Over the next month I bough four more shares, and earned $0.20 in dividend income. Hardly a princely sum, but I was on my way.
Flush with my very first success, my next task was learn something about how to effectively pick stocks for income. Learning something wasn't too hard because I knew nothing. Well, next to nothing. I had some experience in the market....
In 2000 I bought 1 share of Palm, maker of the Handspring Personal Data Assistant and other tech devices. A week or so later I sold it for a loss. So I did know something: I knew how to lose money in the market. It is, perhaps, no surprise that I brought that lesson forward to my dealings with EVC. I lost $0.46 on that deal.
I determined to be better, so I decided on five sectors into which I could invest, sectors that were largely orthogonal. I chose Real Estate, Entertainment, Health Care, Technology, and Energy. Sure, there are some dependencies between them (particularly real estate and entertainment) but I think it's a pretty diversified list.
I made a spreadsheet and developed some criteria so that I could rank each stock I came across.
The sites I used (and use) to support my research include:
- https://www.simplysafedividends.com/high-dividend-stocks/ (Jump off point for beginning research)
- http://www.nasdaq.com/dividend-stocks/ (Free tool for looking up dividend history and company info)
- https://www.investopedia.com/terms/d/dividendyield.asp (Glossary)
- https://www.dividend.com/dividend-stock-screener.php (Free tool for looking at sectors and individual stocks)
- http://library.morningstar.com.hpld.idm.oclc.org/ (Free at-home access via my local library)
I mentioned that there are some immediately-rejected stock candidates. The motivation for this entire exercise is to provide retirement income, yes, and there are some qualifiers to that. One stipulation is that the portfolio yield must exceed a 3% return on my investment. My wife and I have the option to pay more on our mortgage each month, but that extra money isn't always 1/12th of a mortgage payment. Our mortgage has a 3% interest rate, so if we can invest that extra money each month, and earn more that 3% (after taxes) then we're making out ahead in the long run. If we can get to $1,000/month doing it, all the better.
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