Thursday, November 5, 2020

Election Day Plus Two: What Am I Buying And Selling?

 On November 5th, 2020. We are at Presidential Election Day plus two. Things are settling down. I think I know the way things could go. Democratic House, Republican Senate and a toss up for the Presidency.

A sketch drawing of a bulls head. colored red white and blue

Well maybe the image to the right will give you a clue. Yeah. I am a boring bull. Whoever wins the final presidential vote, things won't change much. President Trump, look at the last four years. Former Vice President Biden, look back at the last four years and imagine less tweets,

The truth form me, in my opinion, is that politicians create noise in the markets. Good for futures traders and day trading pundits. But for me. I look for more value and long term buys.

What am I selling these days. Nothing.

Encyclopaedia of Covered Calls (amazon affiliate)In my M1 account I have been buying, Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Next Era Energy (NEE)  and McDonalds (MCD) 

I added to my Apple at the $108 mark. I was just too tempted and we have seen a little bounce from last week. I think the major part of the post sales sell off is gone. I also wanted to get in before the ex dividend date came into play as Apple and Microsoft both pay a dividend in the next couple of weeks.

Amazon was just too attractive at under $3,000.   Next Era Energy is attractive as an alternative energy play. They have done well in the past few years, if the Democratic push on green energy grows it can do well. Even if the deniers of global warming win the skirmishes Next Era Energy is well place just as a utility with a growing population in its main region of the South East UU.S.

In my ROTH IRA. I am buying stock in QYLD. QYLD being a exchange traded fund which sells covered calls in the NASDAQ 100. I began buying it several months ago. It does well in times of fluctuating markets. Its a play for the next few months. There will be lots of volatility as the new presidency begins. Even if  you look forward to less Twitter action, new presidential brooms cause a little uncertainty in their first few months.

I am also investing in the financial sector exchange traded fund *XLF) Banks have been hit this year and the stock is below my $25.00 average cost. Time to add some more I think while I can. As the economy opens up toward the end of 2021, I think, Banks will come back to life, with XLF I don't have the worry of picking the right banks. I just have a lot of banks and insurance plays.

In general I am playing long term defensive, I believe. This post is not investment advice. I am only setting out my own personal strategy. You should look on this only as entertainment, or someones crazy ravings.  My plan is only taking into account my circumstances, you should talk to a qualified investment advisor before making any investments for yourself.

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Friday, October 30, 2020

Stock Market Falling: Has Some Masked Bandit Stole My Cash?

 The end of October 2020 is here. Some of you may be feeling a little low. As though a masked bandit has run away with your cash.

William in Guide dogs for the blind face mask and red baseball cap

But don't feel too bad. If you like me have been investing for years, you are not that badly hit by the last few days sell off.

If you began investing about one year ago, then you might just have broke even for the year. Or you may have a small loss if you went with only Dow components in your portfolio.

If you invested on March 23rd. Well you are probably happy.

Don't fixate on where your portfolio was in September. Even I am down about $6,000 in my whole portfolio.   Even with that loss my total portfolio is 23.4% above its low back on March 23rd. I am up 18.75% annualized over the past two years. That is going back to when my E*Trade account was moved over from Share Builder.

As is often said, it is all relative. I can look back one month to where my portfolios were at an all time high, and feel the pain or look back two years or seven months and see where I have come from the low days.

The Simple Path to wealth book amazon affiliate linkWhat do you think all the investment sales people do. Yes they pick weeks like this and at the appropriate time even today will appear on a growth chart and they will say.

"If you bought on October 30th 2020. You would have gained xxx%"  No they won't mention the highs of September, and we investors will all say "Wow! Why didn't invest then? I would be so much richer!"

I have been there and done that. So many, many times. It's not funny. But I just plod on. Putting in spare cash here and there. Re-investing my dividends.

Speaking of which. Today sees me with a nice dividend payout of about $50. Since it is all DRIP I will be getting some stocks at a nice sale price. See falls in the market can be good. When the market falls I can get more shares. 


