Sunday, January 3, 2021

HEY ABBOTT!! Merry Christmas! Busy month for the portfolio!

LOTS OF STUFF HAPPENING!  WOW, just got my highest dividend raise ever this month!  Abbott Labs raised their dividend a WHOPPING 25%  I can't imagine getting a raise like that at my current job!  While I don't own as much Abbott as I would like (it is very expensive), I'll take it nonetheless!  I can only assume this will continue next year, since what Abbott makes everyone wants right now.  If they can also make a covid home test, this would really boost profits. 

Old Republic (ORI) also announced a special $1 per share special dividend for the third year in a row!  While I don't consider this a part of the dependable income, I do know they did it after Trump removed several regulations which benefitted ORI greatly.  It would be great if they can keep it going, since it is greater than their dividend normally.  My son was thrilled since he bought it a week before they announced it.  You can see below I did some heavy buying this month, not of ORI, but I do intend to do a large purchase of it soon, hopefully before the cutoff for the special dividend.   

While 2020 was a bad year for some, it presented unprecedented financial opportunities for all who could take advantage of them.  I truly feel blessed to continue receiving income which I can then redirect to my retirement.  I am grateful for my secure, well paying job, and the opportunity to keep bringing home the bacon and putting bread on the table, while also setting up my retirement income.  The stock market ended on a very high note, and I do expect some correction soon, but as with anything, nobody knows for sure when.  Especially with all the young money entering the market.  All you can do is tell when it is "close".  Euphoria is the key to look out for, and that is what I am starting to see.  I posted this once before, but it bears reposting to remind me to wait for the Euphoria cycle to end before buying much.

I would also like to comment on Warner Bros. decision to stream since I am an AT&T stockholder (who owns Time/Warner).  I am all for it, and I know this is not a popular decision with Hollywood and the movie theaters.  However, I think it can be profitable for AT&T and Disney should they decided to do it.  There is much money wasted on the way to the theater, and apparently eats up a good chunk of the cost to make a movie.  I personally would prefer to make my superior garlic parmesan popcorn, pause it when I like (bio breaks), and customize my own sound system all while laying on a comfortable couch with no fear of disease, sticky floors, or other people talking.  I understand the key to jobs is layers, but from a user standpoint, it is more economical and fun.  Again, my opinion.  While I am not a fan of the DC universe, I hope Wonder Woman does well.  I do look forward to the new Dune movies, and will probably pay for HBOMAX (owned by AT&T) when Dune comes out.  I did some heavy buying of AT&T (T) because this is a visionary and bold move, and that is what makes money.  Now if they could only shut down CNN...

Dividend Increases & Special Payouts

 December Purchases:

Wednesday, December 2, 2020

Thankful for November Growth

Many unpredictable factors occurring as of this writing:

- Election is over and pro-business candidate lost.

- Covid vaccine claims are popping up with high percentages of effectiveness.

- War is brewing in the Middle East

- Covid cases are spiking and hospitalizations are at an all-time high.

- Families defy warnings during Thanksgiving.

- Black Friday IRL is dead, Cyber shopping is booming.

These are variables with unpredictable long-term outcomes, yet the market is optimistic.  I wish I could explain that, but I cannot.  It can't be because gamblers are stuck at home so they play the market.  Nor because Biden is set to roll back several pro-business regulation removals, that wouldn't make sense.  I know there is a lot of young money in the market, but I can't see how that accounts for anything.  Lack of jobs or people willing to fill them which damages tax income and social security income.  Also the old and infirm are dying which is helpful for the state of social security from an economic standpoint.  These deaths also are taxing to life insurance companies, but are positive for people set to inherit money from their relatives.  Government is set to swoop down on estates not legally protected.  Covid related deaths are set to peak in mid-January, which means further delays to education and some businesses.  I could go on and on with all the variables that add more uncertainty, but I won't.  The point is that no one knows what will happen next.  

As I write this, we have locked down our household.  Our church has been affected by Covid, my work is a ghost town with everyone working from home (myself included part of the week).  My wife's friends have contracted it, and thankfully she hasn't seen them for a few months.  Our annual vacation was cancelled, and we are thinking of buying a few more Oculuses to have a virtual vacation.  Not much to do but watch Kitboga on Twitch and play the market.  Crime seems to be increasing locally, a logical outcome of a hurting economy.  But I digress... the market is predicting that everyone will live happily ever after.  This makes it somewhat difficult to find bargains, but I'm buying when I can.

The ongoing drama of Chevron and Okeo:  Both companies seem to be improving, without cutting dividends.  I actually bought some Chevron recently because I feel more confident.  Hormel recently dropped after poor earnings so I swooped in and bought some up.  I also virtually toured the Spam museum on Zoom.  

As I look back on these words I write, I can't help but think how bizarre the world is currently.

