DIY Investing

DIY Investing can be accomplished by over 99% of the population – Cut out the middle man and add to your savings


Stock Brokers and Financial Advisors – Why they are not your friend

The financial community, especially the “Financial Advisors” and those that make a very good living off of “managing “ other people’s money for them have a vested interest in convincing us there is something “magical” about what they are capable of doing. News

Alert – It’s not!

In fact I am sure you can come out ahead by doing it yourself and eliminating all the hidden fees and commissions they charge you. You can bet they will never recommend individual stocks for you because they cannot make streams of money from you. Some “advisors” even charge a flat percentage of your portfolio for “managing” your portfolios. That is correct, they will make money whether you lose money or make money their cut keeps rolling in.  Over the years this can lead to thousands of dollars that are siphoned off in the form of direct and indirect or even “hidden” fees. So, if they are not my friend then who is? Quick, run to the nearest mirror and tell me what you see. Once again you are correct – it is you. You are the one that is your true friend. You are the one person that you can always count on to have your best interest in mind.

DIY Investing

Why not just take control and invest your own money? I know that not everyone is capable of handling their own affairs but I am willing to bet 99% of you are. Take the time to educate yourself and you will be rewarded many times over. Like any other area in life perhaps the hardest part is learning and familiarizing yourself with the terminology. Once you have that down you will discover every penny you can invest instead of spending can earn you a lifetime of income……………..

So take the time to learn how to invest and save those fees for your own income.



Ever Heard of the 4% Rule?

“Don’t Play by the Rules of Others ! “

Don’t Play by the Rules of Others !

The 4% Rule states that in order to make your savings last you should not withdraw more than 4% of the total amount saved. But for Dividend Income Investors does this rule apply? Dividend Income Investors don’t let someones silly and arbitrary rules interfere with our financial lives !

Let’s say you earn just over $100,000 per year in income and you have saved $1,000,000 dollars for your retirement – under the 4% rule you will be allowed to withdraw a yearly income of $40,000 from your savings account to live on. So when you add the average Social Security payment of $14,000( $28,000 for a couple) to it this gives you a total retirement income of $54,000 ($68,000 for a couple) . Not bad but really not a great amount, especially for an individual or couple that was used to bringing in over $100,000 per year in income pre-retirement. This means you have to reduce your living expense by $32,000 to $46,000 per year to make ends meet. Having been talked into investing into a mix of Bonds, Index Funds, International stocks for their “safety” you are lucky if your total return even keeps up with the 4% rule over the course of your retirement. This would be the subject of another article but these investment vehicles serve the person that sold them to you more than serving you.

The Dividend Income Investor (DII) on the other hand wants a little more out of life. As a DII investor you know you can beat this 4% rule by investing in income generating stocks of 6-10% giving you a higher income and still allowing for growth of your portfolio to keep up and even exceed inflation levels.

In our example the Dividend Income Investor has the same parameters as the average 4% rule person above. That is , He or she currently earns about $100,000 per year in income, and will get the identical amounts of Social Security. He or she has amassed $1,000,000 in savings but the difference is because they have applied the Dividend Income Investors principles to investing they know they are currently generating over 8% in dividends per year ( I am personally just under 10% in my own accounts so yes it is a reasonable assumption).

This leads me to the rate of withdrawal I plan to take personally which is 6%. An why not? I am earning well over the 6% in Dividends each year. In fact not only can I take the 6% but my style of Income Investing still allows a portfolio growth of almost the entire 4% rule !  At $1,000,000 you could safely withdraw $60,000 per year and when added to the Social Security gives you a combined income of $74,000 (Single) to $88,000 (Couple). A much more reasonable amount to cut expenses back in retirement so that you  do not have to drastically change your lifestyle.

But wait, there’s more ! Remember, you are  not withdrawing your entire yield so your portfolio is still growing and compounding on the almost 4%  of Dividend yields you are not withdrawing. This allows you to not only grow your portfolio but allows you to increase the amount of withdrawals to keep up with inflation. Your  retirement will not decrease your lifestyle but will enhance it over the course of your lifetime. Using the example above your portfolio your nest egg should grow to $1,040,000 the first year and to over $1,080,000 the second year so as you can see there is a built in “adjustment” for inflation. That extra $80,000 would produce $600 per month more based on the 9% yield.This is just in two years.  This would help ensure you can adjust your income to cover potential inflation over the years.

The moral here is to not let someone Else’s rules dictate your life. We have to take charge of our on lives and our own finances because only we know the direction we want to take in life.


Thoughts or Comments? Please share your own personal experiences 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.



How Much is Each $1000 you Invest Worth?

Thinking in terms of small achievements are easier for some of to understand so hopefully this will give you the incentive you may need to get started with your savings.

Using a 8% yield as an example ( my personal target minimum yield) then say the purchase price of the stock is $10 and the annual dividend is .80 then — $1,000 divided by the $10 stock price equals 100 shares of the stock purchased.  To determine our dividend income we would multiply the 100 shares by .80 = $80 per year or $6.66 per month (I like to express my income in monthly terms because that is how most of us best relates)

But, if you are reinvesting the dividend income then – assuming the share price stays the same for simplicity purposes you would have added an additional 8 shares of the stock.

So the second year you have 108 shares x .80 = $86.40 or $7.20 !   By the time you reach twenty year s you are bringing in over $28.70 per month, $345 per year and you will now own 431 Shares valued  at $4,310 dollars!

Now if you wanted to you could bring in $28.70 per month for the rest of your life and still have that $4,310 to pass on to your loved ones.

Now it’s easy to determine what ifs

I did this ten times = $ 287 per month

If I did this 20 times = $ 574 per month

Or .. If I did this 50 times =  $ 1,435 per month !

Or even .. 100 times = $ 2,870 per month !

So now that you know the secret start saving and investing $1000 at a time to meet your goals for Income for life!   Thinking in terms of small achievements are easier for some of to understand so hopefully this will give you the incentive you may need to get started with your savings.

I hope you enjoyed this article and encourage you to share your thoughts with the author.


Investing For Specific Goals

“She wanted to earn enough money to cover the rent of the apartment for the rest of her life.”

A Poster on a popular Money Forum I follow had asked for advice. She had just sold her home and had $225,000 in proceeds to Invest. Her dilemma was that her Financial Advisor seemed to be less than enthusiastic about helping her. She was selling the home and moving into an apartment. The apartment’s rental rate was

e$1,300 per month. She wanted to earn enough money to cover the rent of the apartment for the rest of her life. Wisely – She didn’t want to be told “Invest in Bonds” or Invest in an Index Fund because she knew it would not give her the Income she needed to cover her rent.

I knew I could help her. I had recently been through a similar experience. So I shared with her on how I would handle the problem.

First thing to be done is to determine how much of a yield would be required to generate the $1,300 a month in rent.  So doing a quick check shows that she needs to earn a 7% yield from her investments in order to the required $1,300 per month.

Here was my advice:

Buy individual stocks. Use the Dividend Income Method. That is stocks that pay higher yields than most because she needs income today – not twenty years from now.

For Diversity and risk mitigation we identified 27 stocks of various yields that would help reduce the risk of losing large amounts of money should the unthinkable happen. This came out to an average  amount of $8,333 per stock. I did end up weighting the higher yields slightly to ensure she met her goal.

So what I ended up with is: 10 Stocks @ $9,000 each, 16 stocks @ $8,000 each and 1 stock @ $7,000.

Here are my choices:

Continue reading “Investing For Specific Goals”