Weekend Reading – February 20, 2015

happyweekendI passed up on what might have been an amazing experience and opportunity, but I don’t regret it.

I was kindly invited to speak at one of the 2015 Chautauqua events behind held down in Ecuador. You might have heard of these via James Collins’s blog or Mr. Money Mustache’s.

It seems like an amazing event and I certainly have intentions on visiting Ecuador at some point or another as I understand it’s quite the frugaltastic place to live, especially Cuenca. Not sure I can deal with Seattle-like weather, though.

Anyway, I initially accepted the offer as I was simply overcome with joy and excitement. The thought of spreading the message to a new audience seemed like a fantastic opportunity and challenge. However, the more I investigated the potential readership that might be visiting, the more I felt like I was coming from a totally different perspective.

I’ve spent some time poking around Jim’s and Pete’s posts (and Pete’s forum) through the years and I’ve sometimes found a disappointing dogma regarding investing (if you don’t invest in index funds, you’re a fool) and frugality (you should always try to make more money and if you don’t earn $100k/year, you’re a fool). I’m not trying to paint anything with a broad brush and we all have varied attitudes toward saving and investing (as it should be), but I also question whether or not someone who has the kind of money (and time) to spend on a Chautauqua in Ecuador is really coming from the same place as me? And would I be able to provide value if I’m uncomfortable with coming from such a different perspective?

After considerable thought, it occurred to me that I’m really not interested in selling anything at all (my strategy or any other). I’ve shied away from arguments more and more in regards to frugality, financial independence, investing, and saving, as it’s almost impossible to say that one strategy is somehow perfect for everyone. Personal finance is personal for reason. So if someone disagrees with what I’m doing, that’s fantastic. I encourage everyone to find what’s best for them. But I also have no interest in flying halfway around the world to engage an audience that is perhaps uninterested in what I’m talking about and what I’m doing. I’m only interested in inspiring through action and showing what the journey to financial independence looks like on a modest income, high savings rate, and investing in high-quality dividend growth stocks. If someone thinks what I’m doing is unsound, well…it costs you nothing to come and go.

But it all worked  out in the end as I’ll be able to continue focusing on doing what I normally do best that week I’d otherwise be in Ecuador – writing my heart out and living a really blessed and wonderful life. And I think that’s a pretty good alternative.

So I  guess I wanted to share some behind-the-scenes action with you readers. And I continue to appreciate all of your support. Perhaps I’ll branch out at some point, but I’d prefer to speak at an event that was perhaps more catered to what I’m doing and what I’m talking about so as to not feel like a fish out of water. However, I’d also feel quite okay with this blog (and my freelance writing) being the totality of my creative output. I’m blessed to even be here in the first place, which means I don’t feel the need to push the envelope even more. Someone once asked me if I’d be okay not growing the blog (and my income) any more and just cruising to financial independence with the status quo, and my answer to that question is yes. I’m really fortunate to have a great balance going on right now.

As usual, I’m including a few articles I wrote or read this week and enjoyed, and I hope you readers enjoy them as well.

Have a great weekend!

Buffett’s Latest Trades: Buys 15 Stocks, Sells 5 Stocks
I was up until 4 a.m. this past Wednesday putting this piece together. I not only listed every transaction from Berkshire Hathaway’s common stock portfolio from the fourth quarter of 2014, but I also discussed a little about what each transaction possibly means and where the portfolio is going. As I wrote about last quarter, there is a continued trend away from energy and toward media, which is really interesting. Also notable was the fact that he didn’t actually sell out of Deere & Company (DE), but was actually buying the stock all along. He received special confidentiality treatment from the SEC, which made it look like he sold out of DE in Q3. I remember a few readers asking me if I was still going to hold DE if Buffett was selling. I answered the same as what I’m recommending now: As always, it’s important to think independently and come to your own conclusions. Selling DE just because Buffett was (or it looked like he was) would have been a mistake if you believe in the company’s long-term prospects.

Bill Gates’ Latest Trades: Buys 3 Stocks, Sells 4 Stocks
This article didn’t take me as long, but was, in my view, just as insightful and interesting as Michael Larson is a well-regarded investor. It’s particularly that Larson and Gates also closed out their Exxon Mobil Corporation (XOM) position like Buffett.

“What do you do?” Are you a plumber, or a hiker?
Steve wrote an article that strongly reminds me of a piece I wrote a couple of years ago. And it’s basically questioning who you are. My answer to that question – who are you? – was never my job title. Because I’m much more than that. While this needn’t be true for everyone, I’d be willing to bet that most people can (and probably do) offer much more to society than just what they do during their workday. As such, your answer should reflect that.

January 2015 Dividend Income Update – Milestone moment
Mark’s on pace to cross $10,000 in annual dividend income later this year. Excellent work. Think of what you could do with an extra $10,000 every year that you not only don’t have to work for, but also will likely increase faster than inflation. Now we’re talking, right?

Female investors often beat men
It appears that not only do women, on average, generate greater total returns than men, but also do so with less risk. I guess I should have Claudia run the portfolio? It’s too bad she’s not interested. I don’t doubt the results here, but I do sometimes wonder where all the stats are coming from with these studies. For instance:

Females typically save 8.3% of their income, while men only save 7.9%, Fidelity found after looking at over 12 million retirement accounts and adjusting for certain pay disparities between men and women.

I wonder how Fidelity would have access to 12 million individuals’ exact income and savings records? Furthermore, that’s well above the savings rate information that I’ve come across, and we can see that, even within the personal finance community, everyone budgets a little differently. So I always take these kinds of studies and stats with a grain of salt.

The personality types that make the most and least amount of money
Another study, but it is unique in that I don’t know if I’ve come across one quite like this before. I’m personally an INTJ and a pragmatic. Looks like I’m underperforming myself, but I have no doubt I’d be right there where I should be if I were still miserable and working 50+ hours per week in the auto industry. But money buys happiness, right?

