Dividend Growth Investing

[_Jay_]

currently, there are some months when I receive dividend payments weekly, at times I even receive dividend payments from different companies during the same week. in the future, I hope to receive a dividend payment every week of every month, every year.

I don't participate in DRIP programs; when I receive dividend payments, I use them to purchase shares of other stock (including my own capital), that way I can always purchase new companies that are at good valuations.

 

[_Jay_]

I started this process almost 2 years ago...the plan is to create MY OWN income via dividends, so that I can become financially independent, and never HAVE to work again, unless I choose to do so.

atm, all of my holdings are in a brokerage account...depending on your age and circumstances, I would recommend one using either a 401k or an IRA, for tax purposes...with that said, the tax bracket I'm in results in me not having to sweat paying tax on my dividends, and with a brokerage account, I can tap my dividend income if needed, as opposed to having to pay a penalty for having to access a 401k or IRA before age 59. I have no plans to touch any of my dividend income for the next 8-13 years though, preferring to let it accumulate...

 

[_Jay_]

at this current point in time, I'm looking at copping shares in 10 more companies, 1 more utility, and 1 more ETF, then just continue to purchase more shares in what I've already established positions in. there may be other companies I purchase, depending on future conditions and circumstances.

common good advice is to hold shares in only a few companies...that's good advice. but my goal is to collect dividend payments across different companies and different industries. when it's actually time to live off of my portfolio, I have NO PLANS on selling any shares (#TeamBuyAndHold), I plan to live off of the dividend income itself. that's why I've purchased shares in so many different companies and plan to purchase even more.

Dividend Aristocrats and Dividend Champions are known for increasing their dividend payouts every year...and blue chips are known for stability. so this is a way of creating a stable income flow that increases every year, without me doing any additional work.

all I have to do is research which companies fit my needs, then purchase their shares at good evaluations. after that, I let time do the rest of the work.

 

[_Jay_]

I learned a lot of what to do while in college, but didn't do anything back then...big mistake, if I had started back then, I could already be financially independent. if you're into the idea of Dividend Growth Investing, here are some of the resources I check for:

@Sion y'all are prolly already aware of Sion's investing-savvy
http://www.mrmoneymustache.com/ good overall blog for the topic of reaching financial independence
http://jlcollinsnh.com/ another good overall blog, and if you're interested in investing but don't know where to start, peep his Stock Series
http://www.mrfreeat33.com/ a dividend growth investor who's already reached financial independence, good for explaining how to reach FI in simple, laymens terms
http://www.dividendgrowthinvestor.com/ another great dividend growth investor blog, good for going into technical detail when necessary, also a good resource regarding tax issues

 

[killap]

Dope thread... I'm interested in learning more about your strategy. I'll stay tuned

 

[traestar]

currently, there are some months when I receive dividend payments weekly, at times I even receive dividend payments from different companies during the same week. in the future, I hope to receive a dividend payment every week of every month, every year.

I don't participate in DRIP programs; when I receive dividend payments, I use them to purchase shares of other stock (including my own capital), that way I can always purchase new companies that are at good valuations.

Normally the ones that you are long on, it's better to DRIP them. But DRIP is not mandatory. The reason people DRIP some of their dividend stocks is because it builds on itself and you don't have to to constantly invest on it. It's actually better if you have a good amount of shares and the compound is enough to pay for multiple shares.

 

[_Jay_]

currently, there are some months when I receive dividend payments weekly, at times I even receive dividend payments from different companies during the same week. in the future, I hope to receive a dividend payment every week of every month, every year.

I don't participate in DRIP programs; when I receive dividend payments, I use them to purchase shares of other stock (including my own capital), that way I can always purchase new companies that are at good valuations.

