Personal retirement strategy

Discussion in 'Personal Finance' started by Jerseysomerset, Apr 12, 2018.

  1. Jerseysomerset

    Jerseysomerset New Member

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    Hi, I’m a private individual. I hate trying to track the indices and am more risk tolerant than the average person. I have found a wonderful stock, OXLC that pays dividends in excess of 10% per year. What’s wrong with buying this stock only and reinvesting the dividend income when paid? Obviously price could drop but it hasn’t and has been stable for years. Looking for any gotchas that I missed...
     
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  2. T0rm3nted

    T0rm3nted Moderator
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    Hello @Jerseysomerset and welcome to the forums! I have done VERY LITTLE research on the company you posted, but I just pulled up the chart to see what you were talking about. This is the monthly chart dating back to when this stock was listed in 2011. Now to me, that looks to be very clearly in a downtrend LONG-TERM which is what you would be considered with in a retirement account.

    There's a reason sayings like "Don't put all your eggs in one basket" exist, and why people always recommend being diversified. If your goal is long-term investment stocks though and accruing dividends, you'll be hard-pressed to find anything better HISTORICALLY than the dividend aristocrats. I would greatly recommend taking a look into those, and then dividing your money amongst some different sectors to remove some of the risk.

    @JerryM is our resident expert on long-term investing and divends/dividend reinvesting/etc. Maybe he can shed some more light.

    Also, if I may ask, are you close to retirement, or planning pretty far ahead?

    upload_2018-4-13_6-46-42.png
     
  3. Jerseysomerset

    Jerseysomerset New Member

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    Hi and thanks for your insight! I am about 20 to 25 years out from retirement. My thinking is that by reinvesting the devidends, I can get the benefit of increased stock volume ownership ad aggregate the increasing dividends. What are the dividend aristocrats to when he you referred? I will of course go look them up. While I completely concede that what I am doing is very risky, most of my retirement assets as under private management (the typical 1-2% a year but they are not growing anywhere close to the growth I see on this one stock. The same company also offers another stock that I was in initially but this one seems to get a higher return. The dividends have been lowering over time which is concerning but perhaps that’s only because folks are earning more from stock price appreciation in this climate, but maybe that will change longer term and folks will refocus on dividends longer term should the market turn south?
     
  4. Three Eyes

    Three Eyes 2018 Stockaholics Contest Winner

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    Look at the U.S. Dividend Champions section of this page. Download the Excel Spreadsheet or PDF file. Enjoy!
     
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  5. T0rm3nted

    T0rm3nted Moderator
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    I understand your premise of reinvesting the dividends, but if those reinvested shares continue decreasing over the next 25 years like that stock has done (down 50% since it's inception), you will still lose money because every share will lose value.

    The dividend aristocrats are the safer, more diverse, proven stocks that provide dividends. You can feel safe that these companies might not necessarily ALWAYS make you money, but historically they have proven to be the best.

    If I wanted to just play it safe and invest long-term for my future, that is the method I would use. If I had (for example), $50K saved up that I wanted to invest, I would stick $5K-$10K in 5-10 of the stocks from the dividend aristocrats and would set them up to automatically reinvest the dividends.

    Dividend Aristocrats - https://www.suredividend.com/dividend-aristocrats-list/
     
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  6. Jerseysomerset

    Jerseysomerset New Member

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    This is a very valuable resource! Thanks so much! As my timing is reliably poor, the price of my little OXLC is up the last couple days, but if I needed to sell, this would be a good time! I only bought in about a year ago around $10.70 so I’ve done ok, but this information you guys provided is so tremendously useful, I’ll do a ton more research and make some slow moves I think. Thank you all again!
     
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  7. Bridget Mallory

    Bridget Mallory Active Member

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    What is the best age to start investing for your retirement?
     
  8. T0rm3nted

    T0rm3nted Moderator
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    Whenever you start your first job! You can never start too early. The longer you wait, the higher the chances you'll be working well into your 70's to save enough. You start early enough, you increase your odds of a very early retirement!
     
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  9. Bridget Mallory

    Bridget Mallory Active Member

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    Thanks a lot for answering!
     
  10. Small time investor

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    Bridget I have a different strategy for you to supplement your retirement with. Education. Formal education. Get a degree. If you have one get another. It is one of the best ways to increase your income. If you are married and get divorced, they can't take your education away. Once you have it it's good until you are unable to use it. Another thing to think about is getting a hobby that you really enjoy. One that could possibly be a retirement job. Personally I collect antique tools. My retirement job is to sell them. Luckily the value of the tools is going up about 10% to 15% a year. Not a bad return but the value could also drop quickly. So to diversify I also have stocks.
     
  11. sunshinebest

    sunshinebest New Member

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    I agree, start early so you can have an early retirement
     
  12. Stonksalltheway

    Stonksalltheway New Member

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    My personal strategy is simple

    a. Diversify my portfolio and not put all my eggs in one basket
    - I'm looking into mutual funds, stocks, and crypto as a whole. I'm also interested in staking just to reap long-term rewards, got inspire with what $BTCS did with their digital asset holdings/ETH running validator nodes.
    b. HODL projects with real use cases
    c. Invest on projects that developers are chasing for.
     
  13. RobySul

    RobySul New Member

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    I don't know if you should buy these stocks since you don't like the risks. For a personal retirement strategy, you need a financial advisor to help you with this. I'm already retired. I thought I could make a good retirement strategy on my own, but it's not like that. However, I asked the help from humaninvesting.com specialists to have a good financial strategy for saving, investing, and, finally, distributing money meant to support myself during retirement. And thanks to them, I succeeded. Now I have no problem with finances. Thank them very much.
     
    #13 RobySul, Jun 16, 2022
    Last edited: Jun 21, 2022
  14. Rayak

    Rayak Active Member

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    I am a self-directed investor. I receive offers CONSTANTLY and incessantly to act as my "financial advisor", "financial manager", etc. from all kinds of brokers, banks, companies like Edward Jones, and even individual, private financial advisors (hint: RUN AWAY, don't walk!).

    I have spent a reasonable amount of time during my working life, learning about investments, markets, retirement strategies and more, so that I won't have to a. give up one percent or more of my net investment worth annually to "financial advisors", - but more importantly - b. so I won't be defenseless and turn my life savings over to incompetent, greedy, crooked or unskilled financial advisors!

    I'm sure there are good financial advisors out there. But for every six or eight honest, talented financial advisors out there, there's a Bernie Madoff wannabe. And another six or eight who are WAY more interested in what's better for THEM and the companies they work for than what's best for YOU.

    Going the "conventional route" of investing primarily in index ETFs has been proven to perform as well or better, over time, than the majority of financial advisors - including those provided by the major financial brokerages.

    Personally, I have slightly different priorities for my personal finances, so in order to meet my own requirements, I have had to spend time educating myself - including taking classes and seminars - more than a few of which turned out to be sales pitches for... you guessed it! financial advisors, where "lesson learned" was "sign it over to us and pay us to do it for you".

    Most of the really valuable lessons I've learned from reading and through the school of hard knocks, another way of saying "from experience gained in the real world".
     
    #14 Rayak, Aug 11, 2022
    Last edited: Aug 11, 2022

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