Tuesday, January 30, 2018

What is a Dividend?

I started this blog with the goal of educating and helping others that would like to achieve financial independence at a relatively early age. I recommend dividend growth investing, but that's not to say it is the only way to achieve financial independence. Achieving this early retirement will require an investment strategy and it will require diligent investing and saving. You don't need to make a lot of money, but you need to save and invest as much as you can. The more you can invest, the earlier you will be able to retire. 

If I can help even a handful of people get on the right path then I will be happy. I'm here to help answer any questions you might have about personal finance, investing, budgeting, credit cards, etc. I may not have all the answers, but I will gladly help find an answer for you. I believe we are all in this together and if we can learn and grow together then that is truly awesome. 

Most of you probably know what a dividend is, but there may be others who have stumbled on this blog and may not exactly know what a dividend is. It's not a stupid question if you don't know what one is. To be honest I would bet a lot of people in America and other countries don't know what a dividend is. I think a lot of college students aren't being prepared for the real world. They don't have general classes on investing, buying homes, taxes, insurance, etc. I wish they did because I think a lot of kids would benefit from a general class like this. 

To those of you who may not know what a dividend is, I will briefly explain it. 
The literal definition of a dividend is, "a sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves)"

Simply put, you get paid to own a piece of the company. 

How do you own a piece of the company? When a company goes public they issue shares of stock to raise money. People can buy shares of a company and they become part owners of that company. As time goes on the company may start paying dividends to the shareholders as a reward for being part owners and investing in the company.  

To be clear, not all companies pay dividends. They aren't required to do so at all. A dividend usually means the company has been around longer and has the capital to do so. Younger growth companies generally do not pay dividends, because they would rather use that money to grow the company. A lot of tech companies (Facebook, Google, Tesla, Netflix) do not pay dividends because they need that money to invest in new technology. That's not to say they won't do so eventually, but for now they don't. Apple (AAPL) is a good example of a tech company that didn't pay a dividend, but now finally does. They have a large amount of cash and wanted to reward the shareholders. 

How much do you get paid in dividends?

This can vary greatly from company to company, but generally anywhere from 1-6% of your money invested will be paid back in dividends each year. Most of these companies pay dividends quarterly or four times a year. If you are investing in dividend growth companies then there is a good chance the company will raise its dividend each year. This means that they will pay you more in dividends year after year. There are a great number of companies that have been raising dividends year after year for 10, 20, 30, 40, and 50+ years. 

To be completely clear, there is a risk when investing in the market. The value of your shares changes on a day to day basis and it is possible you could lose your initial investment. It is also possible that a dividend paying stock could stop paying dividends or significantly cut the yield. However, you can mitigate this risk by diversifying in the market and choosing large companies with a good track record. 

Why choose dividend stocks?

One of the reasons I love dividend stocks is the consistent and growing payouts by these companies. There is no guarantee in the stock market, but dividend payouts are the closest thing. Many of these companies have a long history of paying and raising dividends. If you happen to choose a stock that goes bankrupt in 12 years, but pays you a dividend for the next 10 then you really don't lose all of your money that you invested. 

What you do with the cash payouts is your choice. 

You can use the money to pay for bills or you can use it to invest in other stocks. You can also set up a Dividend Reinvestment Plan which would allow you to buy additional shares of the same company automatically. Your best bet is to reinvest the dividend payouts either in the same company or another company, but the choice is yours. 

Another reason is that you don't have to sell your shares in retirement. You may have heard of the 4% withdrawal rate in retirement. This basically says you can withdraw 4% of your money each year and you will not run out of money. However, why even worry about selling shares when you could just live off the dividends? Eventually they can become large enough that you could live off just those payments and never have to sell any stock. This means that the market could swing up or down and you wouldn't care. Did you know that most dividend paying stocks continued to do so even in the last recession of 2008-2009. Many companies even raised dividends during this period. 

My hope is that one day my dividends will total more than my expenses and then I will be financially free.

Let me know what you guys think! If you have any questions please feel free to reach out.

Monday, January 29, 2018

How I Track Dividends

Dividend growth investing, keeping track of dividends
Keeping track of my dividends is very important to me. I like to keep track of the dividends I've received and see when dividends are increased. This allows me to easily see if a company has stopped increasing their dividend or if they have cut the dividend. I can also see the true gain/loss a stock has provided me once the dividends are factored in.

I created a spreadsheet back in 2014 when I started my journey to keep track of the dividends manually. I used to manually go through each company to see when they were paying dividends and what the dividend amount was. I've since upgraded my methods so I don't have to do as much manual work. I still have to manually keep track of the dividends paid, but that is because I want to make sure I have that portion correct. I'm a bit of a perfectionist and like to verify with my brokerage (Charles Schwab) before filling in the dividends paid. 

One of the many reasons I love dividend growth investing is that the dividend payments offset a lot of the risk that comes with any company. As much as people like to try and predict the market, no one really knows whats going to happen. The dividends at least guarantee some of my return. Another reason is that dividend growth companies continually raise their dividend year after year. 

If you just look at some of the dividend champions such as Proctor Gamble (PG) and Johnson and Johnson (JNJ) they have increased their dividends every year for 61 and 55 years respectively. This is an incredible feat and if you can invest in a company that raises the dividend for 50+ years you will have done very well for yourself. 

