Investing in Thailand – BGC.BK

Green investments are gaining traction, and while not as exciting as some online start-ups, there are lots of opportunities in this growing market. Also in Thailand. One crucial company for Thailands future success on the environmental front is BGC.BK. What does the company do? Let’s take a look at an excerpt from the “About us” part of their website:

BGC or BG Container Glass Co., Ltd., a subsidiary of Bangkok Glass Public Company Limited, operates in glass packaging business. The plant was established in 1974 and started its production in 1980 in Pathumthani with the production capacity of 150 tons per day. Currently, BGC has 5 glass packaging plants with the largest number of production capacity in Thailand.

From just one furnace, today, BGC has grown steadily. The company was incorporated into BG Container Glass Company Limited in the year 2016 and was registered as Public Company Limited in the year 2018 The company is built on a foundation of innovation, advanced production technology and effective performance that can be recognized internationally. Moreover, the products meet the standards and cover all needs of diverse customers.

With a commitment to innovation and new products, quality control and environmentally friendly for remaining the leader of Thailand integrated glass packaging market.

So there you go. It’s all about glass.

Commitment to reduce plastic usage will drive future business growth

Living in Asia one can’t help to notice the ridiculous amounts of plastic that is being used here for almost everything. Plastic bags, bottles, jars, food containers. And beyond those items critical for daily consumption, it goes even further. It’s very common to see households with plastic furniture, dishes and cutlery, even decorations. As a European arriving first time in Thailand, I was honestly shocked. But change is coming, slowly but steady, and glass solutions will play a crucial role on that front.

BGC.BK is a key player in this market, providing standardized solutions for jars, bottles, bottle closures, and caps. They have a wide range of products adjusted to international standards, and with the government pushing slowly towards plastic reduction in the market, they are poised to grow further.

Reading this I admit that while I am trying hard to make this sound like an exciting opportunity, it’s really not. It’s a pretty boring business with lots of old-school elements to it. Factories, chain-supplies, standard distribution. All basic industry 101. But that doesn’t change the fact that it’s an already profitable company in a growing market, with almost no local competition, and an experienced team.

Solid dividend four times a year

Another key point for me to invest in BGC is the dividend policy. BGC has an annual dividend yield of above 4% and pays out 4 times a year. Last year the company paid a dividend in May, June, September and December. This year should be the same. Anyone interested in a passive-income strategy should therefore have this stock on a watchlist. Or in a stock account.

Disclosure: I am managing a portfolio that has purchased BGC.BK since 2020, and I am adding shares of BGC to this portfolio on a regular basis.

Investing in Thailand – TISCO.BK

Who would have thought? It’s already February. January didn’t really give us a fresh start into a post-covid era, which some overly optimistic people might have expected, and February doesn’t look any better. Neither does March, but let me write about that next month.

Having said that, the world is adapting to the new conditions. Stock markets are back at all-time highs as investor’s sentiment and perspectives for the future seem to be getting more predictable. So today, let me share with you my opinion on a bright star of the investment world of Thailand. A conservative pick from the world of finance: TISCO.BK

A modern specialist for finance in Thailand

The TISCO Financial Group PCL is a giant in the financial industry of Thailand. The company profile on Reuters says the following:

“TISCO Financial Group Public Company Limited is a Thailand-based holding company engaged in the financial and banking businesses. The Company primarily operates two main activities: commercial banking business and securities business. The Company and its subsidiaries provide banking services, personal loan services, corporate lending services, as well as life and non-life insurance brokerage services. They also offer securities brokerage services, asset management services, cash management services, underwriting services and others.”Source: Reuters

So there you go, nicely summarised their entire activities. The first time I stumbled upon Tisco in Thailand when I bought my first car, financed with a Tisco loan, and insured with Tisco insurance. I didn’t think much about it at that time as an investment, but I was amazed about the modern and easy way the loan was handled.

