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I can be reached at:

dividendmantra@yahoo.com

I welcome any comments, thoughts or suggestions. Thank you in advance.

63 comments:

  1. Hey Dividend Mantra,

    I came across your site from the Dividend Ninja column and discussion about living off your dividends. I agree 100% with what your saying about Yield On Cost. I think others are missing the point that not only do you get compounding with reinvestment of dividends but you also get dividend growth itself on top of it. So comparing dividend income to gic/bond income is like comparing apples and oranges.

    Anyways, I really like your site and your "mantra", when I have more time I'm going to spend more time on it.

    I have one HUGE suggestion, and that is you need to get onto twitter. I didn't see any mention of it on your site. Most of the other blogs I follow are all on twitter so I can just go there to see when they are updated. (Eg: Dividend Ninja, Susan Brunner, Canadian Couch Potato, Passive Income Earner)

    ReplyDelete

  2. Thanks so much for stopping by.

    I agree with the apples to oranges comment. I can agree to disagree with someone, however.

    Thanks for the suggestion on Twitter. I will most certainly have to look into that.

    I hope to see you around!

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  3. Is your dividend portfolio in a tax exempt retirement account or is it subject to taxes?

    To retire early (before 59 1/2), I cannot have all of my money in an IRA or 401k. So, have you just accepted the fact that you will pay taxes on your dividend portfolio or is there something else you are doing?

    I am very interested in being able to live off of dividends before I am in my late fifties. But I hate to get killed on taxes, so I am just interested in the way you go about managing your portfolio. I would appreciate any feedback! I'll check back in the comments section.

    Great site...I plan on coming back!

    ReplyDelete

  4. CW,

    My dividend portfolio is not in a tax-exempt retirement account. I have intentionally done this so that I can receive distributions whenever I'm ready...which will hopefully be around 40 years old. I have accepted the fact that I will pay taxes as I go, instead of when I make distributions. Even tax-advantaged accounts eventually have to pay some tax. I'll just end up probably paying earlier, and perhaps more. I'll sacrifice a little compound growth so that I can receive my money earlier in life.

    I'm glad you enjoy the site. Stay in touch!

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  5. Mantra, this is good site you are creating, I am looking for ideas since I am essentially trying to do the same thing but with a slightly different strategy.

    It takes a lot of guts to put yourself out there like this, providing all of your specific information. Looking forward to more updates and investment ideas.

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  6. sfi,

    Thanks for the support and encouragement. It is much appreciated, I can assure you.

    It does take a lot of guts, I suppose...but I really like putting it all out there, for better or worse. Hopefully it inspires others to believe that it isn't really all that hard. It just requires some dedication. One day I'll look back on all of this, and I'll be able to smile as I think about how it all happened.

    Best wishes on your journey as well. I hope it's going as well as mine!

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  7. Hi,

    I came across your website from one of the forum posts. I love your postings, and I love the fact that you disclosed everything about your financial health. I suppose many men out there not willing to show how much he earns due to our egoistic nature.

    I hope your blog stays with you till at least you are 40!

    a random guy from Singapore! :)

    ReplyDelete

  8. ang,

    Thanks so much for stopping by and adding your encouragement. It's truly appreciated.

    I try to be as transparent as possible in my journey so that way we can all look back and see how possible it is to exit the rat race early in life.

    Keep in touch! It's comments like yours that make updating this blog worthwhile.

    Best regards.

    ReplyDelete

  9. Hey - What are your thoughts on GD vs RTN? I was thinking about purchasing some RTM. Seems to have a better dividend, and high div growth rate than GD...thanks

    ReplyDelete

  10. Anonymous,

    I think RTN is a great buy, and it made my potential purchase lists a couple months in a row. The only thing that kept me away was the fact that GD showed weakness when RTN showed strength in terms of price, and also the fact that RTN is a bit more dependent on DOD spending from my understanding. The potential budget cuts could hurt RTN more than GD, I believe. But, I think RTN is a solid buy and is high on my watch list.

    I say buy both if you can.

    Take care!

    ReplyDelete

  11. Thanks for your thoughts. I have no idea if this guys numbers are right, but I found this article interesting. I am looking to get into some RTN soon, and if it drops a few bucks, maybe some LMT.

    http://www.investorplace.com/2011/11/warning-defense-stocks-are-under-attack/

    ReplyDelete

  12. Hey man, please forgive me if I missed this somewhere on your site...but how come you aren't invested heavily in a Dividend index fund? You seem really diversified, industrially and internationally, so wouldn't be simpler and more cost effective for a div index? I'm not questioning your methods, I am just on the fence myself. I appreciate any advice you can give.

