Weekend Reading – March 22, 2015

happyweekendBetter late than never, right? 

I meant to write and publish this article earlier in the weekend, but I’ve been too busy just having fun. The weather has been absolutely incredible down here in Southwest Florida, which has made it difficult to stay indoors. As such, Claudia and I ran some errands yesterday – she just landed a new, higher-paying job which requires some new clothes – via the bus and our own two feet.

Other than that, we spent our Saturday night in one of the best ways possible: pizza and a couple of rental movies.

I tell ya, I used to dread Sundays (especially Sunday evenings). For me, it was just the ending of a weekend that was far too short, which meant the countdown to Monday morning and the long workweek was already beginning. It was almost like being imprisoned for most of your time, but being let free just long enough to taste freedom and know what you were missing out on.

No longer, however, as I now enjoy Sundays just as much as any other day, which is to say that every day is wonderful. No more anxiety in response to the thought of heading back to the office in 12 or so hours. No more sadness because my freedom might end.

There are some excellent articles I’m including for your reading pleasure below, so I hope you all enjoy the compilation. Enjoy the rest of the weekend!

Undervalued Dividend Growth Stock of the Week
I highlighted an industrial conglomerate that appears to be potentially significantly undervalued right now. Check it out.

Route to an $8 Million Portfolio Started With Frugal Living
Special Note: You can Google the headline as a way around the paywall, if one pops up. Folks, if you’re looking for proof that frugal living and investing excess capital into high-quality stocks that pay and grow dividends works and grows wealth in a dramatic way, you’re looking at it.

Mr. Read owned at least 95 stocks at the time of his death, many of which he had held for years, if not decades. They were spread across a variety of sectors, including railroads, utility companies, banks, health care, telecom and consumer products. He avoided technology stocks.

Friends say Mr. Read typically bought shares of companies he was familiar with and those that paid out hefty dividends. When dividend checks came in the mail, he plowed the money back into more shares, Ms. Bokum says.

Remind you of anyone?

Should You Hold on to Large Pockets of Cash?
No More Waffles took a couple of articles I’ve written on the opportunity cost of holding a lot of cash – especially early on in your journey – and used those as a jumping off point to discuss the ins and outs of the decision to hold a good chunk of cash and why he’s personally holding a lot of cash. Like almost everything else in life, it’s an individual call. The quantitative side of the argument means the hard math will show you that you’re better off investing cash fairly quickly, while the qualitative side is quite individualistic. I’ve always said that investing in stocks, especially a high allocation, isn’t for everyone, and all the same neither is holding a small amount of cash. No returns are worth not being able to sleep at night, in my opinion.

These 37 Stocks Go Ex-Dividend Next Week
More than three dozen dividend growth stocks go ex-dividend next week, which you can see here. I then took a closer look at one of these stocks in particular, which just so happens to be a stock that Buffett has been buying up like crazy lately. It’s also a stock in my Freedom Fund. Always great to be a fellow shareholder with Warren.

AT&T – I Just Bought More Stock
Dividend Dreams has been busy lately with putting a lot of capital to work from rollover funds from a 401(k) and Roth 401(k). And AT&T Inc. (T) is where a good chunk of his capital recently went. This was also a stock purchase of mine not too long ago. And Ryan from My Dividend Growth also picked up shares last week.

If You Like Cigars, Whisky, And F$cked Up Charts
This video isn’t new, but it is hilarious. Came across it not long ago and figured I’d share.

