$$$ KPO and CZM $$$: REITs Ladder

Sunday, March 17, 2019

REITs Ladder

I previously blogged about how one can achieve higher interest for the DBS Multiplier account and introduced the concept of a bond ladder - DBS Multiplier + SSBs + Joint Account = Higher Interest! Do take a look if you are looking for a relatively high savings account with a low hurdle (no minimum credit card spending required!).

A quick recap on a bond ladder - It is an investment strategy to generate passive income at regular intervals. Passive income - who doesn't love them? Using Singapore Savings Bonds (SSB) as an example, each SSB pays out interests every 6 months. So if one were to purchase 6 consecutive months of SSB, they will be getting interests every month for the next 10 years until the bond matures. Theoretically, the bond will then mature at a different time and one just got to repurchase the new bond again to repeat it infinitely...

One day, I was thinking if I can replicate the idea and make a REITs ladder (my favorite). lol. Unfortunately, the answer is impossible :'(

I went to SGX StockFacts, removed all the default filter and change the Industry Criteria to "Real Estate Investment Trust (REITs)" and arrived at these 43 REITs (no business trusts). In case you are wondering what is the difference - What’s the difference between a business trust and a REIT? Quite a lot. In short, REITs are required to pay out at least 90% of their taxable income in the form of dividends each year but not for business trusts.

Next, I had to manually extract all the dividends paid out in 2018 (we are not interested in when it XD but when the money enters our bank account). Fortunately, StocksCafe provides an easy way for me to do so.

As you can see, even if you buy all 43 REITs, you will not be receiving any dividends for the month of January, April, July, and October. REITs either pay out dividends quarterly or biannually, hence the best months for a REIT investor will be February and August.

Hope you find this useful or entertaining. You can get a copy of the spreadsheet here - REITs Ladder.

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  1. Have! When you expand your horizons, there are monthly dividend REIT stocks in the US!

    1. Haha. But US got withholding tax, not worth it leh.