    Thank

    ReplyDelete

  13. Kevin,

    I don't like index funds in general. I like ownership in individual companies and I like picking them at my own choosing when I think they are undervalued. I also like voting rights in these individual companies, if I so choose. Index funds shift power from the individual shareholders and give it to the agents/managers in charge of the funds.

    I also like to research stocks and I like knowing exactly what I'm invested in.

    For someone who isn't inclined to look at balance sheets, cash flow statements, earnings/revenue reports and follow multiple companies at any given time then index investing is probably the way to go.

    I think index investing is a fine way to build wealth for a passive investor. It's just not for me.

    Best wishes!

    ReplyDelete

  14. Hey DM,
    you ever set up or come across a google document to import dividends and keep track of your portfolio?
    Love your site,
    Matt

    ReplyDelete

  15. Matt,

    Thanks for stopping by.

    I have not come across something like that. I manually track everything, which is ok because it forces me to stay on top of everything. I'd be open minded to passive tracking as well, but I think it's nice to track numbers manually. If you have something in mind certainly let me know!

    Take care.

    ReplyDelete

  16. Hellom

    Just read your December post on MMM (working my way up from the start over there). I started reading the comments but there are just too many of them, so sorry if this is covered. But I wanted to note that I started with Scottrade, but dropped them because they didn't automatically invest the dividends; seemed like I was giving money away. So I joined Firsttrade, was happy with them, but eventually consolidated all my investment accts over to ING/sharebuilder. Earlier this year, I transferred one more time to ING/Sharebuilder, but through my Costco membership. That cut the commission on non-automatic investments to just under $7. Plus, the free dividend investment.

    Great deal. But then again I'm 48 and nowhere near retiring yet so you might not want to ignore all this :)

    Clint

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    1. And apologies for the typos.
      Clint

      Delete

    2. Clint,

      Thanks for stopping by!

      I use, and like, Scottrade but that doesn't mean it's any more or less of a brokerage service than any of the other discount brokers available.

      I don't particularly mind the fact that Scottrade does not offer a dividend reinvestment service because I choose to reinvest my dividends selectively instead of automatically. I combine dividends with fresh capital and use those funds to make purchases in attractively valued businesses.

      Thanks for the tips, and I'm glad to see you're on your own journey and doing well.

      Best wishes!

      Delete

  17. Ok just a quick question. I just want your opinion I know your not necessarily a professional financial adviser but I do want your advice because I enjoy your blog.

    Ok I have a company profit sharing plan that I put 4% in which is they most they will match and its set up into 5 different funds of my choice. I also put 5% of my pay into my companies stock which gets a solid dividend and is considered a long term dividend growth stock.

    I have a little extra money left over in my check and am going to allocate 5% more should I put it all on stock or profit sharing or should I put some on each and make them an equal 7% each?

    I may not be giving you enough info, just let me know what else you would need to know.

    Thanks,
    Chad

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    Replies

    1. Chad,

      I'm sorry it took me a while to get back to you. You posted this question when I was taking a break from the blog.

      As far as your question goes, I think 5% is already enough for company stock. You already have risk there by your employer being your major source of income (by what I can tell) and then you're adding to it by 5% of your pay going back into this company through a stock purchase plan. If something were to happen to this company, you would be out of an income plus your stock would tank. I'd diversify out of that if possible.

      Best wishes!

      Delete

    2. Auburnfan, I agree with DM above. Does your company give u a match or a discount on your direct stock purchases? I work for a company that gives me 15% discount on my bi-weekly stock purchases, do minimize my risk I simply liquidate a good portion of my shares regularly when the shares are over-valued. I use this money to throw down into other positions (which are better-valued). investing-early.blogspot.com

      Delete

    3. Well I do get a discount on stock purchases of 10%. And I work for walgreens so I feel like it has been paying and raising dividends for long enough that I can bank on it for the long term. I actually did up my percentages while you were not blogging and now I am putting about $300 per month into stock and $300 per month into profit sharing account. I am also working on buying other stocks gradually to build my dividend portfolio.

      Delete

    4. Chad,

      Congratulations on raising your contributions! That's fantastic news. I continue to watch WAG. Excellent dividend growth rate, but I do stay concerned about competition.

