I’ve been working on a post about financial advice from the Bible. One of the concepts I came across that is quite prevalent in the Bible is not to borrow money at interest.
That caused me to take a look at my stock portfolio. As mentioned in an earlier post, I had bought some stocks on margin, about half of my portfolio. After examining my portfolio, I realized that many of my stocks were not gaining enough in dividends to offset my interest payments. Now, with capital gains, I would probably still be ahead, but I’m investing for dividends, not capital gains (though they are nice to have, because rising stock prices usually mean rising dividends).
So, yesterday I closed off 8 of my positions:
I chose these stocks to sell because they were below the interest rate (4.75%) for my margin. So, I am now again in the black, and my monthly passive income from stocks has increased now that I’m not paying interest on under-performing dividend stocks.
This leaves me with:
| Symbol |
Shares
|
Yearly Income
|
| CTL |
2
|
4.06
|
| PBI |
26
|
26.94
|
| NLY |
6
|
9.58
|
| MFA |
14
|
10.58
|
| CFP |
14
|
10.75
|
| CSH.UN |
60
|
32.40
|
| JE |
10
|
12.4
|
| HYF |
50
|
7.35
|
| TRI |
17
|
21.76
|
| ARR |
70
|
64.68
|
| |
Total:
|
$200.49
|
And just to be clear, I’m valuing my investment based on the income it can throw off. The total value itself is of little consequence when planning for retirement in the manner that I’m currently trying with this type of investment.
Now, $200/year is not much to live on, but this is after only a year of investing in the stock market. I’m just happy that I finally got started. Also, considering that my budgeted contributions this year to stocks are only $1040 ($20/week), this will increase my total investment contributions by nearly 20%. This is how dividend growth really starts to help you out, it is just like compound interest.
“The most powerful force in the universe is compound interest”
-Albert Einstein
I think this really will be the thrust of my retirement planning for the long term. My other ventures in Micro Lending, Silver, Crude Oil, etc. use very different approaches. They much more speculative in nature, and as such, I don’t really trust them for long term investing. But they are fun to play in.
What is your long term investment platform? Have you thought about it?