Saturday, April 30, 2016

Dividend Income: April

Well folks, it has now come to my favorite time of the month for investing. That's right, it's time to count the dividend payments for the month that has now passed us. 

What a month it has been! The Dividend Scythe continues to see YOY growth as we move forward through the second year of its life as a dividend growth portfolio. The growth is at current very small but the most important thing to remember is that the growth is much like a game of "frolf" (pictured here - my friends and I playing a round - me at the tee off about to drive that sucker into the sun). 

Each year we find ourselves at the tee off, hoping to get an incredible score by the time we hit the chains and sink our frisbee into the stand. It may have crushed the score of our last hole or it may have come a little short. The larger picture however is that there is a whole round of frisbee golf to complete before the day is out. Whether one year is better than the next or not, as long as you keep playing, the accumulation of your shots at the end of the day will yield a tremendous amount of points.

This is how I like to picture my dividend yields. One year I may do extremely well. Another year I may fall short or flat line basically across the income sector if something is to come up that would stall my ability to invest. However, as long as I keep playing, the income will continue to grow at a rate that is moving upward and onward. That is the most important thing to remember. But enough talk, Let's get into the nuts and bolts of this thing and start seeing some real numbers!

April shows us a big milestone for the portfolio. As of April dividends, we have officially driven past the total dividends received in all of 2015! This has been achieved in only four months. In 2015, the total amount of dividends received was $62.25. In April alone of 2016 however, we received $13.75 in dividend payments. This is added to the already collected dividends from 2016 and we come to a grand total of $70.67 collected so far this year. It's so great to see how far the portfolio has come in such a short amount of time. Even though the amount feels very small in relation to how much the wife and I make on a daily basis at our jobs, it's almost more amazing to see this passive income stack up because we haven't had to left a finger to generate the passive income. It's very cool!

With that being said, I have huge expectations for next month as a few of my key holders such as AT&T (T) issued their dividend for the quarter in May rather than in April. That means that instead of having an expected three to be received in April, we'll be gaining four payments total(of stocks currently owned). That being said, my expectations for the payout for April are set very high. I hope to see the portfolio break through the $100 mark but I am certainly not holding my breath. Things can change at a moment's notice and as investors we always need to be prepared for that to happen. 

Lastly, I want to talk quickly about my moves heading forward into May. Heading into May, I see a few good discounts in the market. One of the most notable is a huge discount in L Brands (LB). They are the spearhead for Victoria's Secret and Bath and Body Works (LB). Their yield is fantastic, their business is solid, and they issue special dividends on an almost annual basis. What's not to like? My eyes are set on acquiring a piece of their company or as a secondary option I will try to grab a piece of Starbucks (SBUX) or Apple (AAPL) while they are deflated as well. I just love how these deals were hardly there a few months ago but now they are all ripe for the picking. Let the games begin!

Friday, April 29, 2016

Budgeting: The Gaps

If you're anything like me, you've got a budget to stick to each month so that you can have enough left over at the end to invest with. That some times can feel so straining that you feel like you have almost no air to breathe. It can feel utterly suffocating.

In times like that, I like to remind my wife (and myself when I have these moments!) that we simply need to find a way to have both a good savings rate and a good time. There are numerous ways to make this happen but I'll go over the most notable way we've conquered this in our lives.

Prior to taking on a budget, the wife and I would have a good time almost non-stop when we weren't working. We had a good amount of money coming in and we saw no reason that we couldn't use a ton of it. One of our favorite things to do was to go to a restaurant in the city called Old Chicago for their beer tour. The beer tour is a beer drinking challenge where those who wish to take it on have to drink 110 different beers in the restaurant. This can be achieved through up to four beers a night and has no expiration date. In fact, it took me a good three years to complete my first tour through it.

Dividend Employees

Do you remember when you were young and you made minimum wage at your first job? I do. I was making almost nothing working at my old football coach's dive of a laundry facility. Every day for four hours a day I would make my way to the shop, tag people's dry cleaning, and bag it for the facilities crew to complete over night. It wasn't much but it created a wage that I was able to live off of at the time (under my parent's house). Imagine if we could create a copy of ourselves to work another job for us? Wouldn't that be great? Even if they could only ever hope to generate a minimum wage, wouldn't it be great to have that has supplemental income? This is how I like to think of my dividend investing.

