Tuesday, April 25, 2017

REINVESTING DIVIDENDS

Just read an interesting article by Warren Buffett on dividends.  He explained Berkshire's policy on dividends, specifically why they do not pay a dividend and how you could generate "dividend like" income by selling a percentage of shares each year.  A very interesting article.  However, it did not answer my question on whether or not Berkshire reinvests dividends they receive on additional shares of stock or do they keep the cash to reinvest elsewhere.

Generally I choose to reinvest all dividends in additional shares of stock.  However, at times it seems contraindicated to do so.  Say you own a large block of stock in a company paying out nice dividends.  Perhaps you bought the shares at a very low price, as I did with UVE.  Now the price is up 100 - 200%, do you still reinvest dividends?  Doing so increases your cost basis, since you're buying new shares at the much higher price.  If you choose to continue holding the stock as I have with UVE, it would seem prudent to take the dividends in cash.  (In this case, I'm still reinvesting in UVE.)  

I mentioned in a post not long ago my strategy for avoiding total losses by taking cash dividends on some of the high risk stocks or funds.  When you collect the dividends in cash, even if the stock price goes to zero, you don't have a total loss because you've still got the cash.  So if you take that a little further, the cash you collect from some of your more questionable investments can be used to help purchase more shares of core stocks for your portfolio.  I've used this many times, collecting cash dividends from current holdings to help pay for new investments or additional shares of low volatility stocks with increasing dividends.  I figure this way I'm still reinvesting dividends, just not always in the stocks that paid them.

At any rate, I must be doing something right.  My monthly dividend income continues to increase every month, even though I've had some holdings cut their payouts.  I always hate to see dividend cuts, but as long as the return is still acceptable and cutting the dividend seems to be the right thing for them to do, I don't mind holding on to these shares.  If they stop paying dividends, I sell immediately.  I don't want any stocks unless they pay some kind of dividend.


Tuesday, April 18, 2017

401k BALANCE RISING RAPIDLY!

While my 401k account through work is still the smallest of my 4 investment accounts, the balance is rising rapidly in comparison!  This is mostly attributable to the twice monthly deposits from payroll as the return on investments is only around 3% so far.  However, since the majority of this money is coming from money I would have been paying in taxes, I'm quite pleased with the result.  Within the next two years, it's quite possible the 401k balance could surpass that of my taxable investment account and may even come close to matching my IRA balance!  Pretty amazing considering I just opened the account last year.

Also amazing is the progress I've made with the Roth IRA account.  I opened the account in June of last year and it is now the largest of my 4 investment accounts.  This is mostly due to cash contributions, but I have also transferred some investment cash and dividends from my taxable account to the Roth to reduce taxable income and increase non-taxable income.  It's working out quite well.  Monthly dividend income from the Roth account now far exceeds that from the taxable account and is rapidly gaining on the regular IRA's returns!  

Although 2017 has been a remarkable year for my investments so far, it has not been without it's setbacks.  I have had a couple of dividend reductions, mostly from the bond funds.  But this wasn't entirely unexpected and the dividend yields on these funds are still high enough that I have no plans to sell my shares.  Unrealized returns on the value of my stocks has been pretty lackluster all around.  The 401k has a higher return on share prices than my other 3 accounts combined and it's only 3.99% to date.  However, I've taken measures to boost capital gains in the future and since I'm investing for dividend income, I'm not overly concerned about whether the stocks go up in price.  In fact, since I'm purchasing more shares all the time, through re-invested dividends and additional cash purchases, I'm kind of happy to see the prices drop occasionally, so I can pick up some bargains.

Looks like I just need to stick with the plan for the rest of the year and 2017 will turn out to be another good year investment wise.  

Thursday, April 13, 2017

SPRING EARNINGS SEASON, HOW IS YOUR PORTFOLIO GROWING?

Spring, a great time to turn your attention to your gardening plans and your plans for growing your portfolio.  This is one of my favorite times of the year, for both reasons.  I am an avid gardener and I enjoy reading all the annual reports that start rolling in this time of year.  Getting a detailed analysis on how each stock has performed in the past year makes it much easier to plan upcoming cash investments with an aim toward maximizing returns.  