I would pay my monthly installments via online banking, at any 7/11 shop, or I could instruct them to withdraw the payments directly from my bank account. I could also make additional payments at any time I wanted, which was great as it helped me to pay off the loan much faster than the 6 years that I originally put in the contract. I paid the car back in half of that time and saved interest on top of it.

Stable growth and solid dividend

When purchasing shares, I prefer buying companies that I trust and that I have a positive experience with. So when I started investing in Thailand some 3 years ago, I naturally took a look at Tisco, and I liked what I saw.

The company has not only solid growth and an excellent share performance to show for, but it also pays annual dividends which are almost constantly growing year on year. In 2019 my yield on cost after tax was 5,84%, in 2020 it grew to 7,65%, and I am now very curious about 2021. The dividend is usually being paid out in May each year.

When COVID hit the markets and the stock dropped to levels below 70 THB, I have added to my position, which pushed my average purchasing cost to a mere 75,96 THB per share. So while I do expect the dividend to be reduced in 2021, I might still reach an excellent yield on cost.

Learning from other markets

Tisco is right now my largest holding in the Thai portfolio I manage, and I am confident that I will add more shares whenever I see the market dipping again or even if it would be just stabilizing further. One of the main reasons why I feel so confident about this company is my experience with another German financial giant: The Allianz AG.

While I never invested in Allianz (yet), it was always one of those stocks for me that I regretted not having had put money in (I still do). As boring as the business sounds in comparison with Apple or Starbucks, it’s one of the most profitable and reliable business models on the planet. It benefits from amazing profit margins and enjoys customer loyalty beyond what most other businesses can present. Not because of having such great products or services, but simply due to necessity.

If you’re investing in Thailand, Tisco should be at least on your watchlist. Do the due diligence, check the numbers, visit their investor relations website and analyze the chart. Read more articles from professional investors and get your facts straight. But I bet you will like what you see and that the stock will find its way into your portfolio.

DISCLOSURE: I have TISCO.BK in a portfolio that is managed by me.

PS: You might notice minor changes to the blogs layout. I have decided not to purchase the WordPress Premium plan this year to reduce my expenses slightly as my dividends dropped by 11% year on year. Therefore, I swapped to a free layout AND you might have to endure some WordPress commercials every now and then. Sorry for that, I will put things back into place next year.

Portfolio year-end evaluation

As the year is coming to an end, it’s time for a portfolio re-evaluation. I do this every year in order to determine what I did good, bad, or just wrong, and what I can and should do better in the next year.

Keeping a cool head

I wrote it many times. When it comes to investments, you need to keep a cool head and take emotions out of the equation. You need to stick to your thesis and know that you’re in for the long run no matter what. But this is easier said than done.

When your shares are moving up for a while and you see your profits surging by 20%, 30%, or even 50%, you might feel the urge to sell your shares just to make sure that you can actually keep that profit. I call this phenomenon “negative greed”. It’s greed because you want to keep the profits, and you want to make sure that your account gets credited before anything happens to it (like another downturn in the market). But it’s “negative” because once the shares are sold, you have obviously no more shares that could grow even further from there. You secure profits, but you lose chances for more profits.

Similarly, when your shares are moving down, it’s hard to stay cool while watching your account going negative into the double digits. When a recession hits and all you can see is a screen with red numbers on it, thoughts will crawl into your head. Thoughts, that question your decisions, making you wonder whether that whole thing is just a big scam that you fell for, and that you should have better listened to all your non-invested friends who think you’re nuts for being an investor.

On both counts, I did quite well in 2020. While I experienced all the emotions and drags as described above, ultimately I kept a cool head. The only shares I sold were those of Apple (AAPL) after the stock-split. They soared by over 150% and I sold some to be able to buy a few new shares of other companies which I considered to be good opportunities. What did I buy?