Thursday, April 28, 2016

Dividend Growth Investing: Quality Over Yield

What is it that makes dividend growth investing so attractive to investors? Is it the excitement we get out of payments without having to sell our beloved stocks? Is it the growth that we get to see out of the companies we invest in much like watching seeds sprout from a well manufactured garden? Or is it something more devious? Cash, money, the green stuff! And more of it!

Wednesday, April 27, 2016

Re-Review of Ford Motor Company

Today, as I was adventuring across the internet, I came upon an article that was posted about Google (GOOG), Ford Motor Company (F), and Uber's attempt at forming a coalition to aid in self-driving cars being pushed forward faster. This coalition has come about because of debates on road rules for self-driving vehicles which can be an insurance nightmare. It brought up the question as to the current status of Ford Motor Company and it got me to thinking, where does Ford stand currently?

Sunday, April 24, 2016


Hello readers,

Today I want to talk about diversification in your portfolio. I bring this up because I have noticed that I myself have been guilty of not diversifying enough. This is why it's always important to keep a watch however on what you're buying.

Monday, April 18, 2016

REIT: How to Evaluate Them

REITs are typically seen as the dividend cash cows for a portfolio much in the same way the golden snitch is seen as a win for Harry Potter in a quidditch game. These massive dividend payers are a dime a dozen however and their metrics seem to be all over the place. Why, you might ask? This is because of a number of factors.

The most important factor is that an REIT (Real Estate Investment Trust) is a unique type of investment that is forced by law to pay out 90% of their income received as dividend payments to shareholders. This causes your typical method of evaluation to fail. This is because the P/E ratio and subsequently most other common ratios become affected by the fact that the net income is slashed due to those dividend payments. How then can we tell if the REIT in question is worth our investment?

Saturday, April 16, 2016

Weekly Wrap Up

What a week it has been. I managed to acquire two great companies, post quite a few paid articles on Seeking Alpha, and I also managed to come in above budget to provide that much more steam into the portfolio. That means that it's ultimately time to look back and see how I feel about it all now that it's all said and done. Let's first look at the articles that were posted on Seeking Alpha:

Hold GameStop - Unclaimed Future Opportunities

AT&T: The Future Is Here

Home Depot: The DIY Dividend King

All in all, I'm happy with the articles that I've posted this last week on Seeking Alpha. I was able to have the chance to have articles on three big companies that I really enjoyed taking a look at. GameStop (GME) was ultimately a hold while AT&T (T) and Home Depot (HD) were buys. At this time, if you've already looked at my portfolio, I only own AT&T but in the future I plan to pick up HD if I can get in on a great price for it. The company has such strong fundamentals and it's ingrained so perfectly into the American household that it would be hard to topple it. As for GameStop (GME), I'll be holding off for awhile. Their core business in gaming stores is definitely threatened with the growing digital game market and I want to see where that business model ends. Also, I fear what the economy taking a fall off the side would do to the business profits. If there are only a few dollars left on the table for an American consumer, I somehow doubt that it would go to used video games at GameStop (however much I'd prefer it to).

As for the budget, paying off the student loans for the wife has freed up a lot of cash flow in our household. Instead of having to spend half of our left over funds at the end of the month on student loans, we can now have that cash as free spending for more investing or for grabbing a few things that are needed. I'm excited to see where future prospects take these funds. I'd like to say that it would go towards paying off the last car loan that we have but quite honestly, the interest rate is so low that it's hard to justify it. I think the money would be a better use in the market where I can make more than what the interest rate charges me in capital gains and dividend payments. This is obviously where the Dave Ramsey school of thinking goes off the deep end in my mind. Why would anyone want to pay off a loan that has an interest rate of less than two percent when they can make three percent or more on the market at any given time.

Anyways, that's all I've got.

