Get Rich - Stay Rich - Investing for Monthly Income

Posts Tagged ‘monthly dividends’

How to Retire a Millionaire

From your early entry into the workforce and throughout your working life, you are always reminded to prepare for your retirement. We all realize the need to have income for the day when we end our working career. This is based on the classic mindset of saving for retirement. Most regularly deposit a portion of income in their 401 retirement plan. There is nothing wrong with this strategy as long as you are prepared to wait for your “someday” in 30-40 years or more. Many are behind in the amount needed to fund a comfortable retirement.

A Government Accountability Office analysis found that that average Americans between the ages of 55 and 64 have accrued about $104,000 in retirement savings. Sound like a lot? Not when you realize that sum would translate into a $310 monthly payment if your money were invested in a lifetime annuity.*

There may be another option to complement your retirement. At Get Rich Investments, we focus on developing multiple streams of income. The strategy is simple, continue building monthly income until your investing income exceeds your current income. At this point, you have a monthly income to support your lifestyle and retire without having to scale back your living. The sooner you start building monthly income, the faster you will produce significant monthly income.

You can keep contributing to your 401K as this will be one stream of retirement income. Another income stream will be SSI if it is still a viable option when you retire. Then, you might want to consider building additional income streams through our strategies. You can start with a small account and watch it grow over time to your ultimate income producing investment. Of course, this will not happen overnight or next week as there is no get rich quick scheme.

How do we create multiple streams of income? We sell options such as cash-secured PUTs and covered call trades. Based on the type of stocks we invest, this is a lower risk strategy than small cap stocks. We also like to capture dividend income from stable, world class stocks. And, we diversify our income streams by investing in CEFs paying monthly dividends.

The amount of income you achieve will depend on your investment capital. Hey look, if we all had millions then we would already be retired. With our strategies you can compound your income over time to grow your monthly income. You can start with a small investment like you would with a 401 and add to it over time. It can compound faster than most envision. As your account grows, you diversify into more income streams such as CEFs using several types of investments.

If you spread your investments across these multiple streams of income, it will lower your risk of not having the income you desire. This is why we call our program the Monthly Income Newsletter. Yes, you can retire a millionaire!

Get started building your income today.

Put Your Money to Work

To start on the road to financial dependence, you must save some money. Most people start with an emergency fund, retirement account such as a 401K and maybe buy some real estate for rental income. Then, smart investors start creating additional streams of income. At Get Rich Investments, we like to buy world-class dividend stocks, CEFs paying money distributions and sell options for premium income. In today’s investing environment, you can no longer keep your money in near zero savings account or certificates of deposits.

“The only reason to save money is to invest it,” writes Grant Cardone, who went from broke and in debt at 21 to self-made millionaire by 30. “Put your saved money into secured, sacred (untouchable) accounts. Never use these accounts for anything, not even an emergency.”

While always subject to a degree of risk, investing is one of the most effective ways to earn more money. As Ramit Sethi writes in his bestseller, “I Will Teach You to Be Rich,” “on average, millionaires invest 20% of their household income each year. Their wealth isn’t measured by the amount they make each year, but by how they’ve saved and invested over time.”

Why would an investor sell put options instead of just buying the stock? You already know my response to this question – to create monthly income. There are several reasons investors should include put writing as a portion of their investment portfolio. Here is my list:

First and foremost is to create income. In this case, we are looking to collect the cash premium from selling the put option and not necessarily purchase the stock. This concepts is very important to better understand. My initial objective is capturing the premium but I realize in some cases the stock will be put to me. This is why I only sell puts on a select list of stocks I am willing to own if put to me. I like to focus on world class stocks that have stable earnings, strong balance sheets, pay growing dividends and trade within a low beta range in the market. This is part of my success using this strategy as I can collect dividends and sell covered calls for more income if the stock is put to me.

This is how I put my money to work. Join me in creating multiple streams of incomes to live the life you desire.

How to Get More Protection from Stock Price Declines

In a flat to bullish market, most call writers will sell an at-the-money call on the stock they own.  the rationale for selling an ATM call is that they have the highest premium in terms of time value.  Of course, the option seller can sell at any strike price.  What should the call seller do in a market driven by fear such as potential debt defaults, FED changes, financial chaos, etc.?  The smart call writer will change their strike price to get more downside protection.

