Table of Contents Portfolio Update Dividend Income Growth (YoY) Quarterly Comparisons Projected Annual Dividend Income (PADI) My Dividend Growth Portfolio has a dual purpose: to drive growth in share value while generating a steady stream of passive income to support my retirement goals. With a current dividend yield of 3.19%, the portfolio is heavily weighted towards growth. However, as I approach retirement, I plan to shift my focus towards maximizing income while reducing exposure to growth. To achieve this, I make monthly contributions of $2,000-$4,000, totaling $3,000 this year, and supplement it with my tax-deferred ROTH TSP account. I reinvest all dividends through DRIP, but as my income grows, I'll carefully select reinvestment opportunities and set aside the necessary funds to cover taxes on my withdrawals. Ready to take control of your financial future? Let me show you how with my Ultimate Dividend Investing Guide. Click the link and take the first step towards building your own Passive Income portfolio today! All Charts are from my Dividend Portfolio Tracker Portfolio Update January was decent month for overall returns. I decided to add JEPI Premium Income ETF and Realty Income to boost my overall passive income and portfolio dividend yield. I'm hoping to live off my dividends and pension in four to nine years, so I increased these positions for this reason. I decreased $SCHD allocation to 25% (from 30%) and increased $JEPI to 10% (from 5%). JEPI Stock ($JEPI) x 38 Realty Income Stock x 13 These new positions added $241.19 to my portfolio's passive income or just over $20 a month. My portfolio returned 4.23% compared to the 6.18% posted by the SP500 as a whole. $MMM and $ DIS continue to drag down my overall portfolio performance. JP Morgan recently said that $DIS present a possible 25% upside. I'm hopeful that Disney will make strides to increase stock value this year now that Bob Iger is making changes. Dividend Income Growth (YoY) My dividend income continues to surpass expectations. January 2023 dividends were more than January 2021 and 2022 combined. This years dividends for January are roughly 4x 2021 and 2x 2022! Forecasting out I will come close to surpassing 2021 total dividend return with 2023's Q1 returns. My monthly income has now surpassed $100 a month as my lowest payment. February may slip below so I'll keep an eye on this. This is an awesome milestone to see that after this month I should receive less than $100 dollars in any month. Quarterly Comparisons Quarterly income continues to grow as expected. You can see below that my January divdends have already outpaced the entire Q1 of 2021. I expect that I will double Q1 2022 results when we end Q1 this year. Projected Annual Dividend Income (PADI) Lastly, my projected annual dividend income is now $2,540.72 or $211.73 a month! 16 of my 17 positions pay dividends (Disney being the non-payer). I'm starting to see rumors online of Disney returning it's dividend. If that happens my dividend income will get a nice a boost. I hope this update hope helps break down the power of dividends and inspires some of the new dividend investors. Stay the course and be patient! Happy Investing!

Financial Independence, Retire Early (FIRE) is a growing movement that has gained popularity in recent years. The idea behind FIRE is simple: to achieve financial independence as soon as possible, so that one can choose to retire early or pursue other passions and interests. This concept has attracted a wide range of people, from young professionals to retirees, who are looking for ways to gain more control over their finances and live a more fulfilling life. The FIRE movement is based on the principle of saving and investing a significant portion of one's income, in order to reach a point where one's investments can generate enough passive income to cover one's living expenses. The goal is to achieve a high savings rate, which can be done by cutting expenses and increasing income. Once financial independence is achieved, the idea is to retire early, either fully or semi-retire, and live off the passive income generated by one's investments. One of the key aspects of FIRE is the concept of minimalism. Minimalism is the practice of living with less, and it is a key principle in the FIRE movement. By living a minimalist lifestyle, one can reduce expenses and increase savings, which can help speed up the journey to financial independence. The benefits of FIRE are many, including the ability to retire early and have more time to pursue other passions, the ability to live a more fulfilling life, and the ability to have more control over one's finances. However, the FIRE movement is not without its critics, some argue that it is not realistic for most people and that it is not possible to retire early without significant sacrifices. This blog post will explore the FIRE movement in more detail, discussing its key concepts, benefits, and potential drawbacks. We will also provide step-by-step instructions on how to start a FIRE journey, tips for increasing income and cutting expenses, and advice on how to track progress and adjust plans as needed. We will also share examples of different FIRE journeys and the pros and cons of each. By the end of this post, readers will have a better understanding of the FIRE movement and will be able to decide if it is right for them. Learn about my journey to FIRE using Dividends as one source of passive income! Check out my Ultimate Dividend Investing Guide or My guide on how to live off Dividends Table of Contents Why is FIRE so popular and why should you choose it Quick overview on how to get started with FIRE Types of FIRE Movements Lean FIRE Lean FIRE Pros and Cons Fat FIRE Fire FIRE Pros and Cons Barista FIRE Barista FIRE Pros and Cons Progressive FIRE Progressive FIRE Pros and Cons Location-Independent FIRE Location-Independent FIRE Pros and Cons How to Calculate your FIRE number FIRE Calculators FIRE Resources FIRE Books FIRE Podcasts Real-Life FIRE Examples What is FIRE? FIRE stands for Financial Independence Retire Early, it is a movement that encourages people to save and invest aggressively to achieve financial independence and retire early, allowing them to pursue their passion, interests, travel and experience new cultures, and have more control over their time and their lives. Why is FIRE so popular and why should you choose it The FIRE (financial independence retire early) movement is gaining popularity for several reasons: Increased dissatisfaction with traditional retirement: Many people are finding that traditional retirement, with the expectation of working until age 65 or older and then living off of a fixed income, is not appealing. The FIRE movement offers an alternative, with the goal of achieving financial independence and retiring early, often in their 40s or 50s. Greater awareness of the power of compound interest: The FIRE movement emphasizes the importance of saving and investing aggressively, and the power of compound interest in growing wealth over time. This message resonates with many people who are looking for ways to build wealth and achieve financial independence. Greater access to information and resources: The internet has made it easier for people to learn about the FIRE movement and access the information and resources they need to get started. Websites, podcasts, and online communities have emerged to provide information, support, and inspiration for people interested in FIRE. Changing views on work and retirement: A shift in society’s perspective on work and retirement is also contributing to the popularity of FIRE. Many people are looking for more flexible work arrangements, and the FIRE movement offers an alternative to traditional retirement where one can retire early and still continue to work in a way that aligns with their passions, goals, and values. The desire for more control over one’s life: The FIRE movement is gaining popularity because it gives people more control over their lives. It allows them to take control of their finances and their time, and to make choices about how they want to live and work that align with their values and goals. It’s worth noting that the FIRE movement is not for everyone, and that it’s important to evaluate your personal goals, values, and what you are comfortable with before committing to this approach. FIRE principles on how to get started Achieving FIRE requires a combination of saving, investing, and budgeting. Here are some steps you can take to get started: Create a budget: Knowing where your money is going is the first step to controlling it. Start by tracking your expenses for a month and then create a budget that allocates your income to the things that are most important to you. Increase your income: Look for ways to increase your income, whether it's through a raise, a side hustle, or a new job. The more money you can save, the faster you'll reach your goal. Reduce expenses: Look for ways to reduce your expenses, whether it's by cutting out unnecessary expenses, negotiating bills, or downsizing your home. Invest aggressively: Invest as much as you can in low-cost index funds or other investments that have the potential for high returns. The key is to invest early and often to take advantage of the power of compound interest. Set a goal and track your progress: Set a goal for when you want to retire and create a plan to achieve it. Track your progress and make adjustments as needed. Financial independence retire early is a challenging but achievable goal. By saving, investing, and budgeting aggressively, you can reach your goal and enjoy the benefits of early retirement. Remember, the earlier you start, the more time your money has to grow and the closer you'll be to achieving FIRE. Types of FIRE Movements Follow me on Twitter to stay up to date! There are several different approaches to achieving financial independence and retiring early (FIRE), and each has its own set of pros and cons. Here are some of the most common types of FIRE: Lean FIRE This approach emphasizes frugality and minimalism, with the goal of reducing expenses as much as possible in order to retire early with a smaller nest egg. This approach can be appealing for those who value simplicity and are comfortable living on a very tight budget. Pros of Lean FIRE Lower savings and investment requirements: By reducing expenses, the amount of money needed to achieve financial independence and retire early is lower. This means that you can achieve FIRE faster, or even retire on a lower income. Simplicity: By embracing a minimalist lifestyle, you may find that you have fewer possessions and obligations, leading to a simpler and less stressful life. Greater flexibility: With lower expenses, you may have more flexibility to pursue other goals, such as traveling, starting a business, or volunteering. Cons of Lean FIRE: Strict budgeting: In order to reduce expenses, you will need to be very mindful of your spending and budget carefully. This can be difficult for some people, and may require a significant lifestyle change. Limited lifestyle options: With a lean FIRE approach, your lifestyle in retirement may be more limited. You may not be able to afford certain luxuries, and may need to be content with a simpler lifestyle. Risk of burnout: By constantly trying to reduce expenses, you may find yourself constantly cutting back and feeling deprived. This can lead to burnout, and make it harder to stick to your plan long-term. It’s important to note that lean FIRE may not be suitable for everyone and that it’s important to evaluate your personal goals, values and what you are comfortable with before committing to this approach. Fat FIRE This approach emphasizes saving and investing aggressively, with the goal of accumulating a larger nest egg in order to retire early with a more comfortable lifestyle. This approach can be appealing for those who want to maintain their current lifestyle in retirement and are willing to delay gratification in order to save more. Pros of Fat FIRE More comfortable lifestyle: By accumulating a larger nest egg, you will have more money to spend in retirement, allowing you to maintain your current lifestyle or even improve it. Greater options: With a larger nest egg, you will have more options for how you want to spend your time in retirement, whether it's traveling, starting a business, or pursuing hobbies and interests. More flexibility: With a larger nest egg, you will have more flexibility to change your mind about retirement and return to work if you want to. Cons of Fat FIRE Higher savings and investment requirements: In order to accumulate a larger nest egg, you will need to save and invest more aggressively, which can be difficult for some people. Delayed gratification: By saving and investing aggressively, you may have to delay gratification in the short-term in order to achieve your goal of early retirement. Risk of overspending: With a larger nest egg, you may be tempted to overspend and undermine your plan to retire early. As with Lean FIRE, it's important to evaluate your personal goals, values, and what you are comfortable with before committing to Fat FIRE. Saving and investing aggressively can be challenging, but it can also provide you with a more comfortable lifestyle in retirement and more flexibility in your retirement years. Barista FIRE This approach is a hybrid of the lean and fat FIRE approaches, where the goal is to retire early but still work part-time or as a freelancer in order to maintain a more comfortable lifestyle and have additional income. This approach can be appealing for those who want to retire early but still want to have some form of income or work-life balance. Pros of Barista FIRE Balance of work and leisure: With this approach, you can continue to work part-time or as a freelancer after you retire, giving you a sense of purpose, income, and a balance of work and leisure. Flexibility: With a part-time income, you can have more flexibility in retirement, whether it's to cover unexpected expenses or to fund a new hobby or travel. Social interaction: Part-time work can also provide social interaction and a sense of community, which can be beneficial for mental and emotional well-being. Cons of Barista FIRE Lack of financial independence: With this approach, you may not have the same level of financial independence as with other FIRE approaches, as you will still need to rely on an income from work. Time constraints: Working part-time can take up some of the time you would have otherwise used for leisure, and may make it harder to achieve your other goals. Potential for burnout: If you're not careful, you may find yourself overworking and burning out, which can be detrimental to your health and well-being. Barista FIRE can be a good option for those who want to retire early but still want to have some form of income or work-life balance. It's important to carefully evaluate your personal goals, values, and what you are comfortable with before committing to this approach. Progressive FIRE This approach is focused on gradually reducing work hours and income over time, with the goal of eventually achieving full financial independence and early retirement. This approach can be appealing for those who want a more gradual transition to retirement and are not comfortable with the idea of leaving the workforce abruptly. Pros of Progressive FIRE Gradual transition: With this approach, you can gradually reduce your work hours and income over time, which can make the transition to retirement less abrupt and stressful. Flexibility: Progressive FIRE allows you to tailor your retirement plan to your specific needs, giving you the freedom to adjust your retirement date as needed. Lower savings and investment requirements: By gradually reducing your income and expenses, you may need less savings and investments to achieve financial independence. Cons of Progressive FIRE Longer timeline: By gradually reducing your income and expenses, it may take longer to achieve financial independence and retire early. Potential for setbacks: By gradually reducing your income, you may not be able to save and invest as much as you would like, which can delay your retirement date. Risk of not fully retiring: If you're not careful, you may find yourself working longer than you intended, or not achieving full financial independence. Progressive FIRE can be a good option for those who want a more gradual transition to retirement and are not comfortable with the idea of leaving the workforce abruptly. It's important to evaluate your personal goals, values, and what you are comfortable with before committing to this approach. It's also important to have a plan in place to ensure that you're on track to achieve full financial independence. Location-Independent FIRE This approach focuses on achieving financial independence in order to have the freedom to travel and live anywhere in the world. This approach can be appealing for people who value mobility and want to retire early and travel the world. Pros of Location-Independent FIRE Mobility: With this approach, you can achieve financial independence and retire early in order to have the freedom to travel and live anywhere in the world. This can allow you to experience new cultures and ways of life, and can be particularly appealing for people who value mobility and adventure. Flexibility: With location-independent FIRE, you have the freedom to move to different places, which can give you the flexibility to live in a place that aligns with your goals and values. Cost of living: By choosing to live in places with lower costs of living, you can stretch your savings and investments further, allowing you to retire earlier. Cons of Location-Independent FIRE Difficulty in maintaining relationships: Living in different places can make it harder to maintain relationships with friends and family. Difficulty in maintaining a sense of community: Without a permanent residence, it may be harder to develop a sense of community and belonging. Unfamiliarity with local laws and customs: Living in different places can also come with challenges, such as unfamiliarity with local laws and customs, which can create difficulties and difficulties in navigating everyday life. Difficulty in finding a stable income: Finding a stable income as a location-independent retiree may be more difficult, depending on the country and type of work you're pursuing. Location-Independent FIRE can be a good option for people who value mobility and want to retire early and travel the world. However, it's important to consider the potential downsides before committing to this approach, such as the difficulty in maintaining relationships and a sense of community, and the potential challenges that come with living in different places. It's worth noting that each of these approaches has its own set of pros and cons, and what works for one person may not work for another. It's important to do your own research, consider your personal goals and values, and create a plan that works for you. How to Calculate your FIRE number Calculating your financial independence retire early (FIRE) number is an important step in achieving your goal of early retirement. The FIRE number is the amount of money you need to have saved and invested in order to be able to retire early and live off of the income generated by your investments. Here is an overview of how to calculate your FIRE number: Quick Tip: The quickest way to calculate your FIRE number is to use the “4% rule” which states that you can safely withdraw 4% of your savings in the first year of retirement, and then adjust for inflation in subsequent years. To use this rule, you need to determine your annual expenses and then multiply that number by 25. This will give you an estimate of the amount of money you need to have saved and invested in order to be able to retire early and live off of the income generated by your investments. Learn more about using the 4% rule during retirement in this in depth guide. For example, if your annual