New investments

  • Wereldhave – A dutch shopping mall operator who suffered dramatic losses in its share price in recent months and who is due for recovery once this whole Covid drama is over
  • Starbucks – The company is showing over and over again that it’s one of the best in the market. The pandemic didn’t hit it as hard as one would have thought, and it will come out stronger in the aftermath
  • Veolia – After watching a documentary on Netflix about drinking water (the show is called “Explained”, highly recommendable) I decided to start focusing more on water-related investments

I also started a savings plan into an ETF. It’s called “Xtrackers MSCI World Information Technology UCITS ETF 1C” and it’s focused on tech-investments world-wide. 100 Euros a month that have started to flow into this ETF, completely paid by the dividends I receive each month.

One more word about Wereldhave. I had this company in my portfolio in the past, and I sold it at a loss when they cut the dividend and when the covid crisis hit. But I kept it on my watchlist and observed the stock movements on a weekly basis. When I noticed that the stock stopped moving further down (after dropping more than another 50% since the time when I sold them) and the company announced a new management team as well as a full restructuring of their business model, I got back in. The shares are now up 40% since I bought them.

Dividend growth

In terms of dividends, Starbucks and Veolia will contribute to my annual income in 2021 as they both pay stable and each year growing dividends. Wereldhave used to pay a strong dividend until the crisis hit. They canceled all dividends in 2020, and I don’t think the company will be able to pay out any dividends in 2021. I expect them though to start paying dividends again sometime around 2022.

My dividend income shrank in 2020 compared with 2019. This was mainly due to my largest and also most disappointing investment: A company called Aurelius (AULRF). It’s a business development company (BDC) which I purchased back in 2018. It was showing not only superior growth opportunities but also had an amazing dividend yield, and since 2018 it developed into my single largest holding position.

Unfortunately, it also became my most disappointing investment. The share price dropped by almost 70% and the dividend was cut down to zero in 2020. However, in the last couple of weeks recovery started to kick in. My losses are now at -56% and given the recent business reviews, I am quite confident that shares will continue to tick up. Also, the dividend should recover in 2021. But I admit, this one is my single largest nail-biter.

Overall it looks like my dividends year on year will reduce by some 11,60%, and this despite the growth of my total invested cash by 8,99%.

Monthly passive income

The total decline of dividend payments by 11,60% is obviously not great, but overall, my monthly passive income remained largely stable. My total dividend yield on investment came down to 3,22% from 3,97% in the year before. For 2021 I expect it to move back up into the 3,5% to 3,9% range.

Considering the scale of the covid crisis, I see my thesis of investing and putting money to work in the stock market confirmed. And 2021 is almost guaranteed to produce similar or better results, with most stocks set to soar once the vaccine distribution starts kicking in.

What a year

Today is the 14th of November 2020, and what a year this has been! With only 6 weeks to go and all the bad news going on, all I want at this point is for it to end.

Whatever your idea or opinion about the Coronavirus might be, we have to acknowledge plain facts that it had an immense impact on literally the world as a whole. This is beyond anything my generation experienced so far.

Jobs were and are being destroyed, incomes diminished, entire industries shut down, and thousands of people are still dying across the globe. And just to be clear: Whether it’s a direct or indirect count, if the virus triggers the death, then it’s on Covid to me.

Since I am working in the hotel industry, I am directly affected by it. In order for my business to survive, I need to cut expenses, reduce jobs, reduce salaries. It hurts. It’s many tears and many broken hearts. Many tough decisions every single day. And despite having the promise of a vaccine now visible on the horizon, we still have a few more months of pain and suffering ahead.

Also let me share with you this: As a business insider in an executive role, I can tell you here and now that this won’t get better any soon. Even post-covid. For most, the jobs that were cut aren’t coming back. The recovery of the service industry, the largest industry in the world, will take years. In order to survive cost cuts will remain in place until further notice.

Financial independence has never been more important

What I am sharing and trying to explain above is that the world is not going to get really significantly better any soon. And even if, how do we know that there won’t be another outbreak in one, two, or five years from now?

We have learned that there is no such thing as invulnerability. There is no such thing as total job security. And when times get really tough, even the best employers might be forced to make some tough choices to the detriment of employees.

Business owners face even greater risks, especially when they operate on thin margins and have not sufficient funds to survive prolongued periods of time without a regular income.

