Multiple Income Streams

“Why should you actively cultivate multiple sources of income?”

 

Multiple Incomes- Exactly what is Multiple Income Streams ?  Developing multiple income streams is a way to enhance your present income, help save for the future and provide an “insurance policy” to make sure that if the unthinkable happens you will still have income coming in from various sources.

Why everyone should develop multiple sources of Income for personal Safety

Everyone at one point in their lives look for ways to earn a living. We have compiled an ever growing list of ways to make money, some you know, some will shock you.

The best ways I believe are the “Passive Income” Ways. Invest the money, the time or the expertise and for the most part put it on auto pilot and let the money flow in. Even if you are modestly successful you could potentially provide yourself a decent steady income for the rest of your life.

How many Income Streams should you develop? I recommend developing as many as you can until you are confident that no matter what is thrown at you in life you know that you can always provide for you and your family.

Recently I have turned my efforts to just this, discovering as many possible ways to make money as I can.  Recent events have shown me that single sources of incomes for almost anyone can spell gloom and doom. Most people in America although in the recent past felt as though they were secure financially if they had a good paying job, a nice house and a decent savings in an IRA or a 401K etc. But the “Great Recession” that started in 2008 and has lasted through the present has dispelled this myth. Many of us followed all the advice of the so called “Financial Experts” and where did that get us? For many it was disastrous, for others it has postponed or perhaps even cancelled our Retirement plans.

The answer – Well everyone might have a different answer but for me the answer is to have as many different sources of incomes as possible, especially from the “Passive Income” sources. Now one note on “Passive Income” as you read on you will see that some familiar types of investments are included in the “Passive Income” category but use extreme caution here, that’s not to say they are not good passive sources of income but as most know these sources can disappear quickly. A good example is CD’s, they were relatively safe and providing a great source of income for many Americans. As many discovered though the CD rates can go from a great return of say 10% to 1% almost overnight. When we discuss CD’s later on we will explore strategies to help mitigate this radical loss of income.

Why should you actively cultivate multiple sources of income? As explained previously there are many unexpected pitfalls that just beyond your control. Will you wake up one morning with the value of your home cut in half? Will the next economic bubble burst and take you with it? Will the bank or financial institution you entrusted your life savings to suddenly be declared a Ponzi scheme? Who knows but you owe it to yourself to be prepared. Not so much by saving your way to retirement but by ensuring that you have multiple incomes for life.  Does this mean you should stop saving for Retirement and personal goals?, absolutely not.  Everything the “financial Experts” have taught are true for the most part it’s just that they have left out one of the most important aspects of ensuring your personal financial welfare – your income. Traditional wisdom teaches us to get a good education or to obtain a skill that will get us a great job and provide the income we need. But, Traditional Wisdom is only half the equation in today’s environment. You must go beyond the traditional good job and savings route.

I saw my father work his whole life and save every penny he could only to see it all disappear when my mother fell ill. Now of course he did the right thing and so will the majority of us when face with tragic  circumstances  , but what if he had cultivated multiple sources of income so that when tragedy fell he not only had the savings to cover the tragedy but the income to keep up his lifestyle?

The whole goal is to never have to worry about the loss of a source of income. After all when it comes to investing all the experts say the key to safety is DIVERSITY and why shouldn’t the same hold true with the most important aspect of your life, your income sources? The idea  is to have MULTIPLE sources of income coming in at all times. Doesn’t it make sense to help insure the safety of your family by simply taking the time to set up easy sources of income? No one is asking you to quit your job or to radically change your life just to take a little energy now and devote it to setting up Multiple Income Sources!

I categorize income into three types

  • Active Income – Active income requires you to show up to work each day and actively participate to earn a salary or income.
  • Investment Income – Investment Income is a type of Passive Income with a few exceptions like that of Day Traders or active Stock Traders etc. Investment Income can require very little effort on your part but you can devote as little or as much effort into as you wish.
  • Passive Income – Passive Income requires very little effort on your part once you have set up your business or income system. Passive Income is the Holy Grail of the Multiple Income Sources. A great source of passive income has been made possible by the internet. There are a great number of people making thousands and even millions from things like Blogging, Niche Websites and posting how to or entertaining videos on You Tube. There is no reason why you can’t join in and be a part of it.

