10k per month is 120k per year.
Assuming DY of 6%, the capital you need is:
120000*100/6 = RM2000000

But if you can invest 2 mil in Bursa, chances are you won't be satisfied with 10k per month. In the end you would still be stuck in rat race

This post has been edited by river.sand: Jan 18 2013, 05:31 PM

Corrected, thanks

Wow, I never know there is such a simple formula I thought I need to do exponential calculation

But growth companies usually give very little dividend, and high dividend stocks usually can't grow that fast

My criteria are very similar

Somebody says that for growth stocks, we look at their EPS; for mature stocks, we look at their cash flow...

I assume DW lives in his parents' house...

Sadly, I migrated from Perak to KL, gotta get a house at bloated price

BTW, I go for overseas vacations occasionally, but I choose to stay in budget guesthouses. For example, my room in Bangkok cost just 200B/night - no air-con, just fan, and the bathrooms were shared among the guests

TECNIC's price was over RM4.00 before its last ex-date, giving a DY of more than 6%. Bu the price keeps dropping after the ex-date. Yesterday it closed at 3.16.
And, it has not been doing well in the last few quarters, so I doubt the price will rebound to 3.50 any time soon.
If its gives a dividend of 18 sen/share this year, the DY will again be more than 6%. But that's a far cry from last year's 25 sen/share.

Sadly, I am one of the investors who got burnt (already cut loss)

This post has been edited by river.sand: Feb 20 2013, 08:59 AM

You can post questions in specific threads...

BJTOTO
http://forum.lowyat.net/topic/1060611/+1140

REIT
http://forum.lowyat.net/topic/2498000/+760

In your example, assuming there are no other major activities, from year 6 onwards there is no huge difference between earning and free cash flow. Which is what Pink Spider said, "... cash flow and accounting earning even out over time."

Dividend payout can be over 100% between year 2 and year 5, but it can't be forever...

= = =

Let's describe this in a simple, perfect example:

- A company's EBITDA is 500k year after year
- in year 1, it has a capex of 500k, depreciated over 5 years
- no tax, interests etc
- no other major investing and financing activities

Y1 - earning 400k, cash flow 0
Y2 - earning 400k, cash flow 500k
Y3 - earning 400k, cash flow 500k
Y4 - earning 400k, cash flow 500k
Y5 - earning 400k, cash flow 500k
Y6 - earning 500k, cash flow 500k

From Y2 to Y5, cash flow is more than earning, so payout ratio of over 100% is possible. Still, if it is 174%, I will be skeptical.
Y6 onward, payout ratio cannot be over 100%.

This post has been edited by river.sand: Mar 1 2013, 08:35 AM

Unless we can spot a good thing before others 'discover' it...
But even if we do, we may not have confidence in ourselves

Cherroy has already mentioned telcos.
High capex industry does have one advantage - high entry barrier.

Should we open a thread specifically for glove makers? I want to learn more about this industry...

I copy some texts from Peter Lynch's One Up on Wall Street...

Obviously you don't have to be able to predict the stock market to make money in stocks, or else I wouldn't have made any money.
(page 84)

If you get interested in buying a turnaround, it ought to be for a more sensible reason than the stock's gone done so far it looks like up to you. Maybe you realize that business is picking up, and you check the balance sheet and you see the company has $11 per share in cash and the stock is selling for $14.
(page 260)

Most the money I make is in the third or fourth year that I've owned something...
(page 266)

I have already mentioned my failure with TECNIC. I'll repeat here...

I bought TECNIC at RM3.90. It's dividend for last year was 25 sen/share. That gave a DY of 6.4%
I also check the annual reports. Its revenue and earning had increased every year from 2006 to 2011. But the EPS dropped in Q4 2011. That was a red flag I missed.

It turned out that, its EPS went down for four consecutive counters (and only slightly went up in Q4 2012). The stock price also kept dropping. In the end, I cut loss at 3.40.

TECNIC is now traded at 3.20, and no dividend proposed for this year...

How to earn 50% dividend in stock market?

http://gpcbiz.com/

What do ya think?





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I add my 2 sen...

Let's say I own reit A. It's yield on price is just 5%. OTOH, reit B's yield on price is 7%. (Let's ignore other factors in this simple example.) I may sell reit A and use the proceed to buy reit B.
But if I can't find that reit B with good yield, there is no point selling reit A and keep the money in FD.