So what are our choices? How can we financially prepare for such an event?

There aren’t many choices, frankly, and there is no single solution. What we have to do is to create layers of protection. To create multiple income streams. And being invested in the stock market is one such strong layer. Also during the current crisis, it has again shown to be a reliable protection for tough times.

I am not talking about the value of my shares. I am down 25% in my portfolio so far. What I am talking about are dividends, my passive income stream.

Let me compare it with my salary, which is currently being cut by 25%. Next month it will be probably around 30%. At its peak, the cut was at 40%. But my dividends have decreased by only 11% year on year. And while I am not certain about my salary, I am quite confident for my dividends to fully recover next year.

Some of the most reliable dividend companies have not changed their policies and kept paying the same or even increased amounts throughout the crisis. This has again reconfirmed with me that for those who seek financial independence, being invested in the market is essential.

This crisis has been a huge reminder that we need to take responsibility for our financial well-being into our own hands. We can’t always rely on others, not to mention governments.

And it’s not just about the money. It’s about having that pressure off your chest, knowing that you have one more layer of safety, one that will contribute to protecting you and your loved ones when times are tough. This feeling alone is beyond any monetary value.

Breaking Rules

Nothing is as it should be this year. 2020 will go down in history as one of the worst years for my generations (X / Y – I am right on the brink).

Highest unemployment as far as I can remember across the globe. People are restricted to travel between countries, in some areas even between cities. Foodbanks, charities, and NGOs are stepping up and doing what they can to get people through hard times, even in the richest and most developed nations. Medical supplies are running short, equipment gets scarce. And governments are printing cash for people like there is no tomorrow.

Every weakness of our economic systems has been exposed by now. The mantra of a small government and an unhinged economy has been crushed to pieces. Whether it’s Germany, the US, UK or Thailand: Without government support it would all collapse.

It’s a terrible situation, but we will get through this, as humanity always did. There is light at the end of the tunnel, and I am confident that we will thrive again once this is all over.

And having said that, as bad as it is, it’s also a great lesson and experience for us. Instead of lamenting and complaining, we have right now the opportunity to analyze the situation and to think about how we can handle a similar occurrence in the future. Because we know that this wasn’t the first, and certainly won’t be the last pandemic that we will have to deal with.

Financial independence should grab more spotlight than ever before

The current situation showed lots of weakness in the structure of our society, especially to those who are in the rat race. As the crisis triggered massive unemployment, salary cuts, and put people in danger of losing access to their basic needs like shelter, food, and healthcare, it has never been more obvious that the rules we follow are flawed.

People are talking about jobs, minimum wages, worker protections. Protections from evictions, free medical support, and other measures to help all of us getting through the challenges of the pandemic. And it’s all good and right. We need to work, we need to have our rights protected, and we need a framework of rules to make sure those in power don’t abuse those who are not in a position to protect themselves.

Unfortunately, the same rules that protect us are also the rules that limit our opportunities. They push us into the rat race, into the dependence on people who employ us, and on governments that care for us. We give away some parts of our freedom and receive in return limited protection that helps us to make it through the days ahead.

But those who really want to get at least a slice of their freedom back, they got to break out of the rules and take ownership of their future. It’s especially situations like the current crisi, when financial independence becomes more important than ever.

Being financially independent means that you can afford to have a shelter without relying on the government, that you can put food on the table without relying on charities, and that your health is protected. Financial independence is not about getting rich. It’s about freedom.

The steps for reaching financial independence are only a few:

  • Earning as much as you can
  • Spending as little as possible
  • Saving and investing the surplus
  • Building passive income

Only four steps that explain it all. Simple and while not easy, definitely achievable with the right mind-set, plan and determination. And the benefits are immense. Not only may it allow you to retire early from your regular job. Achieving financial freedom will also empower you to pursue other paths and passions which you might have not considered previously due to financial commitments that couldn’t be neglected.

