What I Wish I Knew Before Becoming an Income Investor
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- เผยแพร่เมื่อ 26 ก.ย. 2024
- / dividendbull
One of the ultimate goals I've had for this channel is to make higher yielding investing more of a mainstream investing strategy. Not just among retirees but also people who might not be anywhere close to retiring. The allure of holding investments in stocks and funds that pay actual, worthwhile distributions is something that I fell in love with while I was working at Vanguard many years ago. At the same time, because higher yielding investing isn't as mainstream as index funds, day trading or growth stocks, the information out there is somewhat limited. And along the way I've made plenty of mistakes or just done things that I wish I would've taken into account before pursuing a higher yielding investment strategy. So in this video I want to go over a few things that I wish I knew before pursuing the strategy that I have today. And these are all things that aren't the usual cliches, like avoiding the highest yielding stuff.
My wife is already panicking, so many questions! will the rate cut lead to inflation? I'm very worried about my $1million stock portfolio losing value. What strategies should I be employing in my portfolio right now?
investors like you should be cautious of the bull run, its best you connect with a well-qualified adviser to meet your growth goals and avoid b
No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit 80% rise from early this year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q2 2025.
Pls how can I reach this CFA, I need someone to help me manage my portfolio
I'm cautious about giving specific recommendations since this is an online forum and everyone situation is unique, but I've worked with "Melissa Elise Robinson" for years and highly recommend her. Look her up to see if she meets your criteria.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
Interest rates aren’t high, they are about at the long term average. Interest rates were too low for a long time.
I totally agree, it's nice having a savings account that actually means something. I'm ok if rates go down a little but I hope we don't get near 0 rates again for a while.
Agree 100%.
IMHO the overall economy will be better off in the long run with higher interest rates vs. the rock bottom COVID rates. I predict that the economy will be more stable.
Super low interest rates increase risky/speculative investments made by people looking for a quick in-and-out profit.
Also for my situation higher rates are OK because I don’t have any debt and have some of my money in an MMA that pays over 5% interest vs. less than 1% when interest rates were at rock bottom for so long.
Totally agree.
Personally, I think investors will start to seek more market diversification. Can I confidently invest about $40k into the markets this year? I'm still not sure how rates will effect the market just yet, which worries me a lot.
I think investors who are wary of changing market trends should seek out bear market directions from certified strategists/planners. Safer that way
No doubt, having the right plan is invaluable, my portfOlio is well-matched for every season of the market and recently hit 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q3 2024
How can I participate in this? I sincerely aspire to establish a secure financlal future and am eager to participate. Who is the driving force behind your success?
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
That's why I'm thankful I found this channel. I was way overprepared going into income investing and it feels amazing not having to worry about the whole process
I have been a dividend focused investor for a long time. This does not mean I don't own growth stocks, I do. A well rounded portfolio should be a mixture of both categories. One way to minimize the anxiety out of stock market investing, is to make sure you keep a large cash cushion. I invest in the market, but never put all my money in market.
Dividends are dope. Personally, I sometimes use my dividends to buy other dividend and growth stocks for diversification instead of reinvesting in the same stock. To each their own methods though. The good thing is that you’re investing in the first place and that’s what’s important. Salute for the content!
Yes, I've been in constant touch with a Financial Analyst for approximately 8 months. You know, these days it's really easy to buy into trending stocks, but the task is determining when to sell or keep. That's where my manager comes in, to help me with entry and exit points in the industries I'm engaged in. Can’t say I regret it, I’m 40% up in profits just in 5months with my initial capital of $160k
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.
Colleen Rose Mccaffery’’ is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
I am a 72 y/o retired male. I am 3 years into retirement. And started a small stock portfolio, as I liquidated my business . Now have funds and time to study investments. I started with small number of growth stocks and few paid dividends. Which led me to change my goal to income based investing portfolio. I spend about 3 to 4 hours daily research. I am half way to my monthly income goal, but still have a minority growth stock fund. But enjoying the ups and downs of market. My income portfolio is mostly , sbdc, closed end funds, preferred dividend stocks, mlp’s , reits, and etf’s. I learned a lot from videos on TH-cam and research. Thank you for your info.