      Best of luck on building your portfolio!

      Take care!

      Delete

  18. DM - Awesome site! Great work! I love that you share part of who you are in your blog and not just focus solely on stock reviews.

    I'd be interested in hearing how you and the visitors here allocate their wages. I.E do you have a 401k (if so what % are u contributing), do you have an emergency fund, IRA. Aside from any possible retirement account or emergency fund, are you 100% invested in stocks?

    Hopefully I will finish paying off the my debt this year, so beginning in 2013 I will begin my Dividend accumulation. I'm debating if I should just stay enrolled in my 401k up to the match and focus the rest on dividend investments. Even though there are some tax benefits, I really hate those 401k fees!

    ReplyDelete
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    1. Anonymous,

      Thanks for the support. I'm glad that you enjoy the site. The personal nature of this blog can be polarizing, but I think that the journey is more important than the destination.

      I don't have a 401(k). I solely fund my taxable stock account through reinvested dividends and fresh capital from my paycheck. I plan to become financially independent and live off my dividend income fairly early in life, so a 401(k) will not be very helpful in that regard. It should also be noted that my employer does not match.

      I always have at least a few thousand dollars in cash at any given moment for emergencies. Plus, I have around $10k in credit if something disastrous were to happen. I discussed this in a post earlier on the blog. You can find it under "Emergency Fund".

      I'm 100% equities right now due to prevailing low interest rates. When rates rise and bonds fall, I'll likely go very long on bonds. Hopefully, this will happen by the time I turn 40 and I can buy some long treasuries to partially fund my retirement.

      As far as your situation goes, everyone is different. I don't have a match at work and I plan on using my dividend income very early in life. For most everyone else, a 401(k) is a great deal.

      Best wishes!

      Delete

  19. DM:
    One of the hardest things about dividend investing for me is to keep cash available for opportune times. When I have $500. or $1000. in my brokerage it's like a kid in a candy store with me. How about you or do you have lots of will power?

    Bill from Wmsport

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    Replies

    1. Bill,

      I totally understand where you're coming from. Patience is something I'm getting more familiar with as I age, but sitting on cash is difficult for me too. I invest monthly, as you know, so I don't typically wait too long between receiving my commission check from my day job and making a buy.

      I do try to keep a little extra dry powder at all times for large market dips. There are few times, however, that I simply can't find attractive opportunities. Even when the market is heated there are attractive long-term opportunities. I hate sitting on cash because inflation eats it up like candy. Just my take on it.

      Hope that helps.

      Take care!

      Delete

  20. I have been following your blog and portfolio and would really like a little guidance to what would be good price to purchase these stocks today.

    Thanks!

    ReplyDelete
    Replies

    1. Anonymous,

      Thanks for following the blog. I appreciate your readership.

      I'm not quite sure I understand your question. "These stocks" is quite a wide group, and I'm not sure what you're referring to. As far as what looks attractive right now, I recently published an article showing what I'm interested in and what looks attractively valued. It was titled "What Are You Buying".

      Best wishes.

      Delete

  21. Hello... I am new to your site and i love it.. I am going to be a regular visitor here.

    I am getting into dividend investing and eventually want to retire and live off the dividends like you.

    Right now I have 12k to start buying with. I was wondering what you thought might be a good way to get started?

    another family member of mine invests in reits and thinks I should go that path since some of them are paying 10-14% dividends.

    What are your thoughts on reits?

    I have been investing in stocks for over 10 years and have a strategy that I use that is successful, but I want to start moving into dividends.

    Any help is apprecciated.

    jerry

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    1. Jerry,

      Thanks for stopping by. I'm glad you found the site and I'm really glad you enjoy it!

      Well starting with $12k is more than I started with, so that's fantastic. It's unfortunate, however, that the overall market valuation is much richer now than when I first started back in the summer of 2010. I started with about $7k in my checking account (all my money in the world) and used about $4k of it to start investing.

      I would be careful with REITs. They can be a fantastic investment, but right now many are a bit expensive relative to their historic valuations. REITs typically have much higher yields than normal dividend growth stocks, but grow much slower. Also, the 10-14% yields you're speaking of would usually be found in mREITs, which are mortgage REITs and will only be able to pay out those monster dividends while the low interest rates prevail. They can be profitable, but one has to watch them.

      Also, some of the mREITs high yield can be considered a return of capital when you factor in the newly issued shares. Annaly Capital (NLY), a popular mREIT paying out a 12%+ yield is down 3% over the last year, while the S&P 500 is up over 20%.