The Pitfalls of “ Financial Advisors”

First let me say there are a few great Financial Advisors. These are the exceptions however and while most talk a good talk for the most part they fail to deliver. Financial Advisors basically earn their money in one of two ways and even in both ways in most cases. The first way is they earn commissions from the Funds they steer you to invest in. Now usually they have some really good funds to invest in but I personally am not a big fan of Mutual Funds. Mutual Funds charge you to invest in their portfolios, there can be penalties for withdrawing money too soon, they have requirements that they must meet as directed by their charters such as they have to invest in certain percentages of a certain type of stock or have to hold so much in cash and so on. Mutual Funds rarely beat the overall market on a consistent basis.

The second way is that they charge a fee or percentage of your portfolio for actively managing your account.  This can be good as the more your account grows the more money they make.  But they can also earn a percentage of your portfolio even when your money drops, so either way they are making money off of yours.

Another way of Investing in Mutual Funds is to buy them directly from a Fund Company like Fidelity. Cut out the middle man so to speak. This can be good for those that don’t mind doing a little homework.

My favorite way to invest in the Stock Market is to buy the funds directly through a company like Charles Schwab. I only buy Dividend paying name brand stocks, that is they must pay a dividend and they must be  a company that has a long history of dividends and must be a name I recognize. Examples are Coca Cola, IBM, 3-M, Exxon Mobile, Proctor & Gamble etc.

I buy these stocks ( I recommend at least 15 to start and a goal of 30 stocks in differing sectors like Tech, Communications, Energy, Utilities, etc  for safe diversity ) and except for a quarterly review hold them forever. The only way I sell is if I believe that something major will negatively affect the company for a long time or if the products they sell are no longer relevant. An example of a company that has failed to adapt to modern technology for example would be Kodak – once a dominate force in cameras – that has now become obsolete and failed to quickly adapt.

 

 Some potential  Income Sources :

  1. Internet Store Sales
  2. Internet revenue from blogs of informational websites
  3. Dividend Stock Income
  4. Investing in Real Estate
  5. Part Time Jobs
  6. Consulting
  7. Turn your hobby into an income
  8. Trading Stocks
  9. Become a “Wheeler & Dealer” bargain, trade and sell for profit
  10. Open a business on the side of your regular job, example : a food or service  Franchise ( I do Not recommend retail businesses )
  11. Become a Real Estate agent on the side.
  12. Flip Houses
  13. Weekly or  monthly yard sales
  14. open an Ebay or Etsy business
  15. Become a Handyman
  16. Write and sell books/e-books
  17. Teach others how to do what you are an expert at.

 

 As you can see there are many ways to earn extra income but the important thing here is to develop the income sources now before you actually need them. By doing this now you give yourself peace of mind, it will serve as an insurance policy for you and you family and can help you save more money for your future through the extra income generated.

 

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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.

 

 

Three Types of High Yield Stocks

“So what are you waiting for ? Put some high yield into your portfolio and boost your income performance today.”

Some people are so afraid of High Yield Stocks that they shy away from them. The end result being that they have cost themselves thousands of dollars in potential income.

The thinking goes because most of the blue chips only pay 2-3% in dividend yields and the average for the S&P 500 is around 2.5% that anything beyond that is “High Risk.”

Being prudent and cautious in the investing world is a good trait but come on folks, use a little bit of common sense also ! Why don’t “Blue Chip” stocks pay higher dividends then? The main reason is because these stocks are highly desirable and the demand for the stock drives up the stock price and the higher the stock price, well it cause the yield to decline. Another factor is that these behemoths are for the most part very mature and as such grow slower that the younger, smaller and more nimble companies. There really is no comparison.

