Tag Archives: financial independence

How General Mills and Mad Money turned me into a Dividend Growth Investor

Back when I was starting to learn about investing, I spent most of my free time reading investing and personal finance books such as those by Peter Lynch, Robert Kiyosaki (Rich Dad, Poor Dad series), and Jim Cramer.

I also watched Jim Cramer’s Mad Money show almost every evening.* Although his investing style is a lot different than what I’m doing now with dividend growth stocks, I did learn a lot about stock investing that can applied to DGI such as maintaining proper diversification in your portfolio and how to value companies.

Although I hadn’t started investing any money yet, I researched stock ideas a lot, including many of the ones featured on the show. At the time, I was thinking I would eventually start a portfolio that was based only on total return, that is, capital gains. Basing a portfolio off of dividends never even occurred to me. On the show and in all the books I had read, dividends were always mentioned as sort of a bonus that stocks sometimes paid with investing for stock price appreciation being the main focus.

One day, Cramer spent some time discussing some potential investments in the consumer staples sector. I don’t remember all of them but both General Mills (GIS) and Kellogg (K) were mentioned with Cramer thinking that General Mills was the more attractive option at the time as far as valuation went. I researched GIS online and quickly discovered that the company had been paying out dividends for 113 straight years (at that time, now 115!) without ever cutting it. It had been kept at the same level for multiple years occasionally over the company’s history but never cut. That amazed me, especially with so much of the investing talk in 2012 still about recovering from the 2009 recession where so many companies cut or eliminated dividend payments due to the tanking economy. “How was GIS able to sustain and grow their dividend through this latest financial crisis and all the other ones over the last 100 plus years?” I asked. My research online eventually led to Seeking Alpha where I learned all about dividend growth investing from some of the great contributors on the site and from there began focusing most of my research activities to dividend paying stocks. I eventually started investing at the beginning of 2013.

Ironically, I still don’t own GIS in my portfolio (I valued stocks a little too conservatively when I started out and was trying to look for a better entry point), but it was the one stock that really started me on this journey to financial independence. It seems like dividend growth investing and early retirement seem to go hand on so many of the articles and blogs about the topic on the web and I soon realized that this strategy gave me a concrete and seemingly easy plan to be able to achieve my goal of financial independence. Well at least easier than becoming an expert stock picker of growth stocks. 😉 Dividend growth investing could provide me with a steady stream of income that I could live off of instead of trying to just build up a large portfolio and then gradually sell off stocks to fund my retirement, being completely vulnerable to the whims of the market.

 

*Wow, I sound like a huge geek, what kind of 20 year old watches Mad Money everyday? 😉

For all my fellow dividend growth investors out there, how did you get started with this type of investing strategy? Was it a particular stock like me or something else? Comment and share your story. Thank you for reading.

Financial Independence and Long-Term Goals

To me financial independence is about being able to live my life the way I want to you without having to worry about working every day to be able to pay my living expenses. It doesn’t necessarily mean I will stop working completely though. It just means that I won’t be forced into continuing to work beyond when I want to.

For me the perfect day of financial independence would be able to wake up on my own (no more 0330 wake-ups every day!), have breakfast, and review the news and some of my favorite personal finance blogs. Then do a little investment research for my portfolios, head over to my place of business to ensure everything is running smoothly (what type of business yet, I’m not sure, it’s still a way off 😉 ), and then spend the rest of the day doing whatever I feel like. There are several hobbies that I would like to try such as photography, woodworking, and focus more on writing. I’ve always dreamt of writing my own novel and being financially independent would allow me the time necessary to actually crack down and get it done.

So here are some of my long-term goals, including F.I., those that will take several/many years to accomplish. I will be posting my short-term goals for 2014 soon.

-Become financially independent by age 40 (2032).

-Open my own small business by age 30 (2022).

-Publish a novel.

-Take a summer (maybe a whole year?) once I’m F.I. and go on a huge road trip across the U.S to visit all 50 states.

-Complete my Bachelor’s in Business Management by age 30 (2022)-currently taking 1-2 classes per semester with 3 completed.

There, I’ve put them down in writing (and sharing for the entire world to see!) to hold myself accountable. I’m going to track the progress of all of these goals here on the SFZ Blog so be sure to bookmark the site and check it out regularly. Hopefully SFZ will still be around when I’m accomplishing all of these in the future ;).

What do you think of my long-term goals? Do you share any of the same ones and what are you currently doing to accomplish them?