All Millionaires Are Not Equal !

Having accumulated just at a million dollars just before his retirement has left him feeling very good about his keen foresight of hiring Mr. Fancy Dancy of the “Fancy Dancy Brokerage Firm,

Not all Millionaires are Equal –

Some are Richer than Others !

Here’s Why !

Here’s a fictional story about three individuals. Mr Regular, Mr. Knowledgeable and Mr. Fancy Dancy. The story is entirely fictional yet I believe many will believe it is someone they know, perhaps even about themselves.

Let’s consider two Millionaires – A regular old Millionaire (Let’s call him “Mr Regular”) that has a Fancy Dancy Stock Broker at some Fancy Dancy Brokerage Firm making his Investment decisions for him ( Let’s call him “Mr. Fancy Dancy”) and a another millionaire who is a Dividend Income Investor ( Let’s call  him Mr. Knowledgeable).

Mr. Regular is a busy guy, He has done well in life and has set aside a portion of his income for retirement. Mr. Regular always thought of investing in the stock market a risky venture and decided early on that he best leave that the Mr. Fancy Dancy at the Fancy Dancy Brokerage firm to do that for him. After all, how could Mr. Regular ever expect to find the time to learn about investing, it is a really complicated venture and if done incorrectly he could end up losing all his money and have nothing to retire with.

Having accumulated just at a million dollars just before his retirement has left him feeling very good about his keen foresight of hiring Mr. Fancy Dancy of the “Fancy Dancy Brokerage Firm,  to handle his financial affairs. That is he was feeling very good about his decision until his latest visit with Mr. Fancy Dancy only a month before he officially retires.  The first thing his old buddy Mr. Fancy Dancy tells him is about the “4% rule”. Most studies come to the conclusion you will need to make your money last for at least 30 years and that the maximum you can withdraw each year to last the entire 30 years is 4% of your savings ( adjusted for inflation). So he is told his withdrawal will have to be limited to $40,000 per year in order to last for the expected 30 years of his remaining life. This comes out to $3,300 per month. Added to his $1,500 Social Security this comes out to about $4,800 per month. Not bad considering but Mr. Regular is not happy at all. He was bringing home over  $10,000 per month with his job (his salary was $125,000 per year) and now he finds out that he will have to live on half that amount in retirement. Mr. Fancy Dancy explains to Mr. Regular that this is just the way  it has to be. He has him in bonds and stocks (chances are 60% equities and 40% bonds) and they are returning about 2.5% in his investments.  Mr. Regular is now desperate and is trying to think of ways to reduce his cost of living in order to make ends meet. Possibly selling his beautiful home and moving to a lower cost area, cutting back on expensive hobbies like golf or cutting back on vacations. He is even thinking about working part time then he suddenly finds out that he will lose $1 of his social security for every two dollars he earns over a certain amount so that limits his prospects there also. So Mr. Regular has to make a decision, take a drastic cut in his lifestyle or continue working until he has much more than one Million saved for retirement. By holding off he can better retire and because he will have a shorter life expectancy at that point he can safely withdraw a little more than 4% , maybe as much as 5%.

As it turns out Mr. Regular is friends with Mr. Knowledgeable. Mr. Regular shares his story with Mr. Knowledgeable. Mr. Knowledgeable tells Mr. Regular his thoughts about Mr. Fancy Dancy at the Fancy Dancy Brokerage Firm. He tell Mr. Regular while Mr Fancy Dancy is a nice guy that the reality is that he is there to make money for himself and that is understandably his primary focus. He further explains to Mr. Regular that he is a Dividend Income Investor (DII). As a Dividend Income Investor he controls his own portfolio and only buys individual stocks. In this manner he immediately earns more on his investments because he cuts out the middle man.

Mr. Knowledgeable continues to explain to Mr. Regular that he too has One Million dollars saved for his retirement, but he has no worries what so ever about maintaining his life style while in retirement and does not limit himself to the 4% rule, is not worried about running out of money even if he lives to be 115 years old. Okay, now Me. Regular is fascinated and asks him to please continue explaining more about his investment philosophy and about Dividend Income Investing.

