 DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. The Total Money Makeover This month we will do the first of the five most important investment books I have ever read. The Total Money Makeover by Dave Ramsey probably is not an investment book in the relation to how to invest your money. But if I had not read it or adopted his methods of running my personal life, I would never have had the funds to invest the way I do today. In my previous posts, I have explained how I spent years trying to overcome my huge backlog of debt and failed. Finally, I found this book. Buy it on Amazon Dave Ramsey has coached millions of people on how to live and manage their finances. His way works. Many do not like his method as it is in your face and he sees no reason to ever use a credit card. (Debit cards are fine.) If his approach is too radical for you, you can try your plan by mixing his method and yours. I did it that way for over 10 years, and if I had not finally said “ENOUGH”, I think we would still be battling a huge unwinnable battle. Each day, Dave Ramsey has a talk show and discusses situations people are in. If you listen, you will realize your situation is probably not as bad as many who call in. But he gives good sound financial advice. Most spoiled people who think they have to have expensive ‘cars and toys’ find out quickly that he will make you discard those. But hanging on to something you probably should never have bought is not part of his no-nonsense plan. Many like myself got into an over my head debt situation by digging a hole with credit cards. Dave Ramsey’s advice is that if you are in hole, stop digging. In simple words, STOP using credit cards. A study of credit card use at McDonald’s found that people spent 47% more when using credit instead of cash. Credit cards give you a false sense of having more money than you truly have. The Total Money Makeover is not just a book of theories. It is a proven reliable method to take on your debt head-on and come out debt-free in as little as 18 to 24 months. Mine was so great it would probably have taken 5 years to use his method. By using part of his methods, we did it in 10 years. However, when we fully adopted the Dave Ramsey method, we were debt-free in 11 months. Dave Ramsey probably has been where you are traveling today. He details how he became a millionaire quickly, and they blew it all and became broke. He got on his path to recovery and got back to being a millionaire several times over. Listen to some of the takeaway highlights I have gleaned from his book. Takeaway # 1 - The problem you are facing is probably not a lack of knowledge. Knowing what to do is 20% of it, DOING IT is 80%. The problem is looking you back in the mirror each day. The issue is YOU. You must get control of things and handle the issue. The cavalry is not coming. If you don’t do a total money makeover, you may wind up with an “Alpo” dinner in your old age. Sounds gross, but if you can’t afford food, you might reach such desperate straits. Takeaway # 2 - You must have a sound financial system. Anyone can blow more money than they make. But a solid plan will work day in and day out. He quotes great investor Warren Buffett who says “When the tide goes out, you can tell who was skinny dipping.” In other words, if you don’t have your finances in control, the ups and downs of life may destroy you. And this goes for investments down the road too. Get on a fully diversified SOLID plan once you are at the point to invest. Takeaway # 3 - Dave Ramsey said in his book that he has never met a millionaire who said they got to their lofty status by using Discover points. I was the world’s worst about thinking the ‘right’ credit card would save me money. Paying 18 to 23% interest is not something this is a help to you. Credit cards are NOT YOUR FRIEND. He points out that you and I probably don’t own any of those 20-story shiny buildings, do we? But Discover bondage and Visa and Mastercard and American Express own hundreds of them. Credit cards are NOT YOUR FRIEND. In his book, Dave points out that CHANGE IS PAINFUL. We won’t change until the pain of where we are exceeds the pain of change. When it comes to money, we can be like the toddler in a soiled diaper. “I know it smells bad, but it’s warm and it’s mine.” But the rash comes eventually and we cry out. Until you have had it trying to do it on your own, you will not win. The Credit card companies have you where they want you. Culture and commercials point to a very different picture than reality. Takeaway # 4 - The Baby Steps 1 and 2 of the 7 Baby Steps to Freedom. This is all about HOW to get things under control. You quit living above your means and you stick to a budget. All expensive toys are liquidated and you drive an old Buick or Honda. (I drove both).
Takeaway #5 – Baby Steps 3 through 5. Now that your credit card debt is finalized, you come back and get organized with your finances.
Takeaway # 6 - The Baby Steps 6 and 7.
Takeaway # 7 - The results: You may read this and say, this plan is too simple. I have been there and done that. I tried multiple variations of Dave Ramsey’s plan including funding my Roth IRAs while in baby step 2. It just does not work. What should have taken me 5 years took me more like 10 because I would not conform to his plan. There is something about being TOTALLY FOCUSED on that one baby step until it is done that makes you more determined. As Dave says over and over “Don’t give up.” There will be down moments when it seems like you are not getting anywhere. But make a graph or a pie chart and shout out when you finish even a percentage of one of the steps. Baby Step 2 on the snowball may take you 2 years, or if you are in horrible shape, it might take 6 years. But it is worth the trouble. You will be glad you found this book. If like me, you may just need a little simple guidance to get debt-free. It has been the most liberating thing I have ever experienced regarding finances. Look at the millions of people who have stuck with it and can testify that this plan works. In conclusion, let me say that I am so proud to have met Dave Ramsey. He has been a blessing to millions of people (like myself) who have struggled with debt. This is a great book and while not some super important get-rich-quick investment book, it gives you a foundation to get in a position where you can invest and put your money in long-term safe investments.  List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.htm www.lifecanbesimple.net Internet Direct Laptops InternetDirect.Us
0 Comments
 Simple living has so much to offer. It is more than minimalism and being frugal. It allows a person to truly reach that position of Freedom.
