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Timing the Market vs. Buying a Quality Company at any time

These past few months, I’ve been saving my money and just using the dividends I’m receiving to pay off my margin loan because I think the market is quite high now and due for a correction. I also haven’t added any new positions or purchased any shares of the stocks I already hold for the same reason. Except now, I’ve basically paid off my margin loan, my emergency fund is fully funded and I’m just…

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Retirement and the 4% rule

The often-quoted model of how retirement works is that you need to save up a huge chunk of money which you invest in stocks and bonds, and upon quitting work, you can withdraw up to 4% of it per year and in theory, it should last you until you die. I don’t hate this model, but it seems to me that it’s kind of outdated for the following reasons: 1. People are living a lot…

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Real Estate or Stock Market Investing?

I was just listening to the Suze Orman Show on Podcast and she was talking about how she prefers stocks to real estate when it comes to investing. I most definitely agree with her, and my reasoning is exactly the same as hers. By real estate investing, I’m not referring to the house that you live in, but additional ones that you buy and rent out to others. When you have real estate, it comes…

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June 2014 Passive Income Report

June 2014 was by far my best month since starting this blog in November 2013: $604.57. Check out the report here, but you can see that Squidoo and dividend payments were both really high, and Amazon and Iherb were around average. Dividends fluctuate throughout the year, depending on various factors and it’s really something I have no control over. But, Squidoo did very well for me and the best part about it was that I…

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The Rule of 72

A simple way to estimate the time it will take for a sum of money to double is to use the rule of 72. Basically, you divide 72 by the interest rate, per year and the result is the number of years it will take for your money to double. For example: $10 000 invested at a 3% interest rate will take 24 years to become $20 000. Invested at 8%, it will take 9…

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High-yield = High-quality?

A mistake that beginning investors often make is going to a stock screener like Finviz and then simply searching for the stocks with the highest dividend yields, which in some cases are 10 or even 20%. If you buy shares of a certain stock worth $2000, it seems pretty fabulous to get dividends worth $200 (10% yield) or $400 (20% yield) every year. It seems like you’re make our original money back in 5 or…

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How often I look at my portfolio

I’m a long-term investor, which means that I’m more worried about what my dividend stock portfolio is going to look like in 10 or 20 or 30 years from now than I am about it in this current year. I know that there are lots of people who look at the market news and their brokerage account every single day and are paying attention to even little fluctuations in value. I would consider many of…

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Stocks are at record highs: what I’m doing about it

The stock market indices such as the Dow Jones Industrial Average and the S&P 500 are at some record breaking highs. At times like this, people often get into a frenzied like state and throw money around trying to get in on the action. What am I doing about it? Basically nothing. Although I do have a good amount of cash sitting in my bank account here in Korea earning 2% interest or so, it…

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Advice to my 23 year old self

When I was 23, I was just graduating from university with a semi-useless degree in the humanities and making some big decisions about my future. And, similar to when I was 18, I actually had no idea what I was going to do with my life. Here’s some advice for those who are just graduating from college: 1. Student loans are evil. If you were unfortunate enough to accrue them, pay them off as fast…

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The Latte Factor

When people talk about frugality, something that gets kicked around quite often is the Latte Factor. That is people who go to Starbucks every morning and drop $5 on a specialty Latte when they could just make a cup of drip coffee at home and save themselves $4.80 each day, which adds up to over $100/month and more than $1000/year. And I get that. Frugality is all about the small choices you make each day…

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Payout Ratio

One of my favorite metrics that I use when determining which dividend paying stocks to buy is the payout ratio, which according to Investopedia is: “The proportion of earnings paid out as dividends to shareholders, typically expressed as a percentage.” It’s maybe helpful to think of it as similar to finances on a personal level. You have some money coming in each month and you can either spend or save it. Maybe you spend 50%…

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A splurge

I used to the queen of the frugalistas when I was paying off my student loans. These days though, I’ve been toning it down a little bit because I have a substantial amount of money in the bank, and I actually make a lot more money than I did compared to say 5 years ago (almost double). So this means that I am willing to have things that increase my enjoyment of life (2 cats,…

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Buying Stocks: How Limit Orders work

