I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

Click to email CW8888 or Email ID : jacobng1@gmail.com

Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down

Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Sunday 17 June 2012

How to become rich in stocks??? (2)

Read? How to become rich in stocks???

Borrow the idea from La Papillion

** "BIAS" is a special feature in my blog where I get to say whatever I want with scant regards for your feelings. I'm not politically correct in this feature, so go ahead, judge me."

Read? Does Your Account Size Matter? - Part 3

Read? When you have money, what would you do with it?

Read? Preserving or building wealth? That is the difference!

Have you read and understand the above three posts?


Because I am going to do another BIAS post and it may raise your blood pressure when you read liao buay song.

Understanding the importance of Retained Earning by company

Same picture but different Bunnies so different story.

This time ..

Bunny Growth on the Left side and Bunny Yield on the Right side.

S-REITs and other high dividend payout ratio (90% or more) stocks

Bunny Y is showing off his impressive big big leaves to his fellow Bunny G.

Hey! Did you see my big big yield bor?
10% yield hor!!!
Don't play play!!!

Ya, above the ground, it is really  impressive. There is no doubt about it. But, what we can't see is below the ground. Bunny Y's carrot is small small nia but Bunny G's carrot is so big hor.

What is this carrot below the ground?

Retained earning by the company!!!

It is what we can't see above the ground may actually be even more important and critical than what we can see and feel above the ground.

Retained earning is the undistributed profit that is poured back into the company to provide extra working capital. This extra working capital may even help company to reduce its dependency from borrowing more money or raising more equities to fund its growth strategies.

Fundamentally, we know that there are two common methods to value a company. One is through its future earning growth and the other is through its assets growth.

In short, year-on-year retained earning by the company is the fuel and catalyst to expand and grow the company's assets and business prospects without having to raise more and more equities.

And sooner or later, investors in this company will be rewarded by higher stock dividend and higher valuation of the company through its higher and higher earning and assets growth.

It is this year-on-year multipler effect of the company's retained earning and successful execution of its growth strategies using these retained earnings that will help to form the higher base for sustaining its higher and higher stock price over market cycles of gloom and boom.

It is how you become rich in stocks by holding multi-bagger high yield stocks over long run with the right position sizing with respect to your net worth!!!

BTW, nowadays it is quite common to read on bloggers talking more on the importance of dividend income and reits; but can't really remember reading something on retained earning.

Understand bo?


  1. My blood pressure is rising. Must see doctor liao. Hahaha.. ;p

    Read? Roads to wealth creation in the stock market.

    There is room for diversity and some methods might work better for some people and at different times. ;)

  2. CW8888,


    There's a different strategy for each season.

    High yield plays are more "armour" strategies when we have accumulated a sizeable nest egg or when we are into our wealth conservation phase.

    Having said that, nothing wrong with using a high yielding strategy. I use it to provide cash flow to pay for my living expenses. But I am under no illusion it will help grow my net-worth...

    To grow, I use "firepower" strategies. It's not either or. Can blend one!

    It like being an Apple employee. Should we opt for dividend in cash or stocks instead?

    It may depend whether you prefer immediate or delayed gratification.

  3. Hi SMOL,

    You are ever the voice of reason although frequently in an irreverent manner. Hahaha.. ;)

    1. AK,

      I am glad you are laughing!

      Don't spoil my image. I am not an intellect; I'm the comedian.

      I wonder why IKEA don't reward employees with stocks or stock options like tech companies. I could have retired much earlier.

      Oh! I remember now. Not listed... @##$%&#$^^$#!!#$


  4. SMOL,

    Hahaha.. Why shouldn't I be laughing? There is room for diversity in our world and I have never once said that my way is the right way or, indeed, the only way.

    Some might already have a very big root (think straight here) and would like to have a bushy (again think straight hor) bunch of leaves. Some might have a smaller root but would still like to have a bushy bunch of leaves. Some might like to grow their roots bigger... ahem. Hahaha.. Personally, I am happy with both my root and my leaves. ;p

    As long as everyone grows richer and is happy with their results, good. I am not dogmatic.

    Aiyoh, you so humble. You are crouching tiger, hidden dragon. You good. ;)

    Oh, you worked for IKEA? I didn't know that. I find the founder's story very inspirational. Shows us what hard work, thrift and honesty can do for a person.


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