Weekend Reading – October 22, 2011

It’s another beautiful weekend down here in southwest Florida. I’m blessed to live in paradise. I’m even more blessed to be part of a wonderful blogging community that features so many intelligent investors and people who think “outside the box”. It’s through the sharing of ideas that we all become better people. It’s because of this community that I started saving most of my income and investing in dividend growth stocks. I’m glad to give back by providing a real-world example of how some of these ideas build wealth. You’re looking at Exhibit A.

Here are some excellent articles from fellow dividend growth investors, frugalists and personal finance bloggers from the past week.

Building Wealth- Income and Expenditure
Dividend Monk wrote a great article on ways to increase income and also ways to limit expenditures by thinking before you spend money. His advice on increasing income by having an enjoyable second job is spot-on. No sense in building a second stream of income if it’s something you truly hate to do. Money definitely doesn’t buy happiness, and spending all of your time accumulating it at the expense of being happy likely won’t lead to a fruitful life.

INTC Intel Stock Analysis
The Dividend Guy provides compelling reasons to buy INTC, and why he included it as part of the Dividend Growth Index. I’m long INTC, and I think there is a lot of value to be had with Intel at current prices. I’d like to see it come back down to $22 before adding to my position, and I’d love it if we can see it back down to $20.

Your budget is like a leaking ship
Jacob compares the average household’s budget and a wooden ship with cracks in it. Great stuff here. Do you want to spend time constantly at the bilge pump (working), or would you rater be up on deck, enjoying a book while catching a light tan? I think I know my answer.

Gail Vaz-Oxlade Book Giveaway
Dividend Ninja is offering a free book giveaway! Check it out!

September 2011 Dividend Income Update
My Own Advisor provides us an update on his income. He’s doing a great job here and I can only hope to be at these levels within the next couple years. Great job. Keep it up!

Why I Absolutely Love Dividends…
Dividend Partisan clues us in as to why he loves dividends so much. I feel the love. The DJIA can gyrate up and down by more than a thousand points throughout a month, and it has no impact on my monthly passive income. I’ll still collect the same amount of dividends, no matter what. Dividends are stability in an unstable market. Dividends are a lighthouse providing calmness and direction in rough seas.

The Subjective Nature of Diversification
The Wealthy Canadian provides a great article on the subjective nature of diversification. What the word “diversification” means to one person will definitely mean something different to another. It’s amazing that in the world of investing, with all the cumulative years of experience of all the investors out there, that diversification can be so subjective. I personally feel that investing in multiple, non-correlated assets like TWC has done is a great way to achieve diversification. He has many equities in different sectors, index funds, real estate, farm land, gold and so on. Great stuff!

Seven wide-moat dividends stocks to consider
DGI provides a list of seven excellent wide-moat dividend stocks. An economic moat is a competitive advantage that a business has over its competitors. I’m long KO, PEP, WMT, PM, ABT and JNJ on this list. I think all are strong, long-term businesses.

Beginner Investing Mistakes
Dividends For The Long Run discusses some easy-to-make beginner investing mistakes. I personally know that it’s hard not to let commission fees cut too far into an investment. When I first started investing a lot of my transactions were right around $1,000, and some were just under that such as my investment with Sysco Corporation (SYY). He recommends not letting commission fees become more than 1% of the total buy-and-sell transaction. I definitely agree. I now try to make sure each transaction is at least $1,400. My transaction fees are $7 through Scottrade.

Wal-Mart Stores, Inc. (WMT) Dividend Stock Analysis
D4L provides an excellent analysis of WMT, one of my holdings. He rates it as a 5-star stock, one that is highly undervalued from his analysis. I’m bullish on WMT, as I believe they have many competitive advantages. I do think, however, that management has to respond to company weaknesses and make sure they are listening to the consumer. Getting back to basics with the recent price-match guarantee and new company slogan is on the right track.

Retire in Kuala Lumpur, Malaysia
Jet Set Citizen provides some information on retiring in Malaysia. An interesting choice, as Malaysia seems to be relatively open-minded to foreigners retiring there. It shares the low cost of living that is common in this part of the world, although I would argue it’s not as cheap as the Philippines.

Thanks for reading.