I’d Rather Be Young
J$ reminded us why it’s a good idea to slow down and enjoy our youth and time. I notice a lot of us (me included, sometimes) are too busy focusing on a future where we’ll be in a better situation because any number of financial situations will come to pass (debt will be paid off, or dividend income will be $X, or a pension will be online). But, like J$ pointed out, time and youth is far more valuable than any of those things. My comment to this article was:

…I once wrote an article where I asked readers what they’d pay if you could go down to your local Walmart or store or whatever and buy time. What if they sold time in one-year or five-year or ten-year increments. What would you pay? You’d probably pay a hell of a lot of money. If you were old and dying, you’d probably pay all you had. Which is why it begs the question why are so many people working away their youth for more money when they already have something (time) that’s already so much more valuable…

Decision Made… Philip Morris > Lorillard
Lanny swapped Lorillard Inc. (LO) for Philip Morris International Inc. (PM), which makes sense to me. Higher quality, more yield, and lower valuation. I’m personally probably going to hold on to what LO I have, as the acquisition by Reynolds American, Inc. (RAI) seems likely. I’ll collect some shares in RAI and use the cash I receive to diversify elsewhere.

The Ultimate Stock-Pickers’ Top 10 Dividend Stocks
Morningstar listed some of the most popular dividend stocks that are being actively purchased, as well as those that are currently the most widely held.

The Man In The Van
This is a really unique, interesting, and fantastic article that I wasn’t even aware of until a reader passed it along. Norris – and the article – epitomizes some of the things I’ve been writing about lately. He has freedom from a wasteful megamansion and all the trappings that comes with, which offers him freedom to live live on his terms.  I don’t know if I’d want to live in a 1978 Volkswagen camper if I had a $2 million signing bonus waiting for me, but I also know that I wouldn’t live life a whole lot differently than I do now even if I had millions. It doesn’t take much to be happy. Just like selling my car was about way more than money, life in general is about way more than money. Those who focus completely on money are probably missing out on 99% of life. I highly recommend reading this article.

Full Disclosure: Long PM, T, and LO.

Thanks for reading.

Photo Credit: gubgib/FreeDigitalPhotos.net

Edit: Added note for WSJ paywall. 

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60 Comments

  1. DM,

    Thanks for adding us to the list, we appreciate it. It is about time Lanny finally made up his mind with this! Looking forward to diving into the rest of the articles this afternoon.

    Enjoy the rest of your Sunday!

    Bert

  2. DM,

    We definitely have a case of the Sunday night dread from time to time. Congrats to Claudia on her new gig and thank you for the interesting reads. Enjoy the rest of your weekend in paradise that never ends. 😉

  3. Hi Jason,

    With a rainy weekend, the list was just what I needed. Thanks!

    Cheers,

    RA50

  4. Gotta love that no more waffles, and I think I agree with you that holding a lot of cash is godly individualistic.

    We hold a lot of cash too, but this is partly because we’re homeowners, so need a buffer for emergency repairs, as well as ongoing maintenance costs.

    However, we’ve been thinking about the opportunity cost of going down this route… Need to do some calculations as to how much we could realistically expect to gain on an annual basis, from putting a chunk of this cash into dividend stocks.

    Cheers

  5. Thanks for the compilation of articles. I missed some of these this past week so I appreciate it you gathering them together. Can’t blame you one bit for taking advantage of some nice weather and congrats to Claudia for the new job.

  6. FD,

    Thanks so much. She’s looking forward to the new job. 🙂

    I know what that dread feels like. Doing laundry on Sunday night always seems like it symbolized the end of freedom for me, meaning it was back to the grind the following morning. But every week of saving and investing is one less Sunday full of dread.

    Best regards.

  7. M,

    Yeah, how much cash one holds is definitely an individual call. Holding a lot of cash will probably reduce returns/income, but some might need that cushion to help them sleep at night. Whatever works, but I think, over the long haul, I’ll be glad that I tend to stay pretty aggressive in terms of cash allocation. I know I’ve been happier with that thus far.

    Best wishes!

  8. Your comment about being able to buy life is spot on and reminds me quite a bit of the lessons in economics class of marginal utility. Being the kind of person that pre plans things… I think I would start accumulating extra years early on! Seems like a common trend! 😉

    Envious of your weather… it barely hit 25 degrees up here today >.<

  9. I hope you able to get some spring training games in. Keep up the good work, I enjoy reading your blog.

  10. Jason,
    The Man in the Van is great reading. Hard for a Tiger’s fan to root for the Jays, but Daniel Norris might be worth cheering for.

