Saturday, June 29, 2013

Income Investing Articles to Enjoy: 6/29/2013

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Back to Regular Programming

For your weekend reading enjoyment, I have highlighted a few interesting articles from the archives, which I find to be relevant today. The first five articles have been written and posted on this site, while the last five have been selected from other authors. I tend to post anywhere between three to four articles to my site every week. I usually try to write at least one or two articles that contain timeless information concerning dividend investing. This could include information about my strategy, or other pieces of information, which could be useful to dividend investors.
Below, I have highlighted a few articles posted on this site, which many readers have found interesting:
I read a lot about companies, and also read a lot of interesting articles from all over the web. A few that I really enjoyed over the past several months include:
Thank you for reading Dividend Growth Investor site. I am also on Twitter, if you are interested in following me on another platform, where I post about recent trades I have made.

Your might also enjoy:

Friday, June 28, 2013

Teva Pharmaceutical (TEVA) Dividend Stock Analysis

Teva Pharmaceutical Industries Limited develops, manufactures, markets, and distributes pharmaceutical products worldwide. This dividend achiever has paid dividends since 1984, and has increased them for 13 years in a row.

The company’s last dividend increase was in February 2013 when the Board of Directors approved a 25% increase in the quarterly distribution to 1 NIS /share. The company’s peer group includes Actavis (ACT), Taro Pharmaceutical (TARO) and Revlon (REV).

Over the past decade this dividend growth stock has delivered an annualized total return of 8.10% to its shareholders.


The company has managed to deliver a 7.30% average increase in annual EPS since 2003. Analysts expect Teva Pharmaceutical to earn $5.07 per share in 2013 and $5.54 per share in 2014. In comparison, the company earned $2.25/share in 2012. Over the next five years, analysts expect EPS to rise by 6.81%/annum.

Earnings per share have been following a general uptrend, which has been quite volatile however. The company’s US operations have benefited from the recent launches of new generic products such as Lexapro and Actos. The patent cliff experienced by big pharma is beneficial for generics manufacturers such as Teva. Generics account for over half of the company’s sales. The company is under intense competition in the generic pharmaceuticals market, where being first to file might offer a slight competitive advantage to the filer.

However, Teva is not immune to the patent cliff itself. Its multiple-sclerosis drug Copaxone, accounting for 17% of sales in 2012, will face competition from Mylan Laboratories as early as 2015.

Future growth could also be realized from strategic acquisitions. The firm is expecting to benefit from the 2011 acquisition of Cephalon in terms of synergies, as well as adding its portfolio of products through its distributions pipeline.

The return on equity for Teva has been on the decline from a high of 27% in 2003. Currently, it is below 10%, but if earnings projections materialize, it could go up to 15%. I generally want to see at least a stable return on equity over time. I use this indicator to assess whether management is able to put extra capital to work at sufficient returns.

The annual dividend payment in US dollars has increased by 27.60% per year over the past decade, which is higher than the growth in EPS.

A 27% growth in distributions translates into the dividend payment doubling almost every two and a half years on average. If we look at historical data, going as far back as 1990, one would notice that the company has managed to double distributions every three years on average.

The dividend payout ratio has increased from 12% in 2003 to 46% in 2012. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.

Currently Teva is attractively valued at 17.20 times earnings, yields 2.80% and has a sustainable distribution. Unfortunately, I am not certain if it has the durable competitive advantages that would help it differentiate itself from competitors. It looks like in the generic drugs industry, companies do not have any competitive advantages related to branding, that would allow them to charge premium prices. In the long-run, commodity producers cannot realize excessive profits, that would translate into fat future dividends. As a result, I do not plan on initiating a position in the stock.

Full Disclosure: None

Relevant Articles:

Dividend Achievers Offer Income Growth and Capital Appreciation
BHP Billiton (BBL) Dividend Stock Analysis
-\Dividend Stocks for Young Investors
The World’s Best Dividend Portfolio
Most Widely Held Dividend Growth Stocks

Wednesday, June 26, 2013

Dividend Growth Investing is a Perfect Strategy for Young Investors

Imagine your perfect day. You wake up when you are rested, without the need of any alarm clocks. You then do some working out , followed by having a nice healthy breakfast. You then read at your leisure, have a lunch later in the day to beat the 11:30 – 1 pm crowds, and then review your brokerage accounts. You notice dividends from several companies are deposited today, and you decide to transfer them to your checking account. You check for any major items concerning your portfolio holdings, and spend a few hours researching a new dividend stock.

After that you get more time to concentrate on your activities, be it volunteering at the local homeless shelter, mentoring high school students, learning a new language or simply catching up on some good books. Later that day, you might decide to enjoy a few with your mates/gals. This dream is brought to you by dividend investing.

This is my retirement dream in a nutshell. The reason I started Dividend Growth Investor blog in 2008, is to write down ideas on how to make it happen. I believe that dividend growth investing works for all investors, regardless of their age. However, I do realize that older investors might have a preference for higher yielding stocks, while youngsters like myself can afford to build portfolios across the yield spectrum.

One of the most common misconceptions about dividend investing however is that it is not a good strategy for building your nest egg, and therefore it is not suitable for younger investors. Being a youngster myself, I (not surprisingly) disagree.

Younger investors are typically told to take a lot of risks early on, because they have time to recuperate those losses. I find this saying to be very dangerous for young investors. The problem is that taking risk is important, but it should not be mean gambling. Investors should only be taking on large risks when they have a strategy with positive expectancy of a positive return, while risk is minimized. If you invest in penny stocks, social media stocks, or if you bought dot-coms during the tech boom of the late 1990s, you took huge risks but you were likely making concentrated gambles. There is a cost to gambling, because losing your entire nest egg of $10,000 at the age of 24 means you will be poorer by $800,000 by age 70. This calculation assumes a 10% annual return for 46 years.

In contrast, with a typical dividend growth strategy, you get a slow and steady approach that will lead to a monthly passive income that will pay your expenses in retirement. Starting out early will be beneficial, because you would gain the necessary experience through trial and error, and find out the nuances that work out for you. This would make you successful, and ensure you maintain your success in investing. A big part of investment success is not losing too much in your investment career.

