If you recall from my June Income Report, my July goal is to build a social media calendar to help grow our Social Media audiences. Currently, Social Media produces only 17% of our traffic, so I wanted to tap into that potential. A social media calendar would regularly/consistently stay in contact with those audiences. So I compared 3 different social media tools for this CoSchedule Review to do just that, manage Wallet Squirrel’s social media.
Obviously, from the title, I choose CoSchedule for Wallet Squirrel, but anyone wanting to dramatically improve their Social Media game should look this over.
The Three Different Social Media Tools I Tested:
MeetEdgar – This tool allows you to automate your social media messages. You can write a Tweet/Facebook Post/LinkedIn Message and have it automatically repost every month, 3 months or year so that you’re never running out of content. While this is a great tool, the interface was a bit clunky for me in the 14-day trial and for the price of $45 per month, I wanted a bit more than just a backlog of messages automatically posting.
Buffer – This allows you to set up a queue of social media messages on Twitter/Facebook/LinkedIn where you can write messages beforehand, and Buffer will publish them based on timeslots you decide. Think of writing one message then selecting all the different social media platforms you want to send it out to. This eliminates going into each social media account and copy/ pasting your message each time. You can also schedule retweets so you don’t have a bunch of messages going out at once.
I actually use Buffer at work and love it. The biggest downfall is that once you send a message, you can’t automatically reschedule it to be sent again. Since Tweeting only hits 10% of your audience at a time. You’d manually have to add the same tweet over and over and over. It’s just a giant waste of time.
CoSchedule – This is really a combination of the two. CoSchedule allows you to see a full calendar of messages going out and automatically ReQueue them to go out again if they’re popular. I’ve done the 14-day trial and now I’m a paid subscriber. I’m a bit of a fan. Let me dive a bit more into CoSchedule.
I chose CoSchedule, but what is it?
Because CoSchedule loves demonstration videos, here is a brief CoSchedule Review Video of their software.
To me, CoSchedule is a visual calendar that you can see when your different social media posts are going out. You can schedule a post in advance and automatically repost (they call it ReQueuing) popular content so your audience doesn’t miss great content. Here is a screenshot of what Wallet Squirrel’s calendar looks like after using it for two weeks during the CoSchedule Review.
How I use CoSchedule for my Social Media Calendar
Not going to lie, it’s a bit intimidating at first, as is any software. It integrates into a number of social media platforms and WordPress, it took a bit to get my head around it. However starting off, I primary use it for my social media accounts.
(they also do LinkedIn, Google+, Instagram and Tumbler, but I don’t use those yet)
How I Setup Social Media Campaigns
This is a term I’ve heard as a buzz word, but I never really knew what it meant until this CoSchedule Review. I’ve come to learn that a social media campaign is a series of social media messages posted at different times, with all the same purpose. Like the 1,000 tweets you read when Lady Gaga launches a new album. Those set of tweets, collectively are a social media campaign.
For me personally, I use their social media campaign to promote new blog content. I click their campaign button and I set up a template for my new Income Reports. To describe the screenshot below, I add the URL of the post I want to promote and it automatically inserts that hyperlink into a series of messages scheduled to go out that day, the next day, a week later and a month later. All the times are completely customizable. Each message has a default basic message like “check this out”, but I tweak these each time. This is one of my favorite features because it provides a carpet bombing of social media messages for new content over an entire month, created in seconds.
How I Automatically Repost Popular Content
CoSchedule has a popular feature called “ReQueue” which creates a cache of messages that will automatically be published if you have a gap in your social media calendar. Let’s say I want to post 3 tweets each day. If I don’t have a social media posts going out on Friday. CoSchedule can pull an old social media post from my library of social media messages to fill that gap.
Oh my goodness it’s so nice to automatically repost evergreen content
For example last Sunday while writing this CoSchedule Review, I filled my ReQueue library with fun social media messages promoting old content. That way, I will always have at least 3 tweets going out a day. You can even set categories for your ReQueue library such as “Evergreen Content”, “Promotional Content” like a referral link to Bluehost website services or any categories you can think of. Here are the categories I’ve created so far.
Quick CoSchedule Review Pros/Cons
Pros
The software allows you to create an entire social media campaign, aka numerous social media messages on different platforms, in seconds
CoSchedule allows you to automatically “ReQueue” popular content so that it never disappears in the social media abyss. It automatically posts old content whenever you have gaps in your social media calendar.
It has the pros of both Buffer and MeetEdgar.
The really clean design makes looking over your calendar very easy.