Normally the ones that you are long on, it's better to DRIP them. But DRIP is not mandatory. The reason people DRIP some of their dividend stocks is because it builds on itself and you don't have to to constantly invest on it. It's actually better if you have a good amount of shares and the compound is enough to pay for multiple shares.

disagree with the bolded, I don't use DRIPs cuz they're indiscriminate; if the share price is inflated, that'll cause the average price per share to average up, instead of averaging down.

for example, anyone using DRIP right now for...say KO (Coke), MCD (McDonald's), or MMM (3M) are all averaging UP on the price of their shares, as opposed to receiving dividends w/o DRIP'ing, then using those dividends to purchase shares of other stock at reasonable valuations...

^^ I'm already long on KO, but I take those dividends, add some capital, and purchase other shares elsewhere.

 

[Focal Point]

Good work bruh

 

[NothingButTheTruth]

at this current point in time, I'm looking at copping shares in 10 more companies, 1 more utility, and 1 more ETF, then just continue to purchase more shares in what I've already established positions in. there may be other companies I purchase, depending on future conditions and circumstances.

common good advice is to hold shares in only a few companies...that's good advice. but my goal is to collect dividend payments across different companies and different industries. when it's actually time to live off of my portfolio, I have NO PLANS on selling any shares (#TeamBuyAndHold), I plan to live off of the dividend income itself. that's why I've purchased shares in so many different companies and plan to purchase even more.

Dividend Aristocrats and Dividend Champions are known for increasing their dividend payouts every year...and blue chips are known for stability. so this is a way of creating a stable income flow that increases every year, without me doing any additional work.

all I have to do is research which companies fit my needs, then purchase their shares at good evaluations. after that, I let time do the rest of the work.

How much do you save up before you buy stock in a specific company? I generally wait until I have anywhere from 5K to 10K saved up. What's the minimum amount of dividend yield you accept?

If you're buying shares in multiple companies, don't you get hit with the trading fees pretty hard? My online account charges ~$9 for each trade.

You mess with REITs (real estate investment trusts) at all? When I'm searching for high dividend yield companies, I notice they usually top the list.

 

[_Jay_]

at this current point in time, I'm looking at copping shares in 10 more companies, 1 more utility, and 1 more ETF, then just continue to purchase more shares in what I've already established positions in. there may be other companies I purchase, depending on future conditions and circumstances.

common good advice is to hold shares in only a few companies...that's good advice. but my goal is to collect dividend payments across different companies and different industries. when it's actually time to live off of my portfolio, I have NO PLANS on selling any shares (#TeamBuyAndHold), I plan to live off of the dividend income itself. that's why I've purchased shares in so many different companies and plan to purchase even more.

Dividend Aristocrats and Dividend Champions are known for increasing their dividend payouts every year...and blue chips are known for stability. so this is a way of creating a stable income flow that increases every year, without me doing any additional work.

all I have to do is research which companies fit my needs, then purchase their shares at good evaluations. after that, I let time do the rest of the work.

How much do you save up before you buy stock in a specific company? I generally wait until I have anywhere from 5K to 10K saved up. What's the minimum amount of dividend yield you accept?

If you're buying shares in multiple companies, don't you get hit with the trading fees pretty hard? My online account charges ~$9 for each trade.

You mess with REITs (real estate investment trusts) at all? When I'm searching for high dividend yield companies, I notice they usually top the list.

it depends on the amount of capital I'm already sitting on and price fluctuations. for example, right now, I'm planning on purchasing more shares of Disney (DIS), in order to average down on price (Disney's currently overvalued in my portfolio, I initiated a position when they were over $110/share, and they're currently less than $93/share). while I'm stacking capital with my eye on Disney, I'm also noticing that the price of HCP has gone down, and it's prime time for me to cop more, in order to average down on price...with that said, I'm also seeing the price of Lowe's (LOW) is currently within striking distance, and I currently don't have a position with them at all.

do I cop a few more shares of Disney? a handful more of HCP? or a handful and initiate a new position in Lowe's? choices...