    Man it’s nice to have time to read as much as I want. 🙂
    KeithX

  11. Congrats to Claudia! Btw I’ve been eyeing up some GE shares as well. I’m looking forward to a purchase post with all the coming dividends you will be getting!

  12. DY,

    Accumulating years is what it’s all about! And since money buys time, I’m accumulating the former to also accumulate the latter.

    Sorry to hear about the weather, but spring is right around the corner. Hope it warms up quick for you. I don’t mind a little chilly weather, but 25 is too cold for my blood!

    Best regards.

  13. Jim,

    Well, we saw the O’s play the Phillies during Claudia’s spring break. A lot of fun. The stadium here in town is beautiful.

    Thanks for stopping by. Appreciate the support!

    Best wishes.

  14. KeithX,

    Yeah, it’s not just his story that’s really interesting and amazing. It’s his self-awareness and confidence in what he’s doing. Seems to have it really figured out, which is difficult with age and money working against you.

    I’m sure you’re enjoying the extra time. I never understood those that say they’re bored when they’re not at work; I still don’t have enough time for everything. I honestly don’t know how I ever got by with being at the dealership for 50 hours per week.

    Cheers!

  15. George,

    GE does seem pretty compelling here based on the yield, valuation, and future prospects.

    Thanks for dropping by. Looking forward to my next shopping trip, but looking even more forward to sharing the details. 🙂

    Best regards.

  16. Jason,
    Nice article on GE. I last purchased it in December at a hair above $26. My thoughts are similar to yours. I like the fact that they are reducing their exposure to financial services. I had my next possible buy set at $25. It’s getting close. I may be adding sometime soon. I also recently picked up some more EMR. In general, I want my Industrials allocation to be 10-15% and it’s about 9.5% now. Getting there.

    Thanks for the reading list. Enjoy that lovely weather. It’s a balmy 33 degrees here in your home state.

    Steve

  17. Steve,

    Yikes! I think I’ll pass on that 33 degrees. 🙂

    GE and EMR both seem to be really solid ideas right now. I’m loaded up on GE, but I could probably fit a little more EMR in there. Tough to pass up 50+ consecutive years of dividend growth!

    Best regards.

  18. Thanks for the links DM. In regards to Lanny swapping out LO for PM, I was wondering when RAI takes over LO will we be getting partial shares or do they round up/down to the nearest share ? That’s in addition to the cash of course. I’ve never been through a merger before.

  19. Hi DM,

    Thanks for the great weekend reading list. I couldn’t get into the WSJ link, but found this version of the story:

    http://www.dailymail.co.uk/news/article-3003704/The-astute-investments-helped-ex-janitor-92-used-safety-pins-hold-clothes-build-secret-share-portfolio-worth-8-million-died.html

    And like Lanny, I too sold some LO at $67+. I hung on to 50 shares to watch what happens with the RAI merger, and plowed the resulting cash into some EMR, NOV, PG, & VZ. Lower yielding stocks than LO to be sure but I too felt the value had topped out and had been wanting to get into some of these other stocks.

    Think of us New Englanders (20 degrees today with 30+ mph winds!) when you are enjoying your FL warmth and sunshine.

    Keep up the great work! Hope to be reading about all of us “crazy” dividend-collecting, financial independence-seeking souls in the WSJ someday.

  20. Congrats to Claudia, that’s great news!

    Sunday night….ugh….trying to prepare for another work week and very jealous of you my friend. The comment you made on J$’s post was very powerful and quotable, good work! I’m excited to dig into these articles now and appreciate the mention. I will now leave you with an AT&T high five!

  21. Dividend Mantra,

    Here is the link from CNBC about the janitor. There is also a video about it. One of the people in the video should be taken out of the video LOL.

    Congrats to Claudia on her new job.