I wanted to be able to keep track of the companies that increased their dividends year over year, so I worked on finding a solution. If you are looking for a similar solution to tracking dividends and increases then you may want to check out the spreadsheet I created and the steps I take below:

1. Create an account on SeekingAlpha and add all of your stocks to the portfolio.  There are a lot of opinion articles on SA that I don't read, but instead I get the daily summary e-mail of my stocks. In this e-mail contains any press releases related to the companies in my portfolio. These press releases are from the company and are not written by SeekingAlpha. The press releases will contain when companies declare dividends and this will include when they increase dividends as well. I briefly scan these daily morning e-mails for the press releases for this information. You may find some other relevant information pertaining to your holdings in this section as well. 

2. Create a spreadsheet of your own or download the spreadsheet I use and input your own companies. I developed the spreadsheet in Excel because Excel can be a very powerful tool. There are some web queries that pull the data to my excel spreadsheet from Google Sheets. The spreadsheet I use is located here: Stock Spreadsheet

The two data sheets titled "Cameron's Data" and "Cameron's Div Data" are ones that pull data from outside sources. The stock prices are pulled from google finance and the dividend payment date and dividend amount are pulled from Nasdaq's website. There can be instances when the data is not pulled right away and you will get an error. However, I've created two hidden columns that run an iferror formula to at least pull back the last non-updated information. There is some manual work to update the hidden columns if the payment date or dividend value has changed. However, I figure this is still easier than trying to keep track of dates and dividends manually. 

The dividends sheet is a manual entry sheet, but once you have the dividend payout it becomes relatively easy. It links back to the stocks sheet so you can easily add it to the total gain.

If you want to use this spreadsheet and want more help using it just let me know. I'm happy to answer any questions you have. 

3. I follow other dividend growth investing blogs and their social media accounts. A lot of dividend growth blogs I follow routinely post about dividend increases. If they have a twitter account, I can follow them there as well to quickly see if a company has issued an increase. 

As a dividend growth investor it is extremely important to know whether a company raises or decreases their dividend. Creating a system to monitor increases/decreases is vital to making sure you are making the right decisions on buying, holding, or selling. 

Let me know what you guys think! How do you track your dividend payments and dividend increases?


It has been a little over 2 weeks since I started this blog and I just wanted to see if anyone had any comments, feedback, or questions. I know its still early and I don't have a lot of traffic to the site yet, but if there are some regular readers I would love to see what you guys think. 

I also want to let you guys know that if you have any questions you can drop a comment or you can send me an e-mail at 

You can also follow me on twitter @moneydividends and message me there as well. I will post my blog updates on twitter if you want to follow from there. 

Going forward I'll probably be posting about 2-3 times a week and I will include posts updating monthly portfolio/dividend updates. I'll also include stocks I'm buying and selling and also probably stocks of the week. 

Let me know if you guys have any questions or feedback!

Sunday, January 28, 2018

The One Non-Dividend Stock I Love: Facebook (FB)

My first investment ever was a $2,000 purchase of Facebook back in 2012. I didn't know much about investing, but I knew I wanted to own a piece of Facebook. I had watched it fall down to $18.50 a share and believed it couldn't go much lower. It has been one of the best investment decisions of my life. 
I continued to build up my shares of the stock as it continued to rise. Even as I got into dividend growth investing I wanted to hold a good amount of this company. As a Millennial I know how big social media is to the younger generation. I believe it is here to stay, because Facebook has a very solid moat. 

I've thought about selling my shares now and reinvesting them into dividend growth stocks, but I think the growth opportunity is still very high. I also think that eventually they could pay a dividend and it could end up being very rewarding. 

Why do I love Facebook so much?

For starters they continually beat earnings estimates every time. They had a rough start after their IPO, but after that they haven't disappointed. You can look at their fundamentals and look at their earnings growth and see just how incredible it is. Their user growth may be slowing down, but they have yet to reach markets such as China.

Facebook isn't just the one social media site that is symbolized by their name and logo. Facebook has some very dominant apps in the marketplace:

1. Facebook (over 1 billion+ downloads, 2 billion monthly active users)
2. Whatsapp (over 1 billion+ downloads)
3. Messenger (over 1 billion+ downloads)
4. Instagram (over 500 million+ downloads)
5. Not to mention all the other apps and companies they have acquired (over 60!)

These numbers are astonishing and its hard to imagine something replacing them anytime soon. I've heard all the arguments as to why Facebook isn't a great tool, but this is just short-term noise. They will continue to evolve and fix all the issues that have come up. 

One of the biggest things about Facebook that people don't realize is all the data they have. Think about all the posts, photos, videos, etc. that exist across all of these apps. 

In 2014 there were some 250 billion photos uploaded to Facebook!
In 2017 there were over 90 billion photos uploaded on Instagram!

Every day Facebook grows stronger because of all the data that gets uploaded. I can't imagine what the platform will look like in 10, 20, 30 years from now. It will truly be amazing to see. 

I understand a lot of people don't like Facebook and may not even have a Facebook account. I totally understand why people might dislike it, but you can't argue with their success and the success of their other apps. Everyone I know who doesn't have a Facebook account has an Instagram account. 

Either way this is a company I want to own.

I'll most likely continue to invest small amounts into Facebook from time to time. I use Stockpile to buy partial shares so I don't disrupt the amount I'm putting into dividend growth stocks each month.

Let me know what you guys think! Do you own or would you ever own Facebook?

