Monthly update – August 2019

It is no secret, that I am in love with dividends! I felt it in my car driving to work this morning. I even look forward to going to work when a month has passed – Then I get the chance to read all the other blogs monthly updates and I can sum up my own month of dividends. The first of every month is really the dividend investors best day of the month!

Let’s get down to business: The dividends!

This month brought in a total of DKK 70 (11,5 $)

The (big pile of) dividends came in from a total of 9 companies:

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The top 20 travel ideas on my bucket list

People who chases FIRE often have a bucket list. And there is a good reason for that. People who chases FIRE sees experiences and adventures as the good things in life. It resembles freedom, time and independence.

I also have a travel bucket list and here is my top 20:

1 – Isla del Holbox in Mexico and the possibility of snorkling with whale sharks

2 – Slovenia. An underestimated destination in Europe

3 – Japan

4 – Cage dive in South Africa to see a Great White Shark

5 – Train ride in Switzerland

6 – Cycling on Corsica

7 – Visit the Maldives (jan 2016)

8 – Cycling in the Alps and Dolomites (summer 2004, 2006, 2009 and 2011)

9 – Kayak in Lofoten, Norway and see orcas

10 – Drive across USA (2005)

11 – Experience the English countryside

12 – See Hawaii

13 – Live right on the beach in Belize

14 – Costa Rica

15 – Vietnam

16 – See the finish of Tour de France i Paris (summer 2004 & 2006)

17 – Spring in Portugal

18 – See all capitals in Europe (so far I have been in Madrid, Berlin, Copenhagen, Budapest, Prague, Athens, Paris and London)

19 – See Mont Saint-Michel i France

20 – Go to Iceland

Check out Europe’s worst stamp collection

I have four stamps.. Not the boring thing you put on letters back in the 90’s, but stamps in the way, I have bought a small portion of shares in four companies that I consider high risk.

It is mostly a Danish term to call these small buys with high risk a “stamp” – It just means that you invest a smaller amount than you usually do, and that you are ok with a bankruptcy or two 🙂

Now I want to show you my stamp collection, which at the moment must be the worst in Europe 🙂

Stock Buy Current Loss
NIO 5,09 3,16 -38%
Saniona 25,9 19,56 -24%
Changyou 19,25 9,41 -51%
ÅAC Microtech 5,25 4,52 -14%

OUCH!!!

Even though these numbers are terrible, I actually don’t mind. I haven’t risked my entire savings in these stocks. I have invested an amount I’m ok with loosing – I don’t plan on it though!

Stocks is a risk/reward type of game. My global ETF’s are not that risky, but I can’t expect a return much greater than 5-8 % per year. With these stamps I hope that one of them will grow 100-500 % over the next 5-8 years. Substantially more than my ETF’s but also with a risk of getting a big fat zero!

To those of you that haven’t heard of these stocks before here comes a small recap of the 4 businesses:

NIO

Chinese car manufacturer who specializes in electrical cars. Their design is no on level with Tesla or the Germans yet, but even if they only get successful in China, that is still a pretty big market!

Saniona

Saniona is a research and development company focused on drugs for diseases of the central nervous system, autoimmune diseases, metabolic diseases and treatment of pain.  (source: Nordnet)

They don’t have a blockbuster with some candidates they are hoping to get approved.

ÅAC Microtech

With an Å (aa) in its name this company will have a hard time to sell outside Scandinavia. Yet they actually sell a lot and have a quite good order book. Unfortunately, they don’t make a profit… yet.

The company specializes in Nanosatellites just like the Danish company Gomspace. I heard about ÅAC in a podcast, where some analysts conveyed the market and different market players and concluded that ÅAC was one the companies most likely to make a net profit in this business.

Changyou

This company is also Chinese and specialized in gaming. The big loss I have in this company is actually a huge dividend! I don’t expect i 50 % yield every year, but from what I have heard the company have made a successful game and decided to pay out the profits from this to its investors. This buy is a hope, that they will develop another game with success.

Why bother with stamps?