Cons
It’s pretty pricey, it says $39 per month for their solo blogger plan, but it doesn’t include the ReQueue feature which everyone wants. I especially wanted. If you want ReQueue, you need to pay another $30. So in reality, it cost $79 per month. WTF! This is one of the most expenseive social media calendars I’ve found.
The Social Media Analytics isn’t included in the base $79 per month I’m currently paying. If you want analytics, you need to pay more. Yuk, at least Buffer had at least basic analytics in their $10 per month plan.
Why I chose CoSchedule over Buffer and MeetEdgar
As a current user of Buffer, it is great but there are days that I don’t have time to post a new message to social media and my Buffer queue ran out. I needed something with Buffer’s queue feature, but also automatically posted content like MeetEdgar. I considered getting both of these since combined they’re cheaper than CoSchedule, but I prefer to use one piece software that incorporates the best of both.
Plus there are other benefits of CoSchedule that I haven’t touched on during this CoSchedule Review. Mainly because these features are singularly what I wanted the software for. It’s currently a must if I want to grow our Wallet Squirrel social media presence. Not just rapid firing social media messages, but creating conversations and dialogue while reminding our audience of older content. Those combined features won me over.
Conclusion
I’m willing to try CoSchedule out for a couple months to see how this goes, use my referral code for 14 DAYS FREE if you’re interested in trying it too. So far I’ve been impressed with the power this software provides during my CoSchedule Review. Plus their blog has so many great tips on social media you don’t need to pay for. In 6 months I’ll do an ROI “Return on Investment” Analysis to follow up on my progress.
So far, I’d honestly recommend it to any blogger who can afford to spend a ridiculous $79 per month (save 50% if you write a review). It’s a great tool to visualize a social media calendar that’s smart enough to fill in the gaps. Like a Social Media Manager would. Follow us on Wallet Squirrel’s Facebook and Twitter page to see it in action.
Are there any other tools you use I didn’t mention?
*Disclaimer I wasn’t paid for this review, but CoSchedule does offer a 50% discount if you write a review. Since I love saving money, we did this review but maintained our honest opinion and user experience.
Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!
Growing Twitter followers organically is NOT easy. It is a hard, grueling process, where we just reached 500 Twitter Followers but we could have done it so much easier and faster. Here is how we reached 500 twitter followers and lessons learned for the next 500.
First, 500 Followers isn’t THAT impressive
I’m not saying reaching 500 twitter followers is the best you can ever do. It’s just a nice milestone I would like to highlight as I tweak my Twitter strategy. Some of the top Twitter stars have MILLIONS of followers on Twitter.
For example, some of the top Twitter Influencers like Katy Perry has some 99.5 million, Justin Bieber at 96 million and Barack Obama closes in on third at 89 million (source).
Obviously, I am not an ex-president or pop singer, so I’ll stay within the Personal Finance world. Which among them, most Personal Finance Bloggers I’ve seen on average have around 1,500 Twitter Followers. Wallet Squirrel is 1/3 way there!
What I learned getting to 500 Twitter Followers
I am still fairly new to Twitter, so I did a lot of research to understand what Twitter was about and how people are gaining mass followings. Here are the top 20 things I learned from research and experience.
1. Get a Schedule Tool like Buffer or HootSuite to schedule tweets when you’re not around. Tweeting consistently will tell your audience that you’re engaged and visible. I use Buffer and love it.
2. Start following other people in your niche, or who you’re interested in. People feel obligated to follow you if you follow them. Following someone is providing value to them, and people typically want return that value to you. However if you’re following someone Katy Perry, she’ll likely not follow you back. I’m still waiting on Taylor Swift…
3. Regularly Retweet others content. For the same reason as above, people typically feel appreciative when you Retweet their content and will likely follow you since you have similar tastes.
4. ALWAYS add photos in your tweets, it’s regularly proven that tweets with photos are engaged by more readers than plain text. People like photos, use a gif and get even more engagement. I personally don’t always use gifs, I’ve learned photos work just as well. I just make sure to use some type of graphic.
5. Use the Hashtags! That’s the point of Twitter, people can follow certain keywords and your tweet may be among them. Twitter shows you the popular keywords if you want to hop on a current event, otherwise sometimes making up funny hashtags reaches a more engaged audience.
6. Sometimes just ask for a Retweet, it seems silly but people who enjoy your content are happy to help you out if you ask.
7. Don’t use a logo as your profile image. Twitter is a conversation platform, people engage more with people’s faces as profile photos rather than faceless logos. I just updated my Twitter Profile Pic.
