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A follow up. Income increased by $177 in January. Made no other purchases. The rest was DRIPs.
Ver-F slightly above par again at 25.05.
HT-D still super cheap at 21.00
INN-E still super cheap at 21.53
The NI-B I mentioned went to $26.99 so it's no bargain anymore (in my mind)
BAC-B went to $25.94 so getting a little pricey also.
Recovered all my "lost" money.
Update after April.....
Ver-F still higher at 25.21. VER doesn't seem to be too anxious to call it. I might consider buying some more. (Like I said I like monthly dividends)
HT-D no longer super-cheap. It's at $23.45. That's still a price I'd buy at, except I already have $10K of it, and that kind of my cut-off allocation.
INN-E no longer super-cheap. At $23.73. I only have $5K of it, so at some point I might get some more.
NI-B at $26.55 still a bit rich for my blood.
BAC-B at $26.60.... too pricey for me.
I bought some RLJ-A along the the way at average price of $25.64 (I pay $8.99 commissions). It's at $25.40 now. The guy that talked about it on Seeking Alpha and the Innovative Investor site, said that RLJ basically can't call it, so the price above par doesn't matter much. And it's not much above par anyway.
So, if your happy with the yield....go ahead and buy. So I bought some ($2,500) and am likely to buy some more. In fact it may be my $1,000 purchase for May.
I usually try to buy $1,000 or so monthly to have a consistent monthly increase.
Speaking of which, income increase was
$177 for Jan
$268 for Feb (two purchases)
$91 in March
$117 in April
Pretty sure May is a 2 purchase month. Already made one.....
This is the kind of investing I'm kind of interested in as well. Maybe it's because I'm young, but I don't really have any desire to have very much cash and as soon as I have a lot of cash, I try to find another place to park it to increase my returns. I'd rather have the monthly or quarterly income than a big lump sum of cash. I really don't have a use for that kind of cash at present. I will have some uses for large chunks of cash, but I'm trying to set it up so that my monthly income is so enormous that I can stockpile cash rapidly. The biggest downside to stocks for me is I'm not a huge fan of the idea of watching my stock portfolio increase in value, but then having to sell the asset (the stocks) to realize any gains whatsoever. That's not how the rest of my portfolio works so it seems bizarre to me. I'm used to investments where the underlying asset has a large value, but it kicks off X amount of money every month or every year and that's what I mostly care about. The underlying value is almost more academic, a "paper value" that isn't typically realized as even if the asset is sold, it's typically traded into something else (1031 exchange).
There's a lot of appeal to me of being able to reinvest cash and turn it into another income-producing asset. To this point, I have basically said "let it ride" every time I've had any substantial amount of money on the side and I've picked up additional investments. The appeal of income-producing stock, even if the yield wasn't anything crazy, would be kind of nice because the stock would still be a fairly liquid asset compared to my others and any extra income would just be a bonus basically.
My only stock holding now is in a startup company, high risk, high reward, it is still around and kicking about 4 years later but any payoff is probably another 4-5 years away. It's one of those things where I'll either lose the entire investment or probably make 5x my money. I'm obviously hoping for the latter, but it's a small enough portion of my portfolio that it's not a big deal either way. You have to take some shots down the field every once in a while.
All equities can be income producing ... that is how we live in retirement....selling 4% of a portfolio when rebalancing to raise cash is identical to a 4% dividend in , balance and income. The 4% from the portfolio has a more efficient tax structure.
Both cases need 4% in appreciation to offset the draw.. how a total return is arrived at is irrelevant in both cases ......
This is the kind of investing I'm kind of interested in as well. Maybe it's because I'm young, but I don't really have any desire to have very much cash and as soon as I have a lot of cash, I try to find another place to park it to increase my returns. I'd rather have the monthly or quarterly income than a big lump sum of cash. I really don't have a use for that kind of cash at present. I will have some uses for large chunks of cash, but I'm trying to set it up so that my monthly income is so enormous that I can stockpile cash rapidly. The biggest downside to stocks for me is I'm not a huge fan of the idea of watching my stock portfolio increase in value, but then having to sell the asset (the stocks) to realize any gains whatsoever. That's not how the rest of my portfolio works so it seems bizarre to me. I'm used to investments where the underlying asset has a large value, but it kicks off X amount of money every month or every year and that's what I mostly care about. The underlying value is almost more academic, a "paper value" that isn't typically realized as even if the asset is sold, it's typically traded into something else (1031 exchange).
There's a lot of appeal to me of being able to reinvest cash and turn it into another income-producing asset. To this point, I have basically said "let it ride" every time I've had any substantial amount of money on the side and I've picked up additional investments. The appeal of income-producing stock, even if the yield wasn't anything crazy, would be kind of nice because the stock would still be a fairly liquid asset compared to my others and any extra income would just be a bonus basically.
