Wednesday, 7 January 2015

Calculation of Portfolio for Next 5 Years.

I'm trying to picture what my portfolio growth would be in 5 years time so I've decided to come out with a simple Excel Sheet to calculate that with the following assumptions:

1) Annual injection of capital is $10,000.

2) Average dividends yield is 6%

3) Dividends to be reinvested 100%

4) All else remains constant

Year Initial Capital Dividends (6%) Annual Injection Total Average Dividends Per Month

2015 $60,000.00 $3,600.00 $10,000.00 $73,600.00 $300.00

2016 $73,600.00 $4,416.00 $10,000.00 $88,016.00 $368.00

2017 $88,016.00 $5,280.96 $10,000.00 $103,296.96 $440.08

2018 $103,296.96 $6,197.82 $10,000.00 $119,494.78 $516.48

2019 $119,494.78 $7,169.69 $10,000.00 $136,664.46 $597.47

This is what I would At Least have by end of 2019 at the age of 32 years old with all the assumption where everything remain constant.

On top of that I would have $54972 principle amount inside my Standard Chartered Flexi-save endowment plan (which is a huge mistake i've made)

All at the end of 2019.

Conclusion: The growth doesn't really seem optimistic with just $10,000 annual injection.. I guess I will need to cut down more on my expenses and delegate more dollars into my portfolio to work for me as my employees. This is my own business that I will have to groom it myself.

Recommendation for Myself: be a little more frugal and to increase my annual injection to $15,000.

And it would look like this!

Year Initial Capital Dividends (6%) Annual Injection Total Average Dividends Per Month

2015 $60,000.00 $3,600.00 $15,000.00 $78,600.00 $300.00

2016 $78,600.00 $4,716.00 $15,000.00 $98,316.00 $393.00

2017 $98,316.00 $5,898.96 $15,000.00 $119,214.96 $491.58

2018 $119,214.96 $7,152.90 $15,000.00 $141,367.86 $596.07

2019 $141,367.86 $8,482.07 $15,000.00 $164,849.93 $706.84


  1. Hi jfree

    Good projections there.

    On top of it, maybe you can work on improving returns that beat the sti. I know it seems like the market is not within our control but through proper risk management we can view returns as positive over the long run. It will make a whole lot difference to your portfolio by then.

  2. Hi B,

    Thanks for explaining my queries through facebook! Yup I'm optimistic that the stocks i bought now will grow in next 5 years but than dunno by how much. on top of that i also didn't factor in inheritance, windfall from betting and increase in salary income. Thats the worst case safe margin of what i am projecting in the next 5 years.


  3. Hi Jfree, I'm enjoying reading your blog too! Btw, I'm wondering how you project 6% growth annually. Since the market has risks, how can you be so sure that you'll get 6%? Do share! But that's a lovely projection, very inspiring!

    1. Hi Budget Babe!

      Welcome to my blog! The 6% is not the stock growth but the dividends per annum given to me from my mostly REITS stock portfolio ranging from 5% - 7% i averaged it to 6% as an estimation. As nobody can predict the market itself, on assumption #4 I stated All else remains constant. Although for stocks, the price will likely to grow in long term if there's isn't any major crisis.

      Actually I'm still quite new to stocks investing and I'm doing my due diligence learning everyday by reading books and reading other people's blog. Take a look at blogger B who commented earlier above. At his age, his portfolio is so much bigger than mine I wonder how can I catch up with him..

      I am currently thinking about how can I save money for 2015 after seeing your popular blog post. Because you inspired me!


    2. While you may get 6% from dividend yield of REITs, don't forget the REIT stock value could also drop or rise. It's the total return that would impact your portfolio value.

    3. Hello Lizardo,

      thanks for pointing out that. my focus on reits is mainly on the dividends, at least for me, i know that for reits the changes will not be huge since i only bought them on last year's august when they are already in a matured state. so this only serve as a income counter for me. im only concentrating on how much capital i need to put in my portfolio now.



  4. If dividend income is what you desire, and your time horizon is long, lowering the dividend target to 3-4% instead of 6% would open up more options so that you are not overly weighted in REITs. Just a suggestion. These options also carry potential for capital growth along with dividend income, as well as dividend growth.

    1. i totally agree with you, i want to look for something with growth and dividend growth at the same time. but i got no idea what is good.. because i only know reits now, which is what usually middle income people do, play safe and get rich slower than what the rich does. i am now storing capital and will inject once i have the power to. looking to get non reit stocks from now on! after reading rich dad poor dad!

      thanks for the enlightenment Lizardo!!