dividends – ROAD TO WEALTH!

If You Don’t Learn This, You Lose 66% Of The Time

June 4, 2022June 3, 2022 by Road-to-wealth, posted in FINANCE / MONEY

The vast majority of people only know how to buy shares and sell them when the price rises above the purchase price. However, the price in the market has 3 directions.

1. Climbs

2. Floats sideways

3. Drops

It means you only make money 33% of the time. You spend the other 66% waiting while the price goes nowhere or drops. Therefore, you must learn how to make money when one of the other options other than a price increase happens.

The market, in general, has been falling in recent months. So most people have seen their accounts plummet. But today, I’m going to show you how you can make money regardless of the price direction of your investments.

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Using the strategy of catching dividends, I invested in Intel Corporation (INTC).

Intel company had an ex-dividend date of May 5, 22. Two days prior, I invested $4,540. I made a purchase of 100 shares for $45.40.

Once the purchase went through, I quickly sold an option expiring May 6, 22, for a credit of $38.

Since then, Intel’s price has dropped and remained below $45. Typically, people are left waiting for the price to recover, looking at their accounts stagnant for weeks or months.

On May 6, 22, as Intel’s price did not reach $46 or more, the option lost most of its value. So I did what is called a ‘roll.’

I bought that option for $3 and sold the option expiring May 13, 22, for a credit of $54, giving me a net income of $51.

Similarly, the price of Intel did not recover and remained below $45. Repeating the process, on May 13, 22, the option lost all its value again. I bought the option for $1 and sold the one expiring May 20, 22, for $26. For another $25 net credit.

On May 20, 22, the price still did not rise to $45 or more. Unfortunately, I couldn’t watch the market that day, so the option expired and died, losing its value.

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Starting the week of May 23, 22, I sold a new option expiring May 27, 22, for a $5 credit. Likewise, the price of Intel did not recover, so on May 27, 22, I bought the option for $1 and sold a new one expiring on June 3, 22, for $26, for another net credit of $25.

Since I held the shares on the ex-dividend date of May 5, 22, I received a cash payment of $36.50 via dividend on June 1, 22.

Arrived on June 3, 22, the price closed at $43.39, for which the option expired worthless. But, once again, I couldn’t watch the market on this day, so I didn’t do another roll-over.

For 1 whole month, the price of Intel has remained below the purchase price. However, I have generated a total of $184.50 in cash. Subtracting the $5 I have spent on option purchases, I have a net profit of $179.50 or a 4% for the month.

I still hold the 100 stocks on which I will continue to sell options at or above the purchase price.

With **Robinhood**, you can get cash dividends from well-known and established companies.

As you can see, a person with no knowledge of the market would be holding their shares and would have a loss on paper of $201 and nothing more. That person is possibly frustrated with the market because it hasn’t gone up. But we learn to make money in the market no matter how it goes; we make cash while we wait for the recovery.

I want to teach you these strategies and others for free. So I am working on a YouTube channel in which I will teach you everything I know through videos. The channel will be Investi for Spanish-speaking individuals and InvestCity for English-speaking people. We estimate its opening for the end of summer for Investi and early next year for InvestCity.

Stay tuned, and we will provide you with more information soon.

Now, begin your Road to Wealth!

Leave your comment below. If you liked it, pay it forward. Please share it on social media and help others become successful as well. Your success will be the result of two things: Knowledge and Action.

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DISCLAIMER: Please read our disclosure policy here. This post contains affiliate links, and I earn from qualifying purchases at no cost to you. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Road-to-wealth.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles, and other features are for educational purposes only and should not be construed as investment advice. Information for any trading observations is obtained from sources believed to be reliable. Still, we do not warrant its completeness or accuracy or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk, and it is your sole responsibility to evaluate the information’s accuracy, completeness, and usefulness. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.

If You Are Overthinking About Investing and Time is Passing By, This is What Happens

May 22, 2022May 22, 2022 by Road-to-wealth, posted in FINANCE / MONEY

Friends, Colleagues, and even Family Members ask me, “Joey, Why are you so committed to investing?”

It is a question that makes me both happy but also sad.

Happy because everyone around me sees my commitment to my financials. But also Sad because they still don’t understand what moves me.

My goal is that by the end of this article, you will understand my point of view towards the future and take action to help yourself along the way.

I got involved in the markets during the 2008-2009 crash. Believe me or not, it was one of the best times to get involved in the markets because it quickly taught me that it was not easy, especially if you were a trader more than an investor.

Although trading is exciting, it takes time to analyze the markets daily. Try to find what is moving and catch the perfect windows to jump in and out. Unfortunately, it is an ideal recipe for burning out quickly.

On the other hand, let’s say that I’m lazy. I don’t want to be stuck to my computer all day looking for opportunities. So use that time in other productive activities while the markets do their thing, and you still get paid for being patient.

To answer the first question, “why am I so committed,” is because I realized the earlier you begin investing, the sooner you can reach your goal and the less time you have to spend working for someone else. Understand that I said “Investing” and not “Trading.”

Most financial advisors teach individuals about the 4% rule at retirement. Unfortunately, that is a horrible strategy because it involves withdrawing 4% of your capital to live and cover expenses every year. As a result, most people will have little to no money towards the end of their years.

It puts a severe amount of pressure on their kids and family members. Now, they have to cover their expenses and yours as well.

Who wants to put that pressure on their kids?

I’m pretty sure no one does. That is why I have an alternate strategy that will work wonders for everyone.

