This is not a new investment opportunity as it has been around for a long time now. The problem is if you are not into investing and do not read investing books, you probably never heard of this type of investment opportunity. What is a real estate investment trust? Exactly what you might think it is when you read the title. They are companies that invest in real estate holdings, offer shares to investors so that they can own a piece of the pie. This in turn provides the company with the influx of cash to invest into more properties. Now the secret sauce to this deal is that by law these REITS must pay out about 90% of all the income they make back to shareholders. If they make 1 million dollars a year they have to pay out 900K to all the owners. Usually all the dividends are paid out on a monthly time schedule. Now what company you know gives almost all of its profits back to the owners? (None I’ve seen)
I am a big proponent in holding some REITS long-term, as it can provide a substantial amount of income and the ability to diversify nest egg money away from the usual U.S. large cap equities. The REIT market on average provides yields of about 5% and this is not including any capital appreciation on the price of the stock when you decide to sell. For a few examples of REITS in the market today see below:
Have you ever desired to have more cash flow? Well I am on a mission to find out what is the best option for anyone interested in learning about cash flow and learning how to build it. Anyone looking to be financially free and cash flow free must begin finding ways to get multiple streams of income. The cash flow from dividends is a vital piece of the puzzle I believe. I think for the sake of making things easy and for comparison options let’s keep the numbers for all the investing options at 1 grand. The examples below are possible dividend figures for folks looking to increase cash flow.
What is the Best Cash Flow Investment:
1 Thousand Invested Options –
The Low price company stock option:
GE – 1000 / $26.53 per Share = 37.69 shares X .22 QTR dividend = $8.29 QTRLY (3.32% Yield)
The Mid-Priced Company Stock option:
TGT -1000 / 58.79 per share = 17 shares x .52 QTR dividend = $8.84 QTRLY (3.54% Yield)
The High price company stock with greater future returns option:
Pump up the Portfolio with Dividends as Quickly as Possible.
Do you want to know my dividend strategy? I am hoping the moves I make will pay off within my retirement accounts aka Mutual Funds. I am not suggesting anyone try implementing this strategy for their finances. It has worked well for me on most occasions and I have an ultimate goal in mind, to achieve a high portion of retirement income off my mutual fund dividends. Imagine owning 20 thousand shares of dividend paying mutual funds and stocks growing every quarter. I am on track to finally break the 4 grand total shares owned mark.
I keep a record of fund prices on all funds as to help me decide when is a good time to sell one fund and buy another. The same goes for the dividend amounts each fund pays and how often they pay. The best scenario is when the fund that pays the smallest dividend is at its 52 week high, and the fund that pays me a high dividend is priced lower than usual. I would immediately exchange a set amount of dollars from one fund to another, with no fees or charges. The reason is because they are all in retirement accounts and doing exchanges are free. (401K and IRA) See below for my dividend strategy:
Cool Antique cash register used to build wealth in the past.
The Roadmap to Building Wealth
Have you ever asked what is the secret to attaining wealth? Well even though I have not reached the status of ultimate riches like Warren Buffett, I now understand how someone can achieve wealth. The 10 secrets to build wealth are golden facts we all should know. Because of these 10 steps I am on the right path and building my wealth every year. I will discuss with you today a few phrases, which embody the secret to wealth building and how that relates from my experiences with personal finance.
They say knowledge is a tool we all can use to reach any status in life and to me financial knowledge can lead to real wealth. Not the fake wealth people are parading in this life, with debt up to their eyeballs, giving off financial fallacies with every thing they own bought on payments. These secrets are simple things we all can do in life, and if you do them consistently I believe you will improve financially. If you follow them to the tee, this can lead to great riches.
Investing in today’s marketplace is extremely daunting, the plethora of choices can make for paralysis by analysis. The most experienced investor can become contrite with all the choices. Just imagine somebody without any experience in investing and how hard it may be. Because of this issue facing many not familiar with investing, I developed the investing Rules. The rules will be there for many to follow as a guideline. This is an informative post on how to begin on what might be a financially smart path for you.
The first investing rule never invest more than the employer match in 401K when in debt. If you have a budget that allows you the ability to allocate $100 dollars a month to invest in after tax brokerage accounts and another $300 towards student loan debt. Yes you will be growing your net worth month by month and reducing debt month by month. The normal way of thinking behind this scenario is that you are paying down debt to the tune of 3 times what you are investing, and you might not see a problem with this process. The behaviors you are displaying are good, but they are also not the financially smart method. Why, you may be asking?
