Nobody questions Warren Buffett’s investment ability.  He is a singularly talented investor, business man, and one of the most respected men in the world.  When Buffett talks, people listen.  There are plenty of Buffet-mimickers out there.  When he buys Bank of America, they buy Bank of America.  When he buys railroads, they buy railroads.  That doesn’t [...]

[Read more →]

Free Cash Flow is a firm’s net income plus depreciation/amortization and all other non-cash charges - minus changes in working capital and capital expenditures.  It may sound complicated at first glance, but all that really means is that free cash flow is the amount of cash left over after paying the bills and making new investments [...]

[Read more →]

Often when speaking of relations with the Soviet Union, Ronald Reagan would toss out the phrase “trust, but verify“.  Reagan reportedly repeated this old Russian proverb (Russian:  Доверяй, но проверяй) at the signing of the INF treaty to which his counterpart Mikhail Gorbachev responded “you repeat this phrase every time we meet”.  Not to be outdone, Reagan replied, “I [...]

[Read more →]

Welcome to part III of my series examining the attributes of good dividend stocks.   When buying a stock for income, the safety of the dividend is of utmost importance.  Dividend cuts are frowned upon because they amount to an admission of defeat by management and show a lack of confidence in the executive suite about [...]

[Read more →]

Welcome to part II of my series examining the attributes of good dividend stocks.  The first thing to look for when analyzing a dividend stock is its dividend history.  A long record of rising dividend payments shows discipline, sensible capital allocation, and demonstrates management’s commitment to shareholders.
Earnings You Can Take To The Bank
You might not [...]

[Read more →]

Dividend paying stocks are the bread and butter of every income investor living off their portfolio income (or aspiring to, anyway).  As far as passive income strategies go, dividend-paying stocks sit at the top of the heap.  After an initial research effort, good dividend stocks can be held for years, even decades, providing a stream of steadily [...]

[Read more →]

There are several blogs out there devoted to passive income:  Living off dividends, the dividend guy, dividend growth investor, and dividends4life just to name a few, all dedicated to the idea of freeing oneself from the bonds of regular employment by creating a diversified income source not dependent on your direct involvement.  Passive income is [...]

[Read more →]

As Hannah at The Penny Mine noted recently, most people are pretty bad at planning for intermediate-term goals.  Sure, these people will spend countless hours researching mutual funds for their IRA and call 15 banks in their area getting rate quotes on 6 month CDs, but when it comes to a new car fund for a purchase 7 [...]

[Read more →]

Earlier this month, Vanguard filed with the SEC to offer the Vanguard Global Stock Index Fund.  It will track the FTSE All-World Index, a market-cap-weighted index of large and mid-cap stocks all over the world.  It will be offered in both Investor and ETF share classes with expense ratios of 0.45% and 0.25%, respectively.
With approximately [...]

[Read more →]

The science of asset allocation gets a lot of attention in the personal finance realm but it only tells part of the story.  In an ideal world, there would be no taxes or transaction costs, so asset allocation would be the only game in town.  You’d simply divide your portfolio between the various asset classes and [...]

[Read more →]