With this dividend strategy, we are focusing not on net worth per se, but on target annual dividend income. If your goal is to have a net worth of $1 million dollars, but you end up investing it in a relatively illiquid asset such as a personal residence, you might not be able to retire entirely on it. In some parts of the US, you might have to pay $20 - $30 thousand in annual property taxes plus paying for upkeep, maintenance etc. If instead you had a rental property generating $4,000 in monthly income or a portfolio of dividend stocks generating a similar amount, you might be set for life.

I believe that a new investor who does not have a lot of money today but who plans on accumulating their “financial nut” over the next years will be perfectly able to utilize dividend growth investing. With this strategy investors turbocharge the dividend income growth of their portfolios by putting money to work every month in stocks that regularly boost dividends, and then reinvesting those dividends selectively.

Since 2008, I have been on a mission to build up my portfolio income. Every month, I save an amount of money that I deposit in my brokerage account. I scan the market for investment opportunities all the time, followed by analyzing prospective investments. I identify dividend stocks for further analysis either by running my screening criteria against the dividend champions or contenders lists, by looking at weekly list of dividend increases as well as through interactions with other investors and the general method of my inquiry into business.

I do a complete stock analysis of each company I find interesting, in order to gauge whether the company in focus has any competitive advantages, pricing power and whether there are any catalysts for further expansion in revenues and profitability going forward. I focus on companies that can grow earnings over time, which will provide the fuel for future dividend increases. A rising earnings stream is also positively correlated with an increase in stock prices. You can have your cake and eat it too with dividend growth stocks.

My goal is to acquire the quality companies identified for purchase at attractive valuations. Entry price does matter to an extent, because a lower price provides a higher margin of safety in the investment and is equivalent to a higher dividend income. Of course, if you plan on holding stocks for 20 – 30 years however, it would not really matter whether you purchased Johnson & Johnson (JNJ) at $70/share or $75/share. If you overpay today however, it might mean that your returns in the first five years might be below average, until the growing earnings result in a valuation compression that would make the stock attractively valued today.

For my personal portfolio, I try to generate annual dividend growth in the 6-7% range on aggregate. My portfolios also yield approximately 3.50% – 4%. I achieve these aggregate figures by stacking three different types of dividend growth stocks, for maximum results. So far, I am able to cover approximately 50% of my expenses from my dividend income.

A few good picks include:

Coca-Cola (KO) engages in the manufacture, marketing, and sale of nonalcoholic beverages worldwide. This dividend champion has increased distributions for 51 years in a row. Over the past five years, Coca-Cola grew distributions at a rate of 8.40%/year. Currently, the stock is trading above the 20 times earnings limit I have set for myself, but yields a very respectable 2.80%. Check my analysis of Coca-Cola.

Phillip Morris International (PM) manufactures and sells cigarettes and other tobacco products. The company has managed to grow distributions by 13.10%/year since the spin-off from parent Altria Group (MO) in 2008. I like the economics of the tobacco business, without the liability stemming from doing business in one country. PMI's revenues are generated outside the US, and therefore are not dependent on a single country's onerous laws on smoking. Currently, the stock is trading at 16.60 times earnings and yields 3.90%. Check my analysis of PMI.

Kinder Morgan Inc (KMI) is the general partner of Kinder Morgan Partners (KMP) and El Paso Pipeline Partners (EPB). It also owns limited partnership interests in KMP and EPB.  The most important asset is the incentive distribution rights structure, which provide for a 50% share of any future distirbutions growth over a certain threshold for KMP and EPB. Given the growth projections for energy assets in the US, and Kinder Morgan in particular, this stock can achieve high single digit dividend growth for at least the next five years. Currently it is yielding a very attractive 4.20%.

Procter & Gamble (PG) engages in the manufacture and sale of a range of branded consumer packaged goods. This dividend king has increased distributions for 57 years in a row. Over the past five years, Procter & Gamble has managed to boost distributions at a rate of 12.20%/year. Currently, the stock is trading at 17.20 times earnings and yields a very respectable 3.10%. Check my analysis of Procter & Gamble.

Let’s see how a portfolio stacks, where a young dividend investor puts $3000/month in 4% yielders that grow at 6%/year.



After five years with this approach, you would be earning $750 in monthly dividend income. Ten years after starting this strategy you will be earnings $2,000 in monthly dividend income. Fifteen years after beginning your dividend investment journey, you will be making almost $4,000 in monthly dividend income. This slow and steady approach is very boring, and it is not as exciting as tripling your money in Tesla (TSLA) in less than a month. However, more investors who focus on long-term wealth accumulation potential of dividend growth stocks will be better off than investors who gamble on the next big growth stock.

An investor with a vision will look beyond the 3%- 4% current yields today, but look at the potential for higher distributions over time. An investor that starts small at a young age, builds a diversified portfolio of income producing securities with growing distributions when valuations are right, reinvests these rising distributions into more stock and continuously adds to his portfolio, will achieve wealth at a relatively young age.

Full Disclosure: Long KMI, KO, PM, PG, JNJ, KMR

Relevant Articles:

Check Out the complete Archive of Articles
Dividend Stocks for Young Investors
My Dividend Retirement Plan
Dividend Growth Strategy for Retirement Income
Buy and hold dividend investing is not dead
- Carnival of Personal Finance #421

Tuesday, June 25, 2013

My Dividend Portfolio Holdings

Thank you for reading my site. As most of you are aware, Google feeds is getting discontinued on July 1, 2013. As a result, if you are subscribed to receive email alerts through Google Feeds, you might not be able to receive updates in the future when I post an article on Dividend Growth Investor website.

However, you can change your feed reader to Feedly for example, or you can sign up to receive it as an email. For email subscribers, expect to get an email alerting you to reconfirm your subscription the Dividend Growth Investor RSS email list. Please click on the link in that message to continue receiving RSS over email. During the transition you may receive one duplicate notification.













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Rising interest rates affect all businesses, not just dividend paying ones

Ever since the “correction” in dividend paying stocks began five weeks ago, I keep learning that the so-called dividend craze is over. The argument goes that dividend paying stocks are less attractive for investors today, because rising interest rates will make them less appealing.

Before I address this argument on rising interest rates affecting the appeal of dividend paying stocks, I am going to quote Charlie Munger, who has been Warren Buffett’s business partner for half a century.

“I never allow myself to have an opinion on anything that I don’t know the other side’s argument better than they do.”

Unfortunately, I find that people arguing against dividend investing never get their facts straight, and usually resort to manipulating their examples in order to prove their point. Whether this is based on reality or not, is not important for them.

