The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

My Path to Trading Business

Remove ads while supporting the Unscripted philosophy...become an INSIDER.

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
Ljean's characterization of dividends isn't wrong either though.
Saying that dividends are like going to an ATM and withdrawing money from a bank account - sorry that is wrong.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
Yes. What I am getting at is dividend yield by itself is a poor, possibly meaningless indicator to make investment decisions. Take the extreme example of a company with $100/share cash that pays $25 dividend but does no business, it just exists. After 4 years, this 25% dividend will have returned all your investment and the company would be worth zero. You would actually be in the hole after dividend tax. Dividends are businesses way of saying "here, take this, sorry, we dont have any better ways to reinvest your money."
Man, I am in awe... a company that "does nothing and just exists" cannot afford to pay a dividend, and their balance sheet will reveal it right away... what other pearls do you have there? If you are in a market, you are gambling having no fundamental understandings (that what your comments reveal to me, sorry).
 

ljean

Silver Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Jan 22, 2017
393
597
260
USA
Saying that dividends are like going to an ATM and withdrawing money from a bank account - sorry that is wrong.
You go to the bank, take out $10. Your bank balance goes down $10 and you put $10 in your pocket. No change to net worth.

A company issues a $10 dividend, the stock price goes down $10 and you put $10 in your pocket. No change to net worth.
 

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
You go to the bank, take out $10. Your bank balance goes down $10 and you put $10 in your pocket. No change to net worth.

A company issues a $10 dividend, the stock price goes down $10 and you put $10 in your pocket. No change to net worth.
Do you know from what money companies pay the dividends? I guess you have no clue. I can assure you, this is not how dividends are created, declared, and paid out to the shareholders. Please, educate yourself before you make yourself a fool.
 

Black_Dragon43

Gold Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Apr 28, 2017
542
1,436
423
Eastern Europe
So how do you plan to grow this then? So far my understanding is that you’re just trading with your own money, and Im sure you realise that unless you are really exceptional, you’ll have a hard time making consistent profits and scaling to millions. I know traders who are making up to $10K/day but it takes an extreme amount of dedication and effort. Sort of like winning poker tournaments... it can be done, but you simply need to be the best...

A business on the other hand simply needs to provide value, which is much more reachable for the average person and easier to scale.
 

MJ DeMarco

Administrator
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 23, 2007
31,378
117,443
3,751
Fountain Hills, AZ
I believe in trading in the stock market. So, I started my own trading business. I will be posting my progress and insights here.

I started in my "intro" but I will continue posting here.

Here is my Intro thread: INTRO - On the path

---------------------------------------------------------------------------------------------------------------------------------------------------------

TRADING PLAN

We are investors, not traders. We buy assets - dividend-paying companies. We buy dividend growth companies. Our plan is to hold those companies forever. We treat those businesses we are buying as our businesses. It is like real estate. People do not buy homes just to sell them the next day, or next month. People buy to hold their home for the next 30 years or more. We buy dividend growth companies for the same reason.

We buy dividend growth companies to generate income receiving dividends. We want our businesses to reward us for holding their shares and paying us for it. We reinvest the dividends to accumulate more shares. Our goal in accumulating shares of a selected company is to reach 100 shares of that business. All dividends and account deposits are used to accumulate shares.

Once we accumulate 100 shares of a company, we start selling covered calls. When selling covered calls, we sell to avoid our shares being called away. We deploy all hedging strategies to avoid the exercise of the calls. If, however, our shares are called away, we immediately start selling naked or cash-secured puts. We sell puts as a means of investment to buy shares, not to speculate or sell put just to bring premiums. We sell puts against companies we want to buy. Once the shares are assigned to us, we implement the Wheel of Fortune strategy by immediately start selling covered calls again.

All premiums generated from selling covered calls or puts are used to buy more shares of the companies we want to hold.

We only sell our companies when they no longer meet our requirements - reduce or suspend the dividend.