The daily coffee addiction might seem like a small price to pay for being alert at work. That rush you feel is not a trick, it actually wakes people up. Before you drive up to your local Starbucks or Dunkin Donuts, think about what’s your coffee really costing you over your lifetime. I believe we all should drink coffee from wherever we prefer, even if it will cost you $4 dollars a cup. Obviously your money is for you to spend, but I want to give you some details as to the real cost behind this daily morning ritual.
The average person has two cups of coffee per day and if you multiply that by the entire 243 million 18 and over adult population, then you get a staggering 486 million cups of coffee per day. If everybody in the US went to Starbucks for their daily fix, it would be the most profitable company in the US. Now let’s discuss the facts. I will show you if you brew your cup of coffee at home and invest the difference in expenses how much you can save. In addition to the savings how much your savings will grow over a 30 year time frame invested in a US stock mutual fund?
Hey friends can you find $50 dollars from your budget to help you in a big way? Well if the answer is yes then you should continue reading as I will give a few ideas on how to invest that money every three months for your benefit. Before we proceed I have to set some guidelines for all the readers of this blog. What are the guidelines you may be thinking right now? This advice is for people who 1. Do not have any non-mortgage debt, 2. Already have an emergency fund totaling at least 4 months of living expenses, 3. You will maintain a long term investing strategy with the investing dollars. If you qualify after reading these 3 guidelines then you can proceed reading, if not this post is not for you. Completing the two goals above and thinking with a long term mentality will benefit you more than investing right now.
Do you have an idea of what is the best money advice for every age range? I was given a cool article sponsored by fidelity and written by Forbes magazine about what money strategies you need to make in every decade of your life. Beginning in the 20’s all the way up until your 60’s. The premise of the article is how to retire rich by having a long term game plan. Everything in the write up is what many bloggers including MoneyWatch101, have been saying for a while now, become an expert with personal finance to achieve a better than average retirement. It is of no use to constantly repeat the same content to all of you, so now I will give you a different twist and tell you what you need to do in every decade of your life. Granted you do not have to hold off on things because they are mentioned in say the 40’s age range and you are in the 20’s, this is a mere guideline and you can complete them as fast as you desire too.
First before anything you have to find the passion your soul needs to feel fulfilled, and somehow make money off the said passionate work. It will possibly shorten the time frame to reach financial independence and can save you a costly work transition later. Obviously you cannot control when you get the calling to do what you suddenly love to do as a career path, but it doesn’t hurt you to begin to think about it now as to not waste time later. See Below for the money advice:
The 20’s:
The Article Advises / My Input:
-Pay off Student Loans / Pay off all debts or avoid all Debt is best solution
-Sign up for 401K retirement plans / Take advantage early and contribute 20% (You won’t miss it if done from the beginning)
-Fund a Roth IRA / Establish a Surplus -place 50% in Roth ETF’s / 50% in Stocks
The 30’s / 40’s:
-Buy a home / Only if you have 20%+ down payment $$, and expenses are less than 30% total income
-Sign a Will / Do this only when you have kids, and finally have reached 100K in assets
-Purchase 20 years Term Life Insurance / Purchase only 10X your income, instead get 30 year term level
The 50’s:
-Plan Ahead, Find something you can transition too that’s less busy / Agree
-Review asset allocation, do not fall victim to generic advice / Reduce risk but still stay in the game as funds are needed well into the 90’s
-Form a Charitable Foundation / If house is in order, begin steps to give back
The 60’s:
-Update the Estate plan, with careful attention to taxes / Agree
-Play with Social Security, if you are still working consider a file and suspend ploy it will pay off later with bigger SS checks / If Non-SS income is consistent I agree
-Sign the Bill Gates giving pledge to give away more than 50% of wealth to charity / After family is taken care off, I agree
As you can see I only added on the money advice the article mentioned. There’s a ton of money advice for every age range that can be given in multiple posts so be on the look out for the second part of this series coming soon. I hope you can get some value out of the advice given above, have a good money day and life.
Comment if you agree with these steps and if you have any other useful money advice for every age range?