So far, I've reviewed about half of the annual reports for the 31 stocks and funds in my portfolio.  A couple of things I've learned, UVE and UTG which both pay modest dividends, seem to have very good prospects as long term investments.  Also liked what I saw in SPHD and SPLV's annual report, so I'll be adding to my holdings on all four this year.  Recent purchases have been aimed at boosting monthly dividend income while reducing volatility.  I consider additional investments in the four stocks/funds mentioned above as low volatility.  So I'll also be on the lookout for a couple of good high yield investments to boost monthly income.

Tuesday, April 11, 2017

BOOSTED MONTHLY DIVIDEND INCOME BY NEARLY 10%!

In earlier posts this month, I talked about selling SPHD shares in my taxable account to lock in some capital gains and take advantage of tax break by transferring the cash to my IRA.  All that worked out well, but by purchasing shares of CHI and VZ with the money I transferred, I nearly doubled monthly income on that portion of my investments and increased overall monthly dividends by nearly 10%!  It's a win, win, win situation!  Of course I'll have to pay taxes on the capital gains next year, but I can offset that by contributions to my IRA in 2017.

My next big purchase will be ORA and JNJ, sometime around the end of this month or the beginning of next month.  While they won't add a great deal to monthly dividends, they are both solid investments and should add a measure of stability to my portfolio.  I always try to balance out the high risk/high return investments with more solid, low volatility plays.  Recent political tensions may make it possible for me to pick up these shares at a lower price.  We'll just have to see how it all plays out.

While the overall value of my investments may suffer a setback in the near future, I'm looking at it more as an opportunity to pick up extra shares at a better price.  As long as dividend income continues to increase, I'm not terribly concerned with the price of the stock.  After all, my plan is to draw on the dividend income in retirement, not to live on cash from selling stock.

Friday, April 7, 2017

INVESTING IN GEOTHERMAL THROUGH PURCHASE OF ORA

Talk about making changes, after watching a video on the future of geothermal energy and the massive amounts of untapped reserves in the U.S., I decided now might be a good time to get in on the rush to invest in geothermal technology.  Did a lot of research and came up with ORA from an article I read on Motley Fool.  There were a lot of cheaper stocks, mostly with no earnings or no dividends, so I'm going with ORA for their positive earnings and quarterly dividend payouts.  While their 0.65% dividend yield is nothing to get excited about, it's the potential for staggering capital gains and future dividend increases that appeal to me.  

While it remains to be seen whether geothermal will really take off and break the oil industry's hold on world energy markets, if for no other reason, investing in clean energy is the right thing to do.  I'm just hoping it will also be the profitable thing to do.  At any rate, I'll be collecting dividends every quarter.

Thursday, April 6, 2017

UPDATED STOCK PURCHASE PLAN, ABT OUT PFE IN

After doing more research, I decided to drop ABT from my stock purchase plan and replace it with PFE.  While I think ABT is a great company, it seems too overpriced for my tastes, so I switched to the more reasonably priced PFE.  Put in an order to purchase shares of CHI and VZ for my IRA account next Tuesday.  The CHI purchase is for boosting monthly dividend income and VZ is a long term play, but also carries a nice quarterly dividend.

Later this month, as cash on hand permits, I'll be buying JNJ and PFE for my Roth IRA.  Once this month's stock purchases are complete, I'll be up to an annual total of 397 dividend payments per year.  Plan on spending the rest of the year increasing current holdings through reinvested dividends and additional cash investments.  Looks like I'm still on track to double dividend income again this year, but we'll have to see how it goes.  Thinking about replacing my car this year, which means I might have less cash to invest, so it really depends on how all that works out.

Wednesday, April 5, 2017

ANOTHER RECORD MONTH FOR DIVIDENDS IN MARCH 2017!

The month of March set another record, not only for the highest month for dividend income this year, but also by beating out March 2016's earnings by well over 100%!  April too, is off to a good start with 9 dividends collected so far, equaling over 50% of last year's April income.  Still have 20 more dividends to go for this month, so it's pretty safe to say April 2017 will also show a 100%+ increase over last April!

