It’s time for my Dividend Stocks Update on my Lunch Experiment!
For the first 2 stocks in my experiment, I borrowed money from my checking account so I could seed the money for the initial investment. But since I fully paid myself back on the first two stocks (ANH and EVEP), I decided to take borrow more money from my checking account so I could purchase some shares of another dividend stock.
This time I chose a dividend stock called Chimera (another REIT). It’s dividend yield is a ridiculously high 17%.
Initially, I was only going to borrow $1,000, but I decided to bumped the amount up to $2,000.
Since I’m getting money from my other dividend yielding stocks for lunch, I decided to bump up my weekly savings rate to $60. So I should be able to pay myself back in less than 33 weeks (sometime in mid-May 2011).
Here is my Dividend Stocks for my Lunch Experiment Spreadsheet:
| Stock Name | Anworth | EV Energy | Chimera |
| Stock Ticket | ANH | EVEP | CIM |
| # of Shares | 260 | 45 | 600 |
| Orig. Price | $7.84 | $23.25 | $4.01 |
| Curr. Price | $7.16 | $34.26 | $4.14 |
| Orig Cost | $2,038.14 | $1,046.25 | $2,404.80 |
| Curr Value | $1,861.60 | $1,541.70 | $2,484.00 |
| Annual Yield | 13.87% | 8.85% | 17.27% |
| Dividend / year | $258.20 | $136.44 | $428.99 |
| Total Dividends | $823.63 | ||
| 52 weeks | 52 | ||
| Dividend / week | $15.84 |
Overall, I’m pretty please with the outcome of this experiment, but now let me explain some things about my experiment:
- The money used in this experiment is basically “Free Money” because it would have been spent on lunch going out with the guys!
- Since it’s “Free Money“, I can afford to lose it all of it if it came down to that! Yes, I would cry a bit at first, but its money that would have been wasted on eating out anyway.
- Since I can afford to lose this “Free Money“, I can take risks that I normally wouldn’t take. I usually don’t recommend anyone buy a stock with a 17% annual return. This dividend yield will come back to earth eventually!
- This is purely for fun, that’s why I call it an experiment 🙂
And now for some interesting facts about my experiment results:
- EVEP is up almost 50% from where I bought it at! To bad I only bought $1,000 dollars worth.
- ANH is down 8% from where I bought it at! To bad I bought $2,000 dollars worth of this stock (booo)
- CIM recently raised it’s dividend payout for the quarter by 1 cent.
- The guys try to convince me to go out to eat with them more, but I’m content on doing the library thing. Occasionally, I’ll go with them for sushi! Sushi is my kryptonite when it comes to eating out…
- I get a huge kick when I see the dividends hit my online brokerage account.
- Yes, I am nervous about the tax cuts expiring though! Perhaps I’ll have to move my lunch experiment to my roth ira account…
- Doing a real documented experiment like this has been a great experience!
I’m having a great time with this experiment, so far I figure that if the dividend yield rate stays the same (which is highly unlikely), I would be able to go out to lunch twice a week with the guys!
Ironically, I no longer have a desire to go out to eat at lunch and spend so much money. In fact, now I mainly go to the library at lunch and read other personal finance blogs and work on this blog!
What do you think of my lunch experiment and my progress? Do you think I’m crazy for going with such a high stock dividend yield?
-MR
Related:
Check out the next update in my Lunch Experiment, #5.
Or go back to the previous update via my Lunch Experiment #3.