Over the past 3 months, the yield on the benchmark 10 year US treasuries has increased by 50%. While the term 50% seems like a lot, in reality it is used to describe the fact that yields increased from a low of 1.60% in April to a high of 2.50% in June. To put it in perspective, if you were a retiree with $1 million in cash, who purchased ten year treasuries in April 2013, you would be entitled to receive $16,000 in annual interest income for ten years. If you had waited to invest the money today, you would be entitled to receive a little over $25,000 in annual interest income for ten years. In other words, you went from a situation where your money is not earning too much, to a situation where your money is still not earning enough.

The worst part is that investors in US treasuries are still not earning enough to compensate them for inflation, taxes and to earn a decent livable return. At the end of their maturities in 2023, investors would get their $100 back, but it would likely have the purchasing power of about $74 today, assuming a 3% inflation rate per year. If our enterprising investor instead decides to purchase dividend paying stocks, they would be able to generate distributions which grow at or above the rate of inflation, can also protect principal from inflation, while enjoying a preferential tax treatment. As a result, a a portfolio of dividend growth stocks yielding 2.50% today which grows dividends at 10%/year will generate $25,000 in income today based on a $1,000,000 portfolio. In seven years however, this dividend portfolio will generate an annual dividend stream of $50,000.

As you can see, investors who argue that rising interest rates are bad for dividend growth stocks forget that they are not bonds, and therefore can increase dividend checks to compensate for holding the security. Of course, selecting a quality dividend stock does take some effort, which requires screening, analysis of underlying business prospects and purchasing the security at attractive valuations.

In reality, I think that rising interest rates are really bad for fixed income securities such as treasuries and preferred stocks. The fixed coupons provide an illusory safety that income cannot be cut or eliminated. In reality, the purchasing power of these coupons is decreasing every single year. Dividend stocks are not bonds however, as the underlying business behind the security provides a built in inflation protection in aggregate.

When I invest however, I view shares of dividend paying companies as partial ownership stakes in businesses. I try to invest in those quality companies which I would be happy to hold through several cycles of rising and falling interest rates, economic expansions and recessions and stock market volatility. My holding period is essentially forever. This could range from 20 years all the way to over 50 years ( if I am particularly lucky). As a result, any data point less than one year is viewed as noise in my book.

I have outlined below a few dividend growth stocks which are attractively valued, and have exciting prospects ahead:

McDonald’s Corporation (MCD) franchises and operates McDonald's restaurants in the United States, Europe, the Asia/Pacific, the Middle East, Africa, Canada, and Latin America. This dividend champion has managed to boost distributions for 36 years in a row, and has a five year dividend growth rate of 13.90%/year. Currently, the stock is trading at 18 times earnings, yields 3.10% and has an adequately covered dividend. Earnings per share are projected to increase by % over the next five years. Check my analysis of McDonald’s.

Philip Morris International Inc. (PM), through its subsidiaries, manufactures and sells cigarettes and other tobacco products. The company has managed to boost dividends for 5 years in a row, and has a five year dividend growth rate of 13.10%/year. Currently, the stock is trading at 16.80 times earnings, yields 3.90% and has an adequately covered dividend. Earnings per share are projected to increase by % over the next five years. Check my analysis of PMI.

Chevron Corporation (CVX), through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. This dividend champion has managed to boost distribution payments for 26 years in a row, and has a ten year dividend growth rate of 9.20%/year. Currently, the stock is trading at 9 times earnings, yields 3.30% and has an adequately covered dividend. Earnings per share are projected to increase by % over the next five years. Check my analysis of Chevron.

Aflac Incorporated (AFL) provides supplemental health and life insurance products in Japan and US. The company has managed to boost dividends for 30 years in a row, and has a ten year dividend growth rate of 10.90%/year. Currently, the stock is trading at 9 times earnings, yields 2.50% and has an adequately covered dividend. Earnings per share are projected to increase by % over the next five years. Check my analysis of Aflac

To be perfectly clear however, rising yields on treasuries do signal that cost of capital will be higher over time. This does affect corporate profits, as many companies borrow extensively to finance their daily operating needs. The sad part that many anti-dividend arguments miss is that rising interest rates are not good for businesses in general, not just dividend paying ones. However, because the economy is doing better, companies will be able to sell more goods and services, which would offset rising interest rates. However, companies with strong competitive advantages will be able to generate rising profits over time. They can deal with the cost of higher interest rates by passing higher costs to customers who want the products, making operations more efficient by reducing duplicate functions, or working ways to reduce the need for borrowing to finance short-term operations.

Full Disclosure: Long MCD, PM, CVX,  AFL

You might also like:

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Monday, June 24, 2013

Your Retirement Income is on Sale!

Everyone loves a good sale! When you purchase quality merchandise at 50% off, or at everyday low prices, it is considered a bargain and a smart move. When stock prices decline however, investors all of a sudden lose their common sense to become fearful. Lower prices on quality stocks causes investors to shun buying stocks. Higher prices on the other hand, excite everyone.

Stocks have finally began sliding down, and I am starting to get excited. I would love for stocks to get down even further from here. As someone in the accumulation stage of the dividend machine building process, I welcome any price weaknesses with open arms, as it translates into higher entry yields.

The amateurs are starting to get nervous however. They need positive reassurance through rising prices. If they don’t get rising prices, they get scared, and start selling everything. These investors view stocks like lottery ticket substitutes. Many dividend investors, myself included, started their investing journey treating stocks like lottery tickets in their early days. After a while however, it all starts to sync in that stocks are ownership pieces of real businesses, and not just some paper certificates or kilobytes on a computer screen. Success if determined based upon the growth in the underlying business, not because of meaningless short-term stock price fluctuations.

At the end of the day, smart dividend investors view stocks as partial ownership shares of real businesses. They do their research in uncovering those businesses, and then try to buy existing owners out at bargain prices. They can then sit back, monitor their business interests, and collect dividends one check at a time. After all, if you owned an apartment building next to a college that is always occupied, you won’t give a damn if its quoted valued fell by 5% - 10%- 20% in one single day. As long as you can rent your building out, you should do just fine by ignoring “quoted values”.

And what a great time it is to be a collector of business profits, through generous dividend distributions. Corporate balance sheets are flush with cash, more people are going back to work, and that housing market is coming back up. It is even better, when the price of your dividend stream is getting cheaper by the dozen. Just a month ago, everyone was complaining that stocks are overextended, and quality REITs such as Realty Income (O) yielded only 4%. This caused me to ask myself, whether we were in a REIT bubble. Since then, the stock has gone down over 26%, and is yielding a cool 5.30%.