It's tax time and I have to admit it hasn't gone smoothly for me this year.  Big changes in the tax software I use made it more difficult for me to file.  Also led to an omission of filing a needed form on my part, which in turn led to a letter from the IRS and a delay in collecting my tax refund.  Got the form filled out and mailed and I must say the IRS made it very simple to straighten out the problem, so thanks to the good folks in Kansas City office!

Been very busy at work, lots of extra hours and big changes with a new boss at the helm.  Some I think are most definitely for the better, other changes I'm taking a wait and see approach to.  Always try to keep in mind that I can't get too worked up about anything, don't want them taking away my employee of the year award.  Just thankful to have a job that I like and good people to work with, but the benefits are not bad either.

After making some adjustments in my portfolio to simplify next years taxes, I'm taking my investments in a new direction by adding some big blue chip stocks.  Put in order to purchase stakes in JNJ, ABT and VZ.  Also want to add to my currents stakes in UVE, CSX and GLW.  Sold my shares in SPHD in my taxable account for a small profit and transferred the money to my IRA for a tax deduction.  I intend to buy back SPHD later in the year, since I believe it is a great long term investment, but I'm buying the shares for my Roth IRA so the future income and capital gains will be tax free.  Added BLW, although I'm a little iffy about it, to my IRA for the monthly dividend.  But I'll be taking the dividend payments in cash on this one, just to be on the safe side.

Overall, things are going well.  Income continues to increase at a rapid pace, which never ceases to amaze me.  I keep thinking it's got to slow down sometime, but so far it's showing no signs of doing so.  Doesn't get any better than that.

Wednesday, March 22, 2017

I COULD WITHDRAW 5% OF MY TOTAL INVESTMENTS PER YEAR AND NEVER RUN OUT OF MONEY!

If you're like me, you've probably read articles by investment experts saying you should draw anywhere from 2% to 4% per year of your total investments during retirement to make your money last.  I was thinking about this over my morning coffee and did some quick calculations in my head and figured out, with my dividend investments, I could draw 5% a year of the total value of my investments and never run out of money!  The reason being is that 5% of my total investments is only 70% of my annual dividend income.  Which means that not only would I never run out of money but, by reinvesting the 30% of dividends, I can continue to grow my dividend income in retirement with no money out of pocket! 

The real kicker is, I could start taking the 5% right now, if I wanted or needed to.  Of course I have no intention of doing so, because I'd rather grow my income as much as possible while I'm still working.  I also plan on drawing only from my taxable account and my ROTH IRA initially, allowing my 401k to and my IRA to continue to grow until I have to start taking payments from them.  

Friday, March 17, 2017

EXPECTING ANOTHER HUGE GAIN IN DIVIDEND INCOME IN MARCH!

Saw great gains in year over year dividend income in January and February and it looks like March is set to follow the trend!  By mid month, I've already received dividends equal to the entire month's income from 2016!  With 18 more dividend payments this month, it's a pretty safe bet it will trounce March 2016 earnings by a substantial amount.  Since most of the remaining dividends for this month are also the highest paying, it wouldn't surprise me at all to see earnings increase by over 100%!  Which also means that I'm well on my way to doubling dividend income again this year!  

While all this would be exciting enough, I'm also happy to report I'll be able to increase total portfolio value by 20% by the end of April 2017!  The cash to accomplish this is coming from my tax refund and a bonus from work.  Between the two lump sum investments, they should increase monthly dividend income by over 10%!  It's looking like it's going to be another good year.

IT'S TAX TIME, DO YOU KNOW WHERE YOUR REFUND IS GOING?

If you're expecting a tax refund this year, have you decided where to spend the money?  Some people use it to pay bills, some buy a new car or other frills, I'm all for buying myself a raise.  No, I don't mean I'm bribing my boss to give me a raise, I mean I'm investing my tax money in dividend stocks to give myself a raise in monthly dividend income.

I'm happy to report my tax strategy worked out well and reduced my taxable income to the point I owed $0 in federal income taxes.  This, in spite of the fact my earned income increased dramatically in 2016.  Finalized and filed my tax return last week and have already put in the order to purchase shares which will boost monthly cash flow from dividends by a little over 5%!  Nice little raise and I'd be quite happy with that, but I also figured out how to boost dividend income another 5% per month in April by investing an unexpected bonus from work!

SOLD JMP, BOUGHT GAIN FOR A 25% INCREASE IN MONTHLY DIVIDENDS!