That is why I like dividend investing.

A little word on Apple stock:

 I know  Much is being said about the reasons why Apple stock is falling after the results were published yesterday. 

Take the fall in price with a huge pinch of salt.  Apple Always falls on results.

I have invested in Apple since 2006, and I still own quite a few shares. I have only know three times in 14 years where Apple results have seen the stock rises immediately. Two of those were stock split announcements. Apple pundits always find a reason, low iPhone sales, no future notes on sales of X product, uncertainty.


The thing is Apple makes good products, people want good products and people buy Apple products. Plus Apple now has intangible businesses, cloud storage, Apple TV, and Music as well as the App store.


If Apple goes below $100, it could, it has in the past. I will buy, even in its current $100- $115 range it is tempting.


I hope you all have a fun Halloween. Those of you in the U.K. celebrating Bonfire Night on November 5th. Have a great evening.


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Monday, October 26, 2020

How to Set Your Child on the Road to Becoming a Millionaire

/Piggy bankp>

 It may seem to be a near impossibility,  setting up your child so they can become a millionaire. Many of you will scoff and snort.

Even a child who grows up to work tables in a restaurant or diner can learn the skills that will make themselves into a millionaire one day.

To begin with your child will have a great advantage on their side. They have time.

Time allows for compounding. An initial investment with a return of just 5% will double every 14.4 years.  To estimate the doubling time for any amount take the number 72 and divide it by the percentage interest rate.. This is the rule of 72. It is not perfect but gives a good ballpark estimation.

Cash, bank notes, savings

So $100 at 5% takes 14.4 years to double to $200, then doubles again in another 14.4 years, which doubles again  in the same period.  So after about 43 years our $100 invested at 5% would equal  $400.

Of course you don't just invest the $100 and leave it. You add to it over and over again. At a rate of just $10 per week you would be adding an extra $520 per year. Each of those $10 would double in 14.4 years too.

As you add more dollars they in turn generate pennies of interest which in their turn add up to dollars generating more pennies and dollars.

Teaching your child early about compound interest is possibly the greatest way to give them the tools to become a millionaire.

Teach your child about money as a tool.

Give them pocket money, pay them for doing chores around the home. Even consider adding extra to the pocket money that they save in lieu of interest.  Allow them to spend their pocket money if they wish, but teach them that when the money is spent it is gone. Don't buy something that they wanted and were saving for if they spend all of their pocket money on something else.

Encourage responsible spending. Allow them to learn to divide pocket money into spending on what they want, what they need and savings.

ATM Money boxSupport them in opening bank or credit union savings accounts. Accounts that pay a reasonable amount of interest on small balances. Let them see their money grow as the interest mounts.

Teach your child to invest. Help them buy a stock in a company they like. Even a small fractional position in a stock like McDonalds will pay a dividend and grow over time. Or maybe buy a share of stock for them at a birthday or holidays like Christmas.

You will give them the knowledge and experience they need to save and invest as they enter the workplace they will be kitted out for a life in the real world. They will know that money is an asset to be used wisely. Spent on what you need, saved for things that you want and invested to increase your monetary wealth.

Thank you.

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Saturday, October 24, 2020

My Latest Strategy Investing On M1 Finance

 In January 2020 I opened a brokerage account with M1 Finance. I chose the account in part for its fractional shares, I wanted to buy some Amazon and Google (Alphabet) and as that costs thousands of dollars for just one share of either the fractional share seemed the only option.

William Elliott and his black Lab guide dog Leif

A couple of months after I opened the account M1 made some changes to their purchasing policy, they increased their minimum purchase price increasing the minimum from one cent to $1. This meant that my account did not grow quite as quickly.

My aim initially with an investment is to generate cash flow. M1 doesn't work for traders, but should work for cash flow investors.

Recently I have increased my deposits into the account to $13 per week. Also dividends from several sources have started to come in fairly regularly. I am earning about 50 cents per week in dividends.