      I will eventually own REITs at some point, but they will more likely be your standard fare triple net REITs like Realty Income (O). This will be when they are a little more attractively priced. O is up almost 22% over the last year.

      Good luck and keep in touch!

      Best regards.

      Delete

  22. I have a few questions:

    1. Do you have any thoughts about the fiscal cliff? How would this affect your decision to buy/hold/sell stocks you have and/pr are looking at?

    2. Do you know of any online forums/communities devoted to dividend investing? There are forums for everything else. Why not us?

    ReplyDelete
    Replies

    1. Everyday Freethought,

      The fiscal cliff will cause a lot of issues, I'm sure. I'm no economist, so I don't try to speculate on such things. I do know that defense budgets will be hit hard, so I expect defense companies like RTN, LMT, GD and the like to plummet. That, of course, would make them very attractive long-term if they fall far enough.

      I don't know of many forums dedicated to dividend investing specifically. The only one I can really think of off the top of my head is the one over at Morningstar. I don't post there personally, but I've seen a number of articles on Morningstar written in response to hot forum topics and I've stopped by the forum very occasionally.

      Best wishes!

      Delete

  23. Thanks so very much to encourage me invest in dividend growing stocks. It sure must be the best way for investing, commissions are costly and you look like the wisest person I met on a blog.

    I do track and screen for dividends growing stocks on Gurufocus. They have a nice screen for this called All-In-One guru Screener which is very useful to me for now. I hope it helps you too. Still I prefer your picks, except for KMI which has a payout ratio 0f 1,35.

    Thank you again, as you have very interesting picks like NSC which I intend to add to my collection.

    Good to you

    ReplyDelete
    Replies

    1. Anonymous,

      Thanks so much for stopping by and commenting. I'm really glad you found the blog and enjoy it here. I write to inspire and inform others, so I'm glad that it's working for you.

      There are many fantastic screens for stocks out there. I would always recommend to not overly rely on any one screen or metric, but to blend results together the best you can and add in a margin of safety if possible.

      KMI is an interesting pick. Keep in mind that it's laid out a lot differently from most C-Corps, and so what you see isn't totally what you get on the surface. I predict large earnings/dividend growth in the future with that one.

      Please keep in touch!

      Best wishes.

      Delete

  24. Hey Dividend Mantra

    I have been looking for a stock screener that can sort by dividend date (or ex div date). I haven't had much luck at all. I was wondering if you knew of one. I'd just like to narrow down my results to a specific month. I need to get one that pays in November and it'd be nice to remove all of the others from the list. I had my eye on INTC but I think I'll wait until that one levels off. Anyway, thanks for any advice.

    Larry

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    Replies

    1. Larry,

      There are a couple different resources I'm aware of right off the bat.

      This:

      http://ilovedividends.com/american-dividend-stocks.html

      That's a quick snapshot of popular dividend stocks sorted by their payable month.

      Also:

      http://www.dividend.com/ex-dividend-dates.php

      That's a database that screens for stocks based on their ex-dividend dates, which will determine whether or not you get the next payable dividend.

      I hope those help!

      Best wishes.

      Delete

  25. Hi DM, Do you deploy a DRIP strategy with any of the stocks you own

    Cheers D

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    Replies

    1. Anonymous,

      Thanks for stopping by! I appreciate the question.

      I do not use a DRIP strategy for any of my dividends. I wrote an article on this a while back:

      http://www.dividendmantra.com/2011/07/do-you-drip.html

      Best regards!

      Delete

  26. I visit your blog from time to time and enjoy the read. I wish more people lived responsibly & tuned-out the noise of consumerism.

    I wonder if you take advantage of tax-deferred growth opportunities like 401k, IRA, Roth IRA, HSA, etc? It seems most of your investments are in a taxable brokerage account.

    Also you seem to not be very diversified as far as asset class (though you are diversified in industry sectors) .. all of your stocks are basically in the 'Large-Cap US Value' category. You completely exclude small-cap, emerging markets, REITs and most international in general. Have you considered more exposure to these other large parts of the market? Would a small allocation to REITs be a good idea as you do not own real-estate? (though imho, REITs are overvalued atm as investors stretch for yield) How about the Fama-French research on small-cap value? It just seems you have all your eggs in the large-cap value basket.