While preparing my taxes, I realized I could simplify next year's return by selling my stake in JMP (a limited partnership) in my taxable account.  Not wanting to lose the monthly dividends, I decided to reinvest the money in GAIN.  Not only will this make future taxes easier to prepare, but it locked in a small gain on JMP and increased monthly earnings on this cash investment by 25%!  Tax time is a great time for fine tuning your portfolio!

Tuesday, February 28, 2017

FEBRUARY DIVIDEND INCOME UP OVER 100%!

Just collected the final 13 dividend payments for February 2017, for an increase in monthly dividend income of well over 100% compared to February 2016!  If this trend continues, I should have no problem reaching my goal of doubling dividend income again this year.  

How long the Trump rally will continue is anybody's guess, but it's been great for the overall value of my portfolio.  That being said, I'm thinking things will eventually turn and we'll see some downward motion before the end of the year.  With that in mind, I'm currently diverting some dividend income to cash to take advantage of any bargains that may present themselves later in the year.  If I'm wrong and the rally continues, I figure it never hurts to have a pile of cash.

Should collect a check from SendEarnings in March as well as my second cash payment from Swagbucks.  I'll be investing both payments to boost monthly dividends.  While I'm already collecting 372 dividend payments per year, exceeding my goal of a dividend per day, I am thinking about buying shares in another monthly paying fund and a couple of individual stocks.  Probably won't happen in March, but I do have an upcoming bonus from work in April for winning Employee of the Year.  Definitely investing the bonus, just haven't decided how to deploy the windfall as yet.  I'm leaning toward purchasing more shares of quality 5 star funds SPHD and SPLV.  This wouldn't be a big increase to monthly income but it would improve future growth prospects.  On the other hand, if I invested the money in some of the cash cow funds, I'd have more monthly income to put toward purchasing quality shares.  Maybe I'll do both and put half in cash cow stocks and the other half in one of the funds.

February has been another great month overall, so I'm looking forward to what March has in store.  It will be great to kick off the month with another great batch of dividend payments tomorrow!

Tuesday, February 14, 2017

AOD PURCHASE INCREASES MONTHLY INCOME ANOTHER 2%!

Just completed purchase of AOD shares for my ROTH account, increasing monthly dividend income 2% on top of the 3% increase with the purchase of NCV!  AOD pays a monthly dividend of $0.058 per share for a yield of 8.38% on their current price.  Looks like I got in early enough to collect the dividend this month.  This purchase increases total number of dividend payments per year to 372, guaranteeing I'll be paid a dividend for every day of 2017!  Off to a good start on doubling dividend income again this year!

Been doing a lot of projections of retirement income and although it's looking much better than a few years ago, I'm thinking about ways to improve things even more.  Originally I had planned to stop working at my earliest Social Security retirement age of 62, but now I'm thinking I'll draw my Social Security and keep working another year or two, as long as my health allows.  By continuing to work and living off earned income, I could invest my Social Security checks each month to dramatically increase dividend income in just a couple of years.  

Tuesday, February 7, 2017

NCV PURCHASE INCREASES MONTHLY DIVIDEND INCOME 3%!

Completed purchase of stake in bond fund NCV, raising monthly dividend income by 3%!  NCV pays a monthly dividend of .065 cents per share for a yield of 11.45% on their price of $6.83.  This is strictly a cash cow purchase and falls into, what I consider, the high risk category of my portfolio.  I'll be collecting the dividends from NCV in cash.  

Diverted more cash from my taxable account to non-taxable ROTH.  Don't want my taxable portfolio to increase too rapidly, although it has been going up in value with the Trump rally.  So I've been collecting a portion of dividends in cash, mostly from the bond funds and transferring the cash to tax free account.  Trying to keep taxable income down and increase non-taxable income as rapidly as possible.

Used my first cash earnings from Swagbucks (see link on right) to help pay for this stock purchase.  While I had to pay the majority with cash out of pocket, it's nice to know that I've put the free money from Swagbucks to work earning more cash each month.  I've decided to use all cash earned from Swagbucks to boost my ROTH account.  Will have a check coming in March from Sendearnings which will also be added to investments. 

