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The 8 Rules Of Dividend Investing

November 11, 2019 Leave a comment

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Dividend investing involves accumulating stocks that issue dividends to generate a steady stream of passive income.

Rule #1: The Quality Rule

Invest in high quality businesses that have a proven long-term record of stability, growth, and profitability. There is no reason to own a mediocre business when you can own a high quality business.Rank stocks by dividend history and corporate history ,the longer the better. Stocks must have paid steady or increasing dividends through the worst periods of financial stress and turmoil to be eligible for inclusion in your portfolio.

Rule #2: The Bargain Rule

Invest in businesses that pay you the most dividends per rupee you invest. All things being equal, the higher the dividend yield, the better. Additionally, only invest in stocks trading below their historical average valuation multiple to avoid investing in overpriced securities. So rank stocks by dividend yield. Only stocks trading below their say 10 year historical average valuation multiple are eligible for inclusion in your portfolio.

Dividends Don’t Lie

March 9, 2016 Leave a comment

“Question — What’s the best action you can look for in a stock?
Answer — A long record of increasing dividends.

A lot of lies can be told about a stock, but dividends don’t lie. In order to increase dividends, a stock must create a history of producing cash. Analysts can lie, earnings can lie, CEO’s can lie, but dividends don’t lie. A company must increase its actual earnings in order to raise dividends. The only thing better than dividends is the float produced by an insurance company. The float, plus compounding, made Buffett a wealthy man.” – Richard Russell

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Faking It At The Race Course

February 5, 2013 2 Comments

Of course its possible to be the Millionaire Next Door and live a totally low key life,but if you want to use your money to buy excitement or a glamourous lifestyle or if you just want to manage an entree into High Society or if you wish to network to grow your wealth,you might need to get yourself to the race course.And if you don’t know the first thing about managing at the races,here are some basics to help you get started and to fake it till you make it. Read more of this post

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Passive Income

July 24, 2011 4 Comments

wealthymatters.com One of the most important takeaways I got from reading Kiyosaki was becoming aware of the fact that there were different types of incomes and that people in different quadrants of the cashflow quadrant earn different types of incomes.The trick then was to earn from as many quadrants as possible and to especially increase my passive sources of income to such an extent that I could live off them only.That would be the day I no longer had to work to keep myself but work because I wanted to.

Here is a list of passive incomes I have stored on my desktop to periodically remind me of the sort of incomes I should be focused on building. Read more of this post

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Edward Zajac – 94 year old investor

June 25, 2011 1 Comment

This is a story I came across in the Economic Times.It seems to be a reprint from Bloomberg.I have this story pinned to my notice board just to remind me how Dumb Money can become Smart Money.Here is a person who seems to have made good money without trying to become an expert at investing.He has accepted his lack of expertise and found a way to benefit from the expertise of the “smart money”.His method involves just looking at some basic facts before putting his money in a company.The skills required are really basic.The rest of his magic merely seems to be a result of compounding due to his Time in the Market and the wisdom that comes from experience.To follow him we don’t need to understand financial statements or master technical analysis.

Buy & hold strategy not dead yet for 94-year-old investor

NEW YORK: Stick with stocks, says investor Edward Zajac. He should know. The 94-year-old has been trading for 72 years and said he’s made about $2.5 million.

“I am a live, open-hearted investor,” said Zajac. “I’m willing to hold that stock 5, 10 years, if I have to.” Zajac, who lives with his daughter in Henderson, Nevada, bought his first stock, Petroleum & Resources, in 1937 while attending the University of Illinois. He’s invested full-time since 1968, after retiring from installing computer systems to travel the US in a recreational vehicle with his wife. Read more of this post