Friday, January 26, 2018

How to Pick Dividend Stocks

dividend growth investing
I wanted to briefly share how I pick the dividend stocks that I have in my portfolio. Now, not all of the ones I have in my portfolio followed this exact method. Some stocks I bought because I just wanted to own a piece of the company and I have some non-dividend growth stocks as well that I bought for growth reasons. Following the steps below have helped me in picking high quality dividend growth stocks.

1. I created a watchlist on google finance/yahoo finance that I could easily track each day. 
This list contains over 125 stocks and I can easily look at the fundamentals such as P/E, EPS, Dividend Rate, Dividend Yield, etc. 
If you'd like to see this watchlist I created just let me know. 

2. I tend to look for large cap companies with a business model that I can understand.  
If you don't understand how a company makes money then you shouldn't invest in their stock. This will soften the blow if the company isn't doing well. A lot of people blindly throw money into stocks because they got a tip online or from someone they know. Invest in something you can understand and it will make it easier to own the stock. Also, if you can see people using the products/services every day then that will help as well. One reason I like Apple (AAPL) is because everyone I know has an iPhone.

3. I tend to look for companies with a P/E under 20.  
P/E is the price to earnings ratio of a company and it is used to value companies. The higher the P/E usually means it is a higher growth company or the company is overvalued. A lower P/E could mean the company is undervalued or it's a much lower growth company. I'm not necessarily looking for a high growth company, but rather a solid dividend growth company. I'd rather a lower growth company that can continue to pay and increase dividends year over year. 

4. Dividend yield over 2%
The lower the yield usually means it is a higher growth company and its possible I will invest in a company with a yield lower than 2% but I will need to see a solid history of dividend growth to support that. Otherwise I'd rather have the higher yields at this point. I usually look for companies in the 2.5% - 4% yield area with a few outliers. If you see a stock with a very high yield you have to be careful. It's possible that the dividend is unsustainable and will be cut soon. It's usually a sign that the company is not doing well either. 

5. History of dividend growth and earnings growth
I will always look at their recent and long term dividend and earnings growth. A company that has continually raised dividends and earnings is likely to do so in the future. I like to see dividend growth of at least 5% per year, but I will take a lower growth rate if the company is paying a higher dividend. A good example of this is Verizon (VZ) and AT&T (T)

A strong earnings growth is also desired because this means that the dividend growth will likely be supported. 

You can find a list of companies that have consistently raised their dividends at

6. Dividend Payout ratio of less than 60% 
The payout ratio is the dividend per year/earnings per share. A lower ratio means the company should have no trouble paying a dividend and increasing the dividend in subsequent years. A higher ratio means the company may have lower growth or be forced to cut the dividend. Be careful of any stocks that the ratio is at, near, or over 100%

An example of this is Apple (AAPL)
The dividend per year is 2.52 and their earnings per share is 9.19
2.52/9.19 = 27%

While their dividend yield is lower than 2% they have a lot of room to increase it in the upcoming years. I think they will end up being one of the great dividend stocks.  

7. Research the company
Do your own due diligence and research the company. Read up on the latest articles/product releases/product reviews. What is the company doing lately? You can easily check their website for recent news and updates. My broker also provides a lot of detailed reports on the companies which can be very helpful in deciding if I want to invest or not. 

8. Diversify
This is true with any investments you make. You want to build a dividend stock portfolio that is well diversified across all the industries. This will minimize the risk of the portfolio. Its possible one industry today may not exist tomorrow and you don't want to have all your eggs in one basket. 

9. Have patience with your purchase
As with any stock purchases you should always have patience. I am a buy and hold investor for the long term. I don't care about the price of the stock today or tomorrow. I want to see the company grow their earnings and dividends for the long term.

Let me know what you guys think! What other things do you look for when you invest?

Image courtesy of worradmu at 

Thursday, January 25, 2018

Health Savings Account

When I turned 26 in November of 2016, I had to get off of my parents health insurance. I had little to no information on which insurance I should choose. My employer offered three CareFirst choices:

1. A premium plan (Most expensive)
2. HMO Option
3. HSA Option (Least expensive)

Now, I didn't know much of the difference between each of these plans so I started doing some research. I knew I didn't want to pay for the premium plan, because I consider myself young and healthy (I workout 5-6 days a week and make healthy eating choices)

So my decision came between the HMO Option and the HSA Option. The difference in price was nominal so I had to do some research. 

When I started reading about the HSA option my eyes lit up. 

By definition, an HSA is:

"A type of savings account that lets you set aside 
money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in a Health Savings Account (HSA) to pay for deductibles, copayments, coinsurance, and some other expenses, you can lower your overall health care costs.

An HSA can be used only if you have a High Deductible Health Plan (HDHP) — generally any health plan (including a Marketplace plan) with a deductible of at least $1,350 for an individual or $2,700 for a family."

An HSA is triple tax advantaged. 
1. The contributions are tax deductible. You can contribute $3,400 a year if you are an individual and $6,750 if you are a family.
2. The interest earned is tax-free.
3. You can withdraw the money for qualified medical expenses tax free
4. After age 65, you can use your HSA much like a 401(k) and withdraw funds for any purpose.

These are incredible reasons to why you should consider an HSA. 

The only con to an HSA is that you must have a high deductible health plan. This means you will pay more out of pocket if you frequently visit the doctor. If you think you will be visiting the doctor fairly often then I would weigh your options carefully. 

