Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Hey everyone,

My name is Matt and I'm 31 and want to turn 2016 into a year of investing some money. I'm not looking for so much as in retirement money as I am more interested in a hey my roof needs replacing (Hopefully in 10 years & not less..haha) and I'm interested in making dividends start to work for me as in paying some bills. I know I need to grow a substantial amount to make that happen, and I know it's not going to happen by tomorrow. So I just need some help along my journey. I have invested before and kicked myself in the a** plenty of times of stupid purchases (not reading into stocks & penny stocks) all the way to selling stocks that would be very nice to have now :/ .......

I want to put that all in the past and start fresh again. I don't have much to start with and little to put in on a monthly basis for now but hope to grow as some expenses expire and I can put more in. $500 is what I'm looking to start with and $100 a month after that (with putting extra cash in when I can). So if there is any right path I need to get on and some pointers anyone want to throw my way, I would love to hear them and actually focus this time around rather than go all willy nilly about things Smile

The first "stock" I was looking at is actually a REIT called ARR that has been giving out monthly dividends @ $0.33 for the past 6 months, Idk if that is going to change or not or is a bad choice, price as of today was $21.88, which makes it feel nice to me as I can accumulate more shares than stocks that are higher and only payout quarterly or annually. Stupid or decent option for me?

Welcome to the forums!

With that much capital per month you need to be very careful about broker fees.  Most brokers charge $5-$7 per trade, so if your transaction size is $100 you'd be losing 5-7% in broker fees each month.  Some things to consider to avoid this:
* Find a broker with very low or no fees (Robinhood, Loyalty3, etc)
* Use a direct stock purchase plan through a service like ComputerShare.  Most of the time you buy stock directly from the company and can avoid most fees.  I don't have any experience with these.
* Accumulate enough cash for each transcation so broker fees are only ~0.5% per transaction (ie $1,000 - $1,250 per transaction).

I do not know anything about ARR, but it appears to be an mREIT with a yield of 18%.  This seems EXTREMELY risky to me.  I would stick with the DGI blue chip stalwarts (JNJ, KO, etc). Also, if you are new to analyzing companies I would consider investing in an index fund.  There are even DGI index funds like SCHD.
Welcome Matt! 

A lot of people find DG investing after a rollercoaster of experiences with other investing styles. 

I've got to agree with Caversham -- if you are looking to build something to provide income over the long term, an mREIT is probably not a great place to start. Maybe look at something like AT&T (ticker: T) for starters. Yield is a healthy 5.5 percent, so the current income is not too paltry, and if you consistently add to the position, it will grow into a nice cash producer for you over time. Over the years as you add other names and grow the portfolio, T will be a great core position.

We're all happy to help as much as we can. Best of luck!
Welcome, Matt. I started out in 2007, not knowing what I was doing, but knowing that I wanted to rely on a steady stream of dividends from many different reliable companies. My recommendation is to do what I did, start out by investing in your core holdings. For me and many others, it meant the highest quality DGI companies, such as JNJ, XOM, KO, DIS etc. Once those positions were established, I slowly added smaller amounts to other companies, but kept continually investing in my core with the majority of my investing. Do your own research, best of luck.
Welcome, Matt.

I'd steer away from mREITs right now. Actually, I'd steer away from any REITs in your situation while getting started. It sounds like you'll be using a taxable account and REIT's dividends are generally considered "not qualified" meaning you don't get the tax break on dividend income.

Kerim has some good advice. VZ is up there in yield too and XOM is yielding almost 4%. Not bad for an energy company with a AAA credit rating. If you can stand some lower income, JNJ, JCI & UNP are all reliable companies now yielding over 3%. Be aware that the stock price is going to swing quite a bit lately with the market gyrations, especially the industrials. You could also look at some utilities for the income.

I wouldn't be too worried about commissions. Although I wouldn't recommend buying with just $100 but if you can keep transaction costs under 2% ($10 commission on a $500 trade) and hold long-term you should be fine.

Don't rush into anything just on a tip. Steady, regular investing will go far and don't panic and sell just because Mr. Market is doing something stupid.
How do they get the deer to cross at that yellow road sign?

I would sit down and draw up a plan, a plan that is sustainable for the long term that benefits you and your household. It sounds like your decisions were made because there was no plan in place for you to follow. Speaking from personal experiences, if you have "Bad Debt" such as credit cards or any high interest loans outstanding, that would be on the top of my list to pay off before any monies would be deployed into the stock market. Starting out I would also keep my house slush money separate from my investment accounts. If investing is a must and you're committed to it 100% then I would look at the advantages and disadvantages of starting a retirement account such as a 401k (if available) and or a IRA/ROTH IRA vs a regular brokerage account that is tailored to your plan. Once a decision is made, I would start with a good solid core holding whether it's a couple of individual stocks or a mutual/index fund then branch off from there as time moves forward. I would also, READ READ and READ some more then never stop. Remember, there's no rush, the stock market is not going anywhere.

Users browsing this thread: 1 Guest(s)