The 7 Levels of Investors from The Cashflow Quadrant by Robert Kiyosaki

Did you know according to Robert Kiyosaki in his book The Cashflow Quadrant, 50% of the adult population is a Level 0 Investor?

Level 0 is the level where people say they have nothing to invest.

I was a Level 0 investor in my 20s.  Are you a level 0 investor?

If you aren’t a Level 0 investor, then maybe you are a Level 1 investor, which are investors who borrow for everything!  They borrow to spend, they borrow to invest, they borrow to pay their bills.

I was a Level 1 investor in my mid 30s.  Are you a level 1 investor?

I’ve actually moved past Level 2 (saver) and Level 3 (“smart investor”) up to Level 4 (Long-Term Investors) and entering Level 5 (Sophisticated Investors).

Want to find out more about your level and how you can go to higher and higher levels?

Watch this video blog and comment below on what investor level you are at and where you want to be!

5 Biggest Mistakes People Make When Investing in Real Estate

Would you like to avoid the 5 Biggest Mistakes People Make When Investing in Real Estate?

Well, pay close attention to today’s training and learn what I’ve learned from multiple millionaires who are successful real estate investors, including Tom Wheelwright from his book Tax-Free Wealth, and Robert Kiyosaki from his book Rich Dad Poor Dad.

 

5 Biggest Mistakes:

1) Thinking that buying a home to live in is an investment

-People end up using all of their savings as a down payment

-They stop saving when they realize how big their mortgage is

-end up paying money to the bank in mortgage interest

-they spend all their time improving and maintaining their house

-they don’t get experience as an investor

-Property taxes might increase at any time, causing some home owners to have to sell their homes

– Consolidating debt with home equity loans often causes increased spending, which leads to further debt

2) Not properly looking at the cash flow of an investment property

-Property Taxes

-Insurance (mortgage insurance, hazzard insurance, flood insurance, etc)

-Maintenance (plumbers, handy men, roof repair, leaks, etc)

-Management (handle rental laws, and evictions, filling vacancies, screening renters)

-Tenancy Vacancies

-Cost of down payment

-Cost of mortgage fees, points, interest

-Fixed interest mortgages vs adjustable rate

-Legal fees

-Accounting fees

-Tax prep fees

3) Buying your first rental property out of state, or out of your country

-Paying more for maintenance (not being able to check work)

-Management will be less likely to service you (as you are farther away)

-Cost to visit your property

-Lacking experience to run your own property and not gaining it as the property is out of state or out of the country

4) Not Claiming Depreciation for the building

According to Chapter 7 of Tax-Free Wealth, by Tom Wheelwright, one of the biggest mistakes people make, is that they do not claim depreciation of their real estate investment property.

Why, it’s because they are lazy, or their CPA is lazy, or they are ignorant of this important deduction.

In his example, he shows what would happen if you have an investor who buys an $800,000.00 apartment building that cash flows $12,000/yr, or $1,000/mo.

$800,000 (cost of home)
-$200,000 (cost of land)
$600,000 (cost of building and contents)
-$100,000 (cost of contents)
=$500,000 (cost of building)

$500,000
x 3.6% (depreciation for building)
=$18,000 (depreciation deduction)

Without claiming depreciation for the building, you would have to pay taxes on the $12,000 earned from the rental property.

When you claim the $18,000 in depreciation, the rental income is completely tax free, because your business claims a loss of -$6,000!

Not only that, if you structured it properly, the -$6,000 will pass through to your ordinary income tax, reducing your taxable income by $6,000!

5) Not Claiming Depreciation for the contents of your rental property

Tom Wheelwright points out that separating the contents from the value of the building alone is the proper way to file your taxes.

There must be a study conducted by either a CPA or an engineer to evaluate which parts of the investment property are considered contents, and which parts are considered the building structure.

The good thing for an investor, is that contents depreciate at a much faster rate than the building, which leads to a higher percentage used to calculate the depreciation of contents vs. the building structure.

In his example which I showed above, the contents of the building were valued at $100,000.

$100,000 (contents of the apartment building)
x 20% (depreciation for contents)
=$20,000 (depreciation deduction)

So, with the building depreciation, you can reduce not only the taxes on the rental income (you pay no taxes), you also reduce your personal taxable income even more!

$12,000 (rental income)
-$18,000 (building depreciation)
-$20,000 (contents depreciation)

Conclusion

21 Stocks Yielding Over 21% Annually – Earn High Dividends

Have you ever heard of stocks that are paying high dividends of upwards 90%+?

