Dividend Investing – AIM For Your FIRE

The great Warren Buffet has said, “If you like spending six to eight hours per week working on investments, do it. If you don’t, then dollar-cost average into index funds.”

This is exactly the situation I find myself in week after week. I’m a complete nerd when it comes to trying to find the right dividend stocks to fuel my portfolio because I view it as a type of wealth puzzle to solve. Meanwhile, my wife couldn’t care less about it, but she trusts me with paying taxes, mortgage, and essentially everything that has to do with money for us. The strategy that I’ll explain to you isn’t one that’s revolutionary or ground-breaking. It’s one that works for us and one that we feel safe in investing in. So without further ado, here it is…

For our retirement accounts, we are invested in well diversified mutual funds that will grow over time since they’re actively managed. For our taxable investment account, I have us in 17 holdings as of the writing of this post. My holdings are all dividend stocks that I can rely on every month or quarter to grow and to be reinvested. I invest $1,000 per month into our portfolio and I buy stocks whenever I find a great value to take advantage of.

That’s all there is to it. I don’t invest in companies that don’t pay a dividend. Which means to all you Tesla bulls out there, I’m not interested. The reason for this is to have our money work for us without having to worry about the overall picture of the stock market. I want to invest in companies that will pay me back just for investing with them because it’s the easiest source of passive income, you literally do nothing but hold your investments and you’ll get income from it.

Ultimately, years down the road, our goal is to be able to retire much earlier than 60 and live off the dividends our portfolio pays us every month or quarter while still growing our account. That is achieving FIRE for us.

For those of you who are new to the blog and new to dividend investing, I’ll give you an example. Let’s take Pfizer which is ticker symbol $PFE. As of the writing of this post, it is trading at $37.79. It has a quarterly dividend payment of $0.38 per share. This means that for every share that you own of $PFE, the company will pay you $0.38 since you are a shareholder in their company. If you own 10 shares, this means every quarter Pfizer will pay you $3.80. This may not seem like a lot, but you can reinvest that money back into $PFE and buy fractional shares with it so then it can compound the next time they pay out a dividend and so on, and so on.

I want to take advantage of the extreme compounding that dividend investing has to offer so my portfolio can grow at a higher rate. There are many different metrics to look at when it comes to finding the right dividend companies to invest in. Numbers like the P/E Ratio, Dividend Yield, Payout Ratio, and Free Cash Flow are very important to determining which companies to invest in and I will be going into depth on each of those in the future.

If you want an investment strategy to just set it and forget it, I refer you back to the Warren Buffet article back at the top of the post. There is nothing wrong with investing in index funds. They are very safe and are fairly consistent with slow but steady growth over long periods of time. There are plenty of people around the world who have done very well just sticking to safe index funds. But I thoroughly enjoy investing and love to actively do research on dividend companies. And hey, it’s a better hobby than collecting expensive cars or buying a bunch of useless crap I don’t need!

With this section of the blog, I’m going to update my portfolio and let you know which stocks I have chosen to invest in when I buy more. I’ll walk you through my thought process to help educate you on what I look for. I’ll also be sharing my progress with the portfolio and share my plans for the future as well as celebrating important milestones.

I’ll wrap this post up there, so with that being said, I really appreciate you following along with the blog and I’ll catch you on the next one!

Marcus

Hi everyone, welcome to AIM for your FIRE! My name is Marcus and it’s about time that I give this blog thing a shot and make this essentially a journal for my wife and I and our journey towards Financial Independence. I just want to give a quick background behind my wife and I and where we are currently in our financial journey. I’m not doing this to brag or to boast, I’m doing it so if you’re reading this, you can understand how a very average couple can build wealth and to prove to everyone that you don’t need a six figure income to achieve early retirement.

I am 27 and my wife is 25. We both graduated from Boise State University in 2017, I obtained my B.B.A. in Marketing and my wife got her B.S. in Criminal Justice. We live in Boise, Idaho and we recently just bought our first house in March. The big thing that we have going for us is that through all that we have been through already, we don’t have any outstanding debt… except for our mortgage of course. Our combined income is nothing spectacular at $81,000. We are very frugal and love our lifestyle! We like to refer to ourselves as AIMs (Average Income Millennials)

We have a few different investment accounts that we currently contribute to every month. I am maxing out my Roth IRA and have been doing this since I opened my account two years ago. My wife just got her Roth IRA set up as well and she is currently maxing out her’s as well. We also have a separate investment account that focuses on dividend growth investments that we contribute to every month so we can grow it to an amount that will help us retire before we get to our 60s.

Our big goal that we’re always working towards is achieving FIRE. Many of you already know what financial independence is, but for those of you who don’t, I’ll tell you what this phrase means.

FIRE, Financial Independence Retiring Early, is a phrase that has come up more and more over the past two decades. It essentially means that you have the freedom to live off your assets/investments and that you don’t have to work to make ends meet in order to cover your expenses. This is a goal that many strive to achieve because no one wants to work until they’re in their 60s unless they really enjoy what they do for work. It’s very attractive to many people in the Millennial generation because they want that freedom and to not be tied to work their entire lives.

Although a lot of my time is tied up in my work and my hobbies like playing pickleball and researching dividend stocks to find my next income stream, I really want to start this blog to document our financial journey and to help anyone else who is looking for additional information on where to start with their finances as well.

In this blog, I’ll be talking mostly about how to achieve FIRE and specifically how to do it with just an average income. It is absolutely doable, all you need is a plan and stick to it. There are going to be many tips and tricks that I will dive deep on to help everyone who follows the blog. I’ll also go over certain dividend stocks and explain what I look for when I invest as well as what the key metrics are to understand which companies are better than others in this specific style of dividend investing.

I’m looking to post at least 3 times per week especially just starting out having never blogged before. Once I get a schedule going, I’ll most likely be posting every day, but I want to work up to that amount over time.

I just want to close out this first post by giving a disclaimer. I am not a licensed financial professional. You should do your own research and investing on your own terms. This blog is to document my thought process on investing and to give helpful hints and information to help you make a better financial decision on your own or seek out a professional for yourself. Past performances of all the stocks that I’ll be discussing are not guarantees of future results.

So now that we have that stupid jargon to help cover my own ass so no one sues me for anything, I finally just want to say how excited I am to get started on this new project and to share my knowledge with all of you! Once I get everything started and going more smoothly, I’ll set up something so we can build this community and have a dedicated home so I can bring everyone more content more often.

If you’ve gotten this far in the blog, I really appreciate you following along and admire your dedication to reading.

Thank you so much for following along and I’ll catch you on the next one!

Marcus