The one thing I've learned is patience. In order to buy low I needed to learn to wait. I now keep a watch list and when the market declines for at 3 days I go shopping. I do all the things you suggest and then I add to the watch list and put an alert on the stock for the lowest price I conclude the stock will fall to. Sometimes, I wait for months, but as the stock climbs I get gratification.
So true. Patience is one of the most important abilities in investing. It's one of the areas that I'm still working to improve on. Buying too soon and selling too soon can reduce overall returns significantly. Dividend investing is much about being patient, and letting compounding do it's work. Buying the dip is rewarding, especially big market downturns. Patience is very useful in almost all facets of life. Good luck everyone!
I’m with you. I didn’t start making any real money until I started buying low. Imagine that lol. I never chase trends. Took me years to learn but I’m setup great now.
It's fascinating how financial markets always seem to follow a cycle. Artur Grandi's book offers a great plan for securing investments and explores interesting opportunities, like investing in cryptocurrencies.
What surprised me was how fun investing is.
Adding up dividends at the end of the month is my favorite day, hehe.
Crazy, isn't it? I've come to consider investing as a hobby.
I said that when I was young and naïve. Now that I'm older, the saying "don't lose money" is very important. But if you mean collecting dividends, yes that's fun.
@@DekeRadioYes, I agree. Dividend investing & the dividend snowball is exciting.
@@tonynes3577for me it’s buy low and don’t lose money.
nice and real video! keep up the good work! Partly because of your videos, I also became an hi yield income investor, and I really like it
Great time to buy more if the market persist to come down. DcA formula at it's best.
Market is getting hammered right now. Hang tight out there.
This is my second year of investing, I changed a lot of things, and decided to settle on a dividend etf rather than individual companies
*Our government has no idea how our senior citizens survive! No one in the current administration is representing this country. Anyone who is not investing now is really missing a tremendous opportunity. Imagine investing $1,000 and potentially receiving $4,600, depending on market conditions.*
I'm disabled, how can we generate more revenue during quantitative times? I can't afford to see my savings crumble to dust.
Getting Megyn Beth to help me really helped me clear all my debts. I started with what I have left and it's been the best decision I ever made.
All good Invesstors are conversant with Megyn beth, She's unique in the field just got to keep to her instructions and you'd Excel.. starting early is the best.
*SHE'S MOSTLY ON TELEGRAMS APPS WITH THE BELOW NAME*
Ms Megyn..
Great video. I look forward each week to what you’re posting. Thank you again.
My absolute favorite investing channel. i think this guy is my twin i didn’t know i had. 😂 Great minds think alike, keep up the great work!
What I did was maxed out my 401K and IRAs. When I retired at 57 I was up to 35 plus percent saving/investing. Plus I had company matching and Pension. I did this for 35 years while working at the same company. The turtle always wins in the end .
Excellent points, luv it. Thank you.
My very mistake for income investment was chasing extremely high yield and got burn along the way at the very beginning of my investment journey. Later on, I learnt to diversify into quality, low yield, dividend growth companies, plus index like S&P 500, and growth securities. With the recent downturn, the portfolio was able to withstand the test of time due to diversification into all different sectors. It was far from perfect, yet, it did run into some casualty. Overall, it did come out a little ok. It just need some minor bandages from all the volatility and turbulence. Whew! 🤗
FYI.....Interest rates will at the minimum, stay higher for longer, or worse another rate hike. CPI is curling back up and hitting the food and energy sectors hard again.
Good for BDCs and bad for REITs?
