Posted by Dave on February 25, 2014
I saw this book at the library a few weeks ago, and decided to pick it up. The title drew me in, because really, who wouldn’t want to “Strategically” invest – maybe the alternative is an elaborate dart-board system, where you only purchase stocks on a full moon? Without reading this book, I think I would still have a strategy – it just wouldn’t perhaps be as organized as is laid out in the 163 pages.
With both personal finance and fitness/diet books, a significant amount of the book is spent selling the reader on why the author’s way of thinking is different or better than everyone elses, and why you should employ their way of thinking on your life. This book is no different – 92 of the previously mentioned 163 pages are spent going into the history of the stock market and how messed up it has become in the last couple of decades. The author builds his case on why dividend-producing stocks are the best investment vehicle available. Given the title of the book, I would think that if the reader has gotten to the point of actually picking up the book and leafing through it – they are probably already sold on dividend investing and just looking for insight.
The last third of the book is the reason why I will be purchasing an e-book for future reference in my investing “career” ($13.16 on Kindle, $19.50 on Kobo….not sure how Kobo can sell for 50% higher) . There is a possibility that I haven’t read enough books on investing, but the way the author provides insight on stock analysis both from a technical perspective as well as what should be looked for off of the financial statements made his message easy to understand.
For someone interested in investing for cash-flows as I am, the book provides a long-term, sustainable investment strategy. A useful screening process is provided, which will provide a good starting point at identifying potential investments. Also provided by the author is criteria that can be utilized when deciding on whether or not to sell the stock, outside of the price – which I also found very incitive.
So, that’s my sale on this book. The author – Daniel Peris has a second book out that I will be reading in the near future. The “Strategic Dividend Investor” isn’t huge, is written in an understandable manner and provides good information – all qualities I enjoy when looking at a technical non-fiction book.
I am a fairly voracious reader, always looking for book suggestions. Do you have a go-to investment book that you keep on your shelf?
Posted by Dave on January 21, 2014
Last week I wrote about my initial foray into investing and how I arrived at my current early retirement plan about 5 years ago. Sometime in the next few months, I will change over my financial goal from aggressively paying down my mortgage to investing as much money as possible. My intention is to amass enough money to be financially independent from my job employment by the time I’m 45.
Based on my household’s current spending levels, and today’s dollars, I will need somewhere between $20,000 and $30,000 in investment income. I would prefer to go to the lower end, but this is a negotiable number that my wife and I will have to decide on over the next decade, as we continue to work. At some point, we might decide we would rather spend 25% less and exit the workforce early, or that we require more money because we pick up an expensive travelling habit and the budget just isn’t set up to handle that.
I hope to invest my money into cash-producing assets, either stocks or bonds that appear fairly solid (based on the research I carry out) and offer the rate of return that I am looking for. I am assuming I will have to invest approximately $500,000 to achieve the cashflow I need to leave the workforce, which will require as much dedication to that financial objective as I have had in paying off my house.
I look at my current financial objectives as the best return I can get on the time I am spending working. I could choose to not invest the money, and instead spend the money on other things, which may make my life more fun in the short-term. I am looking more at the long-term though – what will make me happier overall in my life? Will a newer, fancier car that will rapidly lose its novelty for me be enjoyable when I’m 70 (which I am hoping to make it to)? Will a larger house bring more enjoyment to my wife and I on a daily basis?
My retirement goal arises because I have the money to do it, and because to me, increased leisure time that I have control of will bring me much more enjoyment than anything else I could spend my money on right now. If I decide I would like to change careers (or am told by my place of work that I should change careers) or work less to enjoy life more now, then my future plans of Early Retirement will have to change as well.
My financial freedom countdown clock will start as soon as my last mortgage payment is done, but until I start seeing investment losses or returns coming in, I will have no idea how close or far away my “exit date” is.
How have you decided how much money you require to retire?
Posted by Dave on January 14, 2014
There was a period, before I started down my current path to early retirement that I really didn’t know what I should do with my money. I read a ton of books, and tried to find the best system that matched both my risk profile as well as my age to find the best way to make as much money as I possibly could. I have a unique mix of both being risk averse for the most part, while at the same time realizing that some known risks have to be taken in order to make some significant gains.
I’m not sure what level of esteem I am currently held in by readers of this blog, but please note that I was both young and not as well read and not as skeptical as I currently am when I decided to pay for investment advice online…..From Jim Cramer. At 24, this seemed like a great idea – I’d read his book and was impressed by the strategy he employed, and was hoping that his paid service would duplicate the massive profits his hedgefund had achieved in my tiny portfolio. Ideally, I was hoping my compounded profits would make me into a millionaire by the time I was 30, so I could buy cooler stuff than I was currently able to afford.
I forget what the service even cost, but I do remember that the advice I was paying him to help me make my millions of dollars was not always in alignment with what he was screaming about on television. That kind of ticked me off, and I quit it before making any significant investment gains or losses. I will chalk this up to a fairly cheap lesson learned.
After my Jim Cramer phase, I flip-flopped to an almost opposite method of investing. I read the book “The Smartest Investment Book You’ll Ever Read”. After my foray into almost day-trading, the advice of consistent purchases and re-balancing of index funds seemed to make considerably more sense to me. My RRSP investment account right now currently holds almost 100% in index funds, which I have essentially ignored since the beginning of my current path. I ignored the account both because I lost interest in investing, as well as because the value of the investments was low enough that it wasn’t worth moving the funds around.
As I’ve mentioned before, the book that really opened my eyes was Derek Foster’s “Stop Working – Here’s How You Can!”. I probably read and reread it a half dozen times when I initially took it out from the library. The idea that I could fairly rapidly achieve financial independence (depending on how low I could get my monthly expenses down to) was more attractive than any long-term strategy I had read or thought about. It was my light-bulb moment, which has lead me down my current path. The plan I set forth from there, after much more reading and obsessing (much to the chagrin of my then girlfriend, now wife, who was not yet used to my ways) is the one I am still following today.
In last week’s post, I wrote about how this year is a transition year for me, where “phase 1″ is complete (debt repayment) and I’m moving into the longest phase – investing to build cashflow to replace current employment income. This week’s post was a look back at my previous investment strategies. Next week I will post about how I see my current and future investment plans going.
How did you start investing? What sources of information did you use when you started? Did you make any mistakes you wish you hadn’t made?