2016 Dividend Income

Where in the world did 2016 go? I feel like it was just yesterday that I was staring down the barrel of January 2016 wondering where dividend growth investing would take me and my wife. One minute I'm getting married and the next minute we've crushed any expectations of income I had prior. I've just completed putting all the numbers together in the spread sheet and I am happy to report that it is all good news.

Total 2015 Dividend Income: $62.25

Total 2016 Dividend Income: $322.91

What an eye watering difference a small year can make in terms of passive income. This is only with regular additions of income towards the greater purpose of passive income for early retirement or additional freedom. That's also $322.91 that my wife and I had to do nothing to generate. Passive income really is one of the best things in the world!

Other changes in the portfolio have come from the addition of new companies to the portfolio. Where it started with only a small hand full of companies, the portfolio now holds a respectful 17 different companies that have met my stringent requirements. I believe that they all hold the potential to be long term positions in companies that should continue to pay dividends. Where this might not be the case for all of them as the unexpected is almost guaranteed to occur, the hope is that the majority of them hold their ground and only get better and better.

Moving forward into 2017, the mission is to continue growing the dividend scythe portfolio. At this time I have a goal of 20 total companies in the finalized portfolio. Once that number is reached, I intend to add to the positions that I feel open ample opportunity for entry. If none offer what I'm looking for at that time, I plan to expand further outwards before upward. Only time can tell however. Other than portfolio outlooks, I plan to post more often than I have in the last few (admittedly slower) months. These posts will be much more geared towards personal finance as a whole rather than just investing as I feel that personal finance success is the ultimate goal and dividend investing is just the vehicle.

Hopefully I will continue to see all of your friendly posts and hear your input on the ideas that I share. Feel free to comment and say hello. I'd love to also see the results of your own portfolios if you're willing to post the results here. Happy 2017 everyone!

-Dividend Reaper

The Importance of a 401-K

Often times in the dividend growth investing community, new investors find themselves throwing a ton of their cash at their dividend growth portfolios to increase the dividend payments as fast as possible. This is a great idea – it adds fuel to the fire and makes it burn that much faster until it’s a huge flame. However, sometimes these investors forget about the all too important 401k in lieu of simply adding to their own dividend portfolios first. This can be a huge mistake.

The stock market as a whole is a giant financial plan. Without it, retirement would be but a dream for a few and most would simply have to rely on meager savings that couldn’t grow even half as fast. Hell, even banks would have a hard time surviving without making money off of their investments. One of the best financial plans that utilizes the strength of the market is a company 401-K or stock purchase plan. If you have one offered at the business that you work in, this is one of the best places to stack your money, especially if the employer offers matching in any way to your contributions.

Volume as a Buy Indicator

Many different investors use many different types of data to qualify a stock for purchase. If you’ve read my investing essentials series, you know a lot of the figures that I myself use. One figure however that was not listed is one that I use to determine whether or not I may be buying in at the right (or best) price. This figure that is relied on is more on the technical analysis side of analysis. What I’m referring to is one of the market itself. It’s a number so valuable that it can be seen as one of the largest indicators of what the market truly values at stock at. I’m talking about volume.

Investment Essentials: Diversification and Specialties

I have written about this many times in the blog before but I cannot state just how important diversification is and why it should also be taken with a grain of salt when you yourself have an expertise. Diversification, if you don't know, is the idea that you are better protected if you spread out your investments into many different areas. This could be diversification through different stocks, different sectors, or even different investments such as mutual funds, ETFs (exchange trade funds), or others.

How To Be Great At Anything

My wife knows that I love podcasts. They are definitely my newest obsession. My morning workouts just aren't the same without them. This morning I was listening to the Freakonomics Podcast that was reviewing the idea of talent - whether it really is a God given thing or if it is something that can be acquired. More specifically they discussed the idea of deliberate practice and how it can create what others see as talent.

Investing Class

Try not to be alarmed when you start seeing me post new pages on the side of the blog that make you feel like you've returned to college. My brother has almost zero investing knowledge and I offered to help by breaking a lot of it down, step by step for him. If you feel like you could gain from any extra knowledge that is presented, please feel free to read it as it is posted. I am hoping to post about one a week as he will be able to use it during his time in the desert (Middle East on deployment). The plan is to go step by step through all of the material that you would have to memorize in order to become a register investment adviser. By presenting this knowledge to him and writing it all myself, both he and I should gain a few things. He will gain a very good base of investment knowledge that spans the most important styles of investing and the terms most used by investors world wide. I on the other hand will gain a deeper understanding of the topics and at the end I should also be ready to sit for the Series 65 as the material will all have been covered other than the most up to date tax/investing laws that have been placed into effect.

Anyways, these articles should start showing up on the side of the blog soon and they will be exclusive to this blog. I won't be posting any of them to Seeking Alpha as they are closer to me and are intended to only be used by my brother to understand the world of investing. Thanks for reading.

W. Buffett and Kinder Morgan Inc.

A lot of speculation has been thrown around lately about Buffett's bet on oil giant, Kinder Morgan (KMI). The bets have been about whether or not he has been profitable on it, whether or not this is one of his few losing bets that he's made, and even if this was some sort of outcome he didn't predict. After all, so many investors wait on his moves and simply follow him on his trades without a second thought. It leaves a lot for the movement of a stock. Therefore, today I want to discuss the bet the Buffett made on Kinder Morgan.

Buffett made his gamble on KMI back when the stock had supposedly hit rock bottom - when it was trading in the low twenties to high teens per share. With that being said, the stock now trades in the high $17 range for the day (currently as I write this article). This means that Buffett likely has yet to make a profit unless he was lucky enough to bag his two million plus shares of the company for a slash off the top. This being unlucky, it's more likely that he had to pay a premium to obtain them as such a large number would not come easy. Buffett then would be said to have to break the low twenties in order to become profitable on his stock pick this time around. If you do the math, that means that Buffett even just currently is down a massive percentage on today's market. Needless to say though, the amount were talking about is such a small blip on the radar of a company as big as Berkshire so the returns are negligible at best.