I would add don't put too much stock (pun intended) into seeking alpha or influencer recommendations. Look for the hidden motive under the surface, if someone is pumping up a stock
You obviously don’t know much about Seeking Alpha. I use it constantly. It is simply a source of in depth news and analysis. I agree with some authors and disagree with others…that’s the point! Where else can you find such detailed research? Reddit?? Please 😂. Morningstar has some good research but it’s not as good as SA.
Some influencers give bad advice. But Seeking Alpha contains a lot of great research and I’d be lost without it. I don’t agree with every article but that’s the point. It covers a range of views.
Seeking alpha can be helpful, but it shouldn’t be your only source
@@hs5312 of course. Which other sources do you like?
@@tvtriviachampion I would say company websites for example, financial reports by firms
As someone who's dipped their toes in income investing, I can totally relate to the need for specialized knowledge.
What counts is total return, the share price drop due to higher interest rates is only a drain on total return if you sell and crystalize the loss. If your are holding the right REIT, BDC etc. the share price will stabilize even recover ( look at Hercules) and dividends start to increase again, so you need to look at total return dividends plus share price change over 20 years say not 5 .
Income investors focus on a slice of the stock market which often excludes small cap and fast growing stocks. If the stock market is efficient (and it is). Income investors will miss out on the performance generated by segments of the market they do not invest in.
Perhaps this is one reason Warren Buffett admits it is very difficult to beat the S&P 500.
Best wishes
Thanks brother
Thanks for your honesty…the only think I don’t like about high yield are reits they constantly perform horribly in any downturn in the economy and now high interest rates…also find your own investment style based on your priorities and goals and always be diversified…the other main point is to give your investments plenty of time to grow Rome wasn’t built in a day …
Your second point regarding specialized knowledge is exactly what a lot of people are falling flat on… especially if you follow a lot of TH-cam/Twitter channels that talk about investments, you're easily swayed to follow their personal findings. Because very very rarely do these channels talk about exactly what this specialized knowledge is, how you can learn to gain it, and what/how you look at finding stocks exactly. Not to mention is that it's really hard to differentiate alternative websites that give stock analysis and financial results, compared to the real ones.
In regards of REIT's, when reading their financial statements, listening to their shareholder meatings… more often than not do they talk a lot of fluff in these statements/meatings, making it equally hard for private investors to learn to block out the "fluff noise" and listen to the cold hard facts.
By the way, congrats on nearing the 200K subscribers!
Great video patience and persistitch.
"nature of cycles". Yes, very important. I am old and have lived through a few cycles. Now that I have finally grasped the significance of this I have precious few years left to use it to my advantage. Most of us will live through a handful of these cycles in our lives. Learn to recognize them and how to respond. You will only get a few opportunies in a lifetime to do so. Get a hold of this concept early on. You will be glad you did. Best wishes.
Learned a lot of patience and disipline, but had one singular goal in mind: to snowball myself out my student loans payments and bills. Did my bachelor's, masters, and finishing up my doctorate. Since they were deferred while I was in school, I stockpiled as much money as possible into my dividend paying assets and set them to reinvest until it's done. Upon my graduation I'll be hovering around $1400/month+ in dividends which will more than cover my interest and repayment, I'll continue to shove money into these to assets to snowball my way out :D it's really satisfying to watch, but yeah ..the fomo is real sometimes, but dividend investing has helped me immensely and kept me grounded
Your experience with high interest rates driving down values is a great lesson. Buy less than you can afford. With 5% money markets it’s now easy to hold sufficient cash. One should always have cash available to purchase more shares when prices decline. With CEFs, I may selectively sell a portion of a holding if it is at a peak premium as there are always other CEFs selling at a discount. Rotation is a valid option. Be concerned about your average share price and work gradually to stay in the green.
I have more of a hybrid portfolio, but seeing the dividends roll in still makes me happy. I know the stocks underperform in an uptrending market, but will do better in more bearish sentiment.
Great channel thank you. Hard and costly lessons have been taught to me by Mr Market over the past 6 years. i have delved into Options, Futures, Value Investing and Income Investing. Its called the price of being schooled and its comes with a high cost. However through the losses and gains I continued to learn and not repeat mistakes and found what works for me and now do well. Income Investing is 25% of my portfolio and truly appreciate your insight.