My wife and I began our quest for a more frugal, freeing, simplified life 10 years ago. The first step was to remove distractions and declutter our home. Getting rid of unneeded possessions not only saves a lot of space, but it is also a mind reliever. Look at the number of storage buildings being built. We all tend to accumulate and accumulate, and finally, after the closets are overflowing and the garage is full, we rent a building. How many things do you think those buildings hold that are truly needed? Very few I dare to say. On our quest, we reviewed what was most important in our lives and set some rules to live by. Boundaries are very important in life. I mentioned that in my article on Finding Your Perfect Life Balance. https://lifecanbesimple.net/blog/finding-your-perfect-life-balance In the process of decluttering, we realized that we needed to quit worrying about what everyone else thought about us, and get our lives in balance and be pleasing to God. That in itself was a great move to freedom. We decided that after years and years of debt, it was time to address it. We tried one method after another, but it seemed there was always a new emergency. We would get one credit card paid off and then use another one to take care of ‘another’ emergency. Some were health-related and truly emergencies. But Christmas is not an emergency, but we didn’t get it in those early years. Finally, in 2018, I purchased Dave Ramsey’s new book, “The Total Money Makeover.” His ideas made sense, so we adopted a few of them. Then in 2019, our local credit union put on one of Dave Ramsey’s training programs. We went to it and almost got it right. We cut up most of our credit cards. His 7 Baby steps to freedom are perfect and on his book review, I will go into detail on those 7 baby steps. So again we almost made it, but again it did not work. Each of those early years, we lowered out debt, but could not get it totally gone. So in October of 2020, we made a pact. Stick to Dave Ramsey’s plan and do it his way. As he says in his book, your brother-in-law may have a better plan, but most likely he is broke. My plans seemed as good as his, but they didn’t work. So we set a goal. 100% debt-free from Credit Card debt and all other debt by October of 2021. We determined that no matter what, we would pay $1200 as a snowball every month, even if we had to take money out of some of our Roth IRAs. And we stuck to it, and the Lord blessed us with it paying off a month ahead of time on Sept. 7, 2021. We stopped trying my way and stuck exactly to Dave Ramsey’s plan. Finally, after 10 years of trying it my way, in one full year, we wiped out all the credit card debt. Praise the Lord for the freedom it has given us. We are now investing over $1,000 monthly and paying down our mortgage. It will be finalized in September of this year. What a relief to no longer be a servant to a lender. When we get fully debt-free, can we stay that way? By budgeting and God’s help, I believe we can. Once your monthly income from investments exceeds your debt, you truly are in control. Staying debt-free will take determination and perseverance. But we have learned a lot about how to NOT do things, so I am hoping we can concentrate on doing things right from now on. Want to be truly free? If you have debt, make up your mind to eliminate it. Read Dave Ramsey’s book “Total Money Makeover”, and just stick to his plan. If you don’t want to spend the $10 it costs, go to the library and check it out. But seek some help and get determined. With God’s grace and help, I believe anyone can do it. We owed over $365,000 when I was 47 years old. Quite a lot to overcome, but we did it. Set a reasonable date to get out of debt, and go for it. If you miss it by 3 months, no big deal. In 3 more months, you will be free. The main thing is to make up your mind and stick to your plan. I read once that only 3% of people set long-term goals, and those are the people accomplishing the most in their lives. Be a goal setter, and find the total freedom of being debt-free. When you get that freedom and are ready to invest, check out our article on beginning investing. https://lifecanbesimple.net/blog/beginning-to-invest www.lifecanbesimple.net www.internetdirect.us Internet Direct Laptops   DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
The Rule of 72 and Saving $1 a Day I attended Midwestern State University and majored in accounting. In my Junior year, we studied the Rule of 72. It is a super simple rule and helps you determine how long it will take for you to double your money. 72 ÷ your compound annual interest rate = how many years until your investment doubles If you want to double your money in 6 years, you can divide 72 by 6 and it tells you that you must make 12% on your interest rate. Basic algebra (keeping both sides of the equation equal) means that if you divide 72 by the interest rate, you get the number of years it will take. So if you know you are making 9% interest, your money will double in just 8 years. 8% interest means it will take 9 years. So it is a fast and simple method to determine years and percentages. That is what compounding of interest does for you. If you take our initial example of making 12%, the reason it will double in 6 years is after the first year, you have your initial investment amount (say $1,000) plus that year’s interest of $120. So the second year, you make much more interest as your basis is now $1120 * 12% = $134, etc. until you roll into $2,000 at the end of the sixth year. May not be exact, but is a good rule of thumb. The rule of 72 has been around for a lot of years. Luca Pacioli, a mathematician from Italy wrote about it in his book “Summary of Arithmetic, Geometry, Proportions and Proportionality”, around the year 1494. Some credit Albert Einstein for the rule, but no documentation supports this claim. The Rule makes it easy to see why compounding is super important, especially if you will start the process in your early years, particularly around 20 to 25. What if I told you that you could save One Million dollars by investing just $1. Not once a year, but ONCE. It can not happen with 0% interest. But with 3% interest, it can happen. Sound impossible?. In his book “Multiple Streams of Income”, Robert G. Allen gave that exact example. He said if you just save $1 you will accumulate 1,000,000 dollars if you receive 3% interest in just 468 years. What?? 468 years? I doubt many of us would live to see that happen. However, if you change that interest rate to 5%, it would only take only 264 years. 