Is Ethical Dividend Growth Investing Possible?
I plan to address this topic myself at some point, though I doubt I’d be able to offer much of a different viewpoint or additional value here. DGI did a pretty good job. There’s certainly a spectrum there, as with anything in life. And ethics are a big gray area. I think on one side of the spectrum you have “Companies that are out to do nothing but evil” on one side of the spectrum. On the other, you have “Companies that do nothing but wonderful things with no negative aspects whatsoever”. Now, it’s obvious that no companies exist completely on either side of the spectrum. Where you fall in that spectrum, in terms of what you personally judge to be ethical and not ethical, is really a personal call. But maybe I’ll expound on that a bit more at some point in the near future.

Am I Crazy for Not Wanting a House?
I don’t think so. Neither does Robert Shiller, apparently. I’m a lifelong renter, and a happy one at that. Like the dogma I was mentioning above, those that believe you’re better off buying rather than renting 100% of the time regardless of your personal circumstances are just plain incorrect. Sometimes buying is better. Sometimes renting is better. Again, a personal call and also depends on your local market. I personally enjoy renting and via calculations have figured out I’m better off financially. However, even if owning were cheaper (which it’s not), I’d still rent. I enjoy the carefree lifestyle and it’s worth a premium if one were to be attached. But since residential real estate returns about 0% in real terms and stocks are somewhere around 7% over the long haul, I’ll rent the former and own the latter.

Trades – Emerson Electric (EMR) and Johnson and Johnson (JNJ) Purchases
Write Your Own Reality recently picked up shares in a couple of the greatest companies in the world. Glad to be a fellow shareholder in both of them!

I Added Shares To This Successful Spin-Off Company
Another stock purchase and another great company. I’m a shareholder in this company as well, but Ryan rightly pointed out the kind of shareholder wealth that Baxter International Inc. (BAX) has generated via spin-offs. And guess what’s coming up? Another spin-off.

The Early Retirement / Financial Freedom Spreadsheet!
J$ put together a cool spreadsheet that can give you a pretty good idea as to what age you’ll be financially independent. I personally prefer a calculator and a piece of paper, but spreadsheets are nice too. I downloaded it and replaced J’s information with my own and it looks like I’m on pace for FI by 38/39 years old, which is right about where I figured I was. Of course, that’s factoring in that I’ll continue to remain just as aggressive with saving and investing, but online income can oscillate a bit. Nonetheless, there’s a margin of safety there with being a year or two early, so I’m feeling extremely confident here.

Monthly Expenses (January 2015, Taipei, Taiwan)
I always enjoy seeing what other people spend, not to benchmark myself but to be inspired to spend less and/or see what’s really possible in terms of a budget. And Jeremy and Winnie are showing how much it costs to travel the world in relative luxury. Good stuff!

One More Stock To Build A Retirement Portfolio Upon At Any Age
Regarded Solutions has put together a series of articles that focus on core stocks to build a portfolio around so as to have a reliable source of growing passive income in retirement. This latest article focuses on Realty Income Corp. (O), which is a company I wish I had a bigger equity stake in.

Kahneman: Clients Driven by Losses, Not Gains
This was an interesting piece on investors’ psychology. I agree that people are more fearful of losses than they are excited about gains, but I’m not necessarily sure that’s a bad thing. A 10% loss takes an 11.11% gain just to break even, so I like to rely on Buffett’s two rules: #1 – Never lose money; #2 – Never forget rule #1. However, I disagree with the thoughts on Buffett near the end, as Buffett was a stock picker for years, especially early on when he achieved some of his biggest gains in percentage terms.

Somewhere over the rainbow
When I grow up I want to own my own island like Richard Branson. For now (and probably forever), I’ll have to enjoy the public beaches here in Sarasota, which are a lot cheaper and pretty enjoyable.

Full Disclosure: Long DE, XOM, JNJ, EMR, BAX, and O.

Thanks for reading.

Photo credit: gubgib/FreeDigitalPhotos.net

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77 Comments

  1. Thanks for the mention Jason! I can completely understand the feelings for the trip. There is a certain time and place for sharing your investment philosophy, and at no point is selling someone make sense. Ultimately, people need to find what works for them, and there are plenty of resources, yourself included, to help answer questions or clear up concerns should there be some.

    As a spreadsheet nut, it was fun checking out J’s work this week.

    Enjoy your weekend!

  2. Excellent post! DM! I utilize your post and blog roll as what I consider an open debate forum. I review the pros and cons of various portfolios and comments from various people. I made the decision to purchase BAX 25 shares after making an informed decision. But KO I did not purchase even though many sites recommended it. I am comfortable with saying I am torn between DPS an PEP at this time because I like their vision and business model I just don’t have the money at this time. To purchase thanks for giving a 45 year old women the confidence to embark on this journey. Of dividend investing also I do have the pleasure of owning a home and one investment house that provides me with $700 a month profit after expenses and just like the stock market some months home and rental income is a headache and sometimes it is a joy but this form has taught me the importance of not having too much exposure in any sector lol! I have also figured out how to save an extra $40 per month by eating out once every other weekend and enjoying more DVD movie nights my husband is thrilled lol! I love this site because you stay true to yourself and that is what matters no one is perfect! But I appreciate your honesty! Thanks again for sharing your truth and thoughts with strangers.

  3. DM,

    Talk about a curveball – had no idea you were mulling over going to make a speech/presentation on your lifestyle. I don’t blame you for turning it down – especially if it’s not your goal to “sell” what you are doing, as you purely enjoy to show what your life is about, YOUR personal financial journey and the events that are leading you through. AI am sure your family is happy to keep you in Florida. How’s the weather by the way down there? We have been hitting some harsh winter weather up here in Cleveland… talk about -20 to -25… just freezing.

    Keep it up DM, great list here! Always interesting to see what Warren & Bill are up to!

