Saturday, January 30, 2016

Weekly Roundup - January 30, 2016


Did you really expect anything else to close out what was a crazy month of January?  You just knew that we'd be doing anything but remaining flat over the week.  The S&P 500 added 1.75% for the week and had a whopping 2.48% gain on Friday alone.  Oil staged a comeback as well and is now around $33.74 after rumors of production cuts from OPEC/Saudi Arabia.  I for one would love to see some cuts to increase oil prices and bring about some more stability, and hopefully income, from my day job.  Who knows what February will bring for both the stock and oil markets?

Friday, January 29, 2016

Dividend Growth Investing at Work - Health Care and Real Estate: 2 Great Trends for the Long Term


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, January 27, 2016

Data Mining The CCC List: Part 2 - The Contenders


In the beginning stages of building a portfolio, company and sector allocation shouldn't be much of a concern. On a $25,000 portfolio an additional $2,000 purchase would represent a 7% weight in the now $27,000 portfolio. At those portfolio levels a purchase can drastically alter the weight given to a specific company or sector.

However, my portfolio is now hovering around the $170k level and as such I think it's much more important to take allocation into account. One idea that I had was to look into the CCC list that David Fish so graciously updates to see if there's any guidance it can provide in regards to allocation for a dividend growth portfolio.

This is Part 2 of my series on data mining the CCC list. You can find Part 1 which covered the Challengers here.

In order to qualify as a Contender on the CCC list a company must have grown dividends each year for at least the past 10 years. Ten years is a significant amount of time in the business world and is generally long enough for at least one full economic/market cycle to come full circle. If a company was able to continue growing dividends throughout the financial crisis in 2008/9 I'm interested.

Continue reading the article on Seeking Alpha.


Image provided by renjith krishnan via FreeDigitalPhotos.net

Tuesday, January 26, 2016

Data Mining The CCC List: Part 1 - The Challengers


Now that my portfolio is quite sizable and fluctuating around the $170k mark, I feel that portfolio allocation, both among individual companies as well as sectors, should play a bigger role in its construction.

One idea I've had to get a rough estimate of how my portfolio should be allocated is by using the trusty CCC list that David Fish so graciously provides for us. Before I go any further I just want to say thank you to David for such a valuable resource.

So the thought that crossed my mind was that maybe I could glean some information from the CCC list in regards to portfolio sector allocation for my actual portfolio. This will be the first of a four-part series where I look at the sector makeup of the Challengers, Contenders, Champions and then wrap it all up by relating my current portfolio allocation to my findings.

The Challengers are the companies that have paid and grown dividends for between 5 and 10 years. These are the companies in the beginning stages of rewarding owners with what will hopefully turn into a decades long streak.

David already provides some analysis on the averages for each list, but I wanted to take it a step further and add in a sector comparison as well.

Part 1 of this series will cover the Challengers. Part 2 will cover the Contenders. Part 3 will cover the Champions and Part 4 will cover the CCC list in its entirety as well as comparing it to my portfolio's current allocation in search of sector allocation optimization.

Continue reading the article on Seeking Alpha.


Image provided by renjith krishnan via FreeDigitalPhotos.net

Saturday, January 23, 2016

Weekly Roundup - January 23, 2016


This past week was definitely not a quiet one for the markets.  Through the close on Wednesday the S&P 500 had declined another 1.1% bringing the YTD decline to 9.0%.  Oil dipped down below $26 during the week as well.  However, things turned on Thursday and Friday with the S&P 500 posting the first back to back gains of the year adding 2.6%.  Oil staged an even more remarkable comeback climbing over 9.2% on Friday alone to get back over $32 per barrel.  We're definitely in an unstable period for the markets but all I know is that the dividends just keep rolling in providing a bit of calm in the storm.  I haven't been able to take advantage of the turmoil so far this year but hope to get in on the action soon.

I had finished up a job last Saturday and was luckily able to stay home until this past Thursday when it was time to head back to work.  Since I work in the oil field there's no declining work right now because who knows when more will come along.  So I'm back to work near my alma mater and even better is it's just a couple hours from home.

Wednesday, January 20, 2016

How Quick Can You Reach Financial Independence?

There's 8,760 hours in a year.  If you're like most people you work a minimum of 40 hours per week and I'll assume there's another 2 hours per day that you spend on either getting ready for work, commuting to work, or de-stressing from work.  That's 50 hours per week minimum that is likely devoted to work related activities or 2,600 hours per year.  A minimum of 30% of every year once you reach working age until you retire is devoted to work.

