Saturday, October 30, 2021

Free Time

I'm finally getting some free time to tinker with the site. As I get older and consumed by work and family obligations, free time comes at more of a premium, which means making smarter decisions about my investments and letting my money work for me.  

A few weeks ago I withdrew all funds from my advisor. Of course having the advisor doing the work for me allowed more free time which was nice, but at the expense of 89 basis points. On $250K, this works out to be over $2K per year. Once I got past the initial review of insurance documents, college funding, etc., the fees were for the management of the assets. The theme of managing the assets was a weighted approach to sectors and asset classes via individual stock picks and index funds. There were some great dashboards, knobs, bells, whistles, etc., all of which looked nice and made me feel good that my money was properly diversified. 

At the same time, I just couldn't get over the ~$185 a month fee. What could I do with that money each year via subscriptions to great tools, and could I manage this myself?  Yes, I could!

So I started doing a lot of research and I found a lot of great tools and some great blogs. I've always been interested in dividend investing so I starting building my own portfolio weighting calculator. Next what was I going to pick, what was the initial strategy?

This is something I'll refine over time, and build some models to support. To begin, I started looking for some key criteria:

  • Prior 5-10 year consistent dividend growth, weighted towards fast growth
  • Dividend Safety ratings from SimplySafeDividends "Borderline Safe" or higher
  • Either reasonably valued or undervalued
  • Overall portfolio beta of .85 or higher, but less than 1.0 (this may change over time as I weight against 401k and other holdings)
  • More evenly distributed sector weighting than S&P and other indexes
So that's the initial framework! Free time well spent pays dividends over time, and that's what I'll do here to grow this nest egg over time. Over the next few weeks I'll be selecting some more research tools (from that earlier ~$2K) and building some more comprehensive models to rebalance and reinvest dividends and deposits.  

Check out the portfolio tab on the initial setup and let me know your thoughts!

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