In July I began to buy a new share everytime I received a dividend. Taking one dollar from my cash reserve and the full value of any dividend received and using this to buy a high value dividend paying stock.

Some weeks in September I was able to reinvest several dollars per week as many stocks pay dividends in that month. In October I am making just one or two purchases per week, but this allows some cash to build and make larger purchases of stocks across the portfolio keeping everything balanced.

When I began in January I received just 1 cent in dividends. Today I am expecting to receive just over $9 between now and January, my first anniversary of opening the account.

I plan on using this strategy until my monthly dividend payments grow to over $13 per month, in effect adding an extra weeks cash input. When this happens I will just allow the portfolio to grow at its own pace with M1 making the investment decisions for me. That may take another two or three years but dividend investing is all about slow and steady.

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Tuesday, October 20, 2020

Hedging My Portfolio or A Bull On the Rampage?

 There are lots of things that tell me to think of hedging my portfolio.

Statue of a bronze bull on Wall Street

Death, viruses, lock downs and business collapses. Damn this year has been tough and you have to say not over yet.

Back in March, one of my portfolios lost over forty percent of it's value. My ROTH IRA luckily a little more defensive lost only eight percent. Thank goodness for those Utillities which bolstered a down facing couple of months.

I do love to buy though.  As well as reinvesting dividends in most of my companies I like to invest a couple of hundred dollars of "new money" each month. By the beginning of August I was generally fluctuating around my break even point for the year. 

Now, in October despite buying a couple of Apple stocks at their high point just before the four for one split I am now up twenty0nine percent in that big loser portfolio I mentioned earlier. My ROTH IRA is now up  seven percent on the year, up about fifteen percent from the low of March 23rd.

My ROTH IRA is pretty low volatile.

 ======== =============================================================



 That brings me to my pet peeve for the year. The Youtube investors who vlog about finance and talk about Invesco S&P High Dividend Low Volatility stock (SPHD)  Ok before Mach it was trading in the high $40's and fell to below $30.  I own the stock too. I lost in the fall. But overall it did not lose as much as it could have and since April it has increased in value to the low $30's and has paid its dividend every month too.

So the Youtubers constantly go on about how the stock is not rising quickly. Er. People! It is doing what it says in the description. It is "LOW VOLATILITY" meaning it should not rise or fall quickly. Exactly what it is doing. It did not fall by a lot nor is it recovering quickly.

Read the F*****g description people, know what you are investing in.

I guess they are getting grief from those people who follow them blindly and bought SPHD back in the days of $40 per share and a nice tasty monthly yield. Though the monthly yield is still good it is tough to stomach the loses in the stocks value and a slow recovery. That's what you get with low volatility. Like my ROTH IRA no big gains, but no big losses either, slow and boring when it needs to be.

I am still a bull though.

Maybe not a raging bull. I am dabbling adding to positions that I already hold. A share here and there. I have put some cash into  covered call etf's. QYLD, and QYLG both buy and sell in the NASDAQ market. QYLG looks to save 50% of it's stock for growth of the portfolio too. I also bought stock in XYLD and XYLG which use the same strategies to invest in the S&P 500. Along with those I added a few RYLD which sells covered calls of Russel 2000 index stock as supplied by Vanguard.

I think 2021 will be pretty volatile. The virus will make it's moves and people will react and over react as usual. But I believe that things will get better before the turn of the year into 2022.

I cannot see a better place to be than in the stock market right now.  Hopefully some of my dividends should start to recover. We will definitely see global markets rise. Things will be better by Christmas. 

Where have we heard that before? 

Ah. Yes but I mean Christmas 2021. For certain, it's a promise. For what that's worth.

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Tuesday, October 13, 2020

More Stock Splits? Yes or No?

 In August we saw both Apple and Tesla make  the news with stock splits. I for one used the opportunity to add some Apple to my portfolio.

