Investing
My Triumphant Return to Stock Investing – This Time for Dividends

My Triumphant Return to Stock Investing – This Time for Dividends

I just started investing again after an extended absence, this time primarily in dividend paying stocks. It feels great to be digging into stocks and looking for returns from gains and dividends.

I have always enjoyed stock investing, but it’s been a while. I need to shake off some rust first.

The Rise and Fall

Years ago I was an investor in stocks. I had a healthy sized Roth IRA account and a good sized taxable account, both growing well. I even had my first 401k account with some modest money in it. My interest in stocks grew right after graduating college. It took me a while to gain enough income for investing, but I started small.

I was researching and picking my own stocks, with a great help from The Motley Fool. Using newsletters from the Fool and knowledge I had gained, I was gaining great returns and growing my portfolios.

I was a long term buy and hold investor, for the most part. I slanted towards more aggressive stock plays, but always stuck with companies that made sense to me. I wasn’t chasing the crazy internet stock boom, preferring to heed the words of Warren Buffet and invest in what I could understand.

I was doing well enough that I was doubling my portfolio size every 2 to 4 years (roughly). Granted, they were modestly sized portfolios, but they were growing very well. And my success was furthering my interest and drive for stock investing.

BUT…

Then it all came crashing down. First we hit financial road bumps. I had to stop investing and start drawing on those accounts, taking out money from my taxable account for the first time. I strategically sold off my largest gainers from the portfolio.

Then we went completely off the rails. I was forced to pull everything out of my taxable account, even taking short term loses on some stock positions. We needed cash.

Finally, I did the unthinkable…I drained my Roth IRA and 401k accounts. We had no other alternatives at the time. We needed the money to keep us going. That was painful! Those were unfortunate steps, but necessary ones in order to keep us afloat at the time.

We had run into terrible timing in the real estate and job markets, making moves at all the wrong times. We had bought a house at the top of the market, sold it just before the crash to move across the country, at about break even. Then we bought another house that was near the top of the market…and we rode that down with the crash. We were upside down on our mortgage.

What did we know? We couldn’t see the collapse coming and the potential larger impacts to our own financial life. Besides, hind sight is 20/20.

Back to Stocks

Like I said, I’m coming back to stock investing after a long layoff. I really just moved away from it completely. There was no reason to track stocks and companies when I had no money to invest. I was like a kid standing outside the candy store with no money.

Being back to stocks feels great, but I’m at a different time in my life. Back when I started, I had no kids and time was on my side. Fast forward 15 years and things look different…4 kids and a crazy home schedule, long hours at work, working on a side gig, little time to spare for researching stocks, and a very shortened time horizon for compounding my investments.

All of that means that I need to be particular about where I spend my time. I need a leg up in the stock research department. Enter The Motley Fool again. Their newsletters are a great entry to stocks for the busy parent like me. They do all the research, provide in depth reports, and give summarized stock recommendations. They pick stocks and give price targets. I’ve used them before and went right back to them again.

In addition, I need to change up my investing style. Or more of a “want to” change my style. I want to invest for income, and that means dividend paying stocks. I’m not looking for the next Amazon, Google, or Apple stock. I’m looking for the tried and true companies, maybe even boring and unheard of companies, that pay out a significant dividend to their investors. Historically, stocks that pay higher dividends perform better over time anyway.

I signed up for the Income Investor newsletter from Motley Fool. I got the 30-day free trial, to see if the newsletters are what I remember in terms of quality. Sure enough, they are still great. Going forward, the newsletter costs $100 for the year, which is worth the price in my view. In my head, I view that cost as part of my stock commissions. Sure it’s expensive for my very small portfolio, but all the value I get from the newsletter and podcasts is well worth that price. And once my portfolio grows larger, the newsletter cost will be largely minimized. Just a cost of doing business for me.

I also started listening to the Motley Fool podcasts to help shorten my learning curve on current market conditions. Sure I don’t understand what’s going on yet with the bigger market or individual stocks, but the podcasts are helping me get up to speed quickly.

I’m listening to these podcasts:

Motley Fool Money
Market Foolery

And I may begin listening to this one:

Rule Breaker Investing

I just realized that this post is all about The Motley Fool. There are no affiliate links in here, so I’m not gaining anything by recommending them. It’s just that they are my favorite resource for individual stock investing. I learned my stock investing skills from the Fool, starting in the late ‘90s.

I was able to break free of the big company mutual fund investing, got rid of my big company financial advisor, and stepped out on my own. I never want to go back and I have the Fool to thank for that.

So yes, this is one big recommendation for the Fool, but they are very deserving of the accolades. They are helping me get back into investing, the same way they helped me get started all those years ago.

Next Up for Investing

For now I wanted to share the story of coming back to stock investing. Later on, I’ll share the stocks I have invested in. I’ll also share the other investing avenues I’m checking out, like the peer-to-peer sites of Lending Club and Prosper, and Betterment. I’m new to those avenues of investing, so we can learn together.

I also want to teach my kids about investing. I have talked to them, or at least my oldest daughter anyway, about growing your money. My oldest is earning some money for doing neighborhood jobs, like watching dogs for neighbors, and I’m investing a portion of her proceeds for her. I’ll explain what we are doing there as well.

Check out The Motley Fool if you are interested in learning stock investing and doing it on your own.

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