Stamps to me is a way to stimulate my need and desire to stock pick. I believe in my strategy, but I also know myself well enough to acknowledge that I need stimulation to keep motivated. These stamps do just that.

For me it is not about the amount of money, but more about finding hidden gems in the stock market. This keep me at my toes and motivates me to read a lot about the stock market in general which in the end will benefit me along the way. And maybe I will someday be able to write an updated article about these 4 stamps and be able to tell you about one or two success stories.

Monthly update – May 2019

Sell in May, and stay away!!

Wow – sometimes I forget my strategy and start to panic when my stocks sdecrease in value. May has been a son of a b*tch to my portfolio value… But hey: Great news!!

My strategy is not based on selling my stocks, but rather keeping my stocks for a long long time as long as they are paying me dividends. And guess what? They are!!

My dividend income in May:

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A love declaration to dividends

I love so many things in life: Of course my wife and my daughter! I have to admit I also have a love for some material things as my roadbike. I also have a deep love for a few concepts as well. Concepts like FIRE, compund interest and of course dividends.

In my speech to my wife at our wedding I tried to make the perfect love declaration (only interrupted by my sobbing). This time I will make a love declaration to dividends.

Love at first sight payment

My first dividend came from a stock, I no longer have in my portfolio: Microsoft. I bought the stock because I found it undervalued and liked their products. Then suddenly, a few months after, a small amount of money got transferred to my bankaccount from Microsoft!

I wish I could say, that my world was never the same after that, but sadly no. It did’nt make that big a difference for me, and a few months later I had to sell all my stocks to make the down payment for an apartment.

When I recently got back into investing, I needed a strategy to approach the market. Shortly before I had read the book by Jakob Lund Fisker called ERE – Early Retirement Extreme. And that really DID make a huge difference for me! His approach to investing was to get his expenses covered by passive income. (He also cut his expenses to an absolute minimum, and that I’m not nearly dedicated enough to copy.)

Free but not free

The argument against dividends are:

  • The company should keep the money – that can use the money to make even more money.
  • You have to pay tax of dividends (in Denmark between 27 and 42 %!!!)

My best arguments pro dividends are:

  • You can use the money to differentiate your stock allocations.
  • You pay tax regularly instead of a big pile when you sell your stocks eventually
  • Dividends motivates you and keep you on track even when the market dips. (you even enjoy these moments because you can collect some high yield stocks at a discount)

Dividend stocks are not the answer if you have a huge pile of money, that you want to invest right now and doesn’t know that much about investing. Then I would definetly buy passive index funds! No question about that.

Dividend stocks are perfect for people like me, who invest small amounts every month with a long-term focus. I wan’t the money to grow steadily.

Motivation every day

The safest way to earn money in the stock market is to have patience. Patience requires motivation, and dividends are a perfect way to motivate you to stay on track.

Let me give you an example.

I have bought Essity (ESSITY-A). A Swedish company that produces hygiene and health products. One of the things they produce is paper and soap dispensers for commcercial use. That means, I use the brand several times a week when I use a bathroom at work, at the gas station or at the library, when the paper towel dispenser is from TORK, which is owned by Essity.

This may sound a but strange, but using the brand actually motivates my in my stock strategy because I use a company’s products, which generates money for me. The same goes with coca-cola, Apple, McDonalds or any other brand that pays dividends.

Final thoughts

I wish I could end this post with intelligent phrases and well-thought arguments, but sadly the truth is very simple:

I love dividends

Dividends make me happy every time I see money transferred in to my brokerage account. The accumulating process that I’m in keeps me interested in the stock market and eager to find the best dividend stocks.

It’s a win-win for me. When the market goes ups, my stocks are up as well. When the market takes a dip, I can purchase stocks with a discount. I’m not investing money I can’t spare, but my wife and I refer to the stock acccount as the “dream account”. Meaning the money will in the future be the fuel to some of our travelling dreams or hopefully give us the chance to quit our jobs permanently.

Dividends. You are the one for me.