All, I’ve been very intense lately talking to friends, peers and co-workers about dividend investing. Not purely because of this, but I come home from work in a haste, not happy and very mentally drained. Even writing articles, which I love to do, ends up being very difficult and even connecting with loves ones results in stress. It would be one thing if I was drained from doing something I love so much that it wears me out, but that is not the case. I’m exhausted in a prison-like manner and that is why I am even more energized at the same time to continue my build up of forward dividend income.
THe 7-6 Day that needs to go
What? Not the 9-5 job? I wish. When you are a CPA, typically, your days are longer and the stress is higher (for no real reason, trust me). Funny thing, I have fought to MAKE my days shorter and somehow, I must be very bad at it. Here is a brief background on my typical day if I am in the office and it is non-busy season (i.e. April – December). Further, I live only 7 miles from our downtown office, please keep that in mind. I leave my house roughly at 7:00 A.M. most days. I drive through frustrating traffic, construction on each and every corner and 30-35 minutes later, I am now “early” arriving to my office (do the math on what my average miles per hour ends up being…). So much for my imaginary idea that I could leave at 7:00 and arrive in 15-20 minutes. Already frustrated, I pour myself one glass of water and a cup of awful coffee from our office machine. Its the ” it turns green after it sits for a few hours” type of awful. My day is starting off as a real winner, let me tell you. Now, I choose to arrive early to “avoid” even worse rush hour that occurs after 7:30 a.m. and to gain a “head start” before being asked questions by 15-20 people at our company, not including the 15-20 different personnel from clients that I service (funny, right?). Don’t get me wrong, I love helping and socializing with people, but wow, whatever agenda I had is probably sitting under an orange cone (cough, construction joke, cough) on my way into this wretched place.
After answering the questions from everyone in the morning, I am able to eat my sandwich at my desk and work on my items during lunch. Remember that powerful lunch hour I talked about? Yes, occasionally I choose to work through my lunch to work on areas I needed or wanted to get through (though sometimes I do personal things for the blog, investments, etc.). How lucky am I? I am now able to work through these tasks that I felt were important, even though we all know this (for the most part) brings very minimal joy to our lives, except reduces the stress that we’ve placed on these matters and/or have let others have influence on our stress levels with mostly internally “fluff” deadlines (clients, partners, other managers, you know the drill). Ah, yes, just how lucky could one employee be at this accounting firm to work on these prized tasks.
Around 1:00 PM it is time to grab another cup of the joyous discolored pouch of coffee that, oddly enough, can stay “fresh” in packets that have been in a drawer for years. You know the Keurig? Picture a machine that someone made in their backyard after mowing grass, to have the machine perform the same tactics as the Keurig (which could be where the discoloration comes from), with a very “harmonious” yet screeching sound. Now THAT is the machine we have in our office. I do try to make my own coffee every morning, but then that actually takes away from enjoying what a “good” coffee tastes like. Heck, this coffee makes the Maxwell House blend taste like fresh espresso grounds from an organic crop in Italy at this point. I digress… (plus my mom will hate me for knocking her Maxwell House, as well as the Kraft (KHC) stock that I own)
After going through part 1 again in the 2nd party of my day, I am caught by a few partners when I try to leave at “a decent hour”. By “decent hour”, I mean sometime after 5:00 P.M. but before 6:00 P.M., during non-peak hours. Now, if I didn’t take any breaks that day and was able to start around 7:30, this already marks 9.50 hours straight of smacking my fingers on keyboards and going through 8x too long meetings (any meeting that is longer than 15 minutes should really think about what we are meeting on). Needless to say, partners start to question, “Why are you leaving?” or make explicit questions such as, “Cutting out early now?”. Are you serious? Not only do I work, on average 70-85 hours per week for 3 months out of the year, but during non-peak when I try to have some form of sanity, but still work more than a full-day in comparison, I’m questioned? Bring on the dividends, is what my response wants to be, very badly. Or better yet – my dividends will soon answer to you bye saying “sayonara”. Here is the funny thing, that drive to work was exciting right? Guess what? I get to do the SAME THING on the way home! YES! Oh wait… doesn’t that lead to just fumigation coming from my mouth/mind when I walk into my front door? You betcha. If I’m lucky, I am home by 6:00 P.M. to cap an overall, with driving, 11 hour day. What is one of the things that keeps me going? The capability that dividend investing has on this situation, that’s for damn sure. (I also won’t say THE one thing, as I have a loving girlfriend, family and friends, but how often do I even get to see them…)
Taking back controL w/ Dividend investing
Now, for the better part of 7+ years, I have been dividend investing. Every career/job I’ve had, I’ve made a commitment to have an exorbitantly high savings rate (above 60% everyone!) in order to fuel my dividend investing portfolio. I’ve been lucky in that I make a decent wage at my employer, for constantly being stressed out (yes, self-induced primarily, as this is my current choice/decision I am making to stay here) and that the cost of living in Cleveland is far less, when compared to other cities. Dividend investing, from back then, gave me a form of income that could allow me to control my own day, my own week, my own destiny. Guys, I tell you, I am gosh-damn passionate about dividend investing, it’s not even funny! Just ask Bert and our countless drives for hours when we worked on client engagements together. Ask family members and close friends. Heck – I know my girlfriend receives the continuous update on the dividend investing portfolio (and she’s starting to make some moves herself!). You may ask – but why are you so excited about dividend investing? How can dividend investing really provide that control? I will try to break that down in a simple, but yet, methodical way.