Suppose you want to write a call on a stock that you are concerned about a potential price drop,  you can look to write an in-the-money call.  The stock is trading at $7.80 per share.  You can write the $7.50 call for $0.90.  This call has a $0.30 intrinsic value so you are getting $0.60 in time value. As long as the stock is above $7.50 at expiration you keep the $0.60 in time value and the $0.30 intrinsic value.  Now you have created a situation where you still make money if the stock declines by 3.85%.

Let’s try another example.  The stock is trading at $136.00 per share.  You can sell the 135 call for $10.25; the 130 for $13.15; the 125 for $16.40; the 120 for 20.05.  You can go down to the 120 call strike to produce a 13% downside protection.   Yet you still get a $4.05 time value premium that is almost a 3% return.  Now you have created a situation where you still make money if the stock declines 13%.

Considering an average volatility, this is a great way to protect yourself for an anticipated price downturn.   While selling ITM calls does not usually realize a return as high as selling ATM calls, it does have the benefit of creating more downside protection for the stock price to fall and still return a profit.  You should only sell ITM calls if you are willing to let the stock be called away.

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This Company Just Raised its Monthly Dividend by 8.4%

Pacific Coast Oil Trust (ROYT) owns net profits interests in the sale of oil and natural gas production.  The Company pays monthly dividends with an annual dividend yield of 9.8%.  Pacific Coast Oil Trust just increased its dividend by 8.4% to $0.151 per month, payable on February 14, 2013, to unitholders of record on February 4, 2013. The Trust’s distribution relates to net profits and overriding royalties generated during December 2012 as provided in the conveyance of net profits and overriding royalty interest.

Pacific Coast Oil Trust (ROYT) is projected to produce earnings of $1.84 in 2013 which is a 28% increase from 2012.

First Call has a consensus BUY recommendation with a 1.8 rating.  Zacks Investment has a 12-month price target of $19.40 on ROYT.

Higher crude oil production and prices favorably impacted this month’s distribution as total production was approximately 8% higher and average realized prices were 2% higher than the prior month.  The current net profits amount from the Developed Properties was approximately $5.8 million, after receipt by PCEC from its counterparties of $0.4 millionrelated to the settlement of applicable hedge contracts. The development expense for the Developed Properties was $0.5 million during the period.

The current distribution also includes a 7.5% overriding royalty on the Remaining Properties which produced 22,783 Boe from 36 Orcutt Diatomite wells and one Orcutt Field well. Production from the Remaining Properties was approximately 10% higher than the prior month due to the Orcutt Diatomite expansion project being ahead of schedule. The cumulative deficit of the net profit interest on the Remaining Properties, including the 7.5% overriding royalty payments, is approximately $5.4 million.

Stocks with 4% Dividend Yields with Positive Earnings Surprises

As we start earnings season, the blue-chip stocks get the attention.  This is logical because these stocks have a large following of investors.  In comparison, I am always looking for stocks with nice yields that have positive earnings surprises.  So far, I have identified three stocks with positive earnings in the first week.  Here are the a brief details of stocks with dividend yields higher than 4% that made the list.

Gannett (GCI), publisher of USA today, reported better-than-expected quarterly earnings this week.  The largest newspaper chain in the United States and an industry bellwether, said excluding special items, it earned 56 cents per share, beating analysts’ average forecast of 52 cents, according to Thomson Reuters I/B/E/S.  Gannett is in the process of rolling out a digital pay strategy; it has launched already at half of its U.S. publishing properties. Digital revenue was up about 33 percent in the quarter and circulation revenue was up for the first time in years.

GCI expects a surge in advertising demand due to the Summer Olympics and U.S. elections.  GCI is trading at $14.78 with a dividend yield of 5.41%.  GCI has an equity summary score of 7.7 out of 10 for a Bullish outlook.

Shaw Communications (SJR) is a diversified communications and media company, providing consumers with broadband cable television, High-Speed Internet, Home Phone, telecommunications services (through Shaw Business), satellite direct-to- home services (through Shaw Direct) and engaging programming content (through Shaw Media).

SJR had net income from continuing operations of $248 million or $0.53 per share for the quarter ended May 31, 2012 compared to$203 million or $0.45 per share for the same period last year. Net income from continuing operations for the first nine months of the year was $628 million or $1.34 per share compared to $392 million or $0.86 per share last year. SJR is trading at $19.42 with a dividend yield of 4.94%.  Dividends are paid on a monthly basis.  SJR has an equity summary score of 9.1 out of 10 for a VERY Bullish outlook.

