Dividend Money Stream for Entertainment – Sept 11th

Dividend Money Stream for Entertainment…

Doesn’t that have a nice ring to it?  Wouldn’t it be great to have your entertainment expenses paid for by a dividend stock money stream?  I know I would like for that to be the case, and quite honestly, I’m working on one for myself in addition to the one my son is working on for his website.

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Unfortunately, unless we dramatically increase our income, we won’t have the luxury of creating a Dividend Money Stream in 1 year, or even five years!  I estimate that creating a dividend money stream that covers all of your entertainment expenses would take at least 10 years to accomplish!  Ten years are a long time, but I think it would go faster than we think!  Still, after only 1 year in and it seems like eternity!

Still each year you are that much closer to your dividend money stream for entertainment goal!  I think that problem of not creating such a goal would mean that you stunt your financial wealth buildup.  Creating such an entertainment stream has an indirect goal of making you much wealthier.  Not to mention enabling you to build up a natural emergency saving fund.  That the flexibility of creating such a dividend stream, it’s flexible and can be used for other uses if the need arises!

Do you think a dividend money stream for entertainment makes sense for you?

Thanks for reading!

 

Dividend Stocks For Entertainment Update 1

Well, we’ve started to collect our money for dividend stocks for this entertainment website!

So far, we’ve earned $300 dollars to be invested in some dividend stock, then we’ll use the dividend income to fund the activities on this site!  The three hundred dollars was from a socialization site submission service that was “officially” started in January.  The term of the submissions service will expire in March 2013.  Why March?  Because as part of the service, January and February of 2012 were free.

Back to our dividend stocks for Entertainment!

In the previous article, I mentioned that the BP dividend stock might be a good candidate to look into, and it has rose about 5% since I mentioned it a few weeks ago.  It’s still a decent stock, but we decided to go more aggressive, since we only expect to have a little to invest.  After all, a 5% dividend is only $15 for the entire year…  That said, we might pick it up if we earn more money to invest…

We’ve decided that we will make our first dividend stock purchase after we have saved up at least $530! Why the $30, you might wonder?  Because of the transaction costs to make the stock purchase and corresponding future sell of that stock.

And we’re going to try and find a dividend stock that pays out at least 10% in dividends.  We’re going to stay away from limited partnership stocks though because the tax computation can be very complex.  Instead we are going to focus on REITs since they payout at least 90% of it’s earnings in dividend.

We got a long way to go, with just being half way to our first $500, but it’s a start!

Bests,

D

Is BP a Dividend Stock For Entertainment Money?

I’m thinking of recommending that my son purchase BP as his first dividend stock for Entertainment money!

Why, you might be wondering… while having a disgusted look on your face…

Well, it was hit pretty hard with lawsuits and other persecutions by the US.  So its stock price is still way off of it’s highs.  But the main reason is that I expect the stock to stay pretty stable at these current prices, and for them to keep their 5% dividend in place.  In fact, I’m hoping that they increase their dividend as the price of the stock goes up over time.

BP_Chart-300x206

BP’s current PE ratio is 5.0, which seems to be a good number for its industry.  Although, the oil spill was a very tragic event, I don’t think the company will go under, and I think that their nice juicy dividend should be good for a long time!  Now I just need some money to pump (pun intended) into the stock since we currently only have about $100 to invest.

Notice in the chart above that they really haven’t recovered much from when the oil spill hit them the hardest!

Disclaimer:  I’m researching this stock, I have not immediate plans to buy any shares within the next 72 hours, nor do I currently own any shares.

Thanks for reading

~D

 

Thoughts on a Dividend Stream For Entertainment

Dividend Stream Idea

The idea is to invest money into a stock that yields a dividend.  Hopefully the stock(s) have some growth potential and yields a dividend rate greater than 5 %.  REITs usually provide such dividends, perhaps they would be a good place to start.  At first, use all of the dividend for entertainment purposes, but after enough money is invested, perhaps throttle back the usage of the dividend to half.  Then with the other half, reinvest it back into the dividend stock.  This way the amount would continue to grow even after you stop investing earned income into it.

Dividend Stream Start

So far, this site has $100 saved up for investing.  At 5%, that would only give out $5.00 a year.  Does sound  like much, but it could buy a few cheap games for and Apple iPod, or perhaps materials for a cheap experiment.  Still, we’ll wait until we have $500 to $1,000 saved up before we invest it.  If we get $1,000 at 5%, that would yield $50 a year and while not a lot, it would enable us to do a few cool things.  Once we get $10,000 saved up, then the dividend stream could provide $500 a year, and that would enable us to do some pretty cool things monthly!

