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!