Weekend Reading – January 17, 2014

This is my first ‘Weekend Reading’ post of the year. Pretty exciting stuff!

I have a few articles I’m currently putting together, and I’m excited about all of the different topics I’m going to cover over the next few months. However, I decided to take a break from writing fresh, new content to put together a quick compilation of some of the best articles I’ve read over the last week or so. While I’m excited about what I’m doing here at Dividend Mantra, there’s a lot of fantastic information out there all over the internet.

I tell ya, just when I think about calling up Comcast and complaining over the fact that my internet bill just went up I sit and think about the fact that access to the internet is truthfully worth every penny; I’d pay much more. But I still need to make that phone call. Every penny saved is a penny I can invest.

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

My Dividend Goals for 2014 and after
Dividend Growth Investor posted his investment goals for 2014 and how much he’s looking to earn from passive dividend income in terms of expense coverage. What’s really awesome is the fact that he’s already covering over 60% of his expenses without having to work. There’s a certain amount of weight that’s automatically lifted from your shoulders when you know that even if you lost your job you could likely make a couple of budget cuts in relatively painless areas and cover almost all of your expenses.

Chiang Mai Monthly Bills 
Tieland to Thailand posted a snapshot of their monthly bills in Chiang Mai, and all I can say is: wow! They’re spending 85% less money than they were in Virginia. Not only that, but they’re living a full life with no unfilled wants or needs. Really great stuff. It’s especially awesome to know that with some ingenuity I could probably retire in just a year or two if I was open to moving abroad and living in a city like Chiang Mai, as my dividend income will probably be near what this blogging couple is spending right now.

My Opinion of Unilever Plc’s (UL) Current Valuation
Bryan put together a quick analysis on Unilever Plc (UL) and concluded that it’s likely slightly overvalued. I can see how that conclusion could be reached, but I personally think UL is pretty close to fairly valued here, or even perhaps slightly undervalued. There’s obviously a reasonable range at what a stock is likely worth because valuing a company is part art and part science. And as such, I can see how the valuation on UL shares right now could range from slightly undervalued to slightly overvalued, and perhaps fair valuation – which would be in the middle – is the most likely conclusion.

The End Game of Dividend Investing: The Zero Hour Work Week
This article’s title is music to my ears! Tim highlighted some of the reasons he’s an income investor, instead of someone who wants to build up an asset base which would eventually have to be sold off piece by piece. I couldn’t agree more! I look at my portfolio as a bit tree, with each company being a branch that spits out quarterly, monthly or annual fruit. I pluck this fruit (the dividends) and use it to grow more branches. But one day, I’ll live off this fruit as it will be the sustenance that sustains my life. And quite literally so, as my dividend income will pay for a roof over my head and food in my belly. The best part is that I won’t have to worry about what the market values my assets at, because I’ll simply be living off of the passive dividend income my investments provide.

Mindless Accumulation
Done By 40 provided a little food for thought here, discussing human being’s nature to keep working even past the point to where basic needs and wants are fulfilled. Productivity is at an all-time high, and it could be argued that many of us can do our jobs well even with much less time at work. However, work weeks aren’t being reduced. People continue to pump out as many hours as they can, and I would argue this is because of hedonic adaptation. More is never enough once you get used to more. However, I got off the hedonic treadmill years ago and I never plan on getting back on.

The Easy Road and The Hard Road
Johnny Moneyseed reminds us that while living a lifestyle that’s necessary to retire extremely early in life is difficult, it’s well worth the effort. Sure, we could all spend as much as we make and and worry about retirement when we’re in our sixties (and it’s too late), and it would be a much easier road filled with less worry about things like budgeting, asset allocation, sacrifice and personal growth. However, I would argue the hard road becomes quite easy once you travel on it for a little while. You start to realize that what you thought was sacrifice and delaying gratification actually turns out to be exactly the lifestyle necessary to hasten gratification.

Portfolio Value Reaches $250,000
Like the title states, All About Interest recently eclipsed 1/4 of a million dollars in portfolio value. Really astounding progress here. It’s great to see other dividend growth investors exceed their expectations and really succeed with this strategy, as it continues to inspire me to reach for the stars.

Exposed! The MMM Family’s 2013 Spending 
Mr. Money Mustache revealed his entire family’s spending for the last year. And, as expected, it was impressive. Even with all of the wealth his family already has, and all of the income they continue to rake in, they continue to live a relatively frugal existence – even if they weren’t trying particularly hard. That’s the cool thing about living frugally for years on end – hedonic adaptation works both ways, and once you get used to living on less it just becomes second nature.

2013 Goals – Full Year Checkup
Passive Income Pursuit did a pretty solid job with his goals this past year. He had a lengthy list of personal and financial goals in 2013, and, overall, he did great. His passive income generation is extremely strong and he and his wife had a great year filled with a home purchase and incredible day job income.

Weekly Purchase – UL
Compounding Income decided to purchase shares in the global juggernaut that is Unilever. As discussed above, you could make an argument that UL is either slightly undervalued or slightly overvalued, but the thing that can’t really be argued is the fact that this company has hundreds of high quality brands under its corporate umbrella. And it’s wonderful to be business partners with a company like that.

The Tipping Point Of Dividend Investing
Eli Inkrot put together a really nice article that discusses a number of “tipping points” of dividend investing. Whether it be the first time you amass $1,000 per year in dividends, the moment when your dividends can cover your housing expenses or the ultimate goal: complete financial freedom where your dividend income covers all of your expenses, dividend investing is wonderful in that it provides tangible reinforcement. You can actually see your expenses slowly getting covered, and that’s really inspiring.

5 Reasons You Need a Will
RB40 discussed how one of his 2013 New Year’s resolutions was to make a will, and he completed this task toward the end of the year. He talked about why you may want to put a will together soon, if you haven’t already. I haven’t put a will together yet, but now that my assets are starting to built to a fairly sizable amount this is something I’ll need to accomplish in the near future.

Top 5 Dividend Stocks For 2014
Charles went out on a limb here and put his stamp on his choice for the best dividend stocks for the coming year.  I agree with some of his picks, and Health Care REIT (HCN) looks particularly interesting to me. I’m going to come out on record and say that I don’t think dividend growth stocks as a broad group are going to have a great year. I think after the massive run coming out of the Great Recession, productivity maximization and rising interest rates are likely to put a damper on many dividend stocks. I’m greatly hoping I’m correct in my thesis as that would provide most of us long-term investors in accumulation mode to stock up on cheaper stocks, however if I’m completely wrong I’ll still stick to trying to find the best individual values I possibly can.

Thanks for reading.

Photo Credit: Benoit Mahe