expenses are $40,000, you would need to have $1,000,000 saved and invested in order to generate $40,000 in annual income. This means your FIRE number is $1,000,000. A deeper look into how to calculate FIRE Determine your annual expenses: The first step in calculating your FIRE number is to determine your annual expenses. This includes all of your fixed expenses, such as housing, transportation, and insurance, as well as your variable expenses, such as food, entertainment, and travel. Make sure to include all of your expenses, including those that you may not think of as necessary, such as your phone bill or internet service. Estimate your annual investment income: Once you know your annual expenses, you need to estimate the annual income that your investments will generate. This is typically done by using the "4% rule," which states that you can safely withdraw 4% of your savings in the first year of retirement, and then adjust for inflation in subsequent years. For example, if your annual expenses are $40,000, you would need to have $1,000,000 saved and invested in order to generate $40,000 in annual income. Determine your FIRE number: To determine your FIRE number, you will need to calculate the amount of money you need to have saved and invested in order to generate enough income to cover your annual expenses. This is done by dividing your annual expenses by the percentage of income that your investments will generate. In the example above, the FIRE number would be $1,000,000. It's important to note that this is just a rough estimate and that there are many factors that can affect your FIRE number, such as inflation, taxes, and changes in your expenses or investment income. Additionally, it's important to consider that FIRE calculations are based on the assumption that you will be able to live off the 4% withdrawal rate, which is not always the case, and that you may need to save more to have a safety net. To achieve FIRE, you will also need to have a solid plan in place for saving and investing your money. This may include increasing your income, reducing your expenses, and investing in low-cost index funds or other investments that have the potential for high returns. Additionally, it's important to track your progress and adjust your plan as needed. In summary, calculating your FIRE number is an important step in achieving financial independence and early retirement. It requires determining your annual expenses, estimating your annual investment income, and determining the amount of money you need to have saved and invested. It's important to remember that FIRE calculations are estimates and that you may need to adjust your plan as necessary. FIRE Calculators These calculators can help you to estimate your FIRE number, which is the amount of money you need to have saved and invested in order to be able to retire early and live off of the income generated by your investments. However, please keep in mind that these calculators can have different assumptions and methodologies, so it's important to read the instructions and understand how they work before using them. Additionally, it's important to consider that FIRE calculations are estimates and that you may need to adjust your plan as necessary. FIRECalc Early Retirement Now Mad Fientist FIRE Spreadsheet Financial Mentor Retire by 40 The Finance Buff FIRE Resources Here is a list of valuable resources for those interested in the Financial Independence Retire Early (FIRE) movement: Blogs: There are many blogs written by people who have achieved FIRE or are on the path to achieving it, such as Mr. Money Mustache, Early Retirement Now, and Retire by 40. These blogs provide valuable information, inspiration, and strategies for achieving FIRE. Books: There are several books that provide a comprehensive guide to the FIRE movement, such as "Your Money or Your Life" by Vicki Robin and Joe Dominguez, "The Simple Path to Wealth" by JL Collins, and "Retire Early with Real Estate" by Paula Pant. Podcasts: As mentioned before, there are many podcasts that cover FIRE topics, such as ChooseFI, Financial Independence Podcast, and Mad Fientist. Online communities: There are many online communities, such as Reddit and Facebook groups, that are dedicated to the FIRE movement where people can share their experiences, ask questions, and get support and advice. FIRE Calculators: There are several online calculators, such as FIRECalc and Early Retirement Now, that can help you estimate your FIRE number and track your progress towards achieving financial independence. Financial Advisors: It's always recommended to consult with a financial advisor to help you determine your financial goals, create a plan and execute it effectively. FIRE Conferences: There are FIRE Conferences organized in different locations, where people interested in FIRE can meet, network and learn from experts and experienced practitioners. FIRE Courses: There are online courses available such as Udemy and Coursera that offer courses that cover FIRE topics, such as budgeting, investing, and retirement planning. This list is not exhaustive, but it should provide a good starting point for those interested in the FIRE movement. It's important to remember that everyone's financial situation and goals are different, so it's crucial to do your own research and consult a financial professional to determine what resources will be most helpful and relevant to you. Books about Financial Independence Retire Early (FIRE) The Simple Path to Wealth by JL Collins "The Simple Path to Wealth" by JL Collins is a book that offers a straightforward and practical guide to personal finance and investing. The book is written in a conversational style and is aimed at helping individuals take control of their finances and build wealth over time. One of the key concepts in the book is the importance of having a strong financial foundation, which includes paying off debt, establishing an emergency fund, and reducing expenses. Collins emphasizes the importance of living below one's means, avoiding lifestyle inflation, and investing in low-cost index funds. Another key idea in the book is the importance of investing in the stock market for the long-term. Collins argues that investing in low-cost index funds is one of the simplest and most effective ways to build wealth over time. He stresses the importance of avoiding the temptation to time the market and instead focuses on buying and holding investments for the long-term. Collins also provides advice on how to save for retirement, including the importance of starting early and maximizing contributions to retirement accounts such as IRAs and 401(k)s. He also covers the importance of understanding Social Security and the role it can play in retirement planning. Overall, "The Simple Path to Wealth" is a practical and approachable guide to personal finance and investing. The book's emphasis on low-cost index fund investing, living below one's means, and paying off debt makes it a useful resource for anyone looking to take control of their finances and build wealth over time. Your Money or Your Life by Vicki Robin and Joe Dominguez This book is a comprehensive guide to personal finance that provides readers with the tools and techniques needed to achieve financial independence. The book was first published in 1992 and has since been updated several times, with the most recent edition being released in 2018. The book's central premise is that people can achieve financial independence by tracking their expenses, reducing waste, and increasing their savings rate. To achieve this, the authors recommend using a simple budgeting system, which involves tracking all expenses and income to get a clear picture of one's financial situation. Once this is done, the authors recommend reducing expenses by eliminating waste and creating a more minimalist lifestyle. Another key concept in the book is the idea of 'money mindfulness', which involves being mindful and intentional about how money is spent. This includes understanding the value of money and the impact of spending on personal goals and values. The book encourages readers to live within their means and prioritize spending on what truly matters to them. The authors also provide advice on how to increase income and invest in the stock market, with the goal of achieving a high savings rate. They discuss the importance of investing for the long-term and avoiding debt, as well as the importance of having an emergency fund. Overall, "Your Money or Your Life" is a comprehensive guide to personal finance that provides practical advice on how to achieve financial independence. The book's focus on mindfulness and intentional spending has helped many people to take control of their finances and create a more fulfilling life. The Total Money Makeover by Dave Ramsey "The Total Money Makeover" by Dave Ramsey is a popular personal finance book that offers a step-by-step guide to managing money and achieving financial stability. The book's central premise is that anyone can achieve financial freedom by following a series of steps, including reducing debt, creating a budget, and investing in the stock market. One of the key concepts in the book is the importance of paying off debt. Ramsey advocates for a debt-free lifestyle and provides a plan for paying off all debt, including credit card debt, car loans, and mortgages. He emphasizes the importance of avoiding additional debt and using cash instead of credit cards for purchases. Another key idea in the book is the importance of creating a budget and living below one's means. Ramsey provides a detailed budgeting system that includes tracking expenses and allocating funds to different categories, such as housing, food, and entertainment. He emphasizes the importance of avoiding lifestyle inflation and staying within one's means. Ramsey also covers the importance of saving for emergencies and investing in the stock market. He stresses the importance of having an emergency fund and provides advice on how to save for unexpected expenses. He also covers the basics of investing in the stock market and the importance of starting early and investing consistently over time. Overall, "The Total Money Makeover" is a comprehensive guide to personal finance that provides practical advice on how to manage money and achieve financial stability. The book's focus on debt reduction, budgeting, and investing has helped many people to take control of their finances and achieve financial freedom. “Retire Early with Real Estate” by Paula Pant "Retire Early with Real Estate" by Paula Pant is a book that provides a comprehensive guide to using real estate as a tool for achieving financial independence and retiring early. The book emphasizes the importance of building passive income streams and reducing expenses to achieve financial freedom. One of the key concepts in the book is the importance of passive income. Pant argues that passive income from real estate investments can help individuals achieve financial independence and retire early. She provides detailed advice on how to invest in real estate, including strategies for finding and financing rental properties, as well as tips for managing and maintaining rental properties. Another key idea in the book is the importance of reducing expenses. Pant emphasizes the importance of living below one's means and reducing expenses in order to maximize savings and build wealth over time. She provides advice on how to reduce expenses, including strategies for reducing housing costs, cutting back on discretionary spending, and reducing debt. The book also covers the importance of saving and investing, as well as the role of real estate in retirement planning. Pant provides advice on how to save for retirement and how to use real estate investments to supplement retirement income. She also provides tips on how to build a diversified portfolio that includes real estate and other types of investments. Overall, "Retire Early with Real Estate" is a comprehensive guide to using real estate as a tool for achieving financial independence and retiring early. The book's focus on passive income, reducing expenses, and smart investing makes it a useful resource for anyone looking to achieve financial freedom and retire on their own terms. “Choose FI: Your Blueprint to Financial Independence” by Brad Barrett and Jonathan Mendonsa "Choose FI: Your Blueprint to Financial Independence" is a book that provides a comprehensive guide to achieving financial independence and building wealth. The authors, Brad Barrett and Jonathan Mendonsa, emphasize the importance of making smart financial decisions and taking control of one's financial future. One of the key concepts in the book is the idea of financial independence (FI), which is defined as having enough passive income to cover one's living expenses without relying on traditional sources of income like a job or government benefits. The authors argue that financial independence is attainable for anyone who is willing to make smart financial decisions and take control of their finances. Another key idea in the book is the importance of maximizing income and minimizing expenses. The authors provide detailed advice on how to increase income, including strategies for side hustles and earning more at work, as well as tips for reducing expenses and living below one's means. The book also covers the importance of investing and building wealth over time. The authors provide advice on how to build a diversified investment portfolio, as well as tips on how to invest in stocks, bonds, and real estate. They also discuss the importance of tax planning and the role of index funds in building wealth. Overall, "Choose FI: Your Blueprint to Financial Independence" is a comprehensive guide to achieving financial independence and building wealth. The book's focus on maximizing income, reducing expenses, and smart investing makes it a useful resource for anyone looking to achieve financial freedom and take control of their financial future. FIRE Podcasts Here is a list of popular podcasts that revolve around the Financial Independence Retire Early (FIRE) movement: ChooseFI: Hosted by Brad Barrett and Jonathan Mendonsa, this podcast covers a wide range of topics related to FIRE, including saving and investing strategies, budgeting, and case studies of people who have achieved FIRE. Mad Fientist: Hosted by Brandon, this podcast covers a wide range of topics related to FIRE, including tax optimization, investing, and early retirement case studies. The Fairer Cents: Hosted by Kara Perez and Tanja Hester, this podcast covers a wide range of topics related to FIRE, including saving and investing strategies, budgeting, and case studies of people who have achieved FIRE. The FIRE Drill Podcast: Hosted by Julie, this podcast covers a wide range of topics related to FIRE, including saving and investing strategies, budgeting, and case studies of people who have achieved FIRE. Personal Finance Podcast of the Year Finalist The Afford Anything Podcast: Hosted by Paula Pant, this podcast covers a wide range of topics related to FIRE, including real estate investing, personal finance and early retirement case studies. The Retirement Answer Man: Hosted by Roger Whitney, this podcast covers a wide range of topics related to FIRE, including saving and investing strategies, budgeting, and case studies of people who have achieved FIRE. Real-Life FIRE Examples One of the most inspiring aspects of the FIRE movement is hearing about real-life success stories from people who have achieved financial independence and retired early. These stories serve as a reminder that achieving FIRE is not only possible, but also that there is no one-size-fits-all approach to achieving it. Here are a few examples of FIRE success stories: Mr. Money Mustache: Mr. Money Mustache, also known as Peter Adeney, is one of the pioneers of the FIRE movement. He retired at the age of 30 by saving and investing aggressively, and now runs a popular personal finance blog where he shares his story and advice for achieving FIRE. The Frugalwoods: Elizabeth Willard Thames and her husband Nate achieved FIRE in their 30s by living a frugal lifestyle and investing in low-cost index funds. They now run a popular blog and have written a book sharing their story and tips for achieving FIRE. Jacob Lund Fisker: Jacob Lund Fisker, an economist and author, retired at the age of 34 by saving more than 70% of his income, living frugally, and investing in low-cost index funds. He now runs a blog Early Retirement Extreme where he shares his story and strategies for achieving FIRE. Paula Pant: Paula Pant is a real estate investor and personal finance blogger who achieved FIRE in her 30s. She shares her journey and strategies for achieving FIRE through real estate investing on her blog Afford Anything. The Mad Fientist: The Mad Fientist, also known as Brandon, achieved FIRE in his 30s by saving and investing aggressively, and now runs a popular personal finance blog and podcast where he shares his story and advice for achieving FIRE. The Retirement Manifesto: Tanja Hester and Mark Bunge achieved FIRE in their 40s and now run a popular blog and podcast sharing their story and advice for achieving FIRE. They have also written a book, "Work Optional: Retire Early the Non-Penny-Pinching Way," which provides a detailed guide to achieving FIRE without having to sacrifice your lifestyle. Root of Good: Justin McCurry and his wife achieved FIRE in their 30s by saving and investing aggressively, and now run a popular blog sharing their story and strategies for achieving FIRE. They also share their experience with early retirement and the impact it has on their family life. The Frugal Gene: Jonathan and Brad achieved FIRE in their 30s by living a frugal lifestyle, investing in index funds, and running their own business. They now run a popular blog and podcast sharing their story and advice for achieving FIRE. Financial Samurai: Sam Dogen, a finance professional, achieved FIRE in his 30s by saving and investing aggressively and now runs a popular blog and podcast sharing his story and advice for achieving FIRE. He also shares his experience on how to achieve FIRE in high-cost cities like San Francisco. These are just a few examples, and there are many other people who have achieved FIRE and are sharing their stories and strategies online. Hearing about these success stories can be incredibly motivating and inspiring, and they show that achieving FIRE is possible with the right mindset, strategies, and discipline. Conclusion In conclusion, the FIRE (financial independence retire early) movement is an increasingly popular alternative to traditional retirement. It offers the opportunity to achieve financial independence and retire early, allowing you to pursue your passions and interests, travel and experience new cultures, and have more control over your time and your life. The principles of FIRE are simple: saving and investing aggressively, reducing expenses, and increasing income. By following these principles and creating a budget, investing aggressively and setting a goal, you can work towards achieving your FIRE number, which is the amount of money you need to have saved and invested in order to be able to retire early and live off of the income generated by your investments. It's important to remember that FIRE is not for everyone and that it's important to evaluate your personal goals, values, and what you are comfortable with before committing to this approach. Also, the FIRE movement is not just about the numbers, it's also about having a lifestyle that aligns with your values and goals. Regardless of whether you decide to pursue FIRE or not, it's never too early to start planning for retirement. By taking control of your finances and your time, you can ensure that you will be able to live the life you want, no matter when you decide to retire. So, start planning today, and work towards achieving financial independence and the freedom and flexibility that comes with it.

