We all have to start somewhere. While there’s a plethora of resources out there for any interested parties, we’ve compiled here what we feel are the best resources available for someone just starting out on the journey to financial independence via living below your means and dividend growth investing.
We recommend Scottrade as one of my brokerages. I do so because their transaction fees are fair and they have a ton of local offices throughout the US. It’s reassuring to know that if I have a problem, I can visit a local office and talk to a human being. And if it’s after hours, I can call and actually get in touch with someone. I also enjoy their research tools, like access to S&P Capital IQ. They also have a revolutionary service called FRIP, which Jason has spoken highly of in the past.
We recommend Personal Capital as a portfolio management tool. Its service is completely free unless you decide to sign up for their financial advisor services. But if you’re a DIY investor like myself, then you won’t find a need for that and Personal Capital will be free. It offers a plethora of portfolio management tools and budget software. And its asset allocation visualizations are beautiful. It’s a great service, especially considering it costs $0 to use. You can read my review on this company, if you’re interested. Although I strongly recommend Personal Capital for portfolio management, I find Mint better for budgeting. Mint, like Personal Capital, is free. I personally use both services and find them complementary.
Great Books On Dividend Investing
By Jason Fieber
This book is highly complementary to the blog. And while you don’t need to purchase it to get value out of this site, it’s a great resource that includes some of Jason’s best content laid out in a very cohesive manner that bridges some of the concepts he discusses in his blog posts. There are four distinct sections of the book that cover individual topics like Jason’s background, financial independence as a concept, the dividend growth strategy, and analyzing stocks. At $4.99, I think there’s a lot of value there.
By Josh Peters
Peters writes in a very easy manner, and this book covers a lot of the basics. He explains why dividends matter, revealing how dividend paying companies tend to deliver superior returns over the long haul. He also talks a little bit about why and how shareholders benefit by receiving dividends, and it’s not just for the income aspect. His ‘Dividend Drill’ focuses on valuation in terms of future expected return (Gordon growth model), the safety of a dividend (how well it’s covered against earnings and cash flow), and the likelihood of the dividend continuing to grow over time (whether or not a company can continue increasing earnings).
By Lowell Miller
This book is very engaging and entertaining, while also retaining its educational format. Lowell does a great job explaining why dividends, and especially the growth of the dividends, are so important to total returns and why smart investors will ignore the fluctuations of the market. If you’re looking for a “how-to” in setting up your own compounding snowball, this is a great place to start.
By Matt Alden
This is a phenomenal read that covers the basics of businesses, the importance of fresh capital, the impact of dividends on long-term returns and why it’s important to seek out high-quality businesses that distribute them, how to properly analyze/value businesses, and a summary of how and why stocks within different sectors (consumer stocks, industrials, MLPs, REITs, etc.) are valued differently. This book is not only a great resource on dividend growth investing, but also on building wealth in general.
By Benjamin Graham
Although not a dividend specific book, this is probably the greatest book ever written on investing. The main draw to this book, and really the crux of it, is that it covers the psychological warfare that investing can sometimes involve. It covers emotions to the point where Mr. Graham actually refers to the stock market as a whole as a bipolar “Mr. Market” that acts irrationally and emotionally. An intelligent investor takes advantage of these emotional swings. It covers equities as a whole, how and why one should invest, investment theory, achieving a margin of safety, market fluctuations, and valuation methods all in great depth. To do a true review on this book would require multiple blog posts dedicated to nothing but.
By Zach Ramsey and Joseph Houge
We found this very informative and educational. It starts out with many of the basics behind dividends, investing, and the difference between qualified and non-qualified dividends. The book later moves into the different types of dividend stocks an investor can pick from, and how to form and manage your own portfolio of high-quality stocks. A great book for both a novice and more advanced investor looking for ways to build sustainable, passive cash flow through dividend investing.
Personal Finance/Financial Independence Books
By Vicki Robin and Joe Dominguez
If you could only read one book on personal finance this would be our recommendation. It sets all the wheels in motion. If you ever wondered why you’re not happy running non-stop on your little rat wheel, this book explains why in a deft manner. It puts into words what many of us are thinking, while also listing nine steps on how you put core ideas to action.
By Thomas J. Stanley
This book is definitely an entertaining read. While not really revolutionary, it does provide excellent evidence of how wealthy people got to where they are and how they tend to stick to their perch. The next time someone makes fun of you for driving a 10-year-old car even though you have hundreds of thousands of dollars in the bank, point them to this book.
By Alice Schroeder
Last, but certainly not least, we have Warren Buffett’s biography. Buffett worked closely with the author, Alice Schroeder, to recount his life in his own words. We recommend this book to anyone interested in becoming financially independent because the principles that Buffett has lived by are a superb example on how to build real, sustainable wealth.
Important Dividend Investing/Research Links
The ultimate resource. This is a document that compiles data on all US-listed stocks that have raised their respective dividends for at least the last five consecutive years. It’s maintained by the great David Fish. Stocks are categorized by Challengers (5-9 years of dividend growth), Contenders (10-24 years of dividend growth) and Champions (25+ years of dividend growth). Not only does the document contain the names of these companies, but it also includes extremely pertinent information like dividend growth rates, valuation, debt loads, etc. If you think of the stock market like a market full of stocks for sale, this would be my shopping list.
Morningstar is a free service that offers research tools for the enterprising investor. Here you can get a stock quote, look up five years of financial data (including cash flow statements, balance sheets, and income statements), and compare historical valuations.
DTA is a collection of recommendations and articles on high-quality stocks, mostly dividend stocks. Here you’ll find a number of relevant and interesting buy and/or sell recommendations based on current information and analysis. Most of the articles feature professional analysts. Check it out!
I use Google Finance to pull up instant quotes on stocks. It also allows you to get a quick snapshot on any stock that includes the price, valuation (using the TTM P/E ratio), yield, EPS, and any relevant news regarding that stock.
If you need brushing up on basic terminology, this is a great place to do so.
Mike – the blogger behind The Dividend Guy – has created this service to create, track, and manage portfolios, as well as provide ongoing tools and support. There’s a monthly fee involved, but it’s certainly a fraction of what you would pay to have a professional create and manage a portfolio for you.
This stock screener screens from Mr. Fish’s invaluable CCC list so you can easily and quickly find potential investment candidates. It offers you all kinds of screening criteria: P/E, yield, years of dividend growth, market cap, etc. Take it for a spin!
If you’re looking for a forum board to strike up a conversation with like-minded dividend growth investors, this is a nice spot. I occasionally post on there myself, and the atmosphere there is overwhelmingly positive and supportive.
In addition to all of the previous recommendations we also recommend reading the wonderful blogs I have listed on our blogroll. While books and forums are wonderful, you’ll see personal growth and investing decisions rationalized in real time here and elsewhere.