From time to time, we use other options strategies to generate income: poor man's covered calls, butterflies, covered strangles, or collars.

Poor man's covered call
We use this strategy against expensive stocks where we do not have enough capital to trade a standard covered call right away or in the near future and when saving money would take many months or years; usually indexes such as SPY, RUT, IWM, etc. We also use it against ETFs or individual stocks while accumulating shares of that stock.

Butterfly
We use this strategy as a directional trade. When we identify a strong trend in any direction, we may apply this strategy to limit our risk but reap a decent profit. For example, buying a call against SPY to participate in a strong trend would cost us $800 while the same butterfly would cost us $200. This limits our risk in case we are wrong.

Covered strangle
This strategy is selling an OTM put and a call against a stock which we want to add shares to our holdings and we already own shares. For example, we own 100 shares of a stock XYZ, and we are OK to buy another 100 shares. We sell covered strangle and our calls are covered by the existing position we already own and our put is covered by cash we have in our account in case we get assigned.

Collars
We may use this strategy (selling covered calls and use the premium to buy protective puts) if we see a need to protect our holdings and buy insurance. The covered calls will generate income for us to buy the puts.

Cost basis offset
Selling covered calls and puts, as well as other strategies, will be used to offset our cost basis. This is more of a psychological or mental offset. However, it helps to see it as having less risk in our stock and that we have purchased our shares for "free" (we used premiums collected when selling the calls and puts, although on many occasions we started collecting these premiums after we purchased the stock).

What about other options strategies?
From time to time we may use a different options strategy, for example, naked call, if we see it fit and we are prepared for any consequences from such trades. But, these trades will be very rare.

REDUCING TRADING COST
Our other trading goal is to reduce trading costs. Therefore we picked a broker that charges low or no fees to trade. We think Tasty Works is the right broker for us. Tasty Works charges no fees to purchase or sell stocks and approx. 1.15 per contract of options trading. This allows us to accumulate our stock holdings buying a single share of the desired stock for no fee.

DISCLAIMER
Note that all trades presented here are our trades and we post them for educational purposes. We are not licensed as investment advisors and we do not know your objectives and goals, so we cannot provide you with any specific investment advice. If you seek advice, contact a licensed advisor. Note, that trading or investing in stocks, options, or futures involves risk and that you may lose all your money. If you decide to mirror our trades, do it at your own risk and do your own homework.▼

Thanks, it's very similar to my Paycheck Pot strategy. I buy dividend stocks and sell calls and puts on them.

In 2020, this strategy fared OK. My regular option trading strategy did fabulously better, and at far less risk ... didn't run the #s, but if I had to guess, I did 100% gains on risk. Of course, 2020 was a nutzo year.

Do you know from what money companies pay the dividends? I guess you have no clue. I can assure you, this is not how dividends are created, declared, and paid out to the shareholders. Please, educate yourself before you make yourself a fool.

Technically he is correct. Dividends, when paid, are a wash. Company issues $10 dividend, market maker reduces the stock price by $10 -- the net net is a wash. Worse, you get taxed on the dividends, so one might argue, it is a net negative since the stock was still a hold.

 

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
So how do you plan to grow this then? So far my understanding is that you’re just trading with your own money, and Im sure you realise that unless you are really exceptional, you’ll have a hard time making consistent profits and scaling to millions. I know traders who are making up to $10K/day but it takes an extreme amount of dedication and effort. Sort of like winning poker tournaments... it can be done, but you simply need to be the best...

A business on the other hand simply needs to provide value, which is much more reachable for the average person and easier to scale.
I am not sure if your comment was to me but I guess it was.