I used to give myself grief when purchasing single shares...until I read that Warren Buffet does it as well...he does it in order to study a company before possibly building a larger position, I do it after deciding I'm definitely going to initiate a position but just want to get my foot in the door (and increase my dividend flow). but to answer the question, it depends on the capital I've already saved and price fluctuations...I may cop as much as I can, I may cop a single share. what works for me, works for me.

minimum dividend yield? that kinda varies...when I first started out, I was chasing yield, but didn't understand the concept at the time. when I realized what I was doing, I chilled, and began researching the companies more in depth, to avoid purchasing an MLP or a REIT that had an unsustainable dividend. nowadays, when selecting a company, I look for firms whose current yield is 2% or more. I look at their 5 year average as well, but that doesn't always tell the whole story:

atm, the company that produces the lowest dividend that I own is Starbucks (SBUX)...their current dividend is .20/share, yield is 1.51%, and their 5 year average is 1.26%. BUT...I also own Apple (AAPL)...whose current dividend is .57/share, yield is 2.05%, and 5 year average is 1.26%. if I focused solely on 5 year averages, I'd be missing out on Apple's juicy azz dividend...

before opening a brokerage account, I did a LOT of research...went on Consumer Reports and erything, lol. Tradeking is the brokerage account I chose [I was leaning towards TD Ameritrade ($9.95/trade) and Charles Schwab ($7.95/trade) initially], in part cuz of their lower fees (Tradeking's fees are $4.95 per trade). the fees are per trade, not per share, so one can cop multiple shares of a single company and still only pay $4.95 for the transaction itself.

I was considering quite a few REITs in my chasing yield days, but I eventually settled down to wanting to purchase Dividend Aristocrats/Dividend Kings, and that narrowed the field a lot...the only REIT I have a position in is HCP, and I'm gonna continue adding on to them, prolly in the near future goin by their current stock price lol, but I have no plans of adding any other REITs to the portfolio at this time.

 

[texas409]

I know these are investments and take time to see the pay off but im wanting to know some ground level basics. How much to invest and how long does it usually take to see profits from your investments?

how much are those profits?

@_Jay_

 

[_Jay_]

I know these are investments and take time to see the pay off but im wanting to know some ground level basics. How much to invest and how long does it usually take to see profits from your investments?

how much are those profits?

@_Jay_

I opened the brokerage account in November 2014, purchasing 1 share of 1 company. first dividend payment arrived in January 2015. with the exception of none in February, I've been getting more and larger dividend payments every month since, as I've purchased more shares in more companies. started off receiving cents and have already worked my way into receiving dollars every month. keep in mind this is all within less than 2 years, but the snowball has started, and is rolling...

I ignore capital gains, and only focus on stock prices when I'm about to purchase more shares. with the exception of Disney (DIS), each of my dividend paying companies pay me around every 90 days. they also tend to raise their dividends once a year. Disney only pays twice a year...for now.

this is dividend growth investing tho, my focus is on the dividends themselves...if you're more interested in the idea of selling shares and locking in capital gains, u might wanna check Sion's thread: http://community.allhiphop.com/disc...-you-need-to-invest-properly-and-much-more/p1

 

[mike06]

how much did you start out with to invest?

 

[_Jay_]

how much did you start out with to invest?

$40.

one of the perks of my brokerage account was "no minimums." copped 1 share of General Electric (GE) without doin any research (smh), and jumped right on in. purchased 1 share of Coke (KO) next cuz Buffett, then my first ETF, Vanguard S&P 500 (VOO)...then stacked more capital with my birthday, Christmas bonus, PTO cash, and income tax.

 

[_Jay_]

an important lesson in dividend growth investing:

Time in the market beats timing the market...basically, the longer you're in the market, the longer you're giving your assets time to appreciate and dividends to grow and compound. also, one gains wisdom just by becoming more familiar with the process, such as learning how to not panic and sell off during a correction for example...

there's a decent to good chance that one can become Financially Independent 10 years after starting...and depending on one's debt and/or savings rate, even sooner than that...those 10 years are gonna pass by, regardless if you're investing or not, might as well make your money work for u, so u can truly call your own shots down the road.

if you're in your 20s or 30s and are reading this...my advice to u is to start asap. it's really NOT as complicated as all the business channels make it appear, and again, Time in the market beats timing the market.

