Friday, November 19, 2021

What’s the best way to start saving money and make my bank account grow?

 Once you know that you want to save your money.  Just how do you go about saving?

coins in a glass savings jar

First you will need to know what you spend all of your money on.

Do you spend it on living expenses? Rent? Food? Transport to and from work? Credit Card payments? Student loans?

This may sound tedious and non too glamorous, it is. It is a necessary part of gaining control of your money. You need to know exactly where your money goes when you are not looking after it.

Start on your pay day.  Make a note on everything that you spend money on for the whole of the next pay cycle, from payday to payday. Big or small make a note of what you spend money on and where you spend your money.

Once you begin to gather all of your data, you will start to find your patterns of spending.  You do not need to cut out any spending at the gathering data stage. You just need to know your cash spending habits right now.

After the first pay cycle is done, you will have a lot of information about how you spend your money.

Look in detail at what you spend your money on. Do you even remember the purchases? It can be surprising how much money we spend without even noticing. A dollar here or dollar there, we tell ourselves that it doesn't matter, but it does it is a loss of your time and cash. You spent your time to earn those dollars, now they are gone, forever.

Look for items in your spending log that are wants and not needs. You need shelter, you need some food, so rent or mortgage are things that you have to pay for. Do you buy a sandwich at the store everyday, then this is a want, try to make several sandwiches per month at home or cut back on your food spending if you throw lots of your food out during the month. Making your food at home is generally less expensive and healthier than food bought in a store or restaurant.

When you go out, do you buy a $20 cocktail to drink? Then choose a less expensive drink.  It'll probably be less loaded with gimmicks and sweet sugary syrups which may taste good but they make you crave even more sweet drinks later in the night.

As you begin to cut back on all of the wants in your life, you'll see you have money left in  your bank account at the end of the month.  You might be tempted to spend it on a one time splurge if you leave it in your main bank account. So, open a high interest savings account with an online bank.  Transfer some of your left over cash at the end of the month to this account.

The high interest savings account will take all of the money that you have to spare and lock it away. You can only take money from these accounts six times per month, and having the money away from your main bank account will mean that you are making extra steps to access your money. As a human you will generally want to do the easiest thing, that is in this account, leave the money alone, it's hard to access.  

Soon, within a month or two, you'll see the savings start to build. As you save, you'll find it gets easier and easier to save.

Saving becomes a habit.

Soon you'll begin to set goals for yourself. "I'll save X dollars by my birthday." 

As your savings build, you can spend some of the money on planned purchases.  But it's also fun to look at things when you have a cash balance and say, "I could buy that. If I wanted too. But I don't need to buy it today."

One of the major killers of savings is credit card debt. So pay off all of your credit cards as soon as you can. Once paid off, try to never carry a balance on your card. Pay it off as quickly as you can. Credit cards can be useful for their insurance value, when you make a purchase, if there is a problem and the seller won't help, report the seller to the credit card company.  Their intervention on your behalf can move even the most reluctant seller to action.  Other than that settle your bill in full every month if you can. Never make just minimum payments unless you are working on paying off several credit cards using the debt snowball method. i.e. paying a lot off one bill while making minimum payments on the other cards, as you pay off one card, move the high payment over until that card is paid off, until all cards are paid in full.

Once you have paid all credit card debt, and built some savings. You can think about investing, to increase your assets and income.To read about creating a Dividend Savings Ladder CLICK HERE.


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Monday, November 15, 2021

How to Create a Dividend Income Ladder From Scratch.

 One of the commonest complaints I hear from people about dividend investing is "But I would only receive occasional income from dividends. What do I do between dividend payments to make money?"

Well of course, in the United States most dividends are paid quarterly. in other parts of the world you receive only semi-annual dividends every six months or so.

Dividend ladder, a ladder  on a plain white background, rising from bottom left to top right, wooden ladder image

One of the first investing tricks I learned back in the 1970's at the very beginning of my investing career was to create a dividend ladder.