    -Lanny

  4. W2R,

    Thanks for the support. Yeah, it seems like an exciting adventure, but it just doesn’t appear to be the right opportunity for me at this exact time. The last thing I want to do is rehash the index investing vs. dividend growth investing argument for an entire week. Now, I’m not saying that would happen. But the mere chance of trying to talk anyone into anything, sell anything, or defend myself in any way sounds like a total bummer. I inspire through action, not by trying to talk anyone into anything. Just not my thing.

    J’s spreadsheet was cool. It basically confirmed what I was already looking at, but it’s nice sometimes to double-check or triple-check the numbers, even if it’s a foregone conclusion. 🙂

    Thanks for dropping by. Have a great weekend over there!

    Best wishes.

  5. Fon,

    Thanks for the kind words. I’m glad my experiences, writing, and journey have provided you some confidence to embark on a journey of your own. Sounds like you’re doing great over there.

    Nothing wrong with DVD nights at all. I was actually just talking with an old friend the other day and were talking about how fun it is just to grab some takeout and have a movie night at home. It’s really the simple things in life. 🙂

    Thanks for dropping by. Have a great weekend!

    Cheers.

  6. Lanny,

    Right. It’s really about showing what the journey looks like; I’m pulling back the curtains, if you will. Now, I don’t always make the right choices and those decisions will bear themselves out over time. But that’s really the beauty of it – showing all the ups and downs. But trying to condense everything I’m about into a two-hour speech would be impossible and really undesirable. It’s more than the money, you know?

    Appreciate you dropping by. It was interesting to see both Bill and Warren sell out of XOM. I’m not surprised by the selling of MCD for Gates, however. Seems prudent with the business model under fire. I’m holding for now, but I don’t expect great things.

    The weather down here is pretty nice. It’s supposed to be 75 degrees tomorrow. We’re actually visiting Anna Maria island Saturday afternoon, which is about 30 minutes away, to see what it’s like over there. I’d love to move to a location perhaps closer to more walkable amenities and closer to the beach within a few years. We have plenty of stuff within walking distance to us, but it’s more by accident as it’s very suburban where we live. I have a few locations in mind, of which Anna is one of.

    Hope you stay warm up there! Negative 25 degrees is unbelievable; I’m cold if it’s POSITIVE 25 degrees!

    Best wishes.

  7. Dividend Mantra,

    I think you made the right decision by not going to that speaking event. It could be basically an “argument” with people over index investing or dividend growth investing. Honestly, I would of did the same thing and changed my mind also.

    I look at index investing is that you are investing no matter if the index is up or down. So if an investor is dollar cost averaging into SPY, for example, then the could possibly loose money as the index is going higher and higher. If an investor has a portfolio of dividend stocks they can pick and choose which stocks to buy and when. With the latter, you get to learn more about how they businesses make money, care more about the businesses due to being an owner, and you get to understand the numbers. To me this is a win-win for the dividend investor who invest in dividend paying stocks.

    I looking forward to the day, I will not have to work for someone anymore. The issue of renting vs owning is a never ending argument. I believe a personal residence is a liability as it sucks money out of your pocket every signal month. I do believe people have to choose whats best for them and their situations when it comes to renting vs buying. For disclosure, I currently rent.

  8. Don’t blame you for deciding not to go in the end. I think it’s a great honour that you got invited though. You could always hold a presentation down in Florida one of these days and I’m sure a bunch of blog readers will show up. 😀

    A lot of great articles that you shared with us. I love J Money’s spreadsheets, they are great. I’m trying to modify them a little bit to incorporate dividend investing. You’re on track 38/39 is great!

  9. I can’t wait to hear about other future interviews, events, or opportunities that make more sense for you, Jason. I guess this weekend you’ll have to settle for your southern beach paradise with the lady you love most, big bummer there 😉

    Loved your DTA articles, and wow were there some crazy moves in those heavyweight portfolios. I’m very excited to dig into the other articles you linked and that was very nice of you to share mine. Have a great and relaxing weekend.

  10. Dogma can be a funny. I sometimes try to argue with myself, taking the opposite position from what I believe and trying that idea on for awhile. I recently did this with Roth IRAs, which everybody Loves (with a capital L)

    Upon arguing with myself, I learned that Roth IRAs are not nearly as good as I thought they were, and in fact during the accumulation phase probably hurt more than anything. Then when I wrote about it, I got hate mail from people saying they weren’t going to read my blog anymore because I said bad things about Roth IRAs. The religion of personal finance is a powerful thing

    And speaking of personal finance, thanks for sharing our big budget for rockstar living 🙂

  11. IP,

    Well, I’m not sure if any arguments like that would have come up or not. I’ve never been there, so I really have no idea. But I think it would be incredibly difficult to make my story be known and provide value in such a venue, especially when Jim, Pete, and some of the other people that are participating preach a very different type of investing. So I suppose there’s a chance of debates, which I’d just prefer to avoid at this point. If my success and results don’t speak for themselves, then I have nothing left to say.

    Renting vs. owning is another interesting and never-ending debate. I’ve noticed that some homeowners can be particularly emotional about it, insisting that homeownership is the better financial decision for everyone. But we both know that can’t possibly be the case. I look at it pragmatically, like I do with everything else. If there was a massive premium attached to renting, I’d reconsider. But that’s just not the case in my market or anywhere else I’ve ever lived. In terms of the “hassle factor”, renting is just better and easier. The fact that it’s currently cheaper for me is just icing on the cake.

    Thanks for dropping by!

    Best regards.

  12. Tawcan,

    It’s definitely an honor to be invited. I tried to make sure that Cheryl knew how honored I was. It looks like an amazing experience. But it just doesn’t seem right for me at this particular time.

    The spreadsheet is definitely cool. It didn’t really tell me anything different from what my calculator shows, but it’s nice to have that verification. 🙂

    Have a great weekend!

    Best wishes.

  13. Jeremy,

    Dogma can definitely be funny. I try to have an open mind, even if I don’t believe in something. For instance, I have your blog, Jim’s blog, and Pete’s blog all on my blogroll even though all of you advocate index investing. I think that goes to show that that I acknowledge that there’s certainly more than one way to successfully invest and even go so far as to support those different points of view in a way. A lot of ways to skin a cat, you know?

