While I am usually not a fan of e-books when dividend loving blogger DividendMonk asked me to review his Dividend Toolkit I knew this was going to be an exception. Right off the bat you can tell that *this* e-book is different as it is 200 pages broken up in 6 intro topics and 6 advanced topics (along with spreadsheets in multiple formats to work through the advanced sections). This is contrary to most ebooks that are just simple topics regurgitated from one’s blog.
- Live Simply, Build Wealth
- Utilize the Raw Power of Compounding
- Explore a Corporation
- Learn the Investing of Basics
- Discover Dividend Growth Investing
- Build and Manage a Growing Portfolio
- In-Depth Analysis of Stock/Bond Asset Allocation
- The Two Problems with Index Investing
- Comprehensive Guid to Stock Analsys Based on Pareto Principle
- Special Investments: MLPs and REITs
- How to Use the Valuation Spreadsheets
- The Pareto Principle Analysis Workbook
I didn’t think I would pull much from the core topics but two paragraphs really struck me…I actually read each a few times:
A committed wealth-builder, on the other hand, has the focus on long term wealth accumulation and financial independence rather than just a few thousand bucks in occasional stock gains. She or he consistently adds money to the portfolio, maybe every month or every other month, like clockwork. This is where the psychological edge of dividend growth investing comes in handy. The focus of this investor is constantly on growth of the passive income stream, rather than short term paper wealth fluctuations.The investor is familiar enough with her financial position, her income, and her investment strategy to make fairly accurate long-term goals of how much passive income she wants by a certain date (five year goals, ten year goals, etc), and then hopes to meet or exceed those goals. (PG. 7 )
But with a dividend portfolio as one of the pillars of the wealth-building strategy, the emphasis is different. It’s not about selling stocks in retirement; it’s about not having to sell stocks in retirement. If you’re diligent during the accumulation phase, the passive dividend and bond interest income alone can comfortably exceed expenses after a certain point, and grow more quickly than inflation. (PG. 10)
In addition Matt’s Chapters on The Corporation and Investing basics should be a must read for anyone that is thinking about getting into investing (regardless of whether you are thinking about passive investing vs active investing.
My Favorite Part of The Dividend Toolkit
While Matt makes it clear he is not a professional he provides a 40+ page explanation of how he analyzes stocks. Providing a summary of that chapter would not do it justice. In fact, I think the chapter needs to be re-read a couple of times prior to updating my own dividend portfolio. If you’d like to see his research in action all you have to do is check out his Dividend Monk blog.
Notwithstanding, his his reliance on the Pareto Principle seems a bit out of place since he really is doing a lot of work on each stock he is researching.
The price is BEYOND reasonable just for the spreadsheets and this one chapter.
My Least Favorite Part of The Dividend Toolkit
I think Matt spends a bit too much time on a few concepts that someone purchasing this type of e-book does not need. For example, there are probably 10 or so pages where he discusses why he doesn’t prefer index investing, and while the chapter is well written and as logical as you’d expect from an engineer, if someone is buying a Dividend Toolkit they have already made the leap to purchasing individual dividend paying stocks.
Have you purchased the Dividend Toolkit Yet? What are your thoughts?
* I was NOT paid in anyway to check out his book – just doing a fellow personal finance blogger a favor.