Well, there are stocks that are paying high dividends and here are 21 stocks paying over 21% in dividends…

In order to succeed in high dividend investing, you need to understand more than just the annual percentage yield quoted as of today February 23, 2016 (which is the quote in this post)…

…you need to know that this stock will continue paying high dividends…

…now there are no guarantees that these stocks will continue to pay out high dividends…

…the company might fail tomorrow due to all sorts of factors…

…what you need to do is research each company, maybe even visit their headquarters and see what is really going on in their daily business…

…read their financial reports, annual report, and other investor documents available on their websites…

…understand what they are doing and understand the history of their earnings and dividend payouts…

In this post, I did some initial research and labeled each stock with not only the APY and how often they pay their dividends (quarterly means they pay every three months)…

I also listed whether the stock price over time is STABLE, VOLATILE or FALLING…

…in my personal experience, if a stock price is falling, that means the actual dividend that you earn is also falling over time…

…so I personally wouldn’t invest in a stock that has a falling purchase price…

…check out this list of high dividend yielding stocks of over 21% and see which one I invested in today…

Have you ever heard of stocks that are paying high dividends of upwards 90%+?

Well, there are stocks that are paying high dividends and here are 21 stocks paying over 21% in dividends…

In order to succeed in high dividend investing, you need to understand more than just the annual percentage yield quoted as of today February 23, 2016 (which is the quote in this post)…

…you need to know that this stock will continue paying high dividends…

…now there are no guarantees that these stocks will continue to pay out high dividends…

…the company might fail tomorrow due to all sorts of factors…

…what you need to do is research each company, maybe even visit their headquarters and see what is really going on in their daily business…

…read their financial reports, annual report, and other investor documents available on their websites…

…understand what they are doing and understand the history of their earnings and dividend payouts…

In this post, I did some initial research and labeled each stock with not only the APY and how often they pay their dividends (quarterly means they pay every three months)…

I also listed whether the stock price over time is STABLE, VOLATILE or FALLING…

…in my personal experience, if a stock price is falling, that means the actual dividend that you earn is also falling over time…

…so I personally wouldn’t invest in a stock that has a falling purchase price…

…check out this list of high dividend yielding stocks of over 21% and see which one I invested in today…

21 Stocks Yielding Over 21% Annually

1) 57.47% quarterly falling SDT – SandRidge Mississippian Trust I (The Trust) is a statutory trust formed pursuant to a trust agreement by and among SandRidge Energy, Inc. (SandRidge) as Trustor, The Bank of New York Mellon Trust Company, N.A. as Trustee (the Trustee) and The Corporation Trust Company as Delaware Trustee (the Delaware Trustee). The Trust holds Royalty Interests in specified oil and natural gas properties located in the Mississippian formation in Alfalfa, Garfield, Grant and Woods counties in Oklahoma (the Underlying Properties). As of December 31, 2014, the Trust’s properties consisted of Royalty Interests in the Initial Wells and 121 additional wells (equivalent to approximately 124 Trust Development Wells under the development agreement). The Royalty Interests are in properties producing from the Mississippian formation in Oklahoma. The Mississippian formation is a carbonate hydrocarbon system located on the Anadarko Shelf in northern Oklahoma and Kansas.

2) 52.53% quarterly volatile CEQP – Crestwood Equity Partners LP develops, acquires, owns and operates primarily assets and operations within the energy midstream sector. The Company operates through three segments: gathering and processing segment, which provides natural gas gathering, processing, treating and compression services to producers in shale plays located in West Virginia, Wyoming, Texas, Arkansas, New Mexico and Louisiana; Storage and Transportation segment, which owns and operates natural gas storage facilities with an aggregate working gas storage capacity of approximately 79.3 billion cubic feet per day (Bcf/d), including its 50.01% interest in Tres Palacios Gas Storage Company LLC, and NGL and crude services segment, which includes crude oil rail terminals, the Arrow gathering system, its fleet of over-the-road crude oil and produced water transportation assets, an NGL storage facility, and US Salt, LLC.

3) 92.12% quarterly falling SDLP – Seadrill Partners LLC owns, operates and acquires offshore drilling rigs. The Company’s drilling units are under long-term contracts with oil companies, such as Chevron, BP, ExxonMobil and Tullow. The Company provides services to these customers with its fleet. The Company’s fleet consists of the semi-submersible West Aquarius, West Capricorn, West Leo, West Sirius; the semi-tender West Vencedor; the tender rig T-15 and T-16; the drillship West Auriga, West Vela, and West Capella. The Company provides drilling services on a dayrate contract basis.

4) 66.39% quarterly falling SDR – SandRidge Mississippian Trust II is a statutory trust formed pursuant to a trust agreement by and among SandRidge Energy, Inc. (SandRidge), as Trustor, The Bank of New York Mellon Trust Company, N.A., as Trustee (the Trustee), and The Corporation Trust Company, as Delaware Trustee (the Delaware Trustee). The royalty interests conveyed by SandRidge from its interests in certain properties in the Mississippian formation in northern Oklahoma and southern Kansas and held by the Trust are referred to as the Royalty Interests. The Trust holds Royalty Interests in specified oil and natural gas properties in the Mississippian formation in Alfalfa, Grant, Kay, Noble and Woods counties in northern Oklahoma and Barber, Comanche, Harper and Sumner counties in southern Kansas (the Underlying Properties). As of December 31, 2014, the area of mutual interest (AMI) consisted of approximately 48,400 gross acres (38,200 net acres) in the counties where the Underlying Properties were located.