At his point in time, we can just dream about the investments that we can purchase, but really we’ll have to wait until we have enough to invest before we take the plunge.  Still it is fun to dream.

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Thanks for reading,

~D

 

Reading on your tablet vs reading on your computer

Reading on your tablet vs reading on your computer

One can write a completely separate article on reading on your computer vs reading on a tablet and which one is the best. Being someone who spends a lot of time in front of his computer working I would prefer reading on my computer rather than on a tablet. Similar to a tablet, but just more organized, I have all my documents, books, pdf’s and what have you directly on my computer. It’s easily accessible and it’s fast.

However my computer is big, heavy and not the latest model on the market. It’s also not touch screen like some of the latest models are so it does lack some features that a traditional Ereader or Tablet would have. I’d say the biggest benefit of reading your books on a tablet compared to computer would be movability. It’s a lot easier to take your tablet with you to the beach or on holiday than bringing your laptop if all you plan on doing with it is reading. Also some tablets have great battery lifetimes and use a lot less power compared to a laptop that might only be able to run on its battery for a few hours.

So to conclude which one is the real winner? I think it’s hard to say, but for the sake of reading on the go and mobility a tablet wins without a doubt…

Here’s a video comparing reading on tablets vs Ereaders.

Here’s also more on Ebook readers and tablets on Wikipedia.

 

AIG Update

AIG is finally out from beneath the weight of being owned by the United States Government!

AIG has also simplified their business model to refocus primarily on insurance, thus in the process selling a lot of non-core businesses that they owned.

Even though they are half the size of what they were the stock decreased by over 10 fold from that same high, so using a very simplistic look and feel approach, it should at least double by the end of 2013.  But so far, it hasn’t risen much, what gives?

All the pistons should be rolling, but this stock hasn’t started the rise that I expected, was I wonder in my assessment?  Or will it just take a while for everybody to believe in this stock again?  Now granted that I wrote my piece on AIG for a future investment and not a short-term trade, but I really expected to see a bit more of a rise by now!  If you want to read my original article, check out “Is AIG The Stock For The Future“?

I listed my expectation in the above article, with particular emphasis on “My plan is simple, buy a $1,000 worth of shares, and hold it for 5 to 10 years and hope that it increases 500% to 800% (or more) over a 5 to 10 year time frame!”

So I believe that the lights are still green on this stock, but the real catalyst will probably be the moment that they reinstate their dividend again.  A second boost could be once they get their credit rating raised.

This stock it beginning to look a bit more like a long shot, but at the same time it has such potential and the fact that they are in the insurance business makes it a huge candidate for a comeback!

AIG

What the chart looks like the one above, it seems like the company might be a good speculative play.

Disclosure:  Both my son and I are long on this stock.

 

Stock AIG Purchase Update

Last week I mentioned that my son was going to purchase shares in AIG, and we have… and now it’s time for an update, and a closer look at the stock.

If you are interested in why we did this, and our plan around AIG, read the article “Is AIG The Stock For The Future?“.

Now for the AIG Purchase specifics:

I bought shares of the stock in two allotments for at average price of $34.77.  Instead of buying just $1,000 worth of stock, I increased the investment amount to $2,100.  You might be wondering, why $2,100?  Well, for some reason I like my stock share purchases to end in zeroes, so $2,100 is 60 shares worth of the stock.  Why do I do this?  I have no idea…

So how is AIG doing for me after a week?

Well, I’m up 3.84%!

AIG
  60
  $2,181.00
  $36.35
  +$0.06
  $2,100.32
  +$80.68
  +3.84%

 

While that seems like a pretty good number, it’s caused mostly by the rally in the entire stock market that has happened these past few days!  I’m not really concerned about the valuation of the stock at this point since we’ll (well my son anyway) will be holding the stock for around 5 to 10 years.  I’m just mentioning it here to give the specifics of the purchase, the valuation will rise and fall many times in five to ten years…

Learning About AIG:

AIG has sold a decent amount of it’s non-core businesses that it owned.  This has helped them pay back the U.S. government.  Obviously, many of the businesses being sold were valuable, and will affect the amount of room that AIG has to grow in the future, but I guess they have to do what they have to do to get the US government paid back!  Such liquidation of the company (I’m over-exaggerating here), means that it won’t be hitting it’s historic high for a long, long time (if ever).

