Saturday, February 22, 2014


At the beginning of 2013 I was receiving 1 dividend payment per month from an investment portfolio that had been decimated due to high medical bills from 3 heart attacks and 2 heart surgeries.  So I set out to rebuild my investments by creating my own "cash machine."  My idea was to structure a portfolio of 20 stocks and mutual funds generating monthly cash flow through dividends.  I completed the setup of my portfolio in November of last year and have since been working to build current positions as rapidly as possible.

My investments are almost evenly split (dollar wise) between my IRA account and my taxable brokerage account.  Generating income for my retirement and if necessary for current needs.  Right now, all dividends are being reinvested to build current holdings.  My 20 investment portfolio includes 8 monthly dividend paying mutual funds (six large cap stock funds and 2 bond funds).  The balance of my investments include such blue chip stocks as GE, LLY, POT and T.  I also have holdings in financials including WFC, NYCB, HWBK, MFC and UVE.  The remaining stock holdings include GLW, RRD, CNP, HBI and EMN.

Dividend income for the month of February 2014 was up 200% over February 2013.  My investment portfolio now produces 156 payments per year, for and average of 13 dividends per month or 3 dividends per week.  When I set out to create my own money machine, I had no idea it would work out so well and that it would be so simple to set up and keep track of.  So far everything has worked out quite well, much better than I had expected.  If I made no further cash investments, it's nice to know that my cash flow would continue to increase each and every month through reinvested dividends.  I like to think of dividend payments as paydays.  My job gives me 2 paydays per month.  My investment portfolio gives me 3 paydays per week.  So you can bet I'll be putting a lot of effort into building up my portfolio.  It's like giving myself a raise every single month.  What could be better than that?

You can create your own "money machine".  I started with 3 stocks that paid dividends in different quarters.  GE, LLY and NYCB.  With these three stocks I collected a dividend payment every month.  Since the "miracle of compounding" works best when your money is compounded more frequently, I simply expanded on my 3 stocks and added another 144 payments a year.  Anyone can do this.

Friday, February 21, 2014


Just got a couple more emails that started out with the title above, "Buy and Hold These Stocks Forever."  While I always check them out out of curiosity, I don't always take their recommendations.

You have to think about why you would want to hold a stock forever.  Warren Buffett says that forever is his favorite holding time for an investment and that would be true if you were making great returns the whole time you're holding the stock.  But to my way of thinking, the only reason I'd want to hold a stock forever is a constant stream of rising dividend income.  As long as an investment in my portfolio continues to increase and pay dividends, I see no reason to sell and replace it with another investment.  Of course this takes into account the financial condition of the company and future earnings prospects which would facilitate continued and rising dividends.

So when you find a good company with a good track record for paying and increasing dividends, by all means a buy and hold forever strategy is the way to go.

Wednesday, February 19, 2014


A co-worker and I were discussing ways to save and stretch your dollars and he said, "That's called being smart with your money."  It got me to thinking of all the ways to be smart with your money.  Today my sister and I spent a few hours together running errands and doing a little shopping.  We both went in the same car, so we cut traveling expenses, one way to be smart with your money.  Had to go to Walmart to pick up prescriptions and a few household items.  I used my cash back debit card to pay for my $4 prescription.  They only pay 10 cents cash back per check or card swipe, so I use it as often as possible on small ticket items to maximize percentage of return.  At any rate, in this case, my already low priced prescription was 10 cents less.  Not much you say, well it all adds up and I figure I might as well have it as giving it away.

From there we stopped at Starbucks for a coffee break, where my sister used her gold Starbucks card to pay for our drinks, netting a discount for having our own coffee mugs.  After a nice break at Starbucks we went by the local thrift store where my sister picked up a couple of chew toys for her dog (normally $10 each, she paid $2 each) and several like new brand name outfits for her granddaughter at a tremendous savings over retail.  I picked out a long sleeved Bass shirt and a short sleeved Croft and Barrow shirt, $3 each, which I figure I easily saved $50-$60 compared to normal retail.  That's called being smart with your money.  

My total spending for 2 shirts, a supply of household and laundry products, pet treats for Pickles and my prescription and over the counter medications amounted to just under $25.  If you think about it, if I'd paid retail for just one of the shirts I bought, it would have cost me more than the entire day's shopping.  Not to mention I used my cash back cards for everything except my thrift store purchases.  