 5) 27.01% quarterly volatile/falling CPLP – Capital Product Partners L.P. is an international owner of tanker, container and drybulk vessels. As of December 31, 2014, the Company’s fleet consisted of 30 vessels with 2.1 million deadweight tonnage (dwt) capacity, including four Suezmax crude oil tankers, 18 medium range (MR) tankers, all of which are classed as International Maritime Organization (IMO) II/III vessels, seven post-panamax container carrier vessels and one Capesize bulk carrier. Its vessels are capable of carrying a range of cargoes, including crude oil, refined oil products, such as gasoline, diesel, fuel oil and jet fuel, edible oils and certain chemicals, such as ethanol, as well as dry cargo and containerized goods. The Company provides marine transportation services under medium to long-term time charters or bareboat charters with various counterparties, such as Maersk Line, BP Shipping Limited, Overseas Shipholding Group Inc., Engen Petroleum Ltd., Repsol Trading S.A. and SUBTEC S.A. de C.V.
6) 27.39% quarterly falling CVRR – CVR Refining, LP is an independent downstream energy limited partnership. The Company has refining and related logistics assets that operate in the mid-continent region. It owns two refineries in the underserved Group 3 of the PADD II region of the United States. It owns and operates a full coking medium-sour crude oil refinery in Coffeyville, Kansas and a crude oil refinery in Wynnewood, Oklahoma. In addition, the Company also controls and operates supporting logistics assets, including owned and leased pipelines, owned crude oil transports, a network of crude oil gathering tank farms, owned and leased crude oil storage capacity and combined refinery related storage capacity. It processes a variety of crudes, including West Texas sour (WTS), West Texas intermediate (WTI), sweet and sour Canadian, and locally gathered crudes. The Company offers refined products primarily to retailers, railroads and farm cooperatives and other refiners/marketers in Group 3 of the PADD II region.
7) 35.35% quarterly falling OXLC – Oxford Lane Capital Corp. is a non-diversified, closed-end management investment company. The Fund’s investment objective is to maximize its portfolio’s risk adjusted total return. The Company’s focus is to seek that return by investing in structured finance investments, specifically collateralized loan obligation (CLO) vehicles, which primarily own senior secured corporate loans. Its investment strategy also includes investing in warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle. It may also invest, on an opportunistic basis, in corporate debt securities on a direct basis and a range of other corporate credits. It makes purchasing in both the primary and secondary markets the income notes and subordinated notes and junior debt tranches of various CLO vehicles and the equity tranches of various warehouse facilities. Oxford Lane Management, LLC (OXLC Management) is the investment adviser of the Fund.
8) 34.34% quarterly falling SXCP – SunCoke Energy Partners LP is engaged in manufacturing coke used in the blast furnace production of steel. The Company operates its business through two segments: Domestic Coke and Coal Logistics. The Company’s coke making ovens utilize heat recovery technology designed to combust the coal’s volatile components liberated during the coke making process and uses the resulting heat to create steam or electricity for sale. The Company is also engaged in coal handling and blending services through the Company’s interests in Lakeshore Coal Handling Corporation (Lake Terminal), located in East Chicago, Indiana, which provides coal handling and blending services to its Indiana Harbor coke making operations, and Kanawha River Terminals. Kanawha River Terminals is a metallurgical and thermal coal blending and handling terminal service provider with collective capacity to blend and transload approximately 30 million tons of coal annually through its operations in West Virginia and Kentucky.
9) 53.21% quarterly falling CHKR – Chesapeake Granite Wash Trust (the Trust) is a trust formed to own royalty interests for the benefit of Trust unit holders conveyed to the trust by Chesapeake Energy Corporation (Chesapeake). The royalty interests held by the Trust (Royalty Interests) are derived from Chesapeake’s interests in specified oil and natural gas properties located in the Colony Granite Wash play in Washita County in the Anadarko Basin of western Oklahoma. Chesapeake conveyed the Royalty Interests to the Trust from its interests in 69 existing horizontal wells (Producing Wells) and Chesapeake’s interests in 118 horizontal development wells (Development Wells) to be drilled on properties within the Area of Mutual Interest (AMI). The AMI lies within Washita County in western Oklahoma and is limited to only the Colony Granite Wash formation, where Chesapeake holds approximately 45,400 gross acres (28,700 net acres) as of December 31, 2014.
