My Financial Independence Journey » Investing
A Brief Primer on Business Development Companies (BDC) Part 1: What are BDCs and why should you invest in them?
Business development companies (BDCs) are companies that specialize in investing in private companies – similar to how private equity or venture capital investors operate. BDCs make loans and often take ownership stakes in their client companies and supply managerial assistance. When the client company makes money, the BDC makes money. Investing in BDCs can be a great way to dip into the exciting venture capital world without having to become an accredited investor and pony … Read entire article »
Filed under: Investing
Dividend Disaster Prevention and Recovery
Last week, I discussed several dividend disaster scenarios. Now that we’ve considered the worst, its time to prepare our defenses. Risk is inherent in every investment. Now that we understand some of those risks, we can explore various ways to prepare our portfolios against them. … Read entire article »
Filed under: Investing
Dividend Disasters (Cuts, Recessions, Deflation, Brokerage Failure)
Today, I want to channel my inner pessimist and wax apocalyptic. It’s time to imagine some financial scenarios ranging from bad to abysmal. Today is all about losing money, and lots of it. Why? Because risk is inherent in every investment. Unless we understand those risks, anticipate them, and prepare for them we are positioning ourselves for disaster. Go get yourself a stiff drink and box of tissues, because financial sadness awaits us. … Read entire article »
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A Brief Primer on Master Limited Partnerships (MLP) Part 1: What are MLPs, how do they work, and why should you consider investing in them.
Master Limited Partnerships (MLPs) are unique investments that offer high yields and diversification into commodities. Simply put, MLPs are publicly traded partnerships. Just like stocks, they are completely liquid investments that are bought and sold on the major exchanges. Many MLPs also have a solid history of consistently raising dividends, making them great additions to a dividend growth portfolio. Unfortunately, MLPs come with some interesting tax filing regulations, that you need to be aware of – but never intimidated by. Read on, and we’ll begin to explore the world of MLPs together. … Read entire article »
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Calculating total annual returns
As an investor, it’s critical that I have a good idea of how well my investments are doing. This is relatively easy if you make one investment, sit on it, then just check the price at some later point in time. But what if you have multiple investments all made at different points in time, like every few weeks when a new paycheck hits your account. Or multiple different strategies like dividend investing, capital growth … Read entire article »
Filed under: Investing, Investment portfolio
A subjective comparison of investment strategies
I’ve been involved in investing in some form or fashion for well over a decade. Over that time I’ve tried a number of different strategies including index funds, dividend growth (current favorite), and speculating. Each different type of investment requires a different level of knowledge to achieve entry level proficiency and carried with it a different level of risk. Hopefully, the list below will help you better understand which style of investing you may be … Read entire article »
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Direct Real Estate Investment vs REITs
As I’ve stated many times on this blog, I am a huge fan of dividend growth stocks (SQUEE!!). However, I am also interested in diversifying my capital into other income producing assets. Of particular interest to me is real estate investing. There are two primary ways to get serious about real estate. First, through holding shares of real estate investment trusts, otherwise known as REITs. Or second, through direct investment in real estate, that is to … Read entire article »
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Is Home Buying Right for Me?
One of my goals for 2013 was to educate myself on home ownership and decide if buying a house was a good idea or not. To that end, I read some books and spent a lot of time reading about home ownership online. After all my research, I have come to the conclusion that home ownership may not be the best thing for me at this point. Below, I’ll work through my thought process. Hopefully, … Read entire article »
Filed under: Investing, Reflections
A Brief Primer on REITs (Real Estate Investment Trusts) Part 2: The basics of evaluating a REIT
In part 1 of the REIT series, we discussed what REITs are, why we should be interested in investing in them, and compared them to being a more traditional landlord. Here, we’re going to review some of the basics of evaluating REITs. While REITs can be great dividend producing investments, they can’t be evaluated in exactly the same way as traditional stocks. … Read entire article »
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A Brief Primer on REITs (Real Estate Investment Trusts) Part 1: What are REITs, why should you invest in them, and how do they compare to being a landlord.
Real estate investment trusts (REITs) are companies that specialize in investing in real estate by owning and renting commercial properties or by collecting mortgage interest. Investing in REITs is a great way to get your feet wet in real estate without becoming a landlord. You simply buy and sell shares of a REIT on a stock exchange like you would any other stock. Because REITs usually pay out almost all (>90%) of their taxable earnings you can earn substantially higher dividend yields through REITs than you could with traditional stocks. … Read entire article »
Filed under: Investing