Dividend Increases & Special Payouts

Fastenal (NASDAQ:FAST) declares $0.40/share special dividend. Nice!

Hormel Foods (NYSE:HRL) declares $0.245/share quarterly dividend, 5.4% increase from prior dividend of $0.2325.  Not bad!

November Purchases:

CVX: 3
JNJ: 5
XEL: 9
HRL: 13
ORI: 47

As Evie once sang:  "Be thankful for the good things that you got.  The good things that you got, are for many just a dream.  So be thankful for the good things that you got."

Saturday, October 31, 2020

A Scary Earnings Month...

 Some good news, but mostly bad :)  The main thing was my net worth went from a record high, to lower than last month.  It dropped a LOT.  There was some good news though:

OKE and CVX did NOT cut their dividends.  This is huge, this tells investors such as myself that these big boys consider 2020 to be a blip, and they will continue next year business as usual.  That doesn't mean the dividend won't be frozen, but there is now a light at the end of the tunnel.

ABBV increased their dividend by 10%  This is a
big deal for me, because I did not do much investing this month.  I paid down some debt, and the way my paychecks were timed this month, I didn't get too much cash in the brokerage account.  This will change next month, however.  In summary, my monthly income went up more than expected thanks to ABBV.

This has been a fascinating month to watch the market.  China related stocks went up on the news Biden is winning in the polls, then everything took a dive on the 30th.  I'm guessing the big money is removing their cash in preparation for any election fallout.  Whomever gets elected, there will be a drop in certain stocks, while others will gain, but different for each candidate.  Either way I will try to maneuver through it.  I feel more confident in a Trump economy (I will miss those buying opportunity tweets), but there will always be different opportunities.  Of course, energy giants like CVX and OKE might be hurt again by a Biden presidency.  

Dividend Increases & Special Payouts

McDonald's (NYSE:MCD) declares $1.29/share quarterly dividend3% increase from prior dividend of $1.25. (That's a relief!)

AbbVie (NYSE:ABBV) declares $1.30/share quarterly dividend10.2% increase from prior dividend of $1.18.  (Still a good yield to buy today)

October Purchases:

WPC - 6 (that's all, folks)

Thursday, October 8, 2020

Welcome to my passive income blog

I am about a week late, but I did save all the data on the last day of the month.  Biggest news is General Mills unfroze their dividend and raised it!!  I never thought I'd see the day! 😁

I'm not very inspired this month, and there isn't really anything in particular to say, with the election inching closer and no perceptible impact on the market.  I've been pretty busy getting back into the swing of things post-pandemic, and preoccupied with some life events.  So I'll just reiterate what I'm doing and why I'm doing it, something I haven't done for awhile.

My dividend investing began back in 2017.  I thought to myself, "I'm a halfway intelligent person, how come I can't make any real money in the stock market?"  I made some good calls, and some bad ones, but every time I invested, I had to wait a long time and hope for a profit.  I wanted a sure thing, something I could depend on, and live on without much time investment and stress.  

Prior to this, each paycheck I had excess cash, and I found that my wife and I were starting to buy things that we really did not need.  Henry David Thoreau's mantra of "Simplify, simplify" kept resonating in my brain.  I realized that in about 8 years I would be eligible for retirement.  While I had no debt (house had been paid off a few years before), I did not think I would be able to retire early, even though my employer offered this option.  As the first of my name to obtain a secondary education, and being blessed with being raised to be frugal but not stingy, I wanted to be able to "make it happen".  Why can't I retire early, as some are able to do, and then pursue some personal goals?

My job had proven itself to be as stable as can be compared to many.  So I just needed to increase my cash flow and invest it in my future.  I could have gone all in with 401k, and I did for a few years, but I did not like the choices that were given to me, and the fact that even if I retired early, I wouldn't be able to touch the money until I am 65.  After all, it was *my* money.  On top of that, my employer didn't even match it.  So how could I live off of it?  I stopped giving to my 401k at this time.

So I did the one thing every bank and insurance company has done for decades, bought high quality dividend stocks.  I took my initial stock account value (about 4k), borrowed 16k from my 401k (which *doesn't* allow me to reap dividends), and dropped 20k into about 10 stocks recommended for dividends.  And I was off to the races!  Best part about it was I didn't have to worry about these stocks breaking me.  General Mills, for example, has paid out their dividend for over 100 years.  They haven't always increased it, but they never decreased it.  That is something you can bank on.

