Keith Park from DivHut.com was kind enough to do an interview for me — the results of which you’ll find below. There’s a lot of great and useful information on his blog, so if you haven’t already checked it out, be sure to do so. In the meantime, enjoy the interview!
Q: I just noticed that DivHut recently turned two… congrats on the milestone! If you had to compare when you first started out your blog to today, what would you say has been the greatest impact your blog has had on your outlook on investing?
A: Thank you for your kind words regarding turning two!
Without question, the greatest impact my blog had on my investing outlook has been my ability to be more intimately tied to all my holdings and potential future investments. By blogging two or three times a week about my personal investments, I have become a lot more aware of my overall performance as well as dividend income stream. Prior to blogging, I looked at my accounts once a month or so and never chronicled my year over year passive income growth nor overall stock performance of my holdings. Blogging definitely ties you to your portfolios in a much more intimate manner.
Q: What was your initial reason for creating your blog and do those reasons still motivate you? Or has your reason for blogging changed over time?
A: As mentioned earlier, the primary reason to start my blog was to chronicle my real world investments and somehow be held more accountable, for better or worse, to my own investing decisions. In over two years of blogging this reason for creating my blog has not changed. I still learn a lot about my holdings and my dividend income stream by continuing to blog about my performance.
Q: Most bloggers in the FI world who post their portfolios usually prefer to remain anonymous, yet you’ve published your full name on your site. Was this intentional? Did you have any initial concerns? Has this caused you any problems (people you know finding out, etc)?
A: I think the question most FI/income bloggers ask themselves at the beginning of their blogging journey is to whether remain anonymous or not. I admit I asked myself the same question but ultimately decided to share my real world portfolio online, for better or worse. I think in this age with privacy and anonymity going the way of the horse and buggy it seems that more and more people are comfortable sharing, learning and being transparent about personal finance, a topic that at one point not that long ago was very taboo to speak about.
Q: You mention on your site that you’ve been investing since 1988. Care to share your best and worst investment choices during that time?
A: I’d say the best investment I ever made was my first. That first stock I owned put my own skin in the game and really introduced me to the world of stocks and investing. It also happened to be a dividend paying stock which was very exciting as every quarter a check, in my name, came in the mail. From that moment on, I became hooked on stocks.
Some of my worst investing mistakes have come from being lured into the world of penny stocks. I was still very much a novice and holding on to “traditional boring” stocks moving an 1/8 or 1/4 point (stocks used to be quoted in fractions) a day wasn’t as existing as watching bigger percentage moves in penny stocks often quoted in 1/16, 1/32 and even in 1/64. While these stocks were all very cheap they never amounted into anything and over time I eventually ceased trading.
Q: You also mention on your “about” page that you weren’t initially sold on the idea of long term dividend investing. Can you elaborate on what changed your mind?
A: I never fully understood the power of dividend growth investing over time. Clearly, this is a great strategy to build a passive income stream in retirement as well as offer long term growth via capital appreciation as your hold time for particular stocks is measured in decades. In the late 80s, interest rates were much higher than today and one could open up a CD and earn guaranteed, risk free returns between 8% and 9%. Why would owning KO or PEP paying me 2% and include capital risk sway me to invest in that manner? Checking accounts were also paying well over 6% too just to hold your money. It was a different time. Looking back though, as I mentioned earlier, I missed on dividend growth which over time could have provided much better long term returns than simply locking my money in a CD. Witnessing the power of dividend growth and long term yield on cost of these dividend growers changed my mind.
Q: Do you have a particular book on investing (or list of books) that you consider essential reading? that have influenced you?
A: I guess my single favorite book would be, The Millionaire Next Door. The message resonated with me quite a bit and while not a traditional investing book it does get you to think about money, investing and lifestyle choices.
( Note: I have to agree; I’m currently reading the the MND and it’s super interesting. )
Q: Since you’ve been investing for a while now, I’m curious how your reacted to the great recession of 2007-09. How did this period change the way you invested your money — if at all? Are you looking forward to the next downturn (bear market)?
A: Seeing your entire stock portfolio in the red never gives you a settled feeling. That being said, watching all my holdings drop anywhere between 30% and 60% I did not feel panic set in nor did I listen to any of the market pundits spouting off their rhetoric on TV and online. I simply held on to every single one of my stocks and continued to make my monthly buys as always. I can honestly say that going through those dark investing months had no impact on how I invest. Foremost, I’m a dividend-centric investor and as long as my holdings continued to pay me a quarterly distribution I was happy.
It’s interesting to note that of about forty different holdings only two cut their dividends, GE and WFC which I gladly held on to and continued to buy more of. Most of my holdings maintained and even grew their dividends like clockwork even during an extremely tough economic environment. I think that’s a testament to investing in high quality companies. While I’m still in an accumulation phase of stocks, I would certainly welcome a drop in stock prices. While I do not look forward to increased market volatility and uncertainty, it would be nice to be able to add to my holdings at much better prices, values and yields.
Q: What other blogs do you follow? Do you have any favourite investing / FI blogs?
A: I follow most of the blogs listed on my blogroll very regularly as I comment on them frequently. For a long time my favorite blog was DividendMantra but I have not been back in a while since the site was sold. That being said, here are just some of the names that I regularly visit. I know that many are left out but for a complete list you can visit my blogroll. Be Smart Rich, Captain Dividend, Dividend Diplomats, Dividend Hustler, Get Rich Brothers, My Dividend Pipeline, Passive Income Mavericks, Passive Income Pursuit, Tawcan, Dividend Gremlin to name a few.”
Q: What’s your overall goal with respect to investing? Is it to become completely FI, to pad your monthly regular income, or something else entirely? What are you plans once you reach long term goal?
A: The overall goal for my investing endeavors is simply to create a “significant” passive income stream that, at best, can sustain my entire cost of living and at worst simply pad my retirement income by a wide margin. If my dividends can pay for 70%, 80% or more of my retirement expenses I’ll consider it a successful investing career. While I’m still far from a true FI experience, I can foresee a time not that far away when I can already partially tap into my dividends instead of simply reinvesting them.
Q: Before we wrap things up here, in 50 words or less, describe your investing strategy…
A: My sole purpose for investing exclusively in dividend paying stocks is to create an ever increasing passive income stream. The most important “ingredient” for creating this passive income stream is time which is why I focus on dividend growers that instantly offer me a return from the moment I buy.
( Note: Wow… exactly 50 words! )
That’s it for now! I want to thank Keith for taking the time to answer my questions. It was a lot of fun reading his responses and definitely interesting to learn about someone else’s investing experiences.
As always, thanks for reading!
PS: If you have your own financial independence/investing blog and would like to be interviewed, feel free to send me a message below. All requests are welcome!