The idea is to invest in assets that will cash flow enough money to cover your expenses while leaving your capital intact. Then, when we die, our kids or family members can inherit that capital (investments) and make their lives easier.

How it works:

Although there are several cash flow assets, we will concentrate on dividend-paying stocks and ETFs.

Why?

Because when you invest in dividend-paying stocks and ETFs, you have several ways of making money. The most common one is capital gains as time passes. If they increase their dividends with time, your cash flow also increases. You can also learn how to sell covered calls and other income strategies to bring even more money each month.

While all of this is happening, you are not depleting your capital. Meaning your net worth will never decrease. On the contrary, you can keep increasing your net worth while living the life you want.

So, What happens if you keep postponing your investing?

In simple words, you won’t have enough cash flow to retire comfortably.

One of two things happen:

1. You can’t retire; hence, keep working longer.

2. You have to increase the money you invest to catch up.

With **Robinhood** you can get cash dividends from well-known and established companies like Coca-Cola (KO).

Let’s look at an example:

Mimi and Joey both begin with a $3,000 initial investment. After that, both invest $300 monthly and receive an average annual return of 8.5%. Mimi is 20 years old, while Joey is 30 years old.

In 10 years, they both have $60,826.

In 20 years, they both have $190,935.

In 30 years, they both have $485,107.

And this is where things take a turn. Joey was 30 when he began investing and is now 60 years old and ready to retire.

Meanwhile, Mimi has another 10 years of compounding before she turns 60 years old, which will end up with a portfolio worth $1,150,226.

Who will have a better life using the 4% rule?

If they both use the 4% rule at retirement, Joey will be receiving $19,404 from his withdrawals. On the other hand, Mimi will be receiving $46,009 for her withdrawals.

You can say that Mimi will have a better life because she will receive more than double what Joey will receive. He will have to figure out how to live on $19,404 a year. However, both of them will run out of money by age 85.

Why?

Because regardless of how big your portfolio is, if you withdraw 4%, you will deplete your account in 25 years.

Just do the math:

Joey – $19,404 * 25 years = $485,100

Mimi – $46,009 * 25 years = $1,150,225

In the end, neither one will have anything to give to their kids, and if they live past their 85 birthday, their families will have to support them for the rest of their lives.

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What if they cash flow instead of withdrawing capital?

Now, this is where my strategy beats the financial advisors. Instead of withdrawing capital, we can build a dividend-paying stock and ETFs portfolio. The investments can be paying 3%-4% today, but if they increase their dividend payouts yearly, by the time you are 60 years old, you could be receiving dividend payouts well above 6%-8%.

Using this conservative estimate, Joey could receive anywhere between $29,106 to $38,808 in dividends. But, of course, it could be higher if Joey learns how to sell covered calls or other income strategies.

As for Mimi, she could receive between $69,013 to $92,018 in dividends. But, again, it could be higher if she learns the strategies previously mentioned.

I think both of them could live comfortably with those amounts, and the best part is they will never run out of money. Their portfolios will remain the same or even increase. Then, when their time is up, and they move on to a better place, their families will inherit their money, or they could give their money to charity.

It is your money, so do with it what you feel is the right thing to do.

Sin companies that pay your expenses and more.

Key takeaways:

The sooner you begin, the sooner you will reach your goals.
Concentrate on cash flowing assets instead of accumulating money to withdraw in retirement
Teach your kids and family members, so they too have a better life
The 4% rule is widespread; however, it is flawed
The more you postpone investing, the more money you will have to invest in catching up.
Begin your investing journey today

Note:

If Joey wants to have the same amount as Mimi by age 60, he will have to invest $750 instead of $300. That leaves Joey with $450 less each paycheck. So don’t be like Joey. Start now!

Now, begin your Road to Wealth!

Follow me on TWITTER, PINTEREST, INSTAGRAM, LINKEDIN, and FACEBOOK for more posts and updates. You can also reach me here with any questions.

If you are not receiving dividends, you are missing out!

Which Oil Stock Is A Better Buy? Exxon Mobil (XOM) or Enbridge (ENB)

March 20, 2022March 19, 2022 by Road-to-wealth, posted in FINANCE / MONEY

Due to a structural supply deficit and the impact of the Russia-Ukraine war, oil prices have risen of late. Exxon Mobil (XOM) and Enbridge (ENB) are two leading names.

Although both companies are in the oil and natural gas sector, their business models are different.

On the one hand, Exxon Mobil (XOM) concentrates on searching, producing, processing, and selling oil, natural gas, and derived products, including gasoline and chemicals. They have a straightforward correlation to supply/demand for the products and price changes in the mentioned commodities.

On the other hand, Enbridge (ENB) facilitates the transportation and storage of oil, natural gas, and related products. They have a more stable infrastructure with fee-based contracts. They get paid a fixed amount for transporting a specific volume of these commodities through their pipelines. As a result, their exposure to the shifts in the price for these commodities is relatively low compared to Exxon.

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Both companies have been great for income investors. Exxon offers a 4.4% dividend. Meanwhile, Enbridge offers a hefty 6% dividend. In addition, both companies are Dividend Aristocrats as Enbridge has raised dividends for 27 years in a row, while Exxon has done the same for 39 years.

One concern with Enbridge is their payout ratio running at 119%. They pay a $2.69 dividend but only have an EPS of $2.25. It could be trouble in the future if they don’t increase their earnings. However, their annualized dividend growth is currently 5.48% since 2000. Their 5-year growth rate is 10%.