    No problem on the mention. Hope you and Winnie have a great weekend!

    Cheers.

  14. Ryan,

    Thanks for all the support. Really appreciate it. I’m incredibly fortunate. I live in a great city with great weather and I get to write for a living. Life is amazing. 🙂

    Happy to share your article. Let’s hope the upcoming spin-off works out as well as some of the past moves!

    Best wishes.

  15. There’s certainly a, well, cult-like (cult-lite?) aspect to the MMM community. He speaks the truth…and sometimes that’s taken as gospel.

    I like how you own your approach, Jason. Be true to yourself and you can’t go wrong.

  16. Hi DM,

    Thanks again for the weekend reading list.
    Personally I think you should reconsider making the trip. Your message is just as applicable as any of the former speakers. The presentation doesn’t have to be about DGI vs indexing. It could simply be about your approach to finding and analyzing companies. The DM method for determining where to invest. Not everyone wants to index and forget. Some people want to hear what you have to offer.

    Good Luck

    Roger H

  17. Thanks for the mention, Jason. It’s interesting how often people – me included – think of the answer to the What Do You Do question to involve a discussion of our jobs. But like you, most of us are far, far more than just what we happen to do to bring home a paycheck.

    I happen to be in your [relative] neck of the woods right now, Jacksonville, FL, for a family vacation to Disney World. Brrr, it gets cold in northern Florida! 🙂

    I hope your writing is continuing to go well for you and you’re enjoying your time putting your thoughts down onto digital paper. It’s both awesome and extremely satisfying to know that you are, once and for all, doing exactly what you love.

  18. Hi DM!

    Thanks for the weekend reading, I’ll be sure to check those articles out. I was wondering what you think about KO’s current situation? The dividend was raised over 8% but this came with the expansion of their payout ratio. A company can’t raise their payout ratio forever and it looks like with KO it’s coming close to that point where payout ratio can no longer be expanded. Also I think that this year we’ll not be seeing any rise in earnings. So I guess what I’m asking is are you worried about the sustainability of KO’s dividend over the long run?

    Thanks a lot and have a great weekend!

  19. Hats off for speaking up. Well, you must do exactly as you please.

    Since I’m writing from (almost) the opposite end of earth, I don’t think the Visa officials would look upon such a request to visit Florida too kindly :)) (kidding)

    Off to read what you’ve posted. You Americans have this saying– ymmv.

  20. First up, thanks for the mention! It’s great to be mentioned on this blog.

    Second, I smiled when I read this:
    “After considerable thought, it occurred to me that I’m really not interested in selling anything at all (my strategy or any other). I’ve shied away from arguments more and more in regards to frugality, financial independence, investing, and saving, as it’s almost impossible to say that one strategy is somehow perfect for everyone. Personal finance is personal for reason.”

    Personal finance is personal and as long as you believe in your strategy AND it’s realizing your financial goals, that is all that matters.

    I’m not a huge fan of MMM forum, I like his posts, but those folks on his forum are like a cult.

    Take care Jason and keep up the great work on your journey!
    Mark

  21. Hi DM

    I think you made the right choice there since the audience wasn’t going to go in the same direction as you have successfully proven and did.

    The other day you were mentioning about the possibility of maximizing your content and time about writing. I was thinking whether you can (and I believe you can) influence a lot more people on the other side of the world who will benefit from your journey. I am not an expert in any reach out marketing gimmick but the objective is to ultimately influence more people from your stories. At least, you know you have a wide fan base out there around the world 😀

  22. I agree with your thoughts on the MMM forums. While I do believe that index investing is appropriate for many people who are not interested in learning the skills necessary to evaluate the health of a business and whether the asking price is fair, the attacks on those who choose individual stocks would make someone seeking honest discussion on the subject believe the 11th commandment is “Thou shalt index”. It’s a shame because they are indoctrinating people with valid questions to believe they cannot do something so why try, why learn, why take control of your finances when you can cede that control to one particular ideology. Thank you for your site and the insight into your journey, which is very much like my own.

  23. Just because you have a different path to FI doesn’t mean it’s wrong. I don’t currently plan on charting the same path as you to FI, but I still enjoy listening to your perspective. Everyone’s journey should be what is most comfortable to them. Cheers!

  24. DB40,

    Agreed. I love Pete’s stuff, don’t get me wrong. But that cult-like groupthink on the forums is something that I’d prefer to avoid. Since his readership base is exponentially larger than mine and he’s already been there a few times, the odds of running into some of those forum members seems to be quite high.

    I often think about what Buffett says about tap dancing to work, where he loves everyone he works around, and avoids working around people he doesn’t like. Well, I now have the amazing benefit of choosing who I work around. And the thought of working around even one person I don’t want to means I’d prefer to avoid the whole thing.

    Appreciate the support. I’m glad that what’s really going on here – staying true to myself – is ringing through.

    Have a great weekend. Thanks for dropping by!

    Best regards.

  25. Roger H,

    Thanks!

    I agree that my message is just as applicable. I have no inferiority complex going on. In fact, I think my message is perhaps even more applicable to society at large due to my more relatable income and approach. But it’s really the thought of bumping up against people I’d rather not bump up against that I fear. I’ve spent maybe a couple hours or so of my life poking around the MMM forums throughout the years and, really, that’s a couple of hours I’d rather have back. The thought of increasing that exposure to a whole week and doing so in person is just something that I’d much rather avoid. I’m just fortunate to be in a position to pick and choose my opportunities, and this particular one doesn’t seem to be right for me right now.

    It’s a shame because I was really looking forward to meeting Pete. But I think I’ll have chances to do so down the road.

    Have a great weekend!

    Cheers.

  26. Steve,

    Indeed. It’s funny how many people automatically answer that question – “Who are you?” – with their job title. Jobs weren’t even around 150 years ago. What in the hell did people do then? Did they have no identity???

