January 2018 Portfolio Review

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Dividend FIREman’s grand experiment in creating passive income through his various Cash FIREhoses is now underway – almost two months under my belt so far. Let’s take a look at my five (5) Cash Firehoses as of January 31, 2018, to see how we are doing so far from an income standpoint. The total equity value of all investments on January 31, 2018 was $1,446,853. The total income from the portfolio in January 2018 was $1,697.94. Here is how the January 2018 income breaks down: CASH FIREHOSE                              VALUE           JANUARY 2018 INCOME   Hard Money Real Estate Loans     $114,928      $570.64   Dividend Account                            $371,613       $586.64   Mutual Fund Account                     $738,494       $366.17   High Yield Savings Account          $130,818       $138.09   Rental Homes                                  $91,000      …
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Cell Tower Companies – REITS without the Retail Risk

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An oft-overlooked opportunity in the telecommunications and REIT sectors is cell tower companies. Every phone call you make, every text message you send, every action you take on a phone app, every internet search you undertake – did you ever stop to think how the information you send (along with the information sent by the other 225 million people in the US with cell phones) is transmitted to the recipient? A very large chunk of this information is relayed through cell phone towers owned by one of the three largest cell tower companies in the US – SBA Communications Corp (SBAC), Crown Castle International (CCI), and American Tower Corp (AMT).   These companies enjoy a virtual monopoly in this space - together they control almost 80 percent percent of the…
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The Making of a Cash FIREhose – Index Funds

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Dividend FIREman subscribes to the “multiple buckets” school of financial independence, with the idea that each “bucket” is designed to provide a separate income stream. I call these buckets “Cash FIREhoses," because each bucket generates a stream of cash, which will grow larger as time goes by. You can see an overview of my Cash FIREhoses here – at the end of 2017, my total income from all of these Cash FIREhoses was $28,208. Not nearly enough on which to retire, but not too bad for a guy who had a negative net worth in 2012! My Boring Old Index Funds Are Throwing Off Some Serious Cash One of my Cash FIREhoses (and currently my largest Cash FIREhose) is a portfolio of index funds. The total amount in this account…
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HELOC Arbitrage – Too Risky?

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My bank recently approached me with opening a $250,000 Home Equity Line of Credit (HELOC) on my primary residence.  The interest rate is 6.6 percent, and there are no closing costs unless I close the line within the next three years.  The money can easily be transferred into my primary checking account via online banking. Given that I have wanted another potential source for emergency cash, and given that there were no costs to me, I opened the HELOC notwithstanding the high interest rate.  I could not get a clear explanation for the high rate - my credit score of 745 was apparently not enough to get a lower variable rate with my bank (I will likely do a separate post on this issue, because the seeming arbitrariness and imprecision…
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Money Lessons From My Father

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My father died last week. His death was neither unexpected nor tragic (he had been sick for a long time, and he passed peacefully in his sleep, which was a blessing). But it doesn’t lessen the void in my heart. As the father of three young men, it pains me to think they will someday feel this same void in their lives.   I can only hope that I have been and will be half the father to them that my father was to me. My father taught me so many things, probably including things I don’t even yet recognize. He was a perfectionist, but he held himself to a higher standard than he held anyone else.   I learned from watching him, from things he told me, and from mistakes he…
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Five Strong Dividend Stocks for 2018

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Using some year-end bonus money, Dividend FIREman has opened up positions in five new dividend stocks: Edison International (EIX) - paid $63.63, PE 14.4, yield 3.85% Blackstone BX - paid $32.98, PE 14.7, yield 6.79% Duke Energy (DUK) - paid $80.38, PE 21.0, yield 4.44% Archer Daniels Midland (ADM) - paid $40.12, PE 18.7, yield 3.21% Proctor & Gamble (PG) - paid $90.14, PE 24.2, yield 3.05% I made these purchases after extensive research, and I can confirm the rumors that finding stocks at a fair valuation in this market is growing increasingly difficult.  I actually pondered the possibility of resting my new little green soldiers until better opportunities (i.e. lower and more reasonable valuations) present themselves.  But after careful consideration I think that deploying my cash to these particular…
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Dividend FIREman’s Research Library for Investors

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The amount of available data on particular stocks can be overwhelming, and often results in information overload.   Market timing, chart movement, societal trends, political intrigue, wind direction, natural disasters - all, some, or none may play a role in whether a particular stock goes up or down at a particular time on a particular day. But none of this is predictable or reliable, and these phenomena are all very complex.   How the market works, what you can determine from a financial statement, when certain markets will go up or down, who can you trust to give you unbiased information - it is enough to make your head spin! In the beginning of my investing career, I often made impulsive investment decisions that turned out poorly, mostly based on…
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2018 Roadmap to Retches

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(Inaugural post of the Satire Series) Happy New Year to my fellow Dividend FIREpersons! Are you tired of being unhappy about money?  Do you always wonder why everyone else seems to have more money than you?  It's because you’re doing it wrong.  Now is the time to finally get your finances straight, and Dividend FIREman is here to help.  What follows is my guaranteed recipe for 2018 success! First, let's review the 8 main categories of investments you should have.  Just as fat, caffeine, sugar, and salt are the 4 main food groups that should be part of your diet every day, there are also certain core investments that should be in everyone's portfolio.  Here is a handy list, which somehow I was unable to find anywhere on the internet.…
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