 Family and friends think I'm crazy for "wasting my time" earning small amounts of cash from these sights, but why is it crazy to earn money instead of frittering away time on facebook?  I like facebook, I've spent endless hours on facebook, like a lot of other people, but they've never paid me any money.  So they can think whatever they want and I'll just keep making money.  

Wednesday, February 1, 2017

JANUARY DIVIDEND INCOME UP 250% OVER 2016!

The new year is off to a great start, if January dividends are any indication.  Total dividend income for the first month of the new year is up 250% compared to January of last year!  This month's income is the second highest month ever, only beaten my December 2016's record earnings!

February is off to a great start with 7 dividend payments for the first day of the month!  With February being a short month and having only 26 dividend payments, compared to January's 27, I expected income to be a little less.  However, a quick review of upcoming dividends shows that I may make a bit more in February than I made last month!  

Even though I made no new share purchases for the month, I did see new dividends kick in from FSC and SPLV.  My planned purchase of bond fund NCV for this month will increase monthly dividend income by over 2% and bring the number of annual dividend payments up to 360 per year.  Thanks to some extra hours at work, I may be able to to make a second stock purchase of SPFF before the end of the month which will increase total dividend payments to 372 per year.  Which means I'll be earning more than a dividend per day for every day of the year!

My biggest concern for the stock market going forward is the trend of company executives involving themselves in national politics.  While they have every right to follow their own personal beliefs, they should not be involving shareholders interests by taking political stands on a corporate level.  Corporations should be like Switzerland and remain neutral.  No sense alienating customers.



Friday, January 27, 2017

SURPRISE BONUS FROM WORK WILL BOOST DIVIDEND INCOME 20%!

I was surprised and honored to find out I'd won Employee of the Year at work!  Along with this great honor, comes an all expenses paid weekend in Branson, Silver Dollar City tickets and a substantial bonus check!  Since I didn't even realize I was in the running, this bonus was totally unexpected, so I've decided to invest the entire amount in my Roth IRA.  This windfall will boost monthly dividend income by a whopping 20%!  This should make it a lot easier to reach my goal of doubling dividend income again this year.

I want to say a very special THANK YOU to all my co-workers who voted for me to be recognized in such a great way!

JUST $2 AWAY FROM MY FIRST $25 ON SWAGBUCKS!

Finally got around to registering with Swagbucks around the end of December.  Now I'm just $2 away from my first paypal payment of $25 and a $5 bonus!  Should make that easily either today or tomorrow.  While that may not sound like much, it's free money!  I've spent nothing, registered for nothing and still earned money, mostly while watching television at the same time.  I have done a couple of surveys and watched a lot of video clips, but it was pretty easy and a lot faster than some of the other programs I've tried.

If you'd like to sign up and start earning money today, just click the link below:

Swagbucks

Although I've chosen to collect most of my swagbucks rewards in cash, you do have the option of converting your swagbucks to gift cards, starting at just $3.


Friday, January 13, 2017

UTG JANUARY DISTRIBUTION NEARLY 7 TIMES NORMAL MONTHLY PAYOUT!

Collected 4 great dividend payments for Friday the 13th!  Was very happy with the payout from UTG, which included a special capital gains distribution, making the January payout 6.8 times higher than December 2016!  Yes I know about the taxable event created by capital gains distributions, but since my shares are held in my IRA and Roth IRA accounts, I'm not too concerned about taxes.  Reinvested all distributions except JMP.  I'm taking some JMP distributions in cash since I originally purchased the stock for possible capital gains.  Just taking a little money off the table should the price drop instead of increasing in value.  Right now I'm ahead, but not planning to sell anytime soon.  I'll continue collecting the dividend in the mean time.

Missouri is getting hit right now with a big ice storm, so I'm a little concerned about making it to work tomorrow.  If I have to call in, it will be the first day I've missed work in the last two years.  Would much rather go to work, since I don't want to lose any hours, but just in case, I've been racking up Swagbucks on my days off.  I figure if I do miss work, the cash I earn online will help minimize the loss.

