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‘Buying Income’ With Stock Dividends – Good Travel Money Strategy?

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  • #33908
    VBJ
    Keymaster


    *$131.10 from NYMT isn’t included in this total.

    Since my last post on this thread, I upped my annual dividend income by $263.67. That’s $4,796.26 per year, $399 per month, $13 per day for doing nothing. I’m looking at this passive income growing and I’m like, man, I can almost travel on this.

    Earnings are now coming in:

    Even though most of the amounts are pretty low, I kind of like looking at this. With each one, I’m like, “That’s a cup of coffee,” “That’s a flight to Orlando,” “That’s some beer for the next Bills game.” I don’t really use this income for such things — I immediately reinvest it into more dividend paying stocks — but it helps to better actualize the value that this strategy is starting to produce.

    Next month many quarterly paying stocks are scheduled to pay out, and I should be getting around $800. Then the compounding can really begin …

    #34596
    Darren
    Participant

    Hi Wade

    Really interesting to follow you on this.
    What site are you using to manage your stocks?
    Where are your prediction visuals coming from?

    Thanks

    Darren

    #34681
    VBJ
    Keymaster

    Hello Darren,

    I mostly use the Think or Swim platform which is connected to an Ameritrade account. I’ve used others — Tastyworks, etc — but I like this the best. The income estimator screenshots come from Ameritrade.

    Let us know how you make out if you try this.

    #34736
    VBJ
    Keymaster


    It’s been around a half a year since I’ve posted an update here. Man, how the markets have changed. I got into dividend investing when much of the market was on sale. The Covid pandemic pushed prices extremely low in many sectors that happen to pay high dividends, and I gobbled them up. But now there’s not many of these deals left — the prices have rose back to their normal ranges, just about doubling the value of my portfolio in the process.

    My dividend income strategy has remained the same: I set up long-term hold positions across a spectrum of high dividend paying stocks until they give me a reason to sell. When you play the high dividend game there’s always a chance that your any of your holdings could decrease their payouts or cut them altogether. So you watch your assets, and keep them on the field for as long as they’re performing. When they fumble the ball you sit them on the bench. For example:

    The price of $DHT plunged and they ended up paying out a 30% dividend. I jumped in and collected a monster dividend payment. The next quarter they cut their dividend in half to around 15%. No problem — 15% is still good and I took one of those payments. The following quarter they basically cut their payout to almost nothing — 3% or something — so I bailed completely, selling all my shares and collecting a small profit. I then took that money and invested it into stocks with higher payouts. But now it seems as if DHT is increasing their dividend again — 18% — and I’m again jumping in.

    $ET also halved their dividend, but it’s still in the acceptable range so I’m holding on.

    It’s a little tough to break out of “collector’s mentality” here and view these stocks for what they are: movable assets. I don’t get attached to any one holding — if there’s something better that I can do with that money I do it. Then if the holding improves in the future, I re-invest. While dividend investing doesn’t require the attention of day trading or swing trading, you do need to man your ship.

    These were some of my other moves:

    Sold:

    $TOT – This is a good, high dividend paying energy stock from a company with a plan for the future. But the high foreign tax that I’m charged each time I buy shares and on every dividend pay out make it not worth it.

    $DHT – Explained above

    $SPG – I rode the stock up and then sold because I could make better use of the money elsewhere. Also, I have no faith in the future of this company.

    $HEP – Moved money to better dividend plays.

    $PBCT – Moved money to better dividend plays.

    $PSXP – Wanted to diversify a little more away from energy.

    $MAIN – Moved money to better dividend plays.

    $SPYD – Moved to better plays.

    $XLE – Moved to better energy ETF ($SBR)

    This is what I bought:

    $PSEC – Bought more. This is one of my favorite plays. Pays monthly.

    $DKL – I like this energy stock.

    $EPD – Bought more.

    $HRZN – Tech play with decent payouts. Pays monthly.

    $KBWD – Real estate ETF. I prefer ETFs to single stocks. Pays monthly.

    $MINDP – Tech stock. Didn’t buy much. Not very liquid.

    $MTBCP – Tech. Good payout. Pays monthly.

    $NYMT – Bought more. Banking. Dividend aristocrat. Has room for price to go up.

    $OPP – Investment fund. High dividend. Pays monthly. I’m definitely down with OPP.

    $ORC – mREIT. High dividend. Pays monthly.

    $QYLD – Tech. High dividend. Pays monthly. One of my favorites.

    $SBR – Energy ETF. I prefer ETFs. Pays monthly.

    $ORI – I have no idea what this company does. Secure dividend pay but doesn’t pay much. I will probably sell soon.

    $DHT – It seems as if DHT is going to come back with a big dividend payout so I started stocking back up.

    Overall, I began investing more in monthly paying dividend stocks and cut down on my quarterly payers. Other than the obvious benefit of getting paid monthly, this gives me less time holding in the event of a dividend cut. In dividend investing, time is literally money – you want your chips placed in the basket that’s going to give you the biggest return while maintaining diversity and overall portfolio homeostasis.

    • This reply was modified 1 week, 4 days ago by VBJ.
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