Weekend Reading – December 3, 2011

The holiday season is in full swing now and I’m excited. I really love the holiday season. It seems that everyone gets a little bit perked up, and I really enjoy spending time with family and friends and remembering why life is worth living. For someone as frugal as I am, the holiday season always presents a challenge between giving gifts but still trying to remain financially vigilant. But, to me it’s not about gifts and exchanging gift cards. I’m excited because later this month I’ll be flying home to Michigan to see family and reconnect with everyone. Good stuff.

On another note, something really big in the frugal living/retiring early world happened very recently. Jacob over at Early Retirement Extreme, gasp, decided that it was time to get a jobby job. A J-O-B. I can only say that although I’m a bit surprised, I’m excited for him and congratulate him on this new opportunity. Some people may in the end consider Jacob a sell out, but someone as obviously talented and intelligent as Jacob is needed a new opportunity to challenge and excite him. What do you think? If you attained financial independence at an early age, do you think you would find after a couple years that you needed a new challenge? There are some people who think he should have used his resources and intelligence to take on problems like energy/food/water shortages instead of using his talents in the world of high finance, but it’s his life to live.

I will just say that Jacob has inspired me to start my own journey to early retirement and financial independence. I think achieving early retirement is less about being lazy and weaseling out of working, and more about getting away from some of the negativity and stress that comes with many forms of employment. I think it ultimately comes down to choice and freedom. Jacob embodies this freedom, as he now chooses to go into a field he finds interesting and challenging. This is a good example of the downside of early retirement. If it doesn’t suit you, or if you get bored…you can always get another job.

Here are some excellent articles from fellow dividend growth investors, frugalists and personal finance bloggers from the past week.

So long and thanks for all the fish
Jacob gives us his swan song and passed the early retirement torch. He has decided to engage in paid employment and he gave a long list of reasons he has chosen to do so. This doesn’t invalidate early retirement, but rather reinforces that it gives you flexibility and freedom to do what you want to do. At this moment, Jacob wants to be employed in high finance. Maybe in 5 years he’ll want to be a fisherman. Who knows. All I do know is that I wish him the best and I thank him for all the inspiration he’s provided me since I discovered his blog and forums. 

The Opportunity of a Decade – Looking Up For 2012
The Dividend Guy provided us with many reasons as to why the stock investor may be king in 2012. I tend to agree here, as I’m a bullish optimist on the long-term wealth-building power of the stock market. I’m actually hoping for a flat market for the next decade or so, as my reinvested dividends and fresh capital buys me more shares for my money. I doubt that’s going to happen as the last 10 years have basically become a “lost decade”, but one can hope!

My Favourite Takeaways – Millionaire Teacher and FREE book giveaway (Part 2)
My Own Advisor discusses some of his favorite parts of Andrew Hallam’s new book: Millionaire Teacher. I liked the rules discussed, and I feel they are timeless. Stay vigilant, stay invested, spend a lot less than you earn and don’t take on debt. Simple rules, but hard to follow. I’m doing my best to follow them all!

How to Build a Retirement Dividend Portfolio with only $1000/month
DGI discusses how to start building a dividend portfolio geared for retirement with just $1,000 a month. Although “just $1,000 a month” is a lot of money, if you follow my blog and start cutting out unnecessary expenses it quickly become an easy number to attain. I’m personally trying to invest more than twice that amount every month, and I’m on a pretty modest income.

Dividend Increases: GGG, WFC, DAKT, WEC
DSO discusses some recent dividend increases, and one prominent company (WFC) that wants to increase dividends. If I was to buy a bank today, WFC would be one of the very few I would be interested in. What about you? Buying any banks?

9 Low-Risk, High-Yielding Dividend Stocks
D4L provides us a list of 9 stocks that have low risk and a high yield. I like some of the picks here, but I’m not real sure about CINF. I think that pick is at least at risk of a static dividend, if not a possible dividend cut due to the high payout ratios. Some of the utilities, as well as KMB, look interesting here. I was looking at NUE for a possible purchase, but it has absolutely skyrocketed over the last week. It’s up over 13% over the past week!

December Starts With Dividend Payments
Dividends For The Long Run discusses his recent dividend payments, and the three companies in question: Aflac (AFL), ConocoPhillips (COP), Intel (INTC) all recently paid me as well! It feels great to collect those dividends!

Thanks for reading.

Comments

  1. says

    Personally, I didn’t start early enough to quit the rat race as early as Jacob. But honestly I couldn’t live on what he was living on either ($8k/yr?) and wouldn’t want to. I would work a few extra years just to pad the bank account. I definitely wouldn’t be worried about the “what will I do all day?” question.

    In the end, it is all about becoming financially independent and doing what you want, even if that is another job!

  2. says

    My Own Advisor,

    No problem. Thanks for stopping by!

    I think the only true way to know that for myself would be to actually retire and see how it goes. Maybe I would get bored, maybe not. But, I’d love the opportunity to see! :)

    Take care.

  3. says

    me myself and I,

    I hear ya. I didn’t start as early either and I’m not saving as much as he was. He had a higher income than I’ll ever have and his savings rate was also higher. He also started slightly younger than me if I’m not mistaken.

    Ultimately, I’d like to travel if possible and travel options are limited when you’re working 51 weeks a year. I’d like to get the chance to pack it all in to see how I’d fare. I’m pretty good at relaxing, when possible. :)

    Best wishes.

  4. says

    If you want my honest opinion, I think Jacob underestimated how much money he would really need to sustain his retirement lifestyle as well as the turn the economy could take during economic down times. Instead of actually admitting his ERE plan was too lean, he decided to go back to work and pose his action as an option rather than a necessity.

    Of course, having never met him or actually viewing his lifestyle choices, I could be wrong, but I think his ERE concept is a bit too “extreme” for periods of economic uncertainty and recessions as we’ve seen over the last half decade.

    I wish him all the best, but have a hard time believing he’s going back to work because he found something he couldn’t pass up as his whole ERE philosophy is based on retiring in order to do what you love.

    Anyway, I’ll jump off my soapbox!

  5. says

    Pey,

    You could certainly be right. I’m in no position to defend or attack him as I don’t know him personally. I know he’s posted many times that he lives on ~$7k/year which certainly wouldn’t require a very large portfolio.

    I was more shocked/disappointed/surprised by his choice of career as he re-enters the workforce. I accept boredom as the reason for him deciding to forgo retirement any longer, but I just find the job an odd choice for someone who espouses minimalism and freedom. High finance is very much the opposite of some of his ideals.

    I’m not against working once my passive income reaches expenses. However, I would likely do something part-time or seasonal and something fun if possible. Employment can serve as an opportunity for social interaction as much as extra income.

    Again, you could be very well right about your opinions. I still thank him for the inspiration, and wish him well.

    Take care!

  6. says

    Like you I was inspired by Jacob’s ERE blog. It was fun to spend several weeks learning about a method I had never heard of. He also posted links to books and blogs that have further opened my mind to the possibilities. Actually it probably started for my wife and I way back in 1995ish when we found a book called Financial Peace by Dave Ramsey. His ideas set us up to eliminate all of our debt and allow us to be ready for Jacob’s extreme methods…which eventually led me to Dividend Mantra.

    I feel fortunate to benefit from their advice and are well on our way to semi-retirement which is the best our family of 5 can hope for with the high cost of health insurance ($1500/month for our family).

    Thanks again to Jacob, DM, David and all the authors of the books these guys have reccomended.

    Shopteacher

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