Read? Got Goals. Got Plans. But No Shame!!!
SMOL: Grasshoppers fly with BOTH wings. Ants have forgotten the art of flying after their maiden mating flight. More like the Queen conveniently don't share this truth with her daughters...
Okay. Ants don't fly so ants lose out?
Never mind. Ants know that bad times and uncertainties are always some years ahead of them so they plan and plan.
Got Plan A, Plan B and Plan C.
They will crawl anyhow. They will crawl anywhere to build up bit by bit a large Reserve or Reservoir for the long Sunny days when Grasshoppers are dancing happily for the longest. Long summer. Shiok!
Tap 3 (Plan A: 10-years investment goals from 2012 to 2021)
Cash flow from his investment portfolio come from his realized net profit/loss (Uncle8888 won't like to sell at losses. He seldoms has net realized losses. If the paper losses become so unbearable; he will just write them off and take a hit on his performance for that year. It is non cash item like any company accounting principles) and dividends received for the year.
Since he is not an active trader most of his cash flow will come from dividends.
Ants don't anyhow pluck Goals from the sky hor! He will count using Microsoft Excel to the nearest decimal points and not akar akar using his 21 up and down fingers. :-)
His basis for his 10-year Goals for Tap 3
Tap 3 is his yearly goal to meet his yearly family living expenses for the next 10 years (2012 to 2021). His family living expenses are calculated from his historical expenses when he suddenly woke up and realized the importance of tracking his family expenses if he wanted to know "How Much Is Enough?".
Trust but Verify!
He trusts History but verify the Numbers with future inflation and with Chart, Graph and the Image.
How Future You Will Thank You!
and when History becomes Goals.
His Goals is more commonly known by folks as passive income.
Depending passive income from dividends?
Someone has already said ...
I feel that dividend into is not very passive nor dependable. It is a good supplement but cannot be "depended" on.
Uncle8888 has known Mr. Market too well. We can't really trust Mr. Market and be too dependent on him to meet our day-to-day survival.
Know The Three Risks? Your Personal Finance and Investment - Three Risks That Are Seldom Actively Discussed by Personal Finance and Investment Bloggers
Ants are good at planning so he has Plan B (Tap 1 : His Large Reserve or Reservoir)
Tap 1 is normally closed and will only be turned on to top up Tap 3 when Tap 3 is not enough during poor market condition and dividends are not enough to cover his family living expenses.
Tap 1 is built with large capacity in mind to last till his EOL...
Plan C (Tap 2: Medical and Health Care Self Funding)
$XX,XXX as emergency cash + CPF MA, SA, and RA and also covered by MediShield and ElderShield.
Now, who said Ant cannot fly?