There are basically three types of high yielding stocks:

  1. They are in naturally higher yielding sectors. Example of these are REITs, MLPs, or BDCs. All sectors known for paying out higher yields. Other examples are Tobacco stocks, and communication stocks, think Phillip Morris, AT&T, and Verizon.
  2. Stocks that are in sectors that for no reason of their fundamentals have found themselves in an “out of favor” scenario with investors. Now admittedly you may want to take a very close look at these stocks first, but this is where you can usually pick up some bargains and buy stocks at higher yields than normal. An example is when a whole sector of stocks are out of favor for one reason or another. An example is tobacco  stocks. At one point everyone thought for sure tobacco was going away but the brave souls that stepped up and purchased the stocks are much wealthier for having the guts to buy them. Another are was the coal stocks, I myself saw 50 to 150% gains on these stocks because everyone convinced themselves that coal stocks were doomed. (And they might be in the very long run, but short term I knew coal could not go away over night) Just a little common sense and you could see how impossible and impracticable it would be to replace coal plants. Things like this takes years and decades to play out.
  3. The third type of high yielding stocks are the ones that are out of favor because of their poor company fundamentals. These of course are the stocks you want to avoid at all costs if you can. Leave the purchasing of these stocks to speculators and gamblers because you will not receive warning before they go bankrupt and rest assure the bigger players will always get out ahead of you and you will be left with nothing but memories.

So in my  opinion it is not only okay to seek out higher yields it is highly desirable. Even when I am purchasing “Foundation Stocks” and all things are equal I ALWAYS pick the stock that has the higher yield. Even a quarter or a half a percent can make the world of difference over a long period of time.

When purchasing stocks keep in mind your desired total yield for your portfolio. If you desire a 10% overall yield for your portfolio then seek out stocks that are at or near that yield. But when doing doing keep in mind why is it at that high of a yield. Is it simply because of a sector selloff  because there is a temporary factor that is causing the sell off? Is the stock in a normally higher yielding sector such as a BDC (Business Development Company) or a REIT (Real Estate Investment Trust ) ? Or the one you  have to be concerned with – because of the companies underlying fundamentals.

So bottom line – I don’t have any qualms about investing in higher yielding stocks but I am very careful and selective about it. It takes a little patience and a little more effort but the reward is certainly worth it. For an example say you have a portfolio producing 3% in income and you can push that up to 6% – well, look at the results:

$100,000 x 3% = $3,000 per year or $250 per month.

If you double that

$100,000 x6% = $6,000 per year or $500 per month.

And triple :

$100,000 x9% = $9,000 per year or $750 per month.

Now which one would serve you better? Personally I would choose the $750 per month in income ! Yet, very few do, because they have the misguided illusion that they will lose their money if they even attempt to invest in higher yielding stocks. In reality it is costing them big time not to invest at least a portion of their portfolios in higher yielding stocks.

I also want to briefly touch on one of the arguments against high yields. Many will argue that the stock cannot possibly sustain that high of a dividend. Well I have been doing this for many years now, and I can attest that most of the stocks I pick do in fact sustain their yields. One of my reasoning’s was that even if a particular stock cut it’s dividend 50% say from 9% to 4.5% it is  still a higher yield than the 3% stock ! Sure I have had a few disappointments with my methods but I am not married to the stocks. When a stock disappoints me I simply sell it and replace it with another stocks that has my desired yield. In many cases they are replaced with a yield that is even better than the original stock.

If this seems like something you would like to try for yourself but you are scared then what I would suggest is that you open a brand new brokerage account and use it to experiment  with. In this way you can limit your risk and it will give you a clear indication as to whether or not you can make it work for you. I would suggest picking maybe 5 stocks at most in a couple different sectors.

A sample pick of stocks might be:

  1. Whitestone REIT (WSR) – 10% – REIT
  2. Newtek Business Services (NEWT) – 9.1% – BDC
  3. Omega Healthcare Investors (OHI) -7.3% – REIT Senior and Assited Living
  4. Starwood Property Trust (STWD) – 8.88% –  REIT Diversified
  5. Vector Group (VGR) – – 7.64% – Tobacco & Real Estate

Note: Yields effective – May, 2017

So what are you waiting for ? Put some high yield into your portfolio and boost your income performance today.

 

 

 

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Keep Your Focus on the Objective

“Sometimes investors lose sight of what their objectives are”

Sometimes investors lose sight of what their objectives are. Yes, it is hard to believe I know, but even hardcore Dividend income Investors find it hard to remain focused one hundred percent of the time. This can be especially true when you see the value of your portfolio dropping like a rock.