20% nets you one million in 75 years. Think of that… One dollar invested and because of time, it would be worth One Million. Most people are not disciplined enough to leave the money alone, much less invest more consistently. So Consistency and Discipline are very important. Now let’s bump the ante a little bit. What if you saved $1 a day. How long would it take? At 3% interest, 147 years, 5% - 100 years, 10% - 56 years, 15% - 40 years, 20% - 32 years. See the importance of consistent steady investments. It is not nearly as important on the amount as the steady savings month after month. And using our rule of 72, if we can average 12% returns, our money doubles every 6 years. In his book “The Total Money Makeover” Dave Ramsey points out that there are dozens of growth mutual funds that average 12 to 15% per year. So a person who starts young and consistently invests in an investment that makes 10% or more is sure to have a large amount in their savings by the time of retirement. Robert Allen said in his book: “ The real key is to keep socking away the money. Let the numbers whisper their silent but relentless message. Consistency. Day in, Day out. Save, Invest, Save, Invest. It may be dull, but no matter, just do it." www.lifecanbesimple.net www.InternetDirect.us Internet Direct Laptops  DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
Passive Income. Why is it important? Because it makes you money while you sleep. We were taught in school to work hard, to make good grades, go to college, and then get a good high-paying job. Put your money into the 401-K or IRA and then retire at 65 and be happy. How does working your life away for 45 to 60 years sound like a good plan? If we can leverage some passive income to our advantage in our 20’s and 30’s, there is no reason we should have to work most of our lives. If you are much older, it still works to your advantage, so keep on reading. You are never too old to develop passive income. Passive income is income that you don’t work for on a daily basis. It can come from dozens of sources. Some may have required earlier work, but it is mainly money today for efforts put in the past. Probably the most common passive income is interest from your savings account. Here is a shortlist of some Passive Income sources. Common Passive Income Streams 1. Interest from Savings accounts or Treasury bonds 2. Dividend interest from Stocks that pay dividends] 3. Income from Corporate bonds 4. Rental income from houses or apartments you own and rent out 5. Income from collections such as art or precious metals 6. Royalty payments from oil and gas royalties 7. Owning a business 8. Residual payments from royalties on content-producing streams. (Kindle books, regular books, YouTube channel productions, etc. 9. On-Line courses you sell over and over. 10. Farm or crop payments for land leased 11. Any type of investment returning you dividends without you having to work for it. We did articles on Dividend Paying Stocks and how to pick some good ones. One was on the Dividend Aristocrats and the other was on the Dividend Kings. Check those out for good leads on stocks that will not only pay dividends but grow in value also. https://lifecanbesimple.net/blog/what-are-dividend-aristocrats https://lifecanbesimple.net/blog/what-are-dividend-kings Why Passive Income? - SIMPLE AND REQUIRING NO INVOLVEMENT You wake up and money flows into your bank accounts and all you do is watch it grow. My friend Joshua King started writing content at the age of 36 and now has over 140 kindle books bringing in a monthly income of over $650. With the compounding effect that this has, he will reach over $1,000 of book-producing revenue each month within five years. So being a writer can clearly be a method of obtaining passive income. Joshua King is the one who got me started on the quest for Passive Income. His book is is one of the top 5 most important Investment Books I have ever read. A review on this one is coming over the next few weeks. Joshua wrote a 319 chapter book on just Passive Income named: The Biggest Book on Passive Income Ever. To be able to write on topics such as investing, we must study and read every day. There is no substitute for filling our minds with new information that is pertinent to business and investing today. Much bad information is there too, so learn who you can listen to and who you can not. My goal over the next few weeks is to start doing book reviews on the books that I have read that have really changed my life. Passive income is an enormous topic. I believe that each of the listed topics above probably will need a full article to properly define and explain. Who should pursue Passive Income? I think we all should. As a Christian, I am promised that the Lord will meet my every need. By producing more income, it allows us to give and help others. Money is not bad in itself. The Love of Money is the root of evil. So don’t get caught up in ‘It is never enough.’ Many books have been written on How Much is Enough. Be content with what you have, but use your time wisely. Be one who is a forever learner. Always be a good steward of the resources God has blessed you with. www.lifecanbesimple.net www.InternetDirect.us Internet Direct Laptops  DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