With a dividend ladder you can create a sequence of dividend checks coming in, almost daily.   I personally receive on average more than seven dividend payments per day.

March, June, September and December still actually see me me receiving more dividends than any other months. But this is just a product of the way U.S. Corporations pay their dividends.  I still receive dividends most week days.

How I begin creating a Dividend Ladder:

First of all, the dividend ladder only works if you use dividend paying stocks and Interest paying Bond funds. You can include growth stocks if you wish, but they will not contribute to dividend income for some time, if ever.

I begin with a framework.  In the last few days of a month, many Mutual funds and ETF pay a dividend. While some companies, Coca Cola ( KO ), Aflac (AFL ) and Allstate Insurance (ALL ) like to pay on the first day of the month.  So one can mix in some monthly paying Mutual Funds and blue chip single company dividends here, choosing companies which pay on the first day of different months helps . So Allstate pays in June, Cocac cola pays in July, Verizon (VZ ) pays in August, then back to Allstate to repeat the cycle.

Week two of the month can be a little sparse, unless you have some Bond funds, Bond funds generally pay out around the seventh of the month.  

There is often a quiet period until about the fifteenth of the month when many monthly paying Real estate investment trusts (REITs ) pay out, One might also include Business development corporations here too BDC likn Main Street Capital ( MAIN ) pay out at this time.

The third week of the month or beginning of the last week sees the paying of dividends from many covered call investment companies.  They generally pay about one week adter the monthly options period closes, that is the third Friday of the month.

After one has created this frame of investments which will pay you a regular monthly income, one only needs to fill in the gaps with dividend paying stocks.

It is a simple method of generating almost daily income from periodic payments.

Build a Dividend Ladder with M1 Finance. Get a Bonus when you start investing.


 With M1 Finances automatic investment program you can set your investments and almost forget.  M1 Finance will reinvest the dividend income into your pre-selected stocks to automatically keep your portfolio balanced in the way you wish.

Your dividend ladder can grow and grow with little effort from you.

As your dividend ladder starts, you only see small increases in dividends at first.  But if you continue to add a little new money, your investment grows, increasing your dividends.  This effect is often call the "Dividend Snowball"  Before long your dividends can be in the tens of dollars per month.

For instance, I opened my account with M1 Finance on January 15, 2020.  I began with just $100, I added $10 per week. My first dividend came just three weeks after opening the account, I received 1 cent from the LQD Corporate bond fund. Afew days later other dividends began to come in.   Today in November 2021, I have earned over $102 in dividends. and my account has grown to over $4,600.  In the next year I expect to earn $12 per month, that is for doing nothing but, monitoring a portfolio occasionally and adding a dew dollars per week.

Amazing.  The power of investing in dividend paying stocks.

Thanks for reading.  I hope that you might try to create a dividend ladder from scratch.

Thursday, November 11, 2021

"Earn Cash While You Sleep."

 It was once said that you are doomed to work forever unless you find a way to earn whilst you are asleep.

a stock market graph rising from bottom left to top right

Some say that Warren Buffet once said those words, I am not sure if it was him, but how often do you earn money?

I took a look at my investments.

I have two crypto accounts, Block Fi and Coinbase. They pay me monthly and Daily. So 377 times per year.. These accounts are new and have grown mostly by means of capital growth.  I am staking my coins and tokens, that is lending them so earning returns of up to 9% in my block Fi account.  5% in coinbase.  But the incoming cash flow is increasing my funds daily.  So the snowball is starting to grow.

I have a twenty-two month old M1 Finance account.  That is generating over $70 per year in dividends.  In the current quarter I am earning over $25 so will be earning over $100 in the next twelve months.  I have 98 dividend paying stocks in that account, those pay me more than 392 times per year.

In my E*Trade portfolios, there are a whopping 1,933 payments per year!  I was stunned by these numbers.

