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Building a portfolio that churns out dividend checks for
every day of the month isn't some pipe dream only enjoyed by
the extremely wealthy... or the extremely smart.
I'll admit, StreetAuthority's Chief Investment Strategist --
Paul Tracy -- is smarter than the average bear. But he also
has a knack for explaining the complex or confusing in a
simple way that even a 12-year old could understand.
So when he told me about his "daily paycheck" strategy, I
knew he wouldn't have told me about a seemingly impossible
goal -- earning income from your investments for every day
of the month -- without having a way to make it simple for
other investors to replicate.
That's when Paul told me about his eight "No-Brainer"
Rules. With these simple rules, anyone can build a
portfolio that pays a steady... and growing...
stream of income.
And these aren't insignificant little $2 and $3 checks -- these are $50...
$60... even $300 checks that can pay for your groceries, your gas, your fine
dining, your weekend at the spa, your holiday shopping... your country club dues...
or even more shares. |
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"No-Brainer" Rules |
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1. Forget growth. Invest in income. |
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2. Reinvest your dividends. |
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3. Take the higher yield. |
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4. Small-caps beat large-caps. |
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5. Look overseas for higher income. |
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6. Choose fast-growing foreign markets. |
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7. Avoid taxes, legally. |
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8. Load up on monthly dividend payers. |
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Keep in mind, we're only talking about dividends here... not cash from capital
gains, which -- if you take into consideration -- are impressive in their own
right:
Several of Paul's holdings are up a total of +54%... +69%... +78%... +99%... even
+108% and higher in the last 24 months.
But he's not selling -- instead, he's leveraging the dividends to buy
more shares, which is quickly leading to even larger paychecks.
For example, back in September 2008 -- while Paul was still tweaking his new
investing strategy -- he collected 15 dividend checks for a total of
$513.44... and he put every cent back into more shares.
That's why one month later, in October, he collected 17 dividend checks for a total of $985.88
-- which he also reinvested.
Then, for the remaining two months of 2008, he averaged 19 paychecks --
for an average payout of $1,778.26 a month.
As you can see, with each month that passes, this "daily paycheck" strategy
can pay you larger and larger dividends!
Last week, I brought you
Paul's "No-Brainer" Rules 1-4. This week, I have the
remaining rules for you... along with
some important news that I think you'll find very valuable.
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"Look overseas for
higher income." |
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It's a cash-flow desert here in America for anyone who needs to bank
an income off their portfolio.
The average U.S. stock pays just
2.2%. (We now have one of the stingiest stock markets in the world, apart
from Japan's.)
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Dividend Yields of Major Stock Indices
The average dividend yield of the S&P 500
today is just 2.2%. That's peanuts compared to yields in
other developed nations...
| Australia |
4.0% |
| Brazil |
2.9% |
| Czech Republic |
5.3% |
| Egypt |
4.7% |
| Finland |
3.7% |
| France |
3.7% |
| Germany |
3.6% |
| Italy |
3.4% |
| New Zealand |
4.8% |
| Portugal |
3.2% |
| Spain |
4.7% |
| Sweden |
2.9% |
| Taiwan |
2.5% |
| U.K. |
3.5% |
| U.S. |
2.2% |
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While you can find the occasional high-yielding stock,
odds are that anything paying above say, 15%, is a basket case. In
fact, once you weed out the money losers,
only 8 stocks in the entire United States pay more than 15%.
Just 8 lonely survivors. But guess what? Expand your
horizon a bit and it's a completely different story.
Right now, there are actually 99 profitable companies
yielding more than 15% -- they just don't happen to be in the U.S.
Eight here versus 99 abroad -- where do you think the
best hunting ground is for a yield-hungry investor?
93% of the jaw-dropping yields these days are abroad. Meanwhile, the dollar is weakening, boosting the value of those
dividends month after month.
And not only are the yields higher overseas, but foreign
markets are growing much faster than the U.S.
Why keep your money in U.S. stocks paying 2.2% in a flat
economy... when you can buy stocks yielding up to 15% or
more in countries that are growing
+5%, +6% and +7% a year?
If you want to start collecting total dividends in excess of
$2,000... $3,000... even $5,000 a month, skew your portfolio
toward fast-growing foreign dividend-payers.