Now you may be asking how does this relate to dividends? Well my HSA allows me to invest my HSA funds. These means I can invest tax deductible income into investment vehicles that will pay dividends tax free. If I need to withdraw those dividends I pay no tax. This is an incredible tax advantaged savings account. 

I have yet to start investing in my HSA, but I will soon. Once I get a snowball rolling in my HSA I will be able to use dividends and interest to pay for my medical expenses. This could lead to me never having to pay for doctor visits or exams. Since health care in the U.S. can be expensive this is a great tool.

I will update everyone once I make my first HSA investment and let you know about the dividends as well.

Let me know what you guys think! What health plans do you guys have?

Image courtesy of everydayplus at 

Wednesday, January 24, 2018


This is a topic that is talked about frequently and there is a great divide on which one to use. I wanted to briefly describe my strategy and which one works for me. 

For starters, DRIP stands for Dividend Reinvestment Plan and allows shareholders to automatically reinvest their cash dividends in additional shares of the same company. Now, unless the stocks are held in a tax advantaged account, you will still be subject to tax on the dividends regardless of if they are automatically reinvested or not. 

So which one did I choose and why?

I've chosen to not automatically reinvest my dividends in any of my stocks. Everyone has their own strategy and I believe this works best for me.  Its possible that this strategy may change with time, but for now I'm not automatically reinvesting dividends.

Here are some of the reasons I chose this path:

1. I wanted to be able to reinvest the dividends in different companies.
When I was first starting out I wanted to diversify and invest in as many different companies as I could. This is still true today as there are a plethora of good companies out there that I haven't had the chance to invest in. I've made over $5,500 in dividends so far and that money has gone into buying 5-6 additional companies. 

2. I like to try and find value in the market
This is one of the hardest things to do when investing. However, you can almost always find good stocks that aren't performing well. It has been harder lately since the market has been doing so well, but they are out there if you look hard enough. I don't want to automatically invest in a company that is way overvalued or a company that is going broke. This strategy allows me to avoid both scenarios.

DRIPs allow you to dollar cost average and you will get shares at the highs and lows. Dollar cost averaging can be a great tool for your investments. If you are able to catch additional shares of a beaten down stock and then the stock starts to rise, you will have done very well for yourself. However, you could also be buying additional shares of a beaten down stock that may never go back up. 

When I was trying to figure out my strategy I asked myself one question. Would I rather buy 100 shares of Company A and never buy another share only to see it rise 1000%? Or would I rather buy 100 shares of Company B and then reinvest my shares buying additional shares and see the company go out of business?

For me I chose the first option because you can't really be mad at yourself if you didn't buy additional shares and the company is doing well. I would have been more mad if I bought additional shares of a company that went bankrupt.

3. Honestly, it is a lot easier to manage
Now if I had thought that DRIPs were way better for my strategy then this wouldn't be an issue. However, I don't want to manage partial shares of a company. It would be much harder to manage going forward. I will have to constantly update my spreadsheets on how many shares I have. It will also be a pain if I ever need to sell a stock (although I'm of a buy and hold mentality)

4. The difference in compounding for me is minimal
I invest in increments of around $800-1200 at a time. I do this to minimize the amount of trading fees and also to get myself invested as often as I can. Any less than this and I will run into a lot of trading fees. This also limits my exposure to any one stock at a time. If I buy $1000 of company A today and tomorrow they announce they are going bankrupt then I won't feel too bad since it is such a small percentage of my overall portfolio. 

If I buy $1000 worth of a stock that costs $100 a share and yields 3% and I choose to automatically reinvest the dividends, then it will take about 3-4 years to buy one additional share of that company. This would assume a small increase in share price and small increase in yield. For me, that isn't enough to really change things dramatically. Every time I invest now I've been making myself buy one additional share than I intended and these extra dividends that are readily available have been useful in being able to do that. 

There are pros and cons to both sides, but I think investing the cash dividends at my own discretion is the best strategy for me. 

Let me know what you guys think! What strategy have you chosen and why?

Tuesday, January 23, 2018

My Roth 401k

I wanted to briefly describe my Roth 401k and why I chose Roth. My employer matches up to 4% of my contribution to my Roth 401k and for me that was a no brainer. Would I like to invest that additional money on my own in dividend growth stocks? Yes, but the employee match is too good to pass on. This is basically free money and I would encourage you to take the employee match.
My 401k is through Principal Financial Group and there are limited investment options. I've chosen the S&P 500 Large Cap Index Fund because I like investing in the top companies in the world. However, there are not a lot of other choices and no options for dividends or dividend reinvestment.

Now, I will never increase it past the 4% unless they increase how much they are going to match. Why? Because there are too many limitations on a 401k to begin with. 

I understand why they exist. They were created to encourage people to save for retirement and they make it hard for people to touch that money. I believe for the most part this is a good thing. However, there should be some flexibility for the rest of us. If I want to take that money out before I'm 60 then I should be able to do that without penalty. Life is unpredictable and it is a shame we have to work and save up money that we can't even touch until we are 60.

This is basically why I chose a Roth 401k instead of a regular 401k. 

