I am a long term dividend growth investor who loves to invest in dividend growth stocks. I invest for long term and focusing to invest each month with 10% of my salary and want to reach financial freedom before I retire. I am updating my portfolio every month and sharing it with all of you.
A savings account is a financial product that allows you to deposit money and earn interest on your balance offered by the banks. There are numerous benefits of having a savings account. Some of the benefits of having a savings account include the following:
Earning interest: Savings accounts typically earn a higher interest rate than a checking account, which means you can earn money on the money you have saved.
Safety and security: Savings accounts are FDIC-insured, which means that your money is protected by up to $250,000 in the event that the bank fails. Always read if the bank is offering the account with FDIC insured. Just see the crypto exchange disasters. They were offering high APY but none of them were FDIC insured and the people lost their savings.
Easy access: Most savings accounts allow you to access your money through ATM or debit cards, checks, or online banking.
Flexibility: You can usually open a savings account with a small initial deposit and make additional deposits at any time.
Goal setting: A savings account can help you reach your financial goals, whether it’s saving for a down payment on a house, an emergency fund, or a specific purchase.
Discipline: Having a savings account can help you develop a habit of saving money regularly, which can be beneficial for your financial well-being. If you have dependent kids you should discipline them financially. They need your help to build their future.
Benefits of Savings account compared to CDs:
A certificate of deposit (CD) is a financial product that allows you to deposit money for a fixed period of time, typically ranging from a few months to a few years. CDs typically offer a higher interest rate than a savings account, but they also have some differences that may make a savings account a better option for some people. Some benefits of having a savings account compared to a CD include:
Liquidity: Savings accounts allow you to access your money at any time, whereas CDs have a fixed term and you may face a penalty for withdrawing your money before the term is up.
Flexibility: With a savings account, you can make deposits and withdrawals as needed, whereas a CD requires you to commit your money for a fixed period of time.
Risk: CDs are considered a low-risk investment, but they do not offer the same level of protection as a savings account, which is FDIC-insured up to $250,000.
Ease of use: Savings accounts are generally easier to open and manage than CDs, which may require a higher minimum deposit and may have more complex terms and conditions.
Ultimately, whether a savings account or a CD is the better option for you will depend on your individual financial situation and goals. It may be worth considering both options and weighing the pros and cons to determine which is the best fit for you.
Banks that are currently giving high interest as of 01/15/2023:
APY: 3.75%, $0 Minimum Balance reqd, $0 monthly fee, Direct deposit from your employer is required to get the APY. The checking account will give 2.5% APY.
APY: 4% in the Brokerage account, $0 Minimum Balance, $5 monthly fee for gold members.
APY: 1.5% in the brokerage account, $0 minimum balance, $0 monthly fee for non-gold members.
I personally have three savings accounts. Currently, I am saving in the Synchrony savings bank. I also keep $1,000 in DCU bank to get 6.17% interest. I also keep money in Robinhood brokerage account.
A savings account is a financial product that allows you to deposit money and earn interest on your balance offered by the banks. There are numerous benefits of having a savings account. Some of the benefits of having a savings account include the following:
Earning interest: Savings accounts typically earn a higher interest rate than a checking account, which means you can earn money on the money you have saved.
Safety and security: Savings accounts are FDIC-insured, which means that your money is protected by up to $250,000 in the event that the bank fails. Always read if the bank is offering the account with FDIC insured. Just see the crypto exchange disasters. They were offering high APY but none of them were FDIC insured and the people lost their savings.
Easy access: Most savings accounts allow you to access your money through ATM or debit cards, checks, or online banking.
Flexibility: You can usually open a savings account with a small initial deposit and make additional deposits at any time.
Goal setting: A savings account can help you reach your financial goals, whether it’s saving for a down payment on a house, an emergency fund, or a specific purchase.
Discipline: Having a savings account can help you develop a habit of saving money regularly, which can be beneficial for your financial well-being. If you have dependent kids you should discipline them financially. They need your help to build their future.
Benefits of Savings account compared to CDs:
A certificate of deposit (CD) is a financial product that allows you to deposit money for a fixed period of time, typically ranging from a few months to a few years. CDs typically offer a higher interest rate than a savings account, but they also have some differences that may make a savings account a better option for some people. Some benefits of having a savings account compared to a CD include:
Liquidity: Savings accounts allow you to access your money at any time, whereas CDs have a fixed term and you may face a penalty for withdrawing your money before the term is up.
Flexibility: With a savings account, you can make deposits and withdrawals as needed, whereas a CD requires you to commit your money for a fixed period of time.
Risk: CDs are considered a low-risk investment, but they do not offer the same level of protection as a savings account, which is FDIC-insured up to $250,000.
Ease of use: Savings accounts are generally easier to open and manage than CDs, which may require a higher minimum deposit and may have more complex terms and conditions.
Ultimately, whether a savings account or a CD is the better option for you will depend on your individual financial situation and goals. It may be worth considering both options and weighing the pros and cons to determine which is the best fit for you.
Banks that are currently giving high interest as of 12/29/2022:
APY: 3.5%, $0 Minimum Balance reqd, $0 monthly fee, Direct deposit from your employer is required to get the APY. The checking account will give 2.5% APY.
APY: 4% in the Brokerage account, $0 Minimum Balance, $5 monthly fee for gold members.
APY: 1.5% in the brokerage account, $0 minimum balance, $0 monthly fee for non-gold members.
I personally have three savings accounts. Currently, I am saving in the Synchrony savings bank. I also keep $1,000 in DCU bank to get 6.17% interest. I also keep money in Robinhood brokerage account.
