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:
Current Income ←this series
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:
Enjoy Part II here:
The Joys of Purchasing $3,150,000 of Stock
Last week we began to construct the 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:
VZ — Verizon Communications Inc.
CQP — Cheniere Energy Partners, L.P.
UHT — Universal Health Realty Income Trust
MO — Altria Group, Inc.
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 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 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.
Wealth Systems is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
NOTE: The content provided on this blog is for informational purposes only and does not constitute financial, accounting, or legal advice. The author and the blog owner cannot guarantee the accuracy or completeness of the information presented and are not responsible for any errors or omissions or for the results obtained from the use of such information.
All information on this site is provided 'as is', with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied. The opinions expressed here are those of the author and do not necessarily reflect the views of the site or its associates.
Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise. Readers are advised to conduct their own independent research into individual stocks before making a purchase decision. In addition, investors are advised that past stock performance is no guarantee of future price appreciation.
By using this blog, you agree to hold the author and the blog owner harmless and to completely release them from any and all liabilities due to any and all losses, damages, or injuries as a result of any investment decisions you make based on information provided on this site.
Please consult with a certified financial advisor before making any investment decisions.