So in just four accounts, I get paid  Wait for it.  Two thousand Seven hundred and two times.That is ppper year.  That is I receive 7.4 payments every day of the year, including Saturdays and Sundays.

These totals do not include payments in my Emergency fund, my regular income from my work nor income from any affiliate links.

Of course I am investing a little more new cash into all of these investments, plus allowing all dividend income and interest to compound.

All of these payments have accrued over the last fifteen year since I came to the United States in 2006, and invested my first $50 in August 2006.  Since then I haven't earned more than $15 per hour from my own personal labor.

So now, I can say, "Yes. I do earn most of my income as I sleep."

Read Creating a Dividend Income Ladder

Read "Why I am Now Investing in Crypto"

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My various affiliate links in this post have some special offers for you. Coinbase and Block Fi, have Free Bitcoin for you, M1 Finance will give you $30 if you fund a new account with $100, that's a 30% bonus before you even start investing. So take a look at those great offers and boost your income ready for next year.

Take a look at this great Wallet available from Amazon.

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Thursday, November 4, 2021

$100 Milestone Reached Today 4th November 2021

 For several days now, my M1 Finance account has been creeping towards the $100 in earned dividends mark.

$100 Bill portrait of Benjamin Franklin.  $100 dollars earned in dividends.

Today, Thursday 4th November, 2021, the latest trenche of dividends hit the account.  79 cents worth, pushing my earned dividends for the lifetime of the account to $100.45.

Now I know that just a few cents over $100 is not impressive to many.  I earn much more in other stock portfolios.  But this account was set up to show that earning dividends from fractional shares is a viable form of income.  I began investing just $10 per week on January 15th, 2020.  I added occasional cash deposits, items such as loose change found around the house, birthday cash.  I have also increased the regular deposit in recent months from $10 per week to $15 per week, now $18.31 per week.


Slowly increasing the deposit or savings rate allowed me to adjust my own feelings about saving and investing in this account.  As I became comfortable with the reduced spending I increased my savings level.  Now at $18.31 per week I am at about my limit for saving and investing rates for this account.


I may increase the account savings rate to $20 next year, maybe more.  That will depend on income.


The First Dividend


The first dividend in this account was   received in the first week of February, 2020.  That dividend was just one cent.  It was paid from LQD, a corporate bond fund which pays monthly, in the first few days of every month.  LQD has been a stalwart of this portfolio.  Every dividend from every one of the dividend paying stocks has been reinvested into the portfolio.  With this reinvestment and regular weekly inputs the portfolio has grown to approximately $4,600

You can see the portfolio at   My Dividend Portfolio

The above link is an affiliate link.  You may open an M1 account for yourself, if you do, you will receive a $30 cash bonus when you fund your new account with $100. I will receive a small cash payment too if you open a new account using my link.  Thank you for supporting me.

Attaining the next goal of reaching $200 in earned dividends should take me a lot less time.  This milestone took me  a few weeks short of twenty months.  Looking back over recent months, I now have a dividend return of about $23.56 per quarter, this varies as days pass, but $23 suggests that I should reach $200 in earned dividends in less than twelve months.  Watch out here for regular updates. October is one of my weakest months for dividend receipts and this account received only $6.52, so my minimum I can expect to receive over the next twelve months is about $72.

But bear in mind that as the whole account grows, every fraction of a share has increased earnings power.  Many of the stocks in this portfolio are expensive stocks, Home Depot, Costco, NVDA, Microsoft.  The overall rate of return is just 2.5% but many of the stocks and ETF in the portfolio are dividend growth stocks.  Some like Johnson & Johnson are dividend kings.  Which means that they have paid increasing dividends over decades.

My largest single holding is Apple,  This stock took a big boost in the portfolio when Apple split in August 2020.  I went from about 0.5 shares to 2 shares.

Since then the rest of the portfolio has been playing catch up.  Not a bad thing for an increasing needf or diversification.

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To read about my Crypto Currency Investments goto Why I am Investing in Crypto.