Follow the dividend investment decisions of a person who has no background in financial investment and wishes to take control of their financial future to retire from their full-time job at 60.

Weekly Portfolio Summary - 27 Jul 2019 13:27

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Portfolio Activity

This is actually two weeks of portfolio activity as I was on vacation last weekend enjoying a great summer getaway in a cabin on Great Sacandaga Lake in NY. Over the last two weeks the bulk of my REIT stocks paid out to deliver a nice large payout.

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Portfolio News - (In Case You Missed These Headlines)

AbbVie (ABBV)

Avangrid (AGR)

Air Products (APD)

Preferred Apartment Communities (APTS)

Brookfield Renewable Partners (BEP)

Bar Harbor Bankshares (BHB)

Camden Properties Trust (CPT)

First American Financial (FAF)

GATX Corp (GATX)

Hasbro (HAS)

3M (MMM)

Medical Properties Trust (MPW)

Marine Products (MPX)

Merck (MRK)

Microsoft (MSFT)

Newtek Business Services (NEWT)

Pfizer (PFE)

Phillips 66 (PSX)

AT&T (T)

T. Rowe Price (TROW)

United Parcel Service (UPS)

Waste Management (WM)

Weyerhaeuser (WY)

Interesting Blog Posts or Articles

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Leaderboard: Monthly Dividend Income From The Blogging Community by Dividend Driven
Stockboard: What Stocks The Blogging Community Are Buying This Week by Dividend Driven

Articles - Comments: 0

Weekly Portfolio Summary - 13 Jul 2019 11:44

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Portfolio Activity

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Portfolio News - (In Case You Missed These Headlines)

Armanino Foods of Distinction (AMNF)

Bar Harbor Bankshares (BHB)

Cummins (CMI)

General Mills (GIS)

Garmin (GRMN)

Iron Mountain (IRM)

Johnson & Johnson (JNJ)

Merck (MRK)

Pepsico (PEP)

Qualcomm (QCOM)

Ryder System (R)

T. Rowe Price (TROW)

Walgreens Boots Alliance (WBA)

Williams-Sonoma (WSM)

Interesting Blog Posts or Articles

Blog Posts
Leaderboard: Monthly Dividend Income From The Blogging Community by Dividend Driven
Stockboard: What Stocks The Blogging Community Are Buying This Week by Dividend Driven

Articles
Is Retirement Flawed
What to Do When You Inherit Your Parent’s House - Comments: 0

New Buy MMM - 09 Jul 2019 20:23

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Brokerage Buy: 3M Company (MMM)

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Purchase Price: $166.97/share
Increase in Forward Annual Div: $34
Inflation Beating Streak: 19 Years
Div Growth Streak: 61 Years
Yield: 3.45%
Payout Ratio: 61%
Most Recent Dividend Increase: 5.88% / Feb 2019

This is my second buy of 3M. As long as the stock stays in the $160's range I will continue to add to my position. - Comments: 0

Weekly Portfolio Summary - 06 Jul 2019 12:03

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Portfolio Activity

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Portfolio News - (In Case You Missed These Headlines)

Brookfield Renewable Partners (BEP)

Garmin (GRMN)

Hospitality Properties Trust (HPT)

Marine Products (MPX)

Pfizer (PFE)

Phillips 66 (PSX)

Interesting Blog Posts or Articles

Blog Posts
Leaderboard: Monthly Dividend Income From The Blogging Community by Dividend Driven
Stockboard: What Stocks The Blogging Community Are Buying This Week by Dividend Driven

Articles
A portfolio manager warns of 4 possible red flags in company proxy statements
Millennials who live with mom and dad will need $10,000 to move out - Comments: 0

Why Turning 50 Was A Major Financial Milestone - 05 Jul 2019 12:14

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In 2018 I turned 50 it marked a special event for me as it represented 35 years of earning income. I have been working since I was 16 years old which equates to 35 years of filing tax returns and paying the FICA or OASDI tax (social security) and never had a year of no earned income making this a huge moment for my Social Security benefit at retirement.

To better understand why I consider this such a major milestone you need to understand how your Social Security payment is determined. The Social Security Administration (SSA) calculates your payment based on what they refer to as the 35 year rule. From the SSA website here is the definition of the 35 year rule:

“Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most. We apply a formula to these earnings and arrive at your basic benefit, or “primary insurance amount.” This is how much you would receive at your full retirement age — 65 or older, depending on your date of birth.“

The interesting part of this calculation is it totals 35 years’ worth of index adjusted income and then divides that by 420 months (35 years) to determine your “Average Indexed Monthly Earnings” or AIME. Then SSA applies what they call AIME bend points (for text “AIME bend points” to determine what % of your AIME will be paid out as a benefit. The formula is never less than 420 months so if you have less than 35 years of income then those $0 earning years are used in your calculation. That’s 12 months of 0’s for every year of not working being factored in that 420 average!

My personal goal has always been to retire early at age 60 and collect my SSA benefit at age 65. Out of curiosity I calculated what my SSA benefit at 65 would have been I retired at different ages:

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As you can see in the chart above the biggest increase in the monthly payout is from age 40 to age 50 and this is due to the fact that I have achieved earned income for all 35 years. You could argue that these are my highest paying years any why the big difference. However, if you look at the increase from age 50 to 60, those additional 10 years of higher pay would replace my 10 lowest years and it only resulted in a monthly increase of $255. So the big deciding factor is not having to average in any 0’s.

The FIRE movement has motivated many to retire in their 30’s & 40’s and I have to give them a lot of credit for having the discipline and courage for their achievement. For me though I have a tendency of visualizing risks and a desire to avoid them as much as possible. As I have gotten older I have definitely become more risk averse. Maybe it is age, experience or just plain fear but I simply do not like risk. When I see my SSA benefit is double what it would have been when I was 35 I feel that much more secure knowing I have a significant steady monthly income that can address any risks that I have not foreseen in my 60s or later years.

As a note, I am not condemning people that retire in their 30s or 40’s. Or that my approach is right or wrong. At the end of the day it is what I am comfortable with as it helps alleviate concerns I have about unknown risks. I have only recently been making a very good salary and saving at a higher rate (close to 25%). In theory my investment income at 60 will cover monthly expenses and support a mild inflation rate of less than 4%, but that is as far as it goes. The SSA benefit will allow me to have income to minimize unknown risks and to be a source of money to occasionally indulge in things outside my normal expenses or day to day activities. Regardless of your situation, when it comes to social security the 35 year rule is something everyone should be aware of and how it impacts you. - Comments: 0


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