Thursday, May 26, 2016

5 Things Every Senior Should Know About Retirement

Retirement Plan for Seniors
5 Things Every Senior Should Know About Retirement
Though the current average retirement age is 62, retirement culture is swiftly changing. Today's college graduates may not be able to retire until 75. If you're a decade or more away from retirement, that could mean your retirement is pushed back closer to your early seventies. The good news here is that this gives you more time to save for the retirement of your dreams.


Your retirement might not look much like your parents' and it will certainly be substantially different from your children's retirement. Here's what you need to know before you take the plunge.

Wednesday, May 25, 2016

Net Worth Update - April 2016


While cash flow is more important when it comes to financial independence, it's still good to look at the balance sheet too, which is why I provide these net worth updates.  Since more and more of my net worth is tied to the markets, there's a larger correlation between my net worth and the markets but in the long run as I continue to save and invest the net worth trend should be higher even though short term fluctuations can vary wildly.  As a dividend growth investor I'm not overly concerned with the short-term gyrations as long as the dividend stream remains in tact, but the markets' effect is noticeable.

The S&P 500 was essentially flat for April adding just 0.3%.  Since the majority of my net worth is tied to the performance of the markets that means the bulk of the changes for April came from cash infusions in the form of a tax refund, over $300 in dividends across all my accounts and savings from my income.  Receiving 9 different pay raises during April was a nice bonus in an otherwise slow month for my investments.

For the month our net worth increased $14,290.26.

Tuesday, May 24, 2016

Dividend Growth Investing at Work - Refining Higher Dividends Out Of The Oil Field


Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends.  Just for owning a small portion of said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  That's dividend growth investing at work!  I mean who doesn't like getting a raise for doing nothing?

Thursday, May 19, 2016

On To Greener Pastures


At the end of April I was laid off from my job of nearly 6 years.  Don't worry though because we're in great shape to ride out this storm while I explore my options.

If you happen to be in the same boat as me or maybe you quit your job there's an important thing you need to take care of:  move your 401k.

The process is pretty simple and usually just entails filling out a couple of forms.  However, there's one big pitfall you want to avoid and that's not doing a direct transfer rollover.  By doing a direct transfer rollover you never have the funds in your hand.  Rather the funds are electronically sent to your new account at the new brokerage house into a Rollover IRA account.  This ensures that all of your savings are sent to the new account and you don't make the mistake of neglecting to send the check in by the deadline.  If you take the funds via a check then you could potentially be on the hook for a big tax bill the following year.

There's two big reasons to rollover your workplace retirement savings into another account.

Tuesday, May 17, 2016

19 Lessons on Money and Life for 2016 Graduates



May is a wonderful time full of the fresh faces of new high school and college graduates ready to embark on this journey we call life.  First off, congratulations to all of you that have completed this phase of education and are ready to move onto the next phase.

Words of Wisdom

I know it's sometimes hard to take advice, but I wanted to impart a few words of wisdom that I've learned over my 30+ years.  After all, it's much better to learn from others' mistakes instead of repeating them for yourself, although I know it's tempting to do so.

Saturday, May 14, 2016

Weekly Roundup - May 14, 2016


This past week was pretty uneventful and I'm still trying to figure out a better schedule for myself during the day now that I have a whole lot more time on my hands.  I'm still bouncing ideas around for what to do moving forward.  Since most of my options would have me changing career fields completely I'm hoping to get in contact with some people in the respective fields to sit down and chat with them to get the inside scoop on what the potential jobs are really like.

Our big concern was what to do in the meantime so we could have some income coming in.  I know my wife didn't want to go back to work, but like I mentioned she had the easiest path to employment.  The great news is that she's already lined up a teaching job for the next school year.  So at least we'll have some income coming in.

Wednesday, May 11, 2016

At A Crosroads


Crossroads, n. - An intersection of two or more roads.  A point at which a crucial decision must be made that will have far-reaching consequences.