Meanwhile, Exxon’s payout ratio is only 65% leaving plenty of room for future increases. Their current dividend payment is $3.52 with an EPS of $5.38. Their annualized dividend growth sits at 3.20%, with 5-year dividend growth of 3%. Also, their exposure to higher oil prices could help them ramp up their dividend growth in the coming years.

Enbridge infrastructure is more of a defensive business, helping them to remain profitable during hard times like during the Covid-19 pandemic. During this time, Exxon saw its earnings drop to negative numbers in Q2 and Q3 in 2020.

Enbridge proved their excellent resilience during these challenging times, seeing their cash flow per share rise while Exxon struggled during the same period.

Fast forward to the current environment, and Exxon is forecasted to grow their earnings per share by 50%, while Enbridge’s forecast is 7% this year.

Although renewable energy is experiencing growth worldwide, the consumption of oil and natural gas will likely keep rising in the coming years. The IEA forecast natural gas demand to grow by 30% by 2040. That gives investors almost two decades of growth still in the tank. Everything else after that will largely depend on where the world is moving to as far as consumption goes.

Global oil demand will continue to grow through 2030, at least by the IEA forecasts. The trend gives the energy industry a solid outlook for the next couple of decades.

Which stock is a better buy?

Both stocks could easily continue to outperform the broad market as long as the pricing environment for energy remains as is.

If you want a significant oil price exposure and are willing to remain calm when the supply/demand for oil is down, meaning that prices could decline, leading to lower profitability for Exxon, then Exxon (XOM) is your pick.

If you want less exposure to oil prices but instead a more stable and reliable cash flow offering a solid dividend growth, then Enbridge (ENB) is your pick.

Ultimately, suppose you want exposure to both. Then, you can either buy both or something like the energy ETF (XLE), a basket of energy companies with an annualized dividend growth of 10.31% and a current dividend yield of 4%.

Now, begin your Road to Wealth!

Leave your comment below. If you liked it, pay it forward. Please share it on social media and help others become successful as well. Your success will be the result of two things: Knowledge and Action.

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GAMESTOP (GME) CONTINUES TO COLLAPSE; IN WHICH DIRECTION IS THE COMPANY GOING?

March 19, 2022March 18, 2022 by Road-to-wealth, posted in FINANCE / MONEY

Key points:

– Earnings fall short

– Company “transforms” as investors pray for a better future

– Negative sentiment after having doubts in creating a market for NFT’s

Since it became a social media meme, GameStop (NYSE: GME) company has been a highly volatile stock. However, without any solid foundation in terms of financial fundamentals, the shares survive because of investors who continue to create an advertising bubble on social media.

Since June 2021, the shares have been steadily down. The company reported a net loss of $141M, which translates to a loss of ($1.86) per share—falling well short of Wall Street projections of just ($.85) per share.

The company has a questionable direction and continues to lose value while there are no signs of improvement soon. The company says it is transforming itself into a technology company obsessed with its consumers. Still, nothing happens on the surface.

When they publicly announced their profit/loss, they talked about the metaverse and NFTs as possible solutions.

Wedbush analysts argued the opposite. They were saying that it would have limited success. They also cut their price projection with a target between $45 and $30.

Today after being worth over $300 in the summer of 2021, they are worth just $90. Not only that, but with this cut in projection, investors are eyeing more losses shortly.

The company has not adapted to the new digital world and may disappear just like BlockBuster did a few decades ago.

They may survive, but their options are limited, and their chances run out.

When the rest of the investors wake up to reality, there’s a very high probability that we’ll see GameStop back trading in the single digits as it did between 2019 and 2020.

Be very careful where you invest your money and seek information before investing. Please do not get carried away by social media and their advertising.

Now, begin your Road to Wealth!

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I officially doubled the output of my co-workers, and this is how I did it:

March 16, 2022March 12, 2022 by Road-to-wealth, posted in FINANCE / MONEY

Humans are all creatures of habit. Some habits help you improve while others drag you down. So if you are not as successful as you wish, you need to tweak a few habits to go from negative to positive.

Every morning, you wake up, then what do you do? Exactly! You have a routine. That is what habits are, something that you repeatedly do. No longer thinking about it, like Nike, you “Just do it”!

With this in mind, think of the person you wish to become, then take action in that direction.

For example, let’s say that you want to become more fit for the summer, then create a simple habit that will grow into something big. Start with walking for 10 minutes each day—no need to get on a treadmill for hours. Habits should start simple and not feel like a hassle because they will be your self-improvement’s compounded interest. I assure you that those 10 minutes will seem like nothing in a few weeks, and you will begin adding time. Meanwhile, your body will start re-shaping itself into the person you wish to become.

Starbucks (SBUX) pays dividends that can cover your daily coffee.

Create your routine. Each day will look similar, so ensure to be rehearsing good habits repeatedly until you become automatic like a system. Remember that you do not rise to the level of your goals and expectations. Instead, you will fall to the level of your systems. If you have a broken system, you should only expect to fail.

Schools and Politicians (aka the government) are great examples. It doesn’t matter which teacher or politician takes charge; they keep failing over and over again. So, are they all that bad? Not really. There are plenty of great teachers and politicians as well. But, sadly, the system used to run schools, and the government is broke. So, everyone within that system will fail regardless of how great they are individual. The same goes for you. You may be a great person, but it becomes harder to succeed if you have bad habits.

Forget about goals. Goals are great for giving you direction. Rather, focus on your systems instead. Systems are best for making progress.

How did I double the output of my co-workers?

