What are your chances of getting rich? That depends to a large extent on where you fall in what the author of today’s article calls the “Getting Rich Quadrant”, which considers the combination of one’s income (high or low) and cost of living (high or low) – and depending on your particular combination, you could be well on your way to self-created riches… or facing a disastrous situation. For more, CLICK HERE.
When it comes to investing for retirement, the author of today’s article argues that “While there has been an explosion in passive investing in recent years, investing specifically in your area of expertise can give you a leg up.” How? By using a self-directed account that allows you to make investments in alternative asset classes associated with that area of expertise. However, the author cautions, while “The scope of what you can do with a self-directed account is broad…the IRS does have rules around what you cannot do with an IRA or 401(k) plan.” For more, CLICK HERE.
“With powerful demographic forces keeping interest rates lower for longer, investors (and financial advisors!) need to adjust their thinking for the future,” declares the author of today’s article, who cites a report from Morgan Stanley warning that, over the next 10 years, returns from a traditional 60/40 portfolio will be close to a century low. So what can investors do to get higher yields in this environment? The author recommends a particular type of investment structure offering much higher yields. For more, CLICK HERE.
With longer life expectancies and lower interest rates, among other factors, the traditional 60/40 portfolio “just won’t be able to cut it anymore”, according to some financial experts. Instead, greater allocations to equities will be needed – and dividend stocks will become the new bonds for retirement. One place investors can look for higher yields for their retirement portfolios? Business Development Companies, which are averaging annual yields of nearly 10%. For more, CLICK HERE.
“The only thing that matters to me in the short-term is my dividends,” declares the author of today’s article when it comes to his retirement portfolio. As a result, he only checks the value of his retirement portfolio once a year. Between those yearly reviews, he notes, “I’m collecting an exponentially growing stream of safe dividends that put me closer to my dream of a dividend funded financial independence closer with every weekly buy and limit order that fills.” For seven high-yield stocks he is adding to his retirement portfolio, CLICK HERE.
Despite having spent decades studying money and finances, the author of today’s article reveals that “it took [him] a decade or more to learn many of life’s most important money lessons and, indeed, some key insights have only come to [him] in recent years.” Among those lessons are “the key to a big portfolio” and what should be – and what shouldn’t be – one’s top financial goal. For 10 money lessons the author has learned over the years – and wishes his younger self had known – CLICK HERE.
Have you seen this market over the last few years?
It’s been moving higher and higher and higher. The famous saying goes something like “The stock market always climbs a wall of worry”.
Sounds about right.
With the record breaking economic run we’re on, the naysayers are calling for a correction, or recession.
They’re rooting for the market to fall.
I’ve got to be honest, I don’t see it.
Just look at this chart.
The market has been trending higher and higher… and I just see business getting better and better.
It won’t go on forever, but for now, I’m not worried!
BUT if the market does pull back, you can bet I’ll be buying with both hands.
That said, I do have a strategy for investing in today’s market…
3 Stocks On FIRE!
I’ve identified 3 stocks that I absolutely love.
Why do I like them?
It’s simple… they’re big well run businesses… that thrive in good times, and survive the bad times.
They’re growing steadily, and are strong performers within their industry.
Better still, they’re throwing off nice fat dividends.
The first one pays a fat yield and has a Huge WORLD renowned investor already holding the stock. It might be the best dividend stock ever…
The second stock is an amazing company, but right now the stock is ON SALE… it’s the perfect time to scoop it up.
The third and final stock trades for less than $10 and pays a HUGE dividend… It’s so big, it’s almost illegal!
I’ll tell you about all three in a moment!
First, let me let you in on a little secret…
How to buy the best dividend stock
Buying dividend stocks isn’t like buying other stocks. No Sir.
You have to take into account a number of different “Angles”… Plus you need to think more about the future… FAR into the future.
What do I mean by that?
It’s simple, to get the biggest gains from a dividend stock you need to hold it for years… and ideally decades!
The perfect story to share WHY… is looking at See’s Candy.
Sees candy was bought decades ago by the famed investor Warren Buffett. As you know his favorite holding period is “Forever”… and you’ll see why in a second.