The downturn in the oil field over the last 1.5 years has been covered extensively.  The unfortunate downside to the boom and bust cycle is that it comes with big hiring sprees during the upswing and unfortunately lots of layoffs during the downswings.  Unfortunately, right before our trip to Nashville I got the call I had been expecting.

Well, kind of.  There was a bit of suspense since all I was told was that I needed to come in for a "meeting", but I wasn't too surprised with the topic when I showed up the next day.  After all I've only had about 3 meetings during my almost 6 years working there so it was pretty easy to read between the lines.

While many people might feel regret, betrayal or anger from a layoff, I felt none of these.  The biggest emotion that I felt was relief.  The down cycle has been a weight on my shoulders not knowing if I would be spared from the next round of layoffs or have my number called.  No longer do I have the doubt or worry of whether I'll have a job the next day since that question has now been answered.

Tuesday, May 10, 2016

Look Beyond the Headlines


When investors look at how a company is doing one of the first things they look at is earnings per share and rightfully so.  Earnings per share can tell you a lot about the history and the current state of the company.  Earnings per share represent how much profits that a company makes for each ownership interest of the company.

Earnings per share are easy to calculate.  It's simply the following formula:

Simple, right?

Earnings per share are one of the common metrics that dividend growth investors use to determine the safety of the dividend and its growth potential.  That makes it especially important to figure out how companies are growing their earnings per share because not all growth is created equally.

The formula is very straightforward, but there's a lot more that's going on behind the scenes when you break it down into its components.

Saturday, May 7, 2016

Weekly Roundup - May 7, 2016


The last two weeks have been pretty hectic around our household, although it's nothing we can't deal with.  But my wife and I did get to take a trip to Nashville last weekend to visit one of her college friends and as our last real trip before the baby comes in July.

Nashville was awesome and we always have a great time when we go.  Although I have to say this one wasn't quite as much fun only because my wife couldn't run in the Rock 'N Roll Half Marathon there and I had the genius idea that I'd just do it.  Afterall, we'd already paid for it.  Several years back my wife and I had done some half marathons together, but then I got my job in the oil field that required me to be gone and made planning much more difficult so I'd just kind of given it up.

Considering that the only training I had for the run consisted of "well my wife can't do it so I'll do it" I'm pretty happy with the 2 hr 50 min finish time.  It's far from impressive but I do have to say it felt good despite the fact that my body was in no way prepared for it.  And it didn't help that I started developing blisters around mile 3 because it had rained before the start and my shoes/socks got soaked.  But the run was good and Nashville is a pretty city although there's way too many hills for this Texas boy.

With being home as well as being away with travel I didn't get a whole lot of writing done although I'm still trying to figure out a way to be more productive while at home.  I'm thinking that I need to just block off a certain time block each day to write or work on other blogging tasks, but in no way can that time be used for anything else.

There's also some new developments that have changed things pretty dramatically and have altered our plans.  I plan to get a couple posts written about it over the next week and where we go from here.

Friday, May 6, 2016

Dividend Update - April 2016


It's the end of one month and the beginning of another so it's time for my favorite update: my dividend update.  These dividend updates reflect all dividends that I receive through my investing pursuits. I hope they can help inspire you to take control of your own finances and invest to build a passive income stream. What you use that stream for is up to you, whether it's to fund early retirement, just provide some FI/FU money, or even to provide for an annual vacation; the key is that it can provide options and open up all sorts of possibilities. You can check my dividend income or progress pages to see what dedication to an investment plan can give you.

Wednesday, May 4, 2016

Dividend Growth Investing at Work - 54 and Counting


Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends.  Just for owning a small portion of said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  That's dividend growth investing at work!  I mean who doesn't like getting a raise for doing nothing?

Thursday, April 28, 2016

Dividend Growth Investing at Work - A Double Dose Of Increases


Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends.  Just for owning a small portion of said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  That's dividend growth investing at work!  I mean who doesn't like getting a raise for doing nothing?