Is there a SAFE PLACE to Invest $50? The year 2022 has been a wild ride for investors. With the S&P 500 down 7 to 8 percent, no investment seems too secure. Perhaps a good solid place to put a few dollars that would be an almost lock to make a few percent would really sound good. Perhaps you have watched your 401-K or IRA go down 10 to 12% this year as both stocks, mutual funds, AND BONDS have gone down. Normally bonds go in the opposite direction of the stock market. Not in 2022. This year, perhaps due to the fed increasing the long-term rates on bonds and the highly inflationary times we live in, everything has gone down. A few stocks such as energy stocks and utilities have done fairly well. But overall, it has been an unstable stock market. With little leadership coming from our government leaders, it appears we may be on shaky ground for a while. You may have panicked and pulled 1/4 or 1/3 of your earnings out of your retirement accounts or brokerage account. If you have, I don’t think you will be pleased with that decision long term. An article published recently by Fidelity shows that people churning money in and out on a whim rarely break even with the people who continue to buy when everyone else is panicking. Here is an excerpt from that Fidelity article: Stick with your plan, even when markets look unfriendly When the value of your investments falls, it's only human to want to run for shelter. But the best investors don’t. Instead, they maintain an allocation to stocks they can live within good markets and bad. The financial crisis of late 2008 and early 2009 when stocks dropped nearly 50% might have seemed a good time to run for safety in cash. But a Fidelity study of 1.5 million workplace savers found that those who stayed invested in the stock market during that time were far better off than those who headed for the sidelines. In the decade following the start of the crisis in June 2008, those who stayed invested saw their account balances—which reflected the impact of their investment choices and contributions—grow 147%. That's twice the average 74% return for those who fled stocks during the fourth quarter of 2008 or first quarter of 2009. While most investors did not make any changes during the market downturn, those who did make a fateful decision with a lasting impact. More than 25% of those who sold out of stocks never got back into the market and missed the gains that followed. If you get anxious when the stock market drops, remember that’s a normal response to volatility. It’s important to stick with your long-term investment mix and to have enough growth potential to achieve your goals. If you can’t tolerate the ups and downs of your portfolio, consider a less volatile mix of investments that you can stick with. So the old, proven, continual purchasing whether the market is up or down is the way to go. The term is dollar-cost averaging. If you buy when the stock is high and sell when it is low guarantees a loss. But if you purchase while the price is down, the average price per share drops. This gives you the ability to make up quickly for any early losses. In my early years, I tried to time the market and found I could not. I now simply look to see if the market is way down and buy what I consider to be a clear favorite at a price. If unsure, I buy one of my ETFs on the full stock market indexes. ETFs: ITOT, VTI, and SCHB. ETF: SPY which is the total S&P 500 is also a good one to buy on the dips. Is it easy to watch your overall portfolio go down day after day? No, it is not. But if you stay in cash or bonds, you have minimal savings at best. I read today that in the 116-year history of the market, equities have consistently outperformed Bonds and savings accounts. So when the averages come in if you stay in equities, you will probably be ahead based on history. History typically repeats itself, but there is no guarantee that it will. Make your decisions carefully and consult someone who can give you a good long-term strategy. So back to our question for this article. Let’s say you have $50 or even $5,000, and you want to be sure you don’t lose any money. You can lock it up for 1 year and then get your principal and interest. If you lock into a one-year CD, most likely it will pay from .80% to 1.4%. Not much to show for your earnings. We did an article on Bonds. Read it at: https://lifecanbesimple.net/blog/what-is-a-bond What if I told you there is an almost sure lock investment that will yield you at least 9.6% for six months and might go above 10% in the following six months. Sounds too good to be true, right? IT IS TRUE. The investment vehicle is a Treasury I BOND. These are relatively new on the market. They are based on the 30-year Treasury bond (yielding somewhere around 2.75%) plus the inflationary adder. Currently, the inflation is so high for the next 6 months (beginning in May 2022), the rate is locked at 9.62%. You can purchase these online at www.treasurydirect.gov I am so pleased with the rate that I am purchasing one per week for the next 52 weeks. What are the limitations of an I-BOND?
That is it in summary. So if you buy today and need the money in 14 months, you would only get 11 months of interest. I say that is still a heck of a deal. Read about I-Bonds at www.treasuryDirect.gov You can set up an online account and purchase a bond in approximately 30 minutes or less. If you already have cashed out some of your retirement accounts, maybe this is a good place to park your money while the market stabilizes. I would not recommend taking money out to buy these, but put your new money in these until the market stabilizes. Read all the rules and limitations at: https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm#irate www.lifecanbesimple.net Internet Direct Laptops  Let’s talk a little today about finding your perfect life balance. If you are like me, life pitches you a lot of curveballs, and if not careful, you will not focus on the most important things. A few weeks ago, I started my new Blog website, www.LifeCanBeSimple.net I had a really good plan to give advice to help people live a simpler lifestyle using many of the minimalism guidelines, and then to help those beginning investors with explanations of Stock Market terminology and some of the insights I have gained from 30 years of investing. Both topics could easily be a full-time job.
