ATTACKING CREDIT TO FREE UP CASH FOR INVESTING

Although I've always read, you're better off to pay down debt before investing, because the money you save on servicing high interest debt is likely to be more than you'll earn from investments, I've always found it more appealing to buy income producing assets than paying bills.  However, while reviewing my finances of late, I've taken more interest in reducing debt, in order to free up cash for bigger investments.

I'm ashamed to admit, I had no idea exactly how much each of my 5 revolving charge accounts are charging me in interest.  So that was the first thing I looked up.  While I don't have the money to pay them off immediately, I can target the higher interest accounts with bigger payments to reduce balances and save on interest charges.  I also discovered what a strong incentive knowing your interest charges are to get you to stop or at least slow down charging.  Although I love Amazon and my Discover card, I'm afraid they're the big losers as far as interest rates.  Amazon is my favorite place to shop, but my charge account with Amazon has an interest rate in the nose bleed section.  So I won't be ordering anything from Amazon for quite some time, unless I'm paying cash.  Discover is not far behind Amazon with the high interest rate.  I recently emailed them about reducing my rate since I've been a very good customer for several years now.  Apparently they've not joined the internet age because they told me they couldn't address that type of request through email, even though it was on their secure website.  I have to admit, I was a bit miffed about that.  After all, they can send me endless emails about everything else and I was using their website, so what's the problem???

Anyway, not picking on Amazon or Discover in particular.  If I didn't really like them, I wouldn't have accounts with them.  I'm going to keep my accounts.  Just won't be using them until my balances are paid off or I get a good reduction in interest rates.  As for the other 3 charge accounts, I cancelled one because of their annual fee.  I don't pay anyone else an annual fee, so I'm not going to pay one to them.  My Paypal charge I haven't been using anyway, so it's no big deal to not use it and the balance is decreasing nicely.  Capital One, my longest held credit card has the best rate of all my open accounts, so if I have to charge, it will be with Capital One, but I'm going to work on getting that balance paid off as well.

Paying off the balances on all my revolving charge accounts would free up $500 per month!  An extra $500 per month which I can then put to work building my dividend stock portfolio.  This doesn't even include the astronomical amount I'll save on interest by paying off debt.  I'm excited to put my debt payment plan into action!

THREE YEAR STOCK PURCHASE PLAN OFF TO A GREAT START!

Toward the end of March, I sat down and mapped out a stock purchase plan to beef up my dividend portfolio.  I estimated it would take 3 years to come up with the cash to complete all the stock purchases.  However, through a series of fortunate events, I'm happy to report I'm off to a great start and may complete the plan in much less time.

I completed the first two trades on April 5th and will complete two more purchases in next week.  I've already set up cash transfers and put in automatic trades to purchase shares of PDLI, JMP and HWBK.  My list calls for purchasing additional blocks of shares in 17 different stocks.  In the first month, I'll have completed 5 of the 17 purchases.  Just 12 more to go.  However, since progressive purchases are more expensive, it may be much slower going forward.  Still it's encouraging to be over a third of the way through the plan.

I'm adding the additional shares of JMP earlier than anticipated, because I think it will be a very good investment in the long run and it will boost monthly dividend income by about 2% starting in May.  This serves a two fold purpose, decreasing investment costs by buying shares in bigger blocks and boosting monthly cash flow, to reach my goal of increasing annual dividend income by 50% over last year.  Any of the plan purchases will get me closer to reaching this goal, but I'll most likely target monthly dividend payers first, since I get more bang for the buck. 

ANOTHER DIVIDEND INCREASE FROM CLNY!

As earnings season progresses and I continue pouring over annual reports from the stocks I've invested in, I'm very happy about all the companies that have increased dividend payouts.  The most recent one to come to my attention is an 8% increase from CLNY.  I own shares of CLNY in my IRA account and although I've not been especially excited about it's price performance, I am happy to see the dividend going up.

ONE DIVIDEND STOCK i'M VERY EXCITED ABOUT!

While looking for a new stock to replace the monthly dividend from ROYT, I came across a stock I'm very excited about.  JMP Group Inc. (JMP:NYSE) is a full service investment banking and asset management firm.  Their current price of $5.11 is near their 52 week low and the stock carries a dividend yield of 9.54%!  Their price to earnings is 11.71% (well below the average) and their price to book is only 0.36%.  The monthly dividend of 4 cents per share is more than covered by earnings of 57 cents per share.  In addition to all this, a top executive of the company recently purchased 26,500 shares of the companies stock, an investment of over $132,500.  If an insider is willing to buy so many shares, he's probably in a position to know that the stock is under valued.  Not only that, but while he waits for the market to catch on, he's collecting a monthly dividend of $1,060 per month or $12,720 per year!  

So I put in an order to purchase shares of JMP today and will be buying more as the year progresses.  While I don't have the kind of money to invest like the company executive, I think I'll do well with whatever stake I'm able to purchase.  Since it's a relatively small company, with a market capitalization of $107.15 million, it may not gain mainstream attention anytime soon.  However, with such a high dividend payout, I'm more than happy to wait.  My current investment in JMP boosts total monthly dividends by 1.6%!  

THREE TRADES I'M NOT TO CRAZY ABOUT

Completed 3 trades today that I'm not to crazy about.  First, I sold ROYT at a huge loss.  It was a speculative venture when I bought in, hoping to benefit from a recovery in the oil market.  I was willing to hold on when the price drop, but couldn't see any sense in it when they stopped paying dividends.  So I cut my losses and put the money to work in more shares of PHK.

Second, I bought additional shares of PSEC.  I like the dividend yield of over 13%, but there's some  questionable stuff going on with the stock.  A risky proposition, but I figured it's worth the risk as long as the dividend holds.

Third, I increased my steak in EGAS.  They're coming off a bad year due to a warmer than normal winter and have cut the dividend again, but I'm looking for some improvement going forward with some of the changes the company has made.  Won't be buying more shares anytime soon, I'll stick with what I've got for now to limit risk.

GLW AND CNP INCREASE DIVIDENDS

I've been busy reading annual reports from some of the stocks and funds in which I own shares.  I happy to see that at least two of them, GLW and CNP, have increased dividends for 2016.  GLW raised their dividend by 12.5% and although CNP had a much smaller increase, I'm happy to see it going up instead of down.  When you own stocks with increasing dividends, you gain more shares over time through reinvested dividends, but it also increases the yield on your original investment.  A very important measure of a good investment is one that continues to grow in value with no additional cash invested.  These are the type of stocks that you want to hold on to forever.

ANOTHER 90% DIVIDEND INCOME GAIN POSSIBLE FOR APRIL, NO FOOLIN!

Collected the first six dividend payments for the month of April, with eleven more to go by the end of the month.  Did a quick estimate of dividends for the remainder of the month and compared that to earnings from April 2015.  By this estimate, income from dividends will increase over 90% when compared to April 2015!  This will make two months in a row with 90%+ increases!  I fully expected to see some increases, but this surprises even me.

I mentioned in my last post that I'm embarking on an ambitious stock purchase plan.  It will most likely take me three years to complete all the purchases I intend to make, since I'll be paying out of pocket and am limited by available funds.  I've scheduled a total of 16 stock purchases, with the first two to be completed on Tuesday of next week.  Just to get things off to a good start, I plan on making the third purchase by the end of April and the fourth purchase in May.  May be able to complete the plan in two years, but I'm giving myself a three year time horizon since each purchase increase in dollar amount as I move down the list.