What to do today?

The world is full of great, smart and amazing people, who have or had the gift to understand and connect some of the dots that happened in their lives, and to turn them into truly powerful statements. Some of these statements turned out to be true not only for them but also for others. Thus, when people read or heard those statements, they connected them to their lives and if helpful, spread them further in the hope and with the purpose to give guidance to others. This is my definition of how quotes become popular.

I like reading quotes and have my own collection of some which I consider more useful than others. Most recently, I stumbled upon this one:

“What you do today can improve all of your tomorrows.” – by Ralph Marston

Such a short sentence, and yet, such a powerful message.

Having an idea or dream is usually the first step for all of us to find a purpose. And yet, while one would imagine that all of us require a purpose and would, therefore, do their best to follow up on their dreams and wishes, the truth is that most people do not find the strength, courage or conviction to be actually able to do what they like.

Too often we find constraints and barriers that seem too hard to overcome and sometimes, things require sacrifices that we are not willing to make. But no matter what your personal reasons may be, without even taking the first step in the right direction, you will certainly never see your dreams become true.

Everything starts with a plan

The first step to reach any goal is to have a plan. Putting some structure into your idea, formulating what you want and how it should look like will give you the guidance you need to establish long- and short-term goals that may lead to your success.

While this blog is all about finance, this applies to any target one would want to set up for oneself. As another accurate quote says:

“Nobody ever wrote down a plan to be broke, fat, lazy, or stupid. Those things are what happen when you don’t have a plan.” – Larry Winget.

In financial matters, this plan is called a budget.

Knowing and understanding how much money comes into your account and how much is gone by the end of every week, month and year are crucial to help you to regain control over your financial situation.

Don’t wait for this. Sit down, take a paper and a pencil and start writing. Be honest with yourself. If you can’t, ask someone to assist you. And after you have done that, start thinking which areas require changes to help you to have a better tomorrow and to reach financial independence.

It can get lonely at the top

One day, I was sitting alone at one of my restaurants in the hotel and having lunch. It was a beautiful day: We had a very solid hotel occupancy of 85%, the sun was shining, the ocean was calm, a fresh breeze was swirling through the entire garden and pool area and I had not a single complaint from any guest.

So, I was having lunch and thinking about the next beverage promotion that we should introduce in 1 or 2 weeks when one of our regular guests approached me. He was actually just passing by, picking up a cocktail from the bar, but when he saw me, sitting there alone diving deep in thoughts, he came closer and said: “It can get lonely at the top, isn’t it?”.

It can indeed.

Over the last 10 years, I have pushed myself to get to the point that I can be in charge of a hotel and take on the responsibility that comes with it. As a rank & file employee, I was always full of ideas and dreams of how I would like to put my stamp on the business I work at. I was learning, studying and gathering ideas and doing online-courses how to improve all kinds of procedures. How we could manage guest expectations better, how to improve our workplace, which IT solutions offer the best benefits, what facilities can help us and our guest to have the best possible stay. Design & architecture related topics, food styling and decorations, … the list is endless.

But what I never really did, was to spend a thought on, what it actually means to be at a top position.

It turns out, that I really underestimated the pressure that comes with it. While I got the chance to put many of my ideas and thoughts into practice, the job of a hotel General Manager is actually frighteningly time-consuming. And the largest chunk of my time, I am actually not spending with guests or hotel improvements. The biggest part of it is the team management.

It is truly fascinating, how tables turn once you move up into management. Suddenly you are not the one questioning a single guy at the top, but instead, you have 150 other persons questioning you. Observing you. Interpreting every word, eye-blink and every move of you. It took me a while to learn how to handle the pressure and also, I had to change my behavior. Truth is, it doesn’t matter who you are, if you want to take responsibility for and lead others, you have to learn how to serve them, while at the same time pushing your agenda. People will only believe in you if you believe also in them.

And this brings me to the recent break-down of Teslas CEO Elon Musk. 

