Wednesday, February 29, 2012

Fun Calculators & Tools

"Fun Calculators"?  Yeah, there is such a thing.  At least I think so.  When calculators can prove how much your money can grow they can certainly be fun.  They can also help motivate you to stick with your investing goals.

In some of my posts I have referenced how money invested over a certain period of time growing at a percentage can grow to a large sum of money.  Some you have asked how I got this number... basically you want me to show my work.  I think this is a good idea, and probably something I should have done awhile ago.  Instead of showing you though I'm going to provide you with my Excel calculators that I use.

Hopefully you'll have "fun" playing with the inputs too so you can see how your own investments can grow if you stick with a dividend growth investment plan.

Tuesday, February 21, 2012

Roth IRA for Kids

In my last article I discussed how I am going to help my son get a head start in investing and how to keep him interested in dividend growth stocks as he gets older. I am excited about the potential of this plan; the only problem is that the government is going to get their share of it as well. If you are reading this then I assume you are not a Communist that enjoys paying taxes, so I'd like to show how you can grow a small amount of money for your child into a very large sum without having to worry about a politician getting their hands on one cent.

For those of you not familiar with a Roth, shame on you, please read this article. Roth IRA's are a powerful retirement tool that is not utilized enough by individuals who have the opportunity to do so. What is utilized even less - and likely unknown to many - is funding a Roth IRA for a child.  READ MORE

Wednesday, February 8, 2012

7 Stocks for Your Child's Retirement

For any of you who are parents, soon-to-be parents, potential parents, grandparents... basically if you have a child or will have a child whose financial independence you care about, this post is for you.

This past September I had a major financial impact that occurred in my life, my son was born. Like most Dads I have since envisioned teaching my son about sports, girls, and of course dividend stocks. What's that? Most Dads don't teach their sons about dividends stocks? Well that's a shame, consider my son a leg up then.

Within a couple of days of receiving his SSN I had opened a 529 plan and custodial brokerage account and set up automatic deposits for each. As I contemplated what his first DRIP stock would be I realized I was approaching this choice as if it was my own portfolio. Or course I wanted to buy a solid dividend growth stock that we could reinvest dividends into for the next 60 years, but I also wanted this to be a great teaching tool for my son. Sure the ALFAC (AFL) duck is funny, but I'm not sure demonstrating DRIP investing to him with a supplemental insurance company was going to grab his attention and get him excited about investing (although I do think it would be a good dividend growth stock to own).  READ MORE

Tags: [MCD] [YUM] [INTC] [XOM] [KMB] [TGT] [PEP]

Friday, February 3, 2012

Boring Terms We Need To Know: PEG Ratio

In our last "boring terms" post we analyzed the common P/E ratio.  Another ratio that ties into P/E that we use in our dividend growth stock analysis is PEG Ratio.  PEG stands for Price/Earnings to Growth.  This ratio demonstrates a stocks current P/E to its expected earnings growth - typically its estimated 5 year growth.

This term was popularized by Peter Lynch, a very successful investor that works for Fidelity Investments. Peter stated in his 1989 book One Up on Wall Street that "The P/E ratio of any company that's fairly priced will equal its growth rate".  So a fairly valued company will have its PEG equal to 1.  The lower the PEG the more undervalued a stock is based on future estimated growth.