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04-19-2015, 07:31 AM
(This post was last modified: 04-19-2015, 07:33 AM by Caversham.)
Hello all,
I am 26 and new to dividend investing. I am so new that I have yet to purchase my first dividend stock. Up until a few months ago, I thought the only way to make money investing was via capital gains and didn't even know that companies paid dividends. Luckily, I attended a retirement party for a coworker who was in his mid-40s. He pointed me towards Lowell Miller's "The Single Best Investment" and Josh Peter's "Dividend Playbook" which I've read multiple times. I also read articles on Seeking Alpha and articles on the many DGI blogs across the internet.
I am blessed to have a job I like, a job that pays wells, and a job in the Midwest which allows for cheap living expenses. This means I can save ~66% of my income. I recently purchased a home, and all of my recent savings were directed towards the down payment. My mortgage is my only debt.
Of the 66% income I'm saving, ~15% will be invested in my work's Roth 401k (a mix of index and mutual funds). The remaining ~50% will be invested in my DGI portfolio.
I am excited to begin my DGI journey, however my inexperience and the market's overvaluation are making me reluctant to pull the trigger on my first stock purchase. I look forward to learning and sharing my experience with you all.
Cheers,
Caversham
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Caversham, welcome!
You are in a position that I believe the majority of us on the board wish we were in: starting very young and with the cash flow to get your snowball rolling in a hurry.
The fact that you've read a couple books multiple times before you've felt comfortable pulling the trigger signals to me that DGI is a great fit for you and there's no doubt in my mind you'll succeed.
Good luck and thanks for introducing yourself.
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Welcome. Great to have other young people on the board! I'm also 26 but I've already had my fingers in this game for a couple of years. Unfortunately my work situation is not as bright as yours so I think that once you get the ball rolling you will catch up with me pretty quick.
Do you mind sharing how much mortgage you have and how long are you estimating it's going to take to pay it off completely?
And yes the market does seem a bit overvalued at the moment, but dollar cost averaging will sort it out in the long run. And with the US economy looking quite stable it's possible that stocks will climb quite a bit before the eventual crash happens. There is a Chinese proverbe that says "The best time to plant a tree was 20 years ago. The second best time is now."
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Welcome Caversham! You are in an enviable position.
IMO, you've read two of the best, non-technical books on dividend investing. Your worry about the stock market is somewhat true but, and even Chuck Carnevale has commented on it, it's a market of stocks. Purchasing EMR, JNJ, AFL and some others at this point will
still reward you very well in the future. Since the dollar to Canadian exchange rate is about the average over the last 20 years, you wouldn't take too big a hit from the exchange rate fluctuations on some of the Canadian dividend growers either.
Have you downloaded the CCC list yet?
http://www.dripinvesting.org/tools/tools.asp A good tool to start your shopping.
Looking forward to your participation. There are no stupid questions and you'll I'm sure you'll get a variety of opinions.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
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04-19-2015, 12:01 PM
(This post was last modified: 04-19-2015, 12:04 PM by Caversham.)
Thanks for the welcome guys! It is good to see another youngin' crimsonhost.
crimsonhost. I agree about dollar cost averaging. Right now I'm considering only investing a part of my monthly savings to ease my way into it and build up some confidence.
DividendWatcher I'm well aware of the CCC list and have looked at it many times. It is a great resource. I have been looking at EMR recently.
I'm also still learning how to learn to evaluate companies. A few months ago I didn't even know what a balance sheet or income statement was.
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I don't mind answering questions about my mortgage...
My mortgage payment including taxes, insurance, etc is just over $1,000/month. It is a 15 year at 3%. I don't have much incentive to pay it off early with that interest rate, especially since a lot of companies yield greater than 3%.
My payment is ~$150 more per month than my previous rent, but I'm generating ~$500 in equity per month. I also don't have to deal with horrendous neighbors.
I suppose it might be different in other parts of the country, but I don't understand why large segments of the financial independence community recommend renting over buying, buying seems like a no brainer to me.
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Welcome Caversham! Good to have you on the forum.
cheers
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Hello Caversham! Even though you haven't bought any stocks yet, you are clearly off to a great start. Being able to save that much at a young age is a gigantic advantage.
Welcome to the forum!
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That's pretty incredible that you can save 2/3 of your income! Welcome to the forum.
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(04-20-2015, 06:37 PM)Jimbo Wrote: (04-20-2015, 04:02 PM)earthtodan Wrote: That's pretty incredible that you can save 2/3 of your income! Welcome to the forum.
Man, aint that the truth, Im lucky if I save enough for a Mcmuffin from Mikey D's..
You go, Jimbo! Buy two if you can, they need the help.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
