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 moeny 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 with. 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 up as well. When the market takes a dip, I can purchase stocks with ease. 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.

Monthly update – February 2019

There is a first time for everything. This is my first monthly update on European Dividend Blog ever! Congratulations to me.

The blog is actually gaining some traction and there are more followers/readers than I would ever expect after just two months blogging. Thank you for that. I know my English skills are not the best, but I actually started blogging in English to educate myself and improve my skills in this language. I promise I will improve along the way!

On the personal side we have sold our house and we are moving out in April. I don’t share a lot about our personal finances, but maybe that will change along the way with this blog.

The sell of the house was good news for us. We are planning to move to a cheaper part of Denmark closer to our parents. I have quit my job and got a new one also near by the city of our parents. It is a big change in our life but our investment strategy shouldn’t be affected by this.

The sale of the house means we most likely will have some spare cash to spend after the purchase of a new house, and I really don’t know what to do with this. That is something to figure out in the next couple of months.

Dividends

In February I received my first dividends!! YAYYYYY!!

Here are the BIG numbers. Prepare to be blown away:

Kinder Morgan = 11,24 DKK
California Water = 4,41 DKK
SparIndex World = 16,35 DKK
SparIndex C25 = 28,91 DKK
Gladstone Investment = 6,72 DKK

Total = 67,63 DKK / 10,3 $

This will cover 0,3 % of my monthly expenses 🙂

I know it is almost something to laugh about, but I am actually just really happy to be on my way. My strategy is to invest small in a lot of different companies to lower my risk. That means I will receive a lot of small dividends throughout the year. Hopefully we will see a big increase next year, and the year after that, and the year after that….

Favorite posts

The best way to make great stuff is to steal from the best. In these monthly updates I will copy the work of Carl from moneymow.com and give you my top three favorite posts from the dividend, FIRE and personal finance ‘blogosphere’ the last month.

Stockles – Arne is no longer anonymous. In this post he reveals his identity and tells an honest story about love, investing and life decisions.

WannabeWalden.com – Louis at Wannebe Walden have made this post, where the FIRE guru Jakob Lund Fisker’s answer from a Facebook group is re-posted. Jakob Lund Fisker is a great inspiration to me, and his answer in this post could persuade anyone to chase FIRE.

RouteToRetire.com – Ever dreamt of moving to another country with better weather? RouteToRetire are planning to move to Panama in the summer of 2019. In this post he explains some of the thoughts behind the big move.

See you in my next update. /EDB

Heja Sverige! New stock buys extravaganza

As I told you in my last post the difference between Danish and Swedish kroner is at a favorable rate (for Danes) right now. Therefor I turned to my watch-list of stocks and found some Swedish dividend stocks to pick up.

This really pins out why it is important to have a watch-list with a lot of stocks on it. Maybe I should write a post about it later on.

By having these stocks in my searchlight I could react fast when the currency hit a low yesterday. My broker have certain rules for minimum buys, and regarding Swedish stocks they have a minimum buy amount of 1.000 Swedish kroner – but with the low rate on Swedish kroner that meant I could buy a lot of different stocks for a small amount of Danish kroner.

These are my buys yesterday:

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Why you should settle with less but strive for more

There are thousands of analysts, experts, experienced traders, hedge-fund managers, billionaires, scientist and geniuses trying to beat the stock market. What makes you think, that you can do a better job?

We are all trying to pick the best stocks possible, but everybody can’t beat the market. But I think you can beat the market if you settle for less than the best possible stocks.

To simplify this, I’ll define that you can beat the market in two ways:

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What I would do if I were in my twenties

I know it is odd to get life advice from a 35-year old. Life advice usually comes from celebrities or old people.

But I think it is great to get advice from someone who stills remembers how it was and has a somewhat good idea of how the worlds works today.

This makes the advice more realistic and more down to earth than say an advice from Kanye West or my wifes grandmother who’s 87 years old.

Here is my list of things I would do if I was in my twenties:

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