We spend an awful lot of time on My Money Design talking about not only how to successfully plan for retirement, but even some strategies for how to get there as early as possible. Why? Because I think that financial freedom and the ability for you to choose what you do with your time are some of the most gratifying things you can accomplish in your lifetime.
The big question then is: What is it that I want to do with all this time once I finally have it? – That’s a very good question, and not one to take lightly. Having some post retirement ideas and goals for what you’ll do with yourself is just as important as the planning it took to get you there.
The following is a guest post from Matt Becker, founder of Mom and Dad Money. Matt is a proud father and husband, and his site is dedicated to helping new parents build financial security for their family.
Although Matt and I have somewhat different personal opinions in regards to dividend strategies, I thought it might be fun to invite him to take the stage and share his perspective on why he thinks Total Return Investing would be better. I’ve always maintained the message on My Money Design that there is more than one way to reach financial freedom. If you can keep an open mind and not reject something just because it is different than what you use, then maybe you might just learn something.
Go ahead Matt ….
I’ll take the whole pie thank you!
If you have paid any attention to the investment world since 2008, you have undoubtedly heard of dividend investing. A dividend investing strategy is simply one in which an investor chooses to put his or her money in stocks that have a strong history of paying consistent dividends.
An alternative to a dividend strategy is called total return investing. With a total return approach, an investor is looking for returns from any source, including but not limited to dividends. Specific to stocks, this essentially means that an investor will view capital gains as an equally appealing source of returns and will proceed with the sole goal of maximizing returns for a given level of risk, without preference as to where those returns are coming from.
It is my view that a total return strategy is superior to a dividend approach in several ways.
What a weekend this will be! First of all, congratulations to my wife for putting up with me for 11 years. Today is our anniversary! I’m very humbled to say that everything I wrote about our love for each other in last year’s 10 year wedding anniversary tribute post is still just as fresh as ever. Unfortunately timing was bad this weekend. So we celebrated last weekend with a date night last, and will be taking a short weekend trip coming up soon in July.
The following post is a guest contribution. If you’d like to write for My Money Design, please feel free to contact me.
Although it may end some of your financial troubles, filing for bankruptcy is not just something that you do once and the work is over. In fact, unless you want to file repeatedly throughout your life, the real work begins after your debts are discharged. Asking how does bankruptcy work is a question that few people ever really take the time to understand, but they should so they can save their finances. If you don’t have debts like student loans or overdue taxes, you may get your debt balance reset to zero, but if you remain in an impossible financial situation then the relief is only temporary.
Unfortunately after many attempts, my niche website IRAvs401kCentral.com has still not broken into the ultra competitive Top 10 in the Google search engine results (SERP) for my main keyword “IRA vs 401k”. While some may call that a disappointment (since the goal for most money earning sites is to make it to No. 1 and start generating revenue), I’m not completely sure that all hope is lost just yet. I have noticed a few very interesting things that put a little bit of sunshine over my situation. Let’s take a look at them:
Why in the world is MMD writing a post about green cloudy pool water? What does this have to do with money?
If you own a pool, then you already know the answer – TONS! Owning a pool is quite a love / hate relationship. I love it in the summer when its 100 degrees outside and I’ve got someplace cool to take a dip. But I simply hate it every spring because getting it started is a nightmare.
How bad is it? There’s nothing worse than pulling your winter cover off only to find +20,000 gallons of puke, army green water. Last year I spent hundreds of dollars in chemicals trying to bring the cloudy pool water back to life only to ultimately get so frustrated that I drained the whole thing and then started all over again. Talk about literally pouring your money down the drain ….
Women everywhere be prepared to take one step backwards from 100 years of progress against gender inequality in the workplace. In a very sad display of male chauvinism, CNN Money recently ran an article about investor Paul Tudor Jones. What was the story about? His candid statement that:
“… you will never see as many great women traders as men”.
Time and time again on this blog we’ve proven that we sometimes don’t know we can do something until we ask for it. That was exactly the case this week when I learned that I can DRIP stocks with my broker. Until now I didn’t think that my account had this feature, but I was glad to find out that it does and I will certainly be putting it to use.
For those of you who don’t know, DRIP stands for dividend reinvestment plan (or program). It is also sometimes abbreviated DRP. When people say you DRIP stocks, they are usually referring to some system you enroll in where instead of receiving your dividend payments by check or cash each quarter you instead automatically buy more shares of that same dividend paying stock. There are a lot of really strong reasons as to why this is a big advantage to you.
I think my obsession with early retirement must have started at an early age when I couldn’t wait for Summer break. I can’t believe that May is already over and it was my children’s last day of school yesterday (and the last day of work for my teacher wife!) So now my whole house (minus me) will be able to sleep in, relax all day, play in the sun, and repeat each day for the next three months.
For as long as I’ve ran this blog, I’ve tried on many occasions to market affiliate products. Why? Because as far as blogging goes, the right execution of your affiliate marketing ideas can be very lucrative! It is one of those passive income methods where you really and truly don’t need to lift a finger to make money.
For anyone reading this who is not a blogger, here’s what we’re talking about: Affiliate marketing is when you put ads on your website. Those links can either be in the form of images or just simple text. When a reader clicks on the link and either fills out a form or completes a sale, that results in a commission for the website owner.
Get enough of the right kind of visitors to come to your site and click around, and you’ve got a potential gold mine on your hands!