    I own many of the stocks that you do, and they are my large/mega-cap value component of my portfolio. The majority of my portfolio is in broad-market ETFs and also tax-deferred. It's too time-consuming and risky to buy individual EM or SC securities so a cheap ETF does the trick for me with those asset classes. I try to minimize the correlation between asset classes as much as possible and do have a small-cap value tilt as the research seemed rather convincing.

    During the years other asset classes do well and large-cap value doesn't, will your portfolio lag needlessly? Take a look at the Callan table here:

    http://www.callan.com/research/download/?file=periodic/free/655.pdf

    Some years large-value does great, other years having an EM or SC allocation would have balanced things out in the portfolio, correct?

    You seem like a person who does their homework, so I am genuinely interested in why you wouldn't diversify more. Maybe there is something I am missing.

    Take care,
    Joe

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    Replies

    1. Joe,

      Thanks for stopping by. I appreciate your comment and the included questions. I'll do my best to address some of them.

      My portfolio is 100% in a taxable account. I've discussed why I do this a few times, but basically the tax advantages that one can reap through an IRA don't necessarily apply to me due to the fact that I'll be living off my investments at such a young age. My work doesn't do a 401k match, and the fees are rather high. Besides, again, I plan on using my investments to live off at a rather young age (hopefully before 40).

      As for your other questions, you have to remember that small cap stocks are higher risk/higher reward than large cap stocks, generally speaking. My prime directive, if you will, is to preserve capital above all else. I have a rather conservative nature when it comes to investing, and the fact that I'm pretty much 100% equities reinforces my notion to stay conservative. That being said, I do have a small cap in my portfolio (a bank no less - SBSI), and my utility holdings are rather small companies.

      I'm internationally diversified not only directly (VOD), but also through most of the companies I'm invested in. Most of my holdings are large cap multinationals that do a significant portion of their business internationally, or in some cases all their business internationally (PM - my biggest holding).

      I find the companies that have long rising dividend streaks and show excellent prospects to continue paying out increasing dividends are large, mature companies with a stable product/service lineup (JNJ, KO, PEP, CVX). Typically you're smaller companies like to reinvest profits into the business to grow. Nothing wrong with that, just a different investment than what I'd be looking at.

      I'm certainly interested in small cap companies that have long dividend streaks and show great promise to continue said streaks, but my the majority of my capital will likely always be tied up with large multinational companies because I sleep well at night knowing there is a certain element of safety there.

      Hope that helps.

      Best wishes.

      Delete

  27. That is a great answer and seems well thought out. I still disagree however that a small stake in an EM etf or SCV etf or REIT etf wouldn't be worth the additional risk/return given your age, regardless of when you want to retire. But a plan that is strictly adhered to does better than people who change their investment plan all the time due to market hype, and you have got a plan for sure.

    I hear you on preserving capital, but it is already a risk to go with 100% equity in one asset class. In 2009 emerging markets returned 79% vs S&P500 Value returning 21% .. The year before EM lost 53% and LCV lost 39%. That is how I thought diversification -does- preserve capital. Of course your portfolio does not exactly reflect that LCV benchmark index.

    Good point on international exposure. Yes, most of our US domiciled companies have huge business overseas, many of them have the majority of their income from overseas. You and I likely have a similar portfolio of stocks. Yeah, SBSI is small.. seems solid for a small-cap value company, good ROE in past.

    A crummy 401k with no match and high fees/ERs is not worth it, I agree. Though .. it would seem at least a Roth IRA would be of benefit to you. Yes, you must be at least 59.5 y.o. to withdraw the earnings, but the original contributions can be taken out at any time. Your life expectancy is likely long, perhaps 80+ .. there are social security / actuarial tables that will tell exactly. So retiring at 40, you will have 19.5 years before you can withdraw earnings and likely at least another 25 years of life after you hit 59.5 y.o. and are eligible to do whatever you want with the Roth earnings.. I would think a portion of your portfolio that was placed in a Roth IRA would return more by the time you would use it due to deferred taxation for 20+ years. The Roth would be an ideal place for that REIT etf or a REIT stock as well since they throw off so much income each year.

    Good discussion, Thanks, Joe

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    1. Hello Dividend Mantra,

      I too agree with Joe, I am a die hard dividend investor. Since I have started late investing for retirement, I have accelerated savings and put everything I can into very safe ETF's (SCHD, SCHB) and some quality REIT's (ARR,NYMT,TWO). My annualized yield for the past year 15.6%, my brokerage account is also taxable, but I have a very good 401K plan with my company. I have a college fund also for my only son, and most of that is in 2 ETF's. Charles Schwab, just announced this past week, with a brokerage account with Schwab, you can buy, sell 105 etf's for "Free" ETF OneSource. The several etfs I have have many of the stocks listed in your portfolio. I diversify my investments in many sectors that include small caps, mid caps, large caps, foreign, reits. Just something to think about and accelerate your way to early retirement!

