For the first 12 years of my life, I lived on a farm. Farm kids usually have to pitch in and help with work around the farm, even at a young age. This was even more true back in the 60's. I can remember carrying water around to all the workers picking cotton in the cotton fields of the Missouri boot heel at the age of 5. Later I was one of the cotton pickers until they automated the process. So in my early life I developed an appreciation for hard work. One of the things I enjoyed most was planting season. I was fascinated that such small seeds could grow into such large plants and produce many times over the original single seed.
As a result of my early life on the farm, I've always enjoyed watching things grow. Now that fascination has switched to growing dollars instead of plants. It truly is the same basic principle, you plant your seed capital, no matter how small. Give it time and attention along the way and it can grow in to a great harvest. Once the harvest comes in, you can enjoy the fruits of your labor or use the new seeds of capital to expand your crop. Right now I'm expanding the crop by reinvesting all my dividend earnings, planning for a much bigger harvest in the future.
No matter how much or how little you're able to put aside for saving and investing, it's guaranteed to bring a measure of satisfaction to watch your money grow.
Tuesday, August 20, 2013
Friday, August 16, 2013
AUGUST DIVIDEND EARNINGS UP 50% OVER 2ND QUARTER
Current estimated earnings from dividends are up over 50% compared to the second month of the 2nd quarter of 2013! This follows a 50% increase in earnings during the second quarter over first quarter earnings. As I've stated before, I don't expect such dramatic increases in monthly dividend income to continue, but it's sure nice to see now.
I'm excited about the month of September. I'm currently on track to receive 15 dividend payments during the month, which is the best so far this year. December will be the really big month, with a total of 13 dividends and 8 capital gains payments! The total number should rise between now and then, due to further new investments. It's very motivating to know that by the end of the first year of my new investment plan, I'll receive one dividend or capital gains payment for 21 out of 31 days of the month!
Working on my plan for 2014. It's never too early to start and I'd like to see the great gains in monthly cash flow continue as long as possible. While they'll most likely slow down some starting in January, I should start to see a lot of benefit of compounding from re-invested dividends. I'm seeing that to a degree now, but it should really pick up after the first of the year, as I start to strengthen positions in stocks I hold in my accounts.
I'm excited about the month of September. I'm currently on track to receive 15 dividend payments during the month, which is the best so far this year. December will be the really big month, with a total of 13 dividends and 8 capital gains payments! The total number should rise between now and then, due to further new investments. It's very motivating to know that by the end of the first year of my new investment plan, I'll receive one dividend or capital gains payment for 21 out of 31 days of the month!
Working on my plan for 2014. It's never too early to start and I'd like to see the great gains in monthly cash flow continue as long as possible. While they'll most likely slow down some starting in January, I should start to see a lot of benefit of compounding from re-invested dividends. I'm seeing that to a degree now, but it should really pick up after the first of the year, as I start to strengthen positions in stocks I hold in my accounts.
Wednesday, August 14, 2013
DEAL FOR TODAY, iSHARES PFF PREFERRED STOCK FUND
While browsing the August 5th edition of Barron's, I noticed in their preferred stock quote pages the large number of preferred stocks paying dividends in the 7%-9% range. As a dividend investor seeking increased monthly income, I thought it wise to do a little more research on preferred stocks.
With limited investment capital, it would be impractical for me to invest in individual preferred stocks, so I looked at ETF's and managed preferred stock funds. While some had better investment results, I decided to add iShares PFF Preferred Stock Fund to my buy list. I won't be investing right away, but I like their monthly dividends with over a 5% yield. Even though it is a passively managed fund, they invest in a limited number of high quality preferred stocks, which suits my investment objectives, since I already have enough invested in riskier issues.
Before I make a final decision to invest, I'll be doing a great deal more research. In the end, I may not choose to invest in PFF, but it's a sure bet I'll be putting some money to work in preferred stocks, one way or another.
