Weekend Reading – April 12, 2014

thaibeachSpring is in the air!

This time of year is just wonderful, isn’t it? The birds are chirping, and the weather is finally warming. Well, down here in Florida it’s always warm, but you get my drift.

I write this post to you today at a bit of a crossroad in my life. My work situation has been increasingly uncomfortable and frustrating, while I continue to miss my family up north. All the beauty down here in Florida, and yet I find myself thinking more about what I’m missing out on. A lot has changed in the last five years since I moved away from home to start fresh and get my life in gear. And get in gear I did! But at what cost? One of my younger sisters gives birth to a baby girl in a few months here, and I wonder if I want to be a distant uncle or not. Changes abound?

Beyond all of this, life as an investor continues to be a cushy existence. I continue to receive raises just for being  a shareholder, like The Procter & Gamble Company’s (PG) 7% raise just recently. This is a great and recent example of why you want to invest in high-quality companies. This raise by PG marked the 57th consecutive year the company has been able to increase its dividend. Some companies aren’t even profitable enough to pay a dividend at all. Imagine not only paying one, but being able to increase it for 57 years straight!

The weather is nice, and I’m hoping to get out and enjoy it a bit this weekend. I’m tired after pulling a Saturday shift, but I’m also energetic with optimism. In case the weather in your neck of the woods isn’t all that great and you’re stuck inside, you may find some of the below articles entertaining and/or educational.

Below, you’ll find a short list of articles I’ve recently read and enjoyed. I hope you enjoy them as well.

Shark Tank’s O’Leary: Only buy stocks that pay dividends
Anyone who follows me on Twitter knows I’m a huge fan of the television show Shark Tank, which airs on Friday nights on ABC. If you follow the show, you’ll know that Kevin O’Leary has earned the nickname “Mr. Wonderful” as a sarcastic reference to his blunt personality. Anyhow, I love the show and O’Leary serves as a very rational voice on the panel of “Sharks” as he is primarily concerned with a business’s valuation, profitability, cash flow, and, most importantly, return on capital. In the video above, O’Leary specifically called out dividend-paying stocks, and recounted an experience that served as an epiphany in regards to how important dividends are. Great stuff from a very intelligent businessman and investor.

How to Manage Your Dividend Portfolio
Dividend Growth Investor is putting together a great series on investing in dividend growth stocks, with each new article focusing on a different aspect of investing. This particular article discusses how to manage a portfolio once you’ve actually started to build one. Everyone has a different method on how to manage a portfolio, and there’s no one right or wrong way to do it. Ultimately, you have to find what works best for you, but this article is a great start for a beginner, or a great refresher for someone a bit more seasoned.

This couple built their own tiny home for $10,000
How inspirational! Talk about vision and fortitude; this couple built their own tiny house for what amounts to less than a down payment for most couple’s seeking their first mortgage. But a mortgage this couple does not have, and instead they now own their own little piece of real estate outright. And while I’m very frugal, I don’t know if I could live in a house this small. But kudos to them for taking freedom seriously.

Best 2014 Dividend stocks Returns & TSX60 Ex Dividend Date
Mike updated us on how his stock picks for 2014 are going, and so far he’s beating his benchmark (VIG) handily. In addition, his picks offer a lot more income than the fund does. He also goes through some upcoming ex-dividend dates for the TSX60.

These 13 Dividend Growth Stocks Go Ex-Dividend Next Week
Adding to the ex-dividend talk, Daily Trade Alert recently published an article I wrote that highlights 13 stocks that go ex-dividend next week. I also took a look at one in particular and concluded that while it’s a fantastic company, the current price doesn’t offer much of a margin of safety. Unfortunate, because this is one stock I’m hoping to eventually own. Of course, you could make the argument that paying slightly too much for a high-quality company isn’t such a bad idea in today’s market, but I’ll pass for now.

Net Worth Update – March 2014
Passive Income Pursuit updated his net worth for the month, and his ascension to wealth has been mighty impressive. Combine a high income with a commitment to frugality and this is what you get.