      Thanks John

      Delete

    2. John,

      Thanks for stopping by!

      I don't think there is anything inherently "wrong" with ETF's, and for most people I think they are a perfectly suitable, or even preferable, investment vehicle.

      For me, however, I greatly look forward to investigating individual companies and spending the time necessary to research stocks and manage my portfolio. For many, this is uninteresting and the time necessary to complete these tasks is generally allocated elsewhere due to preference.

      You bring up a point in that "everal etfs I have have many of the stocks listed in your portfolio". In the end, the etf's are charging a fee, no matter how small, to own many of the same companies I would like to own anyway. I'd rather pay myself that small fee and choose when and why I buy said companies. In addition, a lot of ETF's own a sliver of companies I wouldn't want to own. I get full control by managing my own portfolio.

      Best wishes!

      Delete

    3. Hello DM,

      Thanks for your comments. I also enjoy researching/trading individual stocks even though I am purchasing some ETFs. I started a little late
      so I have have a bit more to catch up. I see the importance in investing in quality individual stocks, etf's and funds. I enjoy watching my portfolio grow, and seeing the significance in compounding , and reinvesting the dividends. I am currently buying WFC, GE, MO, and a few ETFs, and REITs. I really enjoy your website! Keep up the good work!

      John

      Delete

  28. Dividend Mantra:

    I am impressed by your endeavour! I am a regiestered rep and do quite a bit of business in sarasota. I would like to share with you ways to grow your money tax- free and not in the market... call me , maybe we could have coffee one day, when i am in sarasota 904 483 0746

    Joe Carey

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    Replies

    1. Joe,

      Thanks for the opportunity! Do give me a shout when you're down this way and maybe we can meet up!

      Best wishes.

      Delete

  29. Dividend Mantra,

    Do you have any guidance or suggestions you can offer for a first time investor? Everything you read online can be pretty overwhelming so if you are able to help steer me in the right direction that would be great!

    Thanks,
    Adam

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    1. Adam,

      I'm more than happy to help. Hard to say where to start as I don't know your complete situation, but a couple books can help:

      "The Ultimate Dividend Playbook" by Josh Peters @ Morningstar

      "The Single Best Investment" by Lowell Miller

      "The Dividend Toolkit" by Matt Alden (Dividend Monk) - my favorite DG book

      "The Intelligent Investor" by Ben Graham - the greatest investing book ever

      From there, I would suggest going to Morningstar or Google Finance and get familiar with cash flow statements, balance sheets, income statements and the like. Go to individual company websites and read annual reports. Once you're comfortable with how a business works, how it makes money, you should have a good idea of what you're willing to pay for it. The Dividend Toolkit includes spreadsheets with DCF and DDM valuation tools.

      Hope this helps!

      Best wishes.

      Delete

  30. I am subscribed to your 'new' postings. The recent one "Why I Vastly Prefer Dividend Growth Investing To Index Investing" was great. However, I would like to get email notices of comments. I don't see where to 'subscribe' to individual posting's comments. Usually there is a place to subscribe to that, or comment and subscribe. Am I not looking in the right place?

    ReplyDelete
    Replies

    1. alan,

      You are subscribed to the new posts through the link on the right of the page, where it says "Subscribe by email". That subscribes you to the posts.

      You can subscribe to a post, and the comments therein, by clicking the "Subscribe by email" link at the bottom right of the comments section in any post or page. You can see the one for the page we're both commenting on by looking just below this response I'm writing to you.

      I hope that helps!

      Best wishes.

