Thursday, July 28, 2005

Tracking Investment Income

As I drive towards my goal of an investment portfolio worth $300,000, I always keep the income that it is throwing off in the back of my mind. It is this income that is going to provide me with a good portion of my investing return over the years. I have started to use an Excel chart that graphically reminds me of this growing income stream. I find this is an awesome motivator to keep on course as it highlights progress towards my goal.

REMEMBER though, as Canadian Capitalist pointed out in his blog, investing in dividend paying stocks requires you to complete your due diligence. Do not just invest in a stock because it provides you with a huge dividend. A poorly managed company can drop like a rock, and with it so can its dividend, a la Nortel. Dividends don't mean much then. You must understand what you are buying and feel comfortable that earnings will continue to rise in the future, and that you are getting in at a price you are comfortable. That is a judgment call. But more on that later...

Transactions for the week:
Stock: BCE Inc. Transaction: Dividend Reinvestment Amount: $18.60

Good Book: This is one of my favorite investing books of all time. I didn't list it in my Recommenced Reading post, but I should have.

3 Comments:

Blogger ~Dawn said...

Who do you go through for buying these shares? Do you go online like sharebuilder or go through a brick and morter company?

7/28/2005 08:31:00 PM  
Blogger ~Dawn said...

Also another question: If you had $50 to invest in a DRP, where would you put it?

I realize you are not an advisor, just getting an opinion.

7/28/2005 08:41:00 PM  
Blogger The Dividend Guy said...

I am in Canada and the broker that I use is a company called Canadian Shareowners Association - kind of similar to NAIC. They allow for reinvestment of dividends and fractional shares.

If I were to put $50 into a DRP right now, I would probably go with a Canadian company called Enbridge (ENB). I haven't looked at them for a couple of months so I would need to rerun some numbers to make sure it still fit my criteria. Thanks for visiting

7/28/2005 08:58:00 PM  

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