The chicken littles however are scared that the Federal Reserve will stop pumping $85 billion into the economy every single month. However, they seem to be forgetting that the economy seems to be recovering. Most importantly, they seem to be forgetting that most profits in investing are made by the long-term buying and holding, not flipping stocks.

I keep hearing from amateur investors of the world, that the improving economy and the ending of Qualitative Easing by the FED will lead to higher interest rates. Those rising interest rates will be bad for dividend stocks. I usually ignore such talk, not because I am smug, but because I try to look 20 -30 years down the road. I cannot imagine a scenario, where US businesses will not be better off in 20 – 30 years. Businesses will have better productivity, access to more markets, and would have made more in profits. Chances are that we would have new products that few are probably even dreaming of right now. I assume that these products would likely improve lives significantly. I wake up every day, trying to achieve something for myself and my family – I imagine that millions of other people in the US and the Globe are trying hard to achieve just that. Some of these people would be the ones to invent the products mentioned above, that will improve our lives.

In addition, rising interest rates are bad for all stocks, not just dividend stocks. If I had to choose between owning some highly speculative Chinese internet stocks or some blue chip dividend paying stocks that pay me rising dividends every year, I would always go with the dividend stocks. Chances are that the mature dividend stocks will have access to credit at much better terms when things get tough, while the hot growth Chinese internet stocks will get clobbered and many might have to resort to cooking the books to get credit. Again, the goal is to try to select the companies that have what it takes to be here in 20 -30 years, and then try to buy their stock at attractive valuations. You can also call these qualities competitive advantages, wide moats or strong brands. Trying to outguess the economic cycle is a fools game. Even people whose primary job is forecasting macroeconomic trends have trouble getting it right. Your job is again to invest for the next 20 – 30 years, which would cover several economic cycles, and several periods of interest rate fluctuations. In those 20 -30 years, stocks would likely drop by half at least once.

One of the smartest people in the world, who became a billionaire because of his intelligence, once said:

"If you are not willing to hold stocks though 50% loss, you should not be in stocks."

Let that sink in. This person is Charlie Munger, the long-standing business partner of Warren Buffett. If Buffett had chickened out in 1974, when the price of Berkshire Hathaway (BRK.B) had fallen down by 50%, and put everything in Treasuries, he would have never become a billionaire.

When shares of Aflac (AFL) dropped from $25 to $10/share in 2008 - 2009, it was a pretty scary experience. I held on, bought some more, and have been adding to the position and collecting dividends ever since. I am welcoming drops in prices, especially if it would bring companies such as Coca-Cola (KO) to trade at 15 - 16 times earnings. Given forward earnings of $2.14/share for 2013, this would translate into $32.10 to $34.34/share.

Some quality companies like Phillip Morris International (PM) are trading at 16.80 times earnings, yield 3.90%, while having a sustainable distribution. The company is expecting to grow earnings by 9 - 12%/year for the foreseeable future, fueled by its expanding growing operations. Check my analysis of PMI.

Other companies such as Wal-Mart Stores (WMT) are trading at 14.50 times earnings and yield over 2.50%. Wal-Mart Stores has been able to increase dividends for 39 years in a row.Over the past decade, the worlds largest retailer has managed to boost distributions by 18.10%/year. Check my analysis of Wal-Mart.

So back to our Realty Income story mentioned above. If you had $500,000 in May 2013, and you invested the whole stash in realty Income (O), you would have only been able to generate $20.000 in annual dividend income. If you bought Realty Income today, you would be able to make over $26.000. I don’t know about you, but the drop in stock prices is making me feel richer. If I were a rational dividend investor, I would actually hope for lower prices from here. If you get a cash machine that spits out an ever rising stream of dividend income, then wouldn't you want to buy a piece of it at the lowest prices possible?

After all, it would make the cost of your retirement much lower.

Full Disclosure: Long O, KO, AFL, PM, KO

Relevant Articles:

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Saturday, June 22, 2013

Income Investing Articles to Enjoy: 6/22/2013

Most of you know Google Reader is being eliminated soon. We have many readers who subscribe via RSS and use Google Reader. We highly recommend you check out Google Reader alternatives. Also you can always subscribe via RSS, Email, Twitter. We do not have recommendations, but here is what the tech geeks are saying is the best (many of these services will also save all your old feeds, favorites etc):
Back to Regular Programming

For your weekend reading enjoyment, I have highlighted a few interesting articles from the archives, which I find to be relevant today. The first five articles have been written and posted on this site, while the last five have been selected from other authors. I tend to post anywhere between three to four articles to my site every week. I usually try to write at least one or two articles that contain timeless information concerning dividend investing. This could include information about my strategy, or other pieces of information, which could be useful to dividend investors.
Below, I have highlighted a few articles posted on this site, which many readers have found interesting:
I read a lot about companies, and also read a lot of interesting articles from all over the web. A few that I really enjoyed over the past several months include:


Thank you for reading Dividend Growth Investor site. I am also on Twitter, if you are interested in following me on another platform, where I post about recent trades I have made.

Past Editions:

Friday, June 21, 2013

Archer-Daniels-Midland (ADM) Dividend Stock Analysis 2013

Archer-Daniels-Midland Company (ADM) manufactures and sells protein meal, vegetable oil, corn sweeteners, flour, biodiesel, ethanol, and other value-added food and feed ingredients. This dividend champion has paid dividends since 1927, and has increased them for 37 years in a row.

The company’s last dividend increase was in February 2013 when the Board of Directors approved an 8.60% increase in the quarterly distribution to 19 cents /share. The company’s peer group includes Bunge (BG), Ingredion (INGR) and Cargill.

Over the past decade this dividend growth stock has delivered an annualized total return of 10.20% to its shareholders.


The company has managed to deliver an 11.30% average increase in annual EPS since 2003. Analysts expect Archer-Daniels-Midland to earn $2.55 per share in 2013 and $2.95 per share in 2014. In comparison, the company earned $1.84/share in 2012. Over the next five years, analysts expect EPS to rise by 10%/annum.