Buffett bought up See’s candy and dropped a pretty penny for the chocolatier.
But, don’t cry for Buffett… he knew something others didn’t.. He knew See’s is a well run business, and it’s growing.
Fast forward to today… See’s candy pays Buffett a fat dividend every year… here’s the kicker… he now gets more in the dividend than he ORIGINALLY INVESTED!
Warren Buffett wasn’t buying chocolate… he was making GOLD!
Think about it…
That’s like you dumping $10,000 into a stock… and now earning $10,000 a YEAR in dividends.
The return is Astronomical!
So, when you’re looking for the best dividend stock you need to think long term.
But… there are a few other angles… like I mentioned.
Angle number one is a big yield.
If you buy a big yield, it means your capital could be at risk…. But if you buy a low yield, you don’t get much of a return. Balance here is critical.
Angle number two is dividend growth.
A nice dividend is one thing… but is it growing? Is it growing every year? Dividends stocks that don’t grow are OK to hold. But, you need to know why you’re owning the stock.
Angle number 3 is the growth of the stock.
This is less critical, but it never hurts to make a nice return from a dividend… AND see the value of your stock go up and up! For example, I’ve got one stock I own (I’ll write about in a future article, I’m sure)… that has climbed in value over 200%!
Not bad considering it’s paid out a steady dividend too.
The fourth and final angle is Options trading.
This is a really complex area to get into.
I know lots of Dividend investors that also trade options on their underlying dividend stock to make even greater returns.
That’s masters level trading… so we won’t cover it here… but maybe in a future article! Just one other thing to consider!
So, there’s lots to think about when picking a great dividend stock…
Today, I’m going to make it easy on you. Here are three dividend stocks I love. PLUS, I OWN them in my own portfolio! Yes, I actually invested money in each one of these stocks.
Here’s stock number 1…
The Best Stock Ever…
Could this be the best dividend stock ever?
It might be, and let me tell you why…
This company is a Major player in the banking industry.
This company has it’s fingers in dozens of different businesses like: wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, computer and data processing services, investment advisory services, mortgage-backed securities servicing and venture capital investment
According to Bankrate.com they are the 4th largest bank in the United States.
They have a major investor in Warren Buffett who owns almost $19 billion of this stock!
Add to that, the fact the company pays a huge dividend of 4.25% (massive for a bank)… and you see why I love this stock.
Who is it?
It’s Wells Fargo & Co (WFC).
Yes, I know it’s been dragged through the mud with the bank account scandals and shenanigans. But let me share this with you…
During this time the dividend went up. 5 years ago it was $0.375 cents per share… Now it’s $0.51.
For those of you fast on a calculator, that’s a 26.4% growth rate!
Wells Fargo isn’t the only stock I own…
This stock is on sale, get it NOW!
This next stock is getting hit hard… all for reasons beyond its control.
But, longterm, it’s going to be a HUGE stock… and pay a nice dividend.
The company is YUM China (YUMC).
YUMC is a spinoff from YUM.
YUMC operates restaurants under the KFC, Pizza Hut, Taco Bell, East Dawning, Little Sheep, and COFFii & JOY brands.
They are the LARGEST (or one of the largest) operators of restaurants in all of China.
Revenue is up almost 28% in the last 4 years… and profits are up HUGE too!
So, why is this stock on sale right now?
Yes it’s a horrible virus. Yes people are dying from the disease. But, consider this… how long did the SARS scare last? A few months right.
Think about YUMC not in terms of the Virus today, but in terms of a business over the next 10 years.
10 years from now, people will struggle to remember the name CoronaVirus… and YUMC company will have spent a decade growing… and growing… and growing.
And, If you buy it today… you’ll be bragging to your friends how you bought YUMC when it was “On Sale!”
If you thought this company was a great deal, wait until I show you how to…
GRAB a 10% yield with a stock trading under $10
I know this stock idea goes against everything you read about in dividend investing.
High yield stocks are dangerous.
And I agree.
High Yield stocks are dangerous… but this one is worth the risk.
