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| A Year Ago |
I'd like to take a moment and reiterate to the readers of this site what I am doing here and why I am doing it. Back at the turn of the century, I did some trading (not investing, there's a difference) and made a bit of money, lost a bit of money. My employer had a stock participation program (SPP) which I partook in to some profit as well. As time when on, I bought some stocks and promptly forgot about them. During the interim, I worked hard to eliminate all debt, and develop a lifestyle that made me a good steward of the funds I was given (disposable cars, abstain from subscription models, determine ROI, etc.) and suddenly had plenty of cash flow. I had been feeding my 401k like most drones, and started to wonder why I couldn't make money in the stock market (I'm a reasonably smart guy).
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| Today! |
The Trump economy was starting to get underway, and I was poised to be left in the dust. I logged into my old brokerage account, and found $400 sitting in it, and I wondered why. I owned a paper company that paid dividends. It piqued my interest. I started reading primers on investing (and trading) and long story short, learned about dividend investing. Slow growth with cash just for hanging onto the stock, what could go wrong? I liquidated all my stocks, borrowed against my 401k, and began my foray into dividend stocks exclusively. That had to have a solid balance sheet, plenty of cash flow to pay the dividend, have to have paid out faithfully, and a clear direction. After all, I wanted to own a company and invest in it, which is a far cry from the "casino" trading that is done. It would be as though I am financing a business, but letting someone else do all the work.
The goal: Work free income with raises that exceed cost of living. I put $1000 into a stock, and I get (starting) $50 a year for the rest of my life, with that $50 increasing every year by 4-30%. So that, when I retire, I receive income that won't count against social security income, and just have to maintain the stock by making sure the dividend isn't cut. If it is cut, I pull out and invest into another.
This way I obtain independence and freedom, and can pursue other things, such as setting up my children with income from dividends when I pass on, I won't have to depend on social security, have control over my assets (which a 401k won't allow me to do), and pursue a ministry and philanthropy.
So far, I am 2 years in, have almost $100k in assets (by reinvesting dividends and NOT investing in my 401k) and am making almost $5k a year. The goal is 30-50k, of course, but the snowball is getting bigger and moving faster! In the beginning I could only pay my water bill, now I can pay all my utilities plus more (if I wanted to!). Instead, I put more and more every month into the dividend stocks, which makes me more and more money. When I read that dividend investing, while not sexy, is 99% successful, I didn't believe it, but now I do. Know that if I lost my job today, I would be making $400 a month doing nothing, adds some security which just grows and grows.
My investing strategy is gauged different than a younger person's, as I am middle-aged and need to be a bit more risky, but I still am quite conservative compared to my co-worker who is about 10+ years older and chases yield a bit more. I may discuss the finer points in a future post, but you can figure it out studying my past blogs.
Raising two kids gets a little complicated, and this year expenses for school were a tad steep. Coupled with current debt for remodeling, our FCF (free cash flow) is getting a workout. If it wasn't for the free cash flow, and ability to move things around, we couldn't make ends meet. However, the FCF is there, and savings and retirement were impacted little if at all.
Purchases were down for July, since there wasn't a lot of downward action in the market for most of the month. In fact, there was a lot of growth for my stocks. It wasn't until August 1st (today) that I backed up the truck to buy several stocks that went on sale after the double whammy of a rate cut, followed by additional presidential tariffs.
Dividends Received: $113.28 (the low paying month)
| WSO |
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$33.60 |
| XEL |
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$17.42 |
| O |
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$10.87 |
| MAIN |
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$22.55 |
| KMB |
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$28.84 |
July Purchases:
FAST 3
IP 3
WSO 3
OKE 3
ORI 3
ADM 2
ABBV 9
O 2
WTR 2
Last time ORI offered a special dividend, I called it "Breaking News!". This insurance company, which I personally used as my home warranty during my recent move, has been doing great since the Trump era of reduced regulations. Because of the reduced regulations removed by this administration (by ORI's admission), they offered their original special dividend of $1 per share, which I then loaded up on. You can consider it as $1 off the share price, but in this case it actually doubles the dividend offered this year. I hope this trend continues where they reward shareholders. ORI is a nice slow-growth company with a decent dividend and a great balance sheet. So hurry up and buy in before September 6th! I'll probably grab some ORI before the 6th, but I'm hoping for some tradewar "bad" news to cause all the stocks to drop first. I never thought I'd be such a bear when it comes to stocks, but dividend investing will do that to you.
