With 20+ years of stock market experience and a portfolio of 36 dividend-paying stocks, it may seem like investing and personal finance come easy for me. While I've always had a huge passion for investing and I had the incredible fortune of starting young, I have absolutely made my fair share of mistakes over the years. Thankfully, I have learned great lessons from each mistake. Today's video highlights my top 5 stock market (and personal finance) mistakes, with the goal of inspiring others and sharing valuable lessons learned.
When I first got started, I had an incredible interest in dividend-paying stocks from the beginning. That has always been my baseline strategy. However, over the years I have experienced my fair share of distractions the wasted time, capital, and focus.
In particular, today's video covers:
* My experience getting started with stock market investing in the 1990s.
* My mistake getting pulled into the "get rich quick" allure of penny stock trading, and the lessons I learned about "making fast money".
* My mistake diving into the exciting space of fiber optics during a tech market bubble, and why "buy low, sell high" just doesn't make sense to me.
* My mistake falling for a dividend stock yield trap in the mortgage REIT sector, during the height of the subprime mortgage era. This one taught me great lessons about payout ratios and investing in companies that can sustainably pay and increase dividends over the long term.
* My experience buying a car way above my means (a BMW M3 Convertible), and how I quickly learned the importance of being frugal in one's personal finances.
* My recent mistake buying a dividend paying stock that everyone was talking about. This is why I greatly prefer to generate my own investment ideas! And, this is why I love to diversify my portfolio.
At the end of the day, investing is a process. Right around 2008, I truly figured things out and went all in on my dividend strategy. Sure, I had a baseline in dividends all along, but this is when I really "got it" in a big way, and let go of the distractions. I know I'll make more mistakes from time-to-time, but also know that mistakes are just part of the process and should be embraced for their educational value.
More than anything, I truly hope you found today's video motivating!
Want to learn more about my history as a dividend stock investor? Here's another fun video on the topic:
Want to see which books have influenced my investing the most? Make sure to check out my Instagram:
Want to learn a bit more about my experience with Bitcoin in 2017? Here's a video summarizing my experience:
Want to learn a bit more about my experience as an angel investor? Here's a video on my recent experience with SAFE Agreements:
Just getting started out in 2018? Here's a video that addresses this very topic:
Disclosure: I own Bitcoin and other cryptocurrencies in my portfolio.
Disclaimer: I'm not a licensed investment advisor, and today's video is just for entertainment and fun. This video is NOT investment advice. Also, I'm not a tax advisor and today's video is NOT tax advice. Please talk to your licensed investment advisor before making any financial decisions.
All content on my YouTube channel is (c) Copyright IJL Productions LLC.
*"But get it while you here boy*
*Cause all that hype don't feel the same next year boy*
*Yeah and I'll be right here in my spot*
*With a little more cash than I already got" - Drake (I am on one - DJ Khalid)*
*Dividend investing with discipline in a nutshell 😂😂😂 *
At the end of the day it is whatever works for you. If you listen to the noise - it's paralysis by over-analysis. You have to get on with your own strategy, 100% ! Great video. I personally have 34 stocks. 9 US Stocks, and 25 Canadian.
i always tell my kids ,they don t have to be killed to learn its a bad idea , learning other peoples mistakes is vital, as ben graham noted if analysts always got it right share prices would nt move because everything would always be factored in lol
Stocks crashed in 2008-2009. So even if you invested heavily in 2006-2007 instead of a car you would have been down massively on those investments. Going into debt for a depreciating asset is never great idea financially but the timing of it worked out pretty good for you especially because you invested more heavily when the market was so cheap.
Thank you for your video!
Iam still in bitcoin, i didnt get out when it got parabolic, but iam still up a total +100%, and in other cryptos as high as +1000%, i think it will keep going up, since i see great oppertunity with its technology, a peer-to-peer digtal payment system, or something of the like, i also like the idea of storing whealth in something that was created by computers and mathetmathics.
This is my first year, i bought my first stock 2017 in july.
That is a very valid point. As a long-term dividend investor, I am very prepared for such a crash, and will be averaging in all the way down (and all the way back up). In fact, in my 20+ years of dividend investing experience, I have already lived through some crazy scenarios. Thanks for stopping by and sharing!
Understand money. JP Morgan said only gold is money, all else is CREDIT. Mortgages, credit cards, debt notes, computer credits, stocks, bonds, cash in the bank are all just CREDITS, not money. Money is gold. By the way gold has outperformed the Dow from 1966 to 2016. The Dow has lost .85% a year to gold from 1966 to 2016. It's a debt bubble, up 25x from 1966 due to fake, counterfeit currency allowed by President Lyndon Johnson taking America from real silver money to slugs. Slugs are not money. Federal debt notes are not money. Currency is not money. Credit is not money. Only gold is real money, held, owned, and what the central banks hold as security.