I have been an investor in Apple for over ten years, and have a nice holding. I do not hold any Tesla stock itself but am sure there is some of its stock in a Mutual Fund or two which I own=

AAt the time I went onto Quora and asked the question, Should other higher priced companies offer stock splits too. You can read the answers here.


Most of the answers said that stock splits are no more than smoke and mirrors. They mean nothing and merely dilute share holder equity.


I do not agree totally with these answers. Stock splits may not be logical. They may not be  creating more wealth. After all a $100 bill can be split many ways; two $50's, Five $20' etc. But you still only have $100 in your pocket.


What the answers miss out on is the psychology of the human mind. Where I had one of something, I have two, four or seven. That means I have more. Don't I?


Think in terms of marketing. How often do you see an advertisement for a sale, it offers you 50% savings if you buy today. Many people rush to buy without thinking.


But stop and think. You could save 100%  of the price. By not buying at all.


Humans work on emotion, not mathematical logic. I like Home Depot stock at #300, it is a nice buy, but I would rather buy three for #100 each. I would have more.  Foolish I know, but it is how the average human works.


You may also say, well with fractional shares you can buy the $100 of Home Depot. Ah. But. Then I would only have one third of a share. Not much good for my ego. Boasting at the office about my portfolio of fractional shares.


As an investor I want to be able to boast. Tell the world and his dog about how successful a stock picker I am. Stock splits help me do that. Successful companies can split their stock, not infinitely but on occasion and I can see my portfolio grow. 


A win, win situation don't you think? 


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Monday, October 12, 2020

Why Should I Invest in the Stock Market?

Many people before they begin to invest in the stock market ask themselves why they should do such a risky thing as buying stocks in companies.


I asked myself this very question over forty years ago.


My answer to myself back then was to make some money.


How did I start, I read lots of books. Books like "The Little Book of Stock Market Investing"


Did I make money?  Yes. I have made a good amount of money. In the last ten years over $250,000. I have lost a good bit of money too. The crash of March 2020 saw my investments lose almost $70,000 on the worst day. But some investments made then, such as a purchase of MGM has made a return of over 100% in weeks.


I have had some successes over the long term too. I began buying Apple (AAPL) stock in 2008. Shortly after I came to live in the United States. Back then I paid less than $100 for a share. I traded the stock a little, back then there were trading fees too which ate into my profits, up to $20 per trade, ouch! I never had more than ten shares back then.  My average cost per share coming into the August 2020 stock split was $just over $80 per share. Following the stock split at four for one shares my average cost is now $19 per share.


Time in the market helped me generate those returns. I now after about a decade of owning Apple stock, have a cost per share of $19. A stock that trades in the last month at a low of over $105.


 Can you make lots of money quickly?  Yes.  But to make lots of money quickly you need events of the magnitude created by the pandemic. In my forty odd years these came along just four times. Once a decade on average you may think, but three of these events have happened in the last twenty years. The first just over thirteen years before the year 2000 and was mostly a localised crash in the United Kingdom.


At that time I panicked and sold out of the market at the bottom. Losing a decade of work investing and then having to start again in the 1990's.

It pays to stay in the market when stock markets fall. O.K. add to some of your best stocks in times of trouble as long as the stocks you buy are strong companies.  I recently sold out of my energy stocks. Because? Well although the markets took a tumble and the energy sector fell with the market. The energy sector looks to have more problems than just the pandemic. I still own an energy ETF but no major oil companies as single company stocks.

You always need to look out at what is happening to your investments. Constantly look to modify your strategy. I personally like dividend paying stocks. They pay me an income of $200 to $500 per month, it varies on a monthly basis the best months being March, June, September and December. My worst month January. But I also like to speculate a little, buying the occassional non dividend stock, an Amazon, or Paypal and even Pinterest. They add a little spice to my portfolio, along with my McKormick.

So why should you invest in the stock market? If you want to make money, create an income stream away from a forty hour work week. Are prepared to lose somedays, you will win on most days, the market rises on an average of two out of three days over the long term. Though in a long run of losing days it is hard to remember an up day.