Banco Latinoamericano De Comercio Exterior, S.A. (BLX) provides trade financing to commercial banks, middle-market companies, and corporations primarily in Latin America and the Caribbean.  Net Income during the first six months 2012 reached $55.4 million, a $13.4 million, or 32%, improvement compared to the same period in 2011.  The results were driven by the strong performance in the Commercial Division, where Net Income rose $20.3 million, or 96%, during the period, reflecting higher net interest income due to increased lending balances and yields.

Bladex is trading at $21.398 with a dividend yield of 4.68%.  BLX has an equity summary score of 9.9 out of 10 for a VERY Bullish outlook.

Monthly Income Plan Newsletter

Signup below to receive a free copy of the Monthly Income Plan newsletter for October 2011.  This report contains a market update, list of monthly dividend payers, covered call trades, protective puts and calendar spreads.  Subscribe to Monthly Income Plan.


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Diary of a Monthly Income Plan (INFOGRAPHIC)

Some investors and traders are always searching for that “holy grail” to make their millions in the markets.  These traders look to quantum programs, black boxes, high frequency trading and other sophisticated methods to gain an edge on the market.  At Get Rich Investments,we like to keep investing as simple as possible.  Afterall, we are totally focused on one objective to create monthly income from investing.  We created an infographic, “Diary of a Monthly Income Plan” to show how easy it is to invest for monthly income in today’s market.

Free to embed on other sites using this code:  <embed src=”” height=”400″ width=”466″ type=”application/x-shockwave-flash” allowFullScreen=”true”>


Diary of a Monthly Income Plan_(Infographic)

Monthly Income Investments with 10% Yields

It is getting difficult to find high yields in the closed-end funds (CEF) these days.  Below is a table with 5 potential candidates.  All of these CEFs trade at a premium except Alpine Total Dynamic Dividend (AOD) which is trading at a -3% discount.  PIMCO High Income is trading at a 52% premium of net asset value.  All of these CEFs pay monthly income.  These CEFs should remain on your watchlist.  If they pull back in price then you may enter a new position if you are seeking high yield investments.

Ticker Fund Name Closing Price NAV Distribution Premium /
Price Change Rate Discount
PHK PIMCO High Income Fund $13.72 ($0.06) $9.01 10.66% 52.28%
AOD Alpine Total Dynamic Dividend $6.19 ($0.02) $6.39 10.66% -3.13%
NCZ AGIC Convertible & Income II $9.63 ($0.02) $8.51 10.59% 13.13%
NCV AGIC Convertible & Income $10.36 ($0.07) $9.37 10.42% 10.62%
DHF Dreyfus High Yield Strategies $4.96 ($0.02) $4.17 10.40% 18.94%


