Dividends aren’t everything

Came across this twit­ter dis­cus­sion that’s worth shar­ing. I’m a huge believ­er in div­i­dends, and almost nev­er invest in any­thing with­out one… but a company’s div­i­dend (oth­er than it’s exis­tence) isn’t a rea­son to invest. Retail loca­tions are being closed, malls sit emp­ty. While one twit­ter­er points out that Macy’s stock would be worth less (worth­less?) with­out it’s […]

Your Investing Edge

Everyone's looking for an edge. Few are able to stomach the price. Those that do, reap the rewards.

Let’s pre­tend for a moment that the infor­ma­tion in my book is tru­ly dif­fer­en­ti­at­ing. A way to invest and win all the time. Why can’t peo­ple stick with it? Reading this arti­cle on black­jack card count­ing titled ’sur­viv­ing the con­tin­u­ous chain of dis­ap­point­ments’ helps under­stand why. The key to Thorp’s sys­tem was the abil­i­ty to sur­vive los­ing […]

Who doesn’t love raises?

Investing in dividend aristocrats increasing the likelihood of annual dividend increases, not just quarterly payments.

I came across this great arti­cle on the Kiplinger finance site, 12 Dividend Aristocrats for Every Month of the Year. It lists 12 com­pa­nies and shares some of their div­i­dend his­to­ry. As a group, you’ll get div­i­dend pay­ments every mon­th. Getting paid every mon­th, helps with bud­get­ing and cash flow for sure. Though I like […]

Updates to Dividend Aristocrats and Dividend Kings Lists

Some good additions reward companies with long histories of dividend increases

Dividend increas­es are amaz­ing­ly pow­er­ful in their impact on the com­pound­ing of div­i­dend “pay­checks,” espe­cial­ly for peo­ple with a long term focus on build­ing wealth. Increases com­pound over time, but also ensure pro­tec­tion of the div­i­dend “pay­check” from infla­tion. A New Dividend King There are cur­rent­ly only 19 div­i­dend kings, com­pa­nies with 50+ con­sec­u­tive years of div­i­dend […]

Most powerful force in the universe

The Irrelevant Investor
1/18/2017

Buffett has been rich forever, but 95% of his net worth was earned after his 60th birth­day.

Read this arti­cle to under­stand the pow­er of com­pound­ing and why even long term thinkers can’t com­pre­hend how things will play out over the long arc of time.

Compounding plays an impor­tant fac­tor in the Elephant’s Paycheck Blueprint because we rein­vest div­i­dends and count on annu­al div­i­dend increas­es (which com­pound on each oth­er year-after-year). We’re com­pound­ing that div­i­dend return because we get div­i­dends from our div­i­dends, and over time, it real­ly adds up. Even after a “short time” like five years, you’ll see real­ly inter­est­ing num­bers if you look at com­pound div­i­dend growth from rein­vest­ing and annu­al div­i­dend increas­es.

It’s anec­do­tal, but after about 4 1/2 years the pay­check from the total­ly ran­dom sam­ple port­fo­lio I put togeth­er increased 75%, and has a pro­ject­ed raise of over 10% for the next year (con­ser­v­a­tive­ly). The anec­dote I like to tell… you prob­a­bly aren’t get­ting 10% a year (year after year) at your job. But your port­fo­lio can.

Part of the rea­son it’s hard to under­stand is that, as I write about it, I have to shift between absolute num­bers (a 10¢ increase) and rel­a­tive num­bers (a 10% increase) as I’m describ­ing dif­fer­ent aspects of what to expect. I don’t think peo­ple under­stand per­cent­ages very well. If I told you you had a $1 a year income from invest­ing, you’d roll your eyes. But, it’s impor­tant. If you had only invest­ed $50, that’s 20% — a fan­tas­tic income per­cent­age.

At a time when peo­ple want quick answers to things, but don’t want to stop and think about what they mean, it’s hard to get read­ers to spend the time to think about what this all means, and why it’s impor­tant. I had some­one inter­rupt me the oth­er day and say:

wow, you’re a real­ly long term thinker.

Yeah. And I hope some of that will rub off on you guys.

10% growth for 25 years is not 250%, it’s 985%!” When you show relatively new investors this kind of thing, it’s like an awakening.”
@ReformedBroker‬
1/19/17

A fair question

Charlie Munger is famous in the invest­ing world. He’s a plain-spo­ken mas­ter of what should be the obvi­ous, typ­i­fied by the fol­low­ing respon­se to a request for invest­ment advice: Seems sim­ple. In fact it is, and it’s pow­er­ful advice. There’s real­ly no secret to get­ting start­ed invest­ing when tak­ing this advice. Which begs the ques­tion… […]

The Elephant in the Room has a Paycheck cover

The Elephant in the Room has a Paycheck (New York City: Infinite Probabilities, 2016)

A fun and social­ly con­scious plan to get you start­ed invest­ing. Written by yours tru­ly! Yeah, this is my book.

During the edit­ing process, I read my book over and over. There were times when I was feel­ing down about the pub­lish­ing process — whether how long it was tak­ing, or how dif­fi­cult some of the stages were. I’d read my book and be inspired.

I believe I’ve told a unique sto­ry that will help peo­ple who are not friends with num­bers get start­ed invest­ing. Technology is mak­ing it eas­ier than ever to get start­ed, but peo­ple still need a sto­ry to hook their inter­est. Here it is.

It’s a quick read, shouldn’t take more than a cou­ple or a few hours. But be pre­pared to re-read it, espe­cial­ly Part Four where I out­line speci­fic action­able steps to get start­ed.

I’m also work­ing on a free email course to take that sec­tion even fur­ther for peo­ple who start invest­ing mod­est­ly with the pur­pose of learn­ing more about invest­ing. Subscribe if you’d like to be noti­fied when it’s avail­able.

What are Dividends?

Dividends are awesome. Pick the right company, and they go in one direction - UP! Dividends have been rising faster than earnings, and that's a great opportunity for long-term investors

40% of total stock returns come from div­i­dends, but what are div­i­dends? From Part 2 of my book: When you pur­chase shares in a com­pa­ny, you become a par­tial own­er of that com­pa­ny. When buy­ing shares on a stock mar­ket through a bro­ker­age, you’re buy­ing shares of a pub­lic com­pa­ny – a com­pa­ny that has […]

What are Dividends?