Most problems never have to be solved
David put together a really thoughtful post on why most problems aren’t really big problems that need solving. The way I look at it is to keep perspective. Most first world problems aren’t problems at all; they’re inconveniences, at worst. Real issues like starvation and lack of access to basic medical care are problems.

Our $500 Per Month Townhouse in Chiang Mai
Chris and Angela share pictures of their pretty sweet pad they’re currently occupying in Thailand. It’s pretty crazy that they’re only paying $500/month for this place. My girlfriend and I share a positively cruddy apartment in comparison, and pay almost twice as much here in Sarasota, Florida. Chiang Mai is a city I’d love to visit one day, so I really appreciate seeing what’s possible over there on a limited budget.

Updating My Potential Buy List: April 2014
Starting From Zero shares his shopping list with readers, exploring some stocks that he’s currently looking at for potential purchases in April. I think it’s a great list, and all of them are great companies that should be welcome in most anyone’s portfolio.

Passive Income and Pageviews – March 2014 Update
Writing 2 Reality shared his progress on both the passive income front as well as traffic to his blog during March. It looks like he’s been making some tremendous progress on both sides of the coin, and at almost 20% of his passive income goal completed after one quarter, he’s in great shape to catch up near the end of the year and finish strong!

What Are You Going To Do When You Retire?
Done By Forty put together a really nice post highlighting some of the activities he’s looking forward to when he retires early. I really like his take on what amounts to diversifying his activities. As someone who’s received his fair share of questions regarding what in the world I’m going to do when I retire (and a number of articles published that discuss this), my simple answer to this question is this: Whatever I want. To be bound by your employer’s imagination is a rather sad place to be, in my opinion. I’d rather be bound by my own.

The importance of ambition
Here, you can see a video of Richard Branson discussing ambition. I’m a big fan of Branson, and he’s such an inspiring guy. He talks about some big ideas in this video, but the ambition behind all of this can be scaled down to your own life.

14 Months, 18 Countries, $10,000
If you have a travel bug, this post might itch it a tad. Or it might just aggravate it and make you quit your job to travel the world. Retire Before Dad recounts some of his past travel experiences on just $10,000 as he made his way around the world. As someone who has a desire to travel on a long-term basis someday, this was a really mouthwatering post.

March Dividend Update 
Captain Dividend had some great year-over-year dividend income growth, and received some pretty serious passive dividend income during the month of March. You just gotta get that snowball rolling, and it’ll eventually roll itself.

Following The Crowd: The Ninth Deadly Sin
Bryan put together a really nice post on how important it is to be an independent thinker. This especially applies when one is considering investing capital that requires hard work to attain. Nothing worse than working hard to get enough cash to invest in something, then just blindly following the crowd only to be disappointed when the investment in question doesn’t turn out as expected. This post reminds me of a time when I was riding the bus home one day and I heard this guy talking to anyone who would listen about how great gold is. No offense, but when the conversation on the bus is about gold, you may want to stay away from gold. Don’t follow the herd; follow your own beliefs.

Full Disclosure: Long PG

Thanks for reading.

Photo Credit: Witthaya Phonsawat/FreeDigitalPhotos.net

Comments

    • says

      FFdividend,

      Thanks!

      And I LOVED that video. I actually caught it at work during a lunch break when it was on live. That’s how I knew to find it. And I tried to count how many times he says “dividend”, but lost count. And that video doesn’t show the whole broadcast, but later on he’s talking to someone else about investments and repeats the word dividend like three times in a row. Music to my ears! :)

      Best wishes.

      • says

        Thank you for including me in your weekly review Dividend Mantra!

        I certainly enjoyed PG’s dividend increase..If all my companies manage to raise dividends by 6%-7%/year for the next few years, I would be very very very happy.

        Enjoy your weekend!

        DGI

        PS Retiring abroad is really something that can stretch the returns you are receiving from dividends. There are some countries where you can do pretty well on say $1000/month. Of course, if the developing world “develops” in the next 15 – 20 years, those little havens might start getting more expensive..

        For example, did you know that in the 1960s, it was cheap for many US “spring breakers” to go to Europe.. Not any more ;-)

        • says

          DGI,

          No problem at all! Thank you once again for highlighting my journey on your blog. That’s a real badge of honor for me. :)

          And I’d also be very happy if my holdings are able to raise dividends by 6-7% in aggregate over the next decade or so. I’d be in a pretty great spot!