One of the driving forces behind future growth could be the company’s potential for expansion in its Agricultural Services and Oilseeds businesses. The firm plans on allocating 80% of its capital spending budget to these two segments. In addition, it plans on spending half of its growth capex on international operations. ADM is in the process of bidding for Australia’s GrainCorp, which could potentially provide it with higher presence in Asia.

In the long-run, strong demand for crops and agricultural products globally should be beneficial for Archer Daniels Midland. This is a function of potential for the gradual increase in the global population. The world population is expected to increase by 1.4 billion people through 2030, which represents an increase of over 20%. The highest population growth would be experienced in Asia and Africa. While the company has a strong dominant position in the industry, it is exposed to volatile commodities prices.

The company has three major business segments:

The Oilseeds Processing segment includes activities related to the origination, merchandising, crushing and further processing of oilseeds such as soybeans, cottonseed, sunflower seeds, canola, peanuts, flaxseed and palm into vegetable oils and protein meals for food, feed, energy and other industrial products industries. Oilseeds and oilseed products may be processed by ADM or resold into the marketplace as raw materials for other processing. This segment accounted for 45% of ADM’s 2012 operating profits.

The Corn Processing segment includes corn wet milling and dry milling activities, primarily in the United States, to produce ingredients used in the food and beverage industry including syrup, starch, glucose, dextrose and sweeteners. Dextrose is also used by the company as a feedstock for its bioproducts operations, including the production of ethanol, amino acids and industrial products. Corn gluten feed and meal, as well as distillers grains, are produced for use as animal feed ingredients. Corn germ, a by-product of the wet milling process, is further processed as an oilseed into vegetable oil and protein meal. This segment accounted for 21% of ADM’s 2012 operating profits.

The Agricultural Services segment utilizes the company's extensive grain elevator and transportation network to buy, store, clean and transport agricultural commodities, including oilseeds, corn, wheat, milo, oats, rice and barley; and resells these commodities primarily as food and feed ingredients, and as raw materials, for the agricultural processing industry. Agricultural Services' grain sourcing and transportation network provides reliable and efficient services to the company's agricultural processing operations. The Agricultural Services segment includes 160 domestic and 25 international elevators, an animal feed facility in Illinois, 27 domestic and seven international formula feed and animal health nutrition plants, an edible bean plant in North Dakota, 23 domestic edible bean procurement facilities and a rice mill in California. This segment accounted for 33% of ADM’s 2012 operating profits.

The return on equity for Archer-Daniels-Midland has been following the rise and fall in commodities prices over the past decade. I expect this indicator to increase over the next five years, as earnings per share rebound. Currently, the cost of capital is 5.30%, which bodes well for the earnings growth potential behind new projects and capex spending. I generally want to see at least a stable return on equity over time. I use this indicator to assess whether management is able to put extra capital to work at sufficient returns.

The annual dividend payment has increased by 12.30% per year over the past decade, which is slightly higher than the growth in EPS.

A 12% growth in distributions translates into the dividend payment doubling almost every six years on average. If we look at historical data, going as far back as 1990, one would notice that the company has managed to double distributions every six years on average.

The dividend payout ratio has charted a complete u-turn over the past decade. However, it has never gone significantly beyond 35%. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.

Currently Archer-Daniels-Midland is attractively valued at 17.30 times earnings, yields 2.30% and has a sustainable distribution. I would consider adding to my position in the stock on dips below $30.

Full Disclosure: Long ADM

Relevant Articles:

Six Exciting Dividend Increases for Long-term income investors
Dividend Champions Index – Five Year Total Return Performance
Warren Buffett’s Dividend Stock Strategy
Five Dividend Champions Actively Boosting Distributions to Shareholders
Dividend Aristocrats List

Wednesday, June 19, 2013

How to crush the market with dividend growth investing

Dividend growth investing is the true underdog of investment strategies. It is not because the strategy fails to generate consistent returns to investors, but because it is not lucrative for the financial industry. It is also misunderstood because it focuses on dividends that grow, not simply yield. Dividend growth investing is a simple investing strategy that focuses on buying and holding quality companies at attractive valuations, which have the potential to increase earnings and dividends along the way. This is do-it-yourself type investing that relies on long-term holding and involves minimal transaction or advisory fees.

What could be simpler that selecting companies with a proven track record of increasing dividends, trading at attractive valuations, that also exhibit the potential for future earnings growth? As long as you monitor your positions, you can essentially set it and forget it and ignore the day to day noise of Wall Street. What critics of dividend growth investing fail to see is that a growing enterprise that consistently earns more, and pays more in dividends is more valuable over time. Thus, dividend growth investors can have their cake ( the dividend stock) while eating it too (receiving growing streams of dividend income).

I have several exhibits, which discuss performance of dividend growth investing over different time frames. The first exhibit below is from an independent study of returns of S&P 500 Index stocks by dividend policy, prepared by Ned Davis Research. The study shows that a $100 investment in dividend growers and initiators in 1972 turned into a cool $4,168 by the end of 2012, compared to $1,622 for an investment in S&P 500. However, the investors that put $100 in 1972 in non-dividend payers and dividend cutters & eliminators ended up with only $193 and $88 after 41 years! This chart shows you that dividend investing provides you with an edge.



The second chart shows the performance of Dividend Champions between 2007 and 2012:



This is my performance since 2007: I achieved this not because I have a magic ball, but because I have a strategy that provides me with an edge against everyone else. As a dividend growth investor, I could care less how I do relative to the market however. Performance relative to a benchmark is not an actionable item, but something that could provide confusion and make otherwise smart investors question their strategy at the worst time possible. Switching strategies at the wrong times because you lack confidence is a sure way to never amass any wealth in the stock market.

Two other investors performance that I am attaching is the one from fellow blogger Dividends4Life through March 31, 2013:


In my investing, all I care about is selecting great companies at attractive valuations, strong competitive advantages, a track record of raising dividends and the potential for earnings increases. The market can fluctuate all it wants, but by ignoring it and focusing on what matters I have been able to crush it since 2008. After all, companies like Coca-Cola (KO) and Chevron (CVX) will satisfy consumer demands for several decades to come. These companies with enduring competitive advantages are much more likely to pump out billions more in profits and afford to pay higher distributions.

Dividend growth investing is not going to outperform the market every single year, but over time it should deliver a performance that should at the very least slightly exceed S&P 500 results. No investment strategy in the world will generate consistent profits all the time, and outperform its benchmark all the time. Investors should have confidence in their approach, and not let temporary underperformance make them switch strategies. The only sure way to lose money in the stock market is to search for a strategy that makes profits all the time, and thus switching strategies often.

