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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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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GE stock: Should I Stay or Should I Go?

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Good morning and a hearty "Happy Boxing Day."  Today will be my first granular-level post, focusing on a specific stock and my views positive or negative.  As with all of my analysis, please remember I am just a guy.  Not a professional and YMMV. My dilemma today is what to do with GE, which has been one of my biggest losers over the last few years.  This is unfortunately a hot topic for many dividend investors, who have been (mostly) able to rely on a strong dividend from this stock for decades.  It had until recently been a cornerstone of any recommended dividend portfolio. But a few weeks ago the dividend was cut in half, due to insufficient free cash flow. Let's all pause for a moment to recall Eddie…
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The 4 Percent Rule vs. Dividend FIREhoses

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In case the title to my blog didn't give it away, the Dividend FIREman is a devotee of dividend investing and other forms of passive income investing.  My view is that investing in assets that pay dividends, interest, rents, royalties, or other income on a regular basis gives me the opportunity to have my cake and eat it too.  To borrow Tom Wolfe's Bonfire of the Vanities metaphor, as long as I only eat the crumbs, I will never have to eat the actual cake. However, many investment advisors recommend against an approach that focuses solely on the revenue thrown off by a particular investment, especially in a "low yield" environment like we are experiencing these days.  Under this theory, a stock that pays dividends is really just giving you…
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Overview of Passive Income Investing

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What is this thing called "passive income?"  And where can I sign up to get it? Speaking broadly, I define "passive income" as "money I do not have to work to receive."  Another way to say this is "income from assets you have purchased."   Or "income from your investments," such as dividends from stocks, interest from CDs, bonds, savings accounts, and loans, rents from real estate, and book or film royalties.   None of this money is truly "passive," because you either have to earn the money to generate the revenue (and manage the investments once made), or purchase and manage the real estate generating the rents, or write the book that pays you royalties, etc. But for all of these categories, you do not have to get up…
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Dividend FIREman’s Dividend Portfolio

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Symbol Last Price $ Quantity Price Paid $ Total Gain $ Total Gain % Value $ AAPL 176.42 105.4215 92.468 8830.3641 90.4 18598.461 GE 17.76 480.7324 25.7028 -3855.271 -31.1083 8537.8071 MRK 56.22 168.7709 54.706 235.5458 2.5457 9488.3011 PFE 37.13 315.2062 29.168 2492.7381 27.063 11703.6077 VFINX 249.36 46.58 136.0969 5235.8144 82.0741 11615.1888 VZ 53.25 214.2144 46.0653 1509.0989 15.2468 11406.9157 XOM 82.94 160.4528 86.6538 -635.8574 -4.5601 13307.9561 PSX 99.98 129.5837 66.1088 4379.1662 51.0594 12955.7783 S 5.6 130 5.67 -9.1 -1.2346 728 KR 27 389.4507 21.12 2276.0848 27.6255 10515.1678 BRK.B 199.34 20 132.93 1318.21 49.3972 3986.8 DDD 10.15 130 59.905 -6498.12 -83.1215 1319.5 TITXF 0.2917 1500 1.65 -2047.44 -82.3923 437.55 MDT 83.43 145.7085 49.0399 4997.0305 69.7965 12156.4585 T 38.46 395.0234 34.0466 1716.4551 12.737 15192.5984 HAWK 34.45 24 0 826.8 0 826.8 PYPL 75.32…
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Who is Dividend FIREman? (this is my “hello world” post)

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Hi and welcome to my blog!   I created Dividend FIREman to chronicle my personal journey from the poor house to FIRE (Financial Independence Retire Early). “Retiring early” is a relative term when applied to my life.  I am a 53 year old professional living in a large southern city, who spent the first 47 years of his life making a ton of money and squandering most of it.  Seriously, you will be pissed off that I earned so much, and then spent so much.  In 2012, I got divorced and was introduced to a nasty concept called “lifetime alimony.”   The world also slapped me in the face with the cold reality that I had no money and a mountain of consumer debt. But I am living proof that it is…
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