I created a system. I prioritized the boss’s projects on a calendar for the beginning of the month. Then, all the small projects were spread daily throughout the week.

Every morning, I did the projects that I knew wouldn’t take me much time. I knocked out 3-4 little projects every morning. In the afternoon, I started taking down the big projects. Some took me all afternoon. Others were partially complete.

If I cannot finish the big project the same day, I will write it down for the next business day.

On the next business day, you have 2 options:

1. Do the little projects in the morning and the big projects in the afternoon.

2. Finish the big project from the previous day in the morning and use the afternoon for everything else.

I like to keep the routine or system running the same. That means I keep doing the small and quick projects in the mornings and leave the big projects for the afternoon. Finishing those little projects gives me a sense of pride and confidence that I carry into the afternoon to knock out the big projects.

I remove all distractions from my work area. Once I’m focused and in the zone, I can go for hours without stopping. Unfortunately, my co-workers spend too much time looking at Facebook, Twitter, and Instagram. You may not think about it, but try it for yourself. Remove your phone from your work area and see how much you can get done without distractions.

The only exception to changing my routine is that a big project is due soon, and we need to ensure it’s complete by a specific upcoming date.

Pepsi (PEP) is the owner of my favorite drink ‘MountainDew’.

A similar thing happens when it comes to investing. I have invested and subsequently have a more significant net worth than all my co-workers. Do you want to know why and how?

Simple, I have a system to invest my money every month automatically, and I have consistency.

For more lessons, tips, and tricks, read the book by James Clear titled “Atomic Habits.” You will find easy and proven ways to build good habits. For creating businesses that don’t need you to operate, read “The 4-Hour Workweek” by Timothy Ferriss.

Summary:

That is how you can do the same. Look at your habits. Transform yourself by removing bad habits by replacing them with good ones. Those good habits will compound into even better habits, and you will become the person you always dreamed you could be. Create a daily system that will incorporate the routine you will use from the moment you wake up, have breakfast, go to work, lunch, work the second part of the day, exercise or practice a hobby, return home, enjoy some family time, and bed head. You can add or subtract things as needed. But know that systems are everything. You have to be the designer of your life. Take charge!

Now, begin your Road to Wealth!

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MARKET REVIEW WEEK 21-25 FEB & DIVIDEND INCREASES

February 27, 2022 by Road-to-wealth, posted in FINANCE / MONEY

We have seen images and videos of everything occurring in Ukraine over the last week. The stock market was anticipating the attacks and has declined quite a bit from its top the first week of 2022. It has steadily declined ever since, although we had a bounce the last couple of sessions.

Looking at the S&P500 (SPY) chart, prices have bounced before from the $420-430 area. This time, the difference is that we are currently under all the simple moving averages to include the 200 SMA. It’s as bearish as you can get in the stock market.

To turn bullish again, we must trade above the averages, which means prices need to climb over the $450 area.

Pullbacks and market sell-offs are great buying opportunities for long-term investors since you can buy your favorite stocks at discounted prices. It’s like going to the clearance section at your favorite store.

Pepsi (PEP) is a proven company through the ups & downs of the stock market.

History shows that stock markets tend to drop during wartime. However, once it’s resolved, the stock market tends to begin to climb up once again.

With that said, traders have their hands full, trying to figure out which side of the trade they should position. The swings right now are significant, and traders may find themselves in losing positions relatively quickly.

On a positive note, several companies announced dividend increases over the last couple of weeks, while no company has announced dividend cuts.

The picture below shows which companies announced their dividend hikes:

Dividend increases for the last 2 weeks of February 2022 by Joey Ortiz.

Dividend increases over the last 2 weeks of February 2022 by Joey Ortiz.

Overall, we are trending lower in the stock market. Ensure to have a plan and execute your plan as close to perfection as possible. Follow your rules and stay true to yourself. Your plan should account for up and down markets as well.

We will be back next week with more updates. Glad to help!

Now, begin your Road to Wealth!

Follow me on TWITTER, PINTEREST, INSTAGRAM, LINKEDIN, FACEBOOK for more posts and updates. You can also reach me here with any questions.

BECOMING A MILLIONAIRE FROM NOTHING: PART I

February 21, 2022February 17, 2022 by Road-to-wealth, posted in FINANCE / MONEY

Hi all, Joey Ortiz here.

Welcome back to this week’s edition.

Let’s chat about becoming a millionaire, shall we? You may be asking, “Joey, what’s the point?”…

The point is that you need goals. Becoming a millionaire is one of the most common goals when planning to build long-lasting wealth. You are looking forward to building wealth for you and future generations. If you do it right, at some point soon, you will become a millionaire, and then some.

I did not say “Rich” because you can win the lottery tonight, be “Rich” overnight, and be broke again in a year or two. It would be best if you learned how to build and create wealth. It all starts with financial literacy. A knowledge mix of investing and taxes. Yes! Taxes! It is imperative to learn how to keep what you earned and protect your assets.

It starts slow but then something unique happens. Not only snowball into big numbers as the years’ pass, but if something unfortunate happens, like losing it all, you won’t “sweat it” because you know how to build wealth, and you can do it again. But, this time is even faster because you will have something this time that you didn’t the first time around, experience!

Apple (AAPL) is one of the biggest holdings of the Nasdaq.

One way of becoming a millionaire over time is investing in dividend stocks. Many of you ask the same question: Can you live off dividends? YES! Yes, you can. You need to understand that this strategy takes time because you have to accumulate shares for decades. It’s not a get-rich-quick scheme. It takes time, knowledge, and planning.