10) 41.57% quarterly falling CCLP – CSI Compressco LP, formerly Compressco Partners, L.P., is a provider of compression services and equipment for natural gas and oil production, gathering, transportation, processing and storage. The Company fabricates and sells custom-designed compressor packages and oilfield fluid pump systems, and provides aftermarket services and compressor package parts and components manufactured by third-party suppliers. It provides these compression services and equipment to a base of natural gas and oil exploration and production, midstream and transmission companies. It is a service provider of natural gas compression services, utilizing its fleet of compressor packages that employs a spectrum of low-, medium- and high-horsepower engines. Its applications include gas gathering, gas lift, carbon dioxide injection, wellhead compression, gas storage, refrigeration plant compression, gas processing, pressure maintenance, pipeline transmission, vapor recovery and gas transmission, among others.
11) 33.17% quarterly falling FELP – Foresight Energy LP (FELP) is engaged in the mining and marketing of coal from reserves and operations located in the Illinois Basin. The Company controls over three billion tons of coal in the state of Illinois. Its reserves consist principally of three contiguous blocks of high heat content (high Btu) thermal coal, which are used for longwall operations. Thermal coal is used by power plants and industrial steam boilers to produce electricity or process steam. The Company operates four underground mining complexes in the Illinois Basin: Williamson Energy, LLC (Williamson), Sugar Camp Energy, LLC (Sugar Camp), Hillsboro Energy, LLC (Hillsboro) and Macoupin Energy, LLC (Macoupin). Each of the Company’s four mining complexes operates in the Illinois Basin; two are located in Southern Illinois and two are located in Central Illinois. Williamson, Sugar Camp and Hillsboro are longwall operations, and Macoupin is a continuous miner operation.
12) 64.04% quarterly falling PER – Sandridge Permian Trust is a statutory trust formed under the Delaware Statutory Trust Act pursuant to a trust agreement by and among SandRidge Energy, Inc. (SandRidge), as Trustor, The Bank of New York Mellon Trust Company, N.A., as Trustee (the Trustee), and The Corporation Trust Company, as Delaware Trustee (the Delaware Trustee). The Trust holds Royalty Interests in specified oil and natural gas properties in the Permian Basin located in Andrews County, Texas (the Underlying Properties).
13) 32.16% quarterly falling MEP – Midcoast Energy Partners, L.P. is a natural gas and natural gas liquids (NGL) midstream company operating in the United States. The Company is publicly traded growth-oriented Delaware limited partnership that serves as Enbridge Energy Partners, L.P.’s (EEP’s) primary vehicle for owning and operating its natural gas and NGL midstream business in the United States. The Company operates through two segments: Gathering, Processing and Transportation, and Logistics and Marketing. The Company’s gathering, processing and transportation segment is engaged in gathering, processing and transporting natural gas and NGL. The logistics and marketing segment primarily markets natural gas, NGLs and condensate. The Company owns 51.6% controlling interest in Midcoast Operating, L.P. (Midcoast Operating), a Texas limited partnership that owns a network of natural gas and NGL gathering and transportation systems, natural gas processing and treating facilities, and NGL fractionation facilities.
14) 32.04% quarterly falling APLP – Archrock Partners LP, formerly Exterran Partners, L.P., provides natural gas contract operations services. The Company’s contract operations services include designing, sourcing, owning, installing, operating, servicing, repairing and maintaining equipment to provide natural gas compression services to its customers. It provides contract operations services, including the personnel, equipment, tools, materials and supplies. The Company’s general partner, Exterran General Partner, L.P., conducts the Company’s business and manages its operations, which are conducted through its wholly owned limited liability company, EXLP Operating LLC. It caters to companies engaged in various aspects of the oil and natural gas industry, including natural gas producers, processors, gatherers, transporters and storage providers. Some of its customers are also Exterran Holdings’ contract operations services customers.
15) 31.49% quarterly falling CNX – Coal Resources LP is a producer of thermal coal. The Company is formed by CONSOL Energy Inc. (CONSOL Energy) to manage and develop all of its thermal coal operations in Pennsylvania. Its initial assets include around 20% undivided interest in and operational control over, CONSOL Energy’s Pennsylvania mining complex, which consists of around three underground mines and related infrastructure that produce bituminous thermal coal that is sold primarily to electric utilities in the eastern United States. Its Pennsylvania mining complex, which includes the Bailey mine, the Enlow Fork mine and the Harvey mine, has coal reserves. The Company mines its reserves from the Pittsburgh No. 8 Coal Seam, which is a contiguous formation of uniform, thermal coal. The Pennsylvania mining complex includes around 785.6 million tons of coal reserves with an average gross heat content of approximately 13,000 British thermal units per pound and an average sulfur content of around 2.38%.