Following this, I decided to take Thoreau up on his simplification of life, and started eliminating excess.  This was not difficult for me, as I am a minimalist by nature, but my wife is a hoarder, and even today she is still working on eliminating her accumulation of material items.  I basically took the view of, if I don't plan to use it in the next 6 months, get rid of it.  Our donations to the Salvation Army have been epic, and I'm still surprised I haven't been audited yet.  We continued this thinking by going down to one car (I use rideshare to commute to work, when I don't telecommute), getting a modest condo instead of a huge house (less upkeep, and kids are graduating soon), and eliminating time wasters.  When you have too many things, and not enough time to do them, then you don't need those things.  Right now we are preparing for retirement.  Fixing up the condo to our liking so we don't need to spend a lot of money later, obtaining large appliances, but delaying as much as possible until the retirement date, so they last longer, and taking every cent we save and putting it into dividend stocks.

Three and a half years later, I am making over $600 a month in passive income, which I reinvest, along with spare cash from my paycheck.  My employer also recently started matching my 401k, so I am giving the minimum for matching.  Once I retire, I can move my 401k to an IRA and live off the dividends on stocks *I* get to choose.  That is my bigger asset.  I calculate that with the IRA dividends, and my capital investment dividends, I could make over $2k a month if I retired *today*.  

Sadly, I can't retire today, but I can in 4 years.  While $2k a month before taxes is a modest amount, I would like to double it in 4 years, if possible.  Once retired, I can draw on the dividend cash to pay my bills, and the dividends should increase annually ahead of inflation to more and more every year.  Any windfalls I receive, I would use to add to that, and I would monitor the companies that may take a wrong turn, cash them out, then reinvest in another dividend company.  Then, when we pass on to the next life, my kids should be able to split the accumulation down the middle and live off the dividends as well, and hopefully, if they are wise, will pass it down to their kids, and so on.  Trying to leave a financial legacy, so that way if they are artists or missionaries, they won't need to worry about income.

Financial independence and freedom is the end result.  To be able to pursue other projects and endeavors without worrying about paying the electric bill or being able to get your next meal.  Set up my own schedule, say no to something I don't believe in, support or do the things I do believe in without pressure, care for people, and provide opportunities for others than myself.  As a great man once said:  "Without money, one often has to do things one does not want just to survive, and this is not how I want to live."  Money is a tool lent to us, being a good steward of it and not wasting it is the legacy I want to leave.

Dividend Increases & Special Payouts
Realty Income (NYSE:O) declares $0.234/share monthly dividend0.2% increase from prior dividend of $0.2335. (another one of their minor increases, but any increase is good for real estate at this time).

General Mills (NYSE:GIS) declares $0.51/share quarterly dividend4.1% increase from prior dividend of $0.49. (Soon after I first bought them, they froze their dividend, but now they raised it!!  Patience has paid off!)

(October preview, McDonald's raised their dividend!!!!)

September Purchases:

T - 10
WPC - 9
WTRG - 15
SO - 4
ORI - 30

See you next month!

Wednesday, September 2, 2020

Milestone: $600 a Month Passive Income

 A major milestone has been reached for my quest to retirement.  I am now making $600 a month in passive income!  That's $600 in my pocket, to pay bills, buy more dividends, or travel.  Well, not too much travel right now.  Other milestones are close as well, net worth, home value, etc. Things I don't normally share on here.  Also got rid of some home remodeling debt as well.  The pandemic continues to be an economic boon for our household finances.

Not much more to say - America is slowly opening back up, people are starting to come out from their homes, their eyes dilating from the bright light.  There's still a few riots (allegedly funded) in a few blue cities, but it doesn't change anything, so hopefully they will stop the nonsense, and let main street recover like Wall St. did (close to all-time highs again).

Major movers this month:

Abbot Labs - $5, 15 minute covid test, funded by the feds

Air Products 

Procter & Gamble (as expected)

McDonalds??? up 11%

Johnson & Johnson



Target +17%!

Dividend Increases & Special Payouts

Essential Utilities (NYSE:WTRG) declares $0.2507/share quarterly dividend7% increase from prior dividend of $0.2343.

No cuts.  Yet.

August Purchases:

XEL - 4
IP - 6
WPC - 10
O - 5
WTRG - 7
SO - 5
GIS - 2
CVX - 4
ABBV - 2

Saturday, August 1, 2020

Good. Bad. Ugly. Q2 Earnings Season

Q2 earnings, the moment we were all dreading, is here.  Thankfully, it is better than expected, but worse than hoped.  Let's dive into my portfolio, shall we?

The Good

This is a hard time to predict earnings, and many corrections have been made for pretty much all companies.  The recession stocks actually had to correct up!  It appears everyone is learning how to cook their own meals.  Probably good for some people to eat healthier, bad for some people because of the waistline (snacking habits - something I'm struggling with - fasting helps!).  Here're the good stocks that have reported good earnings already (most have gone up $10+ per share the past month):
FAST - their medical side (I didn't even know they had one) has been doing very well
JNJ - Rose and dropped, but ended up higher than starting the month
ABT - Just keeps going, and going, and going...up
PG - Another winner that increased dramatically
WSO - Rose over 16% on earnings... WOW
WPC -  So glad I bought this stock after trading in NNN
QCOM - Another exploder!  Up 17% on earnings news and a deal with Huawei.  New high!