Why dividend-paying stocks? Because it doesn’t take much time out of your daily life. It’s passive income. All you need to do is set a specific amount of money once a month and invest it in your favorite companies. Then, keep going about your life. Then the company will share part of their earning profits with you as a dividend for your time and investment. You are a partner, and you will profit just like all the big investors without putting in any work at all.

It doesn’t matter if you have a raw platform like RobinHood, or something more sophisticated like TDAmeritrade, Schwab, or Fidelity. The reason is you will be buying once or twice a month and not looking to sell ever! Instead, you want to accumulate for the long term. In that case, the platform makes no difference for this strategy.

Things to keep in mind:

1. How much money a month is required to cover your expenses and have some extra money for fun?

2. How to choose which company to invest in? Look under the company’s hood (aka fundamentals).

3. Compare companies long term growth

HOW MUCH?

Starting point. It would help if you did your math. Each one of you is living a different reality. Numbers will vary greatly depending on your habits, income, and current location.

As an example, let’s say that your expenses amount to $2,500 a month, and you will live comfortably with an extra $1,000 for yourself. That means that you need to make at least $3,500 a month or $42,000 a year.

How much will that cost? It depends on the dividend paid by the company and the price you pay for the shares.

As an example, let’s use a very well-known retail store, Walmart (WMT).

Dividend = $2.16

Price = $147 (as of Dec 12, 2020)

Dividend Annualized growth = 12.19%

Dividend Yield = 1.47%

$42,000 / 2.16 = 19,445 shares needed of WMT to cover your yearly expenses.

The current yield of 1.47% will not suffice. It doesn’t even beat inflation.

The annualized growth doesn’t look bad, but the current yield of 1.47% projects to grow to 4.64% in 10 years. Not bad, but there are plenty of better choices.

And if you would buy it all right now, it would cost you a total of $2,858,415 (current price of $147 * 19,445 shares). So unless you have $2.8 million lying around, let’s look for something better.

Listen, when you are a beginner, you may doubt the strategy because all you are about to see is that you received $1.50 or some ridiculous number like that. You will not be even close to where you need to be when you first begin. But you will be there eventually. The critical factor, you need to start! The sooner you begin, the sooner you can get there. It’s like needing to walk somewhere. If you stay on your couch, you won’t make it. But if you put your shoes on and start walking, you will get there eventually. Take action!

Divide that into three steps:

1. Decide if you want to live off dividends and take on this journey; if you do, go to #2.

2. Create your investing plan (includes how much money you will invest monthly and in which companies)

3. Take action and execute your plan!

Amazon (AMZN) is one of the fastest-growing companies in the world.

HOW TO CHOOSE?

Point number two. How do you choose where to put your money? Ok, there are thousands of options for you to choose from in the stock market. Not what you wanted to hear? Sorry, but it’s the truth. So what now?

A quick but not always beneficial way of choosing, only invest in companies that you shop at or know well. That will probably be something like Apple (AAPL), Walmart (WMT), Walgreens (WBA), Verizon (VZ), among many others.

Is it wrong to buy what I know? No, it’s not. If that is the route you want to go, so be it. Just like everything in life, we have to live with our choices.

The good thing is you know and trust these companies. The bad thing is they may not be offering you the best bang for your buck.

Alright, smarty-pants, what other choice do I have? Not the quick way, that’s for sure.

Look under the hood—the company’s fundamentals.

Use a free stock screener like Finviz or BuyUpside (Dividend Growth Rate Calculator – See How Fast Dividends Grow) to look at your favorite companies or not so famous. You never know what you might find. You will be amazed when you find out that your favorite companies are probably too overpriced, and you should invest your money somewhere else.

I use Finviz to look at the current numbers of a company like:

– price

– current EPS

– current Dividend and Dividend Yield, Dividend Payout

– ROE

– Current Ratio, Quick Ratio

– Long term Debt / Equity, Debt / Equity

– Forward P/E, PEG, Price to Sales (P/S), EPS past five years.

From BuyUpside, I find the Annualized Dividend Growth of stock to project into the future using that same growth.

COMPARE COMPANIES LONG TERM GROWTH

Point three. Collect the information to compare companies and their growth. Then, plug in the numbers into an Excel Sheet, and formulate it to highlight only the best. In the end, add up which company highlighted the most, and those companies are usually the ones to choose to invest in because they provide the best cushion from all angles.

In conclusion, I’m looking for a company that can provide an excellent Return on Equity. Has sufficient cash to pay their bills and expenses, has medium to low debt, a good dividend yield now that can beat inflation of 3.5% on average, and sustainable growth for the future. So even if the price doesn’t go anywhere for ten years, I can still receive more in dividends, thanks to their growth. In addition, look for positive earnings growth into the future and growing sales.

Now, begin your Road to Wealth!

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Dividends Up and Dividends Down – What Are You Holding?

February 19, 2022February 18, 2022 by Road-to-wealth, posted in FINANCE / MONEY

As investors, we have to keep an eye out for our holdings. Everyone is happy when things are good, but when things go south, everyone runs for the hills. As long-term investors, we don’t worry about the fluctuations in the stock market, but we do need to be aware of fundamental changes.

Dividend increases are one of my favorite strategies (Dividend Growth Investing). But on the other hand, dividend cuts are one of the first red flags and early signs to show that a company may be in financial trouble.

Another red flags to consider are low amounts of cash available. Again, you can use Finviz to find the current and quick ratios. A metric of 1 or higher is usually a sign of enough money to cover expenses. However, that also depends on their debt.