Mr. Knowledgeable gladly offers to explain the Dividend Income Investing philosophy. First he explains that as previously stated he has one million dollars invested for his retirement. His current yield on cost is 9%, meaning that his returns from his dividend income is $90,000 per year. This equates to $7,500 per month. When he adds this to his Social Security of $1,500 per month his total income in retirement is $9,000 per month. This is only around one thousand dollars a month shy of what he was making at his full time job. Or in other words  he is only taking a 10% pay cut by retiring.  In addition some of his stocks will increase their dividends from time to time giving Mr. Knowledgeable a hedge against inflation. In the event of a a company announcing a dividend cut ( believe it or not this is a rare event ) Mr. Knowledgeable simply sells that stock and finds a similar yielding stock to replace it.

So what are the mechanics of the Dividend Income Investing?

  • First buy only Dividend paying stocks.
  • Never buy stocks below 4% dividend yields.
  • Try to buy stocks with yields in the 4-11 % yield range.
  • Identify stocks that are out of favor but are good solid companies that have sound financial fundamentals yet pay higher than usual dividend yields.
  • Don’t follow the “herd” – when everyone else is running to get out of a stock, that’s the time to start planning your purchase. Recent examples are oil stocks, Retail REITS, Coal stocks, Tobacco stocks. Just because they have become out of favor or socially unacceptable to many doesn’t mean the company will not continue to make money. Use logic and ask yourself basic questions – how many more years will this company be around? Is the market just overreacting to some bad news? Are things really that bad? – Quite often the answer is that everyone is just overreacting. This is when the great buying opportunities present themselves.
  • Don’t buy Speculative stocks – you know like the next great tech company that will make you rich. 99% of the time you will only get poorer – not rich.
  • Don’t buy ETFs and Mutual Funds – You are paying dearly for the middlemen.


So is really that easy ? The answer is yes. Of course you have to keep a close eye on your investments and it does take a little work to find stocks that will average a yield of greater than 9% but it is far from  impossible. In fact I have managed to do that with my personal portfolios for some time now. I, and many others like me are reaping the rewards of Dividend Income Investing. Follow the advice above, and keep focused on what is important, the Dividend Income!

Your comments are always welcome. Please comment below and also consider following me for more on Dividend Income Investing.


Boost Your Retirement Income

“What if I told you that you could Double your Dividend Income for Retirement almost instantly and with almost very little risk beyond what you are presently doing ? “

What if I told you that you could Double your Dividend Income for Retirement almost instantly and with almost very little risk beyond what you are presently doing ? Would you be interested?

So you have save for many years and invested in ETFs or Mutual Funds . You feel like you have amassed a real good chunk of money for your retirement but now you are finally retired and you find yourself on a somewhat meager income to fund your retirement. You could just start selling each year to fund your retirement but that still means you are not only living off of savings but each year your income from savings will decline.

Let’s say you are above average and you have reached what you thought would be a comfortable amount for retirement. You have one million dollars to fund your retirement. You have retired at 63 years of age. Congratulations! But now that you have retired you are panicking. Your social security is $1,500 per month and your “Investments” are only provide you with an additional $25,000 per year or about $2,083 per month in income. That’s a combined income of $3,583. Not too bad but that amounts to $43,996 per year. Your working salary was $100,000 a year before retirement so you have to find ways of making due with your new reduced salary.

You could withdraw $60,000 a year to make up the shortfall. Unfortunately that means your retirement fund will be depleted in about twenty years. By 83 years of age you will be out of money and depending solely on your social security.

There is another way ! Why not consider becoming a Dividend Income Investor (DII). Dividend Income Investing means you only (or mainly) invest in individual stocks that have higher than normal dividend yields. While there are no set rules I personally try not to invest in stocks that yields  below 5% with the exception being a group of “foundation stocks”. My over all goal is a 9% yield on my portfolios.  Yes, it is very achievable and I myself can attest to it. I have done so for many years now.

By converting your Bond Funds, ETFs and Mutual Funds all into individual stocks you are accomplishing a few things that you could not before. You have eliminated the “Middlemen” ( Fund managers) , recurring broker fees and you are now free to invest in companies that meet your goals.

Just maybe you don’t feel comfortable with the 9% – Well okay, even at 6% you have doubled your income.