With limited investment capital, it would be impractical for me to invest in individual preferred stocks, so I looked at ETF's and managed preferred stock funds. While some had better investment results, I decided to add iShares PFF Preferred Stock Fund to my buy list. I won't be investing right away, but I like their monthly dividends with over a 5% yield. Even though it is a passively managed fund, they invest in a limited number of high quality preferred stocks, which suits my investment objectives, since I already have enough invested in riskier issues.
Before I make a final decision to invest, I'll be doing a great deal more research. In the end, I may not choose to invest in PFF, but it's a sure bet I'll be putting some money to work in preferred stocks, one way or another.
Tuesday, August 13, 2013
LOOK AT A DEAL A DAY
As a big fan of the "Rich Dad" book series by Robert Kyosaki, one of his suggestions I always try to follow is to "look at a deal a day." Maybe I take advantage of the deal I find, maybe not, but it's always a learning experience. Then too, there's always the possibility I'll come back to it at a later date.
While perusing the latest issue of Barron's, I came across a couple of deals I thought might warrant further research. One is PMF a municipal income fund. With it's investment in municipal bonds, it provides an attractive tax advantaged income. The recent price of just over $12 and a dividend yield of 8.13% on top of the tax advantages, make this an ideal candidate for providing monthly income in taxable a taxable account. Would not be suitable for an IRA or 401k since they are already tax advantaged. I have decided to buy PMF instead of KO for my taxable account.
Another deal I came across in the magazine was MLP, EPD which I've invested in before. With a recent price of over $60 and a yield of 4.52% on top of a history of increasing dividends, this MLP is still an attractive investment. However, their current price does not fit well with my limited investment capital at the present time. May take a look at them again at some future date.
Completed purchase of a stake in Corning Glass (GLW) and it looks as though I'll be in line to collect my first dividend from them in the month of September. This months' purchase brings the total number of dividend payments I collect from my portfolio to 121 per year!
While perusing the latest issue of Barron's, I came across a couple of deals I thought might warrant further research. One is PMF a municipal income fund. With it's investment in municipal bonds, it provides an attractive tax advantaged income. The recent price of just over $12 and a dividend yield of 8.13% on top of the tax advantages, make this an ideal candidate for providing monthly income in taxable a taxable account. Would not be suitable for an IRA or 401k since they are already tax advantaged. I have decided to buy PMF instead of KO for my taxable account.
Another deal I came across in the magazine was MLP, EPD which I've invested in before. With a recent price of over $60 and a yield of 4.52% on top of a history of increasing dividends, this MLP is still an attractive investment. However, their current price does not fit well with my limited investment capital at the present time. May take a look at them again at some future date.
Completed purchase of a stake in Corning Glass (GLW) and it looks as though I'll be in line to collect my first dividend from them in the month of September. This months' purchase brings the total number of dividend payments I collect from my portfolio to 121 per year!
Sunday, August 11, 2013
CHANGE OF PLANS, BUYING A STAKE IN CORNING GLASS
I made a change of plans for purchasing the final stocks to round out my investment portfolio. I've decided to buy in to Corning Glass (GLW). Their current price of just over $15 per share and a dividend yield of 2.64% make them an O.K. purchase for the long term. However, the reason I'm buying in now is that I suspect their new Willow flexible glass is going to be a big hit, much like Gorilla glass was before it. If that is the case, I'd expect earnings to increase dramatically in the next few years. This will be one of my long term core holdings.
Thursday, August 8, 2013
RR DONNELLEY CLOSING JEFFERSON CITY MO OPERATIONS
It's been all over the local news the past couple of weeks, RR Donnelley & Sons is shutting down operations in Jefferson City, MO.. I understand the anxiety over lost jobs and tax revenues but I'm wondering if none of these people read the annual report. Maybe they'd have seen this coming, since they stated in their last report that the company's earnings from traditional printing operations had stalled and they were moving more toward digital media.
At any rate, I'm hoping this is a move towards cutting costs which would be positive for shareholders. I can't complain, since my investment in RRD is up over 80%. Still I like to see progress towards cost control and increasing revenue. We'll see how it pans out.
At any rate, I'm hoping this is a move towards cutting costs which would be positive for shareholders. I can't complain, since my investment in RRD is up over 80%. Still I like to see progress towards cost control and increasing revenue. We'll see how it pans out.
