HIGH NET WORTH VERSUS HIGH MONTHLY CASH FLOW

You might think it's not one or the other, but it is possible to have a high net worth and a negative cash flow.  The ideal situation would be to have both.  However, if you're just starting out or rebuilding (as in my case) which should you concentrate on first?  I decided that it's more important to build cash flow and then concentrate on improving net worth.  The main reason being that you can own a lot and have a high net worth but it may not be generating any income.  Take for example someone who owns gold bars or gold coins.  If they have enough of them, they might be quite valuable.  However, unless they sell the gold, it's not really putting money in their pockets.  It may go up in price which would increase net worth, but the only way to unlock net worth is to sell something or to borrow against it.

If, instead of a high net worth, you have steadily growing cash flow and use the cash flow to pay off debt or increase your holdings, then you will build net worth.  That was the idea I had when starting to rebuild my investment portfolio after losing most of it to pay off medical bills.  So far it's working out quite well.  While my net worth is nowhere near what it used to be, monthly cash flow is increasing rapidly and I expect to see a turnaround in the next few years.  As cash flow increases, my net worth improves along with it.  But I still concentrate all my efforts on improving monthly passive income.  In my case the passive income is from dividend stocks, but it would be the same principle with real estate or a business.  Build cash flow every month and you've set yourself up for success.

INVESTING IN ISRAEL

Recently I posted about interest in investing in Israel, specifically the possible new found oil field.  However, upon closer examination of current stock holdings I've discovered that I already have a significant amount of money invested in technology and pharmaceutical companies in Israel.  This does not mean that I would no longer be interested in investing in Israeli oil, but I'm happy to know that I'm supporting my people by supporting Jewish owned and operated companies.

I am painfully aware of all the unrest in the middle east and the hostility and danger faced by Jewish people of Israel on a daily basis.  At this time, the best that I can do to show my support is to invest in the nation of Israel and help support their economy.  While I'm not a practicing Jew (I consider myself Christian), I am descended from a German Jewish family and I do support the nation of Israel and have great respect for the Jewish people.

MARKET DOWN OVER FEAR OF FED RATE HIKE

The stock market is down due to concern over a Federal Reserve hike in interest rates.  While I like to see my stocks go up in price as much as the next guy, this is not an entirely bad thing.  Lower stock prices create more buying opportunities with higher yields for the dividend investor.  For example, NYCB's price has dropped significantly since their last dividend payment.  So the money I re-invest from this month's dividend will buy more shares at the lower price than if the price had remained high.  The more shares I own, the more the next dividend payment will be.  But wait, it's gets even better than that, because the lower price without a reduction in the dividend means I'll be getting an even higher yield on the newly purchased shares.  It also raises the average dividend yield for all of the NYCB shares owned.  As long as the market stays down, this trend will continue for all re-invested dividends.  So the real opportunity is boosting monthly cash flow and accelerating stock purchases through re-invested dividends.  It's kind of exciting to think about.  I wouldn't mind the market staying down for a while, although I'm hoping we'll avoid a major recession.

The political scene in the U.S. looks to be favoring Republicans in upcoming elections, which could be good for the stock market.  But it's a little too soon to count the Democrats out.  One things for sure, whoever ends up in control of the country, they're really going to have to do some serious reigning in of spending.  

MONTHLY CASH FLOW FROM STOCKS

As a dividend investor, I invest for monthly cash flow as opposed to traders who attempt to buy low and sell high.  As long as my monthly cash flow is increasing, I'm pretty happy.  This is a very simple way to invest and make money every month from stocks.  However, I just read an article on the Rich Dad Blog, by best selling author Robert Kyosaki, concerning cash flow investing from selling covered call options.  It's a great post and certainly worth your time to check it out.  I intend to give it a try as soon as I learn more about options.

The post is titled: Yes You Can Cash Flow With Stocks  and you can find it by clicking the link below.

Rich Dad blog post

HAPPY HALLOWEEN! TIME FOR TRICKS AND TREATS!

I know it's supposed to be tricks or treats, but the end of October has been good for my portfolio.  First, I pulled off a trick by doubling the total number of shares owned in my portfolio from the first of January to the end of October 2015.  Then, with the month ending on a weekend, I collected end of the month dividends on Friday and first of the month dividends today!  Couldn't have a better treat than that.

