I reached out to Lanny & Bert from Dividend Diplomats, and wanted to share their knowledge and experience with the readers of Roadmap2Retire. Following is an interview-style Q&A session with Lanny & Bert. Enjoy!
Q: Tell us about yourselves
Lanny: I am a kid that was born in Akron Ohio and did not have the fortune of growing up with money. It was always a struggle and every dollar I made always went to something – school, food, saving for a down payment once I was done with education, etc.. This has taught me that hard work,
saving and investing is worth more than words can say, and is the epitome of my being. Also – I’m Italian and l love sports, Cleveland Cavs/Indians and am an avid fitness enthusiast.
Bert: I’m a 27 year old dividend investor born and raised in the Buckeye State. Similar to Lanny, I wasn’t born into wealth and was taught the importance of working/saving money at an early age. Outside of work/blogging/investing research, I am a huge sports and music fan. Couldn’t be happier to see Cleveland snap their title drought the other week and bring home a championship. It was a moment I will never forget in my life! In terms of music, the older the better. I love listening to anything rock, new or old. There are a ton of talented musicians out there!
Q: What are your short, medium and long term goals?
Lanny: Short Term goal is to find happiness. Medium Term goal is to find happiness. Long Term goal is to find happiness. I am almost there on all three phases – I want those around me to be stress-free and relaxed, my loves ones and myself. Oh… and to have financial freedom within the next 7 years would be the hard goal, so that I am absolutely in control of my life, what I choose to pour my heart and time into and that makes the community I serve and myself, extremely happy and places all in a better position than they once were. In the end – to have a family that is healthy and that I get to spend as much time as I’m able to with them. Hands down. Lastly – Dividend Diplomat-ing every single day, the grind is real!
Bert: My short/medium goals are kind of the same. First, make sure Lanny finds the happiness that he is looking for so he stops complaining to me about it. Kidding, kidding. Second, for me I am looking to invest as much as possible now, get the dividend snowball rolling. Earning and investing as much as I can now is the most important thing to me because it sets the table for my long term goals. Without this focus in the short term, the future I would love to have would not be possible. My long term goals are financial freedom, supporting a family, and ideally, to put a family through college. Those goals sound generic I am sure, but that is where my main focus is.
Q: What got your interested in dividend investing?
Lanny: I started dividend investing, as I came from nothing, knew what the struggle with money was with my family and didn’t want that in my life. I read many, many books about investing and dividend investing made sense to me, especially after reading Rich Dad Poor Dad – I wanted to invest into something I understood (stocks), that would be assets that provided cash flow (dividends). I love the taxation related to it, the clockwork of being a dividend investor and DRIPing the dividends (Stock -> Pays dividends à reinvests to buy more shares à More dividends à Stocks grow their dividend à Income Grows -> Pays Dividends… and it continues). Also – it is my primary engine to financial freedom.
Bert: I wanted to get on a roadmap to retire! Kidding, all jokes aside this one is easy. I was always into investing and dabbled into it during college; however, I wasn’t focused on dividend investing. Then I started my job and met Lanny, and he took me under his wing and introduced me to the wonderful world of dividend growth investing. We spent many car trips talking about the benefits of it, laughing about how we received fractional shares for doing nothing, and motivating each other to keep investing every dollar we owned into dividend growth stocks.
Q: Tell us about your best & worst moves in your investing career
Lanny: Best Move = Theory based – starting early/age 20. Best Stock Move(s) – Visa, Lockheed Martin back in 2010. Worst Moe = Theory based – buying the yield instead of the company. Worst Stock = BHP Billiton. I should have seen that coming, hands down.
Bert: One of my best investments was MMM. It was a company I identified as one of the stocks that one day I needed to own in my portfolio. Then one day, the price dropped into the $130s and I decided to initiate a position. Now, the stock is trading at $169 and hasn’t missed a beat since then. Conversely, my worst investment decision was ARCP. I was deciding between investing in ARCP and Realty Income and was caught chasing yield (DON’T DO THAT). Then, ARCP was caught with an accounting scandal, cleaned house, and changed their name to clean their hands of the mess. All of this while Realty Income’s price continued to sky rocket.
Q: There are so many dividend paying companies. How do you pick your investments? (walk us through your stock selection process)
Lanny: We have our dividend diplomat stock screener – I want dividend growth history, at least 5 years, but an aristocrat is the ultimate (25+ years), an above 2% yield, a P/E below 15 and/or the market, a smack dead in the middle payout ratio and a business I can understand.
Bert: I think Lanny summed this one up pretty well!
Q: One piece of advise you’d like to give your readers?
Lanny: Please save as much as you can! Save early, save often and invest as much as possible when you are young. Time is everything. Stay committed, stay the course and be ahead of all expectations. How do I know? My colleagues, peers, and whomever are in awe of where I am with my portfolio and projected income (thought I think I have A LONG way to go), and they want to know the secret. I tell them – Time, Save often and invest in easy to understand companies.
Bert: Again, Lanny summarized this one pretty well so I won’t beat the save every penny comment to death. But I want to make sure to emphasize that dividend growth investing is a long term game. If you focus on picking quality dividend companies that have a history of consistently paying and growing their dividend through many different economic cycles, you will be just fine. Of course there will be short term dips in the market and panics based on a major global development such as Brexit that will cause your portfolio to decrease. If anything, this is the time to load up and celebrate that you are re-investing your dividends at a lower price.
Hope you enjoyed that post and thanks to Lanny and Bert for sharing their thoughts with the readers. I highly recommend following their blog Dividend Diplomats and find them on social media.