For the second time since this the creation of this blog, I decided to sell off most of my dividend portfolio to purchase real estate. Although I don’t regret either decision, I wish I didn’t have to sell. Dividend growth investing is a long-term strategy and it’s not helpful if I keep liquidating the portfolio along the way. At least I didn’t use the funds to go shopping for clothes or buy a depreciating asset like a new car. What’s also interesting is that after the first time I liquidated much of my portfolio, I was really trying to get back to those levels. Before I could even do that, I decided to liquidate my portfolio again. Ouch. Despite the setback, I am on a mission to rebuild my portfolio as quickly as possible. Let’s discuss.
Timeline
Although I want to rebuild as quickly as possible, as a practical matter, rebuilding my dividend portfolio quickly is going to have to wait, at least for a few months. That’s because the property that I have under contract is very expensive. The good news is I am purchasing it right as we start the busy season. But there is no guarantee that I will be able to make enough in bookings to cover the cost of my very expensive mortgage. So, I am preparing to supplement my mortgage payment with my paycheck from work for the next few months.
Truth be told, I am also contemplating selling one of my other properties just so I can afford to make mortgage payments, at least for the next year. Of course, there is the possibility that the new property will cash flow. But, while I hope for the best, I am preparing for the worst. Let’s not talk about the fact that we have to get through another hurricane season.
Increased Monthly Contributions
I would like to think that I can walk and chew gum at the same time. Despite the fact that I will be focused on ensuring I can make my mortgage payments, I should be able to increase my contributions to my dividend portfolio.
Currently, I contribute about $210 a month to my dividend portfolio. After closing, that will likely be increased to at least $500.
Also, I am no longer contributing to my Roth 401K, although I am still contributing to my Roth IRA. Therefore, there is a small chance that I will be able to increase my contributions to $1000, but I am not yet sure. I still have to do the math!
Finally, I just moved out of the house I was living in. My monthly expenses for utilities and lawn maintenance were quite high. I will be living with my mom again and will have no rent to pay. Granted, I will help my mom with her utility bills, but I am not obligated to do so. If I am tight one month, I could hold back on helping with the utility bills.
I am very confident that I should be able to restore my dividend portfolio to what it was prior to my last liquidation and there’s a decent chance I might be able to do so within a year, or two years max! Only time will tell.
Final Thoughts
Sometimes I wonder whether it’s worth all the money I am spending to get a penthouse corner unit beach condo. This, by definition, is the condo of my dreams and, giving my current health situation, I feel that it’s important to live my dreams.
Granted, the expense of it may turn my dreams into nightmare. But, that is a risk that I am willing to take. I would still think it was worth it, even if I experience a negative cash flow situation for a year or two. I am hoping I will be able to refinance the condo when interest rates lower, but I also know that there’s no guarantee of that happening anytime soon.
In any case, my guests will help pay for the mortgage, and I will get a chance to visit the condo with my friends and family whenever I choose. Life is short and I want to enjoy it as much as possible.
Finally, the dividend portfolio balance will be updated in next month’s dividend income report.
What did you think of this post?
Let me know your thoughts by commenting below.