By focusing on quality, dividend growth investors uncover value and outperform indices over time, despite not caring about general stock market fluctuations. This is a winning strategy that can not only deliver a growing stream of dividends to live off, but also grow investors income over time.

Another reason why dividend growth investing is perfect for retired investors is because it protects from the variability of year to year returns. The problem with living off of index funds is that you risk having to sell a chunk of your portfolio when stock prices are unreasonably depressed. An index could go up by 10%/year every year on average, but this could mean going down by 50% in year one and being flat in year two. This could cause you to sell at the bottom in order to fund your living expenses, which could leave fewer dollars left to capture any upside in stock prices. It could also leave less dollars to fund your retirement. The growing dividend yield on the other hand provides a baseline that supports the living expenses of the retiree. When everyone else realizes falling stock prices could cause them to go back to work, the dividend growth retiree would care less as they will be drowning in cash from their portfolios. Not surprisingly, the rising dividends  would also provide an income stream that maintains purchasing power against inflation.

Full Disclosure: Long KO and CVX

Relevant Articles:

Check Out the complete Archive of Articles
Dividend Growth Investing Gets No Respect
Buy and Hold means Buy and Monitor
The Dividend Edge
Are performance comparisons to S&P 500 necessary for dividend investors

Tuesday, June 18, 2013

Dividend income is more stable than capital gains

Over the past century stocks have delivered a 10% annual total return on average. The total return consists of price appreciation and dividend payments. The issue with average returns is that over the past century, there are only a few occasions where stocks clocked in annual returns of somewhere close to 10% in a given year. In reality, some years these returns have been much more than 10%, whereas in other years these returns have been less than 10%. As a result, investors should be warned that these 10% in annual returns are not a sure thing every year.


A large portion of the volatility in annual total returns comes from volatility in capital gains. Years of prosperity during economic booms are swiftly followed by severe market drops during recessions. Investors who sell stocks to fund their retirement face the risk of selling off stocks at low prices during bear markets, which could result in asset depletion and increases the risk of return to the workforce. As a result, relying on selling off stocks for income in retirement might be similar to cutting off the tree branch you are sitting on. For example, investors who retired in 2000 and relied only on S&P 500 index funds for retirement needs would have less than a few year’s worth of expenses left in their nest eggs by now.


On the other hand, dividend income has remained more stable than capital gains. Since 1977, the dividend income for S&P 500 has experienced declines in only 4 out of 34 years. As a result, it is no surprise that the predictable nature of dividend payment amounts is appealing to investors in retirement.


Unfortunately, yields on S&P 500 have been low since 1995, and therefore insufficient to live off of. An enterprising dividend investor however can generate a portfolio which has a better current yield, while also enjoying dividend increases along the way.

For my dividend retirement plan, I am focusing not only on the dividend, when selecting stocks however. I try to select companies that regularly pay and increase dividends, and also have the potential to increase profits over time. Rising profits supply firms with the firepower to increase dividends over time. In addition, I also focus on qualitative characteristics such as competitive advantages, strong brand names and products or services that clients are willing to pay top dollars for. Another important factor is valuation, since overpaying for even the best income stocks will surely lead to subpar returns for the first several years of the investment. Several firms that fit the profile include:

McDonald's (MCD) franchises and operates McDonald's restaurants in the United States, Europe, the Asia/Pacific, the Middle East, Africa, Canada, and Latin America. This dividend champion has raised distributions for 36 years in a row. Over the past decade, it has managed to boost dividends by 28.40%/year. Currently, the stock is attractively valued at 18.20 times earnings, yields 3.10%, and has a well covered dividend. Check my analysis of McDonald's.

Wal-Mart Stores (WMT) operates retail stores in various formats worldwide, under three major segments: Walmart U.S., Walmart International, and Sam's Club. This dividend champion has raised distributions for 39 years in a row. Over the past decade, it has managed to boost dividends by 18.10%/year. Currently, the stock is attractively valued at 14.80 times earnings, yields 2.50%, and has a well covered dividend. Check my analysis of Wal-Mart Stores.

Chevron (CVX) engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. This dividend champion has raised distributions for 26 years in a row. Over the past decade, it has managed to boost dividends by 9.60%/year. Currently, the stock is attractively valued at 9.10 times earnings, yields 3.30%, and has a well covered dividend. Check my analysis of Chevron.

Kinder Morgan Partners (KMP) operates as a pipeline transportation and energy storage company in North America. This dividend achiever has raised distributions for 17 years in a row. Over the past decade, Kinder Morgan Partners has managed to boost distributions by 7.50%/year. Currently, the partnership yields 6.20%, and has a well covered distribution. Check my analysis of Kinder Morgan Partners.

Realty Income (O) is a publicly traded real estate investment trust.This dividend achiever has raised distributions for 19 years in a row. Over the past decade, it has managed to boost dividends by 4.20%/year. Currently, the trust yields 4.80%, and has a well covered dividend. I would consider adding to the stock on yields above 5%. Check my analysis of Realty Income.

Full Disclosure: Long MCD, WMT, CVX, KMR, O

Relevant Articles:

Check Out the complete Archive of Articles
Why I am a dividend growth investor?
My Dividend Retirement Plan
The case for dividend investing in retirement
The case for dividend investing in retirement

Monday, June 17, 2013

Lower Entry Prices Mean Locking Higher Yields Today

The beauty of dividend investing is that once an investor purchases a quality income stock, they can hold on to it for many decades, while patiently collecting cash dividends. The success of a dividend growth investor depends not only on picking the best companies in the world, but also purchasing them at the right price and holding on to them for as long as possible. With the market close to all-time highs, many dividend investors are complaining that it is difficult to find attractively valued stocks to purchase.

I have found that entry price matters when selecting companies. If you pay a cheap price for stocks, you essentially lock in a higher current yield.  In this situation, your margin of safety is higher as well. The advice is usually to buy stocks when there is blood on the streets. In recent memory, the best times to acquire quality stocks on sale was during market crashes such as the ones witnessed in 2001-2002 as well as the most recent one from 2007- 2009. The truth however is that few people have large hoards of cash sitting on the sidelines, patiently waiting to be deployed only at fire-sale prices.