50+ Years of dividend increases turned out to be not as safe as I thought😢. MMM, WBA, LEG all cut in the past 12 months. However, patience with T and OHI for years are now above purchase price including dividends reinvested.
Excellent video, and very insightful and useful. Thanks a lot!
Research very important aswell and intrinsic value
Started 2 years ago and it's fun
Thanks for presenting some very good points about REITs, BDCs and MLPs/LPs, which you refer to them as "alternative investments". I have experienced the same thing you have, where their share prices decline, although they keep producing income. It is ugly to see these type of investments in the red. The points about cycles and interest rates are so important. IMHO, it is better to to invest in (initially) lower yielding, but higher total return stocks (higher capital appreciation and higher dividend growth), especially if you are a long term investor.
By being diverse, one doesn't put the majority of his eggs in one basket. What I noticed about this style of investing is that one has to be diverse because it can easily be discouraging. Patience is key as well.
My portfolio isn't diverse because I'm not woke enough.
It's about balance
What caught me off guard was by how much a dividend can be cut. This makes the yield no longer attractive, but I am still stuck holding a company that is now down from where I bought it.
Wish i had more money to invest too! 😂. For me i made way too many sells since i started. Just about everything that i sold i regret selling at some point. Especially my 2 shares of nvidia and facebook that i got for 160 and 80 . I sold them because they didn’t pay dividends at the time or very insignificant dividends . After i sold them i watched them take off 4x to 6x what i had bought them for. But honestly i do like holding only dividend stocks even though it may not be as profitable because it is less stressful to me. I can track my dividend income and see my progress. Instead of just homping the company never crashes.
What me caught off guard...
I had not enough money to become an income investor. I should have done the calculation first...
Therefore I sold all my dividend stocks and changed my strategy. As a sidenote, I have absolutely no problems with being patience, but I don't like to torture myself with an exercise in waiting if it is for the wrong reason.
VTI just makes more sense to me. If the total return of the market is more than dividend funds, then I’m still making more no matter how big the snowball is. If the total return of the dividend fund is lower than the total return of the market then I’ll always have less.
I would like to see a vid on what resources you prefer to use....
Regarding any investment situation I am looking at, whether I already own shares or am considering buying in, I step back every time and review a Charlie Munger quote......goes like...." What is the stupidest thing you could do right now? " That usually will take the emotion out of any decision and reinforce patience.
Absolutely true that its difficult to see the logic of the account being down from a share price perspective but at the same time collecting dividends monthly. Since I'm near retirement of a few years, although that's an assumption, I don't reinvest my dividends but maybe I should, in some assets. Thanks!
Another excellent video. Thank you.
It is somewhat comforting (misery loves company I suppose) that I am not the only one whose REIT holdings have tanked once the Fed starting raising interest rates. Prior to that my whole income focused portfolio in my E*Trade account was up about 10%.
I have tried a dollar cost averaging approach to lower my average cost and buy while rates are so high. Overall I am in the green when you take into account dividends but like you said it is disheartening to see so many red numbers on my portfolio.
The only thing that caught me off guard was PSEC losing so much in the share price.
Always check the max long-term history, not just a year or even five. We probably have all made the mistake of not considering the loss in share price with high yield offerings. I was able to get rid of PSEC, but have others I'm better off holding for the divs.
I think you should definitely have some pharmaceuticals as part of an income investing strategy. They can pay around 4% and dividends go up every year and you can make money on the stock price. There are a lot of good ones
is hedging via options a solution? I havent learn them yet but the idea of making money both ways without selling sounds nice.
Don’t get obsessed with a Dividend!
What investors need from stock ownership is earnings growth, not dividends. Investing for dividends provides some safety because since most stocks yielding 4 percent and above aren’t growing much. They don’t get bid up quite as much as a growth type stock. You don’t want to buy a over priced popular growth stock or a dividend stock anyway.
