Tuesday, February 27, 2018

Dividend Income Update - February 2018

It has been almost two weeks since I've posted anything. I haven't forgotten about this site, but I've been out of town and then had a minor dental surgery. This was an unexpected expense that has set me back a little in terms of investing, but I should recover in March with some fresh capital.

This is now my second post tracking my monthly dividend income. It really helps to track your dividends each month to see just how well you are doing. It also provides motivation to invest more to try and beat your own personal records. At this point the only way my months would stop increasing is if I started selling stocks. Even if I stopped buying stocks the monthly dividends would continue to grow. That is the power of dividend growth investing!

The companies that paid me this month are:
  • AbbVie (ABBV) -  $26.27
  • Apple (AAPL) - $7.56
  • AT&T (T) - $43.00
  • CVS Health Corp (CVS) - $6.50
  • Enterprise Products (EPD) - $15.30
  • General Mills (GIS) - $7.84
  • Kinder Morgan (KMI) - $4.50
  • Main Street Capital Corp (MAIN) - $4.94
  • Omega Healthcare (OHI) - $21.12
  • Proctor & Gamble (PG) $11.03
  • Starbucks (SBUX) - $9.90
  • Verizon Communications (VZ) - $57.82
  • Williams-Sonoma (WSM) - $8.58

This month I received  $219.86 in dividends.

This is up from $161.89 for February 2017

This represents a 35.8% year over year increase!

Now I would like to get January and February up in terms of dividend income, but I don't buy stocks based on their payment dates. It can be hard because my biggest months by far are March, June, September, and December. These months will eventually catch up though through investing and growing dividends. 

I've run into some unexpected costs these past two months so I'm a little behind in my investing schedule, but I have some fresh capital that will be available in March and I should be able to invest around 2k or so. 

March is looking to be my best month ever and I'm expecting around $500 or so in dividend income. This is truly incredible! This number only took 4 years to reach and is a value that can actually be used to pay off significant expenses or costs. 

The power of dividend growth investing is truly incredible. If I can achieve these results in a short amount of time then so can anyone! I can't wait to see where the dividends are in a few more years. They will be close to covering a majority of my expenses each month. 

Let me know what you guys think! How did you do in February! Let me know in the comments!

Tuesday, February 13, 2018

How to Save Thousands of Dollars Now

When I first started along my path to financial freedom I became very good at saving money and finding new ways to save money. You don't have to make a lot of money to retire early. You simply just need to save a good portion of your income. I see a lot of people who make a lot of money, but end up spending most of it anyways. Who cares if they make more money than you if you can save just as much? 

I found that there are an endless amount of ways to save money, but there are a few things that are really powerful and I wanted to go over a couple here.

1. Make your breakfast/lunch/dinner
This may be hard for some people to do, but it really does add up. I've done the calculations before and my breakfast is around $1 every morning, my lunch is around $3-4 every day and my dinner is also around $3-4 every day. I would say I eat pretty well too and have a good amount of fruits and vegetables. This all adds up to around $8 a day. Food is the easiest thing to change. If you could even just bring your lunch a few days a week then this will really add up.

Just one meal out for lunch or dinner can easily run you $10+ a day. If you compare my $8 a day with someone who averages around $22 a day then you get a $14 difference. Lets multiply this by 300 days because I don't always make every meal. 

Potential savings:  $4,200 a year
This assumes a $14 a day difference compared to someone who eats out once or twice a day. This could even be higher as food costs some people closer to $30 a day. Think about this over a couple years and you are looking at a large sum of money.

It may be hard to make your own food, but there are so many benefits to it. You will end up eating much healthier and you will save a lot of money. You can also save a ton of money on groceries if you shop at low cost places such as giant, harris teeter, and trader joes. We get a lot of free coupons just for being part of their member program which is free to join. We have also found that any Buy One Get One deal at Harris Teeter is actually buy one half off. This can end up saving you a lot of money. 

2.  Get rid of your car (or get a cheaper, gas friendly car)
This could also be hard for people to do. I'm not advocating you get rid of your car because you may need it. I have a car, but it is a 2006 Honda Civic with 90k miles on it. I've had the car since 2006 so it is fully paid off. My car insurance is only $45 a month and maintenance and gas costs are very low at this point. 

