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More Passive Dividend Income – WMT

I got a belated birthday present this week. It was $20, and I decided to put it to work in my Loyal3 account, which allows for stock purchases with as little as $10. I also had a little over $2 in the account from some passive dividend income that I’d made earlier. This meant that I had $22 to put to work this morning (Loyal3 only allows purchases in whole dollar amounts). WalMart has been hit pretty hard lately, and it’s going for a relatively low P/E ratio that’s less than 14. Its dividend yield is around 2.9 percent at this point, which is well above its historical average. Since I’d already started a position in WMT, I decided that it was a good place for my money.

Therefore, I decided to purchase $22 worth of WalMart stock. This small amount added 0.3332 shares at a cost of $66.02. This also adds a bit of income to my estimated dividend income. While $0.65 might not seem like much, the $0.65 here and $5 there of additional that dividend growth investing provides can really grow to a substantial amount over time. This admittedly small addition brings my estimated 12-month forward dividend total to $58.58, although I’m guessing that this should go up in relatively short order as WalMart and a few other companies that I own should be raising their dividend payments. I should also start to DRIP the stocks that are in my TradeKing account. Frontier Communications is the only company that DRIPs in the Loyal3 stable, and I don’t anticipate initiating a position in FTR at any time in the near future.

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Earning Passive Income with More Dividends

The past couple of weeks have been rough on stocks. It’s now down 9 out of the last 10 sessions. I’ve put more money to work, though. Could it go lower? Sure. Will it eventually come up if it does? Most likely. Regardless, as I’ve said before, passive income is the best income, and I’ve decided to buy more of solid companies that have long histories of paying out dividends. My first two buys in the last few weeks were in WalMart and Apple. WalMart has been basically sideways, and Apple has been hit pretty hard in the days since I purchased them.  Day-to-day fluctuations are not a big concern, as I’m not looking to sell these stocks in the next few months.

Last week, I put $150 to work in McDonald’s stock through my Loyal3 account. This purchased 1.5196 shares in the Golden Arches. McDonald’s has a current annual dividend level of $3.40 per share, which gives a dividend yield of just above 3.4 percent on my cost. This added $5.16 to my estimated dividend cash flow for the next 12 months. I’ve eaten at the big M all across the US, and I’ve also eaten at this company’s restaurants in England, the Czech Republic, and Honduras. They are literally making money every day all across the planet.

Yesterday, I decided to buy again. I had $250 to put to work. I again bought WalMart with a purchase of $50. This purchased an additional 0.6973 of a share. At an annual dividend payout of $1.96 per share, this added another $1.37 to my estimated dividend payout over the course of a year. $1.37 might not sound like a huge amount, but the $1.37s will start to add up over time. It’s also possible that WalMart’s stock will increase in price over time, which would further enhance net worth.

My final purchase was in one of Warren Buffet’s holdings: Coca-Cola. This Atlanta-based company has increased its dividend for 52 straight years. This is one of the largest such streaks that are around. This stock is tied to another of my purchases, as McDonald’s sells Coke products around the world. I’ve also had Coke in various places that I’ve visited. This includes places as remote as small towns in Kenya. The footprint of Coke is huge. I put $200 into Coca-Cola through my Loyal3 account. This bought 4.8804 shares of the soft drink giant. Coke currently pays out $1.32 per share for a dividend, and this is a yield of more than 3 percent. This purchase bought me an additional estimated dividend payout of $6.44 on an annualized basis.

There you have it. I’ve bought a small slice of three massive companies that have huge global footprints. All of these companies are able to handle their dividends at this point with their current level of earnings per share. My hope is that they will continue their long streaks of paying out to shareholders and also add to the dividend on an annual basis. My current dividend income portfolio now has an estimated annual payout of approximately $18.28. Of course, this could go up or down, but my goal is to reinvest dividends into companies that also provide income, which will hopefully lead to an ever-growing amount of capital and income. This will definitely be an example of earning money in pajamas.

Disclaimer: I am not a professional investor or a financial advisor. All information in this article are merely for entertainment purposes. People can and do lose money in the stock market. Consult a professional before deciding to make any investments. 

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Stock Purchase–AAPL

This week, I added another position toward my goal of earning money in pajamas with dividend stocks. My first purchase of $100 went toward WalMart Stock. My second purchase was a bit larger because I wanted to make sure that I was able to purchase a whole share of another company with my Loyal3 account. This stock is one of the biggest and most popular in all the world. I decided to buy some stock in Apple Computer. Of course, the best time to buy some Apple stock would have been around 1999, but I was not really into stocks at that point. However, with some money from previous birthdays still available to put to work, I decided to jump in now.

My goal is to earn additional money without actually putting in additional hours for it. Therefore, buying Apple would not have been on my radar had I started just a few years ago. In 2012, however, the company started paying dividends again after a long hiatus. The dividend has been steadily growing since its resumption. The current yield is not terribly high, as it is in the 1.7 percent range, but it has shown growth to the upside. The P/E ratio and the payout ratio for the dividend are both solid, and everyone knows that iPhones and iPads are all the rage with kids these days.

