Weekend Reading – October 24, 2014

happyweekend

Do you have whiplash yet?

I actually visited Cedar Point over the summer, and they sport some of the best roller coasters around. But the stock market has been attempting to give some of those rides a run for their money lately. Up, down, and back around.

Of course, these movements are really nothing when you compare them to major corrections of yesteryear.

Either way, this is exactly why I focus on the rising dividend income my portfolio generates. I’m pretty much numb to stock price fluctuations at this stage in the game, but new dividends that hit my brokerage account never seem to lose their luster. I just never tire of seeing fresh cash flow hit my pocket. Call me crazy.

On that note, I decided to add to my position in one of the two companies I just wrote about, and you can probably figure out which one that is. Just another move to increase future cash flow by buying a stock at what appears to be a a good value today. I do love to increase the size of my outstanding business partnerships as capital and value allows.

In the meanwhile, this weekend is huge. My significant other and I are celebrating our fifth anniversary tomorrow. I met Claudia my very first day in Sarasota back in 2009, just after moving here from Michigan, and we’ve been together almost ever since. She’s been extremely supportive as I’ve transitioned from a somewhat “normal” guy to one who’s almost obsessed with frugality, investing, and achieving financial independence. Luckily, she understands and appreciates the value in the journey and the end result even if she doesn’t totally share my conviction.

I’m currently re-reading Warren Buffett’s seminal biography, and it appears to me that Susan Buffett wasn’t always enamored with Warren’s obsession with investing. Frankly, who can blame her? It also seems she wasn’t such a big fan of frugality, especially once the Buffetts achieved a level of wealth that really required no more effort for money. I’ve read multiple passages that points to her enjoying social outings, shopping, and giving – all while attempting to poke Warren into spending a lot less time on increasing wealth and a lot more time enjoying the wealth. So this was perhaps a point of contention between the two of them. Again, who can blame her? Most people would love to have substantial wealth and actually enjoy it to a degree, and I can’t say I’m not totally against that line of thinking. But Warren is definitely cut from a different cloth (perhaps why he went into the textile business?).

However, I’m lucky in that Claudia is also quite frugal and champions my cause. She takes the bus to work. Shops rarely. And she enjoys free activities like I do – a DVD rental and pizza on a Saturday night or a lazy Sunday afternoon at the beach are both preferable ways for us to spend time together, regardless of how much money we may eventually acquire.

Anyway, I’m looking forward to our weekend together.

In the meanwhile, I’m including some great articles that I recently came across and enjoyed. I’m sharing them with you readers in the hopes you enjoy them as well. Have a great weekend!

These 7 Dividend Growers Just Announced Dividend Hikes
I exposed seven dividend growth stocks that  recently increased their dividends to shareholders. This is what dividend growth investing is all about. Dividends that get increased, which get reinvested back into stocks that are also paying and increasing their dividends, thus increasing cash flow even more. A virtuous cycle!

Retired on $30,000 a Year and Loving It
I just love reading about these success stories. I’ve received my fair share of criticism and doubt in regards to my plan to become financially independent on so little, but it can be done. Just because the media is more obsessed with what the latest Kardashian is up to doesn’t mean there aren’t others out there living the dream on very little. They just aren’t reported on as much because there’s nothing to sensationalize. Stick with the plan, guys.

Undervalued Dividend Growth Stock of the Week
Every week, I write about an undervalued and overvalued dividend growth stock of the week. I could have picked better timing for this article, but the valuation simply improved even more. And I haven’t let that go unnoticed.

Recent Buy – Core Laboratories (CLB)
Henry just picked up shares in this oil services company. I haven’t heard of it before, but the metrics are awfully impressive. The yield is a bit low, hampered additionally by the foreign dividend income withholding tax. However, this has all the makings of a great investment.

Time in the market is more important than timing the market
Dividend Growth Investor reminds us of this timeless and sage advice. Sure, you could do better than systematically buying and holding by timing the market exactly. But you don’t have a crystal ball and he points out that you wouldn’t end up that much better off even if you did have one when we’re talking about high-quality companies over long periods of time. As always, focus on what you can control.

How IBM Investors Should Feel About The Stock Repurchases
Tim penned this great piece that offers some context in regards to IBM’s share repurchase program. I totally agree with this premise here, and I honestly don’t get the general vitriol that IBM specifically seems to get in regards to their buyback activity. I’m praying they’re buying back more shares than ever right now.