  22. Don’t know if you’d seen this. I’m not posting to be contentious as I agree with you that all of this works best when it matches what works for you. As someone who is just about the opposite of you(very concentrated, uses short puts to initiate, cash minimum 25%) in some ways, I’d like to say how much I enjoy your blog and what you do. http://compoundingmyinterests.squarespace.com/

  23. ToughMother,

    Thanks for sharing another link!

    Sometimes the WSJ smacks you with a paywall. All you have to do is Google the headline and it’ll come up with another way in. Just for future reference, in case you get stuck again.

    I’d love to see some of us in similar stories decades in the future. I have a feeling that our odds are quite strong. 🙂

    Best wishes.

  24. Ryan,

    Thanks! 🙂

    My intention is definitely not to gloat or make anyone feel jealous (I know you already know that), but rather to inspire others to escape the dread one might feel on Sunday nights. I know that feeling of despair as my freedom was slowly escaping was one of the motivators that got me here.

    Thanks for dropping by. Hope you have a great week over there.

    Cheers!

  25. IP,

    I don’t see a link here, but maybe I should put up a note there in the article to Google the headline if they have a paywall pop up from WSJ. Any time you run into those, a simple search routes you around it. 🙂

    Thanks for the congrats. She’s excited, as it appears to be a better opportunity with a lot more pay for her. We’ll see how it goes!

    Best wishes.

  26. DM,

    I haven’t run into that site, but I’m not sure what I’m looking at there. Regardless, there are a lot of roads that lead to Rome. A concentrated approach can certainly get you there as well, though I prefer this approach for numerous reasons I’ve laid out in the past, not the least of which is risk management.

    Thanks for dropping by!

    Take care.

  27. I’m wondering how you keep up the motivation and efficency while not having 9-5 routine anymore? Sunday is the same like any other day – I would somewhat feel like being in desert where all the sand around .. looks the same.

  28. I used to really dread Sunday nights as well and, even though I still have to go to work on Mondays, I’ve finally learned how to block out that reality and enjoy my Sundays to the fullest. Can’t wait until I don’t wake up on Monday morning with a sense of impending doom though… :). Thanks for the reading suggestions!

  29. I enjoyed your article about GE, but I have to say, it would NOT be nice if market prices always corresponded with intrinsic value. If that were true, there wouldn’t be any bargains! 😉 Have a great week.

  30. Sundays are always hard for me. Although I enjoy work and think I’ll continue working in some capacity for the next 30 or so years, the thing I look forward to most is simply the freedom to choose what I do and how I spend my time. If I want to work, great. If not, also great! That’s the one thing that is so appealing to me about FI and gets me excited about achieving it. Thanks for sharing these articles – The Man in the Van was a fascinating read and I really enjoyed it.

  31. Tauri,

    That’s an interesting question. I suppose it comes down to internal motivation and whether or not you enjoy what you’re doing. I love writing about financial independence, stocks, dividends, and everything else related to all of this. So it’s easy for me. If this were something I didn’t enjoy, it’d be pretty difficult to wake up and do it every day without the forceful hand of an employer/time clock.

    But you can read more about my routine these days here, which might provide some insight:

    https://www.dividendmantra.com/2015/01/the-routine-that-isnt-routine/

    “Sunday is the same like any other day…” Exactly! I don’t see that as a bad thing? I’ve always wanted every day to be like the weekend, which is kind of what I’ve accomplished. 🙂

    Cheers!

  32. UTMT,

    No problem! Glad you enjoyed that. It was really a great piece. The guy has it pretty figured out. I doubt he’ll always live that way, but he’s handling his finances in such a way that he won’t be one of those sad athletes broke shortly after their playing days are over.

    Best wishes!

  33. Mrs. FW,

    I know that feeling all to well. I’m glad you’re able to block it out; I was never able to do that. But maybe you might not hate your job as much as I used to. A car dealership was pretty much the last place I wanted to be at 7:30 in the morning on a Monday, so the dread was really powerful.

