Thursday, May 17, 2018

MAY 2018 TO SET NEW RECORD FOR MONTHLY DIVIDEND INCOME!

As I suspected, last month's record for dividend income didn't last long.  A quick calculation for the month of May reveals, dividend income will set a new all time monthly record!  While I'm very happy about this, here again, I don't expect it to last long.  The current month has a total of 40 dividend payments, while June has 42 and July 44.  So it looks like there may be one or two more new records set in the next couple of months.  This is especially gratifying when you consider the market hasn't done so well this year and I've added very little new money to my investments aside from my 401k.  (401k dividends are not counted with the rest of dividend income since TransAmerica does not report dividends to account holders.)

No further news on Capital One's transfer of our investment accounts to Etrade.  It's kind of put a cramp in my usual investment style.  Finally decided the forced sale of fractional shares for the account transfers would only really affect my taxable account at tax time, so I stopped all dividend reinvestment to that account and continue reinvesting dividends in my IRA and Roth IRA.  Holding off on deploying any cash out of pocket until I've finally gotten my accounts transferred to TD Ameritrade.


THE 70/30 SPLIT BETWEEN STOCK AND BOND INVESTMENTS

In keeping with my plans to simplify my investments this year, I've decided to go with the 70/30 percent stock and bond portfolio.  Which is, quite simply, you hold 70% of your investments in stocks or stock funds and 30% in bonds.  In my case I'll most likely hold the majority of my investments in broad range index funds for the lower costs.  While many people argue you can do better with actively managed funds, over the long haul the costs of actively managed funds tend to make their performance sub par compared to index funds.  Then too, I truly can't think of any fund manager I believe can consistently outperform the stock index averages.  So I'm going with index funds.

What I find especially attractive about a 70/30 stock and bond investment model is that in order to keep your mix at those levels, you would invest more cash in stocks when their prices are down.  In other words, as the stock market drops and the bond portion of your portfolio goes over 30% because of falling stock prices, you would put more cash into stocks to bring them back in line.  So you're buying stocks at lower prices because you're buying when the market is down.  In retirement, when you're not likely to be adding cash, you can continue this process by selling bonds and buying stocks when the market is down.  When stock prices go back up, you would sell a few stocks and replenish the bond side of your portfolio.  Thus maintaining the 70/30 stock bond mix.  Simplicity itself.

Tuesday, May 1, 2018

MAY 2018 KICKS OFF WITH 11 GREAT DIVIDEND PAYMENTS!

Just collected 11 dividends for the first day of May 2018!  Nice way to start off the month, although it was a little bittersweet, in that I collected my last dividend payments from longtime holdings T and VZ.  I sold out my positions in the majority of individual stocks in order to boost dividend income and prepare for the transfer of my accounts to Etrade.  While I probably won't stay with Etrade, I do want to make the transfers go as smoothly as possible.  

Completed the purchases of additional shares of CHI for my taxable account and ZTR for my IRA.  I think I got in in time to collect dividends on the new shares this month!  May is now a 40 dividend month, although I'll actually collect 42 this month counting T and VZ.  So I have 29 more dividends to go before the end of this month.  With that including some of the largest dividend payments, I'm expecting to do quite well for the month.  May even set a new record high for monthly dividend income, we'll see how it goes.

Finally feel like I've reached a turning point on debt, since it's actually going down instead of up.  Saw a great reduction in interest charges on my highest interest debt, thanks to the extra payments I've been making on the bill.  The first one will be the hardest to eliminate, but once it's gone, the rest should be fairly easy to pay off.  I don't really owe a great deal of money, it's just spread out over several accounts, so it's a lot of monthly payments.  I'm looking forward to being debt free and only having monthly living expenses.  Then I intend to really ramp up my investment program.  Pretty optimistic about how things are going so far.  Maybe it just took getting mad to finally wake me up to the fact that I'll be much better off without all the charge accounts.

Friday, April 27, 2018

I AM DONE PAYING USURIOUS INTEREST RATES!

Been on a kick to pay off my debt, starting with my highest interest rate account and working my way down.  Today I got a letter from an online retailer/payment website saying their charge accounts are being taken over in July by another bank and they're raising the interest rate to 24.95%!  I have been doing business with this company for over 20 years and have bought literally thousands of dollars worth of merchandise and transferred lots of cash through their payment website.  That all came to a screeching halt when I read their letter.  I will NEVER buy another product from their retail website and as soon as my account is paid off, it's cancelled.

I am sick of being charged usurious interest rates for no good reason.  I have years of payment history, never late, always paying more than the minimum.  Several paid off accounts and paid loans but my credit score is still only near 700 and I still get no breaks on the interest rates.  While at the same time, the banks want to pay me less than 1% on my savings.  It's insane and I've had enough.  I'm paying them all off and to hell with them.  I have money, I don't need to borrow theirs and I certainly don't need any more stuff.  So if I can't afford to pay cash for something I want, I don't need it.