Everyone Should Adopt This Alternative Definition Of ‘Retirement’
“When you have achieved enough financial wherewithal to eschew any and all income-producing activities other than those you want to pursue, in my mind you are “retired.” In other words, it is the absence of needing to work, not the absence of working that defines retirement.” – Great stuff. Just plain great stuff. People get hung up on the R word too much, but it’s really quite simple. I think the issue is partially that the concept of retirement hasn’t actually existed for all that long, and so just when people get comfortable with the idea of what it is and what it means we’re already redefining it.

The Intersection of Dividend Growth Investing and Financial Independence
JC put together this great spreadsheet that gives you an idea of how long you have until you reach your “crossover point” into financial independence. I personally played around with it and it delivered a result indicating that I have eight years to go until I’m financially independent. Seeing as how I’m currently 32 and aiming for FI by 40, I’d say I’m in good shape!

These 20 Dividend Growth Stocks Go Ex-Dividend Next Week
I took a look at one of these 20 stocks in particular and concluded that this is not a good time to invest. I’m surprised this major and diversified food manufacturer has posted such poor numbers over the last decade, but it’s wonderful that there are over 550 other dividend growth stocks to consider.

Trades – General Electric (GE) Purchase
W2R averaged down on GE at a great price here. I continue to like GE and will add as capital and portfolio allocation allow.

Middle-class adults have $20K saved for retirement
It seems a recent survey told us no new news. People just aren’t taking retirement seriously. I don’t find this particularly surprising or alarming. However, these same people may have to deal with the repercussions of having to either work until they’re extremely old or they’ll have to learn how to get by on Social Security (which isn’t designed to fully fund a retirement). Actions and consequences. I did find one quote in the article as particularly…umm…enlightening: “Research shows that the No. 1 factor in saving for retirement is your contribution rate, Ready says.” So research shows that not saving money will lead to a lack of savings. Very interesting.

The Bloggers’ Dividend Growth Portfolio: Popular Dividend Growth Stocks Trading On U.S. Exchanges
Ferdi did a great job compiling this list. If you’re looking for a fresh shopping list for your BB gun, this could be it. I don’t necessarily think a popular stock is a good stock, but it is somewhat reassuring to see certain stocks pass the sniff test from a number of different investors.

The man who taught Warren Buffett how to manage a company
I thought this was a really unique and interesting article. It contained some information I wasn’t yet quite aware of, and I’ve read through a lot of Buffett stuff in my time. Great read if you have a little time this weekend.

Mind your dream
Stef reminded us to keep our eyes on the prize. And one of the best ways to do that is to formulate good habits. Just like bad habits can literally destroy your life, good habits can improve your life far beyond your expectations.

The Death of IBM
I can’t say I agree with the hyperbole, but I appreciate the opposite viewpoint. It looks like Roadmap2Retire won’t be investing in IBM anytime soon, which simply leaves more shares on the table for me and others that think the valuation is compelling. As I stated above, the stock market is great in that there are so many opportunities out there. You can literally invest in thousands of different companies at any time – hundreds of them being what we call “dividend growth stocks’. Thus, don’t make the mistake of investing in a company that you’re not totally comfortable with. If you really think IBM is dying then you’re best off staying away. However, I believe IBM is just fine and basically priced for almost no growth at all here.

Full Disclosure: Long IBM.

Thanks for reading.

Photo Credit: gubgib/FreeDigitalPhotos.net

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42 Comments

  1. Jason,

    happy one day to 5th anniversary to you and Claudia.
    Living as frugally as you and some of us are might seem abnormal to the general public.
    That’s because it is – just as passive income and early retirement is abnormal.
    Maybe a better word for that would be special.

    Thank you so much for mentioning me in your reading list.
    I will check out your other choices soon.

    Have a great day tomorrow!

  2. Congrats on the five year Anniversary! And moving back to Florida where you get to enjoy the beach!(lights fireplace) Thanks for helping me find some good readings for the weekend 🙂 Gotta have something to do when I finish up a new post or two 🙂

  3. Nicola,

    Thank you so much! 🙂

    The weather is holding up incredibly well. We’re expecting 82 degrees, low humidity, and all sunshine tomorrow. Really lucky the rain passed us and headed south.

    I hope you have a lovely weekend as well!

    Best regards.

  4. Stef,

    No problem at all. Glad to include you. Keep up the great work!

    I appreciate the support. Claudia and I live a life that is far different from the norm, but I agree with you in that it’s “special”. 🙂

    Have a great weekend. Thanks for stopping by.

    Cheers!

  5. DGI,

    Thanks so much. I’m hoping for the same. 🙂

    I’m glad to hear you’ll be adding. The stock appears to be obscenely cheap here.

