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Sunday, June 10, 2018

5 Things I learned about blogging from dividends.

1. It's a great way to connect with strangers about finances: This may seem funny but it's true. For some reason people you know will talk about every detail of their private family life, but they keep their finances a secret. I understand this. I really don't want people I know to have too much information about my networth. It's nice to be able to connect with like minded individuals and just talk money.

2. Take everything you hear with a grain of salt: Everyone has there own process for choosing their investments often time, they conflict with each other. What's right for one person's circumstances isn't right for everyone.  In some instances people are looking for a certain number of clicks. Be careful of that they may be posting quantity over quality. A good tell is if they are suggesting a particular stock is a great buy, but then don't invest in that stock themselves.

3. Writing it down keeps you grounded: One of the biggest aids to me has been the written aspect of this. The routine of writing and documenting my investments, helps me to stick with my strategy. It's also nice to be able to regularly check in with where I am versus what my goals are.

4. Goals are important: I heard a saying once that a goal unwritten is just a wish. I couldn't agree more. Because I have certain short and long range goals, I find money where I wouldn't normally. I'm constantly trying to build to get there.

5. The competition is only with yourself: I love looking at people with 60 percent savings rates with a goal of retiring in the next 5 years. They are truly inspiring.  It doesn't fit my desired life style or career goals. However, their are certain habits exhibited by the super savers that benefit me. I love taking a portion of what they do and incorporate into my savings plan. Frugality does matter, but I do it to my comfort level.  

Saturday, June 2, 2018

May Dividends

May was a fantastic month for dividends. Nine companies paid a total of $23.98. Last May I earned $8.51 in dividends. So my year over year growth was 181.79%. The snowball is real.



T:              $10.50
GIS:            $2.45
CVS:           $1.50
ABBV:        $3.84
O:                $3.73
KMI:           $1.00
WELL:       $4.35
SBUX:       $0.60
INN:           $0.36


Tuesday, May 1, 2018

Recent Buys PEP and GIS

Nothing exciting here. Had small holdings of both stocks. Both are solid long term dividend payers that are trading at a reasonable price now.

I added two shares of PEP @98.96 per share. This brought down my cost basis. That's 45 years of dividend growth, a 3.76 yield and 65.1 percent payout ratio. Pepsi just raised it's dividend and isn't going anywhere anytime soon. Pepsi is 19.08 percent off it's 52 week high. Morningstar rates Pepsi 4 stars with a fair value at 123. The consensus price target is 115.5.

I added just a single share of GIS at $43.54 to bring down my cost basis. GIS has been a name floating a lot around the dividend community. Until recently many had it on their always buy list. The price and new competition never got me too excited about it. But this was a price I couldn't ignore. This is another stock Morningstar likes right now as it has a 5 star rating. It has further diversified by entering into the petfood market. At 4.50 percent the yield is solid. There are 14 years of dividend growth and a payout ratio of 63.6 percent.

Disclaimer

Material presented on 'Dividend Seedling' is for informational and entertainment purposes only and is the opinion of the author (a social studies teacher and not a financial advisor). None of the information should be relied on or taken as investing advice or a recommendation to invest. None of the information or opinions expressed, constitutes a solicitation of the purchase or sale of any security or investment of any kind. Please do your own research before making any investments. Do not making any purchases unless you are prepared to lose your entire investment.

Additional Disclosure I long everything.

Monday, April 30, 2018

April Dividends

April is traditionally a quiet dividend month for me. This year was no different. 2 stocks paid me a total of 5.23. Up significantly from $1.80 last year. This comes mostly from shares of O I've been slowly adding.

This months dividend payers were:

TIF $1.50
O    $3.73


Monday, April 9, 2018

Savings Rate for 2017

I've been a little afraid to calculate my savings rate. Mainly because I wish it was higher and I'm afraid of how low the number was. I also struggled with whether to count my pension as part of my savings rate? Would be interested to hear thoughts on this. In the end I did decide to count my pension payments. The logic being it's money that's being invested. I decided not to count the money I saved towards my oldest daughter's 529 plan. I also decided not to count money being set aside for a house.

Given these numbers I was able to come up with a baseline savings rate of 15.9%. This isn't where I want it to be, but it's definitely a good baseline number. Of course if I disregard my pension contributions that number would be much lower.

Sunday, April 8, 2018

What is Generational Wealth? How do you build it?

I've made no secret that my goal is to build Generational Wealth. What that means to me is to provide a stable financial environment for my children and grandchildren. But my professional career and research are teaching me that this may be harder than it seems. 

As an aspiring school leader I was able to initiate several programs that brought positive change for students in my school. Without getting too much into the details each one had a fatal flaw. They depended almost entirely on me. When I stopped running the programs they died. I quickly learned that in order to create sustained change, I needed to put systems in place that would become institutionalized and continue to function without me. The same goes with wealth. It's not enough to simply build it and pass it on. What a waste it would be to accumulate wealth for my children only to have it squandered.

Recently I started reading the Millionaire Next Door. One of the pleasant surprises was how many millionaires in this country are first generation Americans. They lived simple lives and invested their money. However, the book also highlighted the challenges of creating lasting wealth. When parents provide for their children and support them with money, it hinders their ability to learn to develop budgeting habits. With every generation that lives in this country people tend to become more and more consumer based. In fact many millionaires want that for their children and unknowingly encourage them to do things that hinders wealth accumulation. They send them to elite colleges, encourage graduate school, delay their start to the work place, and continue to provide for them into adulthood. They want them to have the things they didn't have including the extravagant life style.