Here are some key differences between a Roth 401k and a regular 401k:

Roth 401k:
1. Contributions are from post tax money (earnings grow tax free)
2. I can withdraw my contributions early without tax or penalty
3. I can withdraw my gains early with a 10% penalty fee
4. Good if you think your income in retirement will be higher than your current amount

1. Contributions are from pre tax money (allows you to deduct contributions now, but you pay tax later when you start withdrawing)
2. If you withdraw any amount early you will pay a 10% penalty and income tax depending on your bracket
3. Good if you think your income in retirement will be lower than your current tax bracket

It may be very hard for you to choose which one you want. There are a lot of unknowns in the future such as tax rates and your income. However, right now a Roth provides me with more flexibility. If I retired tomorrow I could start withdrawing my contributions from my Roth account without penalty or tax. This allows me flexibility in an early retirement. 

Although I'm not sure about my income levels in retirement at this point. I believe my income may be higher now than in retirement, but that is hard to predict. If I were to continue to invest until I'm 65 then its very possible my dividend income and any other amounts (social security, stock selling, etc.) may easily exceed my current income. Again, because of this I'm happy using a Roth which will allow me more flexibility.

Let me know what you guys think! Do you have any questions about your 401k? Which 401k did you choose and why?

Monday, January 22, 2018

My Monthly Expenses

I wanted to briefly detail my current expenses and show you how much I spend on a monthly basis. I would consider my expenses around average, but I know I could probably cut back a little which would help me on the road to early retirement. If you can cut back even $100 a month then it can have a big impact on being able to retire early.

Below are my expenses every month: 
(I live in a 2 bedroom apartment with my girlfriend)

Rent: $1,475
Electric: $45
Water: $15
Cable/Internet: $40
Gas: $25
Car Insurance: $41
Entertainment: $400
Food: $600
Misc: $400

Total:  $3,041
Per year total:  $36,492

Rent is definitely my biggest expense and I would love to be able to scale that back a little. Unfortunately the DC Metro area is a very expensive place to live. My salary is adjusted because of the high cost of living around here though. 

I currently work from home and drive a 2006 honda civic. This means I have no car payments and my car insurance is very little at this point.  Working from home also means I spend very little on gas every month.

My employer pays for my cell phone bill and that is why it isn't listed on here. 

Entertainment would include anything like movies, going out, wine/beer, vacations, airline tickets, sporting events, etc. This is a hard number to track on a month by month basis, but I think $400 is about right. Some months it is higher and some it is lower. 

I do a very good job and eat most of my meals from home. We spend about $100 on groceries per week for the both of us. This includes breakfast, lunch, and dinner. The weekends are the only time we eat out, but we do enjoy grabbing a nice dinner. Again, this number could vary greatly depending on our weekend dinners. Food is probably the easiest way to save money if you are looking for areas to cut back.

I've done plenty of calculations on how much my breakfast, lunch, and dinner cost during the week. I probably spend around $7-8 a day on breakfast, lunch, and dinner. Compare this to someone who eats out and spends about $20-30 a day and this really adds up over the course of a year. Is eating out during the week really worth it? What if you could save an additional $5,000 to $10,000 during the year?

Miscellaneous refers to anything unexpected. Gifts, doctor visits, procedures, car issues, etc. This number could also vary greatly from month to month. 

As you can see at this rate I would currently need $36,492 in dividend income to retire. I tend to overestimate so the entertainment, food, and misc could easily come down. If they come down $100-200 then that makes a big difference. Rent is also a huge expense and I'm looking to see if we can reduce that next year by moving to another apartment. 

Overall, I would say my expenses are below average, but there is definitely room for improvement. I think a lot of people spend money on things they don't need thinking it will make them happy. I would consider myself a minimalist and would like to be able to cut back on my expenses a little going forward. 

What do you guys think? What are some of your biggest expenses?

My Strategy to Retiring Early

Now that I've got the blog up and running, I wanted to talk about my personal strategy to retiring early. 

If you have been reading my blog then you would know that I like dividend growth stocks as my investment strategy. However, there's more to it than just investing in dividend growth stocks. 

Part of the problem with retiring early is that you don't know how much money you will need in retirement. There are a lot of future unknowns that are hard to plan for. I don't have a family or a house so I can't say how much money that is going to add to my expenses just yet. I also don't know about my current salary and job and if that is going to increase over the next 10 years. In my estimations I like to underestimate, because this provides me a margin of safety. 

Since I don't really know how much I'll need I'm working on building up as much as I can as fast as I can. Here is what I'm currently doing to try and get to early retirement:

1. Increase my income. This isn't always easy, but if I can increase my salary a little each year or find a way to make some money on the side then that will help to get me to financial freedom earlier)

2. Decrease my expenses. This is easier than increasing your income. There is usually always a way to decrease your expenses. I'll detail my expenses in another post, but I probably spend about $35,000 a year right now. The biggest expense is my rent since I live in the DC Metro area and rent is very high right now. If you can find a small way to decrease your expenses it will really add up big time. 

Here is a quick example: If you eat out 5 times a week at $12 per meal and you cut this back to just 4 times a week, you will save $624 a year. Now this doesn't sound like a lot right? Well if you did this for 20 years it would add up to $12,480. Now this amount could potentially allow you to retire a year or two earlier. What about if you cut it back to just once or twice a week? Is eating out that much really worth it?

3. Invest as much as I can as often as I can as early as I can in high quality dividend growth stocks. I honestly have very little in my checking account because of this. I know that with every buy I get a little closer to my goal of financial freedom. Now I'm trying to build up my checking account a little in the case of an emergency, but I've kept it pretty low for the past four years (<$4k) The longer you wait to start investing the longer you will be working. To really feel the full power of compounding you have to start as early as possible and invest as much as you can. If you have $50k sitting in a savings account you need to put that money to work.