    Have a great weekend!

    Best wishes.

  6. DW,

    No fireplaces here, that’s for sure. But as much as I enjoy the sunshine and the beaches, the season changes you get up there are nice as well. Well, three out of four seasons anyway. 🙂

    Hope you find some value in the articles! Have a great weekend. Thanks for stopping by.

    Take care!

  7. Congrats to you and your wife! I hear ya about the wife not sharing the same enthusiasm when it comes to investing. It’s completely latin to my wife as well, when I’m on the computer all she see’s are a bunch of numbers, but little does she know that all those numbers I’m looking at will eventually be leading her to live a life that she wants. If she wants to stay home with our son, she can…well years from now.

    I’m really looking forward to following you on your journey, and in a few years I hope to be where you are right now. There are 6 other people that have bought that motif, and you are the one that deserves the credit from it. Thank you again for helping me shift my views from a daytrader, to really start buckling down on the long haul investing lifestyle. I even created a spreadsheet where I can get a good ballpark estimate of what the dividend payouts will be each month, and over the course of a year (assuming there are no dividend changes). If you would like a copy of the spreadsheet just ask, and perhaps others will use it as well.

    Well that’s all for now, enjoy your weekend and hope you and your wife have something very special planned.

  8. sjlarowe,

    Thanks so much. We’re excited for the celebration tomorrow. She’s not my wife, yet. But I imagine that will change at some point here. She’s definitely my better half.

    Appreciate the support. I’m confident you’ll be far ahead of where I’m at if you stick with it. I’m nobody special and my income isn’t all that high. If you can leverage even more capital than me that improves your odds exponentially. 🙂

    Keep at it, my friend.

    Have a great weekend! Thanks for stopping by.

    Cheers.

  9. Jason,
    Congrats on the anniversary. May you have 50 more.

    Bought 50 shares of IBM today after selling off my position in Nike. I still like Nike, but the valuation in IBM got ridiculous and I couldn’t pass it up.

    May 1st is only 27 weeks away. Karen and I are still considering a move back to Ocala at that time. But 82 degrees? Seriously, why move down there when it’s a balmy 59 here in Michigan? 🙂

    KeithX

  10. Thank you for including me in the reading list. You’ve include some spectacular articles and I’m honored to have made the cut! In particular the Ferdi’s blogger dividend growth portfolio and Tim’s IBM post were ones that I enjoyed reading this week and am glad you shared with others.

    Enjoy your anniversary weekend!

  11. KeithX,

    I agree with you on IBM’s valuation. I don’t have the capital lying around to buy 50 shares, but I wish I did! But the price just seems obscenely cheap here to me. I’m happy to add a little more. 🙂

    I’ll try to send a little sunshine up your way, although 59 isn’t too shabby. Nice fall weather.

    It’d be nice to have you guys in Ocala. The more, the merrier! Haven’t spent much time there, but the weather sure beats the hell out of Michigan.

    Cheers!

  12. W2R,

    Glad to include you. There’s always some great reading around the web, though I haven’t read as much online as I usually do due to some heavy reading on “The Snowball”. But it’s always good to mix it up a bit.

    Have a great weekend over there!

    Best regards.

  13. Congratulations on the. 5 year anniversary with the significant other. That is a great milestone, so I wish y’all the best. It’s good she has understanding of your FI intent, as that is crucial in a relationship.

    Thanks for the list of reads, I’ll check out the ones I haven’t hit yet. Have a good weekend!

  14. Agent,

    Thanks so much. I agree that an understanding partner is extremely important and beneficial on the way to financial independence, even if your partner doesn’t necessarily want the same thing.

    Appreciate you stopping by. Keep up the great work over there!

    Best regards.

  15. Henry,

    This is the same person. Claudia and I have been together almost since the day I moved here five years ago.

    No problem on the mention. Looks like you might have a blockbuster over there. Wish you the best with it. 🙂

    Cheers!

  16. Have a great weekend and enjoy your anniversary. Time always flies by when looking back. I can’t believe I’m married to Mrs. DivHut almost 6 years and have known her since 1998. Your description of Claudia reminds me a lot of Mrs. DivHut as we spend many weekends strolling around a mall or park. Many evenings are spent watching TV on the couch just enjoying each others company. While physical and emotional attraction are very important between two people financial attraction is just as important.

  17. DM,

    Five years is awesome. I’m glad everything is working out for you and Claudia. The midwest is great during summer, but the south rules from November through May! Speaking of Buffet, I almost picked up “The Snowball” at the library this week, but I grabbed a John Maxwell book instead. I still plan of reading it by the end of the year.