16) 31.18% quarterly falling JPEP – JP Energy Partners LP (JP Energy Partners) owns, operates, develops and acquires a portfolio of midstream energy assets in the United States. The Company operates through four segments: Crude Oil Pipelines and Storage, Crude Oil Supply and Logistics, Refined Product Terminals and Storage, and NGL Distribution and Sales. The Company’s crude oil businesses are situated in areas, including the Permian Basin, Mid-Continent and Eagle Ford shale. The Crude Oil Supply and Logistics segment manages the physical movement of crude oil origination to final destination. The Refined Product Terminals and Storage segment consists of two refined products terminals located in North Little Rock, Arkansas and Caddo Mills, Texas. The NGL Distribution and Sales segment includes its propane cylinder exchange business and the retail, commercial and wholesale sale of NGLs and other refined products. The Company markets its propane cylinder exchange business under the Pinnacle Propane Express.
17) 28.48% quarterly falling CLMT – Calumet Specialty Products Partners, L.P. (Calumet) is a producer of specialty hydrocarbon products in North America. The Company’s segments include specialty products, fuel products and oilfield services. In its specialty products segment, it processes crude oil and other feedstocks into a range of customized lubricating oils, white mineral oils, solvents, petrolatums and waxes. It also blends and market specialty products through Royal Purple, Bel-Ray, TruFuel and Quantum brands. In its fuel products segment, it processes crude oil into a range of fuel and fuel-related products, including gasoline, diesel, jet fuel, asphalt and heavy fuel oils, as well as reselling purchased crude oil to third party customers. Its oilfield services segment manufactures and markets products and provides oilfield services, including drilling fluids, completion fluids, production chemicals and solids control services to the oil and gas exploration industry throughout the United States.
18) 30.53% quarterly falling AMID – American Midstream Partners, LP owns, operates, develops and acquires a diversified portfolio of midstream energy assets. The Company gathers, treats, processes and transports natural gas, fractionates natural gas liquids (NGLs) and stores specialty chemical products through its ownership and operation of 12 gathering systems, five processing facilities, three fractionation facilities, three interstate pipelines, five intrastate pipelines and four marine terminal sites. The Company operates through three segments: Gathering and Processing, Transmission and Terminals. The Gathering and Processing segment gathers, processes, transports and treats natural gas. The Transmission segment transports natural gas. The Terminals segment provides above-ground storage services at the Company’s marine terminals that support commodity brokers, refiners and chemical manufacturers, to store a range of products, including petroleum products, distillates, chemicals and agricultural products.
19) 29.48% quarterly falling AHGP – Alliance Holdings GP, L.P. (AHGP) owns directly and indirectly 100% of the members’ interest in Alliance Resource Management GP, LLC (MGP). MGP is a managing general partner of Alliance Resource Partners, L.P. (ARLP). The ARLP Partnership is a diversified producer and marketer of coal primarily to United States utilities and industrial users. The Company operates in four segments: Illinois Basin, Appalachia, White Oak, and Other and Corporate. The ARLP Partnership operates in the eastern U.S. as a producer and marketer of coal to major utilities and industrial users. The ARLP Partnership operates ten underground mining complexes in Illinois, Indiana, Kentucky, Maryland and West Virginia. The ARLP Partnership also operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana.
20) 28.94% quarterly falling NGL – Energy Partners LP is a limited partnership company that is a vertically-integrated service provider. The Company operates through the following segments: Crude oil logistics, which purchases crude oil from producers and transports it for resale at owned and leased pipeline injection stations, storage terminals, barge loading facilities, rail facilities, refineries and other trade hubs; the water solutions segment, which includes water treatment and disposal facilities; the liquids segment, which purchases propane, butane and other products from refiners, processing plants, producers and other parties, and sells the products to retailers, refiners, petrochemical plants and other participants in the wholesale markets; the retail propane segment, which is engaged in the retail marketing, sale and distribution of propane and distillates; the refined products and renewables segment, which conducts gasoline, diesel, ethanol and biodiesel marketing operations, and corporate and other.
21) 29.18% quarterly volatile NRF – NorthStar Realty Finance Corp. is a commercial real estate company. The Company invests in multiple asset classes across commercial real estate (CRE). Its portfolio consists of healthcare, hotel, manufactured housing communities, net lease, multifamily properties and international real estate, with a focus on Europe. It also invests in other opportunistic real estate investments, such as indirect interests in real estate through real estate private equity funds. The Company also acquires hotel and certain healthcare properties through structures permitted by the real estate investment trust (REIT) investment diversification and empowerment. The Company’s segments include Real Estate, Commercial Real Estate Debt (CRE debt), Commercial Real Estate Securities, N-Star CDOs and Corporate. Its real estate equity investments that operate under the RIDEA structure generate resident and hotel guest related income from short-term residential agreements.