My only stock holding now is in a startup company, high risk, high reward, it is still around and kicking about 4 years later but any payoff is probably another 4-5 years away. It's one of those things where I'll either lose the entire investment or probably make 5x my money. I'm obviously hoping for the latter, but it's a small enough portion of my portfolio that it's not a big deal either way. You have to take some shots down the field every once in a while.
I'm an income investor. Essentially all of my stock investments produce income. I invest in REITS, BDCs, CEF's, and a lot of preferred shares.
Since I've gotten myself to a position financially where I don't have to spend all my investment income, I reinvest the rest. In fact I basically reinvest all of it.
It spits out a little more then $2,000 a month.
Income investing is like having your own annuity except you maintain control of the underlying assets, and can grow them, as long as you are cash flow positive. You can decide how much risk you want to take, etc.
I highly recommend it.
Here's an abridged version of my original post. 4 years ago, I was at $2,000 a month in income/dividends. This month I hit $36,000 so $3,000 a month in dividends/income.
7 1/2 years ago. I was drawing 108k from my portfolio, today the same percentage is 128k despite drawing out over 100k a year for 7-1/2 years just based on total returns .
Not sure of your point …income goes up as portfolio value goes up , dividends or not
It can cause one to over draw a bigger percentage then is safe if one only goes by the withdrawals via dividends .
Unless one is seeing at least a 2% real return the first 15 years of a 30 year retirement even 4% inflation adjusted will fail .
AT&T is a perfect example of why we can’t go by just dividend payouts .
Despite their dividends one would have had to cut draw to less than 4% to stay solvent.
Some high yield funds are paying over 5% . If that was your portfolio , you can’t spend 5% or there is a very high risk you will run out of money before you run out of time .
It is only portfolio value that counts when taking a safe withdrawal rate …how that draw is made up is irrelevant..it can be all dividend , rebalancing a portfolio, , etc.
Unless one buys an annuity there is no such thing as just income investing as safe withdrawal rates are based on total returns and sequences of those returns .
This premise above is like my wife just pulling out a year whatever she feels like and going but I can take this much out without regard for our balance and returns
This is basic retirement planning, all draws are based on cumulative total returns and balances -period.
Only exception is someone drawing some occasional spending money and not trying to live off what they have long term but that is still nothing that can’t be duplicated from non div payers just the same
Last edited by mathjak107; 01-27-2023 at 05:31 AM..
Here's an abridged version of my original post. 4 years ago, I was at $2,000 a month in income/dividends. This month I hit $36,000 so $3,000 a month in dividends/income.
Except just pulling money out without regard for total return and whether the draw can be supported isn’t a milestone .
Any of us can over draw more then we should but that doesn’t mean it’s a good thing .
One can never pull out money in any fashion be it dividends , appreciation , rebalancing or a combination without considering what the assets are doing in total.
There is no such thing as just income investing unless one buys only individual bonds or annuities ..
There may be portfolios that include more or less bond interest for income but stocks are stocks and always have to be measured as such which means total returns .
Some stocks just make it easier to make withdrawals via dividends but that does not mean the value can be disregarded.
All safe withdrawal rates are based on portfolio balances , not how the income may spin off .
This has nothing to do with whether stocks pay dividends or not , it’s simply the rules of taking portfolio withdrawals, especially if they have to support you in good times and bad
Except just pulling money out without regard for total return and whether the draw can be supported isn’t a milestone .
Any of us can over draw more then we should but that doesn’t mean it’s a good thing .
One can never pull out money in any fashion be it dividends , appreciation , rebalancing or a combination without considering what the assets are doing in total.
There is no such thing as just income investing unless one buys only individual bonds or annuities ..
There may be portfolios that include more or less bond interest for income but stocks are stocks and always have to be measured as such which means total returns .
Some stocks just make it easier to make withdrawals via dividends but that does not mean the value can be disregarded.
All safe withdrawal rates are based on portfolio balances , not how the income may spin off .
This has nothing to do with whether stocks pay dividends or not , it’s simply the rules of taking portfolio withdrawals, especially if they have to support you in good times and bad
I am so glad you came back to this board -- you are doing a great job of explaining retirement withdrawals and I have learned a lot from you. So please stick around and keep sharing your knowledge.
I am so glad you came back to this board -- you are doing a great job of explaining retirement withdrawals and I have learned a lot from you. So please stick around and keep sharing your knowledge.
Thank you.
I learned from some of the smartest people on the subject .
All I do is pass on what I learned from them so others can understand…there is just to much myth and old wives tales out there that just never die as others parrot what other misinformed writers and posters put up
Last edited by mathjak107; 01-31-2023 at 08:40 AM..
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