The Safety Valve Of Dividend Growth Investing [View article]
OK I admit it, I don't follow my portfolio religiously every day or even once a week. Some times I don't even check on it for a few weeks at a time. I already have a full time job and even some part time work. Heck, I didn't even know that ConocoPhillips had frozen the dividend, (how do you find out that stuff)?
What I am doing is following a similar approach to what Tim outlined above. Looking for about 40 well diversified stable companies(dividend champs/contenders), each holding 2.5% of my portfolio. Keep reinvesting the dividends till it is producing 110% of my current generous budget. At which time I will stop reinvesting dividends and live on what they through off. I will also be able to devote more time to watching said portfolio.
My plan at that point would be to follow what other DGI have outlined, if there is a cut in dividend, slowing of growth, maybe even a freeze, sell and redeploy. I feel that if 1 to 5 companies stopped dividends and dropped to zero net worth all in one year, while disconcerting it would not be a 'have to go back to work' scenario. On the early retirement board, it seems that when the great recession hit, more people cut spending and scrimped a little bit instead of following the course as normal (which should have been the case if you follow your retirement calculator plans). I think human nature kicks in and people in general cut back to maintain their portfolio due to the shock of seeing it drop so much and so rapidly. I guess I got off on a tangent, but that is where I am heading.
I appreciate all the good information here on Seeking Alpha!
Dividend Growth Investing And The Reluctant Spouse [View article]
Echo the sentiment about the situation. I'm sorry this happened to you, but I have to admit, when you write your article on what you describe above, I will read it with great interest.
Look for a new report from Consumer Reports on the cost of prescription drugs at retail chains to create some buzz. Analysis by the publication shows that consumers can save as much as $100 a month by comparison shopping. Costco (COST) came in the low end of the scale for generic drug prices while CVS Caremark (CVS) was the highest. Drugstore chains (WAG, RAD) could face increasing pricing pressure with big box retailers more willing to use low prices at their pharmacies as a traffic driver. [View news story]
You do not need to be a member to use Costco pharmacy, but if you are an executive member you do get 2% back on the purchases made at the pharmacy. So spend an average of $460 a month in the warehouse and your membership is free ;)
BTW, it is always good to check prices and choose the one pharmacy with the best overall prices, some may be higher hopefully most will be lower, but it is always best to get all your medications at the same pharmacy, for safety and complete drug interaction checks.
What is funny is the article suggests that Costco uses their pharmacy prices as a 'loss leader' to get people in the store, I can attest that while they do love to have people come into the store (that is why no drive through) they do make a fair profit, similar to the rest of the warehouse (i.e. 14% mark up).
What is sad, for the competition, is that Costco can do this while offering an above average wage and better benefits than every other pharmacy chain who have gross margins of 21%+.
Dividend Investors - Don't Just Stand There - Do Something [View article]
" However, my PRIMARY goal is rising income. The fact that I may happen to end up with rising share prices is (at best, for me) a SECONDARY goal, especially as I do not buy with the planned intent to sell."
Totally agree, I think you have to have specific 'triggers' of when to sell, maybe a dividend cut, or suspension, but not necessarily the price of the stock. If said stock is still paying out your expected dividend and incorporating your expected dividend increases, then you could potentially hold it forever.
I feel that if you need to generate $75k year gross (to live happily) and you are generating that with (not real numbers and not diversified, just example) 1000 shares of PEP, 1000 of JNJ, 1000 of O, 1000 of KO, etc, etc. Then as long as I am generating that $75k and the dividend growth is keeping up and hopefully surpassing inflation (depending on your plan) then who cares what the share price is, because I need 1000 shares of PEP generating $x.xx dividend, doesn't matter if it is $75/share or $110 share.
That is why the key for me is watching for dividend cuts, suspensions, and the likelihood of such events.
A subsidiary of Ralcorp (CAG +0.2%) wins a courtroom battle against Frito-Lay (PEP +0.4%) over its used of bowl-shaped tortilla chips. The verdict allows Ralcorp to continue to make the private-label chips which bear a striking resemblance to Tostitos Scoops. [View news story]
I did know you could copyright/patent the shape of a chip. This just leaves it wide open for any chip maker to do the same thing. But I have to admit, I usually don't base my chip buying on the shape of the chip!
How Much Money Will You Need To Retire? [View article]
Or maybe a Value Added Tax, National Sales Tax, or whatever you want to call it, where you get a semi-hidden tax on your 'Tax Free' Roth IRA. Not directly taxing your IRA, 401(k), whatever, but the government still getting a slice in the end.