When you’re buying stocks, there are a lot of different kinds of orders you can use. I generally understand the basics of most of them, but in actuality, I only use 1 type, a limit order. For the dividend stock investor who is investing for the long-term, it’s all you really need. Check out Investopedia for all the different stock market order types. Here’s how a limit order works: 1. Buying stocks. If stock ABC…

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Dividend Reinvestment

When you have dividend paying stocks in your portfolio, you get a share of the earnings paid back to you in the form of a dividend, usually around 3-4 times/ year (although it ranges from monthly to annually). They will automatically be added to your stock brokerage account and will impact the positive (you don’t have leverage), or negative balance (you are using debt/leverage). The exception to this is if you have an automatic dividend…

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Invest like a Grandma: Dividend Stock Investing

There are a million and one things to invest in that are far sexier than Dividend Paying Stocks. A quick list off the top of my head: IPO’s, options contracts, shorting, commodities, emerging markets, Bit coin and day trading. A lot of these things can actually make you a lot of money IF you know what you’re doing. And while I know the basics of most of that stuff, I’m certainly no expert and would…

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The Emergency Fund

Dave Ramsey is all about the emergency fund and I would most definitely agree with him. He advocates having $1000 in the bank until you pay off all your debts, excluding the mortgage. And then once that is done, build it up to 3-6 months of living expenses. These past few years, I’ve been really focused on making and saving my income from the day-job to invest in Dividend Paying Stocks and must admit to…

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Stock Market Pyschology: Greed and Fear

When it comes to how psychology relates to the stock market, there are 2 emotions that dictate most individual investor’s decision: fear and greed. The so-called “Smart-Money” (hedge fund/mutual fund managers) should be making better decisions than the individual investor, but not always. Fear is rampant when the stock market is in fast decline and it leads people to do crazy things such as sell when stocks have hit their lowest points (ie: the crash…

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What’s in my Portfolio: Industrials

I have a few holdings that fall under the category of “industrials” and I love them because they just seem to plug along, making me money off dividends, increasing their earnings and causing me no stress or worry. Exactly the kind of companies I want in my portfolio. 1. Boeing Airlines(BA): 2.7% of my portfolio. Although they’ve had some problems in the past few years with their new airplane catching on fire, etc, they’re still…

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Trading vs. Investing

I’m an investor, which means that I invest my money in the stock market for the long-haul and don’t really care about the short-term fluctuations in the market. I lose no sleep if there is a crash and actually feel quite happy because I can pick up stocks that I want cheaply. Trading, on the other hand is for the purpose of making money off the fluctuations in the market. You can make money when the…

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What’s in my Portfolio: Gold and Silver

Gold accounts for 5.6%, and silver 2.2% of my portfolio.  I am really not as well-versed in this area as I am with dividend paying stocks and ETFs, so will just offer some very general thoughts. I use ETFs (GLD/SLV) to invest in them because it’s annoying and expensive to physically hold it.  Of course, you could just buy them from a store in your town or whatever, but I’m no expert and would actually…

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What’s in my portfolio: ETFs

ETFs are basically an alternative to mutual funds that have emerged in the past 10 years or so.  Instead of active management like a mutual fund, they follow the passive approach.  That is, they just follow and index of some sort, such as the S&P 500 or only buy a certain type of bonds or something like that.  They can help a dividend stock investor by providing much needed diversification and it’s a much better…

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What’s in my Portfolio: Financial Stocks

Financial companies get a bad rap- often for good reason The whole financial sector gets a bit of a bad rap from the press, investors as well as the general public and for good reason: ridiculous compensation packages/poor financial management/extreme risk-taking/government bailouts.  However, it’s too big of a sector to overlook and the key is looking for the less-risky companies that have a proven record of good management. Here are the financial stocks in my…

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Passive Income Report: March 2014

For my February report, please see this post. But, onwards to March.  You can see all the details here, but the total minus interest paid to my broker was $466.44 US.  The large majority of it was in Dividends, and a big portion of that was NPK (National Presto Industries), which paid a special dividend of over $100. Compared to previous years: March 2013: 251.97 March 2012: 455.72 March 2011: 156.86 March 2010: 7.02 Similar…

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