Two people who have touched my life on these topics are both named Joshua. I met Joshua Becker about ten years ago, and he has helped me so much to simplify my life and gain ground on having a simpler lifestyle with a focus on family, God, and the important things. He has a weekly blog on his website www.BecomingMinimalist.com The second Joshua I met was just a few months ago. His name is Joshua King and I found him through one of his free Kindle books on Amazon. His website is called www.MilitaryFamilyInvesting.com He has really been a blessing to me. After his encouragement, I started seriously studying investments to establish passive income. His story is great wherein a single six-year period he went from $77,000 of debt to having over $200,000 in his investment account, mainly from Growth Stocks paying dividends. I have focused on these types of stocks much more than in the past, and while this year’s returns are not great, those purchases have held their own during a terrible market. Upon reviewing other holdings I had on Dividend Stocks in the past, I found that only one other category returned more money over the past 10 years, and that was the full stock market indexes. I did an article on investing your first $100 using ETFs last week. https://lifecanbesimple.net/blog/investing-your-first-100-with-etfs Not only has Joshua King prompted me to study stocks, ETFs, and bonds more seriously, but he has written books on each topic and also wrote about the importance of reading books every day. I have always been an avid reader. Also I have taken new computer classes to stay up on current technologies being in the computer consulting business, but upon review, I found I have been spending too much time reading entertainment books like westerns and not enough on serious topics. So I have really focused on these more important types of investment books. After reading a few more, we will do some reviews on the top 5 books in the near future. When I started the blog, I thought it would be easy. I was talking about two topics I had a passion for and understood. However, I drastically underestimated the time it would take. I thought I could do it in 30 to 45 minutes per day. To properly write an article and proofread it and get it right takes more like 2 to 3 hours, especially if giving statistics on what certain stocks, mutual funds, or ETFs you are doing. And there are so many more investments that we have yet to cover besides the 4 we have discussed thus far. So while Joshua King lives to write books and Joshua Becker lives to teach people to live a simpler life, David still has to do his job and deal with all the other things of life. I have 3 children, 6 grandchildren, and 3 great-grandchildren. Now you don’t do something with every child every week, but you must allocate time for family. Then you have all the other responsibilities of life like your church activities and keeping up with your own investments. To be effective doing anything, we must allow some personal time off to re-charge our batteries and relax. Long-time teacher and radio evangelist Chuck Swindoll taught on boundaries a few years ago. He explained that a river is a means of life to so many near it, but if it overflows its boundaries, sometimes death and destruction follow. We are much like a river in that we too must set boundaries. You cannot work dawn to dusk every day and have that simple life I so want us all to have. We must have time off for the brain to slow down. We need to read our bibles each day and let God permeate our innermost thoughts. In my life, I have always been a full steam ahead person. In my 40’s, I worked with Habitat For Humanity here in Wichita Falls and helped to build/renovate the first 10 homes. I worked so hard that ultimately I was made the President of the organization. I spent untold hours planning and doing the physical work on many of those homes. Do I regret it? Absolutely not. But during those five or six years, I spent too much time away from my family trying to do good to help others. A perfect balance of time spent on what is important is crucial. I prayed about my situation after two weeks of non-stop work getting the articles out almost every day. I think most have been good thus far, and don’t intend to stop. However, I am reassessing how many per week to put out. If Joshua Becker only puts out one blog a week and he is doing Minimalism as his method of livelihood, I think it means I should certainly not try to be husband, grandfather, and Christian and do 6 per week. So beginning this week, I will do as many as I feel I can do. My to-do list which keeps me on track has grown a substantial amount in the last two weeks. My ability to spend time studying investments and maintaining my other three websites and eBay store has been almost eliminated. So beginning this week, with God’s help, I will find my perfect life balance. We will look for QUALITY of articles from now on…. Not quantity. It will take longer to cover the other 50 topics I have, but if God lets me live long enough, we will cover them and many others. So today, why not take a few minutes and think of ways to simplify your life. Cut back on meetings and activities, and take the time to do the things that matter in the long haul. Spending time with family is crucial. Reading scriptures each day will calm and help you to lead a joyful life and help you to get your eyes off the pressures of life. www.lifecanbesimple.net Internet Direct Laptops  DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. What are Dividend Kings? This is VERY IMPORTANT as I mentioned in the article on Dividend Aristocrats. Perhaps besides Growth Dividend Stocks, there is no better method to consistently reap rewards on your investments than to invest in Dividend Aristocrats and Dividend Kings. DIVIDEND KINGS These are stocks of companies that have increased their dividend rate per share for at least 50 years. This is a shortlist by the way. Yesterday we talked about all the criteria it takes to make the Dividend Aristocrat lists. https://lifecanbesimple.net/blog/what-are-dividend-aristocrats This list is pretty simple. You meet just one criterion. So that means a smaller non-S & P 500 company can make the list. Which are more conservative? Kind of difficult to say as you KNOW that the Aristocrats are huge companies, but if a company has increased dividends for 50 or more years, that makes them a very special company that most likely has top management. Dividend Kings are companies that endured financial storms and difficult markets while still finding a way to increase their dividends each year. If a person concentrates a large percentage of their money on the total stock market indexes by using ETFs such as ITOT, VTI, or SCHB, and then puts an equal amount into these various types of dividend stocks, it will give you a lot of diversity and portfolio balance. Does buying Dividend King Stocks guarantee you will make money? Absolutely not. You have to evaluate each company on its strengths and weaknesses, paying close attention to its P/E. P/E is a price-to-earnings ratio. Years ago, a company with good cash flow with a P/E ratio of 8% was considered a good investment. Nowadays, prices have driven up the P/E ratio, and many are above 20%. That does not mean they will not perform well, but it is a note of caution. Benjamin Graham, the author of The Intelligent Investor, makes a huge push for buying only high-quality stocks that have the right Cash Flow and Income Statements. Why anyone would want to buy a stock without it paying a dividend really makes very little sense. To make money in the stock market, you must have a plan and stick to that plan over the long term. Steady consistent investments win the race. Richard Kiyosaki in his book, “Rich Dad, Poor Dad” stresses the importance of having a written plan. He reiterated that in the second book “Rich Dad’s Guide to Investing”. Those two books are in my top 5 books on investments that I have read. We will be doing some book reviews in the upcoming weeks so that you may decide which books might be of interest to you. Study the markets every day. Only by continuing to learn will a person grow proficient in any endeavor. (Work, Family, Investing, etc.) Just to make this list weeds out many unprofitable and speculative stocks. Traits of a Dividend Kings