    Jacksonville gets very chilly. In fact, Sarasota is right on the borderline for me as far as attractive temperatures in the winter. If Hawaii wasn’t so expensive, I’d be living there. But I think there’s a good chance we might move a couple hours or so south in a few years. I’m a total baby when it comes to cold weather. Don’t get me wrong, it’s in the mid-60s right now and it’s expected to hit somewhere around 73 or so today. But I’d prefer 80 degrees right through the winter. 🙂

    Appreciate all the support. I wish the same for your writing and your journey. And have fun down in Orlando today. It should warm up a little later!

    Take care.

  27. I enjoyed the DTA articles. I do pay attention to BRK’s trades just for new ideas and perspectives, but I’ve never tried to follow Buffett in or out of a stock, and I have no plans to exit XOM. I understand why some investors mimic his trades given his track record, but I can think of at least three good reasons not to. First, he might be wrong! It may not happen often, but it does happen, as he freely admits. Second, as you note, his trades are always announced well after the fact, so conditions may have changed in important ways during the interim. And third, every potential investment has to be evaluated based on the investor’s personal goals, as you have noted in many of your articles. What’s right for Buffett may not be right (or even available) for me. Keep up the great work!

  28. Sampo,

    I’m not particularly concerned about KO’s ability to pay the dividend or grow it right now. But it isn’t as comfortably covered as it used to be.

    Free cash flow is very healthy and much greater than it was even five years ago. So Coke is still growing. They’re having profitability issues right now, however, due to currency effects, Venezuela, increased media spending, and restructuring. But volume growth (including sparkling) continues to surprise to the upside. And they have new billion-dollar brands in Fuze, Gold Peak, and I LOHAS. So the moves into still continue to work for them.

    I think they have some near term troubles, but my answer to your question regarding whether or not I’m worried about the sustainability of the dividend over the long run is no.

    Hope that helps!

    Cheers.

  29. austereseeker,

    I’m fortunate to be in a position to take on selective opportunities as they make sense. While Ecuador sounds amazing and I’m sure it’s a lot of fun, it just doesn’t seem like I’m the best fit for it. And that’s really okay. I’m not someone who thinks that they have to take on every opportunity that crosses their desk. There are opportunity costs to everything, and I would have missed out on doing what I otherwise love for a week.

    We all must do as we please, which includes buying back our freedom. And freedom extends to taking on projects and opportunities that make sense. 🙂

    Thanks for stopping by!

    Best regards.

  30. Mark,

    “Personal finance is personal and as long as you believe in your strategy AND it’s realizing your financial goals, that is all that matters.”

    Exactly. Couldn’t agree more.

    And I’m with you on the MMM forums. I’ve largely avoided the place because it totally turns me off. Big fan of Pete and his writing, but not a fan at all of the forum board. But that’s okay. Always opportunities elsewhere.

    No problem on the mention. Can’t wait to see you bust through the $10,000 mark later this year.

    Cheers!

  31. B,

    Thanks! I’m definitely comfortable with my choice. Honored and humbled to be even invited, but not every event is right for us at that particular time. Just the way it goes.

    I don’t really market the blog or my writing at all. I’m really fortunate in that most opportunities have come to me simply by working hard and producing the best content I can. I’m certainly interested in reaching a broader audience and I can see, based on the stats, that’s happening. I’m truly blessed to be able to reach people all over the world. Doing my best to continue that. 🙂

    Thanks for the support. Have a great weekend!

    Best wishes.

  32. “While I do believe that index investing is appropriate for many people who are not interested in learning the skills necessary to evaluate the health of a business and whether the asking price is fair, the attacks on those who choose individual stocks would make someone seeking honest discussion on the subject believe the 11th commandment is “Thou shalt index”.”

    I couldn’t have said it better myself. 🙂

    Totally agree. Indexing is great, especially if you have no interest in following businesses and looking up financial statements. But to say it’s 100% better 100% of the time for 100% of the people is just plain false. I know because I’m one of those people and I’ve not only done better doing it my way, but I’m doing it in a way that works for me. Nothing about personal finance is one-size-fits-all.

    Appreciate the support very much. 🙂

    Best wishes!

  33. FF,

    Agreed. The best approach/strategy is ultimately what works best for you. Sometimes I see dogma and it’s really disappointing. It would be like a doctor saying that everyone should be a doctor because it’s great to fix people and make a lot of money. Great for that person, but I (and many others) have no desire to be a doctor.

    Do what’s best for you and ignore the noise. I think, in the end, I decided to avoid Ecuador on the off chance it became noise.

    Best regards.

  34. Jim,

    Agreed 100%. While Buffett is the one of the greatest investors to ever live, one should ultimately invest in a way that works best for them and their goals. If I were interested in copying Buffett to the T, I’d probably just buy BRK and be done with it.

    I’m certainly glad I didn’t sell out of DE. It was a great illustration to some of the points I’ve made in the past. 🙂

    And I also don’t plan on selling out of XOM either. Not buying any here, but not selling either.

    Cheers!

  35. Good idea on not going. I used to religiously follow MMM and the forum but it became cult like. Pete became more and more forceful of his ideas. The people on the forum had fallen so deep into the belief that they lost touch with core principles. I also became like that and started to preach the same way in real life. I had to take a step back and realize it was controlling my life.

    I follow your blog along with Pete’s but now I visit yours much more frequently. I’ll go over to Pete’s for anything DIY or ideas. What I like about your blog is that you are open minded. I don’t agree with everything you do, but I’m not going to troll or tell you what to do. This is a blog about YOUR path to FI. I come here to get ideas from you and other folks who comment about investing. I day/swing trade and invest long term in stocks, indexes, real estate, & much more. It’s really about what is good for each individual. Set a goal and stick to it.

    Thanks for the share.

