Meager Income

Pay Off Debt, Retire Comfortably on Meager Income, Win the Lottery, Not Necessarily in that Order

My IRA 7 Years Later

Posted on | May 28, 2014 | No Comments

Most of the people I know that own stocks focus only on the dollar value.  They can tell you the balance in the account but they won’t know how much money they are getting or can expect to receive from their investments.

I am more concerned about the amount of income being generated by the stocks I own.  My current investment strategy is to buy stocks that pay dividends and then reinvest the dividends to buy more stock to create an even greater dividend stream.  When I eventually retire, I plan on relying on the meager income to cover my living expenses.

Here is an example of my strategy:

In June of 2007, I opened a new IRA and deposited $4,000 in to the account.

My first purchase in this account was 50 shares of Verizon (VZ) stock in 2009.   Then, a few months later in April of 2010 I bought 25 more shares of VZ.  Because I owned stock in VZ, I also received 12 shares of Frontier Communications (FTR) in May 2009.  I also purchased 100 shares of General Electric (GE) in 2010.  I used up most of the cash in the account but I was now earning $182 a  year.

I let the cash accumulate and eventually had enough money to purchase 100 shares of Banco Santander (SAN) and additional shares of FTR.

Here is my portfolio in the IRA account:

75 VZ
100 GE
100 FTR
101 SAN

My current estimated income is about $350 a year which comes out to a yield of roughly 8% on my initial investment!  While I wait for cash to accumulate again, I’ll research what I’ll be buying next.



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