The Bad
So that was a good list above, but we were expecting everyone to report bad this quarter.  It was inevitable with the shutdown earlier and the slow restart of the economy.  So here are the expected bad boys of my portfolio:
MCD - One cannot thrive on Drive-Thru alone.  200 stores closed in Japan.  They did maintain their dividend, and this is the best of their sector, they will pull through.
ORI - They beat their earnings, but the share price is flat and still far below what I paid for it.  I'm leveraging a little here and there, but I need some sign from the insurance sector that they are ok.
T - AT&T has the cash flow, but Time/Warner is suffering from the lack of entertainment industry.  The dividend is safe, but the share price is still terrible.  Another one I'm nibbling at.
ABBV -  I have been buying on the way down, the yield is too good to pass up, but I am a little surprised at this one.  I expected a medical stock to do better in this environment.

The Ugly
OKE - They maintained their dividend, but this one is not pretty.  While I expect them to cut the dividend, I'm looking for a boost to get out.  But where would I go?  They are the best company out there for natural gas (you may think that's debatable) with a dividend.  If I get out of OKE, I would need to go into another sector completely.  Although my portfolio on a whole is up, I've lost about half my investment in OKE.  The only good news is that this has to be the worst quarter and we can only go up from here, right?  Right?
CVX - Wow this one was way worse than I expected.  Chevron is the king of oil in this market, and they still were hemorrhaging on earnings EPS of -$1.59 misses by $0.70  - Wow!  They also took on some debt to take advantage of this crisis by an acquisition of a smaller company, so they are confident.  I'm just glad I don't own Exxon.

If these two Ugly guys cut their dividend, I may stay with them, going against my rule of running when a dividend is cut.  I have nowhere to go in this sector, they are the best you can get.  However, if they *eliminate* their dividend, I will send them packing and just go to another sector (or maybe load into the other one).  Apparently energy will be too volatile for me in that case.  I need dependable income, and this crisis has separated the men from the boys.

Still a third of my portfolio needs to report, mostly utilities and consumer discretionary stocks.

There weren't a lot of buying opportunities this month, because the good got expensive, and the ugly scared me away, but I did some buying mostly on the market drop yesterday.  Good news is my low month dividends increased by about 60% after all the buying a few months ago.

Dividend Increases & Special Payouts
None, but no cuts either.

July Purchases:
IP - 12
CVX - 7
O - 4
ABBV - 2
SO - 2
ORI - 10
WPC - 2

Looking ahead, the rest of my stocks need to report out in August, following worst GDP on record.  We can only go up from here, right?  I expect that so close to the election, Trump will do his best to shock the economy and to stock market back into action.  Stay tuned.

Thursday, July 2, 2020

Stunted Growth

My net worth grew quite slow this past month, although the highest it has ever been.  I expect this slow pattern to continue until the Q2 earnings are announced (which will be in a few weeks).  I am writing and compiling this data as of July 1st - and the jobs number just came out, and it was very good.  I would like to say we are back to normal economically, but the election is on the horizon, and I fear that the establishment is making inroads in making sure the outsider is not re-elected (yeah, I'm talking to you, Soros).  While the blue outcome could be a bit devastating to the growth of my net worth, as long as regulations aren't reintroduced, it will give me some time to get more deals.

I hit a milestone of $7k a year taxable income, $583 a month.  Not too bad, but I really need to step it up if I want to retire in 5 years.  Whatever I get to, I can figure about x4 that when I retire after moving my 401k over to an IRA I can control for dividends.  That would put me at 28k a year right now, which is not bad.  However, as I am growing my brokerage faster than my 401k (minimal matching contributions and Fidelity's silly restrictions and ETFs), that factor may dwindle.

As far as the riots, I did note them in my "dividend history" as I always do each month on something of significance that may or may not impact the market.  I also noted the 2nd wave.  I think the riots are mostly noise as far as the market is concerned, those people still need to buy goods and services, or at least their handlers do.  The 2nd wave is the troublesome note.  On a good note, Realty Income collected more rent money in June than they did in May, so O is ok!

Dividend Increases & Special Payouts
Realty Income (NYSE:O) declares $0.2335/share monthly dividend0.2% increase from prior dividend of $0.2330.

Target (NYSE:TGT) declares $0.68/share quarterly dividend3% increase from prior dividend of $0.66.

W. P. Carey (NYSE:WPC) declares $1.042/share quarterly dividend0.2% increase from prior dividend of $1.040.

June Purchases:
ABT  3
IP  6
WPC  18
ORI  10
SO  6
WSO  4
ADM  4
GIS  3