Wednesday, April 27, 2016

Dividend Growth Investing at Work - 3 Pay Raises? Yes, Please!


Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends.  Just for owning a small portion of said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  That's dividend growth investing at work!  I mean who doesn't like getting a raise for doing nothing?

Tuesday, April 26, 2016

5 Ways Companies Can Grow


As dividend growth investors the most exciting part is the growth.  Dividend growth streaks aren't built by happenstance.  Companies that can amass decades long streaks have one thing in common: they grow.  Companies must constantly figure out ways to grow earnings, cash flow and most importantly revenue in order to grow their dividend.

How do they grow?

It's pretty simple actually, but not all growth is created equally.  Whenever you're analyzing potential investments it's important to make sure the companies are actually growing.  That means looking at the nominal numbers rather than the per share values to determine if the growth is real or manufactured.

Saturday, April 23, 2016

Weekly Roundup - April 23, 2016


Just a quick update this week.

This week started off very hectic.  My phone started alarming Sunday night/Monday morning because of a tornado warning luckily though we were spared of that.  However, we couldn't escape the rain which was bad enough to essentially shut down the city of Houston on Monday.  Our area was spared from the flooding, but there's so many areas that were hit extremely hard.  Some spots were estimated to have received 20 inches of rain in about 8 hours which is absolutely ridiculous.  The devastation is eye opening.

There were a couple things that really shocked me about everything that's gone on this past week.  For starters I knew they were expecting rain but I hadn't heard of any forecasts calling for anything quite like this until after the rain started.  The other thing that I don't understand is why some areas weren't evacuated on Tuesday/Wednesday/Thursday prior to the flooding getting downstream.  I've seen several reports of people that escaped the initial flooding on Monday just to end up getting flooded out later in the week.  The flood control districts have plenty of computer models and I can only hope that the reason for that was a lack of accurate information and not that someone just completely dropped the ball.

On top of all the rain we received my body finally decided to do its semi-annual sickness recharged.  I don't get sick often and thankfully when I do it's not too bad and this time was no different.  Just lethargy, congestion, some sinus pressure and on and off head aches.  It didn't make for a fun week, but a few days of laying around have gotten me back on track.  So unfortunately I didn't get much writing done.

Thursday, April 21, 2016

Net Worth Update - March 2016


While cash flow is more important when it comes to financial independence, it's still good to look at the balance sheet too, which is why I provide these net worth updates.  Since more and more of my net worth is tied to the markets, there's a larger correlation between my net worth and the markets but in the long run as I continue to save and invest the net worth trend should be higher even though short term fluctuations can vary wildly.  As a dividend growth investor I'm not overly concerned with the short-term gyrations as long as the dividend stream remains in tact, but the markets' effect is noticeable.

The start to the year was brutal for the markets with big declines during January and the first half of February.  However, what goes down must come up as is typical with the stock markets and March was no different.  The S&P 500 climbed 6.6% during the month which was a huge move forward.  Since the bulk of my net worth is tied up in the markets it was a welcomed reprieve to see things start churning higher.

Although with a long term investment horizon the changes are just noise over the short term and are typically best to be ignored.  Of course receiving over $800 in dividends and 5 dividend increases helps out too.  Dividends are great because they are always a positive portion of return.

For the month our net worth increased $55,980.13.

And BOOM goes the dynamite!

Sunday, April 17, 2016

Weekly Roundup - April 17, 2016


Another week has already come and gone.  I don't know about you guys but the weeks just keep flying by faster and faster.  There wasn't much to report on with the portfolio this past week with the only real developments being some dividends rolled in, there were 3 increases announced and the latest batch of ESPP shares hit my account.  I'll be selling this latest group soon although the proceeds won't go towards anything fun like investing.  Just continue to build cash and maybe go to paying down some debt.

I spent the early part of the week finishing up our taxes which wasn't fun but it was a necessary evil.  No one wants Uncle Sam on their case for anything.  We're getting a $4k+ return this year which is great, although I try to get it to between $500-$1,000 because I'm not in the business of making interest free loans.  It seems like every year for the past 4 or so years is that we've had major changes that's complicated our taxes.