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Debt to Equity and Long-term Debt to Equity is preferable under 1 to show a low debt. It is all dependable on the industries and sectors. Some sectors run with high debt, while others may have zero debt.

In my book, as long as the quick ratio and current ratio are higher than debt to equity and long-term debt to equity, it is good enough for me.

Without further ado, let’s take a look at the dividend increases and dividend cuts for the first 18 days of February 2022.

Dividend Increases

Dividend Decreases

The stock market will move up over time. However, that doesn’t mean we have to marry a stock forever. Some companies manipulate their books to look better than they should show, but that only lasts for so long until they can’t do it anymore. The best example for all investors was Enron. You can Google information on all the tricks they did until going bankrupt.

We can ride the ship up but should never ride it all the way down. We are not the captains of those ships. We are captains of our investment accounts, and that is all we care about now and in the future.

Stay vigilant and protect your capital.

Now, begin your Road to Wealth!

Follow me on TWITTER, PINTEREST, INSTAGRAM, LINKEDIN, FACEBOOK for more posts and updates. You can also reach me here with any questions.

How Does Dollar-Cost Averaging works

February 18, 2022February 17, 2022 by Road-to-wealth, posted in FINANCE / MONEY

The amount of financial terminology is enough to send anyone into a panic when you enter the world of investing. So today, we will cover Dollar-Cost Averaging.

Long-term investors often use the term, especially when the markets begin to pull back or fall entirely on its face.

Readers keep asking about it, and the question often goes something like this:

“Dear Joey,

I keep hearing about dollar-cost averaging on my investments, but I’m new to investing and don’t understand it. So how does it help me in the long run?”

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What Is Dollar-Cost Averaging?

Simply put, it means that you set an amount of your paycheck to invest itself automatically, or you can do it manually as well. In addition, the strategy takes advantage of the stock market fluctuations. Every time you buy shares, the overall cost will average out between all your shares while the price goes up and down.

Let’s analyze the picture below:

This person set a monthly amount of $100 (Set amount column) to invest at the beginning of every month (Date column). The stock they invested in fluctuated between $20 and $25 during the year (Stock price column). And the last column shows how many shares this person was able to buy each month.

At the end of the year, the person bought a total of 54.41 shares (Total column) while investing $1,200. When you have the two numbers, you can divide the total amount ($1,200) by the total amount of shares (54.41), and you get the number $22.06.

That means that the average cost of all your shares is $22.06. So you effectively average up and down throughout the year to not buy at the top or the bottom.

Advantages of Dollar-Cost Averaging

When you buy with a set amount throughout the year, you ensure to not overpay for your shares. The market mainly moves upward, but it also has down moves. Therefore, they provide excellent opportunities for you to buy more shares at lower prices. In contrast, you buy fewer shares when the prices are high.

Things to Consider

Dollar-Cost Averaging is an excellent strategy if you are a long-term investor. You are not trying to time the market. Instead, you want to have time in the market while accumulating shares and taking advantage of the famous “the average return over the last 100 years is 10%”.

That doesn’t mean that the market goes straight up each month to end at 10%. Instead, the market fluctuates up and down but, in the end, finishes on average with a 10% increase.

Overall, it is a powerful strategy when you don’t want your money to sit on a bank account with a bit of interest of less than 1%. Instead, you will grow your account and net worth slowly but surely. If you are new to investing or don’t have much time to analyze the markets, consider this a great strategy.

Now, begin your Road to Wealth!

Follow me on TWITTER, PINTEREST, INSTAGRAM, LINKEDIN, FACEBOOK for more posts and updates. You can also reach me here with any questions.

NEW YEAR, NEW RECORDS! 2022 STARTS WITH A BANG! HERE IS YOUR NEXT MOVE.

January 4, 2022 by Road-to-wealth, posted in FINANCE / MONEY

The S&P500 (SPY) had a solid finish to 2021. It rallied on Monday into all-time highs and set the highest point on Thursday, 30 Dec 21. On Monday, 3 Jan 22, the market opened positively, ending the day higher and within 1 point of yet another record.

The cheerful open to the year indicates no re-test of the newfound support (former resistance) around the 471 area. Instead, everything points to the trend resuming to the upside into uncharted territory. It looks like it will take much more than the Fed printing money, another pandemic, or a new crisis. Markets seem unstoppable.

Many new investors are afraid of jumping in at the wrong time, which is understandable. However, the markets are breaking record after record and showing no signs of slowing down.

AMAZON (AMZN) keeps growing year after year. Your account can too!

What to do next?

There are many ways to skin a cat. It’s just a saying people. It’s not literally. However, we are never short of strategies and possibilities as traders and investors.

A. Test the Waters

If you are brand new to investing, I suggest NOT jumping with both feet. Test the waters first. The idea here is to invest half of what you have available. There are two reasons for that:

1. By investing in small portions, you are not risking all of your capital, but at the same time, if the markets keep pushing higher, you are participating and adding gains to your portfolio.

2. With the same token of investing small portions, if the market decides to pull back and take a breather, you will have capital free to be deployed as you wish and at a discount. Who doesn’t like discounts? I do!

B. Learn to Sell

A strategy I use is selling options. I like to sell options on volatile stocks and also on support areas. In my case, the idea is NOT to get assigned the shares. Instead, collect premiums with each sell, rinse and repeat.

If you want to own shares on a specific stock, you sell the options at the price you are comfortable buying it. Keep in mind that each contract holds 100 shares when you sell options.