          I remember you mentioning you may return to Bulgaria once you’re earning enough from your dividends to live off of them, if I’m not mistaken. I think one could do very well in many parts of the world (Central and South America, SE Asia) on $1,000/month. It’s certainly something to keep in mind when work becomes difficult.

          Thanks for stopping by!

          Best wishes.

  1. says

    Thanks for the mention Jason. I know we both think independent thinking is important! I also enjoyed the Procter & Gamble raise. Get your capital ready, looks like we’ll get to buy at a discount. Have a great weekend.
    -Bryan

  2. says

    Great list of articles/videos and thanks for including mine! Really liked that video of O’Leary. Funny how the other hosts thought it was interesting that he only bought dividend stocks like it was a foreign concept. I wonder if we’ll ever see dividend growth investing be talked about more in the mainstream financial media.

    Have a great weekend,
    SFZ

    • says

      SFZ,

      I’m totally with you. At one point on the original broadcast it seemed that one of the hosts was actually annoyed by his confirmation of the importance of dividends. Because dividends and cash flow isn’t what makes their broadcast sexy – they just wanted to talk about Netflix, LinkedIn, etc. Such a shame.

      Thanks for stopping by!

      Best regards.

  3. says

    DM,
    Thanks for sharing my travel piece. Man, $500 per month in Chang Mai, I could go for that! I’ve got a post coming out Monday on PG. Haven’t ever owned any, but that’s needs to change. Enjoy the rest of your weekend.
    -RBD

      • pretire says

        Definitely interested in seeing this nicer place.

        Your $500/mo spot was a big boost of motivation and inspiration for me this stressful Monday.

    • says

      RBD,

      No problem! Really enjoyed the article. I’d love to one day travel the world on a long-term basis, but at the same time it’s tough being just 1,200 miles away from family as it is. We’ll see!

      Looking forward to the post on PG. One of my favorite companies. :)

      Take care.

  4. says

    Great list Jason! I also watch Shark Tank and its interesting to watch how deals are consigned, especially Mr Cuban, Dallas Mavericks owner & Mr Wonderful. I will read few more from your list.

    Enjoy your weekend,
    Passive Income Mavericks

  5. says

    Thanks so much for the mention! I had to bookmark the Shark Tank video but it’s on my watchlist when I get back to some good wifi. Family is very important to me so I completely understand not wanting to be just a distant member and name/address on a Christmas card list. Things will work out and I’m sure you’ll get some clarity on what will be best for you. Have a great rest of the weekend!

    PS I love this time of year, especially here in Texas. The weather is great since it’s not too hot yet. I’m not looking forward to summer coming along as that usually means 100°+ days. For now though I’m just enjoying the weather and getting outside as much as I can.

    • says

      JC,

      Thanks for stopping by. And I appreciate the insight. Family is also very important to me. I love living down here and everything I’m accomplishing, but at the same time it’s tough for me to live so far away from the people I love.

      And I can imagine this time of year is also very nice in Texas. It’s the last great “hurrah” before the heat comes! :)

      Best regards.

    • says

      Ravi,

      Thanks! I don’t miss Michigan the state, but I do miss it because my family lives there. I wish sometimes my family would just move to Florida. :)

      Thanks for stopping by.

      Cheers.

  6. says

    DM, thanks so much for sharing our townhouse post.

    We really loved reading 10K travel story and the tiny home post. We have been researching tiny homes a lot lately. They seem to be such a great option. All the best!

    -Tieland to Thailand

    • says

      Chris and Angela,

      No problem at all. Appreciate you guys sharing the costs over there.

      Tiny homes are indeed quite interesting. I don’t know if I could live in a place quite that small, but I’m pretty open minded when it comes to living in a smaller abode. I think I’d be okay in 400 sq. feet or so. I’m actually more open to living in a small place than a really large one. I feel weird in really big houses.

      Enjoy CM. :)

      Take care!