1.) Dividend investing was very easy for me to understand, due to the business background I had. However, I will say that anyone can truly be a dividend investor and it is not hard or complicated! Getting started and making your first investment is the hard part. That is one of the reasons, however, is that it fundamentally made sense to me. If you are starting out, please read these few articles:
Welcome to the World of Dividend Investing
Power of Dividend Reinvestment
Dividend Diplomat Stock Screener
Milestones of a Dividend Investor
2.) Dividend investing provides INCOME or CASH FLOW to you as the investor. When companies continue to perform well financially, you are rewarded as a shareholder, typically, in the form of a dividend. You made an investment in THEM and they are returning that investment back to YOU. Look at my June dividend income totals, how the heck did I get so lucky to receive almost $1,500 from over 20 different companies?! I have to smack myself often when I see these figures. I know I’ve paid my dues and have worked my ass off to build this machine and it truly pays you back.
3.) Dividend Investing does take up-front research, but monitoring your dividend stock investments is not as burdensome, when compared to growth, penny or even stock options,etc.. Most companies I own have been around for 50-100+ years and have had records of growing dividends for almost as long as they’ve been around. Ever hear of Johnson & Johnson (JNJ), AT&T (T) or Consolidated Edison (ED)? These are a few names in our top foundation dividend stocks if you are starting out, but that’s because of a few things – they have VERY easy to understand businesses, they’ve been around longer than the time I’ve been alive and they’ve increased their dividends the same, consecutively. What if you could go into your day-to-day job and perform quite a bit of research up front, but then the company pays you, year, after year, because of that investment you made into them? (Some could say this is what Pension funds were for, well, those aren’t really around too much any more!) That is what dividend investing does – up front capital, research and an action to purchase, and for some companies – you can do little monitoring and the checks will keep coming your way.
4.) Dividend investments, typically also equate to dividend increases, for the most part. Most dividend investments I make into companies, increase their dividend consecutively, year after year. Now, I’ve had 3 instances where dividend cuts occurred and more instances where dividend increases did not occur. However, for the majority of my portfolio, the companies that I own shares in, continue to increase their dividend ever year. Going back to point 3 above, what if you worked at a company, where not only they paid you every pay period for work you did in the past or your investment of time in the past, but they also gave you an increase every yea because of it? Similarly, that’s what happens here with dividend investing.
5.) Therefore, each dollar that is being saved and then investing into a dividend producing stock, is now producing an income source that can begin to cover you daily/monthly expenditures. For example, when combining my taxable and retirement accounts, I have a projected monthly dividend income (as of this writing) in the amount of $755 per month! What would you be able to do or not do with that? I know I am getting closer to dropping that “7-6” lifestyle above. Dividend investing will buy you time and allow to take back CONTROL of that time! Isn’t that what we truly want? Control of your day. No more 4-10 “bosses” telling you what needs to be done or what to do (unless you love that sort of thing); or driving a pain in the ass commute in construction just to get to the office to do something you tremendously dislike.
6.) Lastly, each added income from dividend stocks (as long as expenses remain in check), helps reduce stress from work, as you become LESS dependent on the “job” that you have. Control begins to shift your way, as you know that you have a monthly income stream from dividend stocks to back you. The closer you are able to find your basic necessities & the cost of those necessities, one could aim to produce dividend income in that amount. Therefore, once you are done dealing with the BS at work, you know that your basic needs will be satisfied with dividend income. What I have found out, as well, is that you tend to do “better” at work when you don’t rely on your work income as much… it’s actually quite funny. Therefore, more control begins to shift in YOUR direction, for YOU to do what YOU want to do with your time and energy.
Why dividend investing has me more energized than ever
Why am I now more energized than ever before? My days are becoming so brutal to get through, that I am now very Black and White about what dividend investing can truly do with your time and control. I want to invest into dividend paying companies more than I can imagine each day that I come home, knowing I’ve spent the last hour in a car or dealing with unnecessary stressful situations. Why? Because I don’t want to even know that I have to do that anymore. I don’t want to answer to 45+ different people every day, that is why this is so important, today, right now.
Dividend investing truly can give you back the control that you are looking for. In some cases, it may not give you back 100% of the control when you first start, due to the steep capital requirements to have enough dividend income to fund your full lifestyle desired, but in time, it starts to revert back to your favor. However, like the wise statement says, the first best day to start was yesterday, but the next best day to start is today/now. I used to collect below the three digits in dividends when I first started, on a yearly basis. Now, I am on average of collecting almost $800 per month going forward (when my individual and retirement accounts are combined, see my portfolio). Here is the kicker – it grows faster and faster every year, the snowball is bigger and has more speed, simple as that (Power of the DRIP). In addition, it’s almost like a sport, once you start, you realize you want to keep going harder and be better with capital infusions. WE owe it to ourselves to set ourselves in the best position to impact the most lives that we can with what we truly value, and add value to others. Dividend investing is one avenue allows one to take control back to do that.
Now, the question is – are you ready to take control?
-Lanny