Investing can be a tricky business, and it’s important to stay informed in order to make the best decisions for your financial future. One of the best ways to gain knowledge and insight into the world of investing is by reading books written by experts in the field. In this blog post, we’ll be taking a look at the top 10 investing books of all time. From the classics written by Benjamin Graham and Warren Buffett, to modern bestsellers like Michael Lewis’ “The Big Short,” these books have shaped the way we think about investing and continue to be essential reading for anyone looking to gain a deeper understanding of the financial markets. Whether you’re a seasoned investor or just getting started, these books offer valuable insights and strategies for building a successful portfolio. So, without further ado, let’s dive into the top 10 investing books of all time. Table of Contents The Intelligent Investor by Benjamin Graham Security Analysis by Benjamin Graham and David Dodd The Warren Buffett Way by Robert Hagstrom One Up on Wall Street by Peter Lynch The Little Book of Common Sense Investing by John C. Bogle The Essays of Warren Buffett by Lawrence A. Cunningham The Black Swan by Nassim Nicholas Taleb The Big Short by Michael Lewis The Dhandho Investor by Mohnish Pabrai The Most Important Thing: Uncommon Sense for the Thoughtful Investor by Howard Marks Don't forget to check out our 'How To' section for helpful tips and tutorials on a variety of investing and retirement topics! 1. The Intelligent Investor by Benjamin Graham The Intelligent Investor, written by Benjamin Graham, is widely considered to be one of the most important books on investing ever written. First published in 1949, the book has stood the test of time and continues to be a must-read for anyone looking to gain a deeper understanding of the financial markets. The main idea of the book is to provide a framework for making sound investment decisions. Graham argues that the most successful investors are those who approach the market with a long-term perspective and a focus on value. He encourages readers to think of themselves as "intelligent investors" who are able to separate emotion from logic when making investment decisions. One of the key takeaways from the book is the concept of "value investing." Graham argues that in order to be a successful investor, it's important to focus on the intrinsic value of a stock rather than its current market price. This means looking at factors like a company's financial statements, management team, and competitive landscape in order to determine whether or not a stock is undervalued. Another important concept presented in the book is the idea of "margin of safety." Graham suggests that investors should only buy stocks that are trading at a significant discount to their intrinsic value in order to minimize risk. This way, even if the market takes a turn for the worse, investors will still be able to come out ahead. The Intelligent Investor has had a profound impact on the financial industry and is considered to be a classic in the field of investment. Many of the concepts presented in the book, such as value investing and margin of safety, have become staples of modern investment strategies. The book continues to be widely read and referenced by investors, financial analysts, and business professionals all over the world. 2. Security Analysis by Benjamin Graham and David Dodd Security Analysis, written by Benjamin Graham and David Dodd, is a comprehensive guide to the principles and techniques of investing in securities. Originally published in 1934, the book is widely considered to be a classic in the field of investment and continues to be a go-to resource for investors and financial professionals. The main idea of the book is to provide a thorough understanding of the various types of securities available to investors and the techniques used to evaluate them. The authors argue that in order to be a successful investor, one must have a deep understanding of the underlying fundamentals of a security and be able to separate the "wheat from the chaff." One of the key takeaways from the book is the importance of in-depth analysis when evaluating securities. The authors provide detailed guidance on how to analyze and interpret financial statements, as well as how to evaluate management teams and industry trends. They also discuss the importance of considering the overall economic and political climate when making investment decisions. Another important concept presented in the book is the idea of "margin of safety." Similar to The Intelligent Investor, the authors emphasize the importance of only investing in securities that are trading at a significant discount to their intrinsic value in order to minimize risk. Security Analysis has had a significant influence on the financial industry and is considered to be a seminal work in the field of investment. Many of the concepts presented in the book, such as in-depth analysis and margin of safety, have become staples of modern investment strategies. The book continues to be widely read and referenced by investors, financial analysts, and business professionals all over the world. 3. The Warren Buffett Way by Robert Hagstrom The Warren Buffett Way, written by Robert Hagstrom, is a detailed look at the investment strategies and principles of one of the most successful investors of all time, Warren Buffett. The book, first published in 1994, examines Buffett's approach to investing and provides insight into the methods that have made him one of the wealthiest and most successful investors in history. The main idea of the book is to provide an in-depth analysis of Warren Buffett's investment strategies and the principles that guide his decision-making. Hagstrom examines the key elements of Buffett's investment philosophy, including his focus on value investing and his emphasis on investing in companies with strong fundamentals. The book also explores Buffett's approach to risk management and how he is able to identify undervalued companies that have the potential for long-term growth. One of the key takeaways from the book is the importance of having a long-term perspective when it comes to investing. Buffett's investment philosophy is built around the idea of investing in companies that have strong fundamentals and are likely to grow over time. He is not focused on short-term gains, but rather on the long-term potential of a company. Another important concept presented in the book is the idea of "circle of competence." Buffett believes that investors should only invest in companies that they understand and have a strong grasp of the underlying fundamentals. This means that investors should focus on industries and companies that they are familiar with and avoid those that they do not understand. The Warren Buffett Way has had a significant influence on the financial industry and is considered to be a must-read for anyone looking to gain a deeper understanding of value investing and the principles of successful investing. The book continues to be widely read and referenced by investors, financial analysts, and business professionals all over the world. 4. One Up on Wall Street by Peter Lynch One Up on Wall Street, written by Peter Lynch, is a bestselling book that provides a behind-the-scenes look at the investment strategies and tactics used by one of the most successful mutual fund managers of all time. The book, first published in 1989, provides insight into Lynch's approach to investing and the methods that helped him achieve an average annual return of 29.2% during his tenure as manager of Fidelity's Magellan Fund. The main idea of the book is to provide a comprehensive look at Lynch's investment process and the principles that guide his decision-making. Lynch emphasizes the importance of conducting extensive research and in-depth analysis when evaluating securities. He also stresses the importance of understanding the underlying fundamentals of a company and the industry in which it operates. One of the key takeaways from the book is the importance of being a contrarian investor. Lynch argues that the most successful investors are those who are willing to go against the crowd and make investment decisions based on their own research and analysis. He encourages readers to look for companies that are overlooked by the market and have the potential for long-term growth. Another important concept presented in the book is the idea of "tenbaggers." Lynch believes that the key to successful investing is finding companies that have the potential to increase in value by a factor of ten or more. He argues that by focusing on companies with this level of potential, investors can achieve outstanding returns over time. One Up on Wall Street has had a significant influence on the financial industry and is considered to be a must-read for anyone looking to gain a deeper understanding of growth investing and the principles of successful investing. The book continues to be widely read and referenced by investors, financial analysts, and business professionals all over the world. 5. The Little Book of Common Sense Investing by John C. Bogle The Little Book of Common Sense Investing, written by John C. Bogle, is a comprehensive guide to the principles and practices of low-cost, passive investing. The book, first published in 2007, provides a clear and concise overview of Bogle's investment philosophy and the methods he has used to achieve success as the founder of Vanguard Group, one of the largest investment management companies in the world. The main idea of the book is to provide a clear and straightforward approach to investing that is accessible to investors of all levels of experience. Bogle argues that the most successful investors are those who adopt a long-term, passive investment strategy and avoid trying to time the market or make active trades. He advocates for low-cost, diversified index funds as the best way to achieve long-term investment success. One of the key takeaways from the book is the importance of keeping costs low. Bogle argues that high investment fees can significantly erode returns over time, and encourages investors to look for low-cost index funds that provide broad market exposure. He also emphasizes the importance of avoiding the temptation to chase performance or try to time the market, which can lead to costly mistakes. Another important concept presented in the book is the idea of "indexing" as an investment strategy. Bogle argues that by investing in a diversified index fund, investors can achieve returns that are similar to the overall market, without the need for expensive research or active management. This strategy has become popular over the years, known as "Passive Investing" The Little Book of Common Sense Investing has had a significant influence on the financial industry and is considered to be a must-read for anyone looking to gain a deeper understanding of passive investing and the principles of successful long-term investing. The book continues to be widely read and referenced by investors, financial analysts, and business professionals all over the world. 6. The Essays of Warren Buffett by Lawrence A. Cunningham The Essays of Warren Buffett, written by Lawrence A. Cunningham, is a collection of letters and speeches written by the legendary investor, detailing his investment philosophy, strategies, and insights on the financial markets. The book, first published in 1997, provides an in-depth look into the mind of one of the most successful investors of all time and offers valuable lessons for investors of all levels of experience. The main idea of the book is to provide a comprehensive look at Buffett's investment philosophy and the principles that guide his decision-making. The book is composed of a series of letters and speeches written by Buffett to the shareholders of Berkshire Hathaway, the company he leads. In these letters, Buffett provides detailed analysis of the company's performance, as well as his thoughts on the overall financial markets and the economy. One of the key takeaways from the book is the importance of investing in companies with strong fundamentals. Buffett is a value investor who looks for companies with a sustainable competitive advantage, strong management, and a history of consistent earnings growth. He also emphasizes the importance of investing for the long-term and avoiding the temptation to time the market. Another important concept presented in the book is the idea of "owner-oriented" investing. Buffett argues that investors should think of themselves as owners of a business rather than just holders of a stock. This means taking the time to understand the underlying fundamentals of a company and the industry in which it operates, as well as considering the overall economic and political climate. The Essays of Warren Buffett has had a significant influence on the financial industry and is considered to be a must-read for anyone looking to gain a deeper understanding of value investing and the principles of successful investing. The book continues to be widely read and referenced by investors, financial analysts, and business professionals all over the world 7. The Black Swan by Nassim Nicholas Taleb The Black Swan, written by Nassim Nicholas Taleb, is a groundbreaking book that explores the impact of rare and unpredictable events on the world of finance and investing. The book, first published in 2007, presents a new framework for understanding risk and uncertainty in the financial markets and has had a significant impact on the way we think about investing and risk management. The main idea of the book is to challenge the traditional view of risk and uncertainty in the financial markets. Taleb argues that the most significant events in finance and economics are not predictable and are often referred to as "black swans" - rare and unpredictable events that can have a huge impact on the markets. He argues that traditional risk management methods based on historical data and probability are inadequate to deal with these events and that a new approach is needed. One of the key takeaways from the book is the importance of being prepared for rare and unpredictable events. Taleb argues that investors should focus on building a portfolio that is robust to the potential impact of black swans, rather than trying to predict them. This means investing in a diverse range of assets and avoiding concentrated positions in any one stock or market. Another important concept presented in the book is the idea of "antifragility." Taleb argues that some systems, such as natural ecosystems, can benefit from shocks and volatility, becoming stronger as a result. He suggests that investors should strive for antifragility in their portfolios, by avoiding over-leveraged positions and building in redundancies to protect against rare and unpredictable events. The Black Swan has had a significant influence on the financial industry and is considered to be a must-read for anyone looking to gain a deeper understanding of risk and uncertainty in the financial markets. The book continues to be widely read and referenced by investors, financial analysts, and business professionals all over the world. The concept of "Black Swan" events has become popular in the industry and is used as a term to describe unexpected events with a significant impact on the markets or the economy. 8. The Big Short by Michael Lewis The Big Short, written by Michael Lewis, is a non-fiction book that tells the story of the 2008 financial crisis, specifically focusing on the individuals who saw the collapse of the housing market coming and bet against it. The book, first published in 2010, provides an in-depth look into the inner workings of the financial markets and the actions of key players leading up to the crisis. The main idea of the book is to provide a detailed account of the events leading up to the 2008 financial crisis and the actions of a group of investors who saw the collapse of the housing market coming and bet against it. Lewis explores how a group of outsiders, including hedge fund managers and traders, were able to identify the weaknesses in the market and profit from the collapse of the housing market. One of the key takeaways from the book is the importance of thinking independently and being willing to challenge the conventional wisdom of the market. The investors featured in the book were able to identify the weaknesses in the market and profit from the collapse of the housing market, because they were willing to look at the market differently and question the assumptions that others were making. Another important concept presented in the book is the idea of the "complexity" of the financial system. Lewis demonstrates how the complexity of the financial markets, such as the use of derivatives, can lead to a lack of transparency and make it difficult for investors to understand the true risk of an investment. This book has shed light on the importance of understanding the underlying mechanics of the financial system and the potential dangers of complexity in the financial markets. The Big Short has had a significant influence on the financial industry and is considered to be a must-read for anyone looking to gain a deeper understanding of the 2008 financial crisis and the actions of key players leading up to it. The book continues to be widely read and referenced by investors, financial analysts, and business professionals all over the world. The book also has been made into a movie, which has helped to popularize the story. 9. The Dhandho Investor by Mohnish Pabrai The Dhandho Investor, written by Mohnish Pabrai, is a book that explores the investment strategies of Warren Buffett and his investment firm Berkshire Hathaway. The book, first published in 2007, provides an in-depth look into the principles and practices of value investing and how they can be applied to achieve long-term investment success. The main idea of the book is to provide a comprehensive look at the investment strategies and principles of Warren Buffett and how they can be applied to achieve long-term investment success. Pabrai examines the key elements of Buffett's investment philosophy, including his focus on value investing, his emphasis on investing in companies with strong fundamentals, and his approach to risk management. The book is based on the teachings of the Indian business leader, Mr. Dhirubhai Ambani, and how they inspired the author to invest in the same way as Warren Buffett. One of the key takeaways from the book is the importance of having a long-term perspective when it comes to investing. Pabrai emphasizes that the most successful investors are those who adopt a long-term, value-oriented approach to investing and avoid trying to time the market or make active trades. He also encourages readers to think like owners of a business rather than just holders of a stock. Another important concept presented in the book is the idea of "circle of competence." Pabrai argues that investors should only invest in companies that they understand and have a strong grasp of the underlying fundamentals. This means that investors should focus on industries and companies that they are familiar with and avoid those that they do not understand. The Dhandho Investor has had a significant influence on the financial industry and is considered to be a must-read for anyone looking to gain a deeper understanding of value investing and the principles of successful investing, as well as how to apply the teachings of Mr. Dhirubhai Ambani on investing. The book continues to be widely read and referenced by investors, financial analysts, and business professionals 10. The Most Important Thing: Uncommon Sense for the Thoughtful Investor by Howard Marks "The Most Important Thing: Uncommon Sense for the Thoughtful Investor" is a book written by Howard Marks, a successful investor and the founder of Oaktree Capital Management. The book, first published in 2011, provides a unique perspective on investing by focusing on the mental and emotional aspects of investing and how to navigate the uncertain and volatile markets. The main idea of the book is to provide a comprehensive look at the mental and emotional aspects of investing and how to navigate the uncertain and volatile markets. Marks emphasizes the importance of understanding the psychology of investing and the role of emotions in decision-making. He also provides valuable insights on how to navigate the uncertain and volatile markets and how to identify opportunities in the market. One of the key takeaways from the book is the importance of thinking independently and being willing to challenge the conventional wisdom of the market. Marks encourages readers to develop their own investment philosophy and avoid following the crowd. He also emphasizes the importance of being patient and disciplined in the face of market volatility, and how to avoid succumbing to emotions that can lead to impulsive decisions. Another important concept presented in the book is the idea of "second-level thinking." Marks argues that successful investors are those who are able to think critically and look beyond the surface level information to understand the underlying factors that drive market movements. He encourages investors to consider the "big picture" and to think about how different events and factors may interact and influence each other. The Most Important Thing: Uncommon Sense for the Thoughtful Investor has had a significant influence on the financial industry and is considered to be a must-read for anyone looking to gain a deeper understanding of the mental and emotional aspects of investing and how to navigate uncertain and volatile markets. The book continues to be widely read and referenced by investors, financial analysts, and business professionals all over the world. Stay up to date! Follow me on Twitter! Conclusion In conclusion, the top 10 investing books of all time provide a wealth of knowledge and insight for investors of all levels of experience. From Benjamin Graham's "The Intelligent Investor" and "Security Analysis" to Warren Buffett's "The Warren Buffett Way" and "The Essays of Warren Buffett," these books offer a comprehensive look at the principles and practices of value investing and how they can be applied to achieve long-term investment success. Other books such as "One Up on Wall Street" by Peter Lynch, "The Little Book of Common Sense Investing" by John C. Bogle, "The Black Swan" by Nassim Nicholas Taleb, "The Big Short" by Michael Lewis and "The Dhandho Investor" by Mohnish Pabrai offer a different perspective on investing, from growth investing to understanding rare and unpredictable events and to apply teachings of Indian business leader Mr. Dhirubhai Ambani. Reading about investing and learning from the experiences of successful investors is crucial to becoming a successful investor. These books provide valuable lessons on how to analyze and evaluate securities, manage risk, and think independently in the face of market uncertainty. They also serve as a reminder of the importance of having a long-term perspective and avoiding the temptation to time the market or make active trades. The impact of these books on the financial industry has been significant. Many of the concepts presented in these books, such as value investing, margin of safety, and the importance of in-depth analysis, have become staples of modern investment strategies. These books continue to be widely read and referenced by investors, financial analysts, and business professionals all over the world and are considered as a foundation for anyone looking to gain a deeper understanding of investing and the principles of successful investing.

