Saturday, August 22, 2015

My First Year of Dividend Stock Investing





I've been DGI investing for one year! And what a year it has been!


This time last year, I initiated my first buy with DE.


While I have been investing and continue to invest in my 401k, this is the first time I took a more active approach to investing, and in particular Dividend Stock investing.


All the investments in this blog are from my taxable account. My tax deferred accounts are fully maxed.


Teething Pains


To be honest, I jumped into the deep end without having a good method for stock selection and my approach for valuation was very basic relying on PE less than the market PE.


I did spend some time reading several great books during a trip to England - but everything was new. Even setting up a sharebuilder account was a novel experience.


Also, I started playing with google sheets. I used excel quite a lot at work but I wanted a spreadsheet that I can access from anywhere. Then, I found out how you can extract key information from the web. This became my first screener.


After the first couple of months, I found that finding quality companies was ‘relatively’ straight forward. Most of my ideas came from the SBI book so I looked for companies with good yields and growth. I gravitated to companies that I was familiar with.


However, valuation was a challenge.


I bought several companies early on, but I was not sure on how to deal with valuation. It took several months of tinkering, and then came my dividend yields theory spreadsheet.


Soon after, I added the DDRM spreadsheet based on the dividend playbook - which gave an estimation of the return in investment.


By the end of 2014, I became more comfortable buying quality companies at reasonable valuations. My investments were up to $20k.


Blogging


At this time, I started reading more blogs.  (Divhut, Dividend mantra, Dividend growth investor, MDP, Dividend Empire, R2R, AFFJ, IWTRS, Dividend Hawk - see my blog roll for anyone else I've missed). These blogs gave me the inspiration to share my ideas.


Moreover, I wanted a blog that captured my experiences/knowledge so that one day my son can take over. I realized early on that with the timeframe involved, the full benefits of DGI investing will come decades later. It's like planting a seed which will grow into a strong tree that will provide for generations to come.


I started my first blog entry on January. I really didn't know where to start so I copied the results from my January screen into blogspot, clicked a few things, dragged in the picture and hit Enter a few times. I created my first blog page.  It took several months before I figured out how to add an image, and to set the right columns etc. I coded HTML back in 1994 but so much have changed. Luckily, things are easier nowadays. I just browsed the net for anything I didn't understand.


First Milestone


By March of this year, I reached my initial milestone with $30k invested. I considered this my first milestone since I was getting $100 a month passive income. It was really cool to see all the income coming in without actually working for it. At this time, I figured that I can simply repeat my steps to get another $100 a month. So, once you know how to make money, you just repeat the steps again and again. Simple, right? Boring right?


Investing Regularly


I was really lucky this year to get a few big bonuses from my work and my extra side-hustles. There were a couple of things I could have done - 1) Pile up my emergency/war chest fund 2) Invest. I chose the latter option - my emergency fund was already full. Instead of living paycheck to paycheck, I was investing paycheck to paycheck.


By June, I have doubled my investments to $60k with yearly dividend incomes of around $200. I continued the aggressive investment approach.


Now, August 2015 - my investment is close to $80k

My investments are also very regular as you can you below.



Experiments and Observations

Based on my experiments 1, 2 & 3 - I am observing the same trends in my first year. While your principal can go up and down, your dividend income is constantly growing.


Bouncing Principal


My principal gains have gone up and down.




Steady Dividends Growth


My dividends per month are steadily increasing.


What's next?

And now, the market is all crazy - which is a good time for us. 

I will continue to invest regularly and I look forward to more dividend income. I look forward to reading all the inspiring articles from the blogging community, as well occasionally sharing my ideas and updates. Most of all, I look forward to the day when I can pass all of this stuff to my son.


How was your 1st year?


D4s

8 comments:

  1. Congrats on the first year of div investing, Div4Son. Thanks for the mention....its great that you started blogging and are sharing your knowledge and experience with the rest of us. Pleasure to have found you and have learned a lot from your blog contents.

    Keep investing that money....the ups and downs of the market will smooth out over time.

    Best
    R2R

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    Replies
    1. R2R,
      Many thanks for your comments! Actually, I've learned a lot from your blogs - especially your analyses and your "Chatter around the World" series.
      I'll be trying to invest paycheck to paycheck in the coming months - it may be difficult during the tax, holiday & vacation seasons, but I think it is the fastest way to FI.
      D4s

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  2. Thank you for the mention my friend! I love the graph you show about the amount invested in total. What a great graph to show consistency and dedication to DGI.

    I always look forward to your posts and wish you another successful year and many more after!

    -Adam

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    Replies
    1. Adam,
      Thanks for your kind comments! A lot of the dedication came from the community. MDP gave me a lot of inspiration to go at it. Also, your weekly summary of recent buys is a wonderful resource and reminder for us to continue to invest in under all market conditions.
      D4s

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  3. Div4Son,

    This is an AWESOME post. Congrats on solidfying that emergency fund and then investing "paycheck to paycheck". From $30K to $80K and now you are close to probably pumping out $250-$300/month from dividend income. Before you know it, you'll be around $400/month at the end of the year. Just awesome!

    -Lanny

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    Replies
    1. Lanny, Thanks! At the moment, my forward estimated monthly dividend income is around $250. I should hit the $300 mark when my investment total crosses over the the $100k point. (Due to the market, this may or may not be the portfolio total). If everyone goes to plan, I should see this milestone at the end of the year or soon after. $400 will probably be in the later spring or early summer. Anyway, Investing paycheck to paycheck is what I'll need to do this achieve this. D4s

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  4. D4s,

    Congrats on your first year. And what a year it's been. Investing more than $75k in one year is just incredible. I couldn't even imagine being able to invest that much money over the course of a year. Really great stuff. Keep it up. Bigger and better things lie ahead!

    Cheers.

    ReplyDelete
    Replies
    1. Thanks for your encouragement, Jason. My plan is to invest 3-5k a month. I was fortunate this year to get extra capital to invest from a relatively large bonus and some of my side hustles. I am not sure if I can repeat this level of Investment, but I will try.
      D4s

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