Posted on 1/31/2018
Investing In Me
The last day of every month I always share the results of my dividend investing efforts. Hands down, these are my favorite blog posts. Let's get straight to the DRIVE fund data and see how much was reinvested!
*Overview of this month's highlights! (What happened this month?)
*Dividend Activity from my Stock Buy List! (Where's the dividend growth?)
*Gains & Losses (Top 10) in Market Value from my Stock Buy List! (What's on Sale?)
*Monthly Dividend Income from my Portfolio! (Which dividend investment paid me?)
Posted on 1/12/2018
Research, Invest, Track - Repeat
After hearing from many of you in the dividend community, I've spent some time documenting what tools I use for my investment research and added a Resources tab on my Home page. Many of you will be familiar with most of these resources. I didn't want this list to reflect only what I use so it also includes resources that are recommendations by others. Thank you to those whom also share your resources on your personal blogs and continue to inspire newbie and seasoned investors.
I hope these resources will be of use to you as you continue to invest and support this strong bull market. Perhaps when you review your investment plan, you will see the benefits of these resources and how they will be able to assist you in meeting your goals. If nothing else, maybe this list will help you filter all the noise out there and provide a focused starting point for your own research. I will keep this list updated as I find more resources so please check back often and email me with resources not listed but you find valuable.
Posted on 1/06/2018
Diversify With ETFs In 2018
Last November I started investing in ETFs. Now I own 21 different ETFs and plan on purchasing many more, providing me with a diversified foundation of investments. In order to narrow my choices and focus on a few ETFs I have applied a new strategy. Here is my simple 5 step process:
Step 1 - Create an ETF Buy List of all the dividend paying ETFs you want to own for the long term. (My ETF Buy List)
Step 2 - Create an ETF Screen to narrow down the best of the best ETFs from your ETF Buy List. My Screen Criteria:
- Dividend Yield > 1.50%
- Morningstar Rating 4 OR 5 stars
- Net Expense Ratio < .30%
- 5 Year Total Return > 15%
- Annual Dividend > $1.50
Step 3 - Run your ETF Buy List through your ETF Screen to shorten your ETF Buy List.
My ETF Buy List went from 48 ETFs to 9 ETFs.
Step 4 - List all ETFs that are in the same category and remove the competitors that have the lower market cap. Now my list has only 2 ETFs SPY and VTV.
Step 5 - Purchase your ETFs starting first with the one priced closest to its 52 week low. My full position for a purchase will be $15,000 per ETF.
Here are my next ETF buys:
Posted on 1/04/2018
Take Advantage of Smart Investments
I have been trying to estimate what my Net Worth will be at the age of 50 (5 years from now). I know that when I turn 50 I will be eligible for catch up contributions to my retirement accounts. While I have been looking over my numbers, my employer just sent an email to all employees with great news that has made me shift my investment strategy a little. They are now allowing employees to save up to $55,000/yr in their 401(k) Account whether it is a Traditional 401(k) or a Roth 401(k) like the one I currently invest in. I now have an extra bucket to hold money called an After Tax Account and it is inside of the 401(k) Account. Before I could only contribute a max of $18,000 every year. Now, along with an increase in the company match of $1,000, I can invest an additional $31,500 into this new After Tax Account bucket. There is a catch to be able to invest the full $31,500. I'm only able to deduct up to 50% from my paycheck. For example, I am not allowed to take my entire check and invest 100% of it into my retirement accounts. $55,000 is not 50% of my annual net income. Even with the new tax cuts, I'm not even close.
There are still good things about this opportunity and one is any money that I personally contribute will be tax-free when I withdraw it at retirement. I only have to pay taxes on the gains of the investments, not the initial capital invested. Being in the Roth 401(k), it's a protected retirement account and I don't have to pay the taxes on the dividends every year. For these two reasons, it makes sense for me to try to max out as much as I can towards the $31,500 contribution annually.