How Much Money Will You Need To Retire? [View article]
I think you need to focus on expenses during retirement. It seems that the 'needing 70-80%' of current income is a farce. If you are already saving >40% of your income to achieve early or just retirement, after you stop making those contributions, pay off your house, pay less taxes (no more ss being taken out of your check), etc. You wouldn't need 70% or more from current income.
My plan is to track my expenses for two years, add whatever extra I want for extra curricular activities, then a fudge factor of 10% added in. Once my dividends meet that figure, I will save 2x the annual amount in cash equivalents (for safety net) and then be done. Instead of having dividends reinvested, they will be directed to my expense cash account and viola life continues with me doing whatever I want. :)
Cincinnati Financial (CINF) won't be changing its dividend policy due to any tax hikes, CEO Steve Johnston tells conference-goers, noting a sizable number of the firm's investors are immune to taxes. CFO Mike Sewell says the insurer's relatively large (25%) allocation to equities is paying off, and the firm is sitting on $1B in unrealized portfolio gains. [View news story]
Is is time for Coca-Cola (KO) and PepsiCo (PEP) to take SodaStream (SODA) seriously? The Israeli juggernaut sells more than 10K machines a day with buyers presumably cutting back on their purchases of traditional soda drinks as they fall under the SodaStream consumables umbrella. While an ad campaign in the U.K. was pulled by regulators, the ad's afterlife on YouTube garnered the broad effect the company desired. A Super Bowl commercial planned for 2013 will deliver an even larger audience. Rumor: PepsiCo and Cuisinart may enter the market with machines in response to the SodaStream surge. [View news story]
I bought a soda stream last year or the year before for Christmas. It seemed to be a novelty item as the taste was never as good as the original, not even close (unless you like diet soda because they are all made with aspartame). Anyhow the kids had fun with it and now it just sits in the cupboard, it seems to be a hassle to find a CO2 replacement.
If Pepsi could make their product actually taste like Pepsi it might be worthwhile, but why cannibalize your own product line?
It is a gamble, as RAS says you could put all you money in and lose it and your job if Costco tanks, but I don't think it will (but neither did Enron employees).
If you move into 100% Costco stock you could be locked out of your original investments for 30 days, may or may not be an issue. You also have to figure that Costco stock will drop by $7 in price when the div-ex date comes or on the dividend pay date. Do you want to hold it and wait for it to come back? (could be a long wait as the general consensus seemed to be that Costco was a bit over valued before the special dividend announcement) Do you want to re-balance to your original funds after? (see 30 day rule above)
I believe the Dec. 4th date is for employees trying to exchange funds in their 401(k) to Costco stock, via T. Rowe Price. I believe they do their 'bulk' Costco purchases on Wednesday. So the 10th will be too late.
I was told by T. Rowe Price though, that you can actually request the dividend to be paid to you instead of reinvesting, even though it is in a 401(k), and not be subject to the 10% penalty if you are under 59.5 y.o., only taxes.
Dividend Payers In The S&P 500 May Become More Scarce In 2013 [View article]
While I am a number of years from retirement, I too plan on keeping steady. Mainly because based on my assumptions, if I am generating $80k in dividends yearly to live off with standard deductions for a married couple and other tax strategies I hope to be at a similar tax rate as the current 15% on dividends. But anything can change in 10 years or so.
The Safety Valve Of Dividend Growth Investing [View article]
Heck, I didn't even know that ConocoPhillips had frozen the dividend, (how do you find out that stuff)?
What I am doing is following a similar approach to what Tim outlined above. Looking for about 40 well diversified stable companies(dividend champs/contenders), each holding 2.5% of my portfolio. Keep reinvesting the dividends till it is producing 110% of my current generous budget. At which time I will stop reinvesting dividends and live on what they through off. I will also be able to devote more time to watching said portfolio.
My plan at that point would be to follow what other DGI have outlined, if there is a cut in dividend, slowing of growth, maybe even a freeze, sell and redeploy. I feel that if 1 to 5 companies stopped dividends and dropped to zero net worth all in one year, while disconcerting it would not be a 'have to go back to work' scenario.
On the early retirement board, it seems that when the great recession hit, more people cut spending and scrimped a little bit instead of following the course as normal (which should have been the case if you follow your retirement calculator plans). I think human nature kicks in and people in general cut back to maintain their portfolio due to the shock of seeing it drop so much and so rapidly. I guess I got off on a tangent, but that is where I am heading.
I appreciate all the good information here on Seeking Alpha!
Dividend Growth Investing And The Reluctant Spouse [View article]
I'm sorry this happened to you, but I have to admit, when you write your article on what you describe above, I will read it with great interest.