Living off of dividends during retirement is a concept that involves building a portfolio of dividend-paying stocks that generates enough income to cover your living expenses. The idea is to invest in companies that have a history of consistently paying dividends and have a strong likelihood of continuing to do so in the future. This income can be used to supplement other sources of retirement income, such as pensions, social security, or rental properties. One of the main benefits of living off of dividends is that it can provide a consistent and predictable income stream, regardless of market fluctuations. Dividends are typically paid out on a regular schedule, such as quarterly, which can help to stabilize your retirement income. Additionally, many dividend-paying stocks also have the potential for capital appreciation, which can increase your overall returns over time. In this article we'll take a look at what it takes to build a passive income portfolio from dividends that you can use to live off of before or during retirement. This article is a supplement to my Ultimate Dividend Investing Guide. If your look to start you dividend investing journey, I've spent 100s of hours compiling as much as possible in one place! Table of Contents The 4% Withdrawal Rule VS Living Off Dividends The Pros and Cons of relying on dividends as a primary source of income Tips for successfully living off of dividends during retirement Determining how much income is needed to live off of dividends The importance of compound annual growth rate (CAGR) and living off dividends Understanding the impact of taxes on dividends The importance of diversifying your dividend portfolio Conclusion The 4% Withdrawal Rule VS Living Off Dividends I covered the 4% withdrawal rule in depth previously. Take a look here if you want to learn more about using the 4% rule during retirement. A summary of the withdrawal rule is that you would sell 4% of your portfolio to use as your income as retirement. The following years you would adjust this amount by inflation to maintain your standard of living. The downside of using the 4% rule is that it requires you to sell shares from within your portfolio to use as your retirement income. Living off dividend income doesn't require you to sell any shares. What are dividends? Remember, dividends are company profits paid directly to shareholders (you!) for owning a stock. You get paid in cash just for being an owner of a share! The rough math is: # of shares owned X Annual Dividend amount = Income Generated You can download my FREE Dividend Calculator if you want a SUPER easy way to calculate dividends! You can build your passive dividend portfolio and NEVER have to sell a share. Your portfolio will continue to enjoy compound interest all while your dividends also continue to grow. Lastly, since you never sell any of your assets you can pass these on to family or children to build generational wealth! Benefits and drawbacks of relying on dividends as a primary source of income Dividends, just like any investment or retirement strategy, come with both pros and cons. Let's take a look at some of the benefits and some of the drawbacks to dividend investing. Benefits of relying on dividends during retirement: Consistent and predictable income stream: Dividends are typically paid out on a regular schedule, which can provide a stable source of income for retirees. Potential for capital appreciation: Many dividend-paying stocks also have the potential for capital appreciation, which can increase your overall returns over time. Diversification: Dividend-paying stocks can provide a way to diversify your portfolio, which can help to minimize risk. Inflation protection: Dividend-paying stocks have the potential to increase their dividends over time, which can help to protect against inflation. Never selling shares: Dividends pay you for owning shares, allowing you to live off dividend income instead of the money from selling shares. This benefit keeps your portfolio intact. Drawbacks of relying on dividends during retirement: No guarantees: Dividends are not guaranteed and can be reduced or eliminated at any time, which can impact your income. We'll cover ways to decrease the risk of this affecting you during retirement. Limited growth potential: Dividend-paying stocks tend to be more mature companies and may not have as much potential for growth as non-dividend-paying stocks. This is not always true but in general dividend stocks will not appreciate the same as growth stocks. Risk: Relying solely on dividends for your retirement income can expose you to more risk, as you are putting all your eggs in one basket. Tax implications: Dividends are taxed differently than other forms of income, and this needs to be factored in while considering living off dividends. Limited income: Relying solely on dividends as a source of income may not be sufficient to cover all your living expenses in retirement. It's important to keep in mind that relying on dividends as a primary source of income during retirement can have both pros and cons. It's important to have a comprehensive financial plan in place and to regularly monitor and adjust your portfolio as needed. Additionally, it's recommended to seek professional advice to make sure you are on the right track. Tips for successfully living off of dividends during retirement Start early: The earlier you start investing in dividend-paying stocks, the more time you have to build a portfolio that generates enough income to cover your living expenses. Create a financial plan: Have a clear understanding of your retirement income needs and create a financial plan that outlines how you will achieve them through dividends. Research and select stocks carefully: Evaluate dividend-paying stocks based on factors such as consistency of dividends, growth potential, and risk. Diversify your portfolio across different sectors and industries. Reinvest dividends: Consider using a dividend reinvestment plan (DRIP) to automate your dividend investing and maximize returns over time. Monitor and adjust your portfolio: Regularly review and adjust your portfolio as needed to ensure it remains aligned with your goals and risk tolerance. Seek professional advice: Consult a financial advisor if you need to. They can help you create a comprehensive financial plan and ensure you are on the right track. Be aware of the tax implications: Dividends are taxed differently than other forms of income, so it's important to have a good understanding of how taxes may impact your income. Consider other income-generating strategies: Diversify your income streams and consider other ways to generate income during retirement, such as rental properties or part-time work. Have a long-term perspective: Remember that living off of dividends during retirement is a long-term strategy that requires patience and discipline. Have a contingency plan: Have a plan in case dividends are reduced or eliminated, so you can adjust your expenses accordingly. Determining how much income is needed to live off of dividends Determining how much income is needed to live off of dividends is an important step in creating a financial plan for living off of dividends during retirement. The amount of income required will depend on several factors, including your current living expenses, desired lifestyle, and projected inflation rate. If you haven't built one yet, now is the time to build a budget. I have both monthly and annual budget templates available to get you started! These will ensure you know how much you are currently spending so you can plan your lifestyle during retirement. A thorough budget is CRITICAL for retirement planning. Annual Budget Template Preview. Available Here To start, you should calculate your current living expenses, including housing, food, healthcare, transportation, and any other necessary expenses. You should also factor in any additional expenses you expect to have during retirement, such as travel or hobbies. Next, you should determine your desired lifestyle during retirement, including your plans for travel, entertainment, and any other activities. This will help you to estimate the additional income that you will need to support your desired lifestyle. Finally, you should factor in the projected inflation rate, which is the rate at which the cost of goods and services is expected to rise over time. Inflation can have a significant impact on your retirement income needs, as it reduces the purchasing power of your income. Once you have determined your current living expenses, desired lifestyle, and projected inflation rate, you can calculate the total income needed to support your retirement. It's important to note that this is a rough estimate, and you should review your calculations regularly and adjust as needed. Now that you have an estimate of how much you will need to live off dividends, let's take a look at calculating dividend income. This is where dividend yield comes into to play. What is dividend yield: Investopedia defines dividend yield as: the dividend yield, expressed as a percentage, is a financial ratio (dividend/price) that shows how much a company pays out in dividends each year relative to its stock price. The formula for dividend yield is: Annual Dividend Paid / Share Price = Dividend Yield To calculate the dividend yield for your portfolio you need to calculate the average dividend yield of all of your assets. This is easy if you have one or two but can become more difficult as you add positions but it's important to know. Calculating the average is as easy as adding all of your dividend yields and then dividend that total by the number of assets you have. This assumes that every asset is equally weighted inside your portfolio. In the example each would be 20% of the portfolio. Here's an example: Asset #1 Dividend Yield = 3.45% Asset #2 Dividend Yield = 2.67% Asset #3 Dividend Yield = 4.12% Asset #4 Dividend Yield = 0.50% Asset #5 Dividend Yield = 2.89% The total would be 13.63. Next, we would divide that by five since that's the number of assets in the example. Remember, this ONLY works if all of the positions make up the same percentage in your portfolio! Your brokerage firm might also provide this number for you. The ANSWER: Our example portfolio has a dividend yield of 2.726% If you are trying to figure out what yield to aim for you can also run calculations off different percentages to see how much you would need to invest to earn your target income. The next formula we can use is the Dividend Income formula: Annual Income Desired / Dividend Yield = Investment Amount Needed This formula tells you how much you need invested at your portfolios yield or target yield to earn the desired amount of dividends. Here's an example: Say we want $72,000 a year or $6,000 a month from dividends during retirement. Using our yield of 2.726% from above the formula would look like this: 72,000 / .0276 = Investment Amount Needed The ANSWER: Using the information above we would need a portfolio value of $2,608,695 to earn $72,000 a year from our dividends. Again, using my FREE Dividend calculator, you can do this much easier! Lastly, I personally aim for an average dividend yield close to 4% to align with the 4% withdrawal rule. This is a personal choice, you can aim higher or lower if you want. Just ensure you understand how this will effect your goal investment total. Also, don't fall victim to YIELD TRAPS! Higher yield doesn't always mean it's the right investment. The importance of compound annual growth rate (CAGR) and living off dividends Just like the 4% withdrawal rule you want your dividends to grow over the use. Ultimately, you want your dividends to grow at or faster than inflation. This will ensure your standard of living remains the same throughout retirement. The awesome fact about dividends is that your stock price will hopefully appreciate and the companies will also increase their dividends each year. It's possible for the stock market to fall for year but your dividends to increase. This is called compound annual growth rate or CAGR. This is expressed as a perentage. It could be the one year, three year average, five year average or longer. Inflation averages around 3-4% annually. Remember, that is an average. For example, the 2022 inflation rate was 6.5%. I personally aim to purchase assets that have a dividend CAGR of 5% or higher. I use FinanceCharts.com as a free resource to research dividend growth and dividend CAGR. It's a great chart that has a lot of technical information. I encourage you to check it out! Below we will take a look a COSTCO Stock ($COST) and see how their growth would play out in an example portfolio. Above is the metrics from FinanceCharts.com on Costco as of January 20 2023. We can extract the follow data: Costco Dividend Yield: 0.73% Costco CAGR TTM*: 13.72% Costco 3Y Avg CAGR: 11.50% Costco 5Y Avg CAGR: 12.48% *TTM means trailing twelve months or what the growth was over the last 12 months. Let's set up an example where we only hold Costco stock: Portfolio Value: $3,000,000 Annual Dividends: $21,300 based on 0.073% dividend yield. Dividend CAGR: 12.48% Costco's dividend yield may be low but their dividend growth rate is high, averaging 12.48% over the last five years. That's much higher than inflation, meaning you standard of living would actually increase if Costco maintains their dividend growth rate. Remember, the growth rate is how much your dividend income will grow EVEN if you add ZERO additional funds to yuor account. This is the growth is all organic growth. Let's see how a 12.48% growth rate works out for you during retirement: As you can see from the example above, your Costco Dividend Income grew from $21,300 or $1,775 a month to $69,045 or $5,753 in just 10 years. It's important to note that Costco has a high dividend growth rate. As more conservative 3-4% growth rate wouldn't show such a drastic increase. Remember, the goal is for your portfolio's dividend growth rate to match or beat inflation. This allows your to maintain a standard of living during retirement. Understanding the impact of taxes on dividends Understanding the impact of taxes on dividends is important for anyone who is considering living off of dividends during retirement. Dividends are taxed differently than other forms of investment income, and it's important to have a good understanding of how taxes may impact your income. In the United States, dividends are considered qualified if they are paid by domestic corporations or qualified foreign corporations. Qualified dividends are taxed at a lower rate than ordinary income. For the tax year 2021, the tax rate for qualified dividends ranges from 0% to 20%, depending on the taxpayer's income level. Qualified are taxed at the same rate as Long Term Capital Gains for federal income tax purposes. Using the information below, you could earn up $83,350 (Married, filing jointly) from dividends and not have to pay any federal taxes if they were all qualified dividends. On the other hand, non-qualified dividends or ordinary dividends are taxed at the same rate as ordinary income, which ranges from 10% to 37% for the tax year 2021. It's also important to note that dividends are subject to state income taxes as well. Some states do not tax dividends at all, while others have taxes that are similar to federal taxes. Ordinary dividends are taxed at your income tax rate for federal income tax purposes. Investing in qualified dividends can help you retain the most dividend income for use during retirement. For US investors, I highly recommend investing in qualified dividends for use in retirement. Another thing to keep in mind is that as a retiree, you may be eligible for certain deductions and credits that can help to reduce your tax liability. For example, if you are over the age of 70 1/2 you are required to take Required Minimum Distributions (RMDs) from your retirement accounts, and these distributions may be taxed differently. It's important to consult a tax professional to understand the tax implications of living off of dividends and to ensure that you are taking advantage of all available deductions and credits. Taxes can have a significant impact on your income from dividends and it's important to understand how dividends are taxed and to plan accordingly. It's also important to regularly review your tax situation and to consult with a tax professional for guidance. The importance of diversifying your dividend portfolio Diversifying your dividend portfolio is essential for anyone who is living off of dividends during retirement. Diversification helps to minimize risk by spreading your investments across different sectors and industries, so that the performance of any one stock or sector does not have a disproportionate impact on your overall portfolio. Imagine you only invest in one dividend paying company and you we're receiving $50,000 a year from them in dividends. If company reduces their dividend by 25%, your income just dropped to $37,500. Even worse, what if they eliminate their dividend? Now your retirement income would be ZERO. Even strong companies have done this. For example, Disney eliminated their dividend entirely during COVID. Diversification help you spread your bets so if one of your positions reduces or eliminates their dividend the other will offset the loss with their growth. When diversifying your dividend portfolio, you should aim to invest in a mix of stocks from different sectors, such as consumer staples, utilities, healthcare, and financials. This will help to ensure that your income is not overly dependent on any one sector and that you have exposure to different industries.You should also consider investing in both domestic and international stocks, as this can provide additional diversification benefits. International stocks can provide exposure to different economic conditions and currency fluctuations, which can help to minimize risk. It's also important to diversify across stocks with different dividend yields and growth potentials. This will help to balance the potential income and capital appreciation of your portfolio. The easiest and most "auto-pilot" way to do diversify is to invest in dividend ETF's like $DGRO, $SCHD, $NOBL, or $JEPI. Remember, ETFs give you 100s of stocks under one umbrella. The ETFs mentioned all remove companies that reduce or eliminate their dividend. No work needed on your end. In summary, diversifying your dividend portfolio is essential for minimizing risk and ensuring a consistent income stream. It's important to invest in a mix of stocks from different sectors and industries, both domestic and international, and with different dividend yields and growth potentials. Follow me on Twitter to stay up to date! Conclusion In conclusion, living off of dividends during retirement can provide a consistent and predictable income stream, but it requires careful planning and regular monitoring. It's important to understand the risks and benefits involved, to diversify your portfolio, and to seek professional advice to ensure that you have enough income to meet your needs during retirement. Anyone can learn how to live comfortably off dividends during retirement! Start building you dividend income portfolio today and let it grow for years to come. Happy Investing!