Conclusion

 After a thorough review of these 21 high yield stocks there were really only 2 that I would consider investing in myself, which was NRF and and CEQP…
…and the reason is that they have share prices that go up and go down (both are on the down now)…
…after some deliberation and a little meditation I bought 23 shares of NRF about 10 minutes ago…
…I encourage you too to get some skin in the game and start investing in some high dividend yielding stocks…
…I’ll see how my investment does and feel free to message me or contact me at anytime if you have any questions about high dividend investing!

P.S.

My joy is seeing you make more passive income AND live a better quality of life…
…I want to help make smiling happy families who are also financially free…
…so I blog about actions that will really change your finances and money situation for the better…
…on top of all those wonderful benefits, I also make money blogging!
AND I want you to make money blogging too…
…so, to be fully informed, I’ve selected the best, easiest to learn and most profitable blogging platform to host my blog…
…and I’m giving it to you now too…
CLICK HERE, enter your best e-mail and watch the free video

Why Invest In Dividends?

Mey here on another beautiful Monday morning here in Ala Moana Hotel enjoying time working next to my Mom (author of the sci-fi novel Veluli: Amac-1 (Volume 1)) blogging about the important question Why Invest In Dividends?

Do you invest in the stock market?

Do you invest because you are hoping the stock prices will go up and you will sell high?

…or do you just do it because your investment advisor tells you to…

…or do you not have an adviser and had no idea what you are investing in?

…this article is dedicated to you, to give you some good advice on stock investing that actually makes sense for a change…

…it assumes that you are like the average person, who has really no idea what their stock fund is investing in, and just wants to make sure that their money is safe…

…so read until the end and get ready to learn the common sense way of investing – in stocks that make you money in dividends…

Mey here on another beautiful Monday morning here in Ala Moana Hotel enjoying time working next to my Mom (author of the sci-fi novel Veluli: Amac-1 (Volume 1)) blogging about the important question Why Invest In Dividends?

Do you invest in the stock market?

Do you invest because you are hoping the stock prices will go up and you will sell high?

…or do you just do it because your investment advisor tells you to…

…or do you not have an adviser and had no idea what you are investing in?

…this article is dedicated to you, to give you some good advice on stock investing that actually makes sense for a change…

…it assumes that you are like the average person, who has really no idea what their stock fund is investing in, and just wants to make sure that their money is safe…

…so read until the end and get ready to learn the common sense way of investing – in stocks that make you money in dividends…

What Are Dividends?

…dividends are a portion of a company’s profits that are paid to you as a shareholder in their company…

…when you buy a stock, you are becoming part owner of the company in return for your cash investment…

…when the company is profitable, they can take a share of their profits and pay their shareholders…

…for example, say a company made 100,000 profit this month…

…and they have 50,000 shares…

…they could pay $2.00 per share in a monthly dividend…

…say you own 1,000 shares…

…you would make 1,000 shares x $2.00/share/month = $2,000.00 per month in dividends…

How Do I Make Dividends?

…when you buy shares in a profitable company that  has chosen to pay it’s shareholders dividends…

…some companies are actually pretty profitable and do not pay dividends (at the time of publishing, Google is one of the most notable, and Apple too until recently)…

…some companies pay pretty consistent dividends, and are proud of that and publish it on their website (like IBM)…

…some companies are required by law to pay their profits in dividends like Real Estate Investment Trusts (like Annaly)…

…you want to choose a company that is profitable and consistently pays dividends…

Why Invest In Dividends?

…so if dividends make money, why do people still invest in companies that don’t pay dividends?

…that’s actually a pretty important question…

…if the stock doesn’t pay dividends, then buying it can only be profitable if you can sell it for more than you bought it for…

…people who invest like this are less concerned with dividends…

…this strategy has a lot more risk…

…check out this quote from Daniel Peris to understand why…

“…of the market’s annual total return of 9.7% since 1926, 8.6% of it (which amounts to 89% of the annual figure) came from dividends.” (page 16 of The Strategic Dividend Invester, 2009)

…so if you are investing in stocks that don’t pay dividends, you’re really gambling that a stock’s value will go up…

…and if you think about it, it makes sense, after all, wouldn’t you want to get paid part of the profits of the companies that you have invested in?

…how else are you going to make a profit from your investment?

Conclusion

…this post was inspired partly from my own dividend investing strategy and my intention to create a consistent passive cashflow…

…and also by reading the first Chapter of what one of my investment adviser friends calls the Bible on dividend investing, The Strategic Dividend Investor by Daniel Peris…

…if you are serious about making money in your investing, I suggest you buy this book and read it immediately…

P. S.

…I blog about financial freedom because it’s my goal to help people have their time back…

…so they can spend less time working and more time enjoying their families and friends…

…I am a blogger and I do it for a profit as well, where I pay our family all of our profits…

…interested in making money for yourself, with better odds than gambling on the stock market?

CLICK HERE, enter an e-mail where I can contact you at and watch the free video…

 

Would You Borrow Money To Invest?

It’s Mey here on a breezy Wednesday evening, had a nice evening with our financial planner and also worked out at the gym, and now winding down with tonight’s blog Would You Borrow Money To Invest?