I am certainly in no position to judge or even to start to begin to imagine, what kind of huge pressure he took on when taking care simultaneously of Tesla, SpaceX, The Boring Company and his AI venture. I am not a billionaire (not even close) and I don’t have 25.000 employees and billions of dollars from investors to be pressured by. But I think I am in a position to give a single advice:

Elon, get some sleep. Do some exercise. Take a vacation.
And learn to delegate.

Being alone at the top is a choice, not a given. The way we treat our colleagues, business partners and investors is what defines us and our business. The problems will never get less. The days will never get longer. Micro-management is not a healthy habit for any company and never works out well in the long run for anybody involved.

If you trust your team and find a supportive left and right hand to help you through thick and thin, then you can have a sit at a nice restaurant, enjoy the breeze, watch your guest/clients enjoying their time with your product and/or service. And when someone approaches you and says that it’s lonely at the top, you can smile back and respond:

“It’s a beautiful day”.

DISCLOSURE: I have no shares of Tesla.

Get paid dividends every 2 weeks – with only 2 stocks in your portfolio

Today, a post with some information for those who appreciate regular and more frequent dividend payment. With “frequent” I am talking about getting paid twice a month and achieving this by investing in only two companies.

How is this possible? Well, it turns out that there are a few selected companies out there which reward their shareholders by paying dividends every single month. You are reading right. Month in, month out, profits are being shared 12 times a year and sometimes even more often.

I would like to share with you some insight into two of those companies, which pay dividends every single month. One of them rewards its shareholders by the middle, and the other one, at the end of each calendar month. So if you have both of them in your portfolio, you get paid roughly every 2 weeks.

The first company is Realty Income (O)

O is a REIT which is an abbreviation for a Real Estate Investment Trust. And it’s not just any REIT, it’s THE most popular, reliable and trusted REIT out there with monthly dividend distributions. In fact, the company calls itself and trademarked the term “The monthly dividend company”.

It has not only paid reliably dividends every single month for decades, but it also raised the dividend every single year. Markets up- or down, O pays like clockwork in the middle of every month.

The second company is Gladstone Investment Corporation (GAIN).

GAIN is a BDC. Business Development companies are a common choice for high-yield chasing investors and while they have the reputation of being riskier compared to REITs, the expected reward is also higher. GAIN has an excellent reputation and one specific benefit: It not only pays a monthly dividend by the end of every month but it also regularly distributes up to 2 additional participation dividends per year, bringing it occasionally to a total of up to 14 dividend payments a year!

About timing

Receiving regular payments every 2 weeks can greatly simplify your life, due to the benefit of receiving cash around the same time when some of your regular, re-occurring payments are due. It can be therefore easily used to cover some of your monthly expenses, such as insurance, utilities, groceries, your kid’s pocket money or whatever comes up.

O and GAIN are obviously not the only monthly-dividend paying companies out there and if you do some research you will quickly find some alternatives. However, no matter which company will catch your interest, please make sure to research it thoroughly and to ensure it matches your risk tolerance.

DISCLOSURE: I am invested in both stocks mentioned in this article.

FIRE – is also a job

FIRE stands for “Financial Independence Retire Early” and it’s actually not a new concept. Any freedom-loving-person will have had this idea no matter at which point in time/history/place in the world. The idea behind it is very simple: Saving up cash, investing and stop working as soon as possible.

It’s a great idea, but unless you are extremely lucky or come already from a wealthy background, it’s very difficult to pull it off without a proper plan – as I mentioned in some of my previous posts. There is no magic bullet. However, what we do have now is not magic. We got the internet.

The internet. The greatest source of knowledge that humanity ever had at its disposal, accessible 24/7 from almost any spot in the world. While there is a lot of useless data out there, there are plenty of blogs, newspaper articles, financial websites and of course, successful early retirees who are usually more than happy to share their experience and how they got there.

Sharing is caring

Sharing knowledge is, generally speaking in everyone’s best interest. At the end of the day, it’s better for all of us if more of us have a safe and sound future. Following this, there are plenty of great websites that can teach us a lot about how to deal with financial issues. How to invest, how to live a frugal (but happy) life, how to pay back your debt, and plenty of other things that can help us to advance.