4. Continue to take advantage of my employer's 401k. My employer matches up to 4% for my 401k and this is a no brainer. This is free money they are giving me as long as I contribute 4%. Of course I would like to have this money to invest on my own, but the free money is too hard to pass up. I chose a Roth 401k because this allows me a little more flexibility down the road. I will go into more detail why I chose a Roth plan in another post, but I do plan on pulling from my 401k when I'm near retirement. I've looked into this and I can pull contributions without penalty and gains with a 10% penalty.

5. Continue to invest a small amount in non-dividend stocks. Now I know this goes against the philosophy of investing in high quality dividend growth stocks, but I believe these stocks are too good to pass on. I also invested a good amount in Facebook at a low price and I'm playing with house money at this point. The stocks I invest in have a very high growth potential and I wanted to own a piece of them. I used Stockpile to invest small monthly amounts so I didn't disturb my pace of investing in dividend growth stocks. The stocks I own are as follows:

Berkshire Hathaway

I also believe there is some potential for these stocks to pay a dividend in the future and that could potentially add a good amount of dividend income to my portfolio. However, If I'm near an early retirement these could be the ace in the hole that helps me get there.

I think these stocks combined with my 401k could help push me over the edge once I'm close to financial freedom.

6. Reallocate high growth stocks. Another possible way to get to early retirement sooner would be reallocating dividend stocks that have greatly outperformed their dividend growth. A good example of this is Boeing. I really like Boeing as a company so I'm not going to start selling yet, but the growth on my principal has far exceeded the growth on their dividend. By selling shares of Boeing and putting them into another higher yielding stock, I effectively add dividend income to my portfolio without having to invest new capital. 

This is basically my overall strategy to achieving an early retirement. In this early retirement I would not look at selling any of the principal and I would live off the dividends completely.

Let me know what you think! What do you guys do differently?

Sunday, January 21, 2018

Why I Chose Dividend Growth Investing?

When I graduated from College in 2013 I didn't really know what I wanted to do in life. To be honest, I still really don't know what I want to do in life. I had a degree in computer information systems and I landed a job with a small IT consulting company. 

The job isn't terrible and it pays well, but I just can't see myself doing it until I'm 65. I think the idea of working until you are 65+ is ridiculous. Why should we spend so much of our life working? I would say a majority of people don't even like their jobs so this makes it even worse. 

When I came to this realization that I didn't want to work this job for another 40 years, I tried to find a way out. I quickly realized that there were no get rich quick schemes. I briefly tried my hand at penny stocks and quickly realized they are not a viable investment strategy. After losing some money on them I stumbled upon a dividend growth investing blog called "Dividend Mantra"

I knew what a dividend was and it all seemed nice, but I didn't realize the full power of dividend growth investing. I guess I didn't think it could really turn into a huge snowball and allow me to retire early. After seeing someone else do this and have so much success, I decided to give it a shot. 

I started trying to cut my expenses and invest as much as I can and as often as I can in dividend growth stocks. Fast forward four years and I'm looking to make over $4,000 in dividends this year. In only a short amount of time I've come to this number. Even if I don't invest another penny this number would continue to grow thanks to the dividend increases that the stocks issue year after year.

The things I really love about dividend growth stocks are the following:

1. They almost guarantee returns through the form of their dividend payments
2. They almost always increase their payments year over year (I've had 0 companies cut their dividend completely and only two or three decrease their dividend in the past 4 years)
3. You can decide if you want to reinvest that money into more stocks of the company or keep the money to pay bills or buy stock in another company
4. You minimize the potential loss through dividends. If a company goes bankrupt in 15 years you wouldn't have lost all your money. The dividend payments would offset the loss
5. You don't have to sell the principal in retirement. I always hear of the 4% withdrawal rule as a rule of thumb in retirement. Why do I need to sell any of my stock at all? If properly invested in dividend growth stocks I can just live on the dividend payments alone and never have to sell the stock. 
6. I don't really have to worry about how the overall market is doing. Most of these companies I own continued to pay dividends throughout the recession. As long as the company isn't going bankrupt and they are still paying dividends I don't really care about the price of the stock. You just have to ignore the short term noise and be confident in the stock you bought. 

I understand dividend growth investing may not be for everyone. It does require some patience. It is not a get rich quick scheme, but rather a strategy that will set you on a path to retirement much earlier than normal. Even if you could retire 10 years earlier wouldn't it be worth it?

Let me know what you guys think! I would love to talk more about why or why you didn't choose dividend growth investing! 

Saturday, January 20, 2018

Recent Buy: Anheuser Busch Inbev (BUD)

I recently picked up 9 shares of Anheuser Busch Inbev (BUD) for $110.80 a share. This adds about another $30 to my dividend income for the year.

Now to be clear I don't think this is one of the better dividend stocks, but it is a company I've wanted to invest in for a very, very long time. There was a recent pull back and I just had to pick up a few shares. 

There are a few reasons why I wanted a share of this company. 

1. Beer/Wine/Alcohol is consumed by almost everyone
2. They have an incredible market share. Whens the last time you went to a sporting event? Did you notice that almost everyone was drinking a bud light? Or maybe it was a Stella or a Goose Island?
3. They are buying up as many of the craft breweries as they can. I personally love craft beer (IPAs being my favorite) and they have bought a lot of breweries that I enjoy beer from. If they continue buying up breweries then they will continue to own a huge chunk of the beer market. 