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"Choose
fast-growing foreign markets
over developed markets." |
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To say foreign markets are on fire is an understatement.
The
benchmark MSCI Emerging Markets Index is up +63.6% year to date
-- more than double the S&P 500's +24.1%
And that +63.6% is an average. Individual emerging markets have
topped those gains, like
Peru, which is up +122% in dollar terms... Russia, up +116... Indonesia, up +117%...
India, up +87%... and Brazil, up +110% in dollar terms.
These markets are also among the fastest-growing economies on
the planet. The IMF says emerging markets will account for all the
growth in the global economy this year and most of the growth in
2010 as well.
To Paul Tracy, investing in high-yielders in
emerging markets is a "no-brainer."
That's why he likes to load his "daily paycheck" portfolio with
promising emerging market plays like First Trust/Aberdeen Emerging
Opportunity Fund (NYSE: FEO).
Investments like this one not
only get you rip-roaring growth from China, India, Brazil, and
Indonesia -- all of which have outperformed during the global
slowdown -- but also get you steady quarterly dividend checks
thanks to its 7.5%-plus yield.
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"It's not what you
earn, it's what you keep. Avoid taxes, legally." |
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Most of us consider ourselves patriotic citizens.
But that doesn't mean we have to pay Uncle Sam any more than his fair share of our investment income.
Unfortunately, when building income-oriented portfolios, many investors get blinded by
high yields on fully taxable investments without stopping to consider how much cash will be left over after the government takes its cut.
Although tax-advantaged securities typically offer lower yields, in many
cases they will put more cash in your pocket at the end of the day. This is particularly true for investors in higher tax brackets.
For example, if you're in the 35% tax bracket a tax-free investment
paying 7% has a taxable equivalent yield of 10.8%. And a tax-free security
paying 10% has a taxable equivalent yield of 15.4%.
These are precisely the types of tax-advantaged situations that Paul
Tracy says you should look for when you're transforming your portfolio into
a daily income machine.
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"Load your portfolio
with monthly payers." |
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A key aspect of the Victorian definition of a gentleman was someone able to
generate enough income to live on from their existing fortune without eating
into their seed capital.
Back then it was called "living off your four percents" -- which
referred to
government bonds that paid around four percent.
Today, Paul's coined a new phrase for this lifestyle. He calls it "living off your monthlies."
That's because a critical component of Paul's new "daily paycheck" strategy calls for
skewing your investments toward companies that pay regularly monthly
dividends.
The idea is to load your portfolio with enough of these monthly payers so
that you get paid nearly every single day of the month... or more.
When you make the choice to invest in a stock that pays a monthly dividend,
you'll probably be surprised when your first check shows up soon.
And you'll be surprised the next month, too, when another check arrives.
After the third month, you'll be spoiled -- you'll find it's easy to grow
accustomed to this lucrative new source of passive income. Especially when
you load your portfolio with monthly payers and you start getting these
checks nearly every day.
And it's not just more convenient to be paid this often, you actually earn
more that way. Thanks to the compounding phenomenon, a stock paying out 1% monthly doesn't have a yield of 12%, but actually
12.68% when compounded -- a big difference over time.
How YOU Can Transform Your Portfolio into a
"Daily Income Machine"
By following these eight "no-brainer"
rules, Paul Tracy has transformed his portfolio into an
income-generating machine... one
that spit out the equivalent of an $87.35
dividend check each day in October.
Now it's YOUR chance to transform your own portfolio into a daily income
machine -- just like Paul has...
At StreetAuthority, we're always looking for new ways to help our
readers make more money. And because of the overwhelming success that Paul
has had with his real-money case study, we've
decided to offer a brand new service -- based entirely on his proven "daily
paycheck" concept.
Over the past several weeks Paul has been working closely with
StreetAuthority's top investment analysts
and research staff to develop this
brand new income service --
The Daily Paycheck.
The Daily Paycheck will be the ONLY income investing service on the
planet dedicated to giving you the optimal combination of dividend-payers
that can get you up to 30 (or more) dividend checks a month.
To get all the details on this brand new service, simply
click right here.
Lou Betancourt
StreetAuthority, Publisher
P.S. I invite you to take advantage of our special offer
-- and learn how to start receiving daily paychecks within the next
week. Simply
follow this link.
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