Look for a new report from Consumer Reports on the cost of prescription drugs at retail chains to create some buzz. Analysis by the publication shows that consumers can save as much as $100 a month by comparison shopping. Costco (COST) came in the low end of the scale for generic drug prices while CVS Caremark (CVS) was the highest. Drugstore chains (WAG, RAD) could face increasing pricing pressure with big box retailers more willing to use low prices at their pharmacies as a traffic driver. [View news story]
BTW, it is always good to check prices and choose the one pharmacy with the best overall prices, some may be higher hopefully most will be lower, but it is always best to get all your medications at the same pharmacy, for safety and complete drug interaction checks.
What is funny is the article suggests that Costco uses their pharmacy prices as a 'loss leader' to get people in the store, I can attest that while they do love to have people come into the store (that is why no drive through) they do make a fair profit, similar to the rest of the warehouse (i.e. 14% mark up).
What is sad, for the competition, is that Costco can do this while offering an above average wage and better benefits than every other pharmacy chain who have gross margins of 21%+.
Dividend Investors - Don't Just Stand There - Do Something [View article]
Totally agree, I think you have to have specific 'triggers' of when to sell, maybe a dividend cut, or suspension, but not necessarily the price of the stock. If said stock is still paying out your expected dividend and incorporating your expected dividend increases, then you could potentially hold it forever.
I feel that if you need to generate $75k year gross (to live happily) and you are generating that with (not real numbers and not diversified, just example) 1000 shares of PEP, 1000 of JNJ, 1000 of O, 1000 of KO, etc, etc. Then as long as I am generating that $75k and the dividend growth is keeping up and hopefully surpassing inflation (depending on your plan) then who cares what the share price is, because I need 1000 shares of PEP generating $x.xx dividend, doesn't matter if it is $75/share or $110 share.
That is why the key for me is watching for dividend cuts, suspensions, and the likelihood of such events.
A subsidiary of Ralcorp (CAG +0.2%) wins a courtroom battle against Frito-Lay (PEP +0.4%) over its used of bowl-shaped tortilla chips. The verdict allows Ralcorp to continue to make the private-label chips which bear a striking resemblance to Tostitos Scoops. [View news story]
How Much Money Will You Need To Retire? [View article]
How Much Money Will You Need To Retire? [View article]
How Much Money Will You Need To Retire? [View article]
My plan is to track my expenses for two years, add whatever extra I want for extra curricular activities, then a fudge factor of 10% added in. Once my dividends meet that figure, I will save 2x the annual amount in cash equivalents (for safety net) and then be done. Instead of having dividends reinvested, they will be directed to my expense cash account and viola life continues with me doing whatever I want. :)
Now to look at Clay King's article.....
The Scaredy Cat Vanguard Dividend Appreciation Portfolio [View article]
Cincinnati Financial (CINF) won't be changing its dividend policy due to any tax hikes, CEO Steve Johnston tells conference-goers, noting a sizable number of the firm's investors are immune to taxes. CFO Mike Sewell says the insurer's relatively large (25%) allocation to equities is paying off, and the firm is sitting on $1B in unrealized portfolio gains. [View news story]
Is is time for Coca-Cola (KO) and PepsiCo (PEP) to take SodaStream (SODA) seriously? The Israeli juggernaut sells more than 10K machines a day with buyers presumably cutting back on their purchases of traditional soda drinks as they fall under the SodaStream consumables umbrella. While an ad campaign in the U.K. was pulled by regulators, the ad's afterlife on YouTube garnered the broad effect the company desired. A Super Bowl commercial planned for 2013 will deliver an even larger audience. Rumor: PepsiCo and Cuisinart may enter the market with machines in response to the SodaStream surge. [View news story]
If Pepsi could make their product actually taste like Pepsi it might be worthwhile, but why cannibalize your own product line?
Costco: Special Dividend Alert [View article]
If you move into 100% Costco stock you could be locked out of your original investments for 30 days, may or may not be an issue. You also have to figure that Costco stock will drop by $7 in price when the div-ex date comes or on the dividend pay date. Do you want to hold it and wait for it to come back? (could be a long wait as the general consensus seemed to be that Costco was a bit over valued before the special dividend announcement) Do you want to re-balance to your original funds after? (see 30 day rule above)
Costco: Special Dividend Alert [View article]
I was told by T. Rowe Price though, that you can actually request the dividend to be paid to you instead of reinvesting, even though it is in a 401(k), and not be subject to the 10% penalty if you are under 59.5 y.o., only taxes.
Can anyone confirm that?
Dividend Payers In The S&P 500 May Become More Scarce In 2013 [View article]
But anything can change in 10 years or so.
Investing Means 6, 12 And 18 Years, Not Months [View article]