I have made the decision to delay my purchasing of Stocks directly in my taxable brokerage account since I want to use my Roth IRA and Roth 401(k) for ETF investments. After I max out my Roth 401(k) and After Tax Contributions, I will buy Stocks with any money that remains. Here is my investment strategy going forward:
Total Capital to be invested over 5 years:
- Roth 401(k) & After Tax contributions: $152,500
- Roth 401(k) company match: $25,000
- Roth IRA contributions: $27,500
- Current annual dividends: $43,323.70
Investments to be added:
- 11 ETFs to Roth 401(k) & After Tax Account
- 2 ETFs to Roth IRA
Items not accounted for:
- Stock Price Appreciation
- Additional Individual Stock Buys
- Dividends From New Buys
- Dividend Growth of All Dividends
- Employment Raises & Bonuses
- Limit Increases To Retirement Account Contributions
- Financial Gifts & Inheritance
Total Invested Over the next 5 years: $248,323.70
Total Including Current Net Worth: $714,324.98
When I turn 50 years old, my Net Worth should be a minimum of $714,324.98. Stay tuned as I progress towards my new goal!
Posted on 1/03/2018
Invest In Yourself
Every year I give myself the best birthday present. I maxed out my Roth IRA contribution and bought an investment that will keep on giving through dividend payments. This year it was easy for me to decide where to put my money because I had an ETF in my Roth IRA that I had not invested my full position of $15,000. So I put the $5,500 contribution into the WisdomTree U.S. Total Dividend Fund ETF. Now that I only have $10,388.08 invested, I will do the same for next years birthday gift.
Here is my updated Roth IRA:
Posted on 1/03/2018
Invest With A Plan In 2018
Today is my 45th birthday! Only 25 more years to go until my retirement.
As a gift to myself, I have spent some time on my financial goals for the year and researched which dividend paying stocks I need to purchase before others on my Stock Buy List. Here is my simple 7 step process:
Step 1 - Create a Stock Buy List of all the dividend paying stocks you want to own for the long term. (My Stock Buy List)
Step 2 - Create a Stock Screen to narrow down the best of the best stocks from your Stock Buy List. My Screen Criteria:
- Dividend Yield > 1.50%
- Price To Earnings < 30
- Years Dividend Growth > 5
- Dividend Payout Ratio < 80%
- Annual Dividend > $1.50
Step 3 - Run your Stock Buy List through your Stock Screen to shorten your Stock Buy List.
My Stock Buy List went from 156 stocks to 57 stocks.
Step 4 - Research and compile the worst 5 stocks of the Dow Jones Industrial Average for the past 3 years.
- 2017 5 worst stocks of the Dow: GE, IBM, MRK, XOM, VZ
- 2016 5 worst stocks of the Dow: DIS, HD, KO, NKE, V
- 2015 5 worst stocks of the Dow: AXP, CAT, CVX, UTX, WMT
Step 5 - Compare your shortened screened Stock Buy List with the Dividend Kings List and extract matching stocks from both. I have 9 stocks in both lists. 3M, CL, GPC, HRL, JNJ, LOW, PG, TGT and VVC
Step 6 - List all stocks that are in the same sector and remove the competitors that have the lower market cap. My list now has just 7 stocks 3M, GPC, IBM, JNJ, PG, VVC and VZ.
Step 7 - Purchase your stocks starting first with the one priced closest to its 52 week low. My full position for a purchase will be $3,000 per stock.
Here are my next stock buys:
Posted on 1/01/2018
Invest In The Rewards Of 2018
Happy New Year! Last year turned out to be a great year financially with my Net Worth having it's largest jump thanks to a solid bull market. As most of you know by now, I decided to sell all of my dividend paying stocks and take some profits while the market is at an all time high. I then turned my focus to building a diversified and solid foundation of dividend ETF's in November and December. That decision paid off greatly with December bringing me the largest dividend income to date!
I will continue to invest in ETF's and Mutual Funds in my Roth 401(k) and Roth IRA in full positions of $15,000. I have a brokerage stock account with Fidelity Investments in which I will buy individual stocks going forward in full positions of $3,000 which is taxable. My full buy lists of ETF's and Stocks can be found on my Investments page. As you can see, finding high quality dividend paying investments is not a hard job. The hard part is earning the funds to invest for the long term. If I had an unlimited supply of capital to put to work, just imagine the buying spree I would tackle!
I encourage everyone that isn't invested in the stock market to start investing in 2018 even if it's a small amount. I have a strong feeling that 2018 will be another big year for dividend growth investors and I look forward to brainstorming my thoughts here. Here's to the next 25 years of compounding dividends!
Full Disclosure: I'm Long on Dividend Growth Stocks in 2018!