Retirement planning is one of the most important financial decisions an individual can make. One of the key considerations in planning for retirement is determining a withdrawal rate that will ensure that your savings last throughout your retirement. One commonly used guideline for determining a safe and sustainable withdrawal rate is the 4% withdrawal rule. This rule states that retirees can safely withdraw 4% of their savings in the first year of retirement and then adjust for inflation in subsequent years, without significantly reducing the likelihood of their savings lasting throughout their retirement. The 4% withdrawal rule has been widely studied and accepted as a safe and sustainable withdrawal rate for retirees, and is often used as a starting point for creating a retirement income plan. In this article, we will discuss the 4% withdrawal rule, its historical performance and how to use it as a guideline to create a sustainable withdrawal plan for retirement. Table of Contents Introduction to the 4% withdrawal rule and it's use as a guideline for safe and sustainable withdrawal rates in retirement What are the Pros and Cons of the 4% withdrawal rate during retirement Analysis of the factors that can affect the sustainability of 4% withdrawal rates Comparison of the 4% withdrawal rule to other withdrawal rate strategies Discussion on the importance of creating and understanding a withdrawal plan Steps and considerations you should take when creating a withdrawal plan Explanation of how to use different types of investments to supplement the 4% withdrawal rule to help create a sustainable income stream during retirement Tips to budgeting and managing your withdrawals to make sure the last throughout retirement Retirement Calculator Resources / 4% Calculators Conclusion Introduction to the 4% withdrawal rules and it's use as a guideline for safe and sustainable withdrawal rates in retirement The 4% withdrawal rate is a widely accepted guideline for determining a safe and sustainable withdrawal rate in retirement. The rule states that retirees can safely withdraw 4% of their savings in the first year of retirement and then adjust for inflation in subsequent years, without significantly reducing the likelihood of their savings lasting throughout their retirement. The 4% withdrawal rate is calculated based on the assumption that retirees will have a diversified portfolio of stocks and bonds, and that the portfolio will earn an average return of around 7% per year. The underlying assumption is that by withdrawing 4% of your savings in the first year of retirement and adjusting for inflation in subsequent years, your savings will last throughout your retirement even if you experience a bear market or a period of poor returns. The 4% withdrawal rate is based on historical data and research that indicates that a 4% withdrawal rate combined with a diversified portfolio, has a high probability of lasting at least 30 years. This idea was first proposed by financial advisor William Bengen in a 1994 study. He found that during the period of 1926 to 1976, a 4% withdrawal rate in the first year of retirement and adjusting for inflation in subsequent years, would have allowed retirees to not deplete their portfolios even during the Great Depression and the two World Wars. Additionally, another study by Trinity University in 1998 found that the 4% withdrawal rate would have been successful for any 30-year period between 1871 and 1995. Lastly, another study by Morningstar in 2002 also supported the 4% withdrawal rate as a safe and sustainable withdrawal rate. The 4% withdrawal rate is based on the assumption of a diversified portfolio of 60% stocks and 40% bonds and a long-term average annual return of 7% on stocks and 3% on bonds. This calculation is based on the historical average returns of the stock market and bond market and assumes that the market will continue to perform similarly in the future. However, it is important to keep in mind that past performance does not guarantee future results and that market conditions can change and affect the performance of your portfolio. Additionally, the 4% withdrawal rate assumes that retirees will live for at least 30 years in retirement, and that they will not have any significant increase in expenses during their retirement. When planning to use the 4% withdrawal rule in retirement, it's important to consider the following questions: How much money do you have saved for retirement? The 4% withdrawal rule is based on the idea that you can safely withdraw 4% of your portfolio's value each year in retirement, so you'll need to have a significant nest egg saved up in order to use this strategy. What is your expected retirement timeline? The 4% withdrawal rule assumes a retirement timeline of 30 years, so if you expect to retire earlier or later, you may need to adjust your withdrawal rate accordingly. What is your expected rate of return? The 4% withdrawal rate is based on a portfolio with a mix of stocks and bonds that is expected to return around 6-7% per year. If you expect a lower rate of return, you may need to withdraw less than 4% in order to preserve your portfolio's value. What is your risk tolerance? The 4% withdrawal rate assumes a certain level of risk, as it is based on a portfolio invested in a mix of stocks and bonds. If you are not comfortable with taking on that level of risk, you may need to adjust your withdrawal rate accordingly. What are your other sources of income? If you expect to have other sources of income in retirement, such as Social Security or a pension, you may be able to withdraw more than 4% from your portfolio without running out of money. What is your expected inflation rate? The 4% withdrawal rate is based on historical inflation rate, if the inflation rate is higher than the historical one, you may need to withdraw more than 4% in order to maintain your purchasing power. Are you comfortable with the potential of running out of money? The 4% withdrawal rate is not a guarantee, and there is a chance that you could run out of money if the market performs poorly or if you live much longer than 30 years. It's important to consider all of these questions when planning to use the 4% withdrawal rule in retirement and to consult a financial advisor for personalized advice. The Data behind the 4% rule After testing various asset allocations, Bengen adopted the assumption that a retiree’s portfolio would be invested 50% in stocks (the S&P 500) and 50% in bonds (intermediate term Treasuries). Using this asset allocation, he tested a range of first-year withdrawal rates: • 3% withdrawal rate: All portfolios lasted 50 years. • 4% withdrawal rate: Most portfolios lasted 50 years. Retirements started in 10 of the 50 years examined fell short of this mark, although they all lasted about 35 years or longer. • 5% withdrawal rate: More than half of the portfolios were exhausted in less than 50 years, with the worst portfolios lasting no more than about 20 years. • 6% withdrawal rate: Only seven portfolios lasted 50 years, with about 10 lasting fewer than 20 years Earlyretirementnow.com has an outstanding in-depth analysis of withdrawal rates if you're interested in the mathematics. What are the Pros and Cons of the 4% withdrawal rate during retirement Pros of using the 4% withdrawal rule during retirement: It is widely accepted as a safe and sustainable withdrawal rate: The 4% withdrawal rule has been widely studied and accepted as a safe and sustainable withdrawal rate for retirees. It is based on historical data: The rule is based on historical data and research that indicates that a 4% withdrawal rate combined with a diversified portfolio, has a high probability of lasting for 30 years. It allows for inflation adjustments: The 4% withdrawal rate assumes that retirees will adjust their withdrawals for inflation each year, which can help maintain their standard of living in retirement. It can provide a predictable income stream: By withdrawing a consistent percentage of savings each year, retirees can have a predictable income stream that can help them plan their expenses. It is a simple retirement system to implement: The withdrawal plan doesn't require additional analysis if you choose a safe withdrawal rate of less than 4%. Simply adjust by inflation each year to determine your income for the year. Cons of using the 4% withdrawal rule during retirement: It is based on assumptions: The 4% withdrawal rate is based on certain assumptions such as long-term average returns of the stock market and bond market and the retirement period of 30 years, which may not hold true in all cases. It does not take into account taxes: The 4% withdrawal rate does not take into account the impact of taxes on your withdrawals, and taxes can have a significant impact on the sustainability of your withdrawals in retirement. It does not take into account market conditions. Market conditions can vary greatly over time and have a significant impact on the sustainability of withdrawals. For example, if the market is performing poorly, a 4% withdrawal rate may not be sustainable and retirees may need to decrease their withdrawals to preserve their savings. It may not be suitable for everyone: The 4% withdrawal rule is a guideline and it may not be suitable for everyone. Each retiree has their own unique circumstances and goals, so it’s important to consider these when creating a withdrawal plan. Analysis of the factors that can affect the sustainability of 4% withdrawal rates One of the main factors that can affect the sustainability of the 4% withdrawal rate is inflation. Inflation can erode the purchasing power of your savings over time, which can make it more difficult to maintain your standard of living in retirement. The 4% withdrawal rate assumes that retirees will adjust their withdrawals for inflation each year, but if inflation rates are higher than expected, it can make it more difficult to sustain the withdrawals. Another important factor that can affect the sustainability of the 4% withdrawal rate is taxes. The 4% withdrawal rate does not take into account the impact of taxes on your withdrawals, and taxes can have a significant impact on the sustainability of your withdrawals in retirement. Lastly, changes in life expectancy can also affect the sustainability of the 4% withdrawal rate. The 4% withdrawal rate is based on the assumption that retirees will live for at least 30 years in retirement, but if retirees live longer than expected, it can make it more difficult to sustain the withdrawals. Therefore, it’s important to consider your own personal circumstances, such as health and life expectancy, when creating a withdrawal plan. Comparison of the 4% withdrawal rule to other withdrawal rate strategies The 4% withdrawal rule is a widely accepted guideline for determining a safe and sustainable withdrawal rate in retirement, but it is not the only withdrawal strategy available. There are several other withdrawal rate strategies that retirees can consider, each with their own pros and cons. One alternative to the 4% withdrawal rule is the “bucket strategy.” This strategy involves dividing your savings into different “buckets” with different levels of risk and expected returns. For example, you might have a “cash bucket” for short-term expenses, a “bond bucket” for medium-term expenses, and a “stock bucket” for long-term growth. The benefit of this strategy is that it allows retirees to have a more flexible and adaptable withdrawal plan. Another alternative is the “floor and ceiling” strategy, where retirees set a floor and ceiling for their withdrawal rate. The floor represents the minimum withdrawal rate that retirees can live on, while the ceiling represents the maximum withdrawal rate that will not deplete their savings too quickly. The benefit of this strategy is that it allows retirees to adjust their withdrawal rate based on market conditions and their own personal circumstances. A third alternative is the "fixed percentage" strategy, where retirees withdraw a fixed percentage of their savings each year regardless of market conditions. The benefit of this strategy is that it provides retirees with a predictable income stream, but it may not be sustainable if the market performs poorly. The 4% withdrawal rule is great tool, but it’s important to consider all options available and choose the one that best suits your own personal circumstances and goals. It’s always advisable to consult a financial advisor to help you understand the pros and cons of different withdrawal rate strategies and create a withdrawal plan that is tailored to your needs and goals if you need to. Discussion on the importance of creating and understanding a withdrawal plan Creating a withdrawal plan that is flexible and can adapt to changes in the market and personal circumstances is crucial for ensuring a sustainable income in retirement. One of the main advantages of having a flexible withdrawal plan is that it allows retirees to adjust their withdrawals based on market conditions and their own personal circumstances, such as changes in income, expenses, and life expectancy. For example, if the stock market is performing poorly, a flexible withdrawal plan would allow retirees to decrease their withdrawals in order to preserve their savings. On the other hand, if the market is performing well, a flexible withdrawal plan would allow retirees to increase their withdrawals in order to take advantage of the higher returns. Additionally, personal circumstances can also change over time, such as unexpected medical expenses or changes in lifestyle. In conclusion, creating a withdrawal plan that is flexible and can adapt to changes in the market and personal circumstances is crucial for ensuring a sustainable income throughout retirement. Steps and considerations you should take when creating a withdrawal plan Creating a withdrawal plan that takes into account your own unique circumstances and goals is crucial for ensuring a sustainable income in retirement. Here are some tips to help you create a withdrawal plan that is tailored to your needs: Assess your current financial situation: Take a close look at your current income, expenses, and savings. This will give you a clear idea of how much income you need to generate in retirement to maintain your standard of living. If you haven't done so, now is the time to create a sustainable and understandable budget. Without one, you're heading into retirement blind. Set your goals: Decide what you want to achieve with your retirement savings. This could include buying a vacation home, traveling, or leaving an inheritance for your children. Having clear goals will help you create a withdrawal plan that is tailored to your needs. Consider your life expectancy: As morbid as it may be, your life expectancy will play a big role in determining how long your savings will need to last. Consider your own health, family history, and other factors that may affect your life expectancy when creating a withdrawal plan. Take inflation into account: Inflation can erode the purchasing power of your savings over time. Make sure that your withdrawal plan takes into account the impact of inflation and allows for adjustments to your withdrawals over time. Consider taxes: Taxes can have a significant impact on the sustainability of your withdrawals in retirement. Make sure that your withdrawal plan takes into account the impact of taxes and that you take advantage of any tax-saving strategies available to you. Be flexible: Your circumstances and goals may change over time. Make sure that your withdrawal plan is flexible and adaptable so that you can make adjustments as needed. Seek professional advice: A financial advisor can help you understand the pros and cons of different withdrawal rate strategies and create a withdrawal plan that is tailored to your unique circumstances and goals. Explanation of how to use different types of investments to supplement the 4% withdrawal rule to help create a sustainable income stream during retirement Creating a sustainable income stream in retirement is crucial for ensuring that your savings last throughout your retirement. One way to do this is by using different types of investments to create a diversified portfolio that can provide a steady income stream. One of the most common ways to create a sustainable income stream in retirement is by using bonds. Bonds are debt securities that pay interest to the bondholder. They are considered to be less risky than stocks and can provide a steady stream of income. However, it's important to note that the income from bonds may not keep up with inflation over time. Another way to create a sustainable income stream in retirement is by using dividend-paying stocks. Dividend-paying stocks are stocks that pay a portion of their earnings to shareholders in the form of dividends. Dividend-paying stocks can provide a steady stream of income, but the dividends can fluctuate depending on the company's performance. Take a look at my Ultimate Dividend Investing guide to learn how to build a income generating portfolio. Real estate investments such as rental properties or REITs (Real Estate Investment Trusts) can also be used to create a sustainable income stream in retirement. These investments can provide a steady stream of rental income and appreciation over time, but they also come with the added responsibilities of property management, maintenance and vacancies if you choose rental properties over REITs. Finally, annuities can also be used to create a sustainable income stream in retirement. Annuities are a type of insurance product that provide a guaranteed stream of income in exchange for a lump sum payment or series of payments. Annuities can provide retirees with a steady stream of income, but they also come with fees and restrictions on withdrawals. It's important to note that each type of investment has its own set of risks and potential rewards, so it's important to consult with a financial advisor to understand how each type of investment may fit into your overall retirement strategy and to help you create a sustainable income stream in retirement that is tailored to your unique circumstances and goals Tips to budgeting and managing your withdrawals to make sure the last throughout retirement Budgeting and managing your withdrawals is crucial for ensuring that your savings last throughout retirement. Here are some tips to help you budget and manage your withdrawals: Establish a budget: Create a budget that outlines your income and expenses. This will give you a clear idea of how much you can afford to withdraw each month without depleting your savings too quickly. A budget also helps you understand where your money is going. Without a budget your financially blind. I have a Monthly and Yearly budget template available on my Etsy store if your looking to get started. Prioritize your expenses: Assess your expenses and prioritize them based on their importance. This will help you identify any unnecessary expenses that can be cut in order to stretch your savings further. Be mindful of inflation: Inflation can erode the purchasing power of your savings over time. Make sure to factor in inflation when budgeting and managing your withdrawals. Review your withdrawal rate regularly: Your circumstances and goals may change over time. Review your withdrawal rate regularly and make adjustments as needed to ensure that your savings last throughout retirement. Create a contingency plan: Unexpected expenses can arise. Create a contingency plan for unexpected expenses and make sure to have some savings set aside for emergencies. Seek professional advice: A financial advisor can help you understand the pros and cons of different withdrawal rate strategies and create a withdrawal plan that is tailored to your unique circumstances and goals. Consider alternative income streams: Consider alternative income streams such as rental properties, part-time work, or social security that can help supplement your retirement income and make it last longer. Budgeting and managing your withdrawals is crucial for ensuring that your savings last throughout retirement. Without a solid plan in place you could run out of funds earlier than expected, which no one wants. Retirement Calculators and 4% Calculators Bankrate Retirement Calculator Basic calculator to help you figure out your retirement. NerdWallet Retirement Calculator Visualize and make real time changes with this calculator. SmartAsset Retirement Calculator This calculator start with a questionnaire to help walk your through the process. Conclusion In conclusion, the 4% withdrawal rule is a widely accepted guideline for determining a safe and sustainable withdrawal rate in retirement, but it has its own set of assumptions and limitations. It’s important to consider all options available, take into account taxes, market conditions, individual circumstances and goals and consult with a financial advisor to help you understand the pros and cons of different withdrawal rate strategies and create a withdrawal plan that is tailored to your needs and goals. With an effective withdrawal plan in place you can forecast how much you want to save and set up a trajectory to reach that goal. Staying committed will ensure that your are ready to retire on time and as comfortable as possible given your unique plan. The longer you wait to start the harder you’ll have to work to retire.

