Lunch Experiment Update:
Dividend Experiment Update
I have finally paid off the loan to myself that I borrowed to buy the latest stock that I bought (CIM). This last repayment time to myself went really fast. In fact, it went so fast that I’m done borrowing money from my checking account to fund my stock purchases. From now on, I”m only going to use the money that I save, and perhaps money from the dividend checks received from the fund itself.
And Now on to the Analysis of My “Lunch Experiment” Investments:
First let me say that I”m excited to say that EVEP has doubled for me (woo hoo)! Unfortunately, it’s also the position I have the lowest initially investment in (boo). Ironically, stock appreciation isn’t what I’m really shooting for… not that I’m complaining! But the real game in this experiment is reoccurring dividend payouts.
- Overall, the “Total Return” of my investments since investing in 2009 is up 19.31%. Note, this number is not per year, but simply the percentage gain of what was originally invested vs the current value. In case you are wondering, yes, I do follow the KISS principle.
- The “Cumulative Value” of my investments equal $6,548.90! This is money that would have went to the restaurant owner and to the waiter in tips. But now it’s sitting in my brokerage account earning me a dividend.
- With a dividend of $14.88 a week, I can easily afford to go out twice a week with the guys at work. Especially if I buy cheaper meals such as soup. Believe it or not, soup at a decent restaurant actually tastes great!
Experiment Observations To Date:
This experiment will span 2 years. I’ve done much better than I anticipated! While my dividend stream is extremely high risk, the money involved is practically free money since I would have been spent on dinning out at lunch anyway! It’s also not diversified very well either! But this is an experiment, and the normal nature of such experiments come with certain levels of risk.
So with this particular experiment, I’m shifting gears into overdrive for a smoother ride until the end of the two years (2 years is the length that I initially defined as the duration of this experiment).
If you have read this experiment from the start, thanks for hanging with me, it’s been a great ride to date!
Do you have any questions about my experiment and more importantly, do you see the value in doing something similar?
-MR
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Nice experiment, MR, and great appreciation. EVEP is one of my dividend payers in my 401K.
EVEP has been a rockstar of an investment for me. Only second to Baidu (BIDU).
Very interesting article. Im a fan of dividend stocks as well. I have to say though, these dividend yields look really high, I dont get anywhere near that kind of return from my 3… JNJ, ADP, and VALIX (dividend paying mutual fund)
Mine are swing for the fence stocks. Very risky, but this is play/free money for me, so I feel justified in doing so.
It would be money that I spent on food or waiter tips. So, quite literally it’s free money in my eyes.
Ever give any thought to using covered calls as a safe way to increase the revenue from your experiment? Sell really out of the call covered calls…would still receive your dividend and you can use the premiums produced to buy more stock or eat some bread with the soup lol
I have thought about buying some puts for other stocks in my portfolio.
But honestly, I’ve never thought about using that money with this experiment! Thanks for opening my eyes to that option!!!
Don’t you love when experiments go well??
Great job!
Yes, very much so.
I’m thinking about re-organizing the experiment soon… I don’t know if I can last the full 2 years…
This experiment has given me ideas for other experiment, etc…
I am following with interest, as I get closer to retirement. I expect to increase my position in dividend stocks as I get close to retirement.
I’ll admit, my experiment is a bad example of dividend stocks. While I don’t think my REIT stocks will lose a lot of value once they cut their high dividends, it will come eventually.
I think if I were more focused on retirement, I’d look at energy stocks like First Energy, etc… Something that will provide a decent dividend stream without a lot of risk.
Then again, I use to own BP before they cut their dividend due to the accident… who knows…
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Nice job! I’m with Evan, how about selling some covered calls or maybe even LEAPS to profit from the time value?