…this is a controversial topic…

…and I think it just DEPENDS on the rate of the loan and also what the investment is…

…I recently had a talk with my mentor in Real Estate, and he advised that an investor with CASH wouldn’t go in on a real estate investment unless the return was AT LEAST 8%…

…so that means if you are borrowing to go in, then you need to offset the rate of your loan…

…let’s say that you have access to a credit line at 6%, which is roughly the current going rate…

…well, in order to make your 8%, you need to find something that is a STABLE 14% return…

…so it just depends…

…if you can find an investment like that, then yes, it would make sense to borrow to invest…

It’s Mey here on a breezy Wednesday evening, had a nice evening with our financial planner and also worked out at the gym, and now winding down with tonight’s blog Would You Borrow Money To Invest?

…this is a controversial topic…

…and I think it just DEPENDS on the rate of the loan and also what the investment is…

…I recently had a talk with my mentor in Real Estate, and he advised that an investor with CASH wouldn’t go in on a real estate investment unless the return was AT LEAST 8%…

…so that means if you are borrowing to go in, then you need to offset the rate of your loan…

…let’s say that you have access to a credit line at 6%, which is roughly the current going rate…

…well, in order to make your 8%, you need to find something that is a STABLE 14% return…

…so it just depends…

…if you can find an investment like that, then yes, it would make sense to borrow to invest…

My Borrowing-To-Invest Personal Story

…I did borrow from my line of credit to invest in a REIT called ARR, which was at 14% APY at the time in dividend payouts…

…the credit line was at 6% and though the interest from the REIT still pays more than I pay on the line of credit, its value has dropped to less than half of what I bought it for, also the dividends have decreased also by 50%…

…My brother recently shared that the high rate REITs are inherently riskier, so when they go down in value, their rates go down proportionately…

…in the end, I don’t think it was a great investment, as I’m still paying off the line of credit and it’s cramping my cash flow…

…it really depends on what happens to ARR, which just did a reverse 8-1 split (meaning the shares were combined so that if you owned 8 shares, now you own 1 that’s 8 times higher in price)…

…so it could go down again…

…only time will tell, but needless to say I stopped investing and am now just watching…

…so like I said, should you borrow to invest?

IT DEPENDS!

What About a Mortgage on a House? Is it Good To Borrow to Invest?

…a lot of people borrow money in the form of a mortgage and consider that an investment…

…I think it depends…

…maybe the mortgage is just to bring stability to where you live and is more of a necessary expense than it is an investment…

…it’s hard to say…

…so many people are house poor, and they are house poor until death, which makes me wonder about the quality of their investment…

…but then again, some get pretty wealthy from the resale of their home…

IT DEPENDS….

What are your thoughts?  

Have you ever borrowed to invest?  

How did it turn out for you?

Lucrative Real Estate Investment Trusts That Will Make You Passive Income

…we look forward every paycheck to invest in REITs or Real Estate Investment Trusts…

…why?

…because they have the biggest dividends, and allow us to invest in Real Estate without the hassle of buying a property, managing it and so on…

…plus, we love the passive income they provide…

…read on for REITs that you might want to dive into yourself…

…we look forward every paycheck to invest in REITs or Real Estate Investment Trusts…

…why?

…because they have the biggest dividends, and allow us to invest in Real Estate without the hassle of buying a property, managing it and so on…

…plus, we love the passive income they provide…

…read on for REITs that you might want to dive into yourself…

  1. Annaly Capital – NLY

    …Annaly was the first REIT I ever bought…

    …it makes quarterly dividends at around 11%-12%…

    …the price of shares when I bought was about $16.00/share and now they are much lower at less than $10.00 a share…

    …ever since the first date it paid, I was hooked…to REITs anyways…

    …they create this nice income where I can spend more time relaxing at the beach with the family =)

    …as quoted from E-trade…

    “Annaly Capital Management, Inc., a leading mortgage real estate investment trust…

    …The Company owns a portfolio of real estate related investments including mortgage pass-through certificates, collateralized mortgage obligations, Agency callable debentures, other securities representing interests in or obligations backed by pools of mortgage loans, commercial real estate assets and corporate debt…

    …The Company uses its capital coupled with borrowed funds to invest in real estate related investments, earning the spread between the yield on its assets and the cost of its borrowings…

    …The Company’s principal business objective is to generate net income for distribution to its stockholders from its investments…

    …Under its investment policy, at least 75% of its total assets are comprised of high-quality mortgage-backed securities and short-term investments…

    …Annaly Management Company LLC is the Investment manager of the Company.”

     

     

  2. Armour Residential – ARR

    …this is our favorite…

    …first of all, the dividend yields are always around 14%…

    …and even though the stock price has gone down, it still gives us a steady monthly income…

    …second, it pays monthly…

    …and it’s pretty cheap right now at only $3.00/share…

    …buy some shares and spend more time at the beach!

    …per E-trade…

    …”ARMOUR Residential REIT, Inc. is engaged in investing and managing a portfolio of residential mortgage backed securities (MBS)…

    …The Company’s securities portfolio consists primarily of Agency Securities backed by fixed rate home loans. The Company is externally managed by ARRM…”

     

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  3. Gladstone Commercial Corp Com – GOOD

    …I actually don’t own any of this stock, but it does pay monthly and it’s ticker symbol is GOOD!!!

