How much do I need to invest in dividend stocks to get a monthly recurring income of S$1,000?

Hey,

You might want to take a look at Royal Dutch Shell which is paying about 11% in dividend right now. Good stuff to be added as part of your portfolio.

As for high yield bonds and income funds, right now is definitely not a god buy. You may want to take a look at US blue chip Tech and Financial institutions for now.​​​

Here is a table for different yield (not guaranteed, must look for appropriate candidates)

https://cdn-blog.seedly.sg/wp-content/uploads/2...

When You would be investing 150000 SGD and be receiving a yearly dividend distribution

of 4% (which already is high all fees and risks considered)

that would make You 500 SGD a month, not much, though for living.

Is $1k a month income sufficient to go on sabbatical?

There are many routes for you to do it, and there are basically 3 main angles to approach.

1) Portfolio risk

2) Portfolio leverage

3) Drawdown

Just from the numbers, to get $12k annual income, you need to achieve 8% per annum from a $150k portfolio..

Portfolio risk means you need to see the asset class to invest in, in order to get the monthly income. Example, if you were to look simply at equity dividends, very likely you are going to get somewhere between 3% to 6% per annum. If you were to look at good bonds, it would be around 1 to 3% per annum. However, you could look at high yield corporate bonds. For example, some Indonesian bonds may offer up to 8 to 10% per annum. But should you be investing 150k there? I don't think so. Likewise, if you were to do options writing, it's possible to get a premium payout of 2 to 4% per month. But this means you may not get back the capital that you put in since the risk is conversion into equity at a lower price. But it will give you the monthly income paid out.
Portfolio leverage is another factor. For example, if you were able to get $100k in a personal loan through balance transfers, it is possible to put this to work at a higher rate than the interest you are paying for it. Example, I recently got offered 6 months balance transfer from Citibank at 1.1% per annum, and no processing fee. It's possible to get a 12 months one too. Hypothetically, if you are even able to get a 4% dividend payout, you are positive in ROI. The risk is that your capital is not guaranteed, and at the end of 12 months when you have to repay the loan, you might have to use up your cash capital to cover any losses in investment.
Example, let's say you buy into a basket of assets, which pay a blended 5%. You use $150k cash, and $150k loan (at 2% per annum interest to make it simple).

So you buy $300k of assets, which will pay $15,000 of dividends. You need to pay interest of $3,000. This means you have a cash flow of $12,000. At the end of the 12 months, your $300k of assets drop to $280k for example. You still need to return $150k of loan, thus your capital left is $130k. Of course, it's possible for your investments to be invested in something safer, but please note that in almost any investment that does more than 4% dividend payout, it is unlikely to be guaranteed in the short term.

Thirdly, your option is to do a capital drawdown. For example, if your blended portfolio is 6% dividend yield. This gives 9000 in dividends. You are still short of $3k, or around 250 a month. You will then sell off assets progressively to cover the shortfall, but it means at the end of 12 months, you are likely to have less than $150k. That's again taking into account that your investments are volatile and you won't get back the $150k anyway.

Cheers!

Fergus

PS: Need more specific advice on your situation? Feel free to reach out to me on Instagram https://rplg.co/fergusig

Or you can find me on facebook in the Seedly Facebook group!

Not realistic... I may not be perfect but I can share my experiment. I was getting 1k/mth with 400k capital i.e. 3% p.a. this was based on the allocation of 50% cash in hurdle accounts, SSB, FD fetching avg 2%, and 50% stocks (of which 25% REITs, 50% blue chips) fetching avg 4%. Even then my stock paper value fluctuates + - 10% = + - 20k.