SHOPPING FOR MY OWN HOME
Did an online search today for lots for sale. I’m looking
for an empty lot with utilities where I can either build
or place a mobile home. I’m buying my new place piece
by piece. I figure if I shop around, I can find a lot and
either build my own place or place a mobile home on
the lot for less than $15,000. I don’t plan on spending
over $10,000 for the lot, so that leaves me $5,000 to
work with on the home.
While you may think it is impossible to build a home for
that amount, I just saw an ad for new steel framed
metal buildings which could easily be converted to a
house, the price was $2,800. I can do all the interior
work myself and pick up materials at a local surplus
outlet. I only have to make the place livable, then I can
work on improvements after I’ve moved in. I plan on
adding a lot of sweat equity to the total project. I’ve set
up a separate housing fund to accumulate money for the
project.
A used mobile home would be less work and lower
initial cost, so I may go with that initially. In the end
though, I’ve decided building a small house would be
most suitable. It all hinges on the sale of the building
where I’m living now. If it takes a while to sell,
obviously I’ll be in much better position financially to
buy my own place. Should it sell sooner, I may have to
go to my backup plan, buying a mobile home and
renting lot space. I’d like to avoid this option, but I
gotta do what I gotta do. I’ve paid rent for way too
many years.
In the mean time, I’m getting rid of some things I no
longer need by having a garage sale. The money raised
from the sale will go in to the housing fund. I’m also
saving money by stepping up couponing (saved 35% on
my weekly grocery shopping today). Also restricting
spending to an as needed basis. The only exceptions
I’ve made to this rule are purchases I can use in my
own home. A washer and dryer, a lawn mower and a
nice used set of dining chairs. I bought the washer and
dryer and lawn mower for $180 used. They work great
and I’m able to use them even now. The chairs were
just a great deal at $32 for a set of 4. They go well with
my dining table and I now have a matching set. The
mixed set of chairs I’ve been using for the past 10 years
are still in great shape and should bring at least $20 at
the yard sale, so I’ll put that money back in the housing
fund.
Also finished up some estate planning. Made
arrangements for my bank accounts and investment
accounts to transfer on death to avoid probate. Set
beneficiaries on my investment accounts and life
insurance and made sure my heirs were aware of what
and how they will inherit. Hope to be around for a long
time to come, but the recent death of a good friend
made it clear to me the importance of having your
affairs in order.
for an empty lot with utilities where I can either build
or place a mobile home. I’m buying my new place piece
by piece. I figure if I shop around, I can find a lot and
either build my own place or place a mobile home on
the lot for less than $15,000. I don’t plan on spending
over $10,000 for the lot, so that leaves me $5,000 to
work with on the home.
While you may think it is impossible to build a home for
that amount, I just saw an ad for new steel framed
metal buildings which could easily be converted to a
house, the price was $2,800. I can do all the interior
work myself and pick up materials at a local surplus
outlet. I only have to make the place livable, then I can
work on improvements after I’ve moved in. I plan on
adding a lot of sweat equity to the total project. I’ve set
up a separate housing fund to accumulate money for the
project.
A used mobile home would be less work and lower
initial cost, so I may go with that initially. In the end
though, I’ve decided building a small house would be
most suitable. It all hinges on the sale of the building
where I’m living now. If it takes a while to sell,
obviously I’ll be in much better position financially to
buy my own place. Should it sell sooner, I may have to
go to my backup plan, buying a mobile home and
renting lot space. I’d like to avoid this option, but I
gotta do what I gotta do. I’ve paid rent for way too
many years.
In the mean time, I’m getting rid of some things I no
longer need by having a garage sale. The money raised
from the sale will go in to the housing fund. I’m also
saving money by stepping up couponing (saved 35% on
my weekly grocery shopping today). Also restricting
spending to an as needed basis. The only exceptions
I’ve made to this rule are purchases I can use in my
own home. A washer and dryer, a lawn mower and a
nice used set of dining chairs. I bought the washer and
dryer and lawn mower for $180 used. They work great
and I’m able to use them even now. The chairs were
just a great deal at $32 for a set of 4. They go well with
my dining table and I now have a matching set. The
mixed set of chairs I’ve been using for the past 10 years
are still in great shape and should bring at least $20 at
the yard sale, so I’ll put that money back in the housing
fund.
