Dividend Income Investing

larry · Post by **larry** » Mon Oct 01, 2012 10:19 am

My grand plan is to use dividend income investing / rental real estate as a means to replace my current income form work. I've been tracking my portfolio for the last six months on my blog.
Latest update for anyone that wants to follow along:
http://dividendincomeinvesting.com/divi ... -1st-2012/
Larry

OurLifeInc. · Post by **OurLifeInc.** » Mon Oct 01, 2012 1:01 pm

Great post Larry, and very nice portfolio. I am building up cash as well since I agree with you...I want to have some on hand should dips come along. The only purchase I have made recently is NSC. Bought them on the dip when their yield went over 3%.
I notice you reinvest most of your dividends right back into the companies who pay them. I swear, I go back and forth on this decision so much. Currently, I take the dividends as cash and then redeploy as I see fit. If you don't mind sharing, what went into your decision to reinvest automatically?

larry · Post by **larry** » Mon Oct 01, 2012 4:42 pm

@OurLife
To answer your question:
Most of the companies that I own have a long, solid history of increased earnings and dividends. Reinvesting the dividends just seems to be the easy way to keep the cash invested and lower my cost basis on each position. I'm happy with most of my picks and don't mind adding to them.
I have seen how others let the dividends build as cash and then use them to add to positions. I've thought about doing that, but I'm not sure that I can do any better job of making a profit, than just letting the dividends reinvest.
I'm also still adding new funds to the portfolio each month, so I use those funds to either add new positions when they appear to be valued well, or let the cash build for awhile and wait for a dip in the market.
So in essence, I'm splitting the two ideas:
Using dividends to reinvest.
Using new cash to pick the best value I can find.
Larry

DividendGuy · Post by **DividendGuy** » Tue Oct 02, 2012 2:33 am

@Larry
Fine looking portfolio you have there.
I have the same plan. I'm not quite sure I'll have rental properties in the mix or not, but I'm definitely planning on living primarily off dividend income. When interest rates rise I'll likely start purchasing long duration bonds just before I retire.
I'm planning on living off dividend income by 40 years old by purchasing high quality dividend growth stocks every single month and living frugally.
Hard to find value right now with easy QE money flowing into the market.
Happy Hunting!

ExpatERE · Post by **ExpatERE** » Wed Oct 03, 2012 12:15 pm

I agree with the others, very nice looking portfolio. I'm attempting to build something similar, although I don't know if I will ever reach the level of diversification you have here.
Currently looking at adding real estate to the mix. Any suggestions??

larry · Post by **larry** » Wed Oct 03, 2012 2:27 pm

@expatere
I own a few reits (UHT, SNH), but bought them at much lower valuations.
I'm watching (NNN) as a possible pick if we have another market downturn.
I read plenty of REIT articles from Brad Thomas on Seeking Alpha. He seems to be a good source for REIT ideas that you can then research on your own.

BennKar · Post by **BennKar** » Wed Oct 03, 2012 9:11 pm

As you have fractional shares on most of your holdings, are you doing DRIPs or do you have a broker that allows you to reinvest dividends in fractional amounts? what is your cost for doing it this way?
Now that I look at your page again, I see you are giving your dividend rate as "yield on cost", which makes sense. I've always looked at is as yield on current value which probably isn't the best way. I should come up with a spreadsheet like yours to see what my yield on cost is.

larry · Post by **larry** » Thu Oct 04, 2012 12:30 pm

@bennkar
Schwab reinvests dividends into fractional shares at no additional cost.
Yeah, I have a simple excel spreadsheet that I update frequently, and then transfer the results to my blog each month.

larry · Post by **larry** » Thu Nov 01, 2012 5:44 pm

Dividend Portfolio updated for the month of October 2012:
http://dividendincomeinvesting.com/divi ... -1st-2012/
Additions this month:
KMI

NNN

PPL

SCHF
Larry

larry · Post by **larry** » Sat Dec 01, 2012 12:55 pm

Updated Dividend Portfolio for November:
http://dividendincomeinvesting.com/divi ... -1st-2012/
Added more:
Altria (MO)

CSX Corp (CSX)

Schwab ETFs (SCHC) and (SCHF)
Larry

larry · Post by **larry** » Thu Jan 03, 2013 2:42 am

Real World Dividend Portfolio for December 2012:
http://dividendincomeinvesting.com/divi ... -1st-2013/
Added positions:
100 shares (GE)

100 shares (CSX)
Plus, lots and lots of dividends reinvested.
Larry

larry · Post by **larry** » Fri Feb 01, 2013 8:57 pm

New update to Dividend Portfolio:
Added shares of COH, KSS, LSE, UMH, MSFT.
Link:
http://dividendincomeinvesting.com/divi ... -1st-2013/
So far, I'm up on everything, except Coach (COH), which is down just a little from where I bought it.
Looking for more monthly payers.
Any thoughts from the wise crowd here?
Larry

George the original one · Fri Feb 01, 2013 9:59 pm

SJR - dividend growth Canadian cable company

LTC - dividend growth REIT, seems overpriced these days

GOOD - appropriately priced, but not dividend growth (who cares at 8% yield?)
Otherwise, one is looking at resource trusts where the monthly payers are not providing yields or bond funds, which I think are dangerous these days as they're no longer offering high yields.

RelicO · Post by **RelicO** » Sat Feb 02, 2013 2:48 am

larry · Post by **larry** » Sat Feb 02, 2013 3:09 am

@George TOO and Joe Schmoe,
Thanks for the ideas.
I was watching Whitestone REIT (WSR)also.
Larry

larry · Post by **larry** » Fri Mar 01, 2013 2:15 pm

Update for February Activity on the dividend portfolio:
http://dividendincomeinvesting.com/divi ... -1st-2013/
This month, I sold EXC and PPL.
And bought:
AAPL

COP

LNCO

MFI

PSEC

QRE

SCHE

SCHF

YUM
Plus, lots of dividend increases this past month. Dividend income steadily growing.
But, indices approaching all time highs. Is a correction coming?
Larry

larry · Post by **larry** » Mon Apr 01, 2013 12:42 pm

April 1st: Update for the Dividend Income Portfolio:
http://dividendincomeinvesting.com/divi ... -1st-2013/
Added more:
AAPL

PSEC

SCHE
New positions:
CAT

GES

RTN

WFC
No correction yet. Finding value with fast graphs. The saga continues.
Larry

secretwealth · Post by **secretwealth** » Mon Apr 01, 2013 1:16 pm

SCHE is an interesting choice--can I ask what's your rationale behind it?

larry · Post by **larry** » Mon Apr 01, 2013 1:23 pm

Secret Wealth,
I'm just adding some emerging markets exposure without trying to pick individual equities. SCHE trades commission free in a Schwab account, low expense ratio, and yields a little over 2%.
Larry

MadHermit · Post by **MadHermit** » Wed Apr 03, 2013 1:26 pm

Hi Larry,
Great portfolio! Do you follow the DGI discussions on SeekingAlpha?