Even more importantly though, it will also prepare you for hardships, and situations as we are experiencing right now. It’s undeniable that those who build up emergency funds that cover 6-12 months of expenses, or who have passive income streams, are significantly less worried while the virus is causing panic and havoc across the world.

The FIRE movement is just a smart thing to do

When you explain the idea of financial independence and the FIRE movement to people who never thought about it, you will hardly find anyone who would disagree with it these days. There is nothing about massive unemployment, stagnant wages, and deteriorating economic conditions that would encourage people to go back to the old days.

And this is not a one-off event. It will happen again. Maybe it will be another virus. Maybe something else. But we know that hard ships are part of the equation throughout our lives. So wouldn’t it be a smart thing to do something about it? To prepare for it?

As my readers know, I am promoting investing in stocks. And surely, many companies got in trouble and had to cut or reduce their dividends, hence also impacting my passive income. But what this crisis showed me clearly is that while there is no 100% protection in this kind of environment, the odds are still clearly favouring investors over regular workers.

I work in the hardest hit industry of the pandemic: I am a hotel manager. And while my salary was cut by up to 40% as my hotel had to close for a few months, my passive dividend-income went down only by 9% on average year to date so far, and I expect it to remain on that level.

If you ever had doubts whether FIRE is for you, these doubts should be gone by now. And whether you invest in stocks or real estate, or any other way that generates passive income streams, it should be (or become) a part of your plan.

The pain continues… for some

We are now in the middle of the third quarter of 2020. August. And the world doesn’t look much better than it looked in the second quarter. In fact, despite all the happy talk that you might hear occasionally on some news, data points increasingly towards a bad fourth and final quarter as well.

So the pain will continue and might even increase. More companies will close their doors. More people might lose their jobs, or endure salary cuts. Many people will remain dependent on the support from governments, friends, families, or charitable institutions… and sometimes strangers.

The suffering is not equal

But some suffer more than others, and guess who is suffering the least? Well, from what I see, income investors have suffered very little in comparison to regular folks.

When I look at my income portfolio, it looks as bad as it gets with current total performance in value development of -29%. Almost a third of the money I invested has disappeared. On paper. In reality, it doesn’t disappear until I sell the shares – which I have no intention to do within the next 20 years or so.

But interestingly, my dividends for this year will be holding up much more stable. According to my most recent forecast, my dividend income for this year will fall only about -8%.

Cash is king

In a crisis like this, income investors have the advantage that most of their investments are/were around financially strong companies, which generate either strong cash flows or which are simply rich.

In addition to this, many dividend-paying companies tend to offer essential services. Whether it’s water, energy, food, or our most addictive tech-entertainment. Those companies keep earning money no matter what and can largely sustain their dividends even in a global crisis.

Having strong cash flows and/or a well-prepared emergency fund, those companies can navigate through the storm, and even use their strong cash position to grow and expand their business. One should not get surprised if the strongest among them come out even stronger after the crisis.

Technology is unstoppable

I have this year so far only added money to my speculative portfolio which has several technology titles in it that either benefit from the pandemic, or which are simply not relevant to the pandemic at all. And while my income portfolio shows a -29% performance, my speculative tech portfolio is already back up with double-digits and +25% in market value.

Some people are wondering why the technology sector keeps rising despite the harsh reality that we experience across the globe right now. But in fact, it’s not surprising. Technology will be moving forward no matter what, and being invested in a few solid technology-focused companies will probably serve as a great diversification to any portfolio for the foreseeable future to come.

Keep investing

So yes, I keep investing. I am currently not adding money to my dividend income portfolio, but plan to do so around October. August and September look still awfully bleak and we might see more bankruptcies, more unemployment, and more suffering. But the longer it will be going on, the closer we will get to a solution. I am, however, putting money into my speculative portfolio.

History has taught us, that after every crisis the market recovers. As a young investor, you should therefore not hesitate. Whether you go in with an ETF or individual stocks. Crisis or not, keep investing regularly, and diligently, and as we get closer to a solution to this awful pandemic, your efforts and trust in the market will very likely plan out according to similar events of the past and reward you in the long run.