    The list of articles is much appreciated as always. IBM is so out of favor right now that it appears to be a screaming buy. KO fell hard as well but most likely will recover pretty quickly. In any event, I like the two of them along with many “Big Oil” companies.

    Have a great weekend!

    MDP

  18. DivHut,

    That’s a great point there about financial attraction. I completely agree. And I’m so glad that you found a partner that’s on the same page. That’s awesome! 🙂

    Thanks for dropping by. We’re looking forward to the celebration tomorrow. I hope you two have a great weekend as well.

    Best wishes!

  19. MDP,

    Oh, I agree about Midwest summers. Can’t be beat. For that matter, I really love late September and early October up there as well. Just great stuff with the changing colors, cooler air, festivals, etc.

    I do hope you pick up the biography at some point. It’s a long, but easy read. Really worthwhile.

    IBM appears to be one of the better values in the market right now, all things considered. The company doesn’t have to do much to make this a solid investment here. The only thing that can go wrong is that the company starts to contract. That would be a problem. However, I believe the downside is pretty limited here.

    Have a great weekend!

    Take care.

  20. Happy Anniversary Jason. Like others, I have followed your journey from FL, to MI, back to FL with great interest. Seems like you are right where you should be at the moment. Good for you.

    I applaud you for being so open in your blog. It is one of the best things I like about it.

    I wish you and you girlfriend the best. Mike

  21. I’ve heard that ‘The Snowball’ is a monster of a biography, but regardless, it sounds like a good read. I may go pick up a copy at the library sometime next week.

    I hope you and Claudia have a spectacular weekend! Happy Anniversary!

  22. Mike,

    Thanks so much. It’s been an interesting journey, and especially so lately. But it’s been the best five years of my life, in many, many ways.

    Appreciate the support. I hope to continue writing and sharing for decades to come. I want to continuously be in a position where I can positively impact people’s lives, and I’m doing all I can to do so. 🙂

    I enjoyed and appreciated our previous conversation.

    Have a great weekend!

    Cheers.

  23. DM– Getting our financial house in order is a great thing and really opens options for us. I’ve done that also in the last five years so I know the inner peace you must feel about your current position. Its a great thing and it shows in your writing. Keep on keeping on.

    I read a lot of DGI/Frugal type blogs and from my untrained eye you are leading the pack. Great message, very consistent and great content. I don’t miss a day.

    You are young–you are smart and you have a passion that you can explain and that makes sense. Just be mindful of us older folks that view things a little more skeptical and ask more questions.

    In my mind everyone should be reading you. You should be incorporated in schools. But what do I know. Thanks, Mike

  24. Happy 5th anniversary! It’s wonderful that Claudia is bought into your vision and shares your frugal tendencies. And, I don’t think a couple has to be identical in their approach in order to be working towards the same goals. All that to say, many congratulations!

  25. Thanks for the mention, Mantra. 100% agree that at the end of day, it depends on the comfort level of each investor – there are so many different companies, so if not one then you can move onto another one.

    Once again, thanks for the mention. Have a great weekend
    R2R

  26. Mrs. FW,

    I agree. We’re definitely not identical, as she hasn’t really been active in regards to reaching for financial independence. But I love her anyway. And she’s been incredibly supportive and she thinks the world of what I’m doing and my passion for inspiring others. 🙂

    Thanks for the warm wishes. Life is really good. Every day is a gift!

    I hope all is well over there.

    Take care!

  27. R2R,

    Definitely agree. Many, many stocks out there to choose from. And that’s just one thing to love about the stock market. You get to pick and choose among a large variety of high-quality stocks at any given time. Good stuff!

    No problem on the mention. I hope you’re having a great weekend as well. 🙂

    Cheers!

  28. Hope you had fun at Cedar Point. Is it as good as people say it is? I was in the area this summer but unfortunately didn’t have time to get there

  29. Dan,

    It was a lot of fun. I would however recommend their “Fast Pass” bracelet, or whatever they call it. It’s extra and goes against my frugal nature, but if you’re going to take the time and spend the money to go to the park it’s worth it. Allows you to bypass the long lines at many of the rides. We didn’t get that and we ended up spending probably seven hours waiting in lines versus just maybe 10 minutes riding rides.

    Cheers!

  30. Tawcan,

    Well, I hope your five years has been just as good or even better than what I’ve experienced. Happy anniversary to you guys as well! 🙂

    Great weekend here. I hope yours was the same.

    Cheers!

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