If you go to the very top first comment of this thread it clearly spells my trading plan and it clearly indicates that I buy dividend stocks to collect dividends (and no these are not ATM-like withdrawals but portions of earnings of those companies paid back to the shareholders and if a company is profitable, see JNJ as an example, it is a perpetual income for you without moving a finger) and on top of that I monetize those positions trading options around those positions. That allows me to grow the money in my account on average 45% per year without dividends (2020 was exceptional as I achieved 419% growth). No need for customers, no need for suppliers, marketing, sales pitches, overhead expenses, etc.

If I stay with 45% compounded growth and $20,000 the portfolio will turn in $890,000 in 10 years and will pay me $46,680 dollars in dividends annually (initial yield 5.52%, dividend growth 11.37%, YOC in 10 years 31%) on top of the options premiums which as of today are about $1,500 a month.

I believe this is a good enough income strategy and growth without the hassle of "finding a value" to sell to people. There are 300 million people in the United States, how many can make it, and become a successful entrepreneur? Creating a functional business that will make you millions is a damn hard job. There are tons of dreamers around who think they will come up with some app and sell it in Apple tunes and become rich. Only a handful of them will make it, the rest will end up wasting their time.

I am an engineer by profession, I had three businesses. Very successful businesses providing HVAC control systems for the food industry. Yet I had to deal with employees, not enough electricians, good programmers but not understanding the point of what needed to be done and how the system must work, late deliveries, complaining employees, change orders from subs trying to milk you on every nut and bolt missed on the plans, demanding clients who hired you to help them and then didn't listen to you but blame you for their problems, and so on; tons of troubles I no longer want. And I do not want to go back and downgrade myself to me 20 years ago starting again thinking what to do people may like just to find out after hours and hours of work that nobody gives a shit. Trading in the market I only need a computer, good knowledge of how stocks and options work, initial capital, a computer, and a good brokerage account. I can trade from everywhere and I do not need people to listen to their whining about anything and everything. I am no longer 20 years old to handle this.

To conclude, even AAPL grows at 30% annually... if I can grow my account 45% annually (excluding dividends) I do better than Apple :D

And if Warren Buffett, Jesse Livermore, Ben Graham, Nicolas Darvas, Dan Zangler, Rick Langer, Joshua Belanger, and others could do it, I can do it too. And I started this thread as a challenge to myself to post my path in the trading business (not gambling buying hot flying chimera stocks like Tesla or Bitcoin with no underlying value praised by many ignorant from-yesterday-to-be-traders boasting about it on social media) and prove myself that it can be done.
 

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
Technically he is correct. Dividends, when paid, are a wash. Company issues $10 dividend, market maker reduces the stock price by $10 -- the net net is a wash. Worse, you get taxed on the dividends, so one might argue, it is a net negative since the stock was still a hold.
That's a short term view. It is a wash at that particular moment when a market maker adjusts the price by the dividend payout and it is to prevent speculators from buying at ex-dividend, capture the dividend, and sell after ex-date. But, I am not looking at a one-day event. Dividend stocks, historically, grow at the same rate as their dividend growth (re: Miller, The Single Best Investment), So this adjustment is only a temporary price adjustment and in no way diminishes the value of the underlying asset. As long as the company makes revenue, it can pay a dividend. If it makes no money, it cannot pay it. And a one-day temporary price adjustment doesn't play any significant role in my trading because I do not day-trade these stocks to take advantage of these adjustments. People don't even know about this happening, that's how insignificant it is.

I bought Apple a couple of years ago, that position is 450% up yet they keep paying me a dividend every three months. From this perspective and time frame, there is no wash.
 

thechosen1

Silver Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Aug 25, 2020
486
747
278
Texas
Something is missing from the discussion of dividends vs growth that seems critically important. Correct me if I’m wrong, but...

If a stock does reinvest its earnings in lieu of paying a dividend, the idea is to grow the company instead. This is great because it can grow unrealized gains!
But... if the stock is relatively unknown, unpopular, or just not all that interesting or hyped up in the news, there is a chance that this stock’s price won’t change much to reflect what management is doing to grow the value. Of course, that makes it a prime “value” stock, but as we all know, “markets can remain irrational for a long, long time.”

