Monthly Archive: November 2015

The market has been pretty volatile over the last few months. A good number of companies have come back to equilibrium, but there are still a few depressed companies that I have my eyes on. These stocks have had a rough year, and as I’m starting to have more investing opportunities, it’s good to have a plan.

IBM

IBM has seen a few choppy years recently while trending down. However, their dividend growth has been maintained, as well as a healthy payout ratio. At the current valuation, IBM has a PE ratio of 9.2 and a yield of 3.85% which is beautiful. It’s not especially popular with 12 quarters of lower revenue. However, Warren Buffett is stockpiling IBM shares right now, which makes me think he knows something we don’t.

WMT

Walmart recently announced a bleak future for the company’s earnings in 2016 and 2017, in combination with their performance, this means WMT is down 30% for the year. This puts the PE ratio at a very attractive 12.6, and the dividend yield around 3.2%. The earnings growth potential over these next couple years isn’t going to be great, but if the price gets depressed further, the dividends will be reinvested at a discount. I’m liking the idea of stockpiling WMT over the next couple years to make bank when they recover and return to growth.

These are the opportunities I have my eyes on currently. I’m also watching Starbucks (SBUX), Yum Brands (YUM), and Whole Foods Market (WFM). How about you, what companies are on your watch list?

This is a bit of a belated post. A couple weeks ago, I purchased 22 shares of VZ at $46.39

At the time, the PE ratio was 18.4 and the dividend yield was 4.8%. Since then, the price has come down, and it is currently yielding over 5%, so maybe you can capitalize on my lack of patience. This investment adds $49.28 to my yearly dividend income, and $4.10 to my average monthly income.

Putting me at $414.44/$500.00 for the annual passive income goal and $34.54/$100.00 for the monthly passive income goal. These numbers are probably a little off due to dividend reinvestment, but I’m getting really close to my $500 per year goal.

I’ve written before about why I like Verizon. You can check it out here.

I think it’s important to celebrate wins on the path to your ultimate goal, no matter how small. Sharing my dividend income results with you readers gives you some insight to what is possible as you begin your journey.

My ultimate goal is to be able to live off of the passive dividend income from my investments, so I can just stay at home and play video games. Here is the money I made in October 2015 without lifting a finger.

KO – $8.39

Total: $8.39

Compared to the dividends I earned in July ($8.32), I made $0.07 more due to compounding, KO should be raising their dividend payment in the first quarter of next year.

I’ve started reading Walden by Henry David Thoreau. I had read it in high school, but recently thought I might appreciate many of the details more as a working adult. I was right. I’m only 20 pages in and so much has resonated with me already.

For those who are unaware, Thoreau wrote Walden about a 2 year period when he lived alone in a cabin near Walden Pond in Concord, Massachusetts. It includes several reflections on what makes life worth living, and some of the self-destructive and ridiculous aspects of society. Above all, the messages on frugality and separating your life and self respect from material goods are especially meaningful to me.

It’s especially interesting how the “keeping up with the Joneses” theme and the associated counter-culture have been around since the mid-1800’s when the book was written. Lines like the following illustrate Thoreau’s opinion on the matter as well as the insignificance of material goods:

“The life which men praise and regard as successful is but one kind. Why should we exaggerate any one kind at the expense of the others?”

“When the soldier is hit by a cannonball, rags are as becoming as purple.”

What resonated with me the most were the parts where he talked about how life is more than the rat race. I feel like this line, in particular, embodies the spirit of the frugal living dividend investor seeking freedom from the corporate world:

“instead of studying how to make it worth men’s while to buy my baskets, I studied rather how to avoid the necessity of selling them.”

There are multiple reflections on what a man truly “needs,” or the necessities of life. The obvious necessities are food and shelter, but having either in excess is a sign that you may be lacking in other less mentioned requirements for a happy life like companionship or finding meaningful things to do.

I’d highly recommend Walden any like minded people.