My Investing Strategy

I've tried a few different investing strategies mostly with little success.  However, over the past couple years I have settled on a strategy that makes sense to me and I believe in.  I have been sticking to it and am starting to reap the rewards through capital gains and dividend income.

My main investing strategy is now what is known as dividend growth investing.  I have been reading all about the strategy on a few different blogs out there that detail the strategy and why it is a good way to invest.  The idea is that you invest in industry leading, solid, blue chip companies with a history of increasing their dividend payments year after year at a rate higher than inflation.  Companies that would be considered dividend growth stocks include Coca Cola, McDonalds, Wal-Mart, Aflac, Walgreen's, Johnson & Johnson and many many others.

When I am looking for dividend growth companies to invest in I to a complete analysis of the companies I am considering.  The main things I want to see are increasing sales, profits and earnings per share.  This is along with the increasing dividend payments to shareholders.  I look for companies that have proven that they know what they are doing.  These companies are good at making money for their owners.

Currently I try to make a purchase of a new dividend growth stock or more shares in one I already own each month.  Unfortunately I haven't been able to do this the past couple months due to some medical bills that have popped up.  However, once we get our emergency savings back up to the levels I like to keep them, I will start back with the dividend stock investing.  I'm looking forward to when this can occur and hoping it will be within the next couple months.

Been Awhile

It's been awhile since I've blogged about my personal finance situation.  Things have been going well over the past few years.  We've received raises and a couple promotions and generally are better off than we were a couple years ago.  There's been some saving and some buying.  Some traveling thrown in there as well.  But all in all our net worth has fortunately continued to rise.  Although I haven't been around to give frequent updates here, you can see from the Net Worth IQ in the sidebar that we have been doing well growing our wealth.  So I plan on updating this site a little more often.  Mostly will be updates on how things are going but also some opinions of different personal finance issues.  Today I'd like to update on how we've been growing our net worth over the past couple years.

Investing

We've been making an effort every single month to put away money in some sort of investment.  My wife and I both have retirement accounts through work in which we contribute to every single paycheck.  This is automatic.  This has probably been the greatest contributor to our net worth increase over the years.

We also invest money as we can in taxable accounts.  I have latched onto a new strategy for investing and have started building a nice portfolio of dividend growth stocks.  I invest in companies I know and understand who pay out increasing dividends year after year.  Along with the stocks we try to put some money away into fixed income mutual funds.  These funds invest in bonds that may be less risky than the stocks.

Paying Down Debt

We continue to pay down our house and other debts such as student loans.  My wife was in a car accident where we ended up buying a new car after and we took out a loan to help with this.  After a short period of time I was also able to pay this loan off.  We also put a sun room on our house.  We financed this and each month make a payment towards this loan.  So overall I think our actual debt level has increased because of the sun room purchase.  But each month we scratch away at this total and eventually we will bring this down to zero.

Saving

It's important to save every month.  We keep an emergency fund as well as saving for short term expenses that I know will occur such as medical bills, insurance bills, vet bills and other random bills.  This money is kept in money market accounts.  While we aren't really earning much interest on this cash, I believe it is important to continually save in case we need it in the future.

Summary

So over the past couple years our net worth has naturally been increasing.  This will happen as long as you focus on increasing assets and decreasing debts.  The biggest gains have come from investing in retirement and taxable accounts.  We will try to continue this progress going forward.