Also finished up some estate planning. Made
arrangements for my bank accounts and investment
accounts to transfer on death to avoid probate. Set
beneficiaries on my investment accounts and life
insurance and made sure my heirs were aware of what
and how they will inherit. Hope to be around for a long
time to come, but the recent death of a good friend
made it clear to me the importance of having your
affairs in order.
Saturday, August 3, 2013
FREE STOCKS INVESTMENT STRATEGY
Recently I had a conversation with a young co-worker who is interested in investing and we discussed different investment strategies to make money in the stock market. One of the strategies we discussed was what I like to call "free stocks."
What do I classify as "free stocks"? I consider a stock investment in which you have none of your initial investment tied up as a free stock, in other words you're playing with the houses money. I like to use this strategy with dividend stocks to build monthly cash flow and total portfolio holdings.
How does it work? I've found that this strategy works best in a rising market, but you can use this strategy in any kind of market. To get your free stock, you do your research, find a good company paying dividends with good prospects for price appreciation. You decide on a dollar amount to invest in the company. Once you've made your initial investment, you simply wait for the price to appreciate a significant amount and then you sell just enough shares to recoup your initial dollars invested.
For example, you find a nice little insurance company selling at $10 per share with a 3% dividend yield. You do your research, the company looks solid with good growth prospects and price appreciation, so you decide to invest $500. Your $500 investment buys you 50 shares (not counting commissions, although you can include costs when selling to recoup your investment). Over time others realize what a good company this is and the stock price appreciates say 30% to $13.33 per share. Which makes your 50 shares worth a total of $666.50. To get back your original $500, you would need to sell about 38 shares (38 x $13.33 = $506.54). This leaves you with 12 shares paying a 3% dividend on your original purchase price of $10 and you no longer have any of your own money tied up in the stock, making it essentially free.
While this may not sound like much, repeat the process enough times and you've built a tremendous dividend portfolio. You might be saying this sounds all well and good, but how do you find such investments. I currently hold positions in 17 different stocks and mutual funds. Out of the 17, I could use this strategy right now on 5 different investments. I could pull all my money out and still own the stocks in my portfolio. While I'm not planning on doing this at the present time, it does show the feasibility of this investment strategy.
What do I classify as "free stocks"? I consider a stock investment in which you have none of your initial investment tied up as a free stock, in other words you're playing with the houses money. I like to use this strategy with dividend stocks to build monthly cash flow and total portfolio holdings.
How does it work? I've found that this strategy works best in a rising market, but you can use this strategy in any kind of market. To get your free stock, you do your research, find a good company paying dividends with good prospects for price appreciation. You decide on a dollar amount to invest in the company. Once you've made your initial investment, you simply wait for the price to appreciate a significant amount and then you sell just enough shares to recoup your initial dollars invested.
For example, you find a nice little insurance company selling at $10 per share with a 3% dividend yield. You do your research, the company looks solid with good growth prospects and price appreciation, so you decide to invest $500. Your $500 investment buys you 50 shares (not counting commissions, although you can include costs when selling to recoup your investment). Over time others realize what a good company this is and the stock price appreciates say 30% to $13.33 per share. Which makes your 50 shares worth a total of $666.50. To get back your original $500, you would need to sell about 38 shares (38 x $13.33 = $506.54). This leaves you with 12 shares paying a 3% dividend on your original purchase price of $10 and you no longer have any of your own money tied up in the stock, making it essentially free.
While this may not sound like much, repeat the process enough times and you've built a tremendous dividend portfolio. You might be saying this sounds all well and good, but how do you find such investments. I currently hold positions in 17 different stocks and mutual funds. Out of the 17, I could use this strategy right now on 5 different investments. I could pull all my money out and still own the stocks in my portfolio. While I'm not planning on doing this at the present time, it does show the feasibility of this investment strategy.
Subscribe to:
Posts (Atom)