      Delete

  31. I'm so happy I found a little news article about you and decided to check out your blog. This is something I'm very interested in doing. My husband and I are 40, and while we don't mind working and have managed to find a great balance between work and LIVING, we want to create a secure & lucrative nest egg so that our retirement isn't spent worrying about how to pay the bills. We're both "blue collar" - no college educations here - but we both have decent jobs and top-notch credit. The only debt we have is the remainder of our mortgage (which will be paid-off in 7 years and is WAY cheaper than renting), and we live below are means - our guilty pleaure is a decent vacation (less than $2500) each year to escape the rat race. No kids - not planning on that, either. We tried, it didn't work out, and 5 years ago I would have told you it was the end of my world - now I realize that NOT having children was a blessing in disguise (speaking for us and no one else - I wholeheartedly believe that the greatest joys in life come from your children - it just wasn't in the cards for us, and we are quite joyful nonetheless!!). So, we have some 401k money tucked away and a pension secured (as secure as that can be - see Enron), but would like to put some of our "emergency funds" to work for us - I could easily start with about $3,500 without feeling a pinch. Do you have any recommendations for books to read - something to get me on the right track? Like I said, no college here, but I have a good head for numbers (my job is doing the books for a small business since 1995 a/p, a/r, bank recs...I'm kind of an accountant without a degree!) I really think this is something I'd like to do for our future. Any advice/reading material to give me a start would be GREATLY appreciated! Good luck to you - and thanks for any advice! I plan to read thru your whole blog in the next few days!!

    ReplyDelete
    Replies

    1. Anonymous,

      Thanks for stopping by and I'm really glad you decided to check the blog out. Very happy you've enjoyed what you've read so far. As a writer, that's a huge compliment. :)

      Congrats on being in good financial shape so far. Being only 7 years away from paying off your mortgage is wonderful at 40 years old. That's way ahead of the curve. Living below your means, as you've figured out, is the big key to building wealth. Once you master that, the rest is smooth sailing.

      I hear you on not having children. For me, not having children isn't really so much a financial decision as it is a personal decision. I decided that children weren't in my future many years ago - way before my journey to FI. The fact that it's economically advantageous to not have children just so happens to work out wonderfully for what I'm trying to do.

      If you're looking for further reading on dividend growth investing, and investing in general I recommend the following books I recommended a couple comments above:

      "The Ultimate Dividend Playbook" by Josh Peters @ Morningstar

      "The Single Best Investment" by Lowell Miller

      "The Dividend Toolkit" by Matt Alden (Dividend Monk) - my favorite DG book

      "The Intelligent Investor" by Ben Graham - the greatest investing book ever

      Many of the dividend growth blogs are great for fundamental analysis, general market thoughts, specific stock ideas and the like.

      Morningstar is a great tool for accessing income statements, balance sheets and cash flow statements for many companies.

      SeekingAlpha.com is also a great community of investors, and the content there is free and mostly robust.

      David Fish maintains the dividend champions/contenders/challengers for free at: http://www.dripinvesting.org/Tools/Tools.asp

      Hope that helps!

      Best wishes.

      Delete

  32. Hi,

    It's me again. Do you mind disclosing how much you earn as a full-time employee? The reason why I asked is because I'm about the same age as you, sharing the same financial goals. My full-time employment in Singapore gives me US62,000/year and I have an investment portfolio of US28,000 (mainly equities/REITs in Singapore).

    The best way to assess myself is to make a healthy comparison with others my age and qualification.

    Ang
    Singapore

    ReplyDelete
    Replies

    1. ang,

      Thanks for stopping by.

      I don't mind any disclosures, as I believe candidness and being open helps us all.

      I made just about $61k (gross) last year (my highest ever, and far above my average).

      I'm on pace to make about $56k this year at my current pace, but the summer is usually slower so this number may trend down as we near the half-way mark for the year. I'd be happy if I could finish in the mid-$50k range.

      Hope that helps! Keep up the good work.

      Best wishes!

      Delete

  33. Hi there. I like what you are doing and have read many of your blog post but it is becoming harder to read. The ads are in terrible spots and makes the reading difficult and distracting.

    I understand why ads are wanted but they shouldn't destract the reader.

    Just my 2 cents.

    ReplyDelete
    Replies

    1. Anonymous,

      I'm sorry to hear of this. There are actually quite limited spots I can put ads, and I hope you can understand that the ads compensate me (very modestly) for the immense amount of time I put into this blog. I'll try to tweak them a bit if the content is hard to read, because the content is the whole reason the blog exists.

      Thanks for the heads-up!

      Best wishes.

      Delete

  34. Hi DM,

    Have you ever listened to any of Jim Rohn's seminars? I ran across a good video of his on YouTube recently. It's pretty long (58:43), but I think you would enjoy it. Along with his personal story, he discusses personal development, goals, and financial independence. The video is called "Jim Rohn Three Keys To Greatness".

    Keep up the good work!