 

[silverfoxx]

an important lesson in dividend growth investing:

Time in the market beats timing the market...basically, the longer you're in the market, the longer you're giving your assets time to appreciate and dividends to grow and compound. also, one gains wisdom just by becoming more familiar with the process, such as learning how to not panic and sell off during a correction for example...

there's a decent to good chance that one can become Financially Independent 10 years after starting...and depending on one's debt and/or savings rate, even sooner than that...those 10 years are gonna pass by, regardless if you're investing or not, might as well make your money work for u, so u can truly call your own shots down the road.

if you're in your 20s or 30s and are reading this...my advice to u is to start asap. it's really NOT as complicated as all the business channels make it appear, and again, Time in the market beats timing the market.

Where is a great start for me to make my first investment? Ive taken accounting, hated it but I understand the importance of it regarding proper investments in spending and generating money. I'm 24. I plan to make my first investment before the year is out. Have to dust of my accounting studies but I'm willing to aquire knowledge.

 

[_Jay_]

an important lesson in dividend growth investing:

Time in the market beats timing the market...basically, the longer you're in the market, the longer you're giving your assets time to appreciate and dividends to grow and compound. also, one gains wisdom just by becoming more familiar with the process, such as learning how to not panic and sell off during a correction for example...

there's a decent to good chance that one can become Financially Independent 10 years after starting...and depending on one's debt and/or savings rate, even sooner than that...those 10 years are gonna pass by, regardless if you're investing or not, might as well make your money work for u, so u can truly call your own shots down the road.

if you're in your 20s or 30s and are reading this...my advice to u is to start asap. it's really NOT as complicated as all the business channels make it appear, and again, Time in the market beats timing the market.

Where is a great start for me to make my first investment? Ive taken accounting, hated it but I understand the importance of it regarding proper investments in spending and generating money. I'm 24. I plan to make my first investment before the year is out. Have to dust of my accounting studies but I'm willing to aquire knowledge.

a great start would be depending on what you're tryna do...if you're interested in the overall best case, u may wish to consider an ETF (exchange traded fund), which for technical purposes acts like a stock. an ETF tracks an index, and you're basically invested in every company in that particular index. Vanguard is a company very well-suited for this (google'em, even Warren Buffett recommends them for his spouse after his death), and one can purchase the entire American market with one ETF, the Vanguard Total Stock Market ETF, VTI. it trades like a stock, and pays dividends every 90 days.

full disclosure, I don't have any shares of this ETF at this time...I do have shares of VOO (S&P 500 index), as well as shares of VT (Total World Stock), but I will purchase shares of VTI in the future...

if you're interested in individual stocks and not interested in index funds/ETFs, that's cool...in that case, I'd recommend u googling the Dividend Aristocrats (all whom pay dividends, AND have raised their dividend payout every year for at least 25 years), choosing which companies meet Your needs, and selecting from there...

as time goes on, u can purchase other companies/ETFs, of course, these are just a starting point, for one not yet familiar with this environment. and before u purchase anything, do your homework, as well as try to purchase at a low evaluation.

great reading material is the first 4 parts of J.L. Collins' Stock Series: http://jlcollinsnh.com/stock-series/

he's gonna steer one in the direction of ETFs, and that's fine, whether u go the individual stocks route, the ETF route, or both...my advice is to read the first 4 in the series, in the order 2, 1, 3, and 4 (there's a better flow in that order IMO).

 

[2stepz_ahead]

i see i wasnt involved in the shouting out....

i see how it is @_jay_

yall never want to give a black man his props

 

[_Jay_]

don't be like that bruh...fr

 

[Reigns]

Yo this is what I'm talking about! Jay I appreciate this. This is exactly what I wanted/thinking of when I first started investing. What do you consider being "long" in a company. I invested in a couple of the companies you mentioned above, but I stopped because I wasn't disciplined (lost like $200 in the first week or so) but I'm ready to start back. Should I invest more in them or put money into other companies.