In reality, as an investor in the accumulation phase I have a few obstacles that a retired investor does not have too much of. I get fresh cash contributions every month that needs to be invested. If I chose to wait for perfect opportunities, the risk I am facing is that I might miss out if stocks get even more expensive afterwards. Nobody can say if dividend stocks will rise by 50% or fall by 50% over the next year. No one can even forecast within a reasonable amount of certainty if they are even going up or down. If the market goes up from here, the money in cash represents a lost opportunity.

If stock prices go down, I would buy at lower prices and earn more dividend income. However, I have found that market timing is something that cannot be consistently done by ordinary investors. If I buy now and stock prices tank, I will have more opportunities to buy at attractive prices later on. Even if the stocks I own go down in value, as long as fundamentals are sound and earnings and dividends keep growing, I should be fine eventually. During the financial crisis, shares of Johnson & Johnson (JNJ) fell from a high of $72.76 in September 2008 to a low of $46.25 by March 2009. At the quarterly dividend of 46 cents/share, the differences in dividend yield were between 3.98% in March 2009 and 2.53% in September 2008. I kept holding on to my position, and adding to it as fundamentals were sound, and the dividend was about to be increased in April 2009.

In a study on dollar cost averaging, I found it pays to invest as soon as possible. Over time, companies get more valuable as they service more customers, make more profits and sell new products and expand in new markets. It is great to avoid stocks that are very overvalued, but truth is, there are attractive opportunities even in today’s market. If you invest funds in attractive companies with bright prospects and strong competitive advantages, you are improving your odds of success.

While entry price is important, it is not the only determinant of investment success. A consistently growing company can eventually “bail out” its patient investors, even if they overpaid for it. As earnings and dividends increase, the P/E compression would render the shares more valuable. This, coupled with a higher yield and the prospects for higher dividends down the road, would increase the value of these shares. Maintaining a diversified portfolio that does not use leverage is another important factor to consider. If you are overleveraged, you can still lose your income stream as well as your nest egg during a market meltdown.
As a result, it pays to invest in recession proof stocks, which offer a product or service that customers need no matter what cycle the economy is in. A few such companies, trading at reasonable valuations today
include:

Aflac Incorporated (AFL), through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance products. This dividend champion has managed to boost dividends for 30 years in a row, and over the past decade has managed to boost them by 19.30%/year. Currently, the stock is trading at 9.10 times earnings and yields 2.50%. Check my analysis of Aflac.

Chevron Corporation (CVX), through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide.This dividend champion has managed to boost dividends for 26 years in a row, and over the past decade has managed to boost them by 9.60%/year. Currently, the stock is trading at 9.10 times earnings and yields 3.30%. Check my analysis of Chevron.

Philip Morris International Inc. (PM), through its subsidiaries, manufactures and sells cigarettes and other tobacco products.The company has managed to boost dividends every year since becoming independent from parent Altria (MO) in 2008. The five year dividend growth rate is 13.10%/annum. Currently, the stock is trading at 17.70 times earnings and yields 3.70%. Check my analysis of Philip Morris International.


Air Products and Chemicals, Inc. (APD) provides atmospheric gases, process and specialty gases, performance materials, equipment, and services worldwide.This dividend champion has managed to boost dividends for 31 years in a row, and over the past decade has managed to boost them by 11.80%/year. Currently, the stock is trading at 17.30 times earnings and yields 3%. Check my analysis of Air Products and Chemicals.

Full Disclosure: Lon AFL, CVX, PM, MO, APD

Relevant Articles:

Buy and hold dividend investing is not dead
Does entry price matter to dividend investors?
Opportunity Costs for Dividend Investors
Dividend Investors are Getting Paid for Holding Dividend Paying Stocks
Market Declines: An Opportunity to Acquire Quality Dividend Stocks

Sunday, June 16, 2013

Carnival of Retirement - Dividend Investing Edition

Welcome to the 74th edition of Carnival of Retirement. The articles below show a variety of opinions from various bloggers on the topic of retirement. As many of you are aware, at this site we focus on dividend growth investing as a means to an end, the end being achieving financial independence in retirement. The articles below show investing ideas and retirement ideas from other points of view, which are not necessarily limited to dividend investing.

The articles are included below:

Michael Kitces @ Nerd's Eye View writes Why Planning To Save More Tomorrow And NOT Today May Be A Better Approach - Recent research suggests that perhaps the real key to saving for retirement is not about cutting your spending today to save more, but instead to simply maintaining your current lifestyle and not increasing it in the future... which, over time, produces a more frugal lifestyle and rapidly rising savings, without giving up anything you enjoy today!

SB @ One Cent at a Time writes Planning for Retirement: Ideal Asset Allocation for your Age - Your age, or more specifically the number of years you have until you retire, is one of the main factors to consider when deciding how much you need to secure your future. This article talks about ideal retirement portfolio as per your age group.

Michelle @ Diversified Finances writes What is Financial Independence? - What is Financial Independence? This might be something that you are wondering. Different people have different meanings for this. For example, if you are younger, it might just mean financial independence from your parents, in which you start paying things on your own.

Roger Wohlner @ The Chicago Financial Planner writes Winning The Retirement Gamble: Step 2 Where Do I Stand? - No matter whether you are a 20 something with many years to go or you are in your 50s with retirement on the horizon, it is important to periodically take stock of your resources for retirement. What have you accumulated, how much are you saving, and what other resources do you anticipate having available to fund your retirement? You need to ask: Where do I stand?

Dividend Growth Investor @ Dividend Growth Investor writes Is the Dividend Craze Over? - I buy the stock in companies, which I believe will manage to increase earnings over time, and as a result they will be able to pay me a consistently higher dividend payment. The stock prices could fluctuate, but unless we get to see crazy valuations like the ones we saw in the early 2000s it makes little sense to sell them.

Austin Fey @ Marotta On Money writes Bucket List: Financial Independence - Most people do not use all their skills at their place of work, so these other skills become hobbies. I am no exception. What I need to pursue these other dreams is financial independence, that is, decoupling my need to eat from my skill as as an artist.

Luke @ Learn Bonds writes Higher Dividend Stocks Still Seem Rather Pricey - When it comes to the overall stock market and high income investments, high dividend stocks are a poor investment relative to other stocks.

MMD @ IRA vs 401k Central writes What are the 401k Withdrawal Rules for Getting My Money Back? - Before putting too much money into your employers retirement plan, it helps to understand the 401k withdrawal rules and when you'll see your money again.

