Asked on 15 May 2019
Hello, I'm 19 this year and just started investing, I've put in roughly $2k SGD into my vickers account. I've diversified slightly into a few sectors but mainly REITs. I've also started a RSF, to buy NIKKO AM STI ETF.
Dividends may be small at the start, but you can always slowly accumulate them. It is like a snowball effect.
What I do is whenever I receive any dividends, I will put them into my warchest and track them. As time pass, you will realised that your dividends will grow from $100 a year to $1000 a year or more. With that, you can effective start to use your dividend to buy more stocks.
You could just wait, at this point no need to hurry. if you have invested more, the dividend sums will get bigger (and commissions bound to get to zero sometime ad in the U.S.) so then you will be able to advantageously reinvest
I would open a separate account and collect all those dividends. I will use it to reinvest into the counters when opportunity arises.
You might want to explore a bit into other markets such as etfs, bond funds to balance out your portfolio.
It might be small but just treat it as you have extra cash to spoilt yourself. It just the start of the journey , don’t expect it to be big. Slowly as years goes by , the effect of compounding will surely grow it into a sizeable amount. So for now just treat it as a discount in your expenses from time to time.
I treat it as extra income (same as bank interest) then just save it aside it to accummulates enough to invest.
Translate from chinese (mosquito meat, not matter how small is still meat)
As you say, you've only just started, so this will only grow with time. Remember the compounding curve. This is just the begining. Jia you.
Don't just see it as a way to reinvest.
See the small dividends as a way to offset your bills too!
If your phone bill is $20, then $20 covers it! Free phone usage!
Since it's small, combine it with your RSP and plan to progressively increase your monthly investment amount.