    Thanks for dropping by!

    Best regards.

  34. Jim,

    Ha! Great point there.

    That comment was somewhat tongue-in-cheek as I quite enjoy the volatility (I’ve done well with it for the most part). All the same, however, I wouldn’t mind if stocks were 100% efficient 100% of the time. It’d just be one less thing to worry about in life. Everyone would be on even ground, and people would just have to worry about saving enough cash to buy stocks. Plus, it’d probably open the market up to a lot more people, which would be great. Pros and cons to everything. 🙂

    Best wishes!

  35. Stephanie,

    Glad you enjoyed that article. It was my favorite this week. Saved the best for last. 🙂

    I hear you there on freedom. That’s exactly why I’m chasing financial independence. It’s about flexibility and choice. If you want to work, work. If you don’t want to, don’t. For instance, I go back and forth on how much I might want to blog once I’m financially independent. Sometimes I think it’d be great to stay just as active, showing what the other side of the journey looks like. Other times I think how intense that sounds and how I’d rather maybe just update everyone once a month or less. The great thing about it is that I’ll be able to slow down or speed up as I wish. And that’s an amazing feeling, being responsible only to yourself.

    Take care!

  36. Nice list of articles. I appreciate you posting them each weekend. And sunny weather is a great excuse for posting late.
    Keep the great weather going down there. I’m visiting my old man in Bradenton for a week in mid-April. Been cold up here in Maryland this winter so looking forward to some sun and fun.

  37. Rob,

    That’s one of the best times of year to come down for a visit. Shouldn’t be too hot yet, but the sunshine never quits. I also like the fall quite a bit, around late October. Pretty much perfect weather around that time. Have fun! 🙂

    Cheers.

  38. Btw Div, FRIPS just came back to Scottrade. I was talking to one of their reps and they’re now available to new and older customers as well. Woohoo!

  39. I agree, this will be the 7th year in a row I have come down around mid-spring to see my dad. Weather has almost always been perfect.

  40. DM,

    WHOA! Cannot thank you enough for including me on your weekend reading, so awesome and nice of you. Looks like there are quite a few of us in the boat of owning Lorillard. I had such a decent sized position that owning the RAI wasn’t going to bode well with me – it’s funny – I didn’t mind my position in tobacco, just realized that valuations on PM was great and it worked out well because I wasn’t buying them because I owned such a large position in LO. Then it dawned on me – oh wait, I should just swap them for PM. Made it happen. Thanks again Mantra, appreciate it!

    -Lanny

  41. Lila,

    Hey, that’s awesome! I noticed the tab is available once again on my account. That’s fantastic. I think it’s a great service that really differentiates Scottrade. Thanks for letting me know. 🙂

    Best wishes.

  42. Lanny,

    I think you made a pretty solid move over there. Cheaper valuation, higher yield, and arguably higher quality. How can you go wrong? 🙂

    Thanks for dropping by. Keep up the great work!

    Best regards.

  43. Hi DM!

    This is a bit off topic, but I wonder how you calculate your savings rate? (I am sure you have covered it on the site somewhere, but I can’t find it) For instance, do you count bills shared with your to-be wife as income?

    All the best!

    /Sensim

  44. Hi Jason,

    Do you think now is a good opportunity to buy Procter and Gamble? I’ve never owned it myself, but am contemplating it since the share price has taken a dip lately. Or do you think it will go even lower?

    Thanks!

  45. Scott,

    Well, PG isn’t cheap here. But it’s a high-quality company offering a pretty solid yield. Really one of the prototypical dividend growth stocks. I don’t think future dividend growth will be nearly as substantial as what we’ve seen in the past, but I do like some of the moves that they’ve been making since Lafley came back. Not particularly cheap and the stock could go anywhere in the short term, but I doubt you’d regret buying the stock over the long haul. I probably wouldn’t even mind adding more myself right now.

    Best regards!

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