Well presented. Very helpful in understanding issues confronting dividend investors over time. Commitment appears to be a crucial factor in overcoming obstacles and challenges. Also very important to 'know thyself' - almost like the self-awareness grows from look-backs and introspection. Also perseverance in sticking with the plan.
Excellent quetion! Typically, I like to get my money working for me. And, I like to "stay in the game", actively investing on a regular basis. So, I like to average in over time. Typically, I like to invest in dollar amounts when commissions are 2% or less of my purchase price. In fact, I speak to this a bit in my latest vlog (see the second question in the vlog). https://www.youtube.com/watch?v=26RyCGYk4sg Thanks for stopping by and great question!
I ask myself that question all the time as well. While I first got exposed to this strategy in the 1990s (and it's always been top of mind), I sure made my fair share of mistakes. Certainly wish I had honed in on this as my sole strategy from the beginning!
So I'm buying century link my wife worked for level 3 communications and based on her opinion she has some extra insight on the direction of the company i say this is one of the best stocks for a dividend investor
ppcian I've made dumb mistakes because of my haste and laziness in not researching but just buying into some hype. I don't want him to make the same mistakes I made. So your humanity and genuine approach show you want to help hard working people to become responsible and smart investors. Keep up the amazing work.
Hi Ian, I know my question may not be exactly related to this video but I have a question. I noticed as I just jumped in to the market and threw in $2000 in to cannabis stocks. Now I realized that this was a real risky move. I'm in Canada so I don't know if my questions are going to be legit to you but here goes.Basically I want to invest like you but as a beginner, what do you think about investing in bank stocks for dividends? Are banks usually a safe institution to invest in? (I'm referring to the major banks in Canada) As a starter, are financial sector a ok place to invest in? PE ratio aprox. 10 and dividend yield at 3.5% - 4.5% stock prices range from $80 - $120 per share. I know those aren't the only factors you look at but I don't know how to look at everything. Thank you in advance!
Thanks so much for the fabulous question! This is a really good one. Let me answer via video. I actually have a few thoughts on the Canadian banks. Thanks, by the way, for stopping by all the way from Canada!
its me again your number 1 subscriber ahah, I wanted to ask whether or not the value of the company(market cap) can directly affect the stock price or shares that i bought? Brief background, Im torned between dividend investing and growth investing; some expert dont believe in dividend paying stocks if i will be investing in a company that dont pay dividend what is the point the only thing that make sense is when the money they make will be reinvested back to the company hence increasing their market cap, please enlighten me. Thank you so much
Fabulous question! (And, thanks for being an early subscriber, that truly means a lot!) At the end of the day, one has the pick the strategy(ies) that align best with them. Everyone has unique needs. Of course, I have landed on the dividend strategy because I love cash flow. One thought here - It's not always an "either/or" situation. Most of the stocks I like to buy are considered "dividend growth" stocks. Meaning, they pay growing streams of dividends over time. However, the growth also underscores that the company itself is growing and I have typically enjoyed nice share price appreciation. If you have not seen it yet, this video might be helpful too. In this video, I discuss dividend investing vs. growth investing: https://www.youtube.com/watch?v=v4nd8Ik8DTU
Absolutely! I actually have a few already that talk about fundamental analysis at a high level, although with no whiteboard in the background. Going forward, my next video will actually do a little fundamental analysis (with whiteboard). And, I have a cool Excel spreadsheet on the way. Basically, A LOT of 10-K and 10-Q analysis in the future. Thanks for being here! Here's something while you're waiting for the new stuff: https://www.youtube.com/watch?v=fDxYxsvPc_s
I tried to make "quick money" and had a penny stock pump to make me $20k last year, I held and got greedy and lost big. I'm back on the horse and trying to "really get it" now with safer investment options. Thanks for the encouragement!
Always enjoy your videos and a reminder of all the mistakes that I have made along the way in my over 20 years ofinvesting. The biggest being margin trading right before the GFC and getting those horrible margin calls! To be human is to err and the key is to learn from the mistakes and not repeat them
Patricia, thanks so much for the kind words and support! I did not now that you have 20 years experience just like me! How cool is that. Thanks for sharing your experience here with margin. You are absolutely right that it's totally human to make mistakes, and it's certainly the best teacher around.
I'm so happy to hear someone tell about the mistakes and losses also. Most people only tell of the good making the information flawed. I wish I knew what the stock market was when I was younger. I'll be 43 this year but I'll do what I can. I personally find the stock market very interesting. I been reading on it and studying different things for the past few years. Life storms happens to all of us and I am finally seeing the light out of the end of a tunnel. I'm where I can invest some now but I should be able to dump close to 50% of my income into investing in four years from now. Thanks for sharing.