After many years of investing, all things being equal , I have decided that a 15% non dividend paying grower is usually a better than a 6% growing dividend payer. Just forget about dividends, it’s the growth rate of a company that matters. After a few years you can sell 9% of your growth stock spend the money like a dividend payment and be far richer than spending the dividends of your 6% growing , 4% paying, stodgy dividend stock. 😊
Sector Diversification is the hardest thing to do with this strat for sure, I need to pick one food stock get into still, and I got only 1 energy holding so far, I was thinking of seeing if adding cyclical dividends industries could be a way to handle FOMO. PS lol everyone was living in a la la land when it came to inflation, im so happy people are starting to see the writing on the wall and the bears can finally start finding those berries in the forest.
The lower the price the more shares you can get with DRIP
This is why I like OXLC. Plus they give a 5% discount on drip.
Keep up the great work thank you.
You should do a video on WHR. Good div, value play right now
A few preferred stocks
Can you take a look at the DNP select income fund and do a breakdown?
I’m interested in your regard for dividend captures. 0:15
My “FOMO”? TSLY. I didn’t take it in the shorts, but I did lose. I dumped before the reverse split, so I’m nowhere near as bad off as people still in it.
4-5% is not high , it's the long term average
Wouldn’t this be a good time to purchase our real estate investment trust? I know we don’t know when the rates will go down. Or, should we wait before buying into real estate investment trust until we know the interest rates will go down?
im glad you used the EM guys, they are terrible and just promote their pay-to-join groups
I think Core or High Yield Divided ETFs have great risk adjusted returns compared to being invested 100% in the S&P 500 or NASDAQ 100 and better returns than the traditional 60/40 portfolio. I laugh every time someone analyzes a REIT using the PE ratio. I believe all websites that show the PE ratio for REITs should switch to using the P/AFFO on the summary page.
nothing here
As a beginner I drank the kool aid of TTCF and XL Fleet :P Lesson learned!
Also... Don't listen to Cramer!
Reits are the worst investment anyone can do. After so many years investing I thought you would already know that
Why are they the worst?
Really interested about the comment you made on P/E ratios not being usful to judging REITs. Can you elaborate? Surely if you have 2 REITs that have the same % dividend yield, but one is P/E 2 and the other is P/E 50, then at a glance the P/E 2 is the better choice.
What do you have prefer to it? P/FCF? P/B?
Its only paper loss if you dont sell. Meanwhile I enjoy receiving dividends while I need to sell.
What do you think about insurance stocks like Legal & General and Allianz? High yield and in the case of Allianz even stock price appreciation 🤔 Metrics for Legal & General look interesting from a dividend perspective, but the share price looks weird on the chart…
Reits and utility stocks don't make much sense given a higher interest rate environment.
Can you review rio tinto high yield good company
Another great video. Thank you!
If you think being in the red on O after a few years is bad, just wait to see what happens to ACRE.
bruh im an income investor but i also buy growth and dividend growth stocks to avoid putting all the eggs in one basket and truly diversify.
Why you don’t mention cover call ETFs?
Any comments about an etf- HIGH?
I think that the red herring is of interest rates. Interest rates are not historically high why do i say this we have gone through a period of historically low interest rates fooling people into believing this is the new normality, so low that they have been lower in many countries than before records began the lowest ever recorded. Some countries went into negative yields and people bought bonds knowing they would lose money.
How many month have we been strung along with central banker stating interest rates will come down month after month quarter after quarter the talking heads have come out and said next time or the next quarter we see interest rates dropping, Now this week the central bankers are admitting interest rates could remain higher than we anticipated for longer.
When the people in power are putting out false information or lying then how can we be expected to make the right decision from crap information.
What do you get with the free patreon?