Be prepared for the long run. Invest in low cost funds if you don't feel confident. Invest in your local market or globally as you feel. Look to the long term.  Over the years to come, you will get older, you will learn, you will make mistakes, you will have bad days, you will have great days. You will be a successful investor.

The laws of mathematics show, you can win at stock market investing.

All the best at your investment journey.

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Friday, August 7, 2020

August 6 2020. Back to Where I was in February 2020

It has been a hard six months.

I did not think in early April when my  stock portfolio had plunged by 30% that my recovery would be this quick.
a stack of used $100 bills

O.k. At the lowest lows I backed up the truck. Pulled out of bonds in most cases and bought either Single stocks. Apple, Microsoft, Johnson and Johnson and Costco mostly.

I did not believe that I would come back to being within $100 of my portfolio value on February 19th, a total of $103,000 in August. today just over $102,950.

Off course I have lost most of my regular monthly income. The bonds paid out monthly cash flow, but falling yields put pay to that. Some have such a low yield today that I earn less than one cent per month. Horrible for someone who loves cash flow.

Some of my REITS also suspended their dividends. They also lost up to 50% of their value. Eeek!

My rescue has come in the form of the likes of Apple and Microsoft. Apples balistic rise in the last two weeks has paid me back. Now a stock split too, will see my average cost per share for Apple fall from $160 per share to $40 per share. One reason to love a stock split that is never mentioned on YouTube.

I have lost about $1,000 in expected dividend income this year. That hurts, a lot.

But I reckon with some  careful buying I can build a stronger cash flow regime.

I have also put a little cash to one side, just one percent of my total portfolio in Gold, in the form of the GLDM exchange traded fund.

The GLDM fund does not pay a dividend but the gold is there for some stabilization if we suffer another rapid fall in the market. Not as a means of generating cash.

For some cash generation I have taken a small position in investments that sell covered calls. My largest position is in QYLD, a monthly dividend payer, that has a reasonable payout, about 15 cents per share on average. I received a nice payout last month for a one percent investment. So I will hold that stock which invests in covered calls on the NASDAQ top 100. I am looking for an S&P 500 equivalent too.

So there it is. Six Months to come back to where I was at the beginning of the year.

How have you done this year. Let us know with a comment or if you like this post, shre it with your friends on Twitter, Facebook or Pinterest.

Oh. By the way I also added a little position in Pinterest (PINS) too. So a share on Pinterest helps my prtfolio too.

All the best.

Saturday, February 8, 2020

First Dividends

It has to be said that dividends are a joy to my heart. I actually wait like a kid at Christmas, looking for those dividends to hit my bank account.
cash is the reward which you receive when you invest for dividends
Cash Dividends

They never fail to bring me joy. After over forty years of investing I still get excited. You would think after all this time that I would have become blase about the prospect of yet another dividend check. But no. Not at all.

Most dividends these days just get re-invested into the paying stock. But yesterday I received my first ever dividend in my new M1 Dividend paying account.

It was a dividend from LQD a monthly paying corporate bond ETF. I also hold this stock in my Roth IRA, where I have a quite large holding. The stock pays over 20 cents per share every month, and I added a fraction of a share to my new M1 Finance account opened three weeks ago to provide some monthly cash income.

Yesterday it paid a one cent dividend for about 500ths of a share.

Wow! Big deal I hear you cry.

Well yes, for me it is a big deal. It is the first dividend in a new account and as such deserves recognition.

I am now seeing a spark of cash inflow.  For the last three weeks cash was going from my bank to fund this new account. I knew that would happen. Now the cash generating portion of the account is primed. Cash has begun to come in from a new source.

Of course I will continue to fund the account from my bank for a while.

That is all planned.

But as the first week of February, 2020, comes to an end. There are several more stocks lining up to pay a dividend this month and several more paying out dividends throughout March.

