Many Singaporeans are attracted to the idea of dividend investing, especially as a way to generate passive income year-after-year with minimal effort.
We typically refer to them as dividend investors. Many of them chase after stocks yielding high dividends, especially when the rates are much higher than the interest offered by your bank or fixed deposits.
It is easy to see why. Imagine if you bought 50,000 shares of Rickmers Maritime at $0.205 for a total of $10,250 (excluding brokerage fees). At a dividend yield of 14.3%, you would be getting $1,466 back every year - within 7 years of holding the stock, you would have earned back the cost of your investment from just the dividends alone. In other words, you would "break even" after the 7th year, as every yearly dividend payout thereafter would be pure profit in your pockets.
I have to admit, I NEARLY ......