Thanks so much for the kind words and support! Truly appreciate it. Being able to invest close to 50% is HUGE. That's a very enviable percentage, for sure. I wish you all the success in the world, and thanks again for being here!
Juan, I want to film a video on this topic, as I get the question quite a bit. For now, I do have a few photos on my Instagram with my favorite dividend investing books from my early days! Here's a stack of my favorite books: https://www.instagram.com/p/Ben-XbthX81/?taken-by=ianlopuch
Thanks for stopping by! Great question. REITs are a bit weird as, by law, they must pay out at least 90% of net income in the form of dividends to shareholders. So, payout ratio will always be 90% or more. That said, net income is really weird for REITs, as it's often understated due to depreciation. AFFO (adjusted funds from operations) is the metric that is more useful, as it adds back depreciation and amortization, but subtracts out real estate sales. The way Austin looks at things from an AFFO perspective looks good to me, although perhaps a bit more conservative than how I I look at dividends as a percentage of AFFO. Thanks for asking!
REITs payout ratios are much higher than most other stocks. Anything above 85% of adjusted funds from operations (AFFO) is taking unnecessary risk, in my opinion. Under 80% is better. Payout ratios under 75% are generally quite safe.
ppcian hey Ian. I found with BHP is that it is very cyclical, in that there are a lot of ups and downs. When it's up, YOC is amazing. When it is down, dividend is down. I love it because it is a huge company and when it is down, I load up and when it is up, dividend is up as well. I don't mind the swings as I am invested in 100 companies and I buy when something is on sale, and when you own just over 100 stocks, something is always on sale!
I do appreciate it doesn't agree with your philosophy. As you are a DGI and I would class myself as a dividend value investor.
Anyway as usual, great content and this sounds sad to admit, but I watch your videos 2/3 times! You need to post daily and then I don't need to do this lol
When I sold BBL, I was able to redeploy into stocks that are more core to my philosophy (stocks that have never cut/suspended their dividend before). I have conviction to hold them for the very long term. Also, have not tracked their performance against BBL from the precise date I sold (as BBL is out of sight, out of mind for me), but would suspect they have performed well on a comparative basis. That said, does not mean BBL is a bad company. It may make a lot of sense for others, and I do wish everyone well who owns BBL for the long term!
Will's explanation is spot-on. These are stocks that typically trade on the OTCBB or pink sheets. Typically worth < $1 per share (hence the name "penny stocks"). Lots of craziness in that market for sure. Lesson learned the hard way!
Stocks that are super cheap per share(exact cutoff is debatable, some say under $5, some say under $1). They tend to be highly volatile so there's the chance to make a fortune if one takes off, but the risk is so high that most people just end up losing money trying to make a quick buck. They could easily swing 20% throughout a day in either direction or just get delisted. Biotech penny stocks in particular seem to be popular with beginners looking to strike it rich with day trading. Losing a bunch of money to penny stocks is a pretty common painful lesson people learn early on.
One of your best videos yet, Ian! I appreciate you sharing so openly. I especially appreciate #5 because it is very, very difficult to be enthusiastic and committed for the long haul when you base decisions on what others tell you to do.
I find that most investors tout their successes and never talk about their errors.That you did this video speaks to your credibility, courage, and humility. Thank you for sharing all this. I too have made investing mistakes and experience has made them far less frequent.
best video you made,,, I see your past history mirrors mine to some degree,, I was successful in 99-2002 trading stocks, my big mistake was I spent most of the money on toys I didn't need , totally thinking this will go on forever,, I was wrong,, by 2005 I had to start over again due to health/taxes/ bad management ,, at age 53 now , I have 10 years of more conservative investing on dividends ,,
I do live in the Bay Area! Would be really fun to connect for lunch/coffee. In fact, it looks like a few other subscribers are also in the area. Let me see if I can set something up later in 2018, perhaps we could have a coffee or team lunch in SF. Stay tuned! Thanks for all of your continued support!
Uploading contracts to an online database should not take too long, and with the right solution, there should be a way to quickly drag and drop them into folders. Of course, the contract management team may want to give some thought as to how those folders are categorized. In some industries, it may make sense to classify them by agreement type, whereas in others they may need to be grouped by timeframe or date. It is obviously important to do what makes sense for your company and to ensure everyone understands the classification system that is instituted. With this sort of well-oiled system in place, it is a lot easier to keep a handle on things.
Divide and Conquer.
This is another area that is very industry-dependent, but it is highly unlikely that any company can afford to have an entire contract team devoted to managing one portfolio. More than likely, it is more realistic to divvy up the team and the contracts so that there is a leader for each relevant sphere. The entire team will obviously have to coordinate and communicate, but resources must be allocated in the most efficient manner possible. In turn, this will allow for several individuals to keep an eye on a smaller batch of contracts, thereby facilitating those periodic reviews.
Outsource the Tedium to Technology.