Then the difference with M1 Finance is that the dividends go into my cash pot to be re-invested in any stock in my portfolio.

I have a portfolio of one hundred stocks, most pay a dividend, just two stocks do not. Amazon and Alphabet.

You can follow my portfolio at My Dividend Portfolio. 

If you also decide to open an account with M1 Finance using this link you will receive a $10 Bonus in your account when you fund your account for the first time with $100

Saturday, January 18, 2020

A Portfolio Which Returned Over 20% Over 5 Years

It is always nice when a portfolio makes market returns. Better still when the subject of the portfolio is a life long hobby.
A graph of a rising stock and a pile of silver coins, cash, making money in the stock market
A Rising Stock Price

This portfolio should see more growth with the ending of the trade war.

What Stocks Are In This Portfolio?

The stock portfolio which increased over 20% is full of railroads and last mile delivery services.

To take a look at the portfolio now available at M1 Finance CLICK HERE.   

 The majority of the components are North American railroads. Companies such as Kansas City Southern (KSU), Union Pacific (UNP) and as well as the major Canadian Railroad businesses. I also added United Parcel Service and Fed Ex, for that "Last mile delivery."

Despite all of the problems over trade wars, initially with Mexico and Canada then moving on to Peoples Republic of China, my railroads have done well.

A little over a decade ago I was buying CSX at $20, it now trades at over $70. Union Pacific a decade ago traded around $140, and today trades at about the same level but in the early 2010's the company split its stock 2 for 1 and traded for a while for less than $100. I bought at those levels and am still a buyer now.

This portfolio also produces a near 3% dividend yield.  Not bad for companies which were in their fast paced growth phase over 150 years ago. Loving them as I do, trains are great for the environment. They can move lots of items, trade goods, commodities and finished goods long distances for low costs and quickly.

Why do I see Railroads as the investment of the Year?

       In recent weeks we have seen the new U.S., Mexico and Canada Trade Agreement move towards ratification and the signing of the first part of a China and U.S. trade agreement.

In my opinion railroads will be major beneficiaries of these agreements.

Canadian rail companies will see movement of items such as lumber and oil to the U.S. Mexico will see continued expansion of goods such as automobiles,  That is good especially for Kansas City Southern, which has access to hubs in both the United States and Mexico.

Union Pacific is the major railroad company serving the West coast ports, with exports of food stuffs and commodities such as Soy Beans expanding to fill demand in China and a possible up tick in imports of consumer goods through the ports of San Diego, Seattle, and Long Beach profits should be secure.

Norfolk Southern and CSX should be secure too, Britain will look for more trade with the United States following Brexit at the end of January and the East coast ports should see recovery as trade with the European Union begins to grow again, following the end of the trade war with the E.U. and as Europe begins to come out of its recession, I think in the last quarter of 2020 or early 2021.

Again you can see the M1 Pie which I created at Train Sets and Last Mile.

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The material in this post is created as a statement of my own views, it is not intended to be taken as financial advice. You should discuss you financial situation with a qualified person such as your accountant, legal advisor or financial advisor.

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Wednesday, January 15, 2020

Investing For Income

Why Invest For Income?

For me. investing is all about creating cash flow and income.
If I did not receive a return on my assets without having to do more work, then I would not bother with investing.

It is all well to invest in Google, Tesla or Amazon. They may be good stocks, at least two of them are, and I do own some Google and Amazon stock.
stacks of $100 bills, cash flow from dividends can soon build wealth
Cash Flow is King

But non of these stocks pay a dividend. Did I say that I love dividends?

Well most of my portfolio is made up of stock paying a dividend some monthly, some quarterly, some every six months or so and some only pay once per year. But I love that cash flow that comes with a dividend.

I hate wondering if I need to think about selling a stock. Has it made enough money for me? Is it distorting my portfolio? Is it time to rebalance? Questions? Questions? Questions?

With a dividend stock I can buy more with a dividend re-investment plan (DRIP). I can take cash and re-distribute that cash into other stock, or I can take the cash and spend it.