  36. Thanks for the mention. I do not invest based on my ethics beliefs. I think that people who tell me I should be following ethics beliefs essentially are telling me I should be focusing on “their” ethics beliefs. I had someone post on my site that it was ok to invest in defense companies, but it is not ok to invest in tobacco. This is the problem with ethics investing – anything you do or believe in, could affect the ethics/morality of someone else. I certain that those who are against tobacco or alcohol invest in something else that is against someone else’s ethical/moral beliefs. That could lead in me not investing in anything. I am sure you can add more to the discussion or put your own unique twist on it.

    As for MMM – I am very dissapointed because the people there are focusing too much on dogma. I am actually scared a little bit, because when you have people who blindly invest in index funds, and do not see any other way, could pose risks down the road ( remember how everyone thought housing could only go up, and how renters are dumb for throwing money out the window etc, and how it turned out). I had a very bad experience on their forum, because someone was mocking me personally. Plus, an index is not really some magic pill for investing success, although I do understand why many people use them and I am ok with it. There are hundreds of way to achieve FI – be it dividend paying stocks, index funds, rental real estate, oil and gas wells, etc. If indexing works for some thats fine – the problem is that they are going to waste your time arguing why the strategy that you have picked for yourself after a lot of research, and why the strategy that fits with your goals and objectives is not good. People that do not see further away from their nose are dangerous.

    As for dogma – you and I have a disagreement on housing. But I think the disagreement is based on our unique situations and locations and goals in life.

    Either way, have a nice weekend.

    Dividend Growth Investor

  37. You should make the trip. There’s nothing to lose, you’ll catch some sun, meet some people and have a blast. You’re trying to persuade yourself that not going is smart, but it’s not. Sometimes good, lucky things happen when you reach outside your comfort zone. Love your blog, btw.

  38. YOLO,

    I agree. I’ve been to the forum boards a few times now, but each time was more and more disappointing. I love Pet’s take on things and I appreciate his perspective even when it’s different from my own, but I don’t take anyone’s word for gospel. Ultimately, as you said, we have to do what is good for us as individuals and stick to that. If you put together an actionable strategy that is sound and built to succeed and give it your all, you almost can’t fail.

    Thanks for the support and readership. Really appreciate it!

    Best wishes.

  39. DGI,

    Agreed there on ethical investing. Kind of what I was talking about in the post, people like to project their ideas onto others as dogma. So what’s ethical for them must be ethical for you. That’s probably why there have been so many wars throughout human history based around religious dogma. People think whatever they believe in is so right that others’ beliefs are wrong and need to be vanquished. I sometimes wonder about humanity.

    Yeah, I don’t even bother with the MMM forums anymore. I visited there a couple of weeks ago or so when doing research on whether or not I think I might be a good fit for Ecuador, and it was really eye-opening. I figured out pretty quickly that I’m not the right guy for the trip. Again, that’s not a bad thing. Not every opportunity that comes upon us will be the right opportunity.

    Thanks for dropping by. Hope you have a nice weekend as well!

    Best regards.

  40. AR,

    Thanks for the thoughts there. I’ve already declined officially, so they’re on to someone else.

    I agree that stretching outside of our comfort zones can yield great results, and I’ve certainly done so many times now…which is how I got here in the first place. But I think stretching just to stretch without a clear reason for it just doesn’t make sense for me. Not to say that’s the right way to go for everyone, but I’m perfectly okay with taking measured risks when they make sense and avoiding them when they don’t.

    Appreciate the support. 🙂

    Have a great weekend!

    Cheers.

  41. Hi Jason/Sensei,
    Your willingness to “put yourself out there” is refreshing. I admire how you think things through. I appreciate your honesty and your simple and commonsense method for evaluating dividend stocks. Thanks for writing this blog.
    Regards,
    Tom

  42. I’ve read a few of MMM’s posts before, but it wasn’t anything that really captured my attention. I think I like your blog better. 🙂

    Really wonderful job on the DTA articles about Buffett’s and Gate’s trades. I’ve never tried to follow Buffett in or out of a stock (I saved myself the trouble and speculation by buying some BRK.B), although seeing what he does is usually pretty interesting.

    Thanks for putting together this weekend reading list!

  43. The whole point of being FI is that you just do as you please. Ha! 🙂
    There is nothing more to add to that.
    Cheers.

  44. An interesting and honest response Jason. Thanks for sharing your thoughts. Given your concerns, I don’t think I would have participated either. Who am I kidding, I don’t have time to participate in ANYTHING additional. We’re off to the beach. Hope you enjoy this weather too. Have a great week buddy.
    -Bryan

  45. Thank you for your great article about Buffett’s last SEC report and stock moves. I was astonished that he closed his Exxon investment, because it was innitiated for just a short time. I guess Buffett was aware of movements of the oil price and normally extremes will come back to normality. He could sit the situation out, but he sold. Maybe he sees larger troubles of this sector arrising, comming from the massiv fracking activities? Or he sees political trouble with Russia and a longer time in competition of the energy sector with overall lower prices and margins for the company?

    Regards

    Marco

  46. Hi Jason,

    Thanks for the open and honest post. You nailed it – “Personal finance is personal for reason. So if someone disagrees with what I’m doing, that’s fantastic.” I always tell my children that if people like them and what they stand for great, if they don’t great. At the end of the day you answer to yourself only with any decision, whether it be finances, relationships or your educational path – you are the only one who needs to like what you are doing.

    I bet you were honored to be invited even if the event did not fit onto your investing approach. I suspect, if you did attend you would be well received. Your blog and your conviction of YOUR goals is inspiring. They were to me and I am sure most of your blog followers. I do not agree with you on everything, but that would not lead me to criticize those areas where we differ. I suspect the audience would have found you inspiring.

    On a side note, my past history is rocky as you know. I have owned many houses and home ownership is a money pit. I will be a renter for the foreseeable future. There is nothing better than passing on expenses like property taxes, and incidentals like water heaters and air conditioner replacements on to a landlord.

    Lastly, Ecuador is amazing. If you ever have the chance to visit the country does not disappoint. Phenomenal beaches, amazing food and don’t even get me started on the ladies, WOW.

    Have a great weekend.