In this article we're going to take a look at stocks that pay monthly dividends. These monthly dividend stocks are ones that I would recommend to anyone looking to add monthly dividend payments to their portfolios. Monthly dividend payers provide consistent income monthly instead of over the quarter or semiannually. Instead of receiving large payments once a quarter you can plan your budget around these monthly distributions. This makes them attractive to anyone looking to simplify their portfolio or budget during retirement. Let's take a look a some of the best monthly dividend stocks available. Table of Contents Why Choose Monthly Dividend Stocks? What to Look for in Monthly Dividend Stocks? Realty Income Stock STAG Industrial Land Stock RIOCAN Stock JEPI Stock MAIN Stock Interested in learning about Dividend Investing? Check out my Ultimate Dividend Investing Guide or my personal Dividend Investing Portfolio Updates! Why choose monthly dividend stocks? Monthly dividend stocks are stocks that pay dividends to shareholders on a monthly basis, rather than quarterly or annually. There are several benefits to investing in monthly dividend stocks, which can make them a good addition to an investment portfolio: Regular income: Monthly dividends provide a regular stream of income for investors, which can be helpful for those who rely on their investments for cash flow or are living off of their dividends in retirement. Consistent returns: Monthly dividends can provide more consistent returns than quarterly or annual dividends, since they are paid more frequently. This can help smooth out volatility in the stock price and provide a more predictable income stream. Compounding: Monthly dividends can be reinvested more quickly, which can lead to faster compounding of returns. This means that the dividends earned from the stock can be used to buy more shares, which in turn will generate more dividends. Tax efficiency: Some investors may prefer monthly dividends for tax purposes, as the smaller regular payments may be taxed at a lower rate than a large annual payment. Diversification: Monthly dividends can add diversification to an investment portfolio, as they can provide a regular income stream that is not dependent on the performance of the stock market. It's worth noting that monthly dividends stocks may have lower yield than quarterly or annual dividends stocks and may also have higher volatility due to the frequency of the dividends. However, for those investors seeking regular income, monthly dividend stocks can be a good addition to an investment portfolio. What to look for in Monthly Dividend Paying stocks? When choosing monthly dividend paying stocks, there are several factors to consider: Dividend Yield: The dividend yield is the annual dividend payment divided by the stock price. A higher yield is generally considered more attractive, but it's important to also consider the stock's payout ratio, which is the proportion of earnings paid out as dividends, to ensure that the dividend is sustainable. Dividend Growth: Look for stocks with a history of increasing dividends on a regular basis. This is a sign of a company's financial strength and its ability to maintain and increase its dividends in the future. Financial Strength: The company's financial metrics such as profit margin, return on equity, and debt-to-equity ratio are important to evaluate. Stocks of financially strong companies are more likely to maintain or increase their dividends in the future. Industry and Business Model: Consider the company's industry and business model, as some industries and business models are more stable and predictable than others. For example, utilities and consumer staples are known for having a stable and predictable cash flow, making them good candidates for monthly dividends. Valuation: Look for stocks that are trading at a reasonable price relative to their earnings, dividends, and growth prospects. This will help to ensure that you are getting a good value for your investment. Management and governance: Look for companies that have a good management and governance, as they are more likely to make sound decisions and act in the best interest of shareholders. It's worth noting that dividend-paying stocks may be more volatile than non-dividend paying stocks and the dividend may be cut or suspended if the company faces financial difficulties. It's always important to conduct your own research and analysis and consult with a financial advisor before making any investment decisions. Realty Income Stock ($O) The first stock on our list is Realty Income or "The Monthly Dividend Company" as it's also known. The Realty Income dividend has been paid for 630 consecutive months and been increased 101 consecutive quarters in a row. It's dividend has also grown at rate 4.4% (CAGR) annually during that time. Realty Income's stock price has returned 14.4% since inception in 1994. Lastly, Realty Income has paid out $10.2 Billion over the last 53 years. Realty Income Dividend Yield: 4.51% Realty Income Dividend Monthly: $0.248 Realty Income Dividend Annual: $3.096 Income from $100,000 investment: $4,510 Realty Income Corporation has a large list of clients from including grocery stores (10%), convenience stores (9%), dollar stores (7.7%), restaurants (11.9%) and more. Realty Income continues to expand into Europe to widen it's net on the market and further diversify. Lastly, Realty Income Cooperation recently spun off its' offices into Orion Office REIT. If an monthly dividend stock that's in the Office REIT sector interests you, I would look into them as well. DISCLOSURE: I am long $O in my taxable dividend investment portfolio STAG Industrial ($STAG) STAG Industrial stock is all about owning industrial properties. They are one of the only pure industrial REITs on the market and they capitalize on that perfectly. STAG boats a portfolio of 111 million square feet from 563 properties across 41 states. This all culminates in a portfolio valued around $8.7 Billion. STAG Industrial highlights their expertise: STAG Industrial Dividend Yield: 4.44% STAG Industrial Dividend Monthly: $0.12 STAG Industrial Dividend Annual: $1.46 Income from $100,000 investment: $4,440 "STAG Industrial, Inc. (NYSE: STAG) is a real estate investment trust focused on the acquisition, ownership and operation of industrial properties throughout the United States. For most of our properties (approximately 96%), tenants have entered triple-net leases, where they are responsible for all aspects of and costs related to the building and its operation during the lease term, including utilities, taxes, insurance and maintenance costs, but typically excluding roof and building structure. By targeting this type of property, STAG has developed an investment strategy that helps investors find a powerful balance of income plus growth." The STAG industrial dividend has been increasing steadily for four years, which may not seem like long compared to Realty Income but I assure you STAG is a great monthly dividend payer. It's dividend growth is less than other peers but that is overshadowed by STAG Industrial's portfolio of properties. STAG pays roughly $0.12 per month or $1.46 annually. STAG Industrial Incorporated is a great choice if you want to add monthly dividend stock from the Industrial REIT sector. Gladstone Land ($LAND) Gladstone Land Corporation is a unique twist on the REIT because it is a A Farmland Real Estate Investment Trust. Gladstone Land stock owns farmland and farm-related facilities leased to high-quality farmers, primarily on a triple-net basis, meaning the farmer pays rent, insurance, maintenance, and taxes. They currently own 169 farms with over 115,000 total acres in 15 states and 45,000 acre-feet of banked water in California, valued at a total of approximately $1.6 billion. Their acreage is currently 100% leased. LAND Dividend Yield: 2.74% LAND Dividend Monthly: $0.05 LAND Dividend Annual: $0.60 Income from $100,000 investment: $2,740 Their primary focus is in annual fresh produce and permanent crops with a back up in grains and other crops. Here's a snapshot of their investments: According to Gladstone, $LAND and farmland present a more stable investment opportunity with lower volatility. $LAND has produced a 110% total return since inception in 2013 which equates an annual total return of about 11%. The average annual return without reinvesting dividends is around 3.45% annually. That's on par to beat inflation, all while producing monthly passive dividend income. What do you think? Are you going to add Gladstone Land to your portfolio? RIOCAN Stock ($RIOCF) RioCan ($RIOCF) is one of Canada's largest real estate investment trusts, with a total enterprise value of approximately $13 billion as of September 30, 2022. Currently they own 198 properties or 35,000,000 square meters of leasable area worth around $13 billion. RIOCF Dividend Yield: 4.57% RIOCF Dividend Monthly: $0.06 RIOCF Dividend Annual: $0.72 Income from $100,000 investment: $4,570 RIOCF's investment portfolio includes commercial committed occupancy and dedicated tenants across essential retail anchor tenants. This includes groceries, pharmacies, personal services, furniture stores, and other types of retailers. RIOCAN's overall stock price RIOCAN's overall stock price has not seen much capital appreciation over the last decade but is set up to grow as the market's recover in 2023 and beyond. If your looking to branch out from US REITs but want to stay in North America then RIOCAN ($RIOCF) is the stock for you! JEPI Stock ($JEPI) It's no surprise that this income ETF made it on the list. I previously compared several Income ETFs here. JEPI or JP Morgan Equity Premium Income ETF is JP Morgan's income producing ETF that's goal is to capture some of the market returns while producing income. The ETF's inception was is 2020 but was offered by JP Morgan as a private investment tool prior to becoming a publicly traded asset. I saw this to reassure investors that this type of strategy has been around and tested for a long time. Some investors always ask "Is JEPI a good investment?" JEPI Dividend Yield: 11.77% JEPI Stock Dividend Monthly: $0.61* JEPI Stock Dividend Annual: $7.32* Income from $100,000 investment: $11,770* *JEPI's monthly dividend is variable JEPI Dividend History can be found here $JEPI seeks to deliver monthly distributable income and equity market exposure with less volatility. JEPI's website describes it below: EXPERTISE Portfolio managers with over 60 years of combined experience investing in equities and equity derivatives. PORTFOLIO Defensive equity portfolio employs a time-tested, bottom-up fundamental research process with stock selection based on our proprietary risk-adjusted stock rankings. Disciplined options overlay implements written out-of-the-money S&P 500 Index call options to generate distributable monthly income. RESULTS Provided an attractive 12-month rolling dividend yield of 9.64% and 30-day SEC yield of 12.51%. Top quintile yield in the Derivative Income category. Competitively priced vs. peers at 0.35%. JEPI returns consistent income higher than most other assets including bonds, REITs, and High Yield stocks. JEPI performed well when compared to the overall market in 2022 and proved that it can decrease volatility in a down market. For investors looking to add a income asset to their portfolio JEPI is the my #1 choice. DISCLOSURE: I am long JEPI in my taxable dividend portfolio MAIN Stock ($MAIN) Main Street Capital Corporation (MAIN) is a publicly traded (NYSE: MAIN) business development company (BDC) that primarily provides capital to private U.S. companies; MAIN is located in Houston, Texas and has over $6.0 billion of investment capital under management. MAIN Stock Dividend Yield: 7.01% MAIN Stock Dividend Monthly: $0.225 MAIN Stock Dividend Annual: $2.70 Income from $100,000 investment: $7,010 MAIN Street Capital Stock pays a consistent cash dividend yield – dividends paid monthly. • MAIN has never decreased its monthly dividend rate • 105% increase in monthly dividends from $0.33 per share paid in Q4 2007 to declared dividends of $0.675 per share for Q1 2023 • Supplemental dividends, paid in addition to monthly dividends, from undistributed income of $0.35 per share in the last twelve months MAIN Street stock's focus falls into three areas: Sustain and Grow Dividends Meaningfully Grow Net Asset Value (NAV) Per Share Supplement Growth in DNII with Periodic Realized Gains MAIN's portfolio consists of the following according to their Q3 2022 investor presentation: 75 portfolio companies / $1.9 billion in fair value • 48% of total investment portfolio at fair value Debt yielding 11.8%(1) (73% of LMM portfolio at cost) • 99% of debt investments have first lien position • 58% of debt investments earn fixed-rate interest • Over 780 basis point net cash interest margin vs “matched” fixed interest rate on SBIC debentures and Notes Payable Equity ownership in all LMM portfolio companies representing 41% average ownership position (27% of LMM portfolio at cost) • Opportunity for fair value appreciation, cash dividend income and capital gains • 68% of LMM companies(2) with direct equity investment are currently paying dividends • Fair value appreciation of equity investments supports Net Asset Value per share growth • Lower entry multiple valuations, lower cost basis • $317.3 million, or $4.17 per share, of cumulative pre-tax net unrealized appreciation at September 30, 2022 Follow me on Twitter for more Stock and Dividend Investments! We reviewed some of the best monthly dividends available. These dividend payers are ones I'd consider as safe. There are other monthly dividend payers on the market but aren't nearly as consistent with their payments. Remember, when choosing a dividend payer, you want to be careful to nit chase yield. It's also important to consider your time horizon for retirement because you don't want to lose out on capital appreciation simply for the yield.

Broadcom Inc. (NASDAQ: AVGO) is large manufacturer of semiconductors and infrastructure software products. Broadcom posted an impressive FY22 revenue of $33.2B, owns more that 17,000 patents, spent $4.9B in 2022 on research and development. $AVGO continues to be a leader in their field and presents a great opportunity for dividend income investors. From Broadcom's Website: Broadcom Inc., a Delaware corporation headquartered in San Jose, California, is a global infrastructure technology leader built on 50 years of innovation, collaboration and engineering excellence. With roots based in the rich technical heritage of AT&T/Bell Labs, Lucent and Hewlett-Packard/Agilent, Broadcom focuses on technologies that connect our world. Through the combination of industry leaders Broadcom, LSI, Broadcom Corporation, Brocade, CA Technologies and Symantec, the company has the size, scope and engineering talent to lead the industry into the future. Just a few highlighted stats from Broadcom's 2022 performance: Table of Contents Broadcom Stock Price Broadcom Dividend Broadcom Dividend History Broadcom Stock Forecast Broadcom VMware Acquisition Follow me on Twitter to get the latest news and updates! Interested in learning about Dividend Investing? Check out my Ultimate Dividend Investing Guide or my personal Dividend Investing Portfolio Updates! Broadcom Stock Price AVGO's stock price total return is 157% over the last five years or an average of 31.4% annually. Posting an impressive $33B in revenue in 2022, AVGO has grown its' revenue by 13%~ (CAGR) since 2018. Broadcom's earnings have helped it's net income recover post COVID, which sits around $11.4B with a 5Y CAGR of 46%. Lastly, $AVGO Free Cash Flow has increased 24% over the last five years and sits at $16.3B for Q3 2022. These values all point to the strong stability of AVGO's dividend and dividend growth rate. Broadcom ($AVGO) Dividend The AVGO dividend currently sits at $4.60 a quarter or $18.40 annually. This makes Broadcom's dividend yield of 3.12% as of January 6th 2023. This is on par with AVGO's ten year average dividend yield of 3.08%, indicating that AVGO might be priced in line with historical values right now. AVGO Dividend History Broadcom has increased and sustained their dividend for 13 years and its' dividend has grown 38% since FY16 but has dropped to 13% CAGR over the last three years, which is still impressive. This translates to roughly 5.22% Yield on Cost over the last five years. AVGO's dividend payout ratio continues to drop post COVID into highly sustainable territory. It currently sits at 60% which is well below my normal safety margin of 75% or less. This should continue to fall into 2023. AVGO Stock Forecast CNN Money shows Broadcom with 15 BUY ratings, 3 HOLD ratings, and 0 SELL ratings as of January 2023. The median AVGO price target is $675, representing a 14.7% increase. The high price target sits at $775 or a 31% increase! Wallstreetzen has AVGO listed as a STRONG BUY for 2023. Lastly, MarketBeat has AVGO listed as a Moderate Buy with a price target of $669. Internal trading numbers are also low, possibly indicating an expected increase in price in the months or years to come. My analysis indicated that AVGO is poised for continued growth in 2023. If the market continues to recover, I expect AVGO to grow 10%-20% in 2023. My personal AVGO stock forecast is $680-$700 by the end of the year. I rank AVGO as a BUY/GROW meaning I recommend adding it to your portfolio (BUY) or adding to your current position (GROW). I currently don't hold AVGO in my portfolio. I plan to DCA into a position around 2% of overall portfolio starting this month. I will lower my DGRO ETF allocation by 2% to make room for AVGO. Broadcom VMware Acquisition Finalized mid-year 2022, this Broadcom acquisition has been approved by VMware and Broadcom shareholders. Following the closing of the transaction, the Broadcom Software Group will be rebranded and operate as VMware, incorporating Broadcom's existing infrastructure and security software solutions as part of an expanded VMware portfolio. The merger is under fire and investigation by European Commission and the US SEC. Broadcom has stated that they are confident that they can move forward with the deal. As the situation develops we'll need to monitor the situation as it moves forward to see how it might affect AVGO's stock price in 2023.

The GOAL of my dividend growth portfolio is to balance increasing share value (Growth) while simultaneously building and producing passive income (Dividends) that can be used during retirement. Currently my portfolio is concentrated more on growth with a dividend yield of 3.41%. As I near retirement I will look to produce more income and less growth. Typically, I deposit $2,000-$4,000 monthly into this portfolio, with $30,500 deposited this year! This portfolio is in addition to my tax deferred ROTH TSP. Currently, I reinvest all dividends utilizing DRIP. As I gain more dividends, I will hand select targeted reinvestment and withdraw the correct percentage to cover anticipated taxes. Looking to start your own portfolio? Check out my Ultimate Dividend Investing Guide, Start Here! All Charts are from my Dividend Portfolio Tracker, available in my store This post covers all of 2022 and compares the results to 2021. Let's take a look! Table of Contents: 2022 Round-up Portfolio Allocation Dividend Performance Dividend Income Projected Annual Dividend Income (PADI) Closing Remarks 2022 Round-up This year I retained all of my previous positions and added a few new positions to include Starbucks Stock (SBUX) and Exxon Mobile Stock (XOM). Below is table showing my current portfolio, how many shares I added this year for each, and how many shares were bought with DRIP. Portfolio Allocation I adjusted my portfolio allocation several times throughout the year. I rebalanced each month by targeting investments that were below their goal allocation. Overall, I made two major choices: I lowered most of my individual stocks to 2% (Down from 3% each) I increased my allocation for SCHD, O, and JEPI to concentrate more on ETFs. I made minor adjustments to MSFT and AAPL (lowered) to add Starbucks and Exxon Mobile to my portfolio at the end of the third quarter. I had waited to purchase these a joined late after major returns for both in 2022. The both continued to produce returns after which was great! Below is a pie chart showing my current breakdown: Portfolio Performance I began the year with portfolio balance of $52,422 and ended the year just shy of $75,000 ($74,866 to be exact). The increase in my portfolio's balance was due to my additional deposits of $30,500 not from its' performance. The market this year was tough on most investors. My portfolio returned -11.77% compared to -19.44% returned by the SP500. Adjust for dividends, my portfolio returned -8.33% in 2023. This reversal was due and I expected it to happen but not to this degree since my portfolio had returned 28.05% in 2021. Dividend Performance As expected, my dividends continued to build this year and I reached a personal milestone of $200 a month, closing the year at $206 a month average. Additionally, my dividend CAGR was 8.47% which is GREAT. Had I been using these dividends as income the increase would have kept my income on pace with inflation. Both monthly and quarterly dividend payouts nearly doubled throughout the entire year when compared to 2021. I received $407.58 in dividends from December alone. Dividend Income My portfolio's income has increased 8.47% organically, meaning my income would have grown 11.88% (including dividend reinvestment) this year even if had I added no additional funds. I invested an additional $30,500 this year and my dividends grew 138.47% compared to 2021. I received $757.19 in dividends in 2021 and $1,809.48 in total dividends this year. Both far cries from the measly $67.19 I got back in 2020. Looking back twenty four months my income averages $108 a month. My expected future income will be around $206 a month moving forward. Crazy to think I only received $33 in dividends for December 2021 and just received $408 this month. That's a 1,236% increase for December over two years! Projected Annual Dividend Income (PADI) My portfolio PADI is $2,483 for 2023 or $206.97 a month on average. My top five dividend payers continue to be JEPI, SCHD, DGRO, O, and MMM. I plan to continue watching my DGRO position. My long term plan is to sell this position to consolidate it into SCHD since SCHD will produce an additional 1% dividend yield compared to DGRO. Additionally, I'll receive an additional boost in income if Disney returns their dividend, something I don't expect until 2024-2025 Follow me on Twitter! Closing Remarks 2022 was a hard year on my portfolio but a great year for my dividends. One main advantage to dividend investing that I love is the mindset. Even though the market was down, watching my dividends grow kept me motivated. Additionally, it kept me from getting emotional, one the common mistakes that new investors make! I look forward to seeing the market recover and in turn my portfolio as we move into 2023. I expect it to be a rough start in the first quarter but should improve by mid-2023. How did your portfolio perform during 2022? Comment Below! Happy New Year and Happy Investing! Cheers!

