Oh boy does it feel good to get back into the swing of things. It's always difficult going through dry spells where I don't have any extra capital to invest and fund new purchases. Honestly, It's a sad and cold time to go through. I'm not expecting everyone to understand these feelings but to me, when I but my mind towards something I really have a strong drive to accomplish my goal. When extended periods of time pass and I don't have extra money to invest it really makes me focus on my finances and see how I have been spending money and why I haven't had extra capital to save.
I understand that life happens however and it always seems to happen that extra expenses creep up and bit you in the butt. I'm trying really hard to control my spending on extra items and really focus on just the essentials. I've done a pretty decent job and the only will big bills I have to pay off is the inflated expenses on my credit cards from going on vacation. Once these are paid off my spending will go back to normal and I will be able to get my savings back on track.
The extra money I was able to invest this month came from my long overdue paycheck that Subaru owed me for the lemon car that I purchased. This was really a blessing in disguise however because it made me realize of stupid buying a new car is and allowed me to used the capital I had to purchase a used car instead. Thinking back on this I'm actually really happy that I made this move. By purchasing a used less expensive vehicle I was able to reduce my monthly expenses by $173 per month! This is some serious monthly savings! It could have been even more if I had found a car for cheaper that I liked but honestly there was nothing that was really good in the $8,000 price range. I ended up having to finance a bit of money but it was only $5,700 compared to the $19,000 loan I had on the Subaru.
I had $2,000 extra after I purchased my new vehicle that I decided to transfer into my Independence fund since this would have been the money I would have been able to save if I wasn't paying the $310 a month. With all that said and done I made two additional purchases this month and I now have a well diversified portfolio with 15 names under my belt. I'm not just 5 companies short of my goal of 20 by the end of 2017. I already have my eyes set on some amazing dividend aristocrats that I will be adding very soon.
The first new company I added this month was LEG. I added 19 shares at $51.33 which increased my annual dividend income by $27.36. I have gladly added another dividend aristocrat under my belt with this company increasing their dividend payouts annually for 46 years straight. These are exactly the companies that I need to be adding to my portfolio. Aristocrats are the bread and the butter to all dividend growth investors portfolios.
A little background of about the company. Leggett & Platt (NYSE: LEG) is a diversified manufacturer (and member of the S&P 500) that conceives, designs, and produces a broad variety of engineered components and products that can be found in most homes, automobiles, and offices. The 134-year-old company (founded in 1883) is made of 17 business units, 21,000 employee-partners and 130 facilities located in 19 countries. Leggett & Platt is the leading U.S. producer of: a) bedding components; b) automotive seat support and lumbar systems; c) components for home furniture and work furniture; d) adjustable beds; e) carpet cushion; f) high-carbon drawn steel wire; and g) bedding industry machinery.
Here are some more facts that make me love this company
DIVIDEND YIELD 2.76%
PAYOUT RATIO 54.8%
FIVE YEAR DIVIDEND GROWTH RATE 3.80%
FREE CASH FLOW 428 MILLION
The second company I purchased this month was OHI. I purchased 31 shares at $33.10 which has earned me another $78.12 in dividend income per year. This is a very small investment I will be making into this company and I plan to keep a very close eye on this investment. It's not that I'm not sure about this company, but since the payout ratio is higher then most, I will keep closer tabs on this. Besides the amazing dividend income, I have been doing my research into the REIT sector lately and this company continues to be the top choice in my book. Management has a clear and concise goal of increasing shareholder value and returning more to the investors.
Here are the facts about this investment.
DIVIDEND YIELD 7.98%
PAYOUT RATIO 74.6%
DIVIDEND GROWTH 7 yrs
FREE CASH FLOW 516 MILLION
FIVE YEAR DIVIDEND GROWTH RATE 8.80%
All in all, this has been a rather successful month. I'm super excited about my two newest purchases. My portfolio is currently sitting at 15 companies in my holdings. I'm just 5 companies away from my yearly goal of 20 companies in my portfolio and $16,000 away from my balance goal. Ill be starting the month of June off strong also as I will have another infusion of fresh capital into the Independence Fund. I already have my eyes on a few companies but I can never predict what the market will hold for me.