Collect 6 good sized dividends for the end of October, including my first dividend from recent purchase, DON!  For the beginning of November I collected 5 dividend payments which included increased payments from NCZ and PHK due to increased share purchases in both funds.

October, with it's 19 dividend payments, turned out to be the second highest month for dividends this year.  It also beat out October 2014, with over a 30% increase in monthly income!  The stock market ended down on Friday from the day before, but over all it wasn't a bad month.

I expect December to set the all time record in this new portfolio, with a total of 22 dividend payments for the month.  Not only is that the most dividends for any single month this year, but it will include special dividends from UVE and MAIN, if previous years are any indication.  They could always decide not to pay the special dividends this year, but I don't see that happening at this point.

HOW I BOOSTED PSEC DIVIDEND INCOME BY 150%!

I took advantage of one of the recent dips in stock prices to double my investment in PSEC.  By buying in at the lower price, I not only bought more shares than my original purchase, I also boosted the monthly dividend by a whopping 150%!  Warren Buffet has always said that your buy in price makes a big difference.  I've always known that was true, but it surprised me how much difference it can make.

The best part about the whole transaction is that I got in before the ex-dividend date, so I'll see the first boost in dividends in November.  November is also the month I collect the first dividend payment from MAIN, so it will be interesting to see what the new monthly income turns out to be.  Of course I could calculate the amount ahead of time, but I like being surprised.

Just read an article on Bing about CEO's retirement benefits.  The writer acted surprised that they stand to collect such extreme amounts during retirement.  I don't know why anyone would be surprised by that.  Almost every annual report I've gotten from every company I've ever invested in, there's some kind of vote on executive compensation (usually to increase it).  While they may not be so concerned about company performance or taking care of the shareholders, they certainly don't drop the ball when it comes to their own pay.  These are the same people who just can't figure out how to give hourly workers a raise.

MY CURRENT TOP TEN DIVIDEND STOCK HOLDINGS

I thought it was time to update my top ten holdings list.  This does not constitute investment advise in any shape or form, simply for informational purposes.

 1.  AOD  Alpine Total Dynamic Dividend Fund.  Current price $8.04 with a dividend yield of 8.58%.  Pays monthly.

 2.  UVE  Universal Insurance Holdings.  Current price $36.32 with a dividend yield of 1.10%.  Pays quarterly.  (Because my original buy in price was much lower, the current yield on my original investment is 8.2%)

 3.  DON  WisdomTree Trust Mid Cap Dividend Fund.  Current price $82.75 with a yield of 1.74%.  Pays monthly.  (Showing a profit on DON in less than a month.)

 4.  NCZ  AllianzGI Convertible and Income Fund.  Current price $5.69 with a yield of 12.13%.  Pays monthly.  (Recently reduced dividend.)

 5.  PHK  Pimco High Income Fund.  Current price $8.33 with a dividend yield of 14.90%.  Pays monthly.  (Recently reduced dividend.)

 6.  LLY  Lilly (Eli) and Company.  Current price $78.51 with a dividend yield of 2.54%.

 7.  GE  General Electric Co.  Current price $29.51 with a yield of 5.12%.

 8.  MAIN  Main Street Capital Corp.  Current price of $30.05 with a yield of 6.39%.  (Showing a profit on MAIN in less than a month.)

 9.  NYCB  New York Community BanCorp.  Current price of $18.95 with a dividend yield of 5.28%.

10.  CRF  Cornerstone Total Return Fund.  Current price of $17.65 with a dividend yield of 22.1%.  (Like the dividend from CRF, but it's performance otherwise has not been good.)


My current yields on several of these stocks are much higher than the current yield, since, like UVE, I bought in at much lower prices.  The thing I found most interesting when compiling this list is that the original 4 stocks I bought when setting up this portfolio are all still in the top ten.  (UVE, GE, LLY and NYCB)  Of course I consider all 4 core holdings, but I haven't bought any extra shares since my initial investment in each of these stocks.  In fact I sold several shares of UVE and it's still No. 2 in the top 10.  Warren Buffet says a good investment is one that continues to grow earnings and increase in value without any additional cash investment.  These 4 stocks all qualify in that regard.