“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.”
There is this belief that investing should not be entertaining. In fact, they say, it should be plain boring. This is probably related to the fact that you should not let your emotions get in the way when you use your money for a “greater purpose”. After all, lots of excitement could also lead to a big depression when the fun is over. Letting your emotions take control of your money is definitely not a good idea. However, this doesn’t mean you can’t find fun and excitement within your investing strategy. Here’s why I think dividend investing is so much fun.
Discovering New Businesses is an Adventure!
First, I must admit: I’m a passionate investor. Does this mean I get crazy and buy anything that is “about to become the next Apple?” Not at all. But if there is one thing I enjoy most about being an investor, it is discovering new businesses!
I’m fortunate to run this blog and Dividend Stocks Rock because both generate tons of emails and comments about potential great stocks. Many readers ask me my thoughts on various dividend growers. I’d say that most of them don’t meet my investing criteria (as they are quite strict). They are not “bad investments” per se, but I don’t get excited by them either.
From time to time, this communication also gives me the opportunity to discover a marvel. This is how I discovered Gentex (GNTX), Andrew Peller (ADW.A.TO) and CAE (CAE.TO) for example.
Even if I don’t add each “suggestion” to my own portfolio, I find it fascinating to learn about new business models. Understanding how companies make money, what the strategies look like, and learning how they find new ways of creating value is simply flabbergasting. At dinner time, I often talk about the “new company” I learned about during the day and I find myself absorbed by it for a few hours. I guess I just love learning new stuff!
Discovering how Disney (DIS) makes exceptional acquisition deals (ESPN, Pixar, Marvel, Lucas Film, Fox assets) and then transforms each piece of content into multiple streams of income is just pure magic. Understanding how a large and mature company such as Microsoft (MSFT) pivoted their business model from paid software to paid subscriptions and opened one of the most prolific cloud services is fascinating.
Sylogists (SYZ.V) is the most recent addition to my portfolio (more to come in my next dividend income update). If Sylogist weren’t trading on the TSX venture, it would be part of the Canadian Dividend Aristocrats. In fact, it is the only stock on the TSX venture to show 8 consecutive dividend increases. Its past 5-year and 10 -year dividend growth rate is impressive, and management also rewards shareholders with a few special dividends from time to time. What’s not to like? Oh, did you ever wonder how such small company can pay such a nice dividend? That’s because there is no debt on the balance sheet!
Getting Paid is Fun
I remember that one of the things I appreciated about having a steady job was to see my bank account getting bigger every two weeks. No matter where and how the money comes; getting paid is always fun. I quit my job in 2017 and I also quit that “income security”. No more paychecks deposited every two weeks.
However, since most of my money is invested in dividend growing stocks, I still get paid every month! All right, you are going to tell me that my dividend payments aren’t as high as my banker’s paycheck… and you are right. But I still feel the same joy when I see my investment account going up by a few hundred bucks each month. No matter what happens in the market, I get paid and I smile.
Watching Dividend Growth in Action is Entertaining
If getting paid is fun, getting a raise is even better! I used to be “against” monthly dividend income updates as I didn’t find the point of reporting my portfolio so often. However, now that I’m doing it for one of my accounts as a case study for this blog, I have to say that watching the power of dividend growth in action is as entertaining as watching Avengers: End Game.
I invested the commuted value of my pension plan in 2017. No new money is allowed in this account, which makes it a perfect case study for dividend growth. When I open my broker account to calculate my monthly dividend income, I get excited to see the growth compared to the year before. Here’s what it looks like:
Quarter after quarter, I get a raise compared to last year. Who doesn’t get excited when you get a raise at work? Those are obviously smaller than real paycheck raises, but the growth is definitely fun to watch.
The End-Result is Definitely Exciting
From the very first dollar I invested in the market, I had a simple goal in mind: build the largest nest egg possible. Funny enough, I enjoy what I do now so much that I’m not sure I’ll ever stop working to “retire” and withdraw money from my portfolio. However, my goal hasn’t changed; I want to grow my portfolio as much as I can. This is a fun goal, this is exciting.
I’ve stumbled upon an old article I wrote back in August 2014 (5 years ago) where I discussed the crazy idea of retiring (e.g. quitting my job) at 35. In this article, I list my total investments which were worth $62K back then. That 62K has more than doubled in 5 years and I’ve added my pension plan to it to making a total close to 275K now. During that time, I didn’t add much new capital because I pretty much “killed my cash” in a once-in-a-lifetime adventure (you can read about it here). So realizing how far I have come in only 5 years is incredibly exciting.
I’m well aware that’s mostly because the market was incredibly good in the last 5 years. I’m not a genius, I’m not a guru and I’m not George Soros. Nonetheless, I feel great when I look at how my money has grown and I certainly get entertained by watching the end-result.
A successful investor will make his/her investment decisions using a strong rationale based on various principles. Emotions should not be part of the process when it’s time to buy or sell stocks. However, it doesn’t mean it has to be boring the rest of the time! Some say I should get some hobbies to be entertained, I would rather make dividend investing one of them.
Do you have fun investing? Do you find it entertaining?