Category Archives: Dividend Investing

Exciting Journey – From $0 to $100K in Little over Three Years

What an exciting journey it has been!

Wow. I finally did it.
At the end of Sep 2015, my total portfolio value crossed $100,000 and to be precise: $107,741.13. 

How I started it?
I’ve written in depth about my journey: Learning, my Eureka Moment, Learning Re-Jigged, Dividend Investing and Learning to Walk in this article and what a journey it has been! My journey to more than 6-figures value started in Dec 2011 and my first dividend check was received in Jan 2012 and since then, it has been such an incredible journey with fellow investors that we shared, inspired and grow together.

I started with virtually nothing to amassing portfolio of more than $100K+ in assets and my journey is well documented every single month up to cents, cents make dollars, Is’nt 🙂 I committed to myself to religiously put some capital every month and cutting down any unnecessary expenses and living a frugal yet decent life. I opened a dividend re-investment plan (DRIP) with ComputerShare and set up automatic investments every month. Once money grew to a decent size, opened another brokerage with TDAmeritrade to better manage the dividends received in other excellent companies and currently, own close to 50 fantastic companies that keep giving blessings every month/quarter.

I’m targeting $3,500 in passive dividend income this year and so far, I’m on track towards this goal. The checks received are re-invested into the quality companies and that in turn generate more dividend income and this cycle repeats over and over again. Initial snowflakes become an avalanche of snow balls that roll down the hill with increasing speed and gathering more snow in the process, i.e., magic of compounding is triggered and before you realize, dividend income starts to grow on its own and you will be able to cover your significant expenses. Once this income is able to cover all your expenses, you have reached the promised land of financial independence: FI 🙂 Your initial hard work has started to pay off and you can begin to enjoy the fruits of your great work.

Thank you to everyone who stopped by Passive Income Mavericks over more than a year. Although, my journey started in right earnest at end of 2011/beginning of 2012, I only started blogging in March 2014. In short little over 3 years, my portfolio was built from scratch: $0 and now, it is filled with great quality companies that are sending dividend checks on my way, every quarter and every year like a clockwork and on the way, growing those checks by 5-9%.

Appreciate following my journey as we inspire each other, cherish and share those beautiful moments when we reach financial independence.

Full Disclosure: Long on stocks in my portfolio.

Thanks for reading.

Go Baby Go – Buy Energy Stocks!

I do not try to time market to buy securities and keep a fixed schedule to keep buying securities in my Portfolios that I’m comfortable with at regular interval, akin to dollar cost averaging, however, once in a while Mr. Market gets maniac and wants to give me bags of goodies at a discount, who won’t take it?  I’d gleefully take them with both my open arms 🙂

Last month of October, I’d fired my ammo on some of the great stocks that I wrote about earlier: GE, HCP, PG, XOM, CVX, PG, ABBV and ARCP being a bold move this month. So, I almost ran out of further ammo to fire this month and was going to take a little breather and load my gun for next round. However, oil prices have been dropping like hot potatoes, almost 30%, and with that energy stocks are tanking in unison and singing songs with same tune, along with drilling and exploration companies for shale oil or natural gas

While Dow Jones Average (DIA) and S&P 500 indexes (SPY) travelling towards rarefied stratosphere as if a rocket has been fired with cryogenic fuel, while the energy sector is gasping for air. Most energy stocks are down 30% to 50%, providing an excellent opportunity to buy them at a value price and providing good dividend yields, 4-6% range. It does not mean energy stocks cannot go down more and there is a fair chance that oil may still go down further, however, I feel good about nibbling now to build up positions and add even more positions later if the energy stocks were to go down further, getting Santa Claus gifts even before arrival of Christmas to patient investors  😉 and we will be rewarded for that for long time to come.

I’ll be adding positions in Royal Dutch Shell plc (RDS.B), Chevron Corp. (CVX), Exxon Mobile Corp (XOM), ConocoPhillips (COP), BP plc (BP), Suncor Energy Inc. (SU) and Total S.A. (TOT), with BP yielding more than 6%, right now. Due to the significant correction in energy stocks this November, my fingers have itched enough to fire some of remaining ammo in my emergency account, which I rarely do but, I would take the offer of Mr. Market right now.

Full Disclosure: Long BP, XOM, CVX, RDS.B and COP.

What do you think about above energy companies. Are you buying some of them now?

Thanks for reading.

My 3 Best Investments so far – Lessons Learnt

I started dividend investing sometime around end of year 2011. Now, I’m taking stock of all of my securities in various portfolios, including a fun portfolio that I do not track over this blog (due to its small amount) and how they performed in this duration from beginning to to-date so that the readers can see what have been my best investment bets so far, lessons learnt and hopefully a dose of inspiration for some 🙂

As the saying goes, hindsight is 20/20, so, you never know what securities are going to perform best in future, it’s only after years of investing, you’ll see the performance. Some securities will outperform others and some will lag behind, in-spite of all the analysis we do.

Without much ado, below are my 3 best investments so far:

#1 Hewlett-Packard Co. (HPQ):

Hewlett-Packard is a multinational IT technology company with varied interests in hardware, software and services and was founded by Bill Hewlett and Dave Packard in 1935 in a car garage. HP has many marquee products under their belt like printers: Deskjet & Laser, PC, Palm, and many others.

+89.67% Up: Average cost: $18.04 and currently trading at $34.22.