I put in a total of $150 into AAPL, and this bought me 1.2313 shares in the company. Currently, the dividend on this stock stands at $2.08 per share after a big 7-for-1 split last year. My current holdings should net me about $2.56 in dividends over the next year. When added to my anticipated dividends from my WalMart purchase, my current estimated dividend income for the next year should be right around $5.60. Both of these stocks could raise their dividends in the next year, so that increase would be added to my $5.60. I also plan to buy a few more positions in the near term, and I have some plans for utilizing some passive income to buy even more, which will give even more passive income. My hope is to increase my dividend income each year until I can replace a significant percentage of my expenses by retirement. They say that the journey of a thousand miles begins with the first step, and I look at these purchases as the first two steps in my journey.

I’ll plan to give updates on any future purchases, as well as any income as it starts to come in.

Disclaimer: I am not a financial professional. The information on this site is for educational/informational purposes only. Investors in the stock market can lose money, up to and including all of their investment. Please consult a financial professional before making any investments in the market.

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Earning Money in Pajamas with Dividends on Loyal3

Note: Loyal3 is closing down in May 2017. Therefore, this platform will no longer be available. It will be a good idea to choose another brokerage.

As I wrote in my last post, passive income is the best income. One of the best ways to get passive income that I noted in that article was through dividend stocks. These stocks are issued by companies who have created enough income and built up enough equity through their business operations to return some of the profits to those who invest in their endeavors. While reading up on dividend growth investing over the past few weeks, I stumbled upon recommendations for a website that allowed for fee-free investing. This site Loyal3.com allows investors to put in as little as $10 toward a number of quality stocks–without having to pay any commissions. I was intrigued to say the least.

I have some money that I’ve had laying that’s come from birthday and Christmas gifts over the last few years, so I decided to open an account and put it to work because it’s basically been earning nothing. I decided to buy $100 worth of WalMart stock last week to see how the site worked. The transaction went through today, and that $100 investment bought me 1.398 shares of ownership in Wally World. WalMart currently pays an annual dividend of $1.96 per share, which is split into four quarterly payments, so this will give me about $2.70 in dividend income over the next year. I chose WalMart because it’s the biggest retailer in the world, it makes lots of money, it pays a solid dividend that’s increased every year for around four decades, and it trades at a relatively low price-to-earnings ratio. As this went through pretty easily, I have decided to buy some more stocks on Loyal3 with the funds that I have available.

The Loyal3 site is pretty easy to navigate, and it only took a few minutes to go from creating an account to linking a bank account and telling the site what to purchase. The transfer of funds from my bank took from Saturday to Tuesday, and the purchase went through on Tuesday morning. The site only makes purchases in a couple of batches each day, so this is something to consider if you’re looking to purchase at a specific price as you can’t totally control the purchase price. I chose this “broker” because most other low-cost brokers are quite expensive if you don’t have a fairly large sum to invest. For example, I considered TradeKing with its $4.95 fee per trade, but for a $100 investment, I’d be starting about 5 percent in the hole before the stock moved up or down at all. It would take a purchase of $500 to make TradeKing or Scott Trade worth it, in my estimation. If I get a good nest egg going, I’ll probably open an account with one of these sites to further diversify without paying heavy fees. With Loyal3, I can buy fractional shares for as little as a $10 investment and it costs me nothing, as most well-established stocks are not going to shift in price by 5 percent on the vast majority of days.

There are some negatives that come with the Loyal3 platform. One is the afforementioned fact that the site utilizes batch trading, rather than up-to-the-minute trades. This can lead to some fluctuations in price, but as noted above, I don’t think that’s going to wipe out any advantage gained by avoiding paying a fee on a smallish trade, at least the vast majority of the time. Another negative is the fact that the site only has a relationship with slightly more than 60 companies, but some of these are among the biggest names around. Included are stocks like: WalMart, Apple Computer, Intel, Microsoft, Coca-Cola, Kellogg’s, PepsiCo, and others. Each of these pay a good dividend that’s grown in recent years (sometimes for decades straight). Energy and healthcare companies are not get included.

However, for my current level of investment ability, I think that the Loyal3 platform should work well for my purposes.  I plan to spend the rest of the money I have available, purchase additional shares with some other passive income, and then reinvest any dividends that I get. The goal is to increase dividend income year-over-year to where I have a nice cash flow supplement when it comes time to retire. Dividends are definitely passive income, and WalMart is active in many countries around the globe, so this company is literally providing income (albeit a very small amount at the moment) while I’m in bed, which is one of the best ways to earn money in pajamas.

Disclaimer: I am not an investment professional. Therefore, this article is intended only for entertainment/informational purposes and is not an actual recommendation to buy any specific security. Stocks go up and down, and investors can and do lose money.