That little guy from EM, is a total clown, lost loads more shorting than just buying the index, but thinks everyone else is beneath him, family money
Great video as always. I definitely fell for a bad high yield investment (AT&T) when I first started. Out of curiosity, do you have a portfolio tracker that you would recommend? I’ve been using a google sheet created by another content creator, but it has issues pulling the dividend yield for some stocks and ETFs. So I’m always on the lookout for something potentially better.
Sounds like your dividend income investing strategy is similar to what Steven Bavaria wrote in his book “The Income Factory”, is that correct? In the book he uses Closed End Finds (CEFs) but you don’t talk much about them, is there a reason why? I’m not certain familiar with CEFs. Trying to learn how to implement a dividend income strategy for my portfolio. Thanks!
Great book! He did an interview with Adam Taggart that was an eye opener for me
@@tehachapicollector3329 Funny that you mention the interview with Adam Taggart because that’s how I heard about the book! It sounds like both Steven Bavaria and Dividend Bull both have the same strategy of focusing on dividend income (vs growth or dividend growth). I’m trying to understand why Steven recommends using CEFs (vs ETFs) but people don’t really talk about them.
Yeah, I wish I had more to invest in one of the sectors most investors are running from-REITS!!
The rating is made by people who want your money😂
What is your opinion of Zacks Financial Service?
you are a smart guy but i think you have a cognitive block do to your young age. interest rates are not high in a historical contexts.
Investing in this economy is a hell at times for the average person that wants full control of their finances, Even investing in ETF stocks can be risky
Well, I gotta admit, I took a hit in the profit department with my stock moves. But hey, every red chart has a chance to turn green, right? Time to step up my trading game and flip that chart for the better.
The question to be asked at times is not if the government or the economy is responsible for the sudden dramatic shifts in the economy but if we are taking the necessary measures to avoid making losses no matter the situation even if the pay roll is not in your favor.
One of the reasons i follow up these stock videos is to improve the returns of my investments and i can’t really say I’ve been seeing noticeable change though …. I’ll keep following to improve my investment philosophy anyway and find better ways to create smarter investments.
What would you consider the necessary measures though? I was at a seminar two days ago where investors gave their opinions on how we can better investment for proper returns.
At times not just creating smart investments but buying assets can improve your profit margins in the long run.
Biggest mistake i've made as a investor was using leverage, because once the market crashed and i couldn't sell out of my position, i was down 20K, with a debt of 30k. Interest was 1%, dividends was 9%, easy 8% i thought, until inflation and interest went up to 4,89% and the dividend got cut. Not doing that again, took me 1,5 year to pay that shit off.
Leverage imo is not worth it 99% of the time for individuals.
@@hopelessdecoy 100% agree, it's not worth it, learned the hard way as a new investor.
Great video! Except for the inflation, I really like this extended high interest rates. The reason is that it gives me more time to earn money at work and put it into the market. while there are so many bargains. I've also had opportunities to pick up bargains of the div/growth area. Since I've started watching your videos, I have doubled my income and make as much in dividends as i do at work. Thanks for all you do.
I appreciate your knowledge and your candor in discussing dividend investing.
Warren Buffett's favorite stock is the S & P 500
Can't disagree. No matter how bad the market is, this one will not not cease to exist.
why he not all in then ?
I’m buying WPC on the dip, and I’m taking a chance on Qqqi
There is a glaring error in this video: SeekingAlpha doesn't use the same parameters to rate BDCs, REITs and other alternative investments. The analysts that cover those types of alternative investments tend to specialize in the type of investments they cover. Such broad, incorrect statements are the kind of thing that make me hit "Next", and unsubscribe.
I couldn't hold on to this plan and wish I stayed the course. I tried playing the options market ( lost $9k ). Basically, lost half my value. Currently, I have 115 shares of QQQY and down $215 in share price, but have received $159 in dividends so far.
I'm planning on using a dividend ladder approach. At the end of each month, I would then evenly distribute the dividends among the 12 stocks. This way, the portfolio stays balanced or close to it.