Dividend Payout from a Portfolio using Scheduled DCS (DCS-S3) Strategy.

In our recent data collected from an existing portfolio using DCS-S3 strategy for the past 4-5 years, we noticed a growing dividend year on year. The portfolio consist regular premium ($100,000 per annum) investment linked plans investing into carefully selected investment funds. Let’s take a look at the past 4 years data and the projection.

First 4 years Dividend collected and deposited into bank account of the investor.

From the above, we can see that the investor who invested $100,000 per annum $35,227.47 in the first 12 months. In the next 12 months, he received $47,757.86. On the subsequent 12 months, he collected another $62,181.80. By the 48th month, he has gotten another $77,444.90.

At the first glance, it seems that investor has invested $400,000. But after deducting the amount he received as dividend, his net investment is only $64,772.53 in Year 1, $52,424.14 in Year 2, $37,818.20 in Year 3, $22,555.10 in Year 4. Total net amount invested is only $177,574.97, instead of the initial impression of $400,000 investment over 4 years.

First 4 years and 4 months Dividend collected and deposited into bank account of the investor. Data collected on 28 Feb 2024

As you can see from the above data, $32,810.95 of dividend already collected from the first 4 months. Let’s take a look at the projection of the dividend payout from Year 5 and beyond.

20 years Payout Projection based on the first 4 years bar chart

Based on above chart, the investment is potentially fully self funding from the Year 6 with about $8,000 top up (based on projected dividend of $92,000) on Year 5. From Year 6 onwards using only $185,574.97 ( $177,574.97 + $8000) approximately to fund a $100,000 annual premium of a regular premium investment plan.