Thursday, May 12, 2016


Was pleasantly surprised to receive Employee of the Month bonus at our morning meeting at work on the 10th.  But I'm even more pleased that I was able to put that bonus to work by adding it to my ROTH IRA to purchase shares of PHK, GGT and GUT.  I mentioned in my previous article I'd be going after monthly income with this account, since income and capital gains are non taxable in ROTH accounts.  With two high yield stock funds and one high yield bond fund, I think I'll be off to a good start.  

Adding PHK and GUT, to my original purchase of GGT, will generate an additional 10%+ in monthly dividend income.  The three stocks combined will add close to 12% to monthly income!  They will also add a total of 28 extra dividend payments per year, bringing my total to 245 separate payments annually or an average of one dividend payment every 1.49 days! The three purchases combined, will also increase total number of shares owned by 12.5%!  Won't be looking to add any new stocks for the rest of 2016, unless I have to replace a stock for some reason, so the 245 dividends will most likely stay the same.  But I think that's pretty good, to be getting paid every one and a half days!

Still haven't decided whether to reinvest dividends in the ROTH account or let them pile up in cash.  If I created a cash balance from dividends, I wouldn't have to sell any shares, should I find it necessary to access some of the money from contributions.  However, since income and capital gains are tax free forever in this account, I'd like to see it grow as much as possible before I retire.  So most likely I'll opt to reinvest dividends in the ROTH and build up a cash balance in my taxable investment account instead.  Since I'm paying taxes on those dividends already, it makes more sense to use that money in case of an emergency and let the tax free income continue to increase.    

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