PIMCO High Income Fund (the Fund) is a diversified, closed-end management investment company. The Fund’s primary investment objective is to seek high current income. Capital appreciation is a secondary objective. The Fund invests in a diversified portfolio of United States dollar-denominated debt obligations and other income-producing securities that are primarily rated below investment grade. The Fund seeks to invest at least 50% of its net assets in debt securities that are, at the time of purchase, rated below investment grade (below Baa by Moody’s Investors Service, Inc., below BBB by either Standard & Poor’s or Fitch, Inc., or unrated but judged by the investment manager to be of comparable quality), which may be represented by forward contracts or derivatives, such as options, futures contracts or swap agreements. Allianz Global Investors Fund Management LLC serves as the Fund’s investment manager. Its sub-advisor is Pacific Investment Management Company LLC.
Alpine Total Dynamic Dividend Fund (the Fund) is a diversified, closed-end investment company. The Fund’s investment objective is to invest in equity securities that provide high current dividend income. The Fund also focuses on long-term growth of capital as a secondary investment objective. In addition, the Fund has no limitations on the percentage of holdings that can be in either international or the United States companies. It invests in various sectors, including consumer discretionary, industrials, energy, information technology, materials, consumer staples, healthcare, financials, utilities and telecommunication services. Alpine Woods Capital Investors, LLC is the Fund’s investment adviser.
AGIC Convertible & Income Fund II (the Fund), formerly Nicholas-Applegate Convertible & Income Fund II, is a diversified, closed-end management investment company. The Fund’s investment objective is to provide total return through a combination of capital appreciation and high current income. It invests in a diversified portfolio of domestic convertible securities, and non-convertible, high-yield bonds rated below investment grade. It seeks to invest at least 50% of its portfolio in convertibles. The Fund invests in sectors, such as advertising, airlines, aerospace and defense, auto components, commercial services and supplies, construction and engineering, diversified financial services, healthcare providers and services, and telecommunications. Allianz Global Investors Fund Management LLC serves as the Fund’s investment manager and is an indirect, wholly owned subsidiary of Allianz Global Investors of America L.P.
AGIC Convertible & Income Fund (the Fund), formerly Nicholas-Applegate Convertible & Income Fund, is a diversified, closed-end management investment company. The Fund’s investment objective is to provide total return through a combination of capital appreciation and high current income. It invests in a diversified portfolio of domestic convertible securities and non-convertible, high-yield bonds rated below investment grade. It seeks to invest at least 50% of its portfolio in convertibles. It invests in sectors, such as advertising, apparel, auto components, banks, diversified financial services, entertainment, miscellaneous manufacturing and retail. Allianz Global Investors Fund Management LLC serves as the Fund’s investment manager and is an indirect, wholly owned subsidiary of Allianz Global Investors of America L.P. (Allianz Global). Its sub-advisors are Pacific Investment Management Company LLC, Allianz Global Investors Capital LLC and NFJ Investment Group LLC.
Dreyfus High Yield Strategies Fund (the Fund) is a non-diversified, closed-end management investment company. The Fund’s primary investment objective is to provide high current income by investing at least 65% of its total assets in income securities rated below investment grade. The fund also provides capital growth as a secondary objective. The Fund invests primarily in fixed-income securities of below investment-grade credit quality. Issuers of below investment-grade securities may include companies in early stages of development and companies with a highly leveraged financial structure. The Dreyfus Corporation (Dreyfus) serves as the Fund’s investment manager and administrator.

Monthly Income from Main Street Capital

Main Street Capital (MAIN) is a business development company that pays a monthly dividend.  It currently has a dividend yield of 8.52% by paying a $0.13 dividend per month.  MAIN has a market cap of $350 million.  There is room for significant growth as MAIN offers more financing to companys between $10-100 million.  The ROE is 20.7% for this stock.

MAIN just completed a successful common stock offering with net proceeds of $70.5 million.  This money will be used to repay outstanding debt borrowed under its $100 million credit facility, to make investments in accordance with its investment objective and strategies, to make investments in marketable securities and idle funds investments, which may include investments in intermediate term bank debt, rated debt securities and other income producing investments, to pay operating expenses and other cash obligations and for general corporate purposes.

MAIN has a trailing PE of 7.63 which is cheap for a monthly dividend with a small capitalization.  MAIN’s PE ratio is among the lowest of any stock in the Investment Services industry and signals that investors have not been willing to pay a premium for this company’s business prospects. Additionally, during the past year, earnings growth has outpaced its historical five year growth rate.

MAIN business summary:

Main Street Capital Corporation (MSCC) is a principal investment firm focused on providing customized financing solutions to lower middle-market companies with annual revenues between $10 million and $100 million. The Company was formed for the purpose of acquiring 100% of the equity interests of Main Street Mezzanine Fund, LP (MSMF) and its general partner, Main Street Mezzanine Management, LLC (MSMF GP); acquiring 100% of the equity interests of Main Street Capital Partners, LLC (the Investment Manager); raising capital in an initial public offering (IPO), which was completed in October 2007, and thereafter operating as an internally managed business development company (BDC). MSMF is licensed as a Small Business Investment Company (SBIC) by the United States Small Business Administration (SBA) and the Investment Manager acts as MSMF’s manager and investment adviser. The Company invests primarily in secured debt instruments, equity investments, warrants and other securities.

On 3/10/2011, MAIN reported 4th quarter 2010 earnings of $0.19 per share. This result missed the $0.27 consensus expectations of the 4 analysts following the company and missed last year’s 4th quarter results by 17.39%.  The next earnings announcement is expected on 05/02/2011.  However, Q1 2011 earnings are expected to $0.34 per share.  For the year, earnings are expected to be above the dividend payout which lessens the chance of a dividend cut.  MAIN has a 5-year sales growth rate of 37%

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