A recent Time Magazine article listed all 37 of these for 2022. https://time.com/nextadvisor/investing/dividend-kings/ For a complete list of all 65 companies in 2022 Dividend Aristocrats, see the following link. https://money.usnews.com/investing/stock-market-news/articles/dividend-stocks-aristocrats So what if a company makes both lists? I think the answer is they may be very reliable and worthy of research.  So if you own both lists, is it a sure bet? Not really. But I have read multiple articles this past week recommending purchasing two of these that overlap. TWO OVERLAP STOCKS TO CONSIDER ABBV – ABBVIE Inc. This is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. Because Abbott Laboratories is on the list, ABBVIE also makes the cut as having come from that same line of management. This company develops and markets drugs in areas such as immunology, virology, renal disease, dyslipidemia, and neuroscience. The current Dividend Rate is 3.74% 5 yr average Dividend Rate is 3.54% 10 Yr. Growth rate: 4.7% FRT – Federal Realty Investment Trust Real estate demand is very strong and growing. This company is a REIT that owns, operates, and develops high-quality retail-based properties primarily in major coastal markets from Boston to Washington as well as San Francisco and Los Angeles. A REIT is a business model used to acquire properties that are rented out to tenants. With the rental income received from properties, REITs return the cash to shareholders and also invest in new properties. A very consistent and steady stream of income. The current Dividend Rate is: 3.8% and the stock is trading at a substantial discount to its 52-week range. I personally have shares of both of these stocks in my Schwab portfolio. The lists above show the number of years they have been on the list, and what their dividend percentage is currently. If you decide to buy some stocks on either list, study each one carefully. Be sure they have a good rating and are expected to continue to grow. If the stock market price per share never goes up, a large percentage of your profits go away. I try to shoot for 7 to 8% of both dividends and a possible price increase over the upcoming year. You can purchase the majority of these on Schwab.com using their Stock Market Slices program. You select which companies you want, then designate the amount of money you want to invest. If you selected 10 stocks and invested $100, then each one would receive approximately $10. You can invest as little as $5. I have used their program to buy 12 of what I consider the best dividend-paying stocks. A few are not on the Dividend Aristocrats report, but the majority of them are. You can purchase any of these on Fidelity.com and buy by the dollar rather than the number of shares. Both Fidelity and Schwab help investors get started on their path to financial freedom with ease of use and good research. A few overlaps both Dividend Kings and Dividend Aristocrats lists which makes those certainly worthy of researching. Always remember that historical returns may or may not help to make good decisions today. So many factors come into play that you must not just read a list and start buying. Study them out and make a logical assessment of each company. What these lists do is give you some EXCELLENT prospects to analyze. www.lifecanbesimple.net Internet Direct Laptops  DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
What are Dividend Aristocrats? This is VERY IMPORTANT. Perhaps besides Growth Dividend Stocks, there is no better method to consistently reap rewards on your investments than to invest in Dividend Aristocrats or Dividend Kings. Tomorrow we cover Dividend Kings. Today we concentrate on the first: DIVIDEND ARISTOCRATS In simple terminology, Dividend Aristocrats are the large United States publicly traded companies that are very successful and highly liquid. When a company pays you a dividend, that is money that you make like a bank paying you interest. If a stock sells for $100 and has a 5% dividend, it will pay out $5.00 in dividends either quarterly, semi-yearly or once per year. If the company pays quarterly, you would receive $1.20 per quarter if the stock was at a level of $100 all year. The reality is stocks do not stay at any set value, so the Earning Per Share can vary causing the dividend percentage to increase or decrease. While this sounds bad, if we are in an upmarket, then the $100 stock at the end of the year may be worth $105 so with that value and the dividend, you really would net out a 10% gain. When I was younger, I wish I had known about Dividend Aristocrats. Ever since I started purchasing these over the past 10 years, my returns have been much better on my overall portfolio. If a person will concentrate a large percentage of their money on the total stock market indexes by using ETFs such as ITOT, VTI, or SCHB, and then put an equal amount into these types of dividend stocks, it will work well for you in the long haul. Does buying Dividend Stocks guarantee you will make money? Absolutely not. You have to evaluate each company on its strengths and weaknesses, paying close attention to its P/E. P/E is a price-to-earnings ratio. Years ago, a company with good cash flow with a P/E ratio of 8% was considered a good investment. Nowadays, prices have driven up the P/E ratio, and many are above 20%. That does not mean they will not perform well, but it is a note of caution. Benjamin Graham, the author of The Intelligent Investor, makes a huge push for buying only high-quality stocks that have the right Cash Flow and Income Statements. Why anyone would want to buy a stock without it paying a dividend really makes very little sense. To make money in the stock market, you must have a plan and stick to that plan over the long term. Steady consistent investments win the race. Richard Kiyosaki in his book, “Rich Dad, Poor Dad” stresses the importance of having a written plan. He reiterated that in the second book “Rich Dad’s Guide to Investing”. Those two books are in my top 5 books on investments that I have read. We will be doing some book reviews in the upcoming weeks so that you may decide which books might be of interest to you. Study the markets every day. Only by continuing to learn will a person grow proficient in any endeavor. (Work, Family, Investing, etc.) Just to make this list weeds out many unprofitable and speculative stocks. Traits of a Dividend Aristocrat 1. At least 25 years of consecutive dividend payments with a higher dividend per share each year. 2. The company maintains a minimum market capitalization of 3 Billion dollars. 3. The stock averages at least 5 million dollars in daily trading. 