  47. The funny thing about MMM ETF suggestion is it seemed to me that he suggests treating it like a dividend payer. Something like, ‘park all your money in a ETF and live off the quarterly dividends and cap gains.’ Essentially what I want to do with my ‘personal ETF that I am making up of dividend growth stocks and based on my selection I’ll get monies every week!

  48. After reading your article on the Buffet trades I dreamed about how cool it would be to have that kind of money to make those kind of purchases. Not the 50-100 quantities that I get to do now.

  49. Tom,

    Thanks for the support. 🙂

    I sometimes think things through too much, though I don’t regret that. Just my approach to life. One of the things I love most about my life now is that I just have time to think. It’s really an underrated activity.

    Hope you’re having a great weekend!

    Best regards.

  50. Seraph,

    Thanks for the huge compliment. I personally love MMM’s stuff, even if a good chunk of it doesn’t apply to me. But I don’t approach his work – or any other – dogmatically. Even I’ve changed a bit over the years in comparison to the me of 2010 or 2011. It’s great to have an open mind.

    Buffett’s moves (and Gates’s) were really interesting, though much more of the same. Continued moves away from energy and toward media.

    Appreciate you dropping by!

    Best wishes.

  51. Jos,

    Indeed. Largely doing what you want, when you want, and with who you want is a massive benefit to this lifestyle. I’m blessed and it gets better every day. 🙂

    Take care!

  52. Bryan,

    I hear you on being busy. I’m busier than I ever planned on being, though I’m not complaining. 🙂

    Going down to Ecuador would mean I’d have to put certain projects on hold, which are projects I rather enjoy. Just isn’t the right opportunity at the right time for me.

    Spent some time down at Siesta Key earlier today. Beautiful day, but everyone recognized that – it was the busiest I’ve ever seen it. (Note to self: Don’t go to the beach on Sundays anymore.)

    Cheers!

  53. DD,

    I was definitely honored to be invited. Seems like a great time down there. And I do want to visit Ecuador at some point, though this year is busy. I’ve got the trip to Omaha coming up for the Berkshire meeting and then we plan on going down to El Salvador in December.

    Yeah, renting is great. I’ve used a myriad of calculators over the years to figure out if I’m truly financially better off by renting. I am in this particular area. Now, I could go down to North Port and buy a decent house for under $100k. Or I could move inland and buy even cheaper. But I have no desire to do that. Generally speaking, the finances tend to favor renters in more urban areas. However, even if renting were more expensive I’d still do it. Not everything in life can be measured in dollars and cents. It’s just like how I’d have more money if I stayed at the car dealership. I’m after happiness, not more money/wealth than I need. Some people will never get that, which is just fine by me.

    Thanks for stopping by. Keep up the great work over there!

    Best regards.

  54. Hey DM sometimes missed opportunities are an opportunity of themselves! Hope you had a good weekend, I personally enjoyed the Buffet article. Way to have conviction with your system and not follow the herd!

  55. Marco,

    Yeah, the energy moves for the most part have been going on for some time now. I was a little surprised by the Exxon deal only because it’s a safe way to play energy and it was a rather large position. He tends to wind those positions down slowly. It appears to be opportunity cost to me, but the portfolio has been moving away from energy and toward media for some time now.

    Cheers!

  56. ed69,

    I’d have to find the articles Pete has written on investing, but I think he generally follows the 4% SWR. Of course, he now has superfluous wealth and income, so it’s almost a moot point.

    It would be nice to execute the size of the trades that Berkshire is working with, but it’s all relative. They’re running a massive conglomerate. I only need $500k. 🙂

    Cheers!

  57. DY,

    Great point. Indeed, sometimes missed opportunities are an opportunity. 🙂

    Appreciate the support and glad you liked the Buffett piece. I spent a lot of time on that one. The 13F wasn’t available to me until late in the evening. I didn’t even get started on the article until around 10 or so.

    Best wishes!

  58. Great decision and good for you that you decided to decline the invite. I understand your hesitation and reasons.
    I used to read MMM religiously in the part but increasingly I found that Pete was becoming rude and didactic in his writings. I found his tone becoming rude and that was enough to hit the unsubscribe button. I prefer your blog because your income and experiences are much more closer to reality and the normal population.
    Keep up the good work.

  59. Hey Jason,

    I was wondering what you think of Realty Income at present, and what you think a fair value to be. Perhaps an article in the future?

  60. Amit,

    I still read Pete’s stuff because I enjoy his perspective, even if it’s at times far different from my own. But I agree with you that my experiences and lifestyle is a bit more approachable. So I tend to empathize a lot more with people that are in a similar situation to my own.

    Thanks for all the support. Much appreciated! 🙂

    Cheers.

  61. Kevin,

    I last analyzed O back in 9/13:

    https://www.dividendmantra.com/2013/09/recent-buy-39/

    My fair value on the stock at that time was $45.68. Updating that value for the current dividend payout gives me $47.63. That seems appropriate to me, and perhaps on the upper end of what O is worth. It appears to be at least 10% overvalued right now to me, which isn’t surprising as most REITs are expensive right now. I’d be interested in O again in the mid-$40s.

    Take care!

  62. Jason, What did you figure your rate of return when you crunched in numbers in the retirement calculator?

  63. Amit,

    Thanks!

    I’m truly just an ordinary guy trying to achieve extraordinary things. I don’t have a problem with a conference in Ecuador or the people who can afford to go, but it’s also not really something I identify with.

    Appreciate the support.

    Best regards.

  64. Amit,

    I left the spreadsheet at 8%. That’s about the long-term average return of the stock market. You may want to adjust it downward to reflect a stretched stock market. I tried it at 5% and it didn’t make a big difference because the contributions are large and the time horizon is short. As I’ve written about, anyone aiming for financial independence with a time horizon of 10 or so years will find their savings rate to be the major driver of success, not investment returns.

    Cheers!

  65. I find it funny – and fitting – that you and I (and Jacob from Early Retirement Extreme) are all INTJs. My girlfriend is as well and she is also a saver. I wonder how many more personal finance bloggers are? More specifically – early retirement type folks, like Pete. Now I’m curious.

