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Please welcome Keith from DivHut as our guest for today’s Financial Literacy Chronicles.  This is Day 29 of 30 in the Financial Literacy Month interview series here on Enwealthen.

Please tell me a little bit about yourself and your blog.

I always enjoyed living a simple lifestyle.

I guess it’s just my personality. Call me a “low maintenance” individual and I won’t be offended.

I truly enjoy travel and have made it a priority in my life since my late teen years through today. I have visited dozens of countries and look forward to visiting many more down the road.

I began seriously investing for dividend income around 2007 when my business at the time was literally falling off a cliff, as most of the world was starting too as well, and my need for another income stream became more apparent. I have always known the benefits of dividends from my very first stock purchase back in 1988 but wasn’t yet sold on the concept of tying up my money indefinitely purely for a dividend income stream.

It was around that time that I learned about Dividend Aristocrats and Dividend Champions when it all just made sense. I could literally see the effects of compounding dividends from these select companies and thought a nice diversified portfolio could provide me with a decent to excellent income stream decades down the road.

And so it began, in my mid 30’s, my first dividend stock purchases for my long term holding which I feel is about 25 to 35 years. But don’t get me wrong… I’m not just about dividend investing. To me life has a lot more to offer.

I find that life is a balance and that you are young only once and while working hard, smart and living in a frugal manner is wise, nothing in life is guaranteed, especially your future, and so you must balance that diligence with some fun.

Remember, “live smart” but don’t forget the key word, “live.”

The safest and most potentially profitable thing is to buy something when no one likes it.

The goal of my blog is to inform and entertain as I wish to educate my readers about stock investing in a simple and easy to read manner.

I don’t get too technical when reviewing my stock selections or doing an industry specific overview.

My blog is centered around dividend investing and sharing my personal journey, with my real world portfolio, as I create an ever increasing passive income stream via dividends.

Can you share your most impactful money memory from your childhood?

I was a teenager at the time and clearly remember the very first time I received a dividend check in the mail.

To be honest, I wasn’t entirely sure why I was receiving a check every few months with my name on it but it was a great feeling and it created a lasting memory.

Of course, I wish I was more tuned in to the concept of dividend investing back then (late 80s). Nevertheless, getting those checks in the mail, and not having to do anything to get it, left a meaningful mark on me as well as what investing could potentially do for me in a passive manner.

After all, my life was mostly about school at the time and realizing that I can make money while at school really enticed me.

We all receive financial advice from people in our lives.  What’s the most interesting or useful financial advice you’ve received from your community?

If you look at my portfolio you will see that I favor the more “traditional” dividend paying stocks that are on the lower yielding side but sport favorable dividend growth.

Reading, commenting and “chatting” with my online peers I have learned that it’s OK to invest in other asset classes such as REITs, for example.

While investing in anything involves risk, I guess the most useful advice I received was not to be too closed or too afraid to diversify my holdings into “other” types of traded securities.

And so, less than two years ago I bought my first REITs in my IRA. I started on the dividend growth path back in 2007 and only in 2015 did I venture into another asset class. That all came about because of my interactions with fellow investors online.

I have several personal finance books I regularly give to friends and family.  What are your 3 favorite fundamental personal finance books you often gift to others?

I have given and recommended these three books among the bunch I have read or skimmed:

The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley

The Snowball Effect: Using Dividend & Interest Reinvestment To Help You Retire On Time by Timothy J. McIntosh

Forever Investing: The Investment Strategy of History’s Greatest Investors by Michael T. Nowacki

I think these three books really helped complement my investing style and thinking when it came to thinking about how I live, save and invest. My long term horizon and attitude towards my investments are partly shaped because of the messages outlined in these books.

What financial literacy education did you receive in school?  If you had a magic wand, what would you change to improve that?

Looking back at my elementary and high school schooling I can honestly say that I received zero financial literacy education.

I have a feeling that most people my age (40s) would say the same. School was only about the “traditional” topics like English, History, Math, Science. I can’t recall a single peep about finance, saving or investing.

That being said, I did start a Business Club in my high school with a buddy of mine. It was small, but we did manage to largely teach ourselves about stocks and investing. I remember going to the library a lot looking up company data in large Value Line books.

With my magic wand I’d definitely create a course dedicate to financial literacy that would focus, in general, on credit, debt, budgeting, saving and investing.

There are so many blogs on the internet, what are 3 of your favorite blogs that instill financial literacy, either by word or action?

In general, I mostly follow dividend-centric blogs as that’s my interest foremost. Of course, I do peruse other financial independence, frugal and “financial lifestyle” blogs.

That being said, I enjoy following along other real world financial independence journeys from Dividend Diplomats, Investment Hunting and Passive Income Pursuit.

To be fair, I follow many more blogs most of which are located on my blogroll. As I mentioned, I appreciate following along other real world examples of buys, sells, portfolio adjustments as well as learning about other investments such as options trading, P2P lending and real estate ventures.

I like learning about their real world investment successes and failures as they document both on their respective blogs.

“live smart” but don’t forget the key word, “live.”

I like to keep inspirational quotes around the house to remind me of what’s important.  Do you have a favorite money quote you use to inspire your financial life?

One of my favorites is from Howard Marks, CFA & Co-Chairman of Oaktree Capital:

“The safest and most potentially profitable thing is to buy something when no one likes it.”

How true.

It seems that most investors like to behave as sheep following one another almost blindly feeling comfortable investing when markets are rising paying ever higher premiums for stocks or other assets instead of looking for the beaten down sectors or stocks that are truly unloved.

Just look at how popular investing in energy companies was in 2013 and 2014 when oil was trading well over $100 a barrel. The mantra of the day was you couldn’t go wrong with any oil major, driller or pipeline play.

Of course, we know what happened in late 2014 and 2015 with the price of oil and any stock that had energy exposure. The entire industry became untouchable and you were considered crazy for wanting to invest in the space.

Of course, that was the best time to get back into energy, when no one was buying and no one was liking the sector as a major rebound starting in late 2015 through today occurred. That quote really rings true.

Thanks for contributing to Financial Literacy Month here on Enwealthen, Keith!

Keith is an early 40’s Internet entrepreneur who launched several dot coms with varying success in each. His living has been made online for the past 18 years and he now writes about dividend investing at DivHut and shares his thoughts on Twitter.  Subscribe or follow to stay up to date with his latest thoughts and investments.

Readers, please share your thoughts on Keith’s experiences, any additional questions you have, and suggestions for who else you’d like to see interviewed in the comments below.  And please do share this with your friends on Facebook, Twitter, and Pinterest.  Thanks!

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