Sunday, May 29, 2016

The Importance of Revenue Growth In Selecting Winning Investments

The Importance of Revenue Growth in Selecting Winning Investments
The Importance of Revenue Growth in Selecting Winning Investments
Over the last couple weeks I've been writing about how companies grow and why it's so important to see how the growth is coming because not all growth is created equal.  Today I wanted to give an example of the differences that can arise if you just look at the numbers as reported instead of digging into them yourself.  But first a quick recap.

Revenue growth is one of my favorite metrics to look at for a company.  I don't have any numbers to back up my claim, but I think you'll all agree that a growing revenue stream leads to rising profits which leads to my personal favorite, a sustainably increasing dividend.  It's pretty safe to say that you won't find many companies that have a lengthy dividend growth streak that haven't also grown their revenue.  That's why I feel it's so important to monitor the top line and how it's growing.

Companies have 4 ways to organically grow the top line and another way to manufacture that growth.

Check out the rest of the article over at Dividend Growth Investor!

Image provided by Sira Anamwong via FreeDigitalPhotos

Saturday, May 28, 2016

Weekly Roundup - May 28, 2016

Happy Weekend!  Check out what's been going on in my world and some of the best articles from around the blogosphere.

Rain rain go away!  Here in the Houston area we're being bombarded with even more rain after having some pretty major flooding about a month ago.  Thursday was really bad and the whole north side of Houston has been getting pounded by rain and to mix things up a bit this time we've been having very strong winds and some tornadoes as well.  Luckily the tornadoes were far from my house or my wife and me as well since I was about 200 miles away during the worst of the storms for my cousin's high school graduation.

It's great getting to see the fresh faces ready to step out on their own into college, military, technical schools or whatever path they decide to take in their life.  I just hope some of these kids take the opportunity to learn from those that are older and already made the same mistakes on money and life that seem to always be repeated generation after generation.

Friday, May 27, 2016

Dividend Growth Investing at Work - Banking On Higher Dividends

Concept of how dividend growth investing works

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 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?