For example, You don’t mind owning AT&T (T) shares at a $20 strike price. Therefore, you will sell the $20 put option.

What happens?

1. Next, multiply the strike price by 100 shares, which will give you the amount needed in cash. To sell this put option, you need to have in your account $2,000 available (not invested) per each contract you plan on selling. This cash will be used as collateral if you get assigned, and this will be the money used to buy those shares. The same thing happens with each option you sell regardless of the stock.

2. Once the money is available and ready to go, one of these two possibilities will occur:

– The stock price falls under the option strike price, and you get assigned those shares. In this case, you will buy 100 shares at $20.

– The stock price remains above the option strike price, and the option expires worthless. Therefore, you keep the premium while releasing the cash held as collateral.

Keep in mind this is an investing mindset. We are not here to jump in and out daily or intra-day. If that is your mindset, you are a trader and not an investor.

STARBUCKS (SBUX) can pay for your coffee with their profits. What are you waiting for?

TRADERS

As a trader, you need momentum. So I don’t recommend any newbie to trade first. Instead, start with the basic easy steps of investing, then move up the latter.

If you are a little more experience, then look for weekly breakouts. For example, during the weekend, change the setting on your chart to weekly. Then, set an alert at the high of the week that just closed. If you are doing it during the week, ensure to set the alert at the high of last week.

Once the alert goes off that a break out of that high occurred, you can take a position with shares, you can sell puts, or you can buy calls. The choice is yours.

Ensure to preset your stop-loss price (area) and your targets.

Are you going to sell all of it once you hit an area?

Are you selling half and riding the other half for more profits?

You can also sell 1/3 of the position at target #1 (T1), sell another 1/3 at a higher target #2 (T2), and let the last 1/3 ride as high as possible for maximum profits.

As I said, there are many ways to skin a cat. First, you need to figure out which strategy makes more sense. Not all methods work for everyone. Please choose the one you like most and become a master at it. Once you become a master, you start adding to your toolbox with new strategies in a few years. Join groups and share your experiences. Also, listen to others and learn from their mistakes.

Now, begin your Road to Wealth!

Follow me on TWITTER, PINTEREST, INSTAGRAM, LINKEDIN, FACEBOOK for more posts and updates. You can also reach me here with any questions.

How Do Dividends Work? Explained

January 2, 2022December 31, 2021 by Road-to-wealth, posted in FINANCE / MONEY

Companies that pay dividends more often do so in cash. It is a way of generating passive income. Yes, my dear readers, although cash dividends are the most popular and recognized type, there are other dividends besides cash.

These include dividends on stocks, bonds, property, and scrip (promissory notes). These are more likely to be used when acquisitions of other companies or in particular situations.

When companies pay cash dividends, they are sharing the company’s retained earnings with their investors. Cash payment will be deposited automatically in the accounts of each investor without requiring any action on their part. So if you invest in a company that pays dividends, you do not have to do anything to receive it. Your broker will do everything for you. You will have 2 options: receive the cash and use it as you think best, or activate what is known as (DRIP), a Dividend Reinvestment Plan that automatically buys you more shares in the company you are investing in.

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How do you know which one suits you?

Very simple, if you are retired, with a good pension check and a huge investment account, accept the dividend as cash and enjoy it while supplementing your passive income.

If you still work and have a small account that cannot live on those dividends, enable your DRIP and not touch it until you retire.

Important dates:

To know if you will receive the dividend or not, you have to understand the following dates.

– Declaration Date: this is the day when the board of directors sits down and decides to announce the amount that each investor will receive per share and the ex-dividend date. Please understand that this date is just an announcement of what will happen. You still do not have the right to receive the dividend.

For example, the local newspaper has a page announcing that they will give toys to the children present on Saturday. Just as the child must be present on Saturday to receive his toy, you will receive your dividend if you owned shares in the company on the announced day.

– Ex-Dividend Date: this is the most important date apart from the payment date. To receive the dividend, you have to own shares by this date. Therefore, anyone who wishes to receive the dividend must purchase their shares BEFORE this date. At least the day prior since this is the first day that the shares start trading without the right to receive the dividend. Every day the market opens, shares will go up and down in price, but this date is the one that separates the line from each other, whether you receive the dividend or not.

For example:

The directors of Apple (AAPL) announced on October 28, 2021, that they would pay a dividend of $0.22 per share. The ex-dividend date was November 5, 2021, payable on November 11, 2021.

Anyone who wanted to receive this dividend had to buy their shares BEFORE November 5, 2021. If you purchased on November 5, you would not be entitled to anything since the directors announced that this would be the ex-dividend day. In other words, everyone purchasing from this date forward would not be entitled to the dividend until a new announcement.

– Record Date: is the date on which you must be a shareholder to receive the dividend. It is usually one or two days after the ex-dividend date. We do not do anything with this date. It is not as important to us as for the directors since this is the list of shareholders that will appear to receive the dividend.

– Payment date: It is the day you will receive your money. This date varies between companies. It can be from 1 week to a month after the ex-dividend date. Ensure to verify the information so you don’t miss your payday.

Let’s practice:

Cisco Systems Inc (CSCO) announced a $0.15 per share dividend with an ex-dividend date of January 4, 2022, payable on January 21, 2022.

1. If you have 100 shares, how much will you receive in dividends?

2. When is the last day you can buy shares and receive dividends?

3. When will you receive your $15?

Bank of America (BAC) has gained over 200% in the last 5 years.

Summary:

1. You will receive $15 in dividends. Multiply the number of shares by the amount of the dividend paid (100 shares x 0.15 cents in this example).