Check out all of the brands here:

Now when I bought the stock it was yielding nearly 3.7%
However, the one downside to owning this stock is that I will get taxed twice on the dividend. This is unfortunate, but again I just really wanted to own a piece of this company since they have an incredible portfolio of brands. 

But, they do sport some pretty good dividend growth with the 10 year growth rate at 14.3% 

I don't consider this stock a dividend champion, but this company is not going away anytime soon and they will continue to pay me for a very long time. 

Let me know what you think! Anyone out there big craft beer drinkers? 

Friday, January 19, 2018

How to Reduce Risk When Investing

I think the biggest reason most people I know have not yet invested in the market is that it is too risky. While it is definitely more risky than a simple savings account, it really shouldn't be viewed as such. 

In the long term the market has consistently gone up. Yes, there have been ups and downs with sharp declines throughout the history, but looking over the long term, the market is up.  

I know you may of heard horror stories of people losing big in the market, but I'm here to show you how you can reduce the chance of this happening. 

To reduce risk in the market you need to do a couple of things:

1. Buy stock in a company that you can understand. Do you understand their business model? How do they make money? Do they have a good product? If you are buying stock in a company because they might have some super advanced technology that no one has heard of or understands, then you shouldn't be buying the stock. 

You should research the stock you are buying. Look at the fundamentals, look at their website, recent news articles, recent product releases, look at the history of the stock, history of earnings, history of dividends. The history can be deceptive because past results aren't indicative of future results. However, I tend to believe a company that continually raises earnings, dividends, and beats estimates more often than not, continues to do so.

2. Diversify.  Do not put all of your eggs in one basket. I like to tell people to take a look at the top 100 companies in the world and start there. What are the chances these top 100 companies aren't going to be around in 5, 10, 15 years?

3. Invest smaller amounts at a time. I invest around $800-$1200 at a time in different dividend growth stocks. This allows me to invest on a regular basis (1-3 times a month), invest in different companies much faster, and minimize the amount I have to pay in trading fees ($4.95) at Schwab. 

By investing a smaller amount you won't have to worry as much about losing it. Now, $1,000 may sound like a lot to you as a beginner investor, but once you build a six figure portfolio, it will only be a very small percentage. 

I currently have about a 90% success rate with all my stocks if you include dividends added. I would say this is very, very good. The unrealized gains on my 90% far outweigh my unrealized losses on my 10%. 

I'm also a believer in buying and holding for the long term. If a stock isn't doing well, but paying me dividends for the next 5-10 years then that will mitigate a lot of the potential losses. If the company goes bankrupt in 15 years I don't really lose all the principal I invested because they will have paid me a good amount back in dividends. This is why I love dividend stocks so much.

4. Don't chase yield. Some people will see a stock yielding 10-15% and think they have found a winner. Usually these companies have some underlying issue and won't be around much longer or the dividend won't last. If you must invest in a company like this, don't invest more than you are willing to lose. 

5. Don't try to time the market. It is impossible to try and time the market. For the past year I've been hearing tons of people calling for a correction of the market and it still hasn't happened. The best thing to do is to constantly buy stock. This way you will buy at the market highs and the market lows. In the long term the market goes up so you will do well. This also goes back to not investing large amounts at once. If you invest smaller amounts more often you will be able to catch the market highs and lows. 

This actually happened with my girlfriend. She wanted to get into investing and had about $5-$10k to invest. The market was at an all time high, but I told her we should just invest because you can't time the market. Well we invested and the following weeks the market went down a few percentage points. I felt really bad, but told her just to wait as it would go back up. Well, that was two years ago and her money is doing very well. Yes, she might have made $100 more, but you can't time the market. If you wait for a pullback and it never happens then you will kick yourself. 

Let me know if you guys have any questions! Any other ways you guys try to mitigate risk?

Recent Buy: Kimberly Clark Corp (KMB)

I recently added to my position of Kimberly Clark by another 8 shares for $114.40 a share. 

I really like this company and wanted to buy on the weakness. This is a global company that manufactures products such as toilet paper, paper towels, tissues, tampons, and diapers. Their brands include Huggies, Pull-ups, Kleenex, Cottonelle, Viva, Scott, and Kotex.

Talk about useful products!

This may not be the most exciting company in the world, but they sell essential products that we all use on a daily basis. I really like this company and wanted to add more on the recent weakness. 

I'm not going to delve too much into the fundamentals of the company, but they yield a 3.3% dividend and are most likely to increase that in the next quarter around 5% or so. This would bring their dividend up to around $1.02 a share and the yield up to around 3.5%

With a payout ratio of around 64% they have room to continue to grow the dividend. 

This to me was a great a buy and a company I'm very happy with. 
Overall I added another $31 of dividend income and the dividend train keeps on chugging. 

Let me know what you think!

Thursday, January 18, 2018

Dividend Growth Investing

I wanted to share with you why I chose Dividend growth investing as my investment strategy. To be honest I have known about dividends when I first started investing in 2012, but never thought of them as an investment strategy. It started with my brother telling me about a blog called "Dividend Mantra" now "Mr free at 33"

He explained that there was this guy that was going to retire early just by collecting dividends from dividend stock companies. Now, I wasn't sure what to think so I looked up the blogs and started researching the strategy. It wasn't a get rich quick scheme, but rather through diligent saving and investing, one could achieve financial freedom and retire early. 