What I’m getting at is that share appreciation is NOT guaranteed. At least with a dividend (one that is supported by a healthy payout ratio and other fundamentals), you are getting an actual return on your money!

This isn’t to mention the fact that some companies simply can’t reinvest into more growth. The main point I’m making is that dividends are the best option in some cases.

Let me know what y’all think. I’m trying to learn by joining this discussion but this is where I’m at on growth vs. dividend (obviously less taxes are nice if you can count on share appreciation - I just don’t think you can ever count on that)
 

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
Something is missing from the discussion of dividends vs growth that seems critically important. Correct me if I’m wrong, but...

If a stock does reinvest its earnings in lieu of paying a dividend, the idea is to grow the company instead. This is great because it can grow unrealized gains!
But... if the stock is relatively unknown, unpopular, or just not all that interesting or hyped up in the news, there is a chance that this stock’s price won’t change much to reflect what management is doing to grow the value. Of course, that makes it a prime “value” stock, but as we all know, “markets can remain irrational for a long, long time.”

What I’m getting at is that share appreciation is NOT guaranteed. At least with a dividend (one that is supported by a healthy payout ratio and other fundamentals), you are getting an actual return on your money!

This isn’t to mention the fact that some companies simply can’t reinvest into more growth. The main point I’m making is that dividends are the best option in some cases.

Let me know what y’all think. I’m trying to learn by joining this discussion but this is where I’m at on growth vs. dividend (obviously less taxes are nice if you can count on share appreciation - I just don’t think you can ever count on that)
You are absolutely correct. At some point, a company becomes so big and makes so much money that they have no more use for it. They did everything they could - reinvesting back into the business, acquisitions, buybacks, assets purchasing and yet they have so much cash that they decide to return that investment back to the investors. While high-flying stocks like Tesla may feel great today and everybody is a king who invested in it a few years ago but the stock price and company valuation are two different things. Tesla's price is not supported by its revenue and ability to make money. Today, Tesla is a king, tomorrow Elon screws it up NIO will come up with something better and outperforms Tesla and its price will collapse with no mercy to all believers. There is no guarantee. And that is valid for all stocks. There is absolutely no guarantee that when you buy today and it appreciates tomorrow. So it is a bet no matter how you look at it. And if I have to bet my money, I want to bet on something that generates revenue and growth, and while I am waiting for that appreciation, I want to be paid for it. Not 20 years from now but immediately.
 

loop101

Gold Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Mar 3, 2013
981
1,683
493
Stock dividends do not make you richer. Its the same as going to the ATM and withdrawing money out of your bank account.

I thought stock dividends were a way for a company to share profits with its owners. If a company never pays dividends, and you will never have enough stock to control the company, why buy any of its stock?

If the answer is because the value of the company will go up, then again, who cares how much it grows if you will never have any influence over it or share in its profits.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

thechosen1

Silver Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Aug 25, 2020
486
747
278
Texas
I thought stock dividends were a way for a company to share profits with its owners. If a company never pays dividends, and you will never have enough stock to control the company, why buy any of its stock?

If the answer is because the value of the company will go up, then again, who cares how much it grows if you will never have any influence over it or share in its profits.
Exactly. If there is never going to be any profit paid to investors, it’s only speculation, not investment.

If your investment demands that the next person buy it from you at a higher price than you paid for it, then you are speculating.

If it produces a measurable ROI, it’s an investment.

At least, that’s what I gathered from reading Benjamin graham for stocks and reading lots of different authors about real estate.
 

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
Besides trading options against my positions, I am also interested in weekly dividend payments, so I added all stocks I like to own into a calendar per week, and now I am accumulating these stocks to achieve weekly dividends. I only enter stocks where I own 100 shares in this calendar (I own many other shares but not all of them are in 100 shares lots yet)...