Monday, April 11, 2016

Recent Buys: ABBV, STAG

I've said it before and I'll say it again; I love the smell of purchases in the morning. This morning I woke up and after finalizing my budget for March I was able to move a good amount into the investing account. This allowed me to quickly grab a few stocks that I've been looking at for some time now. These two stocks were ABBV and STAG. The purchases are as follows:

New Purchases:

ABBV - 10 shares - $586.90 - 3.90% annual dividend 

STAG - 15 shares - $300.90 - 7.02% annual dividend 

With both of these being added to the portfolio, the portfolio gains an additional (potential) $43.60 in annual dividend income. This gives it a huge boost in payouts for the year as I race towards crushing last years dividend payouts. As this is very important to keep my eyes on, I've also gone back and compiled the monthly payouts for 2015 so that I can better understand not just the YOY growth of the totals throughout the year but also through the month. That is as follows:

As you can see, I've already crushed January, February, and March's last year payouts. I hope that this trend can continue into the rest of 2016. The only threat to that would be if a cut was presented that would severely limit a payout for any of the next few months. As I don't see that sort of thing coming and I doubt that most people can, I won't bother thinking about it too much. I will simply plan to keep my eyes forward towards the future and hope that these picks further bolster a well run portfolio of dividend paying stocks. 

Thanks for following and if you have any feedback, please leave your comments below. I would love to hear from any of my readers, most importantly on such updates as new acquisitions. 

Friday, April 8, 2016

Investing Class

Try not to be alarmed when you start seeing me post new pages on the side of the blog that make you feel like you've returned to college. My brother has almost zero investing knowledge and I offered to help by breaking a lot of it down, step by step for him. If you feel like you could gain from any extra knowledge that is presented, please feel free to read it as it is posted. I am hoping to post about one a week as he will be able to use it during his time in the desert (Middle East on deployment). The plan is to go step by step through all of the material that you would have to memorize in order to become a register investment adviser. By presenting this knowledge to him and writing it all myself, both he and I should gain a few things. He will gain a very good base of investment knowledge that spans the most important styles of investing and the terms most used by investors world wide. I on the other hand will gain a deeper understanding of the topics and at the end I should also be ready to sit for the Series 65 as the material will all have been covered other than the most up to date tax/investing laws that have been placed into effect.

Anyways, these articles should start showing up on the side of the blog soon and they will be exclusive to this blog. I won't be posting any of them to Seeking Alpha as they are closer to me and are intended to only be used by my brother to understand the world of investing. Thanks for reading. 

Thursday, April 7, 2016

Moving Forward - Seeking Alpha

Eventually we all reach a point where we have to continue growing outwards to go upward. That moment has happened for me. As of this week, I have started publishing articles for the blog exclusively through Seeking Alpha to expand my audience and gain further feedback on my thoughts. Their reader base is much greater than my own and this should help to breed new knowledge for myself and hopefully that should trickle down further into my readers.

Sunday, April 3, 2016

Dividend Investing - Millennials Move Forward

Dividend investing - it's something that most millennials currently don't understand or don't want to understand. To most of them the stock market is a giant jumble of old man funk that shouldn't be touched. In their minds, their money is better served in a savings account before it is more horribly used on a car that they can't afford but at least the payments can continuously be refinanced on. Like it or not though, they're the future of the stock market whether they know it or not.

Friday, April 1, 2016

Positive Net Worth

The road to positive net worth can be quite the trying one for most people. Most of us in this day and age bring on debt into the adulting world. Whether it be from student loans, a bad car choice, or even a bad run in with a roommate that never paid their share, you find yourself deep in a hole that you never thought you would find yourself in. Thankfully, that hole doesn't have to last forever.

You see, I had dug myself into that hole too. I went to college the smart way. First stop was to community college where I paid each semester in full by working as a bartender, model, and bus boy. I was lucky, tuition at the time was a mere $15/credit hour since the schools in my area were restructuring. This saved me a ton of money because it allowed me to focus on passing and not having to worry about any loans as I adjusted to the differences between college and high school. Once I obtained my associates degree however, I had to move to the much more expensive choice that could no longer be avoided. I had to go to a typical four year, rack up the debt, and get out as fast as possible. Even though I did just that, I still eneded up with a sizable debt. Or... I would have if my parents didn't end up paying for it.