It's almost 2023 and the stock market has taken major damage during 2022. Exchange Traded Funds (ETFs) provide instant diversification under one umbrella so you don't have to worry about picking the perfect stock in 2023. In this article we take a deep dive into the best dividend ETFs for 2023. We'll take a look at SCHD stock, NOBL stock, and JEPI stock. Let's see why I chose these as the best dividend ETFs for 2023. Interested in starting you own Dividend Investing journey? Check out my Ultimate Dividend Investing Guide and personal Dividend Growth Portfolio! Table of Contents SCHD Stock NOBL Stock JEPI Stock SCHD Stock SCHD or Schwab U.S. Dividend Equity ETF is one of Charles Schwab's dividend focused ETFs. SCHD is classified as a Large Value ETF. Below are a few links if you want to do more research: Here are some of SCHD's highlights: A straightforward, low-cost fund offering potential tax-efficiency The Fund can serve as part of the core or complement in a diversified portfolio Tracks an index focused on the quality and sustainability of dividends Invests in stocks selected for fundamental strength relative to their peers, based on financial ratios Why did I add it to this list? SCHD Stock Price history is strong SCHD's 10-year annualized return hovers around 14.12% which is higher than VOO stock's 13.29% over the same period. These are solid returns that include the added benefit of dividend payments, adding passive income for retirement. The ability for SCHD to keep pace with the SP500 is one of the reasons I chose it for this list. SCHD is poised for strong returns in 2023 if the stock market starts to build momentum and recover from 2022 loses. Let's take a look at the SCHD dividend: SCHD Dividend Yield: 3.73% That's more than double the VOO dividend that sits at 1.69%! $1,000,000s invested in SCHD would produce $37,300 in passive income annually and still generate solid annual returns. SCHD Holdings: SCHD's top ten holdings compliment other ETFs, with strong holdings like Broadcom stock, Verizon stock, Pfizer stock, Merck stock, and Coca-Cola stock. Bottom Line: SCHD tracks the Dividend 100 index with a strong dividend yield of 3.73% and primed to capture the returns of the market as it recovers into 2023. It's a great, well-rounded income ETF to hold for years and into retirement. If you haven't added it yet, now is the time! NOBL Stock NOBL S&P 500 Dividend Aristocrats ETF is ProShares offering for SP500 Aristocrats. Below are a few links if you want to do more research: Here are some of NOBL's highlights: The only ETF focusing exclusively on the S&P 500 Dividend Aristocrats—high-quality companies that have not just paid dividends but grown them for at least 25 consecutive years, with most doing so for 40 years or more. Often household names, NOBL's holdings generally have had stable earnings, solid fundamentals, and strong histories of profit and growth. NOBL strategy has a demonstrated history of weathering market turbulence over time by capturing most of the gains of rising markets and fewer of the losses in falling markets. Why did I add it to this list? Dividend Aristocrat Access Dividend Aristocrats have a proven history of continuing to grow and pay dividends through decades of market conditions, including major downturns like 2008 and 2020. Investing in NOBL allows you to directly invest in these companies in a diversified manner. Additionally, NOBL has strong performance that nearly matches that of the SP500. NOBL's annualized returns since inception are 12.07% which only slightly lower than VOOs 13.29% return. Let's take a look at the NOBL dividend: NOBL Dividend Yield: 2% That's higher than VOO's dividend that sits at 1.69%! $1,000,000 invested in SCHD would produce $20,000 in passive income annually and still generate solid annual returns. NOBL Holdings: NOBL's top ten holdings compliment other ETFs while also not overlapping. NOBL includes strong holdings like Cardinal Health stock, Exxon Mobile stock, Genuine Parts Co stock, and more. Bottom Line: NOBL is a great choice if you can't narrow down what Dividend Aristocrats you want to invest in or you want to invest in passively and diverisfied. It's a great compliment to a portfolio of individual stock picks. JEPI Stock JEPI or JPMorgan Equity Premium Income ETF is one of JP Morgan's income ETFs. JEPI is different than the other two ETF's listed because it focuses on generating passive income as one of it's primary goals. It's a relatively new ETF with a 2020 inception date. Prior to being offered publicly as an ETF, it was a private investment product offered to JP Morgan customers. Below are a few links if you want to do more research: Here are some of JEPI's highlights: Generates income through a combination of selling options and investing in U.S. large cap stocks, seeking to deliver a monthly income stream from associated option premiums and stock dividends. Constructs a diversified, low volatility equity portfolio through a proprietary research process designed to identify over- and undervalued stocks with attractive risk/return characteristics. Seeks to deliver a significant portion of the returns associated with the S&P 500 Index with less volatility, in addition to monthly income. Why did I add it to this list? Passive Income JEPI is about generating passive income. It's at a great buying point since the market got hit hard in 2022. If the market recovers you'll be able to capture some of this recovery and still earn an average of 1% monthly in income distributions. Currently, JEPI sits at 14% dividend yield which would net you $140,000 a year if you had $1,000,000 invested! Additionally, JEPI has returned -3% YTD. Now, that may not seem like something to highlight but JEPI has performed well in a year where the rest of the overall market failed to do so. The SP500 and NASDAQ posted double digit loses. JEPI has returned 14.47% since inception compared to the SP500 return of 15.13%. JEPI Holdings JEPI's top 10 holdings include AbbVie stock, Exxon Mobile stock, Hershey Stock, and more. There is some overlap between this ETF and the others I've mentioned. That's not as important since JEPI's primary focus is producing sustainable passive income. Bottom Line: JEPI has proven it's ability to do what it's designed to do: Produce Passive Income even in a down market. JEPI is a great ETF to add to your portfolio, in moderation, if you want to boost passive income. It's also my favorite choice when it comes to income ETF's. What ETF is your favorite moving into 2023? Comment Below! Follow me on Twitter!

Just like the Soda Wars, dividend investors often wonder which dividend paying soda company reigns supreme. Today, we're going to look at Coca-Cola stock ($KO) and Pepsi stock ($PEP) and try to crown a winner. Both are dividend aristocrats, Coca-Cola has paid and grown their dividend for 60 years, whereas Pepsi has done the same for 50 years. Both companies are in the consumer staples market. So, Pepsico stock versus Coca-Cola stock, which is a better investment for a dividend investor? In this article we'll look at which dividend aristocrat prevails! Pepsi, Coke, where's my dividend? Stay up to date, Sign up for my mailing list on the Home Page! If you want to learn mor about Dividend Investing, Check out my Dividend Investing Guide! Table of Contents Price Growth (YTD) for 2022 P/E Ratio Revenue Profit Margin Free Cash Flow Payout Ratio Dividend Yield Dividend Growth and Yield on Cost Conclusion Price Year to Date (2022) First, we'll take a look at Coca Cola stock price and the Pepsi stock price. Overall, share price isn't the driving factor when dividend investing. Don't get me wrong, we'll all take share appreciation combined with dividends any day of the week! In a year that's had double digit negative return both Pepsi and Coca-cola have done extremely well. Coca-Cola returned 6.13% compared to the slightly lower return of 4.39% posted by Pepsi. Both respectable returns, given the year. Dividend reinvesting would have given you an even higher returns, showing the power of Dividends. Coca-Cola's total return was 9.27% compared to Pepsi's 7.64% return. Not to shabby. Both KO stock price and Pep sotck price have performed well this year. WINNER: TIE Coca-Cola P/E Ratio VS Pepsi P/E Ratio Remember, the price-to-earnings ratio indicates the dollar amount an investor can expect to invest in a company in order to receive $1 of that company’s earnings. Currently, $KO and $PEP have a very similar P/E ratios, 27.55x for $KO and 25.94x for PEP. Historically, Coca-Cola and Pepsi have had similiar P/E ratio. We'll need to keep an eye on both as we move into 2023 to see if the companies start to diverge. WINNER: TIE Coca-Cola Revenue VS Pepsi Revenue Pepsi's revenue is almost twice as much as Coca-Cola's. Pepsi's revenue is $83.64B compared to the $42.34B earned by Coca-Cola. Pepsi has a lightly better recovery from 2019-2020 lows with a 31% increase in revenue over the last five years. This is only part of the picture, we still need to look at profit margin. TIP: What Is Profit Margin? Profit margin is one of the commonly used profitability ratios to gauge the degree to which a company or a business activity makes money. It represents what percentage of sales has turned into profits. Simply put, the percentage figure indicates how many cents of profit the business has generated for each dollar of sale. For instance, if a business reports that it achieved a 35% profit margin during the last quarter, it means that it had a net income of $0.35 for each dollar of sales generated. Source: Investopedia Coca-Cola Profit Margin VS Pepsi Profit Margin In the chart above, we can see that Pepsi's profit margin is 11.3% and Coca-Cola's is 23.44%. So, what does that mean? Using the revenue listed above we can see roughly how much revenue each company is converting into profit. Coca-Cola: $9.92B in Profits Pepsi: $9.45B in Profits Now that we've compared the two we can see that both companies are producing around the same amount of profits even though Pepsi produced two times the revenue. WINNER: TIE Coca-Cola Free Cash Flow (FCF) VS Pepsi Free Cash Flow (FCF) Tip: What Is Free Cash Flow (FCF)? Free cash flow (FCF) is the cash a company generates after taking into consideration cash outflows that support its operations and maintain its capital assets. In other words, free cash flow is the cash left over after a company pays for its operating expenses (OpEx) and capital expenditures (CapEx). Source: Investopedia Next, we'll take a look a the FCF values for both Pepsi and Coca-cola. Coca-cola is producing $10.04B in FCF compared to $6.38B produced by Pepsi. Let's combine this with payout ratio to get a full picture on the stability of each companies dividends. Tip: What Is Payout Ratio? The payout ratio is a financial metric showing the proportion of earnings a company pays its shareholders in the form of dividends, expressed as a percentage of the company's total earnings. On some occasions, the payout ratio refers to the dividends paid out as a percentage of a company's cash flow. The payout ratio is also known as the dividend payout ratio. Coca-cola Payout Ratio VS Pepsi Payout Ratio Coca-cola's payout ratio sits around 76% where as Pepsi is at 64% leaving both companies with a decent amount of room to continue paying and increasing dividends. Rough Remainer after Dividends when comparing FCF with Payout Ratio: Coca-cola: $2.4B funds remaining Pepsi: $2.29B funds remaining Both companies have around $2.3B FCF left over once dividends are paid for which is more than enough for dividend growth and re-investing back into the company. WINNER: TIE Coca-cola Dividend Yield VS Pepsi Dividend Yield Coca-cola Dividend Yield: 2.78% Coca-Cola Dividend: $0.44 per quarter / $1.76 annually 60 Years of Dividend Growth Pepsi Dividend Yield: 2.42% Pepsi Dividend: $1.15 per quarter / $4.60 annually 50 Years of Dividend Growth Consumer Staples Avg Yield - 1.89% If you're looking at dividend yield alone then Coca-Cola is the clear winner but we know that dividend yield isn't the full story. First thing we need to look at is whether the current yield is in line with the average diviend yield for each company. As dividend investors we can use this as rules of thumb. While not always true we can infer the following: If the dividend yield is higher than historical averages - The price is lower than average, potentially a buying opportunity If the dividend yield is lower than historical averages - The price is higher than average, potentially telling us to hold off because it might be overpriced Coca-cola and Pepsi are slightly lower than their averages but consistent enough that they aren't leaning either way. Both are higher than other companies inside the consumer staples sector. Winner: TIE Dividend Growth and Yield and Cost Another important factor to consider is dividend growth. Dividends growth at a consistent basis is import, especially, one is growing faster than the other. This could quickly increase your passive income on the original capital you invested. Pepsi's compound annual growth rate (CAGR) rate is 6.55% compared to 4.76% earned by Coca-Cola. Both companies are outpacing inflation's average of 3-4%. Obviously, they aren't beating 2022's current inflation rate. This growth rate will translate to Yield in Cost increasing proportionally with CAGR. This should put Pepsi ahead. Yield on Cost In the near term (3Y/5Y) Coca-Cola and Pepsi are neck and neck. If you owned the companies for the last ten years though you would see a divergence in Pepsi's favor. If you had $1,000,000 invested in each you would be receiving the following in passive income: Coca-cola (4.75%) - $47,500 annually Pepsi (6.45%) - $64,500 annually Looking at the chart the Yield on Cost at fifteen year puts Pepsi ahead slightly as well. This is mostly due to Coca-cola slowing its' dividend growth in the last five years. Assuming this trend continues, Pepsi edges out Coca-Cola. WINNER: PEPSI Conclusion So, who's the winner. Lets recap each category before we grown a winner. Price Growth (YTD) for 2022 - TIE P/E Ratio - TIE Revenue/Profit Margin - TIE Free Cash Flow/Payout Ratio - TIE Dividend Yield - TIE Dividend Growth and Yield on Cost - Pepsi WINNER - PEPSI Ultimately, Pepsi edges out Coca-Cola due to the long term growth of Pepsi's dividend. Taking into account the last ten years, Pepsi would be the better investment for the long term investor. The competition was extremely close and I believe either would be a wise investment since we don't know if Pepsi or Coca-Cola will end up keeping true to their Dividend Growth trends. Only time will tell. Which soda company would you choose? Leave a comment below. Follow me on Twitter! Want to see the power of dividends? Check out my Dividend Portfolio Updates!

