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!