1611339647729.png
 

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
January 2021 is over and despite the craziness in the markets, it started well. Jump in volatility and brokers raising margin requirements made the trading somewhat expensive the last week of January but still manageable.

Account #1 ($25,278.13) YTD: +22.56%
Account #2 ($21,619.92) YTD: -2.69%
Account #3 ($36,959.94) YTD: -0.79%
Account #4 ($11,280.91) YTD: -0.28%

The full report on my blog.
 

AndrewGreen

New Contributor
Feb 4, 2021
2
1
11
Chicago
Not sure I understand what you mean. Can you elaborate?
I tried to start trading on the stock market in 2015, but it didn't work out. My investments did not bring me an income and I faced a big loss, so I had to look for a job through which I could earn enough money for myself and for my family. I learned the lesson that before you start trading on the stock market, you need to earn a separate amount for it, that if you spend it, it will not affect your life. Nowadays I try to learn more about the stock market in order to earn as much as possible, but the problem is that this knowledge is outdated. Now, during the pandemic, it is very difficult to buy secure stocks as they can lose value even faster than before. Maybe someone knows a really good strategy that can go with the current situation in the world.
 
Last edited:

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
I tried to start trading on the stock market in 2015, but it didn't work out. My investments did not bring me an income and I faced a big loss, so I had to look for a job through which I could earn enough money for myself and for my family. I learned the lesson that before you start trading on the stock market, you need to earn a separate amount for it, that if you spend it, it will not affect your life. Nowadays I try to learn more about the stock market in order to earn as much as possible, but the problem is that this knowledge is outdated. Now, during the pandemic, it is very difficult to buy secure stocks as they can lose value even faster than before. Maybe someone knows a really good strategy that can go with the current situation in the world.
I understand what you are saying. I had the same experience in the past. But I was not trading stocks, only options and I was trading options using SPX as underlying. So I was making money but I was also losing them as fast as I made them (sometimes faster).

But I learned a lesson on how to do it and build a portfolio for a living (well, at least, I hope I had).

My strategy is to be buying high-quality dividend stocks (dividend aristocrats) and accumulate enough that I will have enough income from dividends no matter what a stock is doing. A great example was JNJ in the 2008 crisis. The stock lost 50% of its value yet they continued paying their dividends and even increased them. And there were many other stocks in the same category. So, my theory is, if I accumulate enough stocks in this category to pay me for example $90,000 a year when the market is high as well as when it loses 50% of its value and I still receive my dividends, then I really do not care what is going on out there.

On top of that, since I have substantial knowledge of trading options, I decided to trade options against these stocks using a wheel strategy. In my opinion, the wheel strategy is pretty much a win-win strategy (of course if done correctly). So I started selling puts against these stocks (later on I started trading strangles) and have enough cash or shares for assignments. I have peace of mind now not worrying about the stock volatility. I roll the options as much as possible up or down as needed and if I cannot roll for a credit I let it assign. And I have enough cash (or shares) to let the assignment go without ruining my account. And I reinvest all proceeds to buy more shares. I keep reinvesting the dividends and premiums. It is not a quick-rich scheme (as many people believe or hope for) but still substantial growth compared to just passive investing (like what you would normally do in your 401k account).

Thanks to this strategy, I feel relaxed, I was able to navigate through the market 40% crash in March 2020 without losing anything, and in fact, I was buying more shares when they were on sale, my account is up 50% for 2021, and my options premiums average $3,000 a month in 2021.

I plan on accumulating until I have enough to have a sustainable income from dividends and options. I will accumulate a 1-year salary saved in a money market account as reserves and then I will be ready to "retire" and trade for a living. And if something bad happens, I will have a 1-year salary saved to eventually sustain any losses and find a job, but I do not expect that. I feel quite confident that with this strategy I will be able to navigate through good and bad. The goal is not to overdo the trading and not to over-extend the trades beyond cash security or shares coverage because if you trade more than what your cash or shares allow you, you are forced to close the positions due to margin calls and for a loss. Many times, a substantial loss. I learned that the hard way.
 