This is exactly what I was looking for. I knew that getting rich quick was a very tough task and opted for a long term strategy instead. 

Dividend growth investing checked off all the boxes. 

There is no certainties in life, but dividends are the closest thing. It seemed so simple... Why not invest in a company who has a proven track record of paying and increasing dividends for 10, 20, 30+ years? 

The great thing about these high quality dividend growth stocks is that no matter what they are going to pay you a dividend. Its hard choosing a stock and hoping that the price will go up as your only source of profit. Dividend stocks will provide me with a steady stream of income even if the price never goes up!

This makes them much less risky than some company no one has ever heard of that may or may not develop the next gen technology that your friend told you about. 

The other great thing about dividend growth stocks is that I don't have to sell the stock in retirement. You may often hear about the 4% withdrawal rule in retirement. Well I don't want to withdraw or sell any of my stocks. If I'm making x amount of money from dividends I will just keep the stock and continue to collect the paychecks!

Now dividend growth investing isn't for everyone and there are always pros and cons to each side, but it has worked for me so far. When you buy into a great company like Johnson and Johnson (JNJ) or Proctor and Gamble (PG) you just have to sit back and collect the growing dividends. 

The proof is in the pudding and you can see my dividend history and how well it has worked for me. I'm set to receive about $4,000 in dividends this year and that will bring my total dividends received close to $10,000! 

I've only been doing this for 3.5 years and feel so happy to have achieved these numbers. All it takes is diligent saving and investing. Anyone can do this

Let me know why you chose dividend growth investing or why you went another route!

Wednesday, January 17, 2018

Dividend History

Ever since I started my journey I've been keeping track of my dividends in an extensive spreadsheet. Later on I'll provide this spreadsheet, but for now I've created a page to show you my progress and dividend history.

I will update this page at the end of each month to show you how I'm doing.

It really is crazy to see how quickly your dividends increase in just a short amount of time. To think 4 years ago I was making $0 a month and now I'm averaging about $300 a month. The best part is I don't have to do anything to get that money. I just have to invest in high quality dividend growth stocks that routinely pay and increase their dividends.

If you have any questions please feel free to ask.

My Story


I started this blog because I wanted to share my journey to financial freedom and I wanted to help others achieve this same freedom. Below is my story and how I chose dividend growth investing:
I graduated college in 2013 with a degree in computer information systems. After graduating and working an IT job I quickly realized I did not want to do this for the rest of my life. I think its pretty crazy that it is the norm to work a 9 to 5 job and retire when you are 65.

Most people don't even like their jobs and yet they work them for 40+ years!? This is a crazy concept to me and I was not happy thinking this would be my life for the next 40 years. I first looked into penny stocks and saw that they could provide a get rich quick payout and then maybe I could get out of the 9 to 5 world. 

This was a mistake. 

I ended up losing some money on them and learned that penny stocks are not a viable investment strategy at all. 

Fast forward to Spring 2014 and my brother told me about a blog called "Dividend Mantra" and the idea that someone was going to invest in dividend paying stocks and eventually rack up enough passive income through dividends that they would be able to retire early.

I looked up this blog and became fascinated by the idea. It all sounded so simple and easy. I guess I had never thought of the idea because it seemed like it would take forever. However, the compounding effect really speeds things up and I decided I would give it a try. 

Fast forward to 2018 and I'm on track to make at least $4,000 in dividends this year. 

So how did I do it? 

I started investing as much as I could as often as I could in high quality dividend growth stocks. This meant taking a look at my budget as well to see if I could trim any expenses that were not necessary. I quickly was able to invest about $1,500 a month in dividend stocks. 

Now that my salary has increased a little and I'm getting about $300 a month in dividends I'm closer to $2,000 a month invested. 

I'm not sure when I'll be able to retire just yet, but I know that if I keep up the pace I should have a very sizeable number by the time I'm 35 and I may be able to retire by the time I'm 40. This would be an incredible feat as I would save my self 25 years of dead end work. I'm currently 27 years old as of November, 2017.

Now I started this blog because I feel like I've developed a knack for picking high quality dividend stocks and managing my money. I want to be able to help people achieve the financial freedom I'm striving for. I will post frequently about many financial topics and my journey to financial freedom. 

If you have any questions please feel free to ask. 

Tuesday, January 16, 2018



My name is Cameron and I wanted to start a blog to describe my journey to financial freedom. Financial freedom being the idea that I can generate enough passive income through the stock market that I no longer need to work a regular 9 to 5 job anymore. I'm currently 27 years old and I'm hoping to be financially free by the time I'm 42 or so. I believe I can achieve this through cutting my expenses and investing my savings into the stock market. My investing philosophy is that of dividend growth investing. I will explain this more later, but it is simply investing in high quality companies that pay a dividend and increase that dividend year after year. Eventually the dividends I receive will be enough to cover my expenses and I will no longer need another job.

I have been investing for the past 4 years now and I wanted to start this blog because I believe I can help offer guidance to others that may be seeking financial freedom. I believe there are a lot of people that could use my help and I want to help others in achieving financial freedom. I will mainly post about dividend growth investing, but there will be other topics as well. I will be available to anyone who has questions about the following topics:

1. Dividend growth investing

2. Credit cards

3. Budgeting

4. Earning free stuff

5. Health Care

6. Taxes

I hope you enjoy the content on this blog and I will look to update as much as possible. Please stay tuned while I get the hang of blogging and updating this blog. If you have any questions please feel free to e-mail me at