BennyEast.Com/Blog The official blog of Kenny West

Inch By Inch

My salary from investment dividends is now at $216 a month.  It's actually slightly higher than that because I've been investing in new stocks by buying more shares in dividend paying companies.  Those dividends aren't in my trailing reports.  So, the $216 I'm making a month from dividends isn't including that.

This time last year, I was making about $105 a month from dividends.  My goal is to just keep growing that monthly number.  That's it.  I'm not really interested in trying to grow the total amount in the portfolio... In fact, I could care less about the total value.  I'm interested in the salary.  The dollar volume per month.  It's a bit like when it rains, you don't really care about how BIG the clouds were producing the rain.  It's more about how hard it's raining.

If every dividend deposit is a raindrop... I'm interested in creating a downpour.

Basically, every time I buy a stock now, I plan to hold it for the rest of my life.  I'm buying for the long term.  I'm buying shares in companies that pay regular dividends (rain drops) and keep those dividends growing.

But why?

It's pretty simple.  I want to act.  I want to audition for movies.  I want to write music.  I want to write books.

It's hard to make it in any of those industries.  I would argue it's near impossible.  That actually making a living in any of those industries is pretty much impossible for 99 percent of people who try.

Why risk it?  Why move to LA and then end up waiting tables?  Why move to NYC and then end up living with 20 roommates and having to move back?

So, instead... What I'm doing is creating a stable dividend salary that gives annual raises in the form of dividend hikes.  Then, once that salary is enough to cover all my expenses... I can go act, write music, write books... And I don't have to ever worry about making it.  For the rest of my life, dividend checks will pay all my bills.

I'm at $216 bucks.  Obviously, that's not going to pay my bills.  But hey, my only goal previously was to break $100 a month, and then after that, my goal was to break $200.  Now my new goal?  Break $300.

And I'll just keep on letting my investments ride and pay dividends and tally the dividends until that number breaks the point where it covers all my costs in life.

I've mentioned it to a few people, and pretty much everyone laughs at the amount.  But, keep in mind, that $216 dollars is earned without any work.  I could sleep all day, and all night.  I don't have to show up anywhere, do any kind of work at all other than just let the stocks ride passively and the dividends show up in the account.

That's actually pretty powerful.  Consider just a normal 9-5 job... Let's say you get up every morning and you commute the average commute.

The average commute time is 25.4 minutes.

https://project.wnyc.org/commute-times-us/embed.html#5.00/42.000/-89.500

So, that's both ways.  50.8 minutes.  If that commuting is done via a car, you pay for gas.  You pay for maintenance on the car.

To work, from work, to work, from work.  Now, the more time on the road, means the more likely you are to have some kind of car repair needed.

With my dividend checks.... I don't even need to get out of bed to make money.

The only thing I have to do once a year is file the taxes made on the money.  And even that, I could have someone do for me.

So, that $216 I'm making a month, lets say I had to get up and commute somewhere to make that money.  The real rate of return on the income I'm making goes up.

So, even though I'm making more at my 9-5 job, I have commuting costs.

I also have stress costs.  Work is stressful and draining.  Dividends just come in.  I could be poolside, sipping on a margarita.  The dividends keep coming.

You get the idea.

So, let's say to deal with a stressful job someone has to have a couple drinks every night after work... Those drinks add up!

But anyways, it's not that I don't want to work... I just want to work a job that has unpredictable and unstable income.  SO, I'm creating income to replace that part of the industry.

My next goal is just to hit $300.  Once I hit that number in monthly income... I'll plan my next goal.  In the mean time while I wait for that salary to increase... I've been starting to create budgets and spending patterns.  I've been tracking future costs and how much things will cost me going forward to better get an idea as to how I can transition from my current 9-5 to a dividend salary working on creative endeavors.

It'll be interesting to see how long it takes to really replace my current 9-5 salary with a dividend salary.  I do believe it's possible to do... It's just going to take time to get it ramped up.  What's interesting about an investment salary versus a 9-5 salary is... On a regular work salary, you show up, and you get paid.  If you stop showing up to work... Or if for some reason you are let go... That salary stops.

It's impossible to get fired from investments.  Yes, some investments can turn south.  Dividends can be slashed or cut.  This is where proper portfolio management comes in.  There are a lot of companies that have been paying dividends for 100+ years, and many that have been increasing the amount of dividend they pay for 25+ years.  Diversification is key, and holding solid dividend paying companies is also key.

Right now I'm holding 80+ different investments in my portfolio.  My ideal goal is to basically get that number over 1000 different holdings.  So, if any one company goes completely bankrupt... The jolt to my monthly income is less.  As well I hold different kinds of investments... Bonds, common stock, REITs.  The idea is to try and build a salary that will pay me for the rest of my life.

If you had a salary to cover all your life expenses... What job would you work?  What passion would you chase?  For me... It's always been making music, acting, and writing.  I've always wanted to be a hollywood movie producer and actor.  I've always wanted to be a music producer and singer/songwriter.  This basically is my life plan on how I'm going to transition to that.  It won't be overnight, and it might take a while... And it might seem like it's only moving inch my inch... But I'll get there.  Slow and steady.