Wealth Systems: Dividend A Day, Part V

Building the Ultimate Income Portfolio

Congratulations, you made it to Part V of our VII part series.

Wealth Systems is dedicated to the idea that individual investors should have access to the same information, the same strategies… the same wealth building systems as the Elite.

My background in investment banking and alternative investments connected me with hundreds of professional investors including Sovereign Wealth Funds and single family offices. This prompted me to study the history of wealth making, including and especially the financial histories of the wealthiest families in Europe and America.

One common thread between all of them: current income.

They all had at least one income stream. Most had multiple. The best and biggest families layered passive income streams with active endeavors, and then compounded this wealth with financial engineering.

We’re unpacking 5 wealth engines in particular:

1. Current Income ←this series

2. Options

3. Direct Lending

4. Direct Investing

5. Information Product/Service Offering

The idea with this wealth engine is simple:

If you have 90 different investments that pay dividends, you will (on average) receive a dividend payment every day.

With a passive income machine running like this, you can then:

• make your 91rst, 92nd, 93rd, etc.. investment

• add more capital to your existing positions

• invest in information sources that unlock more opportunities

• buy a cash flowing business

• buy a piece of a development asset (copper mine, etc..)

• offset your monthly operating expenses

• treat your family to a nice vacation

When you activate a wealth engine like this and then build another wealth engine… the cash flows compound and assets accrue.

It’s so much easier to make money with money.

Speaking of, let’s continue our series.

Before we dive in, make sure you’ve enjoyed Parts I, II, III & IV.

Part I here:

Wealth Systems: Dividend A Day, Part I

Read full story

Enjoy Part II here:

Wealth Systems: Dividend A Day, Part II

Read full story

Part III:

Wealth Systems: Dividend A Day, Part III

Read full story

Part IV:

The Joys of Purchasing $3,150,000 of Stock

Last week we began to construct the model portfolio.

We started with 5 positions and discussed each company, risks/rewards, etc..

This week we are adding 45 positions:

45 x $70,000 per position = $3,150,000 investment

As a reminder, yield scales.

So it really doesn’t matter if you only have $7,000 per position to invest (or $700).. the key is to get your boat in the water and start benefiting from your assets.

Here’s where we left off, owning these 5 names:

1. VZ — Verizon Communications Inc.

2. CQP — Cheniere Energy Partners, L.P.

3. UHT — Universal Health Realty Income Trust

4. MO — Altria Group, Inc.

5. ABR — Arbor Realty Trust, Inc.

I chose that wide assortment to prompt a high-level discussion of the difference between REITs, MLPS and Common Stocks.

The 45 names we’re adding today bring the portfolio up to 50 companies — here it is in all of its glory:

Let’s walk through these columns quickly for orientation purposes:

• Market Capitalization

• Share Price

• Annual Yield

• Annual Payout

• Payment Yield

• Payout Amount

• Frequency

• Industry

Market Capitalization is the value of a company that is traded on a market, the sum total of all the shares.

Share Price is the cost to purchase a single share of a given company’s stock.

Annual Yield is the return you will receive from your investment, here is a very simple example:

$100,000 invested into a REIT (Real Estate Investment Trust) with a 7% annual yield returns $7,000 per year in dividend payments.

If monthly, you'd get $583 every month.

Most pay quarterly -- in that case, you'd get $1,750 every 90 days on the payment date.

Annual Payout is the total payment amount a shareholder will receive over 12-months of received payments.

Payment Yield takes into account monthly, quarterly or annual payment schedules to calculate how much you will receive per payment.

Payout Amount this builds on the Payment Yield calc above, and ascertains how much the payout payment will be.

Frequency indicates whether this stock is a monthly or quarterly payer.

Industry indicates the Sector this company operates in.

Closing Thoughts and Next Steps

This week we invested $3,150,000 into our hypothetical model across a wide range of asset types and company structures.

Next week we’ll finish listing the full Dividend a Day model portfolio.

90 names in all!

We’re going to add a cluster of monthly payers to increase our monthly/weekly average payment frequency.

We will also add some “yield spikes” in the form of mREITS and other securities.

We’re live building the ultimate tool… the Dividend a Day: Ultimate Income Portfolio.

Once we get your cash flow engine up and running, then we’ll start working with Options and monetizing the existing assets in several ways.

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