4. The stock is part of the S&P 500 stock market index and is publicly traded. Not many companies can pull off this hat trick of meeting all 4 criteria for 25 Years. For a complete list of all 65 companies in 2022 Dividend Aristocrats, see the following link. https://money.usnews.com/investing/stock-market-news/articles/dividend-stocks-aristocrats It shows the number of years they have been on the list, and what their dividend percentage is currently. If you decide to buy some of these, study each one carefully. Be sure they have a good rating and are expected to continue to grow. If the stock market price per share never goes up, a large percentage of your profits go away. I try to shoot for 7 to 8% of both dividends and a possible price increase over the upcoming year. You can purchase the majority of these on Schwab.com using their Stock Market Slices program. You select which companies you want, then designate the amount of money you want to invest. If you selected 10 stocks and invested $100, then each one would receive approximately $10. You can invest as little as $5. I have used their program to buy 12 of what I consider the best dividend-paying stocks. A few are not on the Dividend Aristocrats report, but the majority of them are. You can purchase any of these on Fidelity.com and buy by the dollar rather than the number of shares. Both Fidelity and Schwab help investors get started on their path to financial freedom with ease of use and good research. One day I will spend time and go over which Dividend Stocks I currently own and the logic behind why I purchased them. Tomorrow, look forward to the article on Dividend Kings. They are different than Aristocrats and maybe even better. A few overlap both lists which makes those certainly worthy of researching. Always remember that historical returns may or may not help to make good decisions today. So many factors come into play that you must not just read a list and start buying. Study them out and make a logical assessment of each company. What these lists do is give you some EXCELLENT prospects to analyze. www.lifecanbesimple.net Internet Direct Laptops  One of my greatest joys is planting a garden each year. Do all minimalists have gardens? I think not, but there are lots of reasons why I plant and harvest from my garden during the spring, summer, and fall. Two of my best friends at church were talking with me Sunday about the garden. One fellow agreed that growing your vegetables was the way to go, but another thought it was a lot of work for minimal reward. His opinion was that he could get all the fresh fruits and vegetables at the Farmers Market here locally. While that is true, it does cost money, and you truly don’t know what chemicals were used in raising the plants. By growing them yourself, you know exactly what you used and if they are safe to eat. Advantages of Gardening Great Exercise All of us can use a little exercise. I find the time well-spent and feel better after I work for an hour or so in the garden. Nurturing of Your Soul I have a feeling of comfort that comes over me when I work on planting the seed and watching them sprout and become fruit-producing plants. The watering and cultivating have a calming effect on me on the sometimes chaotic days at work. Fruits for Labor We have the promise that we will reap what we sow it says in the book of James. While that is a spiritual connotation, it is also true in farming and gardening. You plant a few seeds, and you reap a bountiful harvest. You Control Chemical Usage As mentioned earlier, it is not good to have chemicals used to kill weeds entering the body. When we control the environment, we know what has been used and when. I try to grow plants without any chemical use, but sometimes Squash bugs may require a bit of Seven Dust. If so, I make sure that we wait a period of time before harvesting the squash and wash it thoroughly. Tastes Great I ate my first banana pepper at lunch. It may not have been better than others of the past, but being the first fruits from this year’s garden made it super sweet. I think that food grown in the garden is the best tasting food ever. Teaches Another Generation I raised my children to help work in the garden, and two of three of them have their own gardens today. Now another generation has passed and I work with my second set of grandchildren(younger ones) to rototill and plant the seeds each spring. It teaches them good husbandman-ship and it allows them to make a few dollars working for me in the spring and fall. (When we rototill the garden for winter.) Gardening has long been in my family. My maternal grandfather used to keep a one-half acre garden each year and he did it with no plows or any kind of tiller. He had a worn-out hoe that he had used in his farming days, and he would sharpen that hoe and work like crazy. If we came over to see him early, he was out watering and hoeing. If we came over late, he was still out there working, even on the 100-degree days. I fondly remember seeing the twenty or thirty large watermelons lined up on my grandparent’s back porch, and no one could go home without loading up with a few cantaloupe and watermelons. What is your first childhood memory? My very first one is sitting in a high chair in our country kitchen in the country near Vera, Texas with my mother feeding me scrambled eggs. I remember it so vividly as I would pour ketchup all over the eggs. It is funny thinking of a 2-year-old eating scrambled eggs with ketchup. It does not sound tasty to me today. However, my second childhood memory is watching my dad (who was a farmer), use a turning plow to prepare our garden west of the house using a Jubilee Ford Tractor. I was probably 2 ½ or 3 years old, and I was so fascinated to see that dirt turn over as my dad prepared the ground to plant in our orchard. All through my childhood and up into my teenage years, my childhood responsibilities included picking the vegetables, watering, and hoeing out the weeds. (Which I did not really like doing.) But when the vegetables came in, boy I loved eating them. Nothing like homegrown radishes, tomatoes, black-eyed peas, and onions. Fried Squash and fried okra were staples in our home. The pictures below were taken in my garden this morning on May 11, 2022. You can see the plants beginning to grow. On the left, you can see squash plants and black-eyed peas on the right. Notice the tomatoes growing on the tomato plant in the second picture.   I have used electric Sun-Joe tillers for the past five years. I purchased a 16” model 3 years ago and replaced it this year with the 12” model which cost less than $150. It requires less voltage so a 12 gauge extension cord will work, and it is a bit narrower which allows you to plant a bit more closely together and still till between the rows. I just tilled the whole garden this morning in about 30 minutes.  I have an eco-friendly water drip system where I drain our washing machine and our shower into two 5-gallon water barrels. This allows the two hoses to dampen the ground slowly over a 12 to 24-hour period.  Gardening is a personal decision that only you can make. If you have decided to try and simplify your life, I think it is a great way to get some exercise and enjoy the fruits of your labor. It can turn into a bit of work, but I find it worth the effort. If you are limited on space, you might consider using pots or bins. Many people use raised bins and grow many vegetables each year, including my daughter and her husband.
