Saturday, August 25, 2012
Weekend Reading - August 25, 2012
Another week behind us. I can't believe we're entering the last quarter of 2012 already. All cliches aside, I truly wonder where all the time has gone. Most people see year by year escape from their clutches and look back on the time and wonder where all the money went? The great thing about marching towards financial freedom and being so aware of one's spending habits is watching the wealth grow and grow. I can look back every 12 months and see EXACTLY where all the money went. A great majority of it went into my brokerage account, to purchase shares of high quality companies that continue to reward me as a loyal shareholder with rising distributions in the form of dividends.
The market continues up and down and I pay no attention. Pundits on major news programs point to company moves and major government decrees with microscopes and proclamations. That's because they have 8 hours of empty news space to fill. I pay no mind. And neither should you.
Here are some excellent articles from fellow dividend growth investors, frugalists and personal finance bloggers from the past week.
The New Dividend Book is Available
Dividend Monk just released a new dividend investing book. It's a 200-page guide that touches on a lot of themes regarding dividend growth investing and how to grow wealth over the long-term. I already received my copy and do plan on publishing a review on it. Hint: It's fantastic! Matt highlights some basic themes regarding living below your means and how to build and maintain a portfolio in the early chapters. He also discusses why dividend growth investing is such a fantastic long-term wealth building investment style. The tangibility of dividends is one key. Later chapters get into the meat of analyzing individual companies, MLP's and REIT's. He gives you the tools to come up with a fairly accurate intrinsic value of an investment and tells you how he comes up with his stock analysis reports. The book also comes with a very handy toolkit, which is compressed versions of spreadsheets using Discounted Cash Flow and Dividend Discount valuations. You can very easily enter in a few numbers and abracadabra; you get a range of intrinsic values based on varying inputs. I highly recommend it.
Spending Your Money Consciously
My Own Advisor had a guest post on his blog recently regarding being aware of your spending and ways to become more aware. As always, I always recommend being aware of your spending. Even when I splurge and spend money that I probably shouldn't be, I'm still aware of it and account for it.
The Executioner has started a journey towards financial independence and freedom from a full-time job. He has a goal to become financially free within the next decade.
The Live off Dividends Retirement Plan
Dividend Growth Investor highlights his plan to solely live off of dividend income, without the requirement, or need, to sell off assets in retirement to meet obligations. I couldn't agree more. My plan is much the same. Why would you want to cut off branches of your dividend tree when you can simply pluck the dividend fruit? Exactly.
The Dividend Growth Index – August 2012 Update
The Dividend Ninja decided to sell off his entire stake in Staples Inc. (SPLS) in his personal account and replace it with Coca-Cola (KO). Since KO is already a position in the Dividend Growth Index, Ninja decided to replace SPLS with Johnson & Johnson (JNJ). Great move, and one I applaud. I was never a fan of SPLS, and the extremely small profit margins highlight how little margin of error/safety there is with this business. Great move Ninja!
Milestone: $1,000 in Dividends in a Single Year
Deedubs recently hit $1,000 in dividends in a single year for the first time. Congrats! It wasn't that long ago (late 2011) that I was in the exact same spot. I'm hoping to hit $2,000 before 2012 ends. We'll see!
Watch List Update
Compounding Income recently updated his watch list with some interesting picks. He's bullish on a few companies, and at the top of his list is Archer Daniels Midland Company (ADM). I recently highlighted the value in that company, although the record-breaking drought may have a significant short-term impact on the company. I agree with his other picks and am personally long Harris Corportation (HRS). Becton, Dickinson and Co. (BDX) is also a strong pick right now.
Archer Daniels Midland Stock Analysis
Speaking of ADM, Passive Income Pursuit analyzed the company recently. I like the way he analyzes companies. He takes a wide range of valuations, based on different methods like the Graham Number and a DCF analysis, and averages them together. He concluded that it's undervalued by approximately 16%.
My Experience with Minimalism: Less Stuff Equals More Experiences
Jet Set Citizen recently penned a great piece about living more with less. His discussion on how buying more stuff leads to buying even more stuff is especially poignant.
Think a Lot of Companies Don't Increase Dividends? Think Again!
Kanwal Sarai had a great run-down on a big list of companies that recently increased dividends. What's better than a dividend increase?
Thanks for reading.
Photo Credit: Benoit Mahe