    Thanks,
    WE

  66. WE,

    I’ve heard that a few times now. I guess it has to do with a logical and pragmatic approach to life. You’ll also find a lot of engineers (like yourself?) are shooting for financial independence. I guess it’s a problem that some see solving. And once you figure out that it’s not all that difficult to solve (simple, but not easy), it becomes a fun and interesting challenge to conquer.

    Cheers!

  67. For years I’ve been following 15+ personal finance blogs, many of which are based on the goal of retiring early. This is possibly the most important post I’ve ever read on any of them. Too often we (I) compare ourselves to others, which is such a futile exercise given how different our backgrounds, upbringing, education, experiences, decisions, etc, are.

    Thank you for posting this reminder that the only person we should be comparing ourselves to is the person we were yesterday. If I can successfully implement the advice given above, I’m sure it will bring me much peace over the years.

  68. Paul,

    Appreciate the kind words and support very much. 🙂

    I agree that it’s not only futile to compare oneself to others, but also potentially harmful. If I would have started comparing myself to young, self-made millionaires in my late 20s, I may have never even started down this path, feeling like I had already lost. But I didn’t. I compared myself to me and what I thought I could do, envisioning myself financially independent at 40 years old, which is a great feat all in itself.

    Thanks for dropping by!

    Best wishes.

  69. I applaud you for making the right decision for you. I got into the FI journey so I could focus on being the CEO of my own life instead of the CEO of a company so whenever I get there I definitely *won’t* be going out and making speeches, as an introvert I just find the idea of public speeches repulsive. I barely passed my communications class.

    In these situations people usually say that you should step out of your comfort zone but I don’t think that’s always appropriate. One time I went to a dive bar, stepped out of my comfort zone, felt entirely uncomfortable there the entire time even though I was with my friends, and never did that again. I also never stepped out of my comfort zone on public speaking again as my career does not require it.

    It also bothers me when I meet adults who can’t handle others thinking differently from them so I don’t blame you one bit. I used to read a minimalist blogger, he was cool until he started insisting minimalism was something that everyone should embrace, that we should all give up cars otherwise we don’t care about the environment and that if we didn’t like what he wrote we could unsubscribe. He was very militant about his minimalism.

    He believed his ethics should apply to everyone. I couldn’t deal with that narcissism, plus I live in the mid-west where having a car is a need. Especially in the winter. I wasn’t the only subscriber that was offended by his arrogance, I unsubscribed and because at the time I was reading other minimalist blogs, I learned through one of those that he closed his blog after alienating his readers. I still like minimalism but I just don’t like pushy people who are afraid of different opinions.

  70. Anonymous,

    Absolutely. I love the idea of being CEO of Me, Inc. And it’s wonderful to be in a position to make decisions as to what you do and how you spend your day. That kind of freedom is worth far more than any object to me. 🙂

    I hear you there on close-minded people. I’ve always tried to approach things with an open mind, which is what made me such a great candidate for this lifestyle. But I’ve found that many, even within this community, aren’t as open-minded. And that’s a shame. I grew up in the Midwest, so I definitely know how necessary a car is in a lot of areas up there. For me to sit on my perch and demand that others live like me would be ridiculous. And that kind of speaks to the post I recently wrote about not comparing yourself to others. We all have different lifestyles, needs, wants, desires, and aspirations. To say that what I’m doing is right for everyone else would be crazy.

    Appreciate the support. If you continue to approach things with an open mind, I’m confident you’ll go far and have a great time along the way. Don’t pay any attention to the naysayers.

    Best regards!

  71. Thank you for sharing! Always enjoy reading your recommendation. As you may guess, my favorite of all the articles is the one about Women investing better than man. The stock market is a huge passion of mine and the fact that studies show I may have an “edge” in comparison to my male counterparts is pretty cool. With that said, I dont think investing skills have anything to do with whether you are a male or female. The stock market is blind and so is money. But I definitely enjoy reading such studies 🙂 I actually spoke about this same topic on my blog a few months back and had a two part series on women and investing. Im linking below in case your are any of your readers want to check it out–

    http://teachmetoinvest.blogspot.com/2014/10/why-more-women-should-invest-in-stock.html

    http://teachmetoinvest.blogspot.com/2014/10/women-and-investing-part-ii-five-simple.html

  72. Mabel,

    It seems to be that overconfidence is the problem for men. They think they can “outsmart” the market, but, as you mentioned, the market is blind. It doesn’t care about you or your supposed “edge”. Almost every long-term success story I’ve come across has come about because the person in question kept things simple, invested in quality businesses, and limited turnover/fees/taxes by not trading often. It’s simple, but not easy. We often think action is better than inaction, but it’s often just not true.

    Thanks for sharing your perspective!

    Best regards.

  73. Jason,

    I definitely appreciate where you were coming from regarding the Ecuador trip. Honestly, something rubs me the wrong way about designing an event where the majority are paying to fly substantial distances to talk at some retreat about…saving money. It sounds like some out there are simply trying to make an organized business out of the idea of financial independence and early retirement. To me, that isn’t what this whole process is about.

    Not even close.

    Good on you for sticking to your guns on this one. Regardless of how popular or well-read my blog gets, the only reason why you’d ever see me in Ecuador is for a vacation – or, if I’m brave enough, a new place to live! 🙂

  74. Steve,

    Thanks for the support!

    Yeah, this event just didn’t really seem to jive with what I’m talking about. To fly halfway around the world and spend a lot of money to discuss saving money just seems strange. I certainly admire the people behind the event and I think it’s a great idea at its core, but it just doesn’t make sense for me. Hopefully, I get an opportunity to arrange some kind of meetup here in the States, which would be a lot more approachable and sensible for what we’re aiming for here. 🙂

    I’d definitely like to check out Ecuador at some point as well, especially Cuenca. I hear the city is really nice, and the COL seems pretty amazing.

    Best wishes!

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