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
There are misconceptions and misunderstandings about the dividends I have seen in the past from people. Many investors do not want to buy dividend stocks and prefer growth stocks because they consider a 3% yield and sacrificing the stock growth not enough to bother to invest in these stocks.

Another claim is that in order to achieve let's say $90,000 annual dividend income, an investor would have to accumulate a $2.5 million account at current yields, and that is not realistic in today's world since it would take a person over 30 or more years to do.

Both claims are only partially valid. None take into account dividend growth.

If you take into account the dividend growth, the time and amount needed to accumulate shrinks significantly. For example, my current portfolio has a current dividend yield of 3.52% and dividend growth of 5.91%. With these numbers, the future yield on cost will be:

8.75% yield in 10 years shrinking the capital requirements to $1,028,571 portfolio value
31.26% yield in 20 years shrinking the capital requirements to $287,907 portfolio value

and so on (This is when you are reinvesting all dividends and not adding new money. If you start adding more of the new money, it will grow even faster). And, I speed up this process with options income. That was always my dream and goal in investing and trading - generate enough income that can be invested to buy more shares that would generate even more income. At some point in the future, I should accumulate enough income to start paying my bills on top of the accumulating of more stocks.

But yes, you have to give your portfolio time to work it out. If you are looking for a faster way to get rich, then this probably is not for you.
 

thechosen1

Silver Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Aug 25, 2020
486
747
278
Texas
There are misconceptions and misunderstandings about the dividends I have seen in the past from people. Many investors do not want to buy dividend stocks and prefer growth stocks because they consider a 3% yield and sacrificing the stock growth not enough to bother to invest in these stocks.

Another claim is that in order to achieve let's say $90,000 annual dividend income, an investor would have to accumulate a $2.5 million account at current yields, and that is not realistic in today's world since it would take a person over 30 or more years to do.

Both claims are only partially valid. None take into account dividend growth.

If you take into account the dividend growth, the time and amount needed to accumulate shrinks significantly. For example, my current portfolio has a current dividend yield of 3.52% and dividend growth of 5.91%. With these numbers, the future yield on cost will be:

8.75% yield in 10 years shrinking the capital requirements to $1,028,571 portfolio value
31.26% yield in 20 years shrinking the capital requirements to $287,907 portfolio value

and so on (This is when you are reinvesting all dividends and not adding new money. If you start adding more of the new money, it will grow even faster). And, I speed up this process with options income. That was always my dream and goal in investing and trading - generate enough income that can be invested to buy more shares that would generate even more income. At some point in the future, I should accumulate enough income to start paying my bills on top of the accumulating of more stocks.

But yes, you have to give your portfolio time to work it out. If you are looking for a faster way to get rich, then this probably is not for you.

This is important. I know it's slowlane investing, but I think it's crucial people at least understand slowlane math before they start talking about it.

There was another post where I did the numbers for someone regarding dividend growth, to explain how a 3% yield today is very different from a 3% yield 10 years later after your shares have grown to double what they were.

Of course, counting on this share growth is a bit (or a lot) naive, but it is important to know the math.

Anyway, good thread. You should join insiders because there's some stuff on this already being discussed pretty extensively, and more deeply. I mean I'm not staff or anything, but there are a couple threads in particular I feel like you should join in on.
 
Last edited:

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
Another aspect people do not realize when investing in dividend growth stocks is that they tend to grow at the same rate as their dividend growth.

If a dividend company grows its dividend, let's say, 3% per year, expect, that the stock will also grow at least 3% a year.