www.lifecanbesimple.net Internet Direct Laptops  DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are of my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment.
After reading my first few posts on investments, you may be eager to get into the market We looked yesterday at how to invest your first $100 using ETFs (Exchange Traded Funds.) https://lifecanbesimple.net/blog/investing-your-first-100-with-etfs Consider making all your investments in IRA accounts. We did an article on the differences between Traditional and Roth IRAs recently. The Roth IRA is my investment vehicle of choice. https://lifecanbesimple.net/blog/differences-in-roth-and-traditional-iras We mentioned in our earlier posts that mutual funds have advantages over picking stocks and ETFs as these are actively managed by professional managers who know how to navigate the rough waters of downturns in the market. This year makes you appreciate their expertise in a difficult market. https://lifecanbesimple.net/blog/investment-categories Today, let’s consider putting $300 into four mutual funds. I own several mutual funds in my various Roth IRAs, and I picked out these 4 as some of the better performing funds in the past few years. There are dozens of funds in each company that offers mutual funds. I have had success using Brokerage mutual funds. Most have minimum investments of just $1 and no forced continual monthly investment. There are many great mutual fund companies, and they sometimes offer even better results than brokerage mutual funds. So after your initial investments, you may want to shop around and check them out. What you are looking for in a mutual fund is one that is being managed by a seasoned executive who has been with the company for several years. If you have ever read about Fidelity’s Magellan fund, you know that the same manager managed it for 30 years and did a remarkable job. (Peter Lynch). I recently read one of his books which I will review in a future article. Very smart and intelligent man. Things to Consider on Mutual Funds Manager Be sure the same person has been managing the fund over past few years. Type of Fund Some funds charge load fees. This is money out of your pocket. Look for No-Load mutual funds. Hundreds are available with great track records. Returns Look at all returns over several years. Again these are long-term investments and don’t get too worried about the one-year performance. Pay particular attention to the 3, 5, and 10-year returns. Consistent positive returns mean they are managing the fund well. On returns, try to find those averaging 12% per year or better. Many average 15 to 18%, so take your time and get what you need. Fund Investments Again where they are investing the money is important. Some are tied to Large Growth Stocks, some Mid-Cap (medium-sized companies) and a few are Small-Cap. Normally the Large Growth stocks are more consistent, so in starting, these are the ones I would focus on. Funds called Equity/Income funds are those with a large number of bonds or dividend stocks involved. These are normally lower-yielding funds, but a bit more stable due to the bonds. Most all Equity Funds will move some money to cash and bonds as needed to protect their capital. So here are the Four Mutual funds that I own that I believe are good for first-time investors: FBGRX – Fidelity Blue Chip Growth – Large Cap Growth 1 yr: 3.93% 3yr: 25.83% 10 Yr: 18.53 No minimum investment FCOR – Fidelity Corporate Bond Bund (these are not equities, but a bond fund.) This is to help make the total portfolio a bit more stable. 1 Yr: 5.41% 3 Yr: 10.55% 10 Yr: 10.61% No minimum investment SWPPX – Schwab S&P 500 Index Fund 1 Yr: 15.62% 3 Yr: 18.9% 10 Yr: 14.57% $1 minimum Investment PRDGX – T. Rowe Price Dividend Growth Fund – Large Blend meaning investing in both Growth and Value Companies 1 Yr: 22.84 3 Yr: 12.14% 10 Yr: 13.03 $100 minimum, additional investments of $1 or more I have great confidence in T. Rowe Price funds. A person could certainly buy a full range of Mutual Funds from this company and be in good shape as long as you examine the returns of each Mutual Fund. Allocation of the $300: FBGRX - $75 FCOR - $75 SWPPX - $50 PRDGX - $100 (minimum required, but best returns of all four) Feel free to adjust investment amounts as to your situation. Always keep in mind that past historical returns do not guarantee that they will perform this well from now on. But these four have been around a long time, and I am sure that they will probably do well once the market gets past this rough time. As mentioned last night, you can get 9.62% on I-Bonds at www.treasurydirect.gov which may be best place for your money right now. www.lifecanbesimple.net Internet Direct Laptops |
AuthorDavid Parham Archives
June 2023
Categories |
RSS Feed