    Thanks,
    Travis

    P.S. When I try to submit a comment through Chrome on my iMac, it won't go through. I click "Publish" and it clears the comment out of the text box and nothing else happens. I have to use Firefox so the captcha box shows up and allows me to verify and post.

    ReplyDelete

  35. Travis,

    Thanks for the video! I'll have to check it out this weekend. I love seeing new perspectives.

    I'm sorry about the commenting issue. Maybe my layout is somehow problematic for Chrome? I'll have to try commenting back on another browser. I use Firefox. That's really strange. I'll look into it!

    Best regards.

    ReplyDelete

  36. DM,

    I know you're not a short-term trader, and I agree with the buy-and-monitor strategy in order to capture recurring income from a stable dividend stream, but recently I have had the rather good fortune of picking two "winners" that have experienced a rather impressive share price appreciation (>10% over about 3 weeks). I purchased these issues with the intention of collecting dividends, and pooling them to purchase new/more shares. On the flip side, there is still some value available with a good margin of safety out there in the market despite record highs on the DJIA and S&P500, and I'm wondering if now isn't a great time to take some profits (my shares of individual companies are held in a tax-advantaged account, so capital gains are not an issue in my calculations), selling into the hype, and reallocate into other issues. I'm still confident of the fundamentals of the companies in question, and the yield I received was good (and even remains good if I purchased today). Obviously, if the fundamentals had changed, this would be a no-brainer, but I still have faith in these companies.

    Your Freedom Fund is in a non-tax-advantaged brokerage account correct? Have you ever faced a scenario like this? Is there a point where the price appreciation would be attractive enough that you would take the hit of capital gains taxes to lock in the gain when you wouldn't have sold otherwise?

    Just a curiosity,
    ---Michael

    ReplyDelete
    Replies

    1. Michael,

      Great question there.

      If a stock I own becomes grossly overvalued then I consider it for sale. The key word is "grossly" and that's something that is definitely subjective. The other part of that issue is what do you do with the capital from a sale like that? Is the entire market overvalued, at which time you start selling everything and go to cash? If one particular stock I own becomes overheated I'm definitely open to selling it (and recently did so with UNS). This kind of sale only comes after a significant disconnect between reality and the stock price.

      You also have to consider why you purchased it in the first place. Did you buy with the intentions of holding for the rest of your life? In that case, is a fast price appreciation all you need to sell?

      Buying and selling are both very individualistic decisions. I usually only consider selling in three cases: gross overvaluation (as in ridiculous overvaluation), fundamental changes to the company (as recently happened to ABT) or dividend cuts/holds. Other than that I'm usually content to hold.

      What I would do if I were you is re-analyze the company and try to ascertain the fair value of the company to a reasonable degree and figure out how far above that level your stock is trading and whether it's worth it to sell.

      Best of luck!

      Take care.

      Delete

  37. DR,

    I appologize if this question has already been asked and answered. I'm a recent fan of your blog and love your approach on investing and life in general. You mention that you do not re-invest your dividends automatically, which is a great idea, but rather take the dividends and invest them the way you like. My question is are you paying tax on the dividends that your getting now that you choose to re-invest yourself? And if so, wouldn't you consider that a double taxation due to you being taxed on the gains later on? Thanks so much.

    Best regards,

    -D

    ReplyDelete
    Replies

    1. D,

      Thanks for stopping by. Glad you found the blog and enjoy what I'm doing here. I hope you stick around!

      Automatic dividend reinvestment (DRIP) vs. selective dividend reinvestment doesn't change my tax scenario. I hold all my funds in a taxable account, so I do pay taxes on my dividends. I hold them in a taxable account because I plan on accessing my income stream at an extremely early age in life. I'll still have the traditional social pension via Social Security when I reach traditional retirement age (unless the laws are changed before then, which they very well may).

      Dividends are a form of double taxation, because dividends are taxed at the corporate level and then taxed at the individual investor level again. That's why you see some detractors of the dividend growth investment strategy complain about dividends. It's not a perfect system due to our tax laws, but it's preferable to any other alternative I've been able to find.

      You can avoid the immediate double taxation by investing in a tax-advantaged account like an IRA, but you'll eventually face this tax bite. I choose to have access to my money at a very early age, so I'll likely be giving up some tax advantages, and hence money, by doing it my way. But in the end I'm also giving up over a million dollars by retiring at 40, so you can see that money isn't everything for me.

      Hope that helps.

      Best wishes!

      Delete

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