If you have a car that isn't paid off yet then you are probably paying around $300-400 a month plus another $100 or so a month for insurance. If you can afford to completely get rid of your car or settle with a cheaper car than you could potentially save yourself around $400 a month. 

Potential Savings:  $4,800 a year

3. Move Somewhere Cheaper
The three biggest expenses are rent/housing, transportation, and food. These may not always be the easiest things to change, but even just a little change goes a long way. Our rent would be considered very high at $2,360 a month. We live in a highly populated area with a ton of jobs. The salary makes up for it a little, but we understand that if we move somewhere else we could end up saving a good amount of money. We are looking at moving this upcoming fall to try and save around $200 a month. 

A tip for trying to save money on rent is by moving in the off months. During the Fall/Winter rent usually goes down or they usually offer free months of rent. If you can set up your schedule to sign a lease in those months then you can score some big savings. 

Potential Savings: $2,400 a year (This could be huge if you could move somewhere much cheaper) 

4. Join Free Rewards Programs/Use Coupons
The amount of free stuff/discounted stuff we get is incredible. Join every reward program you can and make sure you ask if there are reward programs. Once you sign up make sure to put in your birthday, because they will send you free things on your birthday. 

I probably received around $100 of free stuff on my birthday just because I was signed up for their rewards programs. I even got a free month of bagels from Panera and I'm still not sure why they did that. 

Grocery stores tend to give some great deals out for their members as well. Every Saturday we tend to get anywhere from 1-3 free items from either Harris Teeter or Giant. They do this almost every Saturday and all you have to do is join their free member program. 

There are tons of good rewards programs out there and I can provide a thorough list of the ones I use if you guys are interested. 

A good example is OpenTable. This is an app that allows you to make reservations at restaurants. The app is free to use and you collect points for every reservation you make. Now it may take some time, but once you collect 2,000 points (100 pts per reservation) they give you a $20 gift card. 

Potential Savings: $1000-2000 a year (harder to calculate, but if you use the rewards programs and coupons effectively then you can earn a lot of free stuff)

5. Get a credit card with a good rewards program
I will write a post about how to use credit cards effectively, but if you get a good credit card with a good rewards program then you can essentially travel free a lot of the time. Your points that may be worth $100 can be used for $200 worth of travel. This is why its always better to use them for travel as opposed to giving yourself cash back. 

I really enjoy all of the Chase cards and would recommend just about any of those to anyone looking to get a credit card. Considering how often you may need to travel you can end up saving a lot of money. 

Potential Savings: $1000-2000 a year (will depend on how you use your points)

These are probably some of the biggest ways to save money. There are hundreds of other ways, but these are some of my favorite and most utilized ways. The total potential savings per year from these five items is around $14,000 a year

Want to retire early? This would be a huge step in doing so. If you could free up this amount of money and invest this in dividend growth stocks over a couple of years then you would be on a fast track to retirement. 

I've learned that people don't like making changes or they think it is too hard to change. One of the ways I've worked around that is making many smaller changes instead. I'm not saying you should stop eating out every day, but maybe start with only eating out 4 times a week instead of 5 and work your way down to 1 or 2. 

If you can make many small changes then they really add up to a much bigger change. This potential savings could have you retiring 5-10 years early. Wouldn't it be worth it to be able to cut your retirement age back by that much? 

Let me know what you think! What other ways do you guys like to do to save money?

Monday, February 12, 2018

The Most Valuable Asset

I'm currently 27 years old and I still don't know what I want to do with my life. I don't hate my job, but I just don't want to do it for the next 35 years. I believe the vast majority of people are in jobs that they don't particularly enjoy very much. This is a really sad truth that I learned very quickly after graduating college. 

When I found out about dividend growth investing and it's potential to allow me to retire early, I was hooked. Even the thought of retiring 5, 10, 15, or 20 years early would be incredible. It's only been 3.5 years since I started with dividend growth investing, but I'm seeing the results and there is an end in sight. I quickly learned that your most valuable asset is your time. We all don't know how much time we have so why waste it working at a job you don't enjoy? The idea of working until you are 65 seems ridiculous. Some people don't even live to be 65 and then others may not live much longer than that.