#2 ConocoPhillips (COP):

ConocoPhillips is world’s largest independent exploration and production company, based on proved reserves and production of liquids and natural gas. They have operations across 27 countries with over 18K workforce and a truly diversified company across globe.

+40.97% Up: Average cost: $60.55 and currently trading at $85.36.

#3 Johnson & Johnson (JNJ):

Johnson & Johnson is a consumer & healthcare company and lot has been written about it by many over decades in fact. This company has 30 consecutive years of increasing adjusted earnings and 52 consecutive years of dividend increases.

JNJ has an amazing set of products in various segments: baby care, skin & hair care, wound care & topicals, oral heath care, OTC medicines like tylenol, motrin, benadryl, etc., nutritionals, vision care, medical devices and diagnostic products, prescription pharmaceutical products, that are used daily by millions world over.

+36.44% Up: Average cost: $77.16 and currently trading at $105.27

Lessons Learnt: All the above 3 companies are top notch in the segment they operate , have growing earnings and hence growing dividends that are distributed to shareholders over the years, in-spite of the great recession or wars in between.  They were bought at the price when they were fairly valued and therefore had margin of safety. Wish I had bought them more 🙂

Full Disclosure: Long on all securities mentioned here.

What have been your best investments so far in your DI life ? Please do mention in comment below as it may help our community readers to see any other hidden diamond(s).

Thanks for reading.

Dividend Investing – Back to Basics

A lot has been written about Dividend Investing (DI) and Dividend Growth Investing (DGI). However, for an absolute beginner, when he starts reading about DI/DGI, he is like a dear in front of the head lights and does not know what it is all about and what to do. I am starting a series of articles that will explain about the whole process of Dividend Investing: what it is and how to begin your financially independent (FI) journey.

I felt that there is a need to connect DI with your own life that you live and only then, it will start to make a better sense by providing living and breathing examples to a beginner who just started his journey. Only then, a beginner can really make a connection and more importantly make thoughtful decisions as espoused by Benjamin Graham, Warren Buffet, John Bogle, and other investing legends.

This article starts with your daily life style that an absolute beginner can relate to and understand. Before looking into what Dividend Investing is all about, I will present you with an inventory of our various activities that you perform every hour, every day, every week, every month, every quarter, every year in and every year out without fail, which at the most fundamental level are as follows:

  • Air: You need to breathe in air and without it you can’t live even for a second. This air is FREE. No company or government has a monopoly on this. Hence, there are no real private businesses around this FREE supply source. Hence, no one makes any profits out of it (I am not talking about Beijing Air, where some smart entrepreneur could still think of ways to make money 🙂 like auctioning a jar of fresh air from Alps for $86 bucks!).
  • Get to Work:  In order to getting to your school or work, you need to do brush, bath, shower, shampoo, dress and beautify yourself in order to impress someone 😉 All these satisfying elaborate activities require touching many products. What products come to mind and who makes them: Colgate, Johnson & Johnson, Proctor and Gamble, Kimberly-Clark, etc. I call this as the most important observation that can make you a smart investor and giving you a 6th sense. This can serve you much better than reading several Wall Street analysts’ reports, watching top-notch TV honchos and reading hedge funds recommendations. You can extend these sharp observation skills to other businesses around yourself while driving or where ever you visit and see who is attracting droves of customers.
  • Food: In order to pump in some calories into your human body, you need to at-least drink water or drinks and eat some sort of food. Who makes these products: Coca-Cola, Nestle, Hersey, Star Bucks, McDonald, Chipotle, Pepsi, …. you can fill in your favorite. Point of this exercise is to observe the products or services that you and others will need on an on-going daily basis and what companies provide those necessary products. These companies must be dominant players and in some cases almost have virtual monopoly and are said to have a “wide moat” around them as Warren Buffet calls. It will be very difficult for new competitors to come in and knock them down.

You can continue and expand this exercise to your other daily needs like Energy, Shelter, Fun/Entertainment, Health, Defense, Finance, and many other areas, some even beyond my imagination like golden curtains in bathroom 🙂

You toil hard from 9 to 5 in office to make money, $$$$$$$$… and you use that money to purchase necessary products and services. Now, think about it: you literally drain your life, blood and energy on them and it makes perfect sense to get some money back from these companies, but, how. This is where Dividend Investing (DI) comes into play. You need to own these very companies (investing). Once you do, these companies will reward you with a form of cash back (dividend) on a regular basis (monthly or quarterly) and isn’t getting some money back awesome! This is the crux of Dividend Investing (DI), my friends.

When you purchase a share in these profit making enterprises, you are really buying a very-very small slice of the big pie (unless you have an elephant gun like Warren, to eat big slices 🙂 of pies). But, that’s okay; our pie will grow with more money invested in these companies as time goes by. They will shower you with dividends and that buy more shares (ownership) and this keeps growing resulting into a big snow ball effect, where rolling snow from hill gathers more snow, resulting into a bigger and bigger ball, and when the money ball becomes so big that all of your expenses are covered by the dividends, you have achieved Financial Independence (FI) and freedom to live a life that you always wanted. You have free time and do things that you really love to do, travel around world, learn about amazing new cultures and soak in the wonders of nature or simply sit back and relax! Life should be moments of pleasure and filled with activities that you have great passion about. This is what I call enriched life filled with happiness.

All the best on your FI journey! Thanks for reading.

Full Disclosure; I am long on securities for companies mentioned in this article.