There are of course no guarantees, but what is guaranteed these days anyway?

About multiple income streams

People all around the globe face unprecedented challenges. Well, at least it’s unprecedented for my generation (Gen X), and certainly for Millenials and anyone younger than them. Millions are losing jobs, are forced into quarantine. Many are in dire need of some kind of assistance, whether it’s cash, food, or both.

Here in Thailand, we just passed through the first month of the lockdown. When I drive through the streets of Bangkok or Pattaya where I am currently working, I see people lining up (with social distancing) for food support from the government and from some private institutions.

The Thai government is issuing cash support of THB 5.000 per month to those who need it most. It’s not much, but it’s enough to survive on a very low bar. Together with the support from private institutions, NGOs, and hundreds of those who are more fortunate and who are volunteering to support, I have no doubt that the country will get through the event.

I am also always astonished by the amount of support among Thais in times of crisis. My wife is getting postal packages from friends and family with food, face masks, and snacks. We pass on the favor by sending things to others who need it more than us. I am fortunate enough to still have my job and my monthly salary intact, albeit slightly reduced.

About income and unexpected situations

But not everyone is lucky. Similar to other places around the globe, unemployment in Thailand is on the rise on a massive scale. This is dire in a country with very limited governmental social protection in place, and where most people live paycheck to paycheck.

Which brings me to the main point: Unemployment means for many people to lose their only source of income. And we can see right now more clear than ever, how many people’s lives really depend on their job. Being without work and without an opportunity to find new employment within a short time has now turned into an existential threat for millions of people.

Also, only very few of them could have even imagined such a situation two or three months ago. Yes, some might have an emergency fund and savings to ride out bad times. But would they have expected that they can lose their job, their income, and their benefits within such a short period of time? Hardly.

Building up multiple income streams

This is where the lessons of FIRE become such a powerful reminder, because having multiple, passive income streams is what FIRE is all about! The whole point of becoming financially independent means not being dependent on your job.

Building up passive income streams is best done by investments. Sure, the stock market is crashing and we are sliding into a recession. But out of the 33 companies in my income portfolio, so far only one of them has canceled the dividend, and only two announced to reduce it for this year.

Thanks to this, I am never worried about losing my job. Sure, my monthly dividends can’t compare with my salary, but that’s not the point. The important part for me is that I won’t need to rely on government support and on charities. I will be able to fulfill my main responsibility of providing shelter, medical protection, and food to me and my family on my own.

Personally, this is a very important factor to me, as this defines my perception of freedom and independence.

Who gets the money

And just to add another layer of understanding of why investing is a safer bet than your job, let me explain here one thing. While our savings and jobs are being destroyed, a crisis like this also generates unimaginable amounts of money. While stock valuations may be nosediving right now, governments all across the globe are printing cash like there is no tomorrow.

And where does this cash go to?

In the US, every US national is receiving a one time check of USD 1.200. There are 328,8 Million people in the US, so this sums up to roughly 395 Billion USD. Yes, it’s a lot of money.

But you know who gets more? Companies. Especially the big ones. They get bailed out when they get in trouble, they receive grants, and the FED is reducing interest rates so they can borrow money almost for free.┬áThis may sound very negative, but I don’t mean it that way. That’s just how it works for plenty and a variety of reasons.

The important thing is that you have a choice to make. Do you stick to your job and when you lose it, wait for your one-time check of USD 1.200? Or do you invest, and build up multiple and passive sources of income?

Having the knowledge that governments across the globe will put significantly more effort into protecting your investments and your sources of passive income (in comparison with taking care of you directly), this shouldn’t be a complicated choice to make.

Panic has never been a good adviser

The coronavirus is now officially a pandemic. A serious threat not only to human lives but also to the world economy, to our health system, and yes, even to our financial system.

As the virus spreads further, entire countries are closing borders, schools are closing doors, events get canceled, elections move online. People get scared to go for a beer to their local pub. Even the premiere of the new James Bond movie has been postponed!

