Building a Dividend Portfolio

I came across a really good article on SeekingAlpha.com and i want to share it. It is called "DIY Dividend Investors Club: Building a Sustainable long term dividend portfolio". Although it is based in the US, many principles can be reused in Singapore. We can even invest in those stocks they have highlighted. They are great dividend plays, some of the most well established companies in the world. They sell things that we need everyday of our lives to make our day a little easier. [eg. Coca cola - soft drinks, Kimberly Clark - tissue/toilet paper, Colgate - toothpaste, Unilever - various consumer goods, Procter & Gamble - Various consumer goods, Mcdonalds, Wal-Mart etc.]  This is only Part I, they are going to publish more parts in the future. Do look out for them.

However my key issue with investing in the US for dividends has always been the 30% tax they charge on all dividends!! There is a way to get around this if you are a long term investor, engage in Dividend Reinvestment Scheme if the company allows it. 

Tried to do this, a year ago but I have fallen flat in my search to establish something, my broker at OCBC said "we don't have such scheme". I gave up for the time being. If anybody knows how to escape the 30% tax, do let me know. 

I think i read somewhere that if you open an account with an US trading platform, they hold your investments in their custodian account and reinvest the dividends to buy in more units each time. I am still quite a noob when it comes to investments.

Meanwhile FEELING INSPIRED; I am thinking of adapting this strategy to Singapore stocks with the following aims:

• Portfolio Size: $100,000
• Target # of Stocks: 5-10
• Maximum Stock Concentration: 10.0% of portfolio
• Maximum Sector Concentration: 20.0% of portfolio
• Maximum High Yield Concentration: 20.0% of portfolio
• Minimum Dividend Yield: 5.0%

      
Its entirely possible to build a dividend portfolio in Singapore with the expectations to earn a minimum of 5% per year. Lets see how it goes, It will be a 20 year plan starting from 2014. 

End-of-Life Medical Expenses

Came across an interesting study done in the US.  I think most people are worried about having enough money to support ourselves in the last few years before death. Given that medical advances have increased life expectancy of the average person in Singapore to 81.89, just behind Japan @ 82.59. Medical bills during the last 5 years of our existence on Earth has also increased over the years. I understand the study was done in the US but basic principles will remain constant in other parts of the world. 
In this article mentioned, The correlation between Income and Medical expenses(out of pocket, not covered by insurance) were studied for the last five years of a group of people. To be blunt, the study is questionable to say the least. However I do agree that insurance will not cover everything and we still need to prepare a sum aside for other expenses. 

From the article, the average comes to about US$39,000 for medical care in the final five years of life, or about US$7,800 a year. It also says the number varies greatly with income. How much different is our Medical expenses in Singapore? Last time i checked, medical expenses should be cheaper for those on government subsidy. It is very hard to gauge how this will translate to cost in Singapore. So after doing some research on my own came up with these numbers:

Procedure (Cost in USD)	USA	Singapore	% Savings
Coronary Angiography	6,000	1,500	75%
Coronary Angioplasty	42,000	11,500	73%
Coronary Artery Bypass	55,000	13,000	76%
Hip Replacement	24,000	16,000	33%

source: http://www.expatmedicare.com/healthcare-singapore-expats-guide

Surgery in Singapore seems to be significantly cheaper than US. For my own sake, i will just take worst case scenario and say S$50,000 average for last 5 years of life or S$10,000/yr now, or in 50 years time (if i live that long) at 5% inflation rate: it will cost S$114,674/yr or S$573,369 over the last 5 years of my life if i live till 80. Of course this calculation is riddled with uncertainties and variables, but roughly i guess one should set aside 1/2 Million bucks. damn! Now that is something to worry about.

Here is the weblink of original article.