The Money Tree

Safely Generating Income in Retirement

Approach

Investment ideas discussed in The Money Tree are a product of the editor’s 34 years of experience and education in the “school of hard knocks”  while managing his own money.

The objective of this site is to chronicle the editor’s efforts to increase his net worth through the application of two separate strategies.

The first is to invest in income producing real estate.  The editor will attempt to generate consistent quarterly cash flow by primarily investing in real estate syndications.  To a lessor extent he will also be an opportunistic investor in mezzanine financing of small commercial and residential properties.  A complete list of his current investments can be found in the “Current Real Estate” tab.  The editor’s goal is to achieve an average annual ‘cash on cash’ return of 8% on open positions and an average return on invested capital of 12% on all closed positions.

The second strategy is a long-term, buy and hold strategy of select large-cap equities with a proven record of consistently raising their dividend on an annual basis at a rate that exceeds the rate of inflation.  These will include common stocks as well as multi-limited partnerships (MLPs).  The editor may, from time to time, enter covered call trades against these shares to enhance his overall return.  A listing of current holdings can be found in the “Long-Term Holdings” tab.  The criteria for entering new equity positions are as follows:

(1) Equity is a dividend aristocrat, having paid increasing annual dividends for a period of not less than 15 years.

(2) The dividend yield at purchase will be at multi-year, if not all-time, highs.  For example, I purchased Exxon-Mobil in August of 2015 at a price of $73 when it was paying a quarterly dividend of $0.73.  The dividend yield of 4% was, at that time, the highest ever for XOM.

(3) The dividend yield at purchase will be a minimum of 3.0% and preferably over 4%.

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