$1,000,000 x 6% = $60,000 per year. + $18,000 social security = $78,000 per year

$1,000,000 x 7% = $70,000 per year. +$18,000 social security = $88,000 per year

$1,000,000 x 8% = $80,000 per year. +$18,000 social security = $98,000 per year

$1,000,000 x 9% = $90,000 per year. +$18,000 social security = $108,000 per year.

I know that if you have never managed your own investments it can very very daunting. The investment community has worked hard to convince us that the stock market is so complicated and scary that only they, after you pay them, can invest your money for you. They try to over complicate things even further by trying to convince us that you must have your money invested in several types of investment vehicles to be properly divested. None of this is even remotely true. Why do you have to have a portion invested in foreign stocks for safety when most large American corporations are global? Why do you have to invest in bonds. They say they are “less risky” than stocks but I can find no evidence of this what so ever. Unless they can convince you that you are not capable of purchasing stocks and managing them yourself, they cannot make money. I am here to tell you other wise. Buying stocks is simple.

Please consider following us and reading our articles to learn how to purchase and manage your stock portfolio your self. We try very hard to make our articles not only educational but simple. By keeping things simple more can understand and follow along.

Most of you can at a minimum double your retirement income and a good percentage of you can even triple your retirement income.

Previous Articles you may Interested in:

The Difference Between Dividend Growth and Dividend Income Investors

Risk Mitigation

Making Money from “Sin Stocks”

Ever Heard of the 4% Rule?



Please feel free to share you thoughts and comments with us.



Start Early – Retire Early

Start in your teens or twenties and retire in you forties or fifties!

So if it is this easy to achieve how come more people don’t do it? This is a great question.

The number one reason I believe people don’t do this is because no one ever taught them the importance of investing or the means to do it.  In my case I had enough knowledge to understand compounding and see the future results but I never was shown how to do it. My parents didn’t teach me because they themselves didn’t know how to do it.

I believe and hope that I can break this cycle with my own children and family. To share my knowledge, teach them how easy it is and inspire them to start as early as possible investing. Lead by example so to speak. The younger you are to farther away a time period of thirty years seems but for those of us that are there are beyond we know just how quickly it sneaks up on you.

You don’t have to live in poverty or give up all the necessities of life, nor do you have to give all the luxuries of life, but just enough for you to reach your goals. ( See the Golden Rule of Investing Article) What you do have to do is make up your mind that you are going to work towards your investing goals. Map out an Investing strategy and stick to it. You might have to make adjustments along the way but that is okay as long as you do not give up and lose your focus. It is really difficult to convince a young person to save and plan for events thirty or more years into the future but it should become the parents’ number one focus. Keep encouraging them, keep demanding it and lead by example.

Some of your strategies for motivating your children should include:

  • Open bank accounts for them at early ages – When they save enough money have them buy dividend stocks with it.
  • Buy Stocks for them as Birthday, Christmas, Hanukah or other occasion gifts.
  • Encourage Grandparents and friends to buy stock for them also.
  • Help them to set realistic short term , medium term and Long term goals
  • Set up tracking charts so that they can track and watch their investments grow, making sure to show them increases in “Monthly Income”
  • Help them to identify future rewards that can be achieved
  • Discuss the importance of protecting their investments

And while it is very desirable to start investing at as early of an age as possible it is never too late to start investing.  I myself was around 40 years old when I became serious about investing, but it would have been so much easier had I started in my twenties or even sooner. I always thought I could not afford it – the truth is looking back I just didn’t want to afford it. That was a big mistake and wish I had someone in my life to teach me and push me into investing.

People in general (including my past self) always seem to have unlimited excuses for not investing.  Investing is not a difficult thing to do. The hardest part is staying invested. Most of us have a tendency to follow the herd so every time the herd starts stampeding for the exits most of us tend to follow. This is usually the exact opposite thing we should do. The brave bull that stays owns the pasture when the dust clears.

So my message is you can do it. Push yourself to start investing and teach your children how to do it. In turn hopefully they will teach their children and pass on the knowledge through generations.

Start slowly – Set your goals that you can easily reach – say $1,000 at a time. Once you reach that goal do it again and again. Before you know it you have done it 25, 50 or 100 times and now you are on your way to Independence.


Thoughts or comments on your own personal experiences? We would love you to share them with us! Please comment below.