We got married in 2012, bought a house in 2013, had a kid in 2014 and unfortunately lots of medical bills and 2015 brought a major decrease in income (about $100k lower gross, OUCH!) between my wife quitting her job and me not working as much due to our son's health issues as well as a couple pay cuts along the way.  Not to mention the fact that my income is highly variable from month to month since I'm paid a small base salary but make my real money whenever I'm at work.  Hopefully 2016 will be a bit calmer for taxes so we can do some better planning, but I'm sure something else will pop up because it always does.

Friday, April 15, 2016

Dividend Growth Investing at Work - 2 More Increases


Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends.  Just for owning a small portion of said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  That's dividend growth investing at work!  I mean who doesn't like getting a raise for doing nothing?

Wednesday, April 13, 2016

2016 Goals - About D*mn Time!


I know, I know I'm a little bit late on getting these out since we're already into 2Q.  Seriously how in the world has 3 months of the year already gone by?  Better late than never right?

Our financial goals are pretty simple this year which I've alluded to in a couple posts.  The main theme for this year is to build up cash and pay down debt.

As many of you know I work in the oil field and I honestly have no idea what things are going to be looking like over the next 6-12 months.  Even if oil prices do rebound, as they've been doing recently, I'm not sure at what point we'll actually see drilling come back.  As of earlier this year there were at least 700 wells in Texas alone that were drilled not completed or "DNC".  Essentially they've been drilled, but the E&P companies are delaying fracking for a better pricing environment. There's estimates of 4,000+ wells nationwide that are DNC so my guess is that drilling will be the last thing to come back as the "fracklog" gets worked down.  So yeah, a large cash reserve is a must right now especially with a baby coming in July.

Financial Goals

Monday, April 11, 2016

Dividend Growth Investing at Work - 60 Years of Dividend Growth for this Consumer Giant


Something I love about dividend growth investing is that each month I get to hear about companies I own deciding to pay me more money in dividends.  Just for owning a small portion of said companies.  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  That's dividend growth investing at work!  I mean who doesn't like getting a raise for doing nothing?

Sunday, April 10, 2016

Weekly Roundup - April 10, 2016


Another week down and another week full of work.  Although given the current state of the oil field I can't complain too much about being busy.  I don't normally have people to talk about business/investing with on a regular basis but it's been great this past week since my counterpart is interested in investing.  It's just great to be able to throw ideas around about business opportunities, business models, future trends and much more.

One thing I noticed this past week while researching another company and well GAAP accounting doesn't make sense in some cases.  The company in question has a large investment in another company and while reading through the annual reports and financial statements I saw that the net income for this company is increased by the earnings that their ownership stake represents even though none of those earnings were actually transferred to the company.  That's why it's so important to read through the financial reports and most importantly the footnotes.

Thursday, April 7, 2016

Forecasting Dividend Growth


The start of the year is typically a great time for dividend growth investors with many companies getting off to a fresh start with higher payouts.  The first quarter of the year was no exception with 13 of my holdings giving out 14 raises.  In total my forward dividends have increased by $67.69 through dividend increases alone.

April looks to be an especially fruitful month with 7 companies slated to announce raises based on the timing of their previous raises and maybe an 8th could join the party.  Even better is that some of the financials that I own, Wells Fargo, Bank of America and J.P. Morgan might announce increases as well depending on when their capital allocation plans are approved by the Fed.  That's a minimum of 7 and potentially 11 raises that I could get in April alone.

As a dividend growth investor that gets me excited.  There's not much that's better in the world of investing than hearing that a company you own wants to give you more money because you own some shares.

Even better is the diversity among these companies.  There's 2 consumer good giants, a consumer/health care company, health care real estate company, a technology firm, industrials company and an an oil giant.  There's also 1 Dividend Challenger, 3 Dividend Contenders and 3 Dividend Champions.