MMD @ My Money Design writes My Broker Lets Me DRIP Stocks – Why That’s Great - I recently found out that my account has a feature to DRIP stocks. This is great news because it means I'll be able to put the dividends to work and accelerate building my fortune!

Ted Jenkin @ Your Smart Money Moves writes Are You Worried About A Stock Market Crash Again? - With markets hitting all-time highs this year, many people have become concerned that we will see a repeat of dot-com bubble crash in 2000 and the recent 2008 market crash.

Irfan @ Everything About Investment writes Best Roth IRA Providers of 2013 - When selecting a Roth IRA account providers, individuals consider a lot of factors and expenses such as trading fees, transaction costs and commissions per equity trade. Here we have highlighted the best Roth Ira account providers of 2013 for you to choose from considering all the factors.

A Blinkin @ Funancials writes Housing Soars 10.9% As Inflation Remains Subdued - The leading measure of U.S. home prices showed that the national average rose 1.2% over the 1st quarter of this year. More impressive (or concerning?) is the 10.2% increase we have experienced, as a nation, over the last 12 months. A composite of 20 major metropolitan areas showed an increase of 10.9% over the last 12 months.

Tony @ We Only Do This Once writes How to Reduce Financial Stress - My finances are one of the things in my life that has the potential to stress me out the most. In my quest for a stress-free life (HA!)— enhancing my productivity, furthering my career, creating routines, etc. — I have found that addressing my finances has helped keep my overall stress to a minimum.

Matt Becker @ Mom and Dad Money writes My Personal Investment Plan - An overview of how my wife and I have implemented our personal investment plan. My hope is that this information helps you think about how to implement your own plan.

Everything Finance @ Everything Finance Blog writes 5 Golden Rules for Investing in Annuity - If you’re considering investing through annuity, what things must you consider? Here are 5 golden rules for investing in annuity.

Russ Thornton @ Wealthcare For Women writes Information Is Not Enough - An explanation of why more or better information isn't enough to help us make smart financial decisions. For example, why do some doctors smoke? Certainly they know it's not good for them. It's not about information; it's about behavior

Brent @ PersonalFinance-Tips writes 5 Best Housing Markets for the Current Boom - The housing market has definitely rebounded in 2013, with levels of optimism not seen since before the recession took hold in 2008. A study by Rasmussen says that nearly 40 percent of Americans believe their home will increase in value in the next year, and nearly 60 percent believe their home is worth more than when they bought it.

CAPI @ Creating a Passive Income writes What You Need To Know About Dollar Cost Averaging - If you aren't familiar with dollar cost averaging things can seem confusing. Read here to see what dollar cost averaging is all about - it could help.

John S @ Frugal Rules writes How to Invest in Stocks When You Do Not Know Where to Start - Investing in stocks, or anything in the market, can be overwhelming for many. The key to overcoming that fear is knowing where to start and educating yourself so that you can set up an investment portfolio that’ll help you grow your wealth and reach your long-term retirement goals.

Investor Junkie @ Investor Junkie writes Edward Jones Review - Is a Full-Service Broker Worth the Price? - Unlike many discount brokerages available online, Edward Jones is a full-service broker. So what really comes with this type of service, and is it worth paying a little more?

Don @ MoneySmartGuides writes Understanding Inflation - What exactly is inflation? It's a subject that sounds more difficult to understand than it really is.

John @ Card Hub writes Ask the Experts: How to Maximize the Impact of Charitable Donations - Despite the recent economic turmoil, Americans have continued to display an altruistic streak, donating billions of hard-earned dollars to noble causes each year. While the cynics among us will chalk that up to the accompanying tax benefits, it doesn’t really matter as long as the money is being put to good use. But that’s the crux of the issue: How can we make sure our charitable donations actually get to those who truly need the money, rather than executives’ pockets or, worse, fraudsters.

Anton Ivanov @ Dreams Cash True writes Money Saving Tips – Pay Yourself First - Saving money may seem like a big challenge, especially if you are caught up in the spending frenzy of our consumerist society. But if you cool down and think, it’s not difficult to find ways to save money. Adopting the Pay Yourself First principle is a great way to boost your savings.

Melissa @ Minting Nickels writes My Roadmap to Becoming a Better Investor - As an investor, I’m constantly looking for ways to improve myself and improve my investment returns. Last year was somewhat of a disappointment, so this year I’m gonna kick-ass Rambo style to make up for last year’s shortcomings. In the following year, here are 4 things I’m going to do to improve my investment style (and how you can mirror my improvements).

Tushar @ Start Investing Money writes Could You Invest More Cash if You Were Self Employed? - It's an interesting question isn't it? Plenty of Americans are employed with businesses of all sizes, but in recent years there have been an increasing number of self employed people carving out their own businesses as well.

Thomas @ Finance Inspired writes How to invest in private companies - Heres a quick fire lesson in Angel Investing, what it is, how to go about it and more importantly how to profit from it.

Lazy Man @ Lazy Man and Money writes A Chink in Index Funds' Armor? - I got my July 2013 edition of Money Magazine yesterday and on page 43 there is an interesting article about balancing a lopsided index fund. So Money Magazine asks the question, "Is it time for you to rethink indexing?" They quickly answer it with a no. The next thing they suggest is Vanguard FTSE All-World ex-US ETF. Their theory is that you can "cover a broad spectrum of domestic and foreign stocks" with just those two. I respectfully disagree.

Bill Fay @ The Frugal Toad writes Why You Should Start Saving for Retirement Now - Today is the day we’re going to clean out the garage, weed the garden, paint the kid’s bedroom — and start saving for retirement. Those all are chores that we know should have been done yesterday, but we think can wait until tomorrow. The garage, bedroom and garden can wait. Retirement savings can’t.

Jason Hull @ Hull Financial Planning writes What Does the Future You Think? - Studies show that if we look at images of our future selves, we save up to 30% more than we would if we didn't. Here's how to get in touch with your future self so that you don't blow all of your money today.

Jacob @ My Personal Finance Journey @ My Personal Finance Journey writes What Asset Allocation Level Should You Use for Treasury Inflation-Protected Securities (TIPS)? - This post analyzes and answers the question: “what level, if any, of your portfolio should be allocated to Treasury Inflation-Protected Securities (more commonly referred to as TIPS)?”

If you want to submit to the Carnival of Retirement next week, sign up at Blogger Carnivals.



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