Now obviously there are people out there who love their jobs and don't mind working 8+ hours a day. I just have a hard time believing there is a job out there that I would want to do for 8 hours a day every day. I want the freedom to be able to do whatever I want. I don't want to have to worry about writing e-mails, taking phone calls, attending meetings, etc.

If I had the choice I would rather use that time for other things. I would love to spend more time with family and friends, reading books, writing posts, analyzing stocks, watching movies/shows, working out, traveling, cooking, etc. 

Once I realized that your most valuable asset is your time, I stopped spending so much money on things I don't need. Would you rather have a new watch, new tv, new car, or would you rather have a few more years of retirement? You may not think that a few hundred dollars here and there really matters, but it really does. Purchased goods only provide a brief amount of happiness. You may feel happy about you buy that new car, but in a year is it really still making yoou happy?

I find that a lot of my friends love to spend their money on frivolous things and that's fine, but I know that it won't make me happy. True happiness to me would be the ability to retire early and do whatever I want. 

Let me know what you guys think! What motivates you to achieve financial freedom early?

Thursday, February 8, 2018

Recent Buy: AFLAC Incorporated (AFL)

The recent volatility in the market opened up some great buying opportunities. I just love when the market goes down, because stocks essentially go on sale. When the overall market goes down, has anything really changed about the company you are buying? Are they still selling products/goods/services? Are they still paying a dividend? If yes to both of those questions then you don't have much to worry about. 

Did you know that most companies continued to pay dividends during the 2008-2009 recession? Some of these companies even increased dividends during that period.

Price and yield are inversely correlated and when the market goes down all the dividend yields go up! This means your money you invest will earn you even more money!

Now, I know I said I probably wouldn't be able to invest any money this month, but with some of the volatility there were just too many good buying opportunities. I also received a $500 bonus from work that helped allow me to be able to buy. 

I ended up purchasing 13 shares of AFLAC Incorporated (AFL) for $83.90 a share. This purchase adds $27.04 of yearly dividend income to my portfolio. 

AFLAC has been on my list for a long time, but I never had the chance to buy until now. They tend to be a very boring company in terms of stock price, but they don't disappoint in terms of dividend growth. 

Some quick facts about AFLAC:
  • 35 years of dividend increases
  • 2.45% current dividend yield
  • P/E of 7.8
  • Payout ratio of about 19% (tons of room for dividend growth)
  • EPS grew 12.4% over the past 5 years
  • 10 year dividend growth rate at 8.1%
These are a lot of reasons to love the company.  

They sell insurance in the US and Japan for individuals and groups. Almost everyone has and needs insurance. AFLAC is a pretty well known company and most everyone knows their duck mascot when they see it on TV. 

There may be some more volatility in the upcoming months for the market. This will present more buying opportunities. Hopefully I can free up some more capital in March to purchase some more stock. 

Let me know what you guys think! Did you buy any stock on the recent weakness?

Monday, February 5, 2018

What If I Stopped Investing

I love running hypotheticals and different formulas on my spreadsheets to see where I'll be in a few years time. One of the things I was thinking about was how would I be doing in 20 or so years if I never invested another dollar starting today? The beauty of dividend growth investing and investing in general is that your money starts working for you. Year after year your money increases and that compounds on the amount each year. The biggest asset you have is your time. There is a famous quote that goes, "time in the market is more important than timing the market." I love this quote, because of the truth in it. As long as you can invest on a continuous basis then you will end up doing very well. 

I was thinking about these hypotheticals this weekend and I ended up running the numbers this morning to see how they would turn out.

They usually say the market increases about 7% a year and I would say my dividend growth is around 5% a year. Now both of these numbers are smaller than my actual growth rates, but I like to underestimate in my hypotheticals and formulas. 

Life is unpredictable and you never know what could happen. If tomorrow I lost my job or became very sick, it's possible that I would have to stop investing or maybe even sell some stock. I hope this doesn't happen, but lets just say I'm forced to stop investing for the next 20 years. Now, because I've invested heavily for the past four years, my dividends and gain on principal will still grow no matter what. 

Lets take a look at where my dividends would be in 20 years assuming a 5% growth rate:

This goes to show you the power of investing. If you can start early and invest as much as you can then you will set yourself up very nicely. 