This past couple of weeks have been especially trying for me as I am heavily weighted in REITs and other stocks that for what ever reason have been in steady declines. Our first instinct as human beings is the “Flee or Flight” response and perhaps from my own observation this tendency is a self preservation technique for most species. Given an opportunity I believe most of us as well as most animals choose to Flee when confronted  with danger. And this response makes a lot of sense when you stop and think about it. Fighting should be the last choice because of a great number of reasons not the least of which we might lose our life in the process. As Investors though, this is most  likely the wrong choice to make. We should usually decide to stand our ground and “fight”.

If you stop to think things out you can begin to focus on the right decisions even in the majority of the most trying times. Ask yourself just a few simple questions.

  • Why did I invest in this stock?
  • Has anything changed that would have persuaded me not to invest had I known prior to purchasing the stock?
  • Have I lost faith in the company and its fundamentals?
  • Will it still provide me with the income I expected?
  • Is it just this stock declining or the whole sector that is pulling back?

Why would I sell a stock just because some investors have decided that this sector might not do as well over a short period of time? Investors in general tend to panic and over-react to most situations. Other investors have different objectives than you do. If you are a Dividend Income Investor your objective is to generate high income. IF the other investor is a trader they make money by trading in and out of stocks  to maximize their profits and timing is very important for them. If you have a stock that is generating the income you desire and the fundamentals are still sound and the outlook for continuing that income then why would you want to sell?

When Stocks are on Sale – Go Shopping !

If you stop and think about it this is exactly the time you should be making stock purchases – not selling stocks. Why is it that when a stock drops in price the majority of investors run for the exits and sell their share? If you were at a regular store shopping for items you need would you turn and run out of the store because the store announce those products were now on sale for 5, 10 or 25 percent off? Of course not. buying stocks when others are selling gives you advantages over the others. You are purchasing the stock with a lower cost basis and at a higher yield than normal. Both are great for the long term.

As an example let’s look at the returns of a stock that normally yields 5% and because the stock drops in value you can now purchase it for 6.25%:

We invest $10,000 into the 5% yield of XYZ. The shares are valued at $50 and pays a dividend of 2.50 per share.

$10,000 would buy 200 shares and would provide you with $500 per year in income.

Now the same XYZ stock drops down to $40 per share and is now yielding 6.25%

$10,000 would purchase 250 shares and would provide you with $625 per year in income !

So the motto oft his story ? Stay Focused and keep your sight on what your true objectives are. it is easy to get caught up in the hype and the panic of others but if you just stay calm, take a deep breath and make the “Logical” choice as a Dividend Income Investor you will be rewarded for years to come !

 

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I would also appreciate hearing your thoughts and comments !

 

REITS Vs Real Estate

‘Investing does not have to be complicated but it seems many of us want to make it so.’

I read an article recently where the author tried to make the point that investing in REITs (Real Estate Investment Trusts)  was better than investing in Real Estate. I didn’t buy all of his arguments and believe his conclusions were flawed. Just so we are clear I own many REITs and I have owned and still own rental properties.

Which is better ? Investing in REITs or Real Estate.  The answer – There is no simple answer. I love REITs. They have many advantages over Real Estate properties and they have many advantages over general equity stocks. While I will not discuss all the advantages and disadvantages of REITs here (Look for a future article – Why I love REITs) I will point out the number one advantage of owning a REIT – Its higher yield. Remember your two best friends? That’s right Mr. Time and Mr. Yield. Together you will probably find no better friends, at least in the investing world.

But let’s compare his arguments for REITs with that of Real Estate:

REITs are less risky, better diversified, liquid and cost-efficient

Less risky ? That is very subjective, Real Estate is not any more of a risk than REITs, in fact I would argue that Real Estate is in fact less risky of an investment when done by someone who knows what they are doing. Better Diversified? Again, this one just not make sense, but I believe I see what he is trying to say but comparing a basket of stocks with a real estate investment is comparing apples to oranges. He also states that unless you have a Hundred million dollars you cannot possibly be well diversified – I believe he pulled the figure out of a hat somewhere! Besides I know people that own dozens of properties in many locations and in some cases differing types of properties so again I do not agree. Cost efficient ? I don’t understand his argument here so I really don’t know how to respond except – ???? The one part of this statement I do agree with is that of Liquidity. It is generally much easier to buy and sell REITs than Real Estate.

