Sunday, July 19, 2015

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.


1 comment:

  1. Great point, we can't create time, investing is one of the way to free yourself from work and other income generating activities so you can have more time.