These are just a few of the ideas we've come up with to stretch our dollars.  There are unlimited ways to make your money go farther, you just have to figure out how.  

Tuesday, February 18, 2014


Like most people around this time of year, I’ve been working
on my taxes.  I took advantage of the fact that I hadn’t
maximized my IRA contributions for 2013 to increase my tax
refund.  I made an additional lump sum contribution which
boosted my refund by 25%.  Then I invested the extra
contribution in CRF which will boost my dividend income for
2014 by 33% over last year!  Think about the kind of gains you
could make in your investment portfolio if you could do that
every year.

Took advantage of a great offer from Capital One to open a
new savings account.  While interest rates are terrible for
savers, their current rate is about 3 times what my regular
passbook savings account is paying.  Not only that, but they’re
giving me a $50 bonus for opening the account!  I’m thinking
I’ll be making good use of my new savings account to park idle
cash.  I don’t like to have any money that is not working to
earn more.

If I made no further cash contributions to my investment
accounts for the rest of the year, I estimate dividend income
would be more than double 2013 with dividends reinvested.
However, I plan to add to my taxable account and my IRA
throughout the year, so the actual increase in monthly cash
flow is hard to predict.  One thing is certain, the plan is
working, so I’ll be working the plan.

Saturday, February 8, 2014


Do you want to be rich?  Most everyone would, or at least
they’d like enough wealth to be comfortable.  It’s really quite
simple to accomplish, perhaps so simple most people overlook
it.  I know I have for many years now.

What I’ve come to realize is, to build wealth it doesn’t matter
where you’re starting from.  All it takes is living below your
means and converting earned income into income producing
assets, preferably those providing perpetual income.  This is
why I favor high quality dividend stocks.  I try to pick
companies I think will outlive me and ones who have a
reasonable chance to continue paying and increasing
dividends.  It doesn’t really matter if it’s stocks or a business or
income producing real estate as long as it provides a monthly
stream of increasing income.

So you decide where to invest your money and you keep
increasing your investments until the income replaces the
amount of money you make from work.  Once you’ve
accomplished this, you are finacially free to either continue
working or pursue other interests.  Ideally you’d like your
income to continue to grow.  In my case, I plan to work as long
as I’m physically able to, partly because I like to work and
partly because I’d like to keep building my assets to the point
where I’m able to take cash payments out each month and
re-invest the rest.  That way my income continues to grow
every month.  I also like the idea that my family and friends
who inherit my estate will continue to collect a monthly stream
of dividends long after I’m gone.  Providing generational

Bottom line, if you want to be rich, spend less on things and
spend as much as you can purchasing income producing assets.


February is off to a good start with dividend income from my
investment portfolio up nearly 20% over last year!  So far I’ve
collected 4 dividend payments for the month with another 6
payments to come before the end of February.  Since deploying
my new investment strategy last year, I’ve seen monthly cash
flow increase dramatically over and over again.  I had expected
the increases to level off, which will most likely happen later
this year, but it’s a real rush to keep seeing such whopping
increases in income!  Wouldn’t it be great if your job gave you
so many raises?

With the Fed cutting back their stimulus program, the market
has had some extreme drops of late, with a lot of buzz about a
market correction.  Since I’m in the accumulation phase of my
investments, looking to build on the positions I already have,
I’m pretty excited about the drop in stock prices.  What it
means to me is an excellent buying opportunity.  Not only will
my investment dollars purchase more shares, with prices down
and as long as dividend payments remain the same, dividend
yields on all new shares purchased are rising.  When you’re
buying with a goal of increasing monthly cash flow from a
dividend investor’s standpoint, lower prices and higher yields
are your friend.  Not only will new cash investments help
increase overall yields and cash flow, but the cash machine I
built up over the past year is churning out dividends at the rate
of 10 to 15 payments per month which I’m having re-invested,
so cash flow is increasing at an ever more dramatic rate.

While the a market correction will not work well for
speculative investments, my exposure to speculative plays is
limited to just one stock at the present time, so I’m not
expecting much of an impact to my overall investments.  I had
a feeling this was going to be a good year and it’s sure shaping
up to be.  We’ll see how it goes.