I’ve always considered myself a good saver, but had fallen off the tracks a bit in the last few years. A side comment made by a friend at a party flipped a switch in my brain and my wallet, and I’ve been aggressively learning, saving, and investing since.
Starting a blog
I’m excited to share in the hopes it may help other people. I want:
- A recorded history
- Inspiration for future me
I turned 34 in 2017. I got a degree in engineering when I was 22. I spent the next six years pursuing everything except engineering. I sporadically saved a few thousand dollars in a Roth IRA during this time.
At 28, I finally succumbed and have been in a steady and lucrative engineering position since. At times, I’ve maxed out my 401k. Other times, I haven’t contributed a single dollar. At the same time, I purchased a house and managed to effectively put 20% down. I also took a five-month self-paid sabbatical. I’m excited to expand on some of these things in upcoming blog posts.
A light bulb goes on
I often thought retirement was not in my future. I had a year’s salary or so saved up in retirement accounts at the age of 33. Assuming I live until 85, I figured that meant I could retire when I turned 84. It seemed dim.
And that was when I mentioned my lackluster investment experiences to a group of friends. One of them looked at me and said, “Let’s talk.”
I never actually did talk to him. Instead, I started a $6,000 brokerage account and picked about 12 companies that I believed were undervalued based on a free stock screener.
The next six months were a learning process. I contributed more as time went on, I chased high yield, or in some cases, recently discontinued dividend companies. I was a blind mouse trying to go through a maze.
I discovered dividend growth investing
I eventually stumbled onto a blog that chronicled steady, growing dividends. The author described exchanging $1,000 to buy a low yield, fast-growing dividend stock. Every $1,000 would generate around $30 of yearly income for the rest of his life. The idea clicked with me.
I refocused on companies with a dependable, growing dividend. I also re-evaluated my earlier stock choices and made a few adjustments.
Now that I had a strategy, I began taking advantage of my available tax-sheltered accounts, and warmed up to the idea of mutual funds and ETFs in addition to individual stocks.
My current standing
A sizable percentage of my take-home pay now goes into my retirement accounts. I envision replacing my salary with dividend income. At that point, I will be able to choose whether to keep working, take another sabbatical, retire, or do whatever I want! That’s my definition of financial freedom.
For now, I reinvest all dividends. Each contribution I make speeds up my process. I’m glad I figured it out now rather than later, and I actually get enjoyment out of buying a good company. Follow along on my progress as time goes on!
I hope to hear from others, and I enjoy reading other peoples’ progress as well.