To my Kids: Earning $1,000 per month in passive income is entirely possible!

Recently I watched a YouTube video from CNA MoneyMind about how to make $1000 a month in passive income:

https://www.youtube.com/watch?v=wBuXI0bFAAE

I want to tell you this is entirely possible, and I have done it. 

In fact in the below chart, you can see I have achieved this since 2022 (caveat: data point for 2025 has only 1 sample size):

You can read through all my blog posts with title "Dividends for <month-year>" posts such as the below, but I'll summarize my journey in this post.

https://financeopti.blogspot.com/2025/02/dividends-for-jan-2025-towards-5k-month.html

How I Started Dividend Investing

Like many foolish investors, I started dabbling in stocks as soon as I graduated and started working. I thought I will try and see if I could beat Warren Buffet. I soon realize this is impossible.

You can try too, but please make sure you draw a conclusion on whether you can beat Warren Buffet or not fast. 

I learned that what I was doing was speculating in stocks (ie. gambling) and not investing.

Hence I started reading up on investing. I found a book that systematically details how to derive the fair value of the stock. I will pass this book to you. 

Thereafter I acquired my first investing strategy, called 'Strategy Fair Value'.

Using this strategy I was able to determine at any point in time, which stocks are worth buying. I used this strategy on Singapore blue chips.

However, even with this strategy, it took a while to make money. This is because quite a number of stocks went down in value after I bought them. Yes, even with this strategy, the hit rate was not good. However,  the trick is to keep the stocks for the long term. If you add up the dividends collected over the years, the returns are positive.

Hence, the biggest learning I got was that for good stocks, you have to hold long-term. How long is long? At this moment, let's just say I plan to hold it as long as possible - the longest period I have held a stock thus far is 11 years and counting.

Later on, I learned about ETFs. The whole point of ETFs is about diversification. Rather than just holding one stock, you buy a bundle of stocks in a particular sector/country. If you are starting, my recommendation is VUSD. 

Tips:

• Formulate your investing thesis early - are you speculating or investing
• Buy blue chip stocks
• Hold long-term
• Don't speculate
• For dividend investing, make sure the dividend yield is > 0%
• For diversification, buy ETFs