There in lies the challenge. I not only need to build wealth, and pass it to my children. But I have to help give them the knowledge to take care of it and pass it on to the future. The latter seems to be the biggest challenge. Influences like my amazing mom that spoils my children with far more gifts and designer clothing than they need (or than we can store), is developing a consumer mentality in my oldest daughter. Both my girls have incredible 529 plans.

Wealth accumulation also comes with challenges as well. My wife and I are currently renting a house that is larger than what we need. We are going to buy a house in a neighborhood with great schools and high prices. We spend well of 30k per year on private daycare. So even though we aren't spenders otherwise, these two costs alone limit our savings. My wife and I also both went to graduate school and got a late start saving.

That said we do have plenty of advantages. We both make fairly decent salaries. Nothing I would describe as affluent. But we are both over 90k per year. We both have room for upward growth in those salaries as well. My mother essentially took care of college for our kids. We can focus on wealth accumulation and don't have to worry about burdening our children with debt. My job comes with a pension that means I can retire with a steady income aside from my savings.

In order to build generational wealth the first task is accumulating wealth.

1. Continue to grow professionally. The more successful I am as an administrator the more room for growth and with it more salary. This is also a basis for my pension a major component of my retirement income. Goal here is to secure administrative tenure, and continue to build my resume towards another promotion. My pension is based on my salary the last 5 years in the work place. So I need to put in work professionally to have it pay off financially. The bonus here is I love my job.

2. Invest every pay raise. Currently saving $550 a month over my pension payment. That's not near enough for what I'm hoping to accomplish.Both my wife and I have established time frames and investing thresholds. I'm hoping to be investing $833 per month in 5 years, $1250 in 10 years, $2,500 in 20 years.

3. Enable my wife to save. Daycare costs, my teacher salary, and paying for my administrative certificate has placed her behind. As the daycare burden relaxes it will be nice to see her savings takeoff.

4. We put a mission plan in place to guide our spending.

Generational Wealth Objectives (Still developing)

1. Actively talk to our children about savings and the importance of saving a minimum of 15-20% of their salary. I know this number is relatively low for most Dividend investors. But It's a number that should accumulate wealth if there is already a base there.

2. Talk about monthly bill pay and what things cost, and be open about financial limitations. Talk to them about the opportunity cost that buying designer clothing can cost in missed investments.

3. Don't give our children too much money too soon. It is important to let them go into the world them go into the world themselves and make their own way. A little struggle is good. Provide assistance, but not support.

4. Start Roth IRAs for kids with their first jobs, even if they are in high school. Let them get an idea early how their money can work for them.

5.  Build a 529 fund for my grandchildren. Take that burden off the plate of their parents and ensure a good start for that generation.

Disclaimer



Material presented on 'Dividend Seedling' is for informational and entertainment purposes only and is the opinion of the author (a social studies teacher and not a financial advisor). None of the information should be relied on or taken as investing advice or a recommendation to invest. None of the information or opinions expressed, constitutes a solicitation of the purchase or sale of any security or investment of any kind. Please do your own research before making any investments. Do not making any purchases unless you are prepared to lose your entire investment.

Additional Disclosure I long everything.

Monday, April 2, 2018

Recent Buys CVS and KMI

I guess it took a trade war with China and some anti-Amazon tweets from 45 to get some value back into this market. I capitalized on this recent dip with a couple of small buys today. 

I opened a new position with CVS buying 3 shares @ 61.80 per share. 

I added a share of KMI @ $14.83

I had been following CVS for a while and today I finally pulled the trigger. What I got was a 5 star rated Morning Star Stock just $5 per share off their 5 year low. Fifteen out of 24 brokerages have CVS as a buy or strong buy. Their one year consensus price target is 88.57. Talk about an upside. But the best part for a dividend investor is the payout ratio is just 31 percent, 10 years of dividend growth and a solid 3.28 percent yield. They've taken on a lot of debt buying Aetna, but have positioned themselves to dominate the market with pricing long term. I'm really happy with this purchase and the price. 

The KMI purchase was a straight value play. There's a lot of upside $14.83 brought down my cost basis a little. KMI has a solid 3.36 yield and a payout ratio of 58.8. There have been rumors for a while that they are finally going to start raising their dividend again. KMI is rated as a 4 star Morning Star stock that is 32 percent off its 52 week high. 14 out of 22 brokerages rate them a buy. There may also be good news with their Kinder Morgan Canada.

Overall happy with these two purchase. I am trying to save for a house. However, if this freefall continues there may be at least one more purchase this month.

Disclaimer



Material presented on 'Dividend Seedling' is for informational and entertainment purposes only and is the opinion of the author (a social studies teacher and not a financial advisor). None of the information should be relied on or taken as investing advice or a recommendation to invest. None of the information or opinions expressed, constitutes a solicitation of the purchase or sale of any security or investment of any kind. Please do your own research before making any investments. Do not making any purchases unless you are prepared to lose your entire investment.

Additional Disclosure I long everything.

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5 Things I learned about blogging from dividends.

1. It's a great way to connect with strangers about finances: This may seem funny but it's true. For some reason people you know wi...