So the ultimate outcome, and changes to our lives, possibly to the world, it’s all very uncertain. And nowhere is this uncertainty better reflected than in the stock market. Having crashed almost on a scale comparable to the financial crisis of 2008, we can see the negative sentiment of investors on full display.

Where do we go from here?

After three weeks of markets being basically in free-fall, the last Friday showed something of a possible turn around. After the US-President decided to declare a national emergency and at least showed something more of seriousness about the situation, confidence seemed to return to the markets and stocks recovered some of their losses.

But is this enough to start a full-scale recovery? In my humble opinion, it’s still way too early to even think about it. Not only does the response from the White House lack enough credibility to be trusted and to trigger a sustainable recovery. Even more importantly we will need to see some real numbers before the full impact of the crisis can be assessed. What numbers am I talking about?

  • Lost revenues
  • Lost jobs
  • Recovery costs
  • Updated annual forecasts (for everything)
  • Dividend payouts and dividend cuts
  • Repercussions on globalization as a system
  • Political repercussions

That’s a lot of data to digest and I don’t dare to predict how long the evaluation of it may take. And I am not alone there. Markets tend to react quickly to possible opportunities because there are plenty of speculative traders who are willing to take a risk to bet on the direction which they consider more plausible. But more than often these emotional and non-data driven speculations go wrong. It’s a 50:50 bet.

Don’t panic. Analyze. Invest.

Therefore, I wouldn’t be surprised to see some additional bad weeks ahead of us. The short spike-up which we observed on Friday could turn out to have been only a short-sighted flare of hope from some speculative investors betting on a turnaround, ahead of having done the required due-diligence and analyzing some real numbers.

For us private investors it’s a challenging time. First of all, we got to keep a cool head. Panic doesn’t help. As my personal portfolio has lost over 30% in value, I haven’t lost any sleep about it.

First of all, the loss is not real until I actually sell the shares. Until then, it’s only a loss on paper. And do I have any reason to sell my shares? I don’t think so. All the stocks in my portfolio have been bought for a reason. While the dividend payments might get cut or even fully canceled for a year, as long as the business itself doesn’t face an existential threat, I don’t worry.

Secondly, markets go up and down. That’s what they do. We had an 11-year run-up and it might be time for a turn-around. Will this turn-around last forever? Very unlikely. Bull-markets are followed by bear-markets and vice-versa. Do I, or my generation (I am from Gen X), need to worry? Very unlikely. I have still plenty of time ahead of me and will almost certainly see more recessions – and more recoveries.

Lastly, I am an optimist, and what I see is a great opportunity to continue building up my retirement portfolio. Even if we should have now entered a bear market and a possible recession. All I see is companies and businesses, learning to adapt, getting more efficient, improving their resilience and tweaking their operational proficiency, to come out even stronger once this bear market will be over.

So don’t panic. Analyze. Invest.

To space and beyond!

Investing in the stock market always involves risks. In financial jargon, we have something called a “magic triangle”. It describes and shows the relation of the three cornerstones of any financial investment: Profit, security, and liquidity. You can never have all three maxed out.

The more your investment tends towards one cornerstone, the less the other two will get applied. I.e.: An investment with a high return (profit) will offer less security and fewer options to get to your money if you need it (liquidity). On the other hand, a highly liquid investment with a safety margin will usually offer a significantly lower profit. You get the picture.

Taking a hit

Why am I bringing this up? Because I just took a strong hit and realized a loss of almost 2000 Euros on my investment in the Dutch REIT (Real Estate Investment Trust) Wereldhave (WRDEF) The shares are caught in a downward spiral for a couple of years now and after two dividend cuts and a decline of almost 65%, I have decided to get out of it.

Frankly, I got out way too late. I should have acted sooner but I still had the expectation for a rebound. I was also quite comfortable with the high dividend yield of 10% in the first year, and still 6% after the first dividend cut. But the second dividend cut would bring the yield down to only 4%, with a perspective of even further reductions down the road. It’s just too many negative points that piled up.