Dividend income for January 2017 already exceeds January 2016 dividends by nearly 50%!  With some of the biggest dividends yet to come, it will be interesting to see what the monthly total comes to.  Just off the top of my head, I'd say I could easily see a 100%+ increase over last year!  I did expect a nice increase, but frankly I'm blown away.  Never expected the big payout from UTG, so that's a very nice surprise and the rest of the month looks pretty good too.  We'll see how it goes.

Friday, January 6, 2017

EASY WAY TO AVOID TOTAL LOSS ON ANY DIVIDEND STOCK

As a long time investor, I have to admit to having a couple of total loss investments.  My old shares of Kmart which I purchased during their bankruptcy went to $0.  I had 1,000 shares of Atlantic Energy Solutions which also ended up worthless.  There was also a high flying REIT back in the 90's that dropped to $0.  As scary and disappointing as this may seem, I've found an easy way to avoid this as soon as I switched to dividend investing.

What's the secret?  Take some money off the table.  When you own a stock paying dividends, it's quite easy to take some money off the table by simply collecting your dividends in cash instead of reinvesting.  While I'm a die hard advocate for reinvesting your dividends, there are times when this would be contraindicated.  If you own some high yield, high risk stocks like I do, it never hurts to take some of the risk out by collecting some cash dividends.  If you collect cash, that money is yours and even if the share price drops to zero, you still have the cash.  Thus you avoid having a total loss on your investment.  

I employ this strategy regularly and it helps me sleep much better at night knowing I'll never lose my entire investment in any one stock.  You don't have to collect all the dividends in cash.  To continue growing monthly income, I'll have the dividends reinvested for 3 months and collect cash for the next 3 months.  That way I'm covered if the stock does well and I'm covered if it doesn't.  Maybe I miss out on a little growth, or maybe I avoid excessive loss and have a nice tidy bundle of cash to take advantage of other investment opportunities as they present themselves.

Just a simple way to any avoid total loss.  

Thursday, January 5, 2017

HWBK INCREASES DIVIDEND!

Collected first dividend payment from Hawthorn Bank (HWBK) for 2017 and was pleased to see they'd increased the dividend from .05 to .06 cents per share.  Also received the first dividend payment from monthly dividend payer CCD.  It's always gratifying to add a new stream of dividend income.  Should also get the first dividend from SPLV later in the month.

Reviewed my 401k statement online.  Looks like my two fund picks are far outperforming the target retirement fund the company picked out for me.  So much for their expertise.  Still it's nice to see the total investment increasing every month.  The return is not all that much but the regular deposits from my paychecks are adding up pretty fast.

Signed up for Swagbucks to add another small stream of income.  Looks like it will be pretty easy to make an extra $25 to $50 per month.  Definitely plan on investing any cash earned.  They say you can earn up to $150 per month watching videos, but I'm thinking that's not very likely to happen.

Just finished reading Charles Carlson's "The Little Book of Big Dividends."  I'd highly recommend it for anyone interested in dividend investing.  It's explains everything you need to know about dividend investing and is packed with actionable advice including sample dividend portfolios.  While it was nothing new to me, it was an interesting read and provided some good ideas I could incorporate into my own investment plan.


Monday, January 2, 2017

KICKING OFF THE NEW YEAR WITH 7 GREAT DIVIDEND PAYMENTS!

2017 has finally arrived and I couldn't be happier to start the new year off right with the first 7 of 27 dividend payments for the month of January!  While these 7 payments may not seem like much, they are equal to over 50% of the total monthly dividend income for January 2016.  With 20 more dividends for the rest of the month, which include the majority of the big dividend payments,  it's a pretty safe bet I'll see a huge increase in monthly income for January compared to 2016.

The first order of business for the new year is to purchase the final two monthly dividend stocks to guarantee a dividend for every day of the year.  As long as I complete this task before the end of March, it's a done deal.  Since I already have the cash to make the new purchases, it shouldn't present a problem.  I've decided to buy shares of NCV and SPFF.  NCV is strictly an income play, going after the high yield, SPFF provides a smaller yield with possible dividend growth and capital gains.  I'm also planning to purchase shares of AEG, the parent company of TransAmerica, to recover the fees they charge me for my 401k through AEG's dividends.  Should complete all three purchases before March 1st.  

The plan for the rest of 2017 is simple, reinvest dividends and make additional cash purchases of current holdings to boost monthly cash flow as rapidly as possible.