This company plays in the arbitrage space. What’s that mean? It means they borrow money at low rates, and buy other securities that pay a higher interest rate.
They get to keep the difference.
In this case, they borrow money on the cheap, and buy mortgage securities. Their exposure is if interest rates change too quickly. Then bad things start to happen.
The company I like, and own, has been doing this for years.
Better still, the stock price is a whopping 7 bucks and change… and even better, they pay a 10% yield!
I’ve been clipping this coupon for years now… and it’s money in the bank!
The stock hasn’t grown much, and the dividend does not increase, but the fat payoff is fantastic!
The company… MFA Financial (MFA).
Check them out!
3 Jaw dropping stocks you need to buy
I just outlined for you three great dividend paying stocks to buy.
Here’s the deal, I believe in building a portfolio of stocks. You don’t want to own just one… because if something happens you don’t want to lose your life savings!
This is why I just gave you three quality stocks to research, monitor… and if you like them as much as I do, BUY THEM!
Now a word of warning… please don’t ever just randomly buy stocks you read about online. Even the ones I recommend. You need to do your own research. Read the latest 10K and 10-Qs look at their press releases… Visit the website.
The nice thing is big organizations like these pump out tons of data and reports.
You’ll learn by doing your own research… plus as you monitor your businesses over the next few years, you’ll see them growing and changing… which is a really cool thing to see.
Remember there’s some safety in diversification… I suggest buying at least 10 or 15 different stocks… The key is picking the best ones and sticking with them forever!
You’d be surprised at the cost of “day trading” and the bite the tax man takes… those little fees and expenses really add up over the years.
Now, one last thought…
This is one of those weird things I like to point out to people… but I like to buy stocks on Tuesday around Lunch time.
I find market volatility is a bit lower… as monday craziness is over.
You also want to avoid placing orders at the open and at the close of the market.
You see, there can be a buildup of orders at the start and end of trading and it can cause a stock to whipsaw. Lots of volatility happens at the open and close.
So, I randomly picked Tuesday at lunch.
Is that a deal breaker… nope.
If you find a good stock on Wednesday, should you hold off buying it? Nope.
(But I would ask, what’s your rush? Remember you want to own things for decades. So, being in a rush and trying to game the market on a short term trade doesn’t fit our trading style.)
Will this guarantee you the best pricing? Again, Nope.
It’s just a rule of thumb I like to use and sometimes it works to my advantage!
The Next Three Great Stocks
Today, I gave you three stocks that I like.
I like them so much, I own them.
I’ve owned them for a while, and I’m always looking to add more to my portfolio. So, fair warning I might be buying more next week, next month, or next year.
But let me leave you with one critical piece of advice…
Remember there are tens of thousands of publicly traded companies… Some are good, some are bad, most are average… and a rare few are DIAMONDS!
Those great companies… those diamonds… are the ones we’re looking for.
They’re tough to find, and are often hidden. You’ll need to dig and do research and really work to uncover them.
So never stop prospecting.
To your success,
Zen Money News
Can you retire on the S&P 500 alone? This is the question that the author of today’s article examines, stating the following: “For investors just starting out and dollar-cost-averaging into their ROTH IRAs or 401ks, an S&P 500 Index Fund can be a good foundational holding. But what about as you age and prepare to retire? Can a well-diversified large cap stock fund such as the S&P 500 (or a “Total” Stock Index) provide you the ongoing income you will need in your later years?” For his analysis of – and answer to – this question, CLICK HERE.
Can something as simple as how a question is asked have a dramatic impact on an individual’s retirement wealth? A just-published study finds that, indeed, it can! In fact, the authors of the study found that “How a deceptively simple question gets asked can lead to an improvement in retirement wealth of up to 50%”. What is this “deceptively simple question” – and how can how it gets asked lead to such a significant improvement in retirement wealth? CLICK HERE.
Each week, the author of today’s article invests $500 of savings into two or three dividend-paying companies for his retirement portfolio. For a detailed examination of the companies under consideration for this week’s retirement portfolio purchases – and the screening process the author employs to make his weekly stock selections – CLICK HERE.