Moving on

2000 Euros is a lot of money. But, I had no feelings at all while exiting the position. A key factor to success in investment is emotional control. It also helps that I have enough other stocks to balance this loss. Especially the recent run-up in Apple (AAPL) was of great support on that front. My Apple shares are up 96% and I sold a small chunk to make up for the loss and to spread/diversify my investments a little more.

Also, as some readers might remember, I had another great success story. My investment in Virgin Galactic (SPCE) as recent as only 2 months ago, back in December. While I invested only a tiny amount of 270 USD (250 Euros), the company had a stellar run for the last 2 weeks and is up 242%, meaning that my investment more than tripled, almost quadrupled. I bought in 25 shares at 10,57 USD and sold yesterday 8 shares at 35 USD. Of course, it’s not enough to balance the loss of 2000 Euros, but let’s see where this goes. With the sales of 8 shares, I already got over 100% return on my investment and I still kept 17 shares for whatever happens in the near or distant future. Several analysts see this company already as the Tesla (TSLA) of space.

Exciting times.

Disclosure: As mentioned, I owe all the stocks mentioned in this article except for Wereldhave (WRDEF) which I just sold.

What would you do…

… if you wouldn’t need to work anymore? If you wouldn’t need to worry about food, shelter, and health, what would make you get out of bed every single day?

As the election in the US is drawing closer, I have spent some nights learning about some of the presidential candidates. The person who is standing out of the crowd for me: Andrew Yang. And even though I don’t think that he will be successful in the current campaign, I believe that his time is yet to come.

His MATH campaign (Make America Think Harder) is clearly not aiming at the people who are currently in power and who will remain so for a few more years – probably. Politics in America are old, white, and corporate. But times will change. All those who cling to power now have a very short candle of life left to burn. Once they’re gone, the change will come.

But politics aside, I want you to think about what would happen if the concept of a universal income for citizens would become reality. How would your day look like?

The Freedom dividend

This concept, also known as a universal income, is not a new idea. Without getting into details, let’s just assume that it’s feasible and you and your partner suddenly start receiving 1.000$ each on your bank account. Unconditionally, on every first day of each month.

That’s 2.000$ for the household a month. 24.000 $ a year. It’s not enough for a “perfect” life, but it’s probably enough to let you stop worrying about food, shelter and to some degree, about health. How would this change your life?

Critics are easy to point out that people would just stop working, stop doing anything for that matter. To a point, this is probably true. People would probably stop doing jobs that pay less than that. For example, service staff in restaurants or coffee shops who don’t even get paid by the hour but rely solely on tips might reconsider their life choices. Employees who get their lives sucked out by unscrupulous managers (*cough*A-m-azon*cough*) might be OK to sacrifice 100$ or 200$ a month to get their life back.

But we all need a purpose in our lives. And while many people think that rich people, those who could afford to hang out on a beach in Bali or the Bahamas all day, are living the dream relaxing and spending money all day long, nothing could be further from the truth. Most rich people work actually quite a lot. The difference is though, that they work on things that they are passionate about. Because they can afford to do so.

Don’t wait for Andrew Yang

The truth is that many skills, many qualities of the past, have disappeared over the years as they proved to be not profitable enough to provide an income for people who practiced them. Artists, handicrafts, social workers, volunteers. The list is long. Some of them were meant to go and nobody will miss them. Others are dearly missed and needed.

So while we wait for this concept to get embraced by nations who can afford it, there is another option to take matters into our own hands and to get the freedom dividend anyway: By investing, and generating passive income.

The freedom dividend is exactly that. A dividend. And you don’t need to wait for Andrew Yang to get it. All you need to do is to start investing in dividend-paying stocks. And while you build up your savings and your passive income, whether Andrew Yang will be successful or not, will not hinder you from achieving the target of getting some freedom back through regular dividend payments straight to your bank account.

Once you get that, you might find your passion in some jobs which are dearly missed and needed, but which are not being pursued by anyone due to low profits and lack of interest from large corporations. The term “retirement” might just then receive a completely new meaning for you and for others…