If being angry about the high interest weren't enough motivation, I figured up how much I'll be able to add to my investment accounts each month, once all the bills are paid off.  It's a staggering amount!  So to all those greedy banking bastards, I'm saying, "Sayonara Suckers!"

Wednesday, April 25, 2018

RECENT TRADES INCREASE MONTHLY DIVIDENDS OVER 2.5%!

Once again I was able to make some trades and increase monthly dividends by over 2.5% with no cash out of pocket.  I did this partly because my online broker is handing over their accounts to Etrade later in the year and I wanted to consolidate my portfolio.  But I also have been on the lookout for ways to increase income from current dollars invested.  So today I sold my stakes in CNP and GLW in my taxable account and used the money to buy more shares of CHI.  In my IRA account, I sold T and WFC and used the cash to purchase more shares of ZTR.  Both moves together lead to monthly payouts instead of the quarterly payouts I was getting from the individual stocks and lead to an overall increase in monthly cash flow of over 2.5%!

While I have nothing in particular against Etrade, I think it would have been better for Capital One to give their account holders a choice of brokerages to transfer their accounts to.  I'm leaning towards TD Ameritrade and would transfer my accounts now, however since I'm in the habit of re-investing dividends, I own a lot of fractional shares that I don't think I could transfer over.  Capital One plans to pay cash for fractional shares before transferring accounts to Etrade, so I guess I'll have to wait until that all plays out and transfer my accounts back to TD Ameritrade after they've gone over to Etrade.  Kind of a hassle, but I'm not seeing any other way to make the switch.  That's why I think Capital One should have offered more choices.  

Thursday, April 19, 2018

WHAT I'VE LEARNED ABOUT GENERATIONAL WEALTH FROM AGATHA CHRISTIE

I never read Agatha Christie's books when I was young, but I happened across a collection of them at a thrift store last year and received another stack of her books for Christmas, so I've been enjoying reading many of her books and short stories since then.  While the books themselves are wonderfully well written and give a glimpse of the British lifestyle of her era, I noticed a recurring theme about the way the gentry viewed wealth and investing.  They didn't look at their investments as something to be sold to provide for them in their old age, rather they were viewed as a source of income.  In other words, they lived off the income their investments produced and passed the investments on to their heirs when they died.  Thus perpetuating generational wealth.  

That is the way I view dividend investing.  I have no intention of selling my investments when I retire and living off the proceeds.  I intend to live off the income they produce, or a portion of the income and leave the rest to my heirs, so the next generation benefits from all my hard work.  Think of what it could mean to a country's economy if all their citizens did the same.  In the book, "The Richest Man in Babylon", the king wanted the man with the most wealth to teach others how to create wealth in order to make his kingdom one of the richest in the world.  Imagine how much better off the world would be if everyone were taught the importance of saving and investing rather than becoming wage slaves, living paycheck to paycheck and dying broke.

Don't want to stray too far from the point.  I just found it fascinating that there was a time and place where people thought more about generational wealth.  While I hope to be around many more years, I'm excited about the prospect of leaving a meaningful inheritance to my family.  

APRIL 2018 TO SET NEW RECORD HIGH FOR DIVIDEND INCOME!

With April typically being one of the lower months for dividend income and after last month's near record high, I wasn't expecting to do quite so well this month.  However, I did a quick estimate today after posting dividend payments from PSEC and ZTR and April will set a new record for dividend income.  Not only will it beat out March 2018, it will be nearly double April 2017's income and will beat the all time highest month to date, December 2017, by more than 3%!

This leads me to believe all the recent trades I've made were a good thing.  Especially when you consider that income increases from some of the trades don't even kick in until next month.  Which means that this month's record may be short lived.  While May has only 41 dividends compared to April's 43, the amounts will be higher and I'll collect the last dividend from VZ.  If that doesn't break this month's record, June surely will with it's total of 46 dividend payments.

Read an article on AEG today which makes me wish I'd bought more shares around the $4 mark.  While my stake is up considerably, I have no plans on selling.  I originally bought the shares as a way of collecting back some of the fees charged on my 401k.  My 401k is run by TransAmerica which is owned by AEG.  So I bought the shares of AEG on the cheap with the idea of collecting the dividend to get back some of the money they charge for managing my 401k.  I also own a piece of AEG through JPS, one of my convertible securities funds.  After seeing how much AEG earns per share compared to what they pay out in dividends, I think it's well worth holding on to in it's own right.  Looks like it could turn out to be a very good long term investment, although I wish they paid dividends more than twice a year.