Now I would be 47 years old and I would be making $9,000 a year in dividends. This is assuming I don't invest a single dollar for the next 20 years. This is truly incredible as I'm almost 20 years before the "typical retirement age"

This just goes to show you the power of investing. If you can start early and invest as much as you can then you will set yourself up very nicely.

Now lets take a look at the growth of the principal amount over the next 20 years assuming a 7% annual growth rate:


Again, I haven't invested another dollar and my money has grown to a substantial amount. This is why it is so important to invest as much as you can as early as you can. Now you can run these simple scenarios, but imagine another 20 years or imagine if you just invested a small amount each year. I will be a millionaire in retirement even if I don't invest another dollar. 

This is the power of dividend growth investing and investing in general. If you have the ability to place your money in high quality stocks for a long period of time, then you will end up doing very well. 

Let me know what you guys think!

Friday, February 2, 2018

Dividend Income Update - January 2018

This is my first post in a series where I will track my dividend income each month and compare it to the prior year. I hope these can inspire other people to see just how easy it is to collect these dividends. 

January is a slow month for me in terms of dividends, but it was better than last year!  These posts will be fun for me to write because they deal with dividend income and you can truly see the results of dividend growth investing. 

The companies that paid me this month are as follows:

  • Toronto-Dominion Bank (TD) -  $8.70
  • JPMorgan Chase & Co (JPM) - $10.08
  • Bank of Nova Scotia (BNS) - $9.24
  • Sysco Corporation (SYY) - $7.20
  • General Electric (GE) - $5.64
  • Cisco Systems Inc (CSCO) - $19.43
  • Western Digital Corp (WDC) - $4.50
  • Cardinal Health Inc (CAH) - $14.33
  • Philip Morris Intl (PM) - $20.33
  • Walt Disney Co (DIS) $8.40
  • Altria Group Inc (MO) - $9.90
  • PepsiCo Incorporated (PEP) - $9.66
  • Kimberly-Clark Corp (KMB) - $7.76
  • HP Inc (HPQ) - $9.47
  • Nike Inc (NKE) - $2.80

This month I received $147.46 in dividends. 

This is up from $96.13 for January 2017. 

This represents a 53.4% year over year increase!

Now, again January is my slowest month of the year so the rest of the year should be much higher. My biggest months by far are March, June, September, and December. With all the recent dividend increases I'm looking at around $500 for this March! 

When I first started it was hard to see the results adding up to anything, but now its truly incredible as the results don't lie.  

This year I've run into some unexpected costs so it may be a bit of a down year in terms of investing, but I hope that with added dividends and increases that I can invest close to $2,000 a month. This would allow me to add around $700+ in forward dividend income. 

How did you guys do in January? Let me know in the comments!

Thursday, February 1, 2018

Portfolio Update - January 2018

This is the first post in a series I'm starting that will track my portfolio from month to month. I will update my portfolio page and I will add a post detailing the prior month. 

January was a fantastic month for investors across the board. It was my best month ever in terms of market appreciation. Its incredible to see this type of appreciation. While this not to be expected every month, it just goes to show you the power of investing.

February may be a light month in terms of investing. I have some large expenses coming up and I may have trouble getting any money into the market. I also want to build up my checking account a little in case of emergencies. I've kept it fairly low (<$4k) for quite some time and I'm trying to build it up a little higher.

This month however I was able to purchases shares in two different companies to add to my dividend income. 

On January 9th I was able to purchase 26 shares of Main Street Capital Corporation (MAIN) at $38.80 a share. I've wanted to own a piece of this company for awhile and finally pulled the trigger. This will add around $63 in yearly dividend income. 

The following day on January 10th, I was able to purchase 8 shares of Kimberly-Clark Corp (KMB) at $114.40 a share. I saw some recent weakness in the share price and decided to add more of this incredible company. This company sells essential goods across the world and they have increased their dividend for 46 years in a row! This will add $32 in yearly dividend income. 

This month I was able to add nearly $100 in yearly dividend income!

Overall my net worth increased $11,799.33 from $191,379.67 to $203,179.01

This was my best month ever by almost $2,000! Its truly amazing to see not only the power of dividend growth investing, but investing in general. 

I will update the portfolio page with the updated values as of January 31st, 2018. 

Let me know what you guys think! How did you guys do this month?