. (eg. 7 shares where the shares are transacted in 100-unit lots).

For certain stocks (especially ones with low volume), fractional shares may be harder to sell.

#2 No control over price & timing of DRP purchase

Since the terms of a DRP are decided by companies, investors do not have a say on the price and the timing of when a DRP purchase will happen.


No Money Lah Verdict

So there you have it! I hope this guide has been helpful in making DRP easy to understand!

For most investors, DRP is an amazing tool to automate the compounding process of their investments.

If you have any questions on DRP, feel free to leave your questions in the comment section under this post!


FAQ on DRP:

Q1: How can I enroll in a DRP?

When a company that you invest in announces a DRP, you will normally be notified by your broker. To enroll in the DRP, just log in to your brokerage account and there should be a corporate action section for you to enroll in it.

Q2: Is enrolling in DRP compulsory?

No, it is not compulsory for investors to enroll in a DRP. If you do not wish to reinvest your dividends into the company via DRP, you can choose to receive your dividends in cash.

Q3: Is DRP subjected to Dividend Withholding Tax (WHT)?

Yes, DRP is subjected to Dividend Withholding Tax, just like ordinary cash dividends. 

LEARN MORE: What is dividend withholding tax (WHT) and how to deal with it?

Q4: Are there any fees to enroll for DRP?

If a company offers DRP, there is usually no extra cost for investors to enroll for the DRP. This means there'll be no commissions and exchange fees involved. 


Looking for a reliable global broker? ProsperUs has you covered!

This educational post is sponsored by ProsperUs by CGS-CIMB.

ProsperUs by CGS-CIMB is a regulated broker from Singapore that gives investors access to 30+ exchanges in more than 8 countries. (US, Hong Kong, China, Japan, UK, Singapore, Malaysia, Europe, and more!)

Now that you've learned about dividend withholding tax, you have the choice to invest in countries with a more efficient tax rule via ProsperUs!

In addition, ProsperUs offers multiple instruments from stocks, ETFs, futures, options, Forex, and CFDs. This is great for investors looking to diversify across different asset classes.

Exclusive ProsperUs Referral Code – MONEY20

ProsperUS referral code

If you are thinking to give ProsperUs a try, here’s something exclusive to No Money Lah readers – you will not find this anywhere else!

From today till 31/12/2022, key in my exclusive promo code ‘MONEY20’ while you register, and get a FREE SGD50 cash top-up & up to RM300 e-wallet credits when you open a ProsperUs account:
p

RewardsHow to qualify
#1 One-time top up of SGD20 into your ProsperUS accountInitial funding of SGD500 within 30 days of your account opening. To qualify, you should not withdraw the SGD500 for at least 30 calendar days.
#2 A further top up of SGD30 into your ProsperUS accountExecute at least 3 trades by 31/1/2023
#3 Up to RM300 in Grab or T&G e-wallet credits RM120: Initial funding of SGD1000 within 30 days of your account opening + 3 trades by 31/1/2023.

RM180: Initial funding of SGD3000 within 30 days of your account opening + 3 trades by 31/1/2023.

RM300: Initial funding of SGD10,000 within 30 days of your account opening + 3 trades by 31/1/2023.

To qualify, you should not withdraw the initial funding for at least 30 calendar days.
Note: A deposit in other currencies of equivalent value will also qualify you for the rewards. eg. Initial funding of ~RM1600 or ~USD400 is equivalent to SGD500.

p.s. Please check for the latest exchange rate accordingly.

Click HERE to view the full T&C of this referral reward.

Open a ProsperUs Account Today!


Disclaimers

This article is brought to you in collaboration with ProsperUs by CGS-CIMB.

Any of the information above is produced with my own best effort and research. 

This post is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.

This post may contain promo code(s) that afford No Money Lah a small amount of commission (and help support the blog) should you sign up through my referral link.