I think it's quite obvious that we should all find a way to cut that down.  Just imagine what you could accomplish and how much healthier your life would be if you could find a way to support your lifestyle on the income that your investments provide.  That 2,600 hours per year that we spent working could now be devoted to something, anything.  Malcolm Gladwell wrote in "Outliers" that it takes 10,000 hours to become a master of something.  Using just the time that you used to spend working you could potentially become a master at anything in less than 4 years.


Many of you that visit my blog are pursuing financial independence just like my wife and I.  The concept of financial independence largely springs from a desire for freedom.  Freedom to travel.  Freedom to more fully develop relationships.  Freedom to raise your children yourself.  Freedom to pursue causes you're more passionate about.  Freedom to not HAVE to work.

Monday, January 18, 2016

Net Worth Update - December 2015


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.

Much like November, December ended up being a pretty bland month in terms of net worth.  The S&P 500 was down around 1.75% during December so essentially a flat month for my net worth again is fine by me since the majority of our net worth is tied to the performance of the stock market.  Although market changes are generally just noise that are typically best to be ignored.  Of course receiving over $840 in dividends and getting three raises to boot sure does help to ease the sting of market volatility.  Dividends are great because they are always a positive portion of return.  For the month our net worth declined by $224.62.

Sunday, January 17, 2016

Weekly Roundup - January 16, 2016


Quick round up this week.

The markets sure are in a sour mood to start off the year.  After being down about 6% through the first 5 trading days of the year the S&P 500 is now down 8% year to date.  If only I had some cash ready.  Luckily though I'm working on getting money moved around in order to restart our Roth IRAs so hopefully sometime over the next couple weeks we can start making the first purchases.

Other than the market turmoil and the noise from the financial media it was a pretty calm week.  I had gone back to work a week ago Friday and it was great because it was only 2 hours or so from the house and about 30 minutes outside of College Station, home of my alma mater Texas A&M University.  I loved getting to be back in the area of where I went to school and even walked around campus a couple days just to check things out.

Friday, January 15, 2016

Dividend Growth Investing at Work - The First Raises of 2016!


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, January 13, 2016

Jackpot!


I don't think there's anyone, in the U.S. at least, that hasn't heard about the $1.3 $1.4 $1.5 B Powerball lottery that will be drawn tonight.  That's right a B not an M.  A 1 and a 5 and then 8 0's.  I don't normally purchase lottery tickets because it's a tax on people that can't do math, but $1.5 B has me intrigued so I went ahead and threw $10 at it.  Just in case.

I know that the odds of my wife and I winning the Powerball are slim to none*.  Well, probably closer to none to none, but that $10 won't break us and who doesn't like to dream a bit.  Of course the $1.5 B is actually closer to $930 M if you take the cash instead of the annuity and you'll actually only take away about $560 M after the government gets it's cut.**  But I think we would be just fine with a $560 M lump sum.

That kind of money is life changing and would quickly throw us into the upper echelon.  Although I have a feeling that we'd never rub elbows with them.  While my wife and I don't lack much of anything and overall I'd say our lives are around an 8 out of 10 on an arbitrary happiness/contentment scale.  Overall we're quite happy but seeing as how I'm at work as I write this and my wife will be getting up in a few hours to head to work as well, we don't own our time.

Tuesday, January 12, 2016

Dividend Update - December 2015


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.

Saturday, January 9, 2016

Weekly Roundup - January 9, 2016


The new year is in full swing and I've been taking the time to relax, read, and research.  After being gone for work for 33 days until just before the end of 2015 and finally getting some time off I decided to take a break from the blog for a couple weeks.  I was able to make it home a couple days after Christmas and while I missed the day I didn't miss the family.  Some of my family was out of town over Christmas so we did a big Christmas and birthday celebration on New Years Day.  It was great getting to see everyone which unfortunately happens much less often than I'd like.

Since my work schedule is very unpredictable I tend to slack on the writing whenever I'm home if I don't already have posts lined up because I stay busy with taking care of the "honey do" list and trying to see as many family and friends as possible.  And of course relax a bit.  Despite the large decline in the price of oil, work hasn't slowed down too much for me which is both a good and bad thing.  Although there won't be too many complaints from me because I'm thankful to have survived the layoffs thus far and to still have a job.