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My goal in Lending Club accomplished!

Dividends Today I have reached a goal of saving $10,000 in my Lending Club account. The process is not finished yet and it will take at least two more months to finish it completely, but all the final deposits are on the way and I can move on to next goal.

My next goal is to reinvest all proceedings and gains made in Lending Club and continue this account to grow, but there will be no new contributions. The next step then will be to save $10,000 in my TD account or reach that value. I will be depositing money monthly (at this point I can afford $150 monthly) plus all potential surplus money, bonuses and all money I can afford to set aside and save.

Here is the outline of my goal and strategy with TD account:

  1. I will continue in dividend investing.
  2. I will be selecting high yielding, good quality stocks with great dividend history and dividend increase of at least 10 years or more (with some exceptions, such as REITs.
  3. Keep 30% in cash which will be used for put selling (cash secured puts).
  4. Reach 100 shares on current holdings (this goal will exceed a time frame of my primary goal).
  5. Start selling covered calls on owned stocks (which reach my 100 shares holding).
  6. Start selling cash covered puts and buying stocks by selling puts.
  7. When the market and my holdings will be rising I will be saving cash and adding more position sparingly (only when a great opportunity arises). When the market or my holdings start declining I will be looking for opportunity to buy more shares from saved cash.
  8. Since I am a believer in leveraging and agree with Douglas R. Andrew’s opinion (see “Missed Fortune: Dispel the Money Myth-Conceptions – Isn’t It Time You Became Wealthy?” by Douglas R. Andrew), that in early years of savings an investor should leverage his investments “to the tilt” and in later years start de-leveraging, I will use the principles in his book to boost my savings. I am aware of the caveats and dangers using margin, but if managed correctly you can sustain even horrible market declines avoiding margin calls.
  9. And last I will reinvest all my gains and proceedings (dividends). I will not be reinvesting them back to the companies who paid, but based on balance of holdings,
  10. I will be balancing my portfolio to keep my holdings equal in dollar amount as well as based on income weight. Having holdings balanced based on income can help in case when one stock drops the dividend or cut the dividend, the income loss will be smaller than when having larger position. For example, when holding FULL which pays 11.23% compared to ABT paying 3.24% I will be forced to have less exposure to FULL than to ABT. If both FULL and ABT will represent 4% of the entire portfolio income, if FULL stops paying I would lose only 4% of the entire portfolio income. With dollar amount weight I would lose 11% of my income. However, I will still keep balance in between both ways, but leaning towards income based balance. Of course in early years my portfolio will be imbalanced and more concentrated, but as time will go this will be fixed.

I think, that is about all I want to do with my portfolio at this time. As I spoke with Dave Landry (whose book “The Layman’s Guide To Trading Stocks”. I strongly recommend to all beginners in investing and trading stocks), he said to me when I was complaining about my trading results:

“Start SLOW and build… have realistic expectations. Also, if you’re happy doing what you are doing, then keep doing that… and be prepared to do some homework!”

Thanks Dave, I will continue in building my financial freedom and keep your advice!

Happy Trading!

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