Showing posts with label fun. Show all posts
Showing posts with label fun. Show all posts

Friday, May 20, 2016

The real cost of buying a new car

I am a fairly frugal person. An example of that is the fact that I drive a 15 year old car. I would likely keep driving this car until all is left is the steering wheel. The money I have saved always purchasing second hand cars would result in me being richer by hundreds of thousands of dollars over my lifetime. I do not see the point of buying an expensive new car every five years in order to get from point A to point B, when an older but reliable car can do the same thing for less.

Not everyone is like me of course, and I am totally fine with this. I sometimes realize however why some individuals would never accumulate a lot of money for their retirement. As someone in the accumulation phase, I have come to realize that the only inputs I have control over include:

1) The amount I can save and invest
2) The type of investments I choose to put my savings in
3) Maintaining low transaction and tax costs associated with investments
4) Sticking to my strategy even if someone is (temporarily) getting rich faster than me

Wednesday, October 14, 2015

From zero to $15,000 in dividend income in 8 years

Back in May 2007 I had a net worth of $2,000.

I then promptly exchanged most of that networth for an old vehicle so that I can get to work. I sold that same vehicle less than two years later for a loss of 80%.

Luckily, I had better luck saving a large portion of my income every month, and investing it wisely. My savings rate has consistently been above 50%.

Right now, my expected annual dividend income is scheduled to cross $15,000 for the first time ever. This number is calculated by multiplying the current annual dividend per share on each investment I own, times the number of shares I own. This includes everything I own in taxable and tax-advantages accounts such as my 401 (k). In other words, if I do not add any new cash to my investment accounts, and I do not reinvest dividends, I will be able to generate $15,000 in annual dividend income going forward.

Monday, October 12, 2015

Expense Report - Last Four Months

For the past eight years, I have managed to save money regularly, and put that money to work. I have focused most of my efforts on the process of selecting dividend growth stocks, discussing why I practice the dividend growth strategy, and sharing my progress towards my goal of attaining financial independence through dividend investing sometime around 2018.

One aspect of my journey that I have always taken for granted has been my focus on keeping living costs low. After reading about the stories of others on their way to financial independence, and following personal finance blogs written by people who were in huge debt, I believe that I was wrong to never really stress the importance of frugality in my wealth building process.

I believe that frugality is one of the most important factors behind my success. I define my success as the ability to cover monthly expenses through investment income. Based on my projections, I can cover somewhere between 60% - 80% of my expenses with the dividend income that my portfolio generates. The best part is that when I really started my journey in 2007, I only had $2,000 sitting in my checking account.

I try to keep costs low, and try to be smart about finances. This means that the more I manage to save by keeping my expenses low, the more I will be able to invest for my future. I believe that being smart with my finances in my 20s is important. This is because the money I invested in my 20s will be able to compound for me for the longest period of time. By front-loading my savings and investment early in life, I will be able to enjoy compounding my money for the longest period of time.

Thursday, May 8, 2008

The friendliest states for dividend investors

I usually spend several hours per week researching dividend investing. I go through hundreds of stocks and stock strategies in order to learn something new and get an edge over other investors in the marketplace. Over time I have started to notice that most companies from the state of Ohio look promising as dividend stocks and seem to be shareholder friendly. Thus, I conducted a short research in order to check which states were the friendliest for dividend aristocrats investors. By doing that, I could then isolate some specific trait for those states which might have escaped my attention, had I not focused on it.

I simply took the 59 aristocrats in the index and checked to see where they are headquartered. And the winner was Illinois, with 7 dividend companies located there. The number two spot is held by three competing states – North Carolina, New York and Ohio. New Jersey holds the third spot for most dividend aristocrats located there.

Relevant Articles:

- Why dividends matter?

- My Goals

- What’s a passive income from dividends?

-Why do I like Dividend Aristocrats?

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