This blog was originally written on Medium by the author.
Welcome to the review of my dividend growth stock portfolio that I have been maintaining since 2017. Many of you will ask what is the purpose of writing and sharing my dividend portfolio in the article. I want to show examples of how one can build wealth by investing in dividend-paying stocks over the long term by sharing the dividend income in my portfolio. I started investing in dividend-paying stocks in 2017 with no income from dividends. In 2022, I am earning $2,583 yearly from dividends. How much money am I adding monthly to my portfolio? I invest 10% of my salary in dividend stocks and reinvest all the dividends to buy back the stocks. The best part of dividend stocks is the yearly increase of dividend $ amounts and reinvesting dividends to buy additional stocks of the company’s stock which generates more income from dividends yearly. A good dividend company increases at least 5% dividends a year; some companies with high growth may increase by 20% or more. So on average, a dividend investor can see approximately ~7% increase in income from dividends which must be higher than your 9 to 5 job. To identify a good company that will keep increasing dividends, you must go through the company’s financial health and business model.
Dividend Portfolio:
Building a dividend portfolio takes time, you just cannot start buying stocks because they have a high dividend yield. As I mentioned earlier, before buying the stocks you have to understand the company’s business model, how the company will perform in the future, the earnings growth, total cash flow, long-term debt, etc. I started to buy dividend stocks in 2017. I am doing DRIP since then and regularly investing in stocks. I have diversified my portfolio to balance my investment.
Sector distribution of my portfolio
I am largely invested in high-yield dividend-paying ETFs. I am holding Schwab U.S. Dividend Equity ETF (SCHD) and Vanguard High Dividend Yield ETF (VYM). My second largest sector is tech followed by the healthcare and financial sector.
Dividend Portfolio Pie chart
My highest position is in Apple Inc (AAPL) although I did not invest the most in this stock. The last time I purchased Apple was in 2018. Since then the stock price has increased more than 3 times. I am only doing the DRIP every quarter for all the stocks.
At the beginning of 2023, my annual dividend income is $2,583.38. In the last year, my income was $1,588.92 which is a 62.59% increase from the previous year. In 2020 and 2021, my income was almost the same as I sold a good amount of my stocks to pay the downpayment on my first home at the end of 2020.
Annual Dividend Income since 2017
The column chart below shows the growth of my dividend income monthly basis for the last five years. You can see from the chart how my income is increasing every year. I am achieving this just by investing in dividend stocks on a monthly basis and reinvesting the dividends.
5 year dividend comparison
The quarterly chart also shows the increase in my income quarterly. If I keep investing as planned it will grow rapidly as the compounding interest will play a bigger role with time.
Quarterly Dividend Distribution
The table below shows the Yield on Cost (YOC) and the current yield of my current portfolio holdings. My biggest gainers are Apple (AAPL), Microsoft (MSFT), Mastercard (MA), Visa (V), etc. I have most of these big gainers between 2017 and 2018. Another noticeable thing you will see that the YOC for Apple, Microsoft, Mastercard, and Visa. The current yield is too low for all of them, but my YOC is quite high, especially for Microsoft at 3.09%. This happened because of their big dividend increase every year. It is increasing my yield every year. YOC is calculated by dividing a stock’s current dividend by the purchased price while the current yield is calculated by the current dividend by the current stock price.
Portfolio Gain %
The stocks in the red zone or the negative gain stocks are all my recent buys except for 3M (MMM). I am in negative gains for quite a long time for 3M. Currently, I am reinvesting the dividends to dollar cost averaging. I bought Caterpillar (CAT) and Chevron (CVX) during the pandemic low and they more than doubled since then.
In November, I opened a position in Medtronics (MDT). This is a $102B Irish company that develops and manufactures medical therapy devices for healthcare systems worldwide. The company has a long history of success and a solid business model. Recently the price of the stock dropped significantly. I was watching the stock for a good entry price. I have added at $77.2 average price. Holding this stock for the long term will give a good return. Also, the price of the stock was 42% lower than its all-time high ($135.16). The yield is 3.53%, the payout ratio 51.13%, PE ratio is 14.5, and the 5-year CAGR is 8.62% which makes the stock a buy for me.
Medtronic important numbers
The current low price and the high dividend yield make this stock very interesting. I will keep adding until it reaches 2.5% of my portfolio.
Stock price, TTM Dividend payout, and TTM Dividend Yield for $MDT. Source: Macrotrend
The stock’s free cash flow is 3.598 per share. Free cash flow indicates a company’s ability to pay dividends, increase dividends in the future, pay down dividends, and also to grow the business. Although the cash flow decreased recently, it is still higher compared to the beginning of 2021. The price to free cash flow also increased higher recently to 21.43 which is a little bit higher. Generally, 15 to 20 is good. Also, the company’s debt-to-equity ratio dropped, and currently, the value is 0.458 which is not great but anything below 0.5 is considered good.
Source: Macrotrends.
I have used Macrotrends for the charts. They are free to use.
I have shared my dividend growth portfolio to make an interesting topic about dividend investing for new investors to grow wealth and earn passive income by just investing in those stocks. I have also highlighted the importance of dividend reinvesting and compounding interest. I have also shared my November purchase. I purchased Medtronic Inc. (MDT) in my dividend portfolio and I am holding it for long-term.
Disclaimer: I am not a financial advisor and I am not advising anyone to buy or sell any stocks. This author will not be liable for any type of financial damage that may occur by following my articles. I am just sharing my portfolio with everyone if anyone likes my strategy and gives me feedback. Please do your own analysis before investing in any companies.
This blog was originally written on Medium by the author.