REITs have historically outperformed private real estate

Pure Hogwash ! In fact in his supporting paragraph he compares the performance of REITS  to the S&P 500, and Private Real Estate Funds, not to private real estate investors. Big difference here. I have personally known private investors that have made over 100% returns on real estate deals.

REITs provide REAL passive income

Well, okay. I’ll buy that unless you pay a property manager to manage your properties you will have to put in more work, but real estate investing is certainly no 9-5 job ! But this even tries to make an argument that you will end having to take on a second job. Totally ridiculous statement in my opinion.

REITs are not necessarily more volatile

Again he tries to compare REITs with Private Real Estate without even comparing the two. He uses various metrics to point out that REITs are not more volatile that Private Real Estate but does not show any examples of Private Real Estate volatility. The thing is I do agree that REITs are not that volatile but neither is real estate. Yes, real estate does fluctuate but very few of us look up the expected price of our home or real estate investment very often. The truth is though your home more than likely will not drop in value over night because the FED has stated they may raise interest rates or because of tensions with some foreign country, or just because the whole stock market is in a general decline that day. I have no hard core proof to present, but my own experience tells me that Real Estate for the most part holds its value very well.
Then of course we have his conclusion:

My conclusion is that if you are not a professional real estate investor, forget any form of private real estate investing including crowdfunding, limited partnerships and direct ownership (excludes home, and other exceptions). And even if you are a professional investor, you might still be better off investing in REITs.

Obviously there exist many exceptions to this conclusion, and I am sure that private real estate makes more sense for one investor than another. But REITs have so many advantages over private real estate that it is difficult to argue against it. REITs are less risky, better diversified and liquid, but they have still managed to outperform private benchmarks in the past.

Read his “conclusion” carefully. It just does not make sense. Only professional real estate investors should invest in private real estate? Really? Does one have to be born into the Professional Real Estate Investing profession?

And then – Even if you are a professional real estate investor you might be better off investing in REITs?  Then he repeats his unsubstantiated arguments again to summarize his conclusion.

My Take.

I personally invest in both REITs and in Investment Properties. Yes, real estate takes more time and effort and yes, real estate can be difficult to sell sometimes, with these I agree. But no, Real Estate is not any more volatile than REITs and it is not only for “Real Estate Professionals”.

REITs are great investments also. Many of my REIT investments make great returns for me and I enjoy collecting yields ranging from 5% to 10%. Some of my current REITs are APTS, VTR, WPC, O, CCP, OHI and I am happy to own them, but they are very different than owning actual investment properties. I have generally achieved much greater returns investing in real estate than I ever could investing in only  REITs.

My advice.

If you are up to it and in a financial position to do so I recommend not choosing between the two but investing in both. Then you can experience the best of both worlds, more diversity in your investments, higher returns and still maintain some liquidity for your needs.

Investing does not have to be complicated but it seems many of us want to make it so.

Your thoughts and comments are welcome !

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In The Spotlight Vector Group

“Vector group has a relatively high Dividend yield, usually well over 7%”

The Vector Group Ltd. (VGR) is one of my favorite stocks but most don’t seem to appreciate it like I do.

You see Vector Group is one of those hated Tobacco companies. No, I don’t smoke, but this being a free country and somewhat of a free world I believe people have the God given right to enjoy their short time here on earth as they please as long as they do not harm others or infringe on others rights to pursue their own happiness. In other words I prefer to live and let live. I know very well that many of you will disagree with me and that’s okay but I doubt you will ever change my mind. I know, smoking is horrible and yes it kills people but so do a multitude of other things. In fact I am willing to bet that most of the people that hate tobacco stocks have a least a couple of vices of their own.  Anyway I believe I have made my point so I will not pursue this any longer.