  7. says

    I found it very telling how quickly the other people seated with Kevin O’Leary went right on back to speaking about just about as diametrically opposite of stocks possible as soon as they could.

    Not to say that non dividend paying stocks are wrong, but the selling structure of the terms that you as an investor need to be aware of are more upfront. They can come across like a bazaar, with groups of people up and down the street hawking and squawking their wares to all that can hear.

    In the end, it all comes down to your individual decisions with your money, nothing else matters. You can’t always control the wind, but you can control your sails: the pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.

    Let the wind at your back guide you to tack about and gain wealth as you can; with what you earn; and how you live; in the time you have. You can’t spend tomorrow, you can only choose how you live it.

    • says

      Dividend Gamer,

      I agree. The hosts on that show cared nothing of O’Leary’s wisdom regarding cash flow. They guy is pure genius, and they all could care less. He can bristle a bit because of his bluntness, but he’s incredibly intelligent. Kevin is really underrated.

      And I agree with you: In the end, one should allocate capital and time as one feels best for his/her life. If you’re reaching your goals, that’s all that really matters. I’m after time and freedom, and the strategy I’m using to pursue my goals works best for me.

      Cheers!

  8. says

    First off, thanks for the mention this week Jason, much appreciated!

    I love Shark Tank, simply an awesome show and worth a watch just to learn how differently successful businessman (and women) look at businesses differently while ultimately wanting the same goal. Kevin is clearly a numbers driven guy who cares at lot less about the product/business itself, and is only focused on his return. Fairly prudent indeed. Mark Cuban is probably the biggest “visionary” on the panel and looks to find value in processes or other less tangible aspects to the business. Love the show, and as a play at home investor, I try and determine the valuation on my own, and see how it compares to the investors if and when a deal is struck.

    • says

      W2R,

      I’m a huge fan of the show. Whereas most people my age get excited on Friday nights about hitting bars, I get giddy because Shark Tank is on. I’m just wired differently. :)

      And I also try to value businesses and give a yay or nay on businesses before the Sharks do. My girlfriend likes to prod me for answers after the initial pitch. “What’s it worth?” “Good idea or bad?” “Will anyone buy it?” It’s fun!

      Hope all is well.

      Best wishes!

  9. says

    Thanks for sharing these links Jason. Enjoyed reading them. Regarding the Thailand one, I am wondering how an income from a US growth dividend portfolio would be taxed when living in another country? same like in the US or would there be additional taxation to be paid since living abroad?

    • says

      FabSavings,

      That’s a great question. I’ve never actually researched the subject. As far as I understand it, US-sourced income would face the same taxation whether or not you actually live here. Perhaps someone with a better understanding of taxation from abroad could chime in. I’m hopeful the taxation doesn’t change, because I’m planning on paying the IRS very little in early retirement. We’ll see how it goes! :)

      Best wishes.

      • Ravi says

        In general, as a US citizen, you are taxed on worldwide income at US rates.

        Example, you make $50K in the US and $40K in China. You will pay US tax on $90K AGI, and at some point you get credits/deductions for taxes you pay on the $40K in China.

        Each country is a little different on how exactly your local income there will be taxed, but that’s the general premise of how your US taxes will go.

  10. ck says

    I love your website and have a couple thoughts to share. I’ve loved reading the debates on Dividend vs. Index investing over the years and it got me thinking.

    In Canada, as much as I’d love to invest in 50 worldwide dividend stocks like yourself, it isn’t feasible. In the USA it seems that you can buy so many cross listed stocks without getting dinged over and over on foreign exchange fees. You have the solid Canadian banks and Vodaphone for example.

    Can Canadians do this? I know we can Norbert’s Gambit on purchases but then when we need to pay our Cdn bills via Usd money we get hit up again on the conversion. This along with commission fees, compared to free ETF purchases seems to make Index Investing the logical approach for Canadians.

    Do you know any solutions to this?

    • says

      ck,

      It’s hard for me to comment because I’m not from Canada, and I don’t have any personal experience with this.

      When I buy stakes in foreign companies, it’s through ADR or ADS shares, so they trade on one of our exchanges and it makes things easy. There are very small fees for owning these ADR or ADS shares – typically I pay $0.01 or so per share when dividends are received – and there are exchange rate fluctuations on the dividend payments themselves most of the time, but other than that it’s just like domestic equity.