2. January 3, 2022, is the last day to buy and receive the dividend.

3. You will receive your dividend on January 21, 2022.

It’s that simple, my friends. If you want to verify which companies will pay dividends on a specific day, visit this Nasdaq page. Now put this new knowledge to good use.

Now, begin your Road to Wealth!

Follow me on TWITTER, PINTEREST, INSTAGRAM, LINKEDIN, FACEBOOK for more posts and updates. You can also reach me here with any questions.

New Year and You Are Doing This Again?

December 30, 2021December 30, 2021 by Road-to-wealth, posted in FINANCE / MONEY

The New Year is fast approaching. It will be here in less than 48 hours, and it’s that time of the year where everyone starts thinking about New Year’s resolutions. Are you there yet?

At the end of the article, go ahead and tell me in the comments below what you plan on improving in the new year. Are you looking forward to a better you in 2022? I am and will be sharing some of my resolutions with you all.

The most common goals are working out more and eating healthier. A percentage of you are also looking to start investing. Improving your finances is an excellent goal for a new and improved you in 2022.

Are you looking forward to focusing on your investing goals and improving your life and your family’s life? It’s possible, and you know it. And you see, many other average people do it all the time.

So, I ask you again, are you prepared to do the work to BECOME an investor? You know it doesn’t happen by itself.

Pepsico (PEP) moving up and steady in 2021.

I have mentioned this before, but as a reminder, all investors begin precisely at the same place, with no knowledge and no experience. Some are lucky to be born in a family with financial expertise, which is passed down at an early age. However, that doesn’t change that they still have to learn and put skin in the game to gain that experience. Others, like us, have to grind out that knowledge. As a result, we sacrifice countless hours, family time, fun times, and many other things. However, once we find our new knowledge, the most important thing is there is nothing to worry about once you teach family and friends what to do and when to do it. There is a strategy to the madness.

Some years become a dividing line in our lives—the life before and after a specific event. You often hear the negative, but there are positive events and years. You can make 2022 your year!

For me, Covid in 2020 was that year. What!? Joey, covid is still messing with all of my plans, and it’s 2021. Sure, mine too. But it was during that lockdown in 2020, I was able to analyze all of my trading systems and figure out which ones worked and the ones that didn’t. With a few tweaks, I headed to 2021 with full force. I have to say; it has been the best and most profitable year for me, my family, and friends have ever had. Yes, they copy my trades at their own risk, and you will be able to soon enough. Keep reading; you will understand.

I want to share a few important things I learned in conjunction with my resolutions for 2022.

1. Patience – as the world goes through rough patches and keeps constantly changing, we need more patience than we have ever needed before. Things will never be the same, and we have to adapt and improve ourselves. That will also take patience; we won’t adapt and change in the blink of an eye.

2. Just shut off – as the world was shutting down, I took that time away from everyone and read books, analyzed my strategies, and most importantly, got closer with my family. It doesn’t matter what your job is and how important you think you are; once you are gone, they will replace you. You are an asset to them, but they can find another asset. Your family won’t. They can’t; there is only one of you. So be present and pay attention to what is important. Learn to shut off for them.

3. Life, Investing and Luck – you can put in the work, reading, studying, training, working, preparing in general. However, a positive outcome is not guaranteed. Ever! You will win some, and you will lose some. Understand that, and your life will be less stressful.

4. Be a Crane – no one can be a champion unless they play a one-person sport like golf, boxing, or tennis. And they still have coaches and a team behind them. You don’t have to do it by yourself in life and investing, but improving yourself is only 50% of the process. Once you are where you want to be, or at least close to it, ensure to be a Crane and lift others. You can’t scan the whole market by yourself or cover all the strategies, but you can have a team that works together. It doesn’t matter if they are family, friends, or people you meet on the internet. If we all row in the same direction, we will get where we want to be. That’s a Champion mentality.

5. Quality time – although it goes in hand with point 2 to shut off, just because you shut off doesn’t mean you are creating or having quality time with your loved ones. Sitting there staring at them with a pale face doesn’t count as quality time. Instead, have “dates” with your kids and spouse. Take days to go to their favorite places, as well as take days to go to yours. Remember to have a balance. That way, everyone is happy while you create life memories; together.

Facebook (FB), newly known as Meta has seen gains of nearly 200% in the last 5 years.

My new year’s resolutions are:

– I’m going to get back in great physical shape. Yes, I know! One of the most common ones, but I have neglected myself a little bit for far too long. I don’t do diets, strictly exercise. I may do some social media appearances. No promises, though.

– I will be a Crane and lift others. I plan on doing that by starting a YouTube channel. As a matter of fact, two channels. English and Spanish-speaking individuals are all invited. It has been brought up to me a million times before that most of my readers prefer short videos rather than reading articles. Well, your wish is my command. The new year will serve you well, and I’m working on the ins and outs of it. I will write about it once the channel is up and running.

– I will add 3 passive income sources. Also, encourage you to do the same. It could be with dividends, affiliate marketing, e-commerce, or any other way you prefer. It doesn’t matter. You choose what you are interested in doing because remember that it will take time and work initially, and you need to stick through thick and thin.

– I will make my life more fun by traveling more, creating new things that I never saw myself doing, helping others, and paying it forward.

I want you to be dreaming BIG, just like I’m doing right now. Twelve months seems like such a long time and no time at all. Either way, 2022 will come and go. So make this your year and take ACTION!

From my family to yours, Happy New Year!

Now, begin your Road to Wealth!

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