Love it!

How do I choose a dividend stock?

First I look for a stock that is making a positive cash flow, and has done so over several quarters or years.

Then I look at the current yield of the stock. All dividend stocks show a yield in respect to their current share price. I like a 1.5 to 3.2 percent current yield.

You do not want to get carried away with a dividend yield. Too high can mean that a stock is too low in price, so may have other issues or it may be funding its dividend by borrowing.

The 1% to 3% area is a sweet spot. Giving a company a chance to grow its dividend and not stretching its income too much and there by giving it cash to grow its bottom line.

Most dividends are just a few cents per share, most of my stock pays in the region of 40 cents per share, but do not concern yourself with that. Buy ten shares paying 40 cents and you earn $4 or 100 shares and a dividend of $40 will be winging its way into your pocket or portfolio.  Compunding is the key here.

Lots of 1 cents make up a dividend income of $1,000 in time. I earn several thousand dollars from my income in dividends per year. Enough to make a car payment every month, or keep me in Starbucks coffee every day. But at the moment I prefer just to re-invest the cash back into more stock.

I generally do not concern myself with daily fluctuations of the stock market. If I need another $10 in a particular month I add to a stock paying in that month or one paying the $10 over the year.

As time passes you find that your dividend yield over cost is what matters, not the current yield.

For instance You buy a stock yielding 2% it increases its dividend annually, the stock price rises, but the yield on a daily basis falls. The stock you bought initially will still be paying you 2% and subsequent purchases will change your overall percentage yield over time, the stock always pays you the yield at the time of purchase. Buying over the long term and holding means that you have little bundles of stock paying 2%, 1.8%, 6%, 0.9% and so on so your yield on cost could grow.

At present I have one portfolio paying a 4.32% yield on cost where the average yield is only 2.65%. Just because some of the stock was bought back in 2008 when stock price were low and yields jumped for many stocks during the Financial Crisis.

Sunday, January 12, 2020

Investing Goals. Why Have Them?

What is Your Why?

So, when setting a goal for your investments you need to ask yourself "What is your why?"

When setting your goals it helps to know your why
Know your why and set a goal

Why do you need to ask this?

Would you leave your house on a journey before deciding where you want to go? Are you going to the store? Are you taking a trip around the world?

You need to know where you are going to, just so that you will know when you get there.

So make a plan. Set up a series of way points. So you can check your purpose and success at various times. 

I have wandered, Now I have Goals.

Ten years ago I set up a Roth IRA, It is just the thing to do when you live in the United States and plan to retire. My only plan back then was to build a portfolio that would build up my net worth. It did just that. I have a nice little portfolio. 

Then about three years ago, I noticed a problem with the income stream of my Roth IRA. I had four months of great cash flow. March, June, September and December. The other eight months were pretty poor, from several hundred dollars in the quarter months, to one or two dollars in the other months of the year.

I think this is a common problem with U.S. portfolios, so many companies that pay dividends pay out in those quarters, not many pay out in the other eight months,

What is my Why?

So I had to ask myself was I happy with the situation? The answer was no. I did not want the majority of my income coming in those quarter months. I wanted smoother cash flow.

I needed new goals.

I decided to build my dividend  income in January, February, April, May etc. to just $100 per month.

That was three years ago. I added more stock from companies that paid dividends in those months, Apple, Starbucks or Disney. 

I also added stock in monthly dividend payers, the likes of Realty Income and other real estate investment trusts and a mutual fund or two.

Of course monthly income also caused my quarterly months incomes to rise too, but my aim was not to match the quarter month income. Just to increase my income cash flow in the non quarter months.

This week-end, looking at my Roth IRA income for 2020, I see my income for those eight non quarter months is now set to be over $100 per month.

Goal Achieved!

Now I will expand my goal to make my non monthly dividend income to reach $200. 

That should not take as long. With dividend re-investment plans and new cash going into the account.