However, here I am talking about an established blue chip. If you find a newcomer, paying a 12% dividend and growing it by 30% a year then I strongly recommend you to check their dividend history. Most likely, you find out that the dividend was grown last year only, the dividend history is 3 years only, and all that is to boost the income of insiders who are bankrupting the company (unfortunately, in the past, I have invested in a few when I was chasing the yield).
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
This is important. I know it's slowlane investing, but I think it's crucial people at least understand slowlane math before they start talking about it.

There was another post where I did the numbers for someone regarding dividend growth, to explain how a 3% yield today is very different from a 3% yield 10 years later after your shares have grown to double what they were.

Of course, counting on this share growth is a bit (or a lot) naive, but it is important to know the math.

Anyway, good thread. You should join insiders because there's some stuff on this already being discussed pretty extensively, and more deeply. I mean I'm not staff or anything, but there are a couple threads in particular I feel like you should join in on.
Yes, I agree that this kind of investing is a slow line. But, honestly, is making a business a fast line?

How many business owners started their business and became millionaires in a year? Not many. Even Zuck was working on his Facebook spy program for years before he went public. Jeff Bezos also didn't become a trillionaire overnight. Building a successful business is tough work, and it may take years to build it. And many times of long hours and years of hard work they realize that they got in a dead end.

A great example is today's pandemic. Many small business owners worked their butts out to build their businesses and when the pandemic hit, many went belly up.

M.J. did a great job in his books but I think he also set false expectations mainly among new, inexperienced, young people who believe that in order to join the fast line club, all it takes is to find an edge, write a program, website, app, sell it to the public and become rich (in a year, or even better, tomorrow). But the fast-line success is not about speed.

Another great example is the frenzy around the Wallstreet bets subreddit and GME pump and dump. Many young investors think that investing in the markets is easy and you make millions overnight.

Here is a video of people who gained such false expectations and who now believe investing and trading is piece of cake. The video gained over 2 million views on TikTok and Twitter:


View attachment Untitled Project.mov

Why I have not thought about it before?

Get Rich: few people show up
Get Rich QUICK: Millions will come
 
Last edited:

Martzee

Bronze Contributor
Read Millionaire Fastlane
I've Read UNSCRIPTED
Oct 6, 2020
94
104
116
49
Denver, Colorado, United States
February 2021 in in the books and here are my accounts' results for the month and YTD investing in the high quality dividend growth stocks and trading options around them:

Account #1 ($31,687.63) YTD: +54.03%
Account #2 ($23,809.97) YTD: +7.17%
Account #3 ($37,703.46) YTD: +1.28%
Account #4 ($11,900.94) YTD: +5.20%


Here is a full investing and trading report for the 8th week and February 2021:

2021 Week 8 investing and trading report | Hello Suckers ...
 

Sponsored Offers

  • Sticky
MARKETPLACE Fox Web School "Legend" Group Coaching Program 2021
I thought I would post up the first video from the newest 2021 program content... Just a...
  • Sticky
MARKETPLACE Kill Bigger Incubator
I have not offered one of these in a while, but it looks like I have time to take on an...
  • Sticky
MARKETPLACE You Are One Call Away From Living Your Dream Life - LightHouse’s Accountability Program ⚡
Hi Andreas, It is per month, with the first month being half. This is a great question, I...
  • Sticky
MARKETPLACE Lex DeVille's - Advanced Freelance Udemy Courses!
Hi Lex, I looked at several options including Kajabi and settled on the Divi theme on Wordpress...
  • Sticky
MARKETPLACE Grow Your Business With a Book (An Unorthodox Marketing Strategy That Built One of the Largest...
Are you looking for a new, lesser-known but potentially very lucrative source of leads to your...
  • Sticky
FEATURED! Introducing... WEALTH EXPO$ED, A Short Story By MJ DeMarco
The story is BASED UPON a true story. The details aren't entirely accurate or from a distinct...



Forum Sponsor

Grow an online business:
- Start immediately!
- Master business skills!
- 100+ Fastlane students enrolled!
Review & Details >

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom