Personal Post #2: Why Do We Invest?

July. What a great month. Smack in the middle of an already killer summer for me. So far Div Kid's girl friend visited the great PNW, the 4th of July is always an exciting time and I decided to not study abroad (more on that later). Summer is ending for me though, as I am to report to school sooner than I would ever want. To take my mind off the thought of summers end I decided to pose a question to you all and I encourage you to leave a comment below so we can discuss this at length!

Why do we invest? While it may sound elitist to say investing is about money, it is about money. Money in, money out, cashflow, dividends, growth, financials, percentage points, ratios. All of it is tied to money. Does that mean we invest just to make or have more money than we did before? I would tend to argue against that. While we all have our own reasons. I would argue that we invest to some degree for Time. 

Now I know what you are saying. "The last personal post was about time.. how can this one be about time?" 

Well, to the astute observe I say yes. This post is about time, but regarding very different sense of the topic. While I cannot read minds and tell you why you invest exactly, I bet it is pretty similar to my reasons. You are most likely a Dividend Growth Investor and thats why you are reading this. Already we have a pretty large amount of things in common if the above is true. I can tell you why I invest, lets see if there are any similarities by the end of this shall we?

The most significant reason I invest is to create time. No Im not crazy, Im serious! Well, mostly. I can't create time, but I can invest with the goal of creating free time! Time away from work, time away from my commute, time with my family, time enjoying life. Someday I will be able to live off of the income that my investments provide. This will allow me to quit my day job (such as Dividend Mantra) and live my life how I see fit. Call me a nonconformist, but there is something quite attractive about waking up and deciding to do what I want to do for a living. All while companies like  KO, PG, CVX pay for it! 

In my adult life I want to, travel, build a car, photograph the world and dividend investing should allow me to do just that and more! In 20 years when I retire (all variables permitting) I will still be racking in the (pay)checks from my stock purchases years ago. This is what investing for free time looks like. You get to do what you want to do when you want to do it and no one can tell you otherwise. 

Now it's not to say that investing in mutual funds or ETFs won't yield this same situation, but income producing assets are much more interesting to me. Why would I plant a tree, watch it grow, cut it down and sell the wood when I could just pick and sell the fruit? In the end the difference is retaining the tree (stock shares) and incurring less taxes! 

Investing is something that I do because it will allow me to live the life everyone wants to live deep down. Make a commitment early and it's much less scary. I promise.

See any similarities here between why we invest?

Do you own any mutual funds or ETFs?

If yes what is your ratio? Dividend stocks/Funds?

I am a 21 year old kid who seeks to create a life of financial independence via passive income. The accumulation and growth of quality dividend yielding stocks will be the main source of income and this is my journey.

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July Stock Watch List

It is again a new month, a new opportunity. Another chance to deploy my depreciating cash and exchange it for dividend growth stocks. Even though I have only been investing in dividend yielding companies since March, I am already seeing how powerful this investing strategy is. Not only have I collected $42.01 in dividends, but I collected this passive income simply by being a shareholder. I understand that this is just the beginning, but with the high quality companies I have chosen this number will only go up. 

So with the passing of July 1st I started looking at companies I was interested in adding to my portfolio. Admittedly though this was set back a tad due to the 4th of July. Nevertheless my list this month is full of mostly undervalued and always popular companies. 

This month I am going to really be looking for a little higher current yield as my purchases that ended June were a bit on the growth side of things (watch for an upcoming post on these purchases). Furthermore I am extra interested in the financial sector as my portfolio is still lacking in that area. 

July Stock Watch List

Bank of Nova Scotia 

This is a company I initiated a small position in a while back. I currently own 2 shares of (BNS). Don't laugh, this position comprises 1% of my entire portfolio. With a current yield of 4.41% and a payout ratio of 47.5% BNS has that hard to find combo that we are all looking for. Great current yield and room to run. While admittedly the dividend growth rate is not fantastic. With 3 consecutive years of growth and a 4.6% growth rate BNS has some explaining to do but I am willing to give them a chance. 

Travelers Co.

(TRV) is pretty hot right now in the DGI community, and for good reason. Travelers has a current yield of 2.44% and a rock bottom payout ratio of 26.2%. 6 consecutive years of growth are backed up by an annualized 3 year dividend growth rate of 10.6%. A position in TRV would be the first insurance company in the Div Kid portfolio and a seemingly great place to start. 

Visa 

I may have missed the boar on the outstanding run the stock has had over the last year but I am still interested. My time horizon is 20 years and because of that I can afford to take a risk on a company like this. (V) is up over 25% year to date and is making a name for itself in the DGI community as a possible contender. Sporting a currently minuscule yield of .72% widespread adoption has yet to be seen. With 6 years of dividend yield growth it's safe to say V is certainly considering making a splash.

Other companies that do not currently fit my immediate interests but are up for consideration.

SBUX
QCOM
CAT
DIS
VTR
KO
AAPL
UNP

ABC: Bold denotes current holding

What have you purchased recently?
Are any of my considerations on your list?
Any big updates with your portfolio or strategy?

I am a 21 year old kid who seeks to create a life of financial independence via passive income. The accumulation and growth of quality dividend yielding stocks will be the main source of income and this is my journey.

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Income and Expenses: June

The end of another glorious month has come and gone and I now have another opportunity to share with all of my readers how much money I have spent, saved, put to work, or squandered away. I find that this is a very valuable activity because not only do I pour over my financial statements for the month, but sharing my spending and saving habits keeps me accountable. This accountability is what I am really after. At my age I would say I am doing pretty well and for me that is an issue. It makes it easier to fall off of the path that I want to follow. I have extra money that I could spend in meaningless ways. This month was a challenging one as I found myself picking between enjoying being a kid and planning for my financial future (more on that later).

This post will cover all cash flow from June 1 to June 30.

Income

In the month of June I brought in $1,129. This is a 55% decrease in income compared to last months reporting. If you remember correctly though, last month I reported having a large deposit from cash accrued while at school. Removing that outlier deposit (as I did last month to reach a more realistic savings rate) the difference in income month over month is a 182% increase! This is mainly attributed to an increase in the consistency of my temporary work assignments that I noted would be coming. 

In addition to salary and savings account interest I had little income. The second largest source of income resulting in $370 of deposits comes from private sales of a few items such as an antique beer sign. Finally I received 9.02 in dividends from my ROTH IRA with Vanguard. I will update on my taxable portfolio dividends (which are growing!) soon.

Expenses

Here is the damage for the month. In June I spent $715 which is a 306% increase month over month. This is hard for me to write as I did get a bit off track this month in the spending. But I must add a bit of an asterisk on that number as my largest purchase wasn't even paid for until July. This month I decided to purchase an Xbox One. I know I know. I just wrote an article about spending meaningful money and not buying new fancy things such as this but there is a reason. I bought the new Xbox with the idea of selling my current Xbox and rolling that money into the new purchase with a little new money as well. In the end I found a good opportunity to upgrade and took it. I feel that in the end this will be meaningful money because I took the time to find a great deal and plan out the finances of the purchase. In the end I will only be paying $150 for the new system.

Aside from my $338 Xbox One, I spent money on mostly gas to get back and forth to work. Restaurants eating out with friends and entertainment. At first writing this article I felt guilty spending this much money. With my increased income and expenses my saved income rate this month is still 63%. This leaves me with an average saved income rate of 75% for the year. This is still encouraging and I am still on track in saving 70% of my income this year.

What was your saved income rate this month?
Have you spent money on anything you regret recently?
What goals have you set recently?

I am a 21 year old kid who seeks to create a life of financial independence via passive income. The accumulation and growth of quality dividend yielding stocks will be the main source of income and this is my journey.

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