There are also some that believe it is a dying industry and I can’t argue much there. Certainly as people become more educated as to the adverse effects of tobacco smokers are on the decline. Let’s have a look at what Vector is all about as a company.

Vector Group is the fourth largest Tobacco Company in America. It was founded in 1873 , one hundred and forty four years ago! It’s brands are Pyramid, Grand Prix, Liggett Select, Eagle 20’s and Eve. It’s brands are considered the discount brands in the tobacco industry. Last year its tobacco products had earnings (EBITDA) – ( Earnings before taxes)  of just under $270 Million dollars.

What many people don’t realize though is that Vector Group also engages in the Real Estate business. It’s Real Estate business is called New Valley. New valley owns a broad range of real estate properties and owns over 70% of Douglas Elliman Realty. It is the largest residential real estate brokerage firm in New York city and is the fourth largest firm in the United States with 90 offices and over 6000 agents. It also through its alliance with Knight Frank, has a network of over 400 offices in 55 countries with over 22,000 real estate agents. In addition it is also involved in property management services, title and settlement services and relocation services.

Performance :

If you Invested $100 in 2005 your return would be:

  • S&P 500 – $ 240.1
  • S&P Midcap – $276.0
  • Vector Group (VGR) -$ 558.6 !

Source : VGR Investor Relations

Okay, so now for the good part ! The investor stuff !

Vector group has a relatively high Dividend yield, usually well over 7%, and for most that would be sufficient but in addition to its great yield it also pays a “Stock Dividend” of 5% which means that if you own 1000 shares you receive an additional 50  shares of VGR stock !

There has been many articles as to why VGR cannot sustain their Dividend but it has managed to do so since 1995. Have a look for yourself at it’s Dividend History!

Vector Group Dividends

Now of course history is not indicative of future performance or results but as you can see the history is great.

Is it a little risky ? Compared to many stocks yes but compare to most – no. The rewards can be great for those that dare. I have owned this stock for two years now and continue to add on dips. It is one of my largest holdings. I look forward to receiving the dividends each quarter and I have a special glimmer in my eyes come September each year looking for those stock dividends which helps to increase my share count even more!

Looking for more stocks like this one ? Then you may want to check out Southside Bancshares

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In The Spotlight – Main Street Capital

I especially enjoy the “special dividend” each December. It feels like they are sending me a Christmas present of cash !

Main Street Capital (MAIN) is considered by many to be the the best of breed for Business Development Companies (BDCs).

Main Street Capital provides long term debt to middle market cap companies. According to a recent press release:

”  Main Street’s portfolio investments are typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in diverse industry sectors.  Main Street seeks to partner with entrepreneurs, business owners and management teams and generally provides “one stop” financing alternatives within its lower middle market portfolio.  Main Street’s lower middle market companies generally have annual revenues between $10 million and $150 million.  Main Street’s middle market debt investments are made in businesses that are generally larger in size than its lower middle market portfolio companies.”

Main is a Monthly Dividend payer ( current Dividend is 0.185 per share) or on an annual basis $2.22 per share. In addition it pays a Special Dividend twice a year in June and December of 0.27 cents per share.

Initial Public Offering (IPO) was October 2007 @ $15.00 per share – Since that time  Main has paid ($20.54 per share in cumulative Dividends)

Main Street Capital has been in my own portfolio for about two years now and quite frankly I wish I had gotten into it much sooner and at a much higher share count than I initially did. I continue to hold the stock and Drip the dividends. At around forty dollars per share at the time of this writing I find it just a little pricey but of course that’s the case with almost every desirable company. If I were initiating a position today I would recommend buying in slowly on any dips.

Some have been predicting with BDCs such as Main facing stiffer competition from banks that BDCs may have to cut their “special dividends”in the future but frankly that is not something I see happening any time soon. As a Dividend Income Investor I don’t make decisions based on what possibly happen but rather what is currently happening. If and when things begin to change – well I will deal with that when the time comes but right now I am enjoying collecting the great dividends that Main Street Capital is generating for my portfolio.

There may be better investments out there but you will have a very hard time finding them!

I especially enjoy the “special dividend” each December. It feels like they are sending me a Christmas present of cash !

 

For More Information visit Main Street Capital’s Website

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