    …dividends are at 8%…

    ..per E-trade…

    “Gladstone Commercial Corporation is a real estate investment trust (REIT)…

    …The Company is engaged in investing and owning net leased industrial, commercial and retail real property and selectively making long-term industrial and commercial mortgage loans…

    …The Company conducts all of its activities through Gladstone Commercial Limited Partnership (Operating Partnership). The Company controls its Operating Partnership through its ownership of GCLP Business Trust II, which is the general partner of its Operating Partnership, and of GCLP Business Trust I, which holds all of the limited partnership units of its Operating Partnership…

    … The Company’s business is managed by its external adviser, Gladstone Management Corporation. The Company offers administrative services through Gladstone Administration, LLC…

    …The Company generates its investments from the ownership of income-producing real property or, to a much lesser extent, mortgage loans secured by real property…”

     

…when I first learned about REITs my mind was blown…

…I can be the lender instead of the one paying the mortgage!

…if you love this post too then spread it around and share it with your facebook wall, twitter fans, all your peeps…

…let’s make the world a wealthier place!

3 Investments Tips That Will Make You Wealthy

…investing in ourselves is the only way to become wealthy…

…and yet, there’s so many complicated words, and sometimes it may seem like you need to get a degree to understand it all…

…this post explains the most important concepts that you need to understand how to invest to become wealthy…

…investing in ourselves is the only way to become wealthy…

…and yet, there’s so many complicated words, and sometimes it may seem like you need to get a degree to understand it all…

…this post explains the 3 tips that all seasoned investors use to grow their wealth, and most everyday people never learned…

…read on if you want to become a wealthy investor…

  1. Invest on a Budget: Dollar Cost Averaging

    …when you invest, it’s good to set a monthly dollar amount…

    …and invest it whether the market is up or down…

    …so when the market is down, your money buys you more shares…

    …and when the market is up, your money will buy you fewer shares…

    …as long as you are investing for the long term…

    …and as long as you don’t sell low…

    …then you will average out the lows and the highs in the market…

    …this is called dollar cost averaging…

    …the graph below shows how when the price goes up, you buy less and vice versa…

    …this type of disciplined invested will allow you to grow your wealth and give you peace of mind as you won’t have to check how they are doing all of the time…

    …it becomes automated…

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  2. Diversify or Not to Diversify – That is the Question

    …according to most it is important to diversify your investments…

    …for instance, you don’t want to invest all your money in Australian dollars and then come to find that the Australian dollar declines for years and you are locked in a losing position…

    …the popular advice is that you should invest in a diverse number of investments so that when one is down, the others are up…

    …for instance, perhaps the real estate market and the stock market has crashed, well then commodities like gold might be on the rise…

    …it’s almost the dummy proof way of investing so that you are guaranteed to win some even if you lose some…

    …now another opinion from the book The 80/20 Principle: The Secret to Achieving More with Less by Richard Koch is that you should put all of your eggs in a few well researched baskets and watch them like a hawk…

    …Koch points out that only 20% of your investments will constitute 80% of your wealth…

    …so instead of diversifying across the board, find the few really good investments and put in all your money there…

    …in the end, I do both…

    …I have funds that are diversified in a 401K and also my own funds where I focus mainly on a few high dividend yeilding stocks…

    …below is one suggested diversification strategy that I use with my 401K from It’s Not About the Money: A Financial Game Plan for Staying Safe, Sane, and Calm in Any Economy by Brent Kessel:

    U.S. Large 21%
    U.S Large Value 21%
    U.S. Small 9%
    U.S. Small Value 9%
    International Large Value 8%
    International Small 8%
    International Small Value 3%
    Emerging Markets Portfolio 3%
    Emerging Markets Small 3%
    Emerging Markets Value 3%
    Real Estate 10%
    Commodities 5%

    …You can use funds that are made up of the classes of investments above…

    …if you don’t have that much variety available in your 401K, you can combine the Large together, the Small together, and the International with the Emerging Market…

    …also, I think in general most people are heavily over invested in Real Estate, especially if they have a high mortgage…

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  3. Buy Low and Sell High: Balancing Your Portfolio

    …as you start to buy stocks, you create what’s called a portfolio, or your group of stocks…

    …in order to ensure that you make the highest profit possible with your portfolio you need to learn how to buy low and sell high…

    …this can be done in a way that avoids emotional trading…

    …I will tell you from personal experience that it’s easy to say “Buy low and Sell High”…

    …however when you see your shares drop in value and the dividends drop too, you are not very likely in the mood to buy more…

    …and yet that’s the best time to buy more!!!

    …so how can we keep our emotions in check and profit from our investments?

    …it’s called balancing your portfolio…

    …let’s say you decide that you want a certain mix of stocks as such:

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…blog about your expertise and get paid for it…

…click on the image below, watch the free video and get started!