Creating income in order to sow wealth seeds

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I have posted a flurry of property related articles of late.

First was the big one, becoming a property developer. This is a cornerstone stock for me, and after an additional purchase of stock, I will now, via my shareholding, be developing and selling one apartment per year.

Secondly came my long desired purchase of a self-storage stock. Hopefully more of this stock to come in future.

This week I wrap things up on the property side.

Renting out apartments and a UK bargain hunt.

I trimmed a few holdings of stocks that were lagging a bit on the earnings side and where I was perhaps too concentrated. I have used the proceeds to buy a variety of property stocks. One I am very excited about is called Indlu Place. This is a residential property stock, yielding over 9%, with low gearing. The kicker for me is that it pays a quarterly dividend. So far each quarter has paid a higher dividend that the quarter before. Like the self-storage stock, I like the fact that this stock is not in shopping malls or offices. I believe there will always be a demand for residential accommodation, especially in the lower income brackets where they play.

indlu4
A few of my new apartments

I have also been taking advantage of the currently strong currency where I live to invest in two UK property stocks and one German property stock. These stocks had all fallen quite a bit since Brexit, so I believe I have paid a fair price, some were half the price compared to a year ago. Two have the option to reinvest dividends, which I will take up in order to compound the investments.

Now to use income to plant dividend seeds

I never expected to start a property business. Investing seldom goes according to plan, which is one of the things I like about it. Circumstances, currencies and markets are always changing. When I started to feel over exposed to two stocks, which made up close to 60% of my portfolio, and they offered attractive exit prices, I decided that I wanted to convert a portion of that equity into safe income. Also selling my hotels allowed me to buy a property development stock.

However, my income needs for now have been met by the recent purchases. That is not to say I do not want or need more income, but I feel I have created a decent income stream, and can now get back to the process of creating wealth again.

I believe wealth will ultimately come from owning great stocks, the great compounders. The Coca-Cola’s, the Wal-Marts and the Unilevers. However, ideally one needs to find early versions of these stocks to achieve maximum benefit. The property stocks will buy me some more time and some income with which to find and invest in these stocks when I find them.

I currently have five or six of these potential wealth seeds in my portfolio, now it is time to accumulate some cash again, and look for the next great one, or add to my existing wealth seeds.

Conclusion

It will just take a few of these wealth seeds to come to fruition to really change my financial future. You have to be in it to win it after all, and now I can at least look forward to a quarterly dividend from my apartment tenants, they will not make me rich but will at least help keep me in the game a bit longer, and the great thing about a property stock as opposed to the physical property is that they will not call me in the middle of the night with a blocked drain! I will also sleep a little easier knowing that I have some euro and pound income trickling into Dividend Tycoon HQ, especially given recent political developments in my home country.

I hope I have inspired you to create an income stream of your own which will buy you a little more time, and help accumulate funds, to go after the really big winners. For myself I do feel that becoming a (minor) property tycoon will be a benefit in the ultimate goal of becoming a (major?) Dividend Tycoon.

 

 

 

 

2 thoughts on “Creating income in order to sow wealth seeds”

  1. Hi DT.

    I share your excitement for a few of the dividend stocks on your list, ILU (I have a big position on this one, decided to get this rather than buy-to-let), SSS and BWN.

    The BWN share price looks really really good currently..Thinking of buying some with my next ILU income. I see that they are also planning on maybe spinning out a Residential REIT later on which I really like.

    Keep the posts comming!
    J

    1. Hi Johnny,

      Thanks for reading! I do think the market being too pessimistic on Balwin,I have been buying more. I went to the results presentation recently and their product really good. Also a fan of ILU, especially the quarterly dividend, and a lot less hassle than BTL. SSS also a favorite, although perhaps less value at the moment than BWN and ILU.

      Regards,
      DT

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