      I hope someone from Canada can perhaps add some perspective. I know many of the Canadian dividend bloggers own shares in many US companies, so it doesn’t seem to be an issue for the most part.

      I’m sorry I couldn’t offer more assistance!

      Take care.

  11. margaret says

    Jason,

    From a family perspective and someone who is “older”…I would answer the question of “Do you want to miss out on the memories”? If you stay in FL, you may be a “nice stranger” to your nieces/nephews, but not be part of the “fabric of the family”. Those are just thoughts regarding your decision. Also, what do you think your “future self” would say to your “current self”? Best of luck in your decision. (I think you know which way I am leaning!)

    Margaret

    • says

      Margaret,

      I totally understand what you’re saying here. I have some decisions to make, but either way I’m pretty excited for the future. I don’t have any children of my own, but I’m very excited to be an uncle. I never intended to be a family member from afar, but it’s interesting how life can sometimes take you in different directions than you were expecting to go.

      Thanks so much for the insight. It’s much appreciated!

      Best wishes.

    • Ravi says

      Similar challenges for me as well. Right now I’m hoping that my career takes me abroad, for short periods of a few months or even longer stints of 1-2 years, but I think long term I would feel the need to return to the US since all my family and close friends are here.

      With my sister getting married in a year… and maybe a kid or two within 5 years of that, I would hate to be so far away and miss their childhoods as an uncle.

      I’d be okay with my parents as they’ll likely retire/semi-retire in the next 5 years, so they could easily come visit me for a few weeks/1-2 months at a time. It wouldn’t really be that different than if I lived 500+ miles away in the US.

      I’ll be considering a company/location change in the next 3 years and maybe even b-school if I can score well enough on the GMAT. Lots to think about.

      I suppose that’s the benefit of being young and taking that time to explore. Life sure does not get easier. I wish I was in high school again…

      • says

        Ravi,

        I hear you. It’s easy to explore and change while you’re young. Every year that passes makes it more difficult as life inevitably changes.

        It would be indeed incredible if your career took you abroad. I have a desire to travel, but I also know it’s many years off for me. I have to have the passive income to support such a journey, and with my sisters young and raising families now I want to be part of that process as much as possible. But one day everyone will have their own lives, and that could provide the flexibility for me to take off on a great adventure. We’ll see. It’s all very exciting.

        Thanks for stopping by and sharing!

        Best regards.

  12. says

    Hi DM,

    Thanks for the links. I’ll be checking them out.

    Just one mans opinion on your impending ‘uncle hood’ I think the fact that you are so close to your FI goal that you could just finish it up or see where you are at in 3-4 years. Your niece isn’t going to remember you till year 4. Just think how much more time you could spend with her and family if you were FI and running your blog in MI in 4 years?

    On the other hand. You might be able to move to MI and find a more enjoyable, better paying job. Would your significant other move with you? Tough choice(s).

    Good luck.

    • says

      ed69,

      Thanks for the thoughts in regards to my family situation. It’s tough to say what’s best. I’m happy here in Florida, and things are going well. But with the changes at work, my pay cut, the fact that my dealership is moving which required me to buy a car, the new baby coming, and some other changes, it almost seems as if a move back is inevitable.

      And I don’t think I’d find a better-paying job in Michigan, or even one I liked better. The unemployment rate up there is among the highest in the nation, and the pay isn’t any better anyhow. A move back would be due to family concerns. And while my girlfriend is intrigued by the idea of going, she also has a young son to think of. So we’ve been chatting about some changes, and a lot is still up in the air. It’s definitely an interesting time right now, but I’m optimistic that I’ll make good decisions and things will work out for the best.

      Thanks for stopping by!

      Best regards.

      • Ravi says

        I work at the corporate level, but if you’ve got any interest in something at GM I’d be happy to chat further.

        I can’t say much specifically, but it’s definitely restructuring itself and has lots of room for driven people. Great benefits too. Not as great as a decade ago, but then again that led to bankruptcy.