Once you start following even just a few of these websites, get into investments and start figuring out how to save up cash, you will quickly realize that it’s actually pretty time-consuming. The time you spend on it will at some point start producing results, and the results will (hopefully) turn into cash. And well, isn’t this the definition of a job? Dedicating time and effort to a monetary reward?

 You will probably never retire

Looking at it this way, one can say that even a person who has reached FIRE, never truly retires. You need to keep learning, investing, saving and being actively focused on maintaining your FIRE status. This is the reason why I actually don’t use this term for my personal future goal.

Ultimately, it’s not about retiring early, but about the freedom to pursue our own interests at the time and place of our choice.

Evaluating your expenses

My family was never wealthy, frankly speaking, there were times when we had trouble to get through a month and as far as I remember, we mostly lived paycheck to paycheck. This resulted in a very low pocket money which our parents would hand out to me and my brother. It didn’t bother us when we were very young, but things became unacceptable when we turned teenagers.

Hanging out with friends, buying new sneakers or going for a party costs money, as do computers (I still remember that first C64) or books and magazines. I wanted to have all those things, and there was only one way to get them. I had no choice: I had to work.

The Time & Money Relation

The legal age to start working in Berlin in 1994 was 14 years (don’t nail me on the details, I might be 1 year off) and I quickly found part-time jobs which I could do after school. It was a great experience for me: Working just 1,5 hours in a shop cleaning or filling up empty drawers would provide me with the income that before I had to wait for an entire week. We are talking about roughly 10 DM – today the equivalent of approx. 5 €.

I realized how much time I had wasted in the past: 1 week vs. 1,5 hours for the same reward. Just that the latter one would require my active participation.

The lesson learned was that I could get much more money by spending more time working. Having realized this, I didn’t want to spend time at home anymore. I wanted to go out and work.

However, since that very first time, while I basically kept on working until today (I am 38 now), this feeling that I had when making my first salaries didn’t come up too often with later jobs. I was always tight with money and therefore I learned very quickly that if I wanted to get anywhere with my wishes for what I want and what I need, I had to prioritize – and sacrifice.

Measuring expenses

It was a tough lesson and I hated the very idea that most things were still out of reach for me. Because you see, we get used to our salaries very quickly and by some miracle, the more money we get, the more things we start to see that we want to have which are out of our reach.

So, when I started to work the initial happiness didn’t last that long. I got unsatisfied with the situation, as I needed to make constant choices and set priorities. To help myself manage my expectations in a better way, I developed very quickly this 1 way of measuring expenses, which helped me to actually really understand what I truly wanted every time when I reached for the wallet.

I was counting hours.

I was counting how many hours I needed to work, to either get the money back that I was about to spend, or, how many hours I would need to work in order to be able to afford something I wanted. With this idea in my head, the evaluation of “wants” and “needs” took a truly different perspective.

Time is limited. There are only so many hours in a day and with my limited knowledge, school and friends to take care of and family, there was simply a limit of how much I was realistically able to earn. Measuring working hours against the price of a product would clearly show me if it’s something worth working for.

At that time I also learned that in the future I would have to learn to control these 2 factors: My hourly income and the amount of available time to take advantage of it.

This habit stayed with me until today and in a sense, investing in stocks became the ultimate solution, because this is what stocks, especially dividend-paying stocks, do.

They take time almost out of the equation because analyzing and purchasing a stock is a one-time effort. But it can reward you for decades. The only difference is, that instead of time to exchange for money, you need to put money as a downpayment first, and receive both, time and money slowly back, stretched over a long period of time until it starts to out-weight your initial investment.

The more you invest, the more time you free up and at the same time your hourly income increases. Patience and diligence is the key here.

Just chasing higher salaries will seldom give you time back. And working less will seldom give you opportunities for higher salaries.

You see, this is what investing is all about, and this is why it’s, in my opinion, the best way to escape the rat race.