Thursday, October 13, 2016


Last month I posted about not reinvesting dividends for a while, while I waited to see where the market was headed and to see what the Feds were going to do with interest rates.  I figured I could get a better price if the market drops and that it's never a bad thing to have a big pile of cash.  

If I had any doubts about my decision, they were quickly squelched after reading an article from the Associated Press this morning about Warren Buffet's company, Berkshire Hathaway.  They were talking about how Berkshire had amassed nearly $73 billion in cash by mid summer and were generating an additional $1.5 billion per month.  There was speculation as to what Warren Buffet planned to do with the cash, whether he'd buy out another company, or purchase millions of shares of stock in one of the companies in which he already owns shares.  Whatever he decides to do with the money, I'm sure he'll eventually put it to good use, he always does.

At any rate, my takeaway from this is that it's not always necessary to reinvest dividends in the same company from which you received them.  I do believe it's good to continue reinvesting that money, but my plan is to build up cash and reinvest it in new stocks and funds to create additional streams of income.  I currently own shares in 27 different stocks and funds and would like to increase that to 35 by the end of next year.  By purchasing the additional stocks and funds in 2017 I'll boost my total number of cash dividend payments to around 371 per year, more than a dividend per day!  Collecting most of my dividend payments in cash will help me reach this goal as quickly as possible, since I don't have to come up with all the cash from earned income.  

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