  13. itsme says

    The O’Leary video made me feel good. At work, people ask about our investing style and which stock to buy. I always tell them……if it doesn’t pay a dividend, I don’t want it. :-)

    Here’s another interview that I found interesting: http://youtu.be/uxyv6UPluJs

    • says

      itsme,

      I’m totally with you. If it doesn’t pay a dividend, I’m not interested. Relying only on what Mr. Market deems your investment is worth is silly to me. I want cash flow, baby! :)

      I watched part of that video. Although I’m not interested in buying his mutual funds, I’m certainly in total agreement with his investment philosophy.

      Thanks for sharing that video!

      Best regards.

  14. Ron says

    DM,

    I don’t know what it is like moving so far away. I live in the Northeast and it is so expensive to live here and also pay taxes. I am looking at FL or TX. No state income tax and real estate is less than half. Also, my job pays 10-15% more down there. With all that I could be seeing $1200-1500 more if I was down there. However, I have been contemplating moving down there for years now and I haven’t been able to pull my trigger. My entire family and all my friends live here. It’s frustrating because I could be putting that money to work. These decisions are so hard to make.

    Loved all the links except Mr. O’Leary’s. I loathe that man and everything he stands for. He is highly hypocritical. This is just my opinion.

    As always, great work and continue to work hard.

    • Ravi says

      Consider places all around the midwest/southeast/south. Depending on where you’re looking to move, state/local taxes and cost of living may have an inverse relationship (e.g. FL has no taxes, but cost of living is not cheap… NC does have taxes, but is definitely cheaper near a larger city-Charlotte).

      It’s very specific, depending on which metro areas you’re looking into, but something to consider.

    • Ravi says

      With that said, I don’t know what could possibly hold Texas back in the next 5 years. Very business friendly place.

      The biggest issue I see that would curtail growth would be infrastructure. Houson/Dallas/Austin are getting congested, and that slows things down past a certain point until better commute/transport/schools/etc get in place.

      Still, good problems to have there.

    • says

      Ron,

      Sorry to hear you didn’t enjoy the O’Leary video. I think he’s incredibly insightful, but that’s just from what I know of him. If he is indeed a hypocrite that’s disappointing. I can’t stand hypocrites.

      And I hear you on staying put. It was very hard for me to move away from my entire family back in 2009. My family is very close, and perhaps more close than some other families out there due to everything we’ve been through. I have a lot of respect and love for my parents for adopting me and my three sisters when we were all young. They never did have children of their own, and I’m quite sure a lot of that has to do with automagically having four children when they were only in their mid-20s. So there’s a lot of appreciation there.

      However, I also don’t regret anything. I’ve done some wonderful things here in Florida. Maybe I stay, maybe I don’t. But either way I know that I’m only doing what’s best for me, my loved ones, and our futures.

      I wish you the best of luck with your decision there. I can imagine it’s tough to stay put when you know in your heart you can kick ass somewhere else. That’s what I was going through five years ago, and I chose to leave. It worked out fantastically, and I’d do it all over again if given the chance.

      Best wishes!

  15. says

    love the picture Jason, i’m with you on that, i have a few friends in thailand and a few other places over in asia. The cost of living in some incredible places is pittance. Definitely worth a consideration later on in life. cheers T

    • says

      Tales,

      I’m with you all the way. It’s amazing how paradise can be accessible on the cheap. It’s certainly something I keep in mind as my passive dividend income continues to grow.

      Thanks for stopping by!

      Best wishes.

  16. Debbie M says

    … and so another thing that’s good about dividend income is that it’s much less dependent on your location than wage income.

    • says

      Debbie M,

      Absolutely!

      Becoming financially independent technically also means you’re geographically independent, depending on other personal circumstances. I’d like to think that’s pretty awesome. :)

      Take care.

  17. donebyforty says

    Jason, thanks so much for the kind words and for including my post in yours. I often think about moving closer to family too. Just another option that FI makes more possible, right?

    • says

      DB40,

      No problem. I enjoyed your post. :)

      And you’re right: Financial independence, and the pursuit of it, gives us a ton of flexibility and freedom. It’s a wonderful journey.

      Best wishes!

Join The Discussion!