The Thrift Savings Plan (TSP) is the retirement investment plan for federal employees and the DoD Uniformed Services. TSP closely resembles typical 401(k) plans that most civilian employers offer. TSP has nearly 6.2 million enrollees and around $732 Billion in assets under management making it one of the largest retirement funds in the United States. Unfortunately, new TSP enrollees receive little to no education when they start an account. The TSP board of Directors has made many quality of life improvements since I first enrolled 16 years ago. Back then I was given a piece of paper and told to sign up. That was it. For example, new enrollees are now automatically place in life cycle funds (which we'll cover) vice the G fund. Recently, they've revamped the website and even added mutual funds. In this article we'll cover the basic, the different funds, and a few investing strategies. Table of Contents What is the Thrift Savings Plan? Thrift Savings Plan Funds Lifecycle Funds TSP G Fund TSP F Fund TSP C Fund TSP S Fund TSP I Fund TSP Mutual Funds TSP Investing Strategies Beginner Intermediate Advanced TSP Loans TSP Withdrawal FOLLOW ME on TWITTER for more investing information or if you have questions If you're looking to learn about investing in general check out my blog! I'm also and expert in building passive income via Dividend Investing! Thrift Savings Plan Login One of the first things you want to do is ensure you can access your TSP login information, without it you won't be able to take any action on your account. Log in at TSP.gov. Account issues can be resolved by calling the thrift savings plan phone number at 1-877-968-3778. The secondary TSP contact number for international calls is (404) 233-4400 (not toll-free). Business Hours: Monday - Friday from 7:00 a.m. to 9:00 p.m. eastern time These are the phone number for what TSP calls the Thrift Line. For general inquiries, you can email thriftline@tsp.gov. Do not email personally identifiable information or documents. Please note that you cannot request account transactions by email. The address for the thrift savings plan is: ThriftLine Service Center C/O Broadridge Processing PO Box 1600 Newark, NJ 07101-1600 Thrift Savings Plan App Recently, the federal thrift savings plan created an app that you can use to manage your account. This is a vast improvement over the legacy computer only based service. I highly recommend you download the TSP App off the the Official TSP Website here. What is the Thrift Savings Plan? TSP allows automatic payroll deductions up $22,500 annually (TSP Max contribution for 2023). Investors over the age of 50 can add an additional $7,500 in catch-up contributions annually in 2023. They also allow Tax Deferred (Traditional), Roth, or a combination of those two for your contributions. The basics of Traditional versus Roth are: Traditional - Contributions are made pre-tax. You pay no tax now but will pay tax on withdrawal on both your contributions and the compound interest they generate when you retire. For example, if you withdrew $1,000 and pay 10% tax, only $900 goes to you. Lastly, one benefit to traditional contributions is that they lower your taxable income. Roth - Contributions are made post-tax. You pay the taxes now so your withdrawals are tax free at retirement. You don't pay tax on the compound interest. For example, if you withdrew $1,000 you would get the full $1,000. The right choice is based on your personal finance goals and there isn't a one size fits all option. I recommend you run the numbers using TSP retirement calculator or one of the other Thrift savings plan calculators. Thrift Savings Plan Funds TSP can be broken down into two types of funds, life cycle or L Funds and Individual Funds. TSP recently added mutual funds as well which will be covered after the individual funds. Simply put, funds are investment tools you can allocate your money towards. It's important to note that you can set up percentages for your contributions to go across multiple fund types. As mentioned above, if you're a new enrollee your contributions will automatically be set up to contribute into an L Fund appropriate for your retirement year. Let's break down the funds to get an understanding of each and review TSP fund performance before we cover investment strategies. You can find TSP share price history here. TSP L Funds or Lifecycle Funds As of 2022, there are ten L Funds available. L funds typically invest in a diversified breakdown of the individual funds offered by TSP. TSP automatically adjusts the percentages as you get closer to retirement. The goals is to be riskier (providing potentially better returns) when first starting out and moving to safer funds as you get closer to retirement. L Funds have associated target retirement dates like L 2050 which targets the retirement date of 2050. Once an L Fund reaches its target date it will automatically move to L Income. Per the TSP website, L Income is for those at retirement age who are currently withdrawing from TSP. It also receives their lowest risk rating and has produced a 4%~ return since inception. Listed above is the comparison tool off of the TSP Website that highlights L Income, L 2040, and L 2050. This was generated on 13DEC2022, where the market had fallen 15.66% by that time year to date (YTD). You can see that the L 2050 fund had lost the most while L Income performed better since it tries to be "safer" to preserve your balance while at retirement age. Conversely, L 2050 has posted better returns (8.58% lifetime) over the conservative L Income fund in the last 3, 5, and 10 years. These are just examples and the funds past performance may not play out the same into the future. TSP Individual Funds Individual funds fall into lettered funds, G Fund, F Fund, C Fund, S Fund, and I Fund. Each attaches itself to a different segment of the market, tries to match an index, or purchases certain asset classes. As such, each individual fund has it's own goals that can help you as an investor when choosing fund allocation. Let's take a look at each fund. TSP G Fund G Fund also known as Government Securities Investment Fund, invests in Government securities issued by the United States treasury. It consists of 100% Short-term U.S. Treasury securities. This fund is all about capital preservation. This comes with the downside that your returns could be outpaced by inflation which would erode your purchasing power over time. From the TSP website: The G Fund’s investment objective is to ensure preservation of capital and generate returns above those of short-term U.S. Treasury securities. Below are few charts that show the rate of return and growth of $100 invested since the funds inception. Updated charts can be found here. TSP F Fund The F Fund or Fixed Income Index Investment Fund tracks the Bloomberg U.S. Aggregate Bond Index, a broadly diversified index of the U.S. bond market. Bonds and Interest rates typically have an inverse relationship so in periods of falling interest rates, the F Fund will experience gains from the resulting rise in bond prices. This is seen when reviewing the short term returns for the fund since interest rates have been rising to combat inflation. Bonds are used by typical investors to offset volatility in their portfolios. A typical investment allocation that commonly gets referenced is 60/40 or 60% Stocks and 40% bonds. From the TSP website: The F Fund's investment objective is to match the performance of the Bloomberg U.S. Aggregate Bond Index, a broad index representing the U.S. bond market. Below are few charts that show the rate of return and growth of $100 invested since the funds inception. Updated Charts can be found here. TSP C Fund The C Fund or Common Stock Index Investment Fund offers the opportunity to experience gains from equity ownership of large and mid-sized U.S. companies. The C Fund tracks the SP500 Index. The SP500 index contains 500 leading U.S. companies so you won't get international exposure with this fund. The SP500 is one of the major benchmarks used to measure overall stock market performance. It's also been used by investors as a "fire and forget" investing strategy, where they solely invest in SP500 indexes. This fund is 100% stocks so it comes with higher risk than the G or F Fund but has historically posted better returns in the long term. It's important to note that the SP500 companies change over time as the market evolves which helps ensure that you stay continually invested in the leading companies, when a company falls off or is added to the SP500 you don't have to do anything different. The fund will adjust accordingly. Below is an example of the C Fund's Top 10 Holdings. From the TSP Website The C Fund's investment objective is to match the performance of the Standard and Poor's 500 (S&P 500) Index, a broad market index made up of stocks of 500 large to medium-sized U.S. companies. Below are few charts that show the rate of return and growth of $100 invested since the funds inception. Updated Charts can be found here. TSP S Fund The S Fund or Small cap stock Index investment fund tracks the top85% of U.S. companies, not including stocks tracked by the SP500. That's 3,741 companies as of December 2022. This diversification helps you potentially capture returns posted by small and mid-cap companies inside the stock market. Just like the C Fund, this fund offers no international exposure. You can use this fund to further diversify your portfolio across more companies not covered by the C Fund. As with the C Fund, this fund is 100% stocks so it comes with larger risk than the G and F Funds. Below is an example of the S Fund's Top 10 Holdings: From the TSP Website: The S Fund's investment objective is to match the performance of the Dow Jones U.S. Completion Total Stock Market Index, a broad market index made up of stocks of small-to-medium U.S. companies not included in the S&P 500 Index. Below are few charts that show the rate of return and growth of $100 invested since the funds inception. Updated Charts can be found here. TSP I Fund The I Fund or International Stock Index Investment Fund is TSP's international exposure offering. The fund tracks the overall performance of the major companies and industries in the European, Australian, and Asian stock markets using the MSCI EAFE Index. It consists of 100% Non-U.S. companies. This is an important sector to consider because the US stock market has not always outpaced the international sector. There are times where international stocks perform better than the U.S. market. Adding this as a percentage of your overall portfolio allows you to capture those opportunities. From the TSP Website: The I Fund's investment objective is to match the performance of the MSCI EAFE (Europe, Australasia, Far East) Index. Below are few charts that show the rate of return and growth of $100 invested since the funds inception. Updated Charts can be found here. TSP Mutual Fund Window (Updated December 2022) Mutual funds are new to TSP and offer greater investment flexibility. This is the first time that TSP has allowed it's investors to invest in assets outside the TSP Funds. The move comes with strict restrictions and higher fees. Hopefully, TSP removes some of these restrictions and lowers the fees to allow for younger investors to take advantage of this opportunity should they choose. Using the mutual fund window transfers money out of your account to open a separate investment account provided by TSP's mutual fund window vendor. Here is a link to TSP's Mutual Fund Window Fact Sheet. From the TSP Website: A mutual fund pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Mutual funds are companies, and investors buy shares in them just like people buy stock in other companies that produce goods or provide services. Each share of a mutual fund represents an investor’s part ownership in the fund and the income it generates. Below are some of the restrictions and fees: Your initial transfer to the mutual fund window must be $10,000 or more but may not be more than 25% of your total TSP savings. You must have at least $40,000 in your TSP account to ensure that your initial transfer isn’t more than 25% of your total TSP savings. You may not invest more than 25% of your total account balance in the mutual fund window at any time. This means younger TSP investors will have to wait until their accounts hit a $40,000 minimum prior to investing. Additionally, for those who prefer mutual funds over the TSP funds, the 25% cap will hold them back from allocating a larger position. Fees you’ll pay $55 annual administrative fee to ensure that use of the mutual fund window does not indirectly increase TSP administrative expenses for TSP participants who choose not to use the mutual fund window $95 annual maintenance fee $28.75 per-trade fee Other fees and expenses specific to the mutual funds you choose, which you can review in each fund’s prospectus These fees can start to add up if you aren't allocating a large enough percentage of your pay towards your TSP. My short term recommendation is to open your own retirement account with a broker of your choice to invest in Mutual funds, stocks, or ETFs. The fees will be less but you will have to manage two accounts, TSP and the other retirement account. TSP Investing Strategies There are multiple different investing strategies when it comes to TSP. Millions of possible allocation set-ups for each of the funds. This section is going to cover a basic overview of ways to invest within TSP. I won't be providing "example portfolios" but only high level recommendations so you can choose what works best for you based on time, interest, and the level of management you want to perform. I break these down into Beginner, Intermediate, and Advanced. Beginner The beginner strategy is the easiest and requires little to no work on your end as the investor. The beginner strategy is simple: Use the target date Lifecycle funds for your retirement. This is great if you want no part in managing your TSP account other than funding your account. You can still choose Roth, Traditional, or a combination and the percentage of your pay you allocate to TSP. I highly recommend you allocate the minimum percentage to earn 100% of your employers TSP match. Essentially this makes your "initial return" on those funds double or 100% which is HUGE. Using this strategy allows TSP to move your funds around where they see fit based on when you want to retire. You fund the account and TSP does the rest. Intermediate The intermediate strategy requires you to do some research. The amount of research depends on how often and in-depth you want to make your investment allocation. In this strategy you set up your own custom allocation for each of the individual funds including the L Fund if you want. You could have the 60/40 stock to bond split mentioned above. You could have 50% Lifecycle Fund / 25% C / 15% S / and 10% I. The combinations are unlimited. I will say, when choosing an allocation, remember that each investment should serve a purpose in your portfolio. This strategy will have the best chance of success with research and that understanding. You could choose a simple allocation, set it up, and leave it like than for as long as you want. Advanced WARNING This is an advanced investment strategy that has been shown to produce highly volatile returns. Some individuals have shown high sucess while other have lost $1000's. Past stock market performance does not translate to future performance. Use at your own risk! The last strategy is known as Seasonal Trading with TSP. This is the ultimate 100% hands on approach. The strategy is not endorsed by TSP but has a huge cult following amongst TSP investors. Use this strategy at your own risk. I've seen investors post amazing returns and seen some perform worse than desirable. There is an entire website and facebook group dedicated to it. If you choose to do this, expect to do a lot of research. I used this strategy for a while but found that it took to much time and I didn't have internet 24/7, which is required to keep up with the trading requirements. In a nutshell, TSP Calc researches and analyzes historical trends in the performance of TSP Individual Funds to try and pin point the ideal time your money should be in a certain fund each month to maximize returns. A How-to Video can be found here. TSP allows you to transfer money to different funds through Interfund Transfers (IFTs) twice a month (three if you transfer back to G Fund). These investors use the TSP Calculator to build transfer schedules based around this premise. The goal is to be in the right fund at the right time. Again, this strategy has a steep learning curve and requires a lot of hands on work on your part. Below is an example transfer schedule. Ensure you have a firm grasp on finances and Seasonal Trading before you jump in feet first. TSP Loans The TSP website outlines loans as follow: "As an active TSP participant (a current federal civilian worker or member of the uniformed services), you’re allowed to borrow money from your TSP account. You repay the loan with interest in regular payments—through payroll deduction if you’re still in federal service, or by direct debit, check, or money order if you’ve left federal service. The interest rate, which stays the same for the life of the loan, is the same as the G Fund interest rate for the month before you request the loan." There’s also a one-time fee that comes out of the loan amount and is never returned to the account: $50 for a general purpose loan $100 for a primary residence loan Click here to learn more about TSP loans or to apply for a TSP loan. TSP Withdrawal Thrift Savings Plan has several terms for withdrawal. There a serval types of withdrawl through TSP: Hardship or financial hardship withdrawals Age based withdrawals (59 1/2 years old) Financial Hardship Withdrawals To be eligible for a financial hardship withdrawal to you meet one of the following criteria: Recurring negative monthly cash flow Medical expenses (including household improvements needed for medical care) that you have not yet paid and that are not covered by insurance Personal casualty loss(es) that you have not yet paid and that are not covered by insurance Legal expenses (such as attorneys’ fees and court costs) that you have not yet paid for separation or divorce from your spouse Losses due to a major disaster declared by the Federal Emergency Management Agency Traditional TSP withdrawals are subject to federal income tax and state tax (depending on your state tax rates). All withdrawals incur an additional 10% early withdrawal fee if you are under 59 1/2 years old. Additional minor requirements can be found on the TSP Financial hardship withdrawal homepage. This concludes this article on TSP Investing. I hope this helps you get a start in TSP with a basic understanding of what will work for you. Thanks for visiting. Happy Investing!

Table of Contents Portfolio Update Dividend Income Growth (YoY) Quarterly Comparisons Projected Annual Dividend Income (PADI) The GOAL of my dividend growth portfolio is to balance increasing share value (Growth) while simultaneously building and producing passive income (Dividends) that can be used during retirement. Currently my portfolio is concentrated more on growth with a dividend yield of 3.22%. As I near retirement I will look to produce more income and less growth. Typically, I deposit $2,000-$4,000 monthly into this portfolio, with $27,500 deposited YTD. This portfolio is in addition to my tax deferred ROTH TSP. Currently, I reinvest all dividends utilizing DRIP. As I gain more dividends, I will hand select targeted reinvestment and withdraw the correct percentage to cover anticipated taxes. Looking to start your own portfolio? Check out my Ultimate Dividend Investing Guide, Start Here! All Charts are from my Dividend Portfolio Tracker, available in my store Portfolio Update November was a decent month for my portfolio overall, making back some ground that it lost this year. I've been flirting back and forth with $75,000 invested. I added another $3,000 into my account this month to purchase the following shares: Cisco Stock ($CSCO) x 2 Microsoft Stock ($MSFT) x 1 Realty Income Stock ($O) x 14 Starbucks Stock ($SBUX) x 2 Oracle Stock ($ORCL) x 1 SCHD ETF ($SCHD) x 16 Exxon Mobile ($XOM) x 2 The newest addition to my portfolio are $XOM and $SBUX which I can't complain since they have returned 5%~ and 11%~ respectively. These new positions added $105.64 to my portfolio's passive income or just shy of $9 a month. November returned nearly the same percetages as the the SP500. My portfolio returned 5.4% compared to 5.17% posted by the SP500. My yearly return has performed better than the SP500 by almost half. I'm still a -7.64% YTD. That's better than the -14.39% return posted by the SP500 since January 1st. Including DRIP I have returned around -4.5% for the year. Dividend Income Growth (YoY) My dividend income continues to surpass expectations. My November dividends are nearly 100% more than 2021 and 749% more than 2020. Yearly passive income received also surpassed 2021 totals and we still have Decemve dividend payments. My 2022 total passive income is $1,401.90 compared to $757.19 for 2021. That's a 85.15% increase! One thing I have considered is modifying my portfolio to bring in consistent dividend income month to month. Currently the quarters have my largest dividend payments. This would require me to close some positions and start new positions in dividends in the months I'd like to raise. This is really a quality-of-life issue since it would require me to budget quarterly income over several months instead of a more balanced payment schedule. Below is the last two years of dividend payments. Quarterly Comparisons Quarterly income continues to grow as expected. I've already received more than half of my expected dividends for Q4 with December, the largest month for my portfolio, remaining. I expect to come close to passing 2021 Dividends total with just Q4 earnings. Projected Annual Dividend Income (PADI) Lastly, my projected annual dividend income is now $2,125.41 or $177.12 a month! 16 of my 17 positions pay dividends (Disney being the non-payer). I hope this update hope this update helps break down the power of dividends and inspires some of the new dividend investors. Stay the course and be patient! Happy Investing!