From Coins to Shares

In our daily lives, despite the constant push to go cardless. There will be times where we still rely on notes and coins for our small daily thrills like buying coffee or food during breakfast, lunch or dinner.

As I recalled many years ago, one of the local banks used to have this program where you could round up your purchases, and they will pay you some interest for this money set aside in a segregated account. Now fast forward to about 5 years later – which is now, that scheme might have become obsolete. However, with the rise of Apple Pay, Samsung Pay and Android Pay just to name a few, not only are we going cashless, we are going cardless, we still see little pennies lying around.

The little experiment I did over the past few months was to save up my pennies. From the meals or small items I purchase, I will use the dollar notes to pay and what is left behind are some coins. So I have a small jug to keep these coins. At the end of the month, these coins get exchanged for notes again. Either at the bank or at some hawker stalls which I know of. Then the notes get deposited to buy shares.

Below is a list of shares that provide decent monthly dividends. These are mainly Exchange Traded Funds with a yield of more than 5%.

So let’s say we put aside $50 a month in coins and buy into Harvester ETFs, and calculate the return over 12 months (base on the dividend rate from Jan 2016-Dec 2016), and a monthly investment of $50 (net of the exchange rate and brokerage commission).

We see the returns in the graph below:

HVST - Graph of investment- commission & forex loss (Jan 2016 - Dec 2016)
Graph of investment- commission & forex loss (Jan 2016 – Dec 2016)

While the initial amount of S$50 per month for 12 months might not seem like a lot.

Let’s look at the breakdown below
Total investment (Accumulated): S$600 / A$584.40
Total Share Value on 31-Dec-2016: S$584.78/A$561.06

From the above calculations, we could see there is a slight loss of $15.22 in the investment despite the re-investment of dividends. Short term loss in value is possible depending on the market movements. However, when holding it for the long run does have its benefits. With technology, we can do more to save as much as we might spend more with card less, so it is good to keep a check on spending and investing the extra cash.


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