ADOPTING THE MINDSET OF A MILLIONAIRE (6)

I put my lunch money into the stock market

Earlier this year I took a dive into the world of stocks and shares. My aim? Well, I would like to have another source of income and become a millionaire.

Disclaimer: for financial advice finding a financial expert is key!

I am not an expert, but I am slowly turning into an avid trader, eager to make mistakes and hopefully learn. For this reason, after taking my first dive and purchasing ULVR and LGEN shares, I went back for more and a few others.

What are shares?

When you acquire a share, you are acquiring a percentage in a company or of an asset. Therefore, a share is a proportion of an investment.

When you hold shares, you become a shareholder.

Originally, the plan was to only have 4 companies which I would regularly invest in during 2021, however, after receiving a special dividend from TSCO which I used to acquire IAG shares, I set a target of holding a portfolio totalling of 3,500–5,000 shares by 2025.

See breakdown below:

Author’s own — Investment Table 1: Actual vs Targets

Setting targets is very easy, but after drawing up an estimated annual investment table, I realised that to increase my portfolio by 1000 shares in any given year, I will need to increase the value of my monthly investment amount sooner rather than later. And of course, be ready to purchase a higher number of shares when the value is lower.

As I don’t want to invest more than 5%-10% of my current salary in the stock market, I would like to try and achieve 12 dividend payments per annum and use it as part of my regular investment.

There goes my January to March (2021) lunch money.

Disclaimer: for financial advice finding a financial expert is key!

My current portfolio is broken down as follows:

Legal & General Group (LGEN) — 55 shares
Unilever (ULVR) — 4 shares
GlaxoSmithKline (GSK) — 5 shares
Tesco (TSCO) — 93 shares (post special dividends)
Anglo American (AAL) — 2 shares
International Consolidated Airlines Group (IAG) — 53 shares
Polymetal International (POLY) — 8 shares

Right now, my trades are minimal, and that’s because I am only investing what I am comfortable with losing. My recommendation for you, is that you set how much you would like to invest, and decide if you want to do one off trades, or if you would like regular monthly investments.

Also, you may have already noticed that all of the links above take you to a HALIFAX page, and that is because my current trading account is a HALIFAX Share Dealing account. And no, I am not earning a single penny from them to share these links with you, just added them for reference.

I chose HALIFAX simply because I have a bank account with the bank and had no patience to carry out my research and look for comparable evidence in order to find the “IT” account. For me, this works perfectly, but as I do not know what is going on outside with other accounts, I recommend you do your research before settling with any platform. Find out what works best for you.

If you are interested in finding out what I learned in February, read the article below:

As mentioned, I am interested in dividend paying shares, and it makes sense (to me anyways) for my 10–15 companies to contribute towards the 12 payments I require to grow my portfolio by 700–1000 shares every year for the next 5 years.

What are dividends?

Simply put, this refers to a split of earnings between shareholders, more like a financial reward for your investment.

When do the companies I have invested in so far pay dividends based on previous years or recent (2021) updates?

Author’s own— Dividends Table 2: Dividends Estimated Payment Schedule

Looks like I need to read more about ULVR as it could be my golden ticket to Financial Freedom! And potentially GSK too. May and September look promising if I play my cards right.

Digesting the fundamentals of companies for breakfast, lunch and dinner is hard and takes time, however, it is crucial you do your own research and understand what you are getting yourself into. Or accept that if you invest into the unknown (like I am (pretty much) currently doing) you are risking a lot more. I am doing my research, but need to expand it even further, and find out or try estimate what can be expected now that we are reaching the other side of the pandemic.

Why? Because I want regular dividends. While dividends are not guaranteed, as they can be stopped at any time, what happened in the past dark 12+ months will dictate which companies may need to keep their dividends on hold a little longer. And I will need to look outside my current bubble or invest harder on a few of the current 7.

My advice to you, is to list out the industries which trigger your interest and you would like to research to find companies to invest in. This will enable you to break down your research into smaller chunks and allow you to decide which industries are better for you, right now.

Personally, I am interested in:

Financial services
Consumer goods
Pharmaceutical
Mining
Aviation

So far, I have invested in 7 companies, however, the aim is to have around 10–15 companies to invest in. While I partially agree that 10 is better than 7, I also don’t want to spread myself too thin too quickly, as I still have companies with less than 5 shares, and these need to be boosted up before I add another company to the list.

Why so many companies? I want to diversify my risk and earn dividends even if it’s only from 4 or 7 companies. Also, highly recommended as part of the FIRE movement.

How long will I hold these shares for? Not sure, but as I am looking for long-term investment, I have started with a plan to regularly invest monthly for the next 5 years. Be prepared to hold yours for even longer if necessary.

I am also interested in dividend paying Exchange Traded Funds (ETFs), but this will be for another article.

I hope you enjoyed this brief update, chat again in a few months or maybe end of year. Let’s see.

Disclaimer: for financial advice finding a financial expert is key!

Not a seasoned writer, just a human doing this thing called life. *** My motto: Filling up my cup, so I can overflow into yours

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