Plus I hope a little in capital gains.

Why have investing goals? Simple, for me. To help you get to place that you want to be.

Happy New Year. I wish you health, wealth and happiness.

Please share this post with your friends and family if you liked it. Thank you.

Thursday, January 9, 2020

Is it Possible to Build Your Own Annuity?

Is it possible to build your own annuity?

In short Yes  it is possible to create a portfolio that will in part mimic an annuity.

a cash generating annuity can pay regular bills
Cash From Your Own Annuity

How I would build an annuity.

How do you go about building an annuity like portfolio?

First know the aim of the annuity. Is it to pay a regular bill, a mortgage, car payment, or school fees?

When you know what the annuity is for then you can look for the stocks, mutual funds and Exchange Traded Funds that will provide you with income.

This annuity is for regular amounts of income while you live.

You can include a Life assurance policy for the cost of funeral expenses, your beneficiaries will receive the portfolio of investments after your death.

So if you are looking for a fixed amount of income, say you have a $300 per month car payment. It is easy to build a portfolio of dividend and cash paying stocks and bonds that you can use to pay either part or all of your car payment, mortgage, or school fees.

I use this method to pay for my current college fees. A class costs me $160 per semester.

I invested $50,000 over the last ten years. It pays me just over $2,000 per year in dividends.

It comes out at about $100 in January and February, $400 in March, June and the other quarter months.

I take out $600 per year for fees and textbooks. This little annuity keeps on growing too as the market grows and as dividends increase. 

Last year it grew by 18.7%, 4% Dividend growth and just under 15% stock price growth.
To read

I am also building a $10,000 Portfolio for income beginning in October 2019. To read how that is proceeding go to my blog post at Financial Independence for the Blind.

ad more about building an annuity CLICK HERE.


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Monday, January 6, 2020

Fearing a Stock Market Crash in 2020

Welcome to the Investor in 2020.

Many people today are asking if there will be a stock market crash in 2020?

Will there be a Stock Market Crash in 2020?

Every year it seems the internet is all a buzz with the question of whether there will be a stock market crash this year. I have seen these headlines in financial papers and on financial  news programs for forty years now.
Should we fear a crash in the stock market in 2020, a large bronze bull statue on Wall Street, close to the New York Stock exchange
Bull or Bear in 2020?

The answer is a simple, no-one knows for certain. 

Last year   the markets went up, by around 30%. My own accounts went up between 25% and 14.8%. The 25% rise was in a single mutual fund stock portfolio which I had invested a large amount of cash on December 24, 2018, so hitting the market on it's lowest day of 2018. Gaining a large bounce in the first two months of 2019, over 12% in those first two months alone.

My 14.8% rise was in my long term holding Roth IRA. There are a lot of long term stock holdings in that account so they have had a long time to rise over the last 12 years since I opened the account.  Overall my long term return since 2007 is 133% overall.

Personally I say not too fear a stock market crash in 2020, here are my reasons why:

  •  Your time horizon for investing should be a long period. At least ten years for me.
  • Crashes in the stock market are relatively rare.
  • Crashes, corrections and dips in the market are good times to increase ones portfolio.
  • Fear feeds fear, sometimes fear of a crash may cause a crash or correction for no reason. Thereby creating potentially profitable periods.
  • Volatility in the stock market is normal. Creating potential profits.
  • Being a contrarian, people showing fear tells me that there is still not an overall feeling of euphoria, which can actually portain a period of downward pressure on the stock market
I do not say to ignore the fear.

Acknowledge the possibility of a downturn in the markets. But maintain a level head.

  • Buy stock in companies which make a positive cash flow and make profits.
  • I like to take a dividend stock over a loss making growth stock.
  • When in doubt, consider an Exchange Traded Fund or Low Cost Mutual Fund.
  • Create a strategy, make yourself flexible and modify the plan and strategy to the circumstances.
  • Never invest money that you will need this week or this year.

Read More advice CLICK HERE.

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