Another noteworthy piece of new is that the government is lumping AIG into a group called SIFI, which stands for “Systemically Important Financial Institutions” (SIFI) and thus to be regulated closely by the Federal Reserve.  This doesn’t sounds promising, but it is what it is…

So I’m not entirely as optimistic as I was previously about the stock climbing as quickly as I thought, but I do think it will be a great investment for us (yeah, I bought some too) in the long run.

Only time will tell!

Thanks for reading,

-D

 

Is AIG The Stock For The Future?

Okay let me present the graph for AIG, then we’ll discuss why I’m wondering “Is AIG the Stock for the future”!

AIG

Wow have you even seen a stock go from such a high valuation to almost a flat line kind of valuation?  Kind of scary (luckily Halloween is around the corner!), huh.

And the kicker for this stock is that it doesn’t even have a dividend yield anymore, not to mention the huge reverse stock split it went through in 2009!   Seems like this stock is a huge LOSER!  Since it doesn’t have a dividend, it’s obviously not a good candidate as a stock for building a “Dividend Stream For Entertainment“, so why am I looking at it?

Because it still has huge “Lottery Ticket” potential!

A reinstatement of their dividend might happen…, although even if it did, there is a good change that it would not be a high payout amount since it wasn’t previously.  But  for me, I’m more interested in the capital gain potential!  My plan is simple, buy a $1,000 worth of shares, and hold it for 5 to 10 years and hope that it increases 500% to 800% (or more) over a 5 to 10 year time frame!

If the stock increased 800% from the current price level ($35.90), that would mean that the future price would be $287.20!  So that would mean that if I had $1,000 worth, it would grow to $8,000!  While it’s a long shot, it has merit!  Let me explain my slightly twisted logic.

  1. During the “Great Recession”, AIG got hit especially hard since it was one of the bad boys of the entire ordeal!  It was so bad, that they US government had to bail them out by buying shares of AIG so that at one point the US government owned over 92% of the company!  WOW!
  2. Today, the US government owns 22% of the company!  This is a far cry from the 92% the government use to own!  A nice side feature is that the government should end up making a very healthy profit from the bailout payback!
  3. Once the government sells the rest of the stock, the price should climb substantially!  That could mean that the stock price might soar in the near future (perhaps in a few years?)
  4. The company is refocusing on it’s primary business (insurance) which in and of itself is quite profitable.
  5. If the company even climbs back to 25% of its previous valuation prior to 2008, we would be very, very happy!

Now for the tie in to a Dividend Stream for Entertainment!

After the US government sells it’s remaining shares, there is a good chance that AIG will reinstate it’s former dividend.  If the stock the increases over 800%, this dividend yield would more than likely also increase substantially.  If AIG doesn’t reinstate their dividend, but still has the capital appreciation in the stock price, perhaps at some future point, we’ll sell the stock and buy real estate, thus getting a income stream for entertainment that way.

Either way, a small investment of $1,000 has a lot of potential for room to grow, and that’s what are are going to do.

Are you wondering “Is AIG the stock of the future” too?  Tell me what you think!

 

Disclosure:  We both (son and I) have a small position in this stock and we are long on the stock.

A Dividend Stream For Entertainment

It’s great because it’s a blog that acts as a diary about the fun things that he is currently doing in his life.  Someday he’ll look back and remember those fun things that he did via his blog entries…

The tricky part of blogging about entertainment is that it can get costly… For a kid without an income stream (aka a job!), it’s hard to have money for this type of blog.  After all, it’s hard to write about fun activities when you don’t have money to spend on such entertainment activities.  Sure there are free and frugal activities, but those are far and few between, and besides, he has done most of those that are local to the area.  Oh sure, he’ll still write about them, but it would be hard to someday take a girl out on a date without some money, no?

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So is my son stuck in a chicken vs egg dilemma?

No!  After a brief discussion, we decided to establish a dividend stream for entertainment timez!  This actually works out well for us because I’ve been meaning to teach him more about investments for quite a while, and this can lead into such a win-win scenario.

While my son gets an allowance, it’s already spoken for and besides I think it would be more fun to merge our two interests.  So we decided to create a dividend stream from any money that he earns online, and invest that money in either stocks or mutual funds that provide a dividend stream.  The idea being that the dividend stream would then be used for his entertainment activities.

Someday (after he get’s more traffic), we’ll put Google Adsense on the site too.  Hopefully that will help him gain some money for his blogging activities.

Thanks for reading!

The D~