8. Promote your Twitter account on your other social media platforms and blog. While Wallet Squirrel’s Twitter is 500 Followers, Facebook actually brings in the most traffic for us monthly. So we can ask our Facebook users to follow us on Twitter every once in awhile.
9. Reference people/companies from your blog posts in your Tweets. We get way more engagement when we specifically reference people in our Tweets. Usually when I comment on other people’s blogs, I’ll send out a Tweet referencing them saying nice article. I did this in “What I Learned from Commenting on 30 Blogs in a Week“.
10. Use Follow Buttons on your website so people can share your content. So far NO ONE has done this through our page buttons, but maybe in the future. I’m on the fence about this one, but maybe when we get more traffic.
11. Tweet Inspirational Quotes from Warren Buffett or your favorite philosophers. It seems silly, but sometimes it hits someone right when they’re feeling down. I need to do this more.
12. Pin your best tweets to the top of your Twitter Profile. When new users look at your Twitter Profile, they’re going to look at your top tweets to see what kind of personal tone you use. Pin your best tweets up top to give the best impression. I’m going to try to pin my monthly Income Reports up top.
13. Ask your email list to follow you on Twitter. This can be a simple “PS please follow me on Twitter so I can have more follower than my mother” comment.
14. Tweet the same content multiple times. Each Tweet last 15 seconds on average and then disappears forever. What if your perfect audience wasn’t reading at that time? Retweet messages that you think are beneficial. Some of the top Twitter influences do this all the time.
15. Always reply to tweets that reference your or direct messages. If someone takes the time to mention you then you should give them some kind of thank you or recognition. It’s polite and really well received in the community. I try to thank everyone publically who retweets my tweets.
16. Always thank users for Retweeting your content. I mentioned it above, but it deserves its own line item.
17. Don’t send a massive amount of tweets in a short period. If your tweets are filling up people’s entire screens over and over, they’ll get aggravated and unfollow you. You should constantly be tweeting but spread them out.
18. Don’t stop Tweeting. People who regularly tweet are considered to be more engaged and get more followers than those who tweet once every two weeks.
19. Tweet snippets of your articles. Instead of tweeting “5 Ways Millennials Waste Money”, you should break it into 5 different tweets each sharing 1 of the reasons. Giving value in your tweets is better than taglines any day.
20. Be a real person. Don’t spam your Twitter account with “READ THIS” and all of your stuff to read/sell. Remember that you’re talking to real people. Use words and tones as if you were talking to a group of your friends. People WILL notice.
My Short Failed Twitter Experiment
In February I told myself that I would tweet 16 tweets a day for a month to see what would happen. In February I had previously sent 111 tweets, had 338 Twitter Followers and was following only 29 people.
I did 2 weeks of it until I was exhausted. I only sent out my own tweets and it was all promotions garbage. I hated every second of it. So I cut back to 5ish tweets a day and started a mixture of retweets, some promotional content and new content. I told myself I would do this until I got to 500 Twitter Followers and reevaluate if Twitter is worth it.
It took 4 months, ugh. Growing Twitter Followers is hella hard.
Today I’m at 513 Twitter Followers (151% increase) having sent 646 Tweets (581% increase) and now following 184 Twitter Followers (634% increase). Calculating the math to it, it seems like the increase in people who I follow had a significant impact, related to lesson #2.
Conclusion
While I originally went into this experiment hating Twitter, I’ll admit it’s grown on me. It’s an effective communication tool for short concise messages. I can’t knock that.
During the last 4 months of focusing on Twitter, I’ve learned a lot. So I’m daring myself to get to 1,000 followers in the next 4 months. Think it’s possible?
Lol Not with my current stats. I’ll have to up my game and stick to these 20 lessons learned. Any additional suggestions?
Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!
As Adam mentioned in Monday’s article, we are revamping and drastically improving Wallet Squirrel. =)
In the last 3 months we have about doubled in traffic so we’re committing more resources to Wallet Squirrel and that means upgrading to Bluehost. Specifically, we upgraded to the Pro Plan. Yay for growing!
Why Bluehost? Well because ONE it was highly recommended by many of my blogger friends and TWO because it’s MUCH faster. We were SO slow! This is a much needed and happy upgrade.
How does switching over to Bluehost work?
On Friday, Bluehost started copying our WordPress files from iPage.
By Friday evening, everything was copied over.
Then I had iPage switch the DNS over to Bluehost. This is how the internet knows which server to use when someone visits WalletSquirrel.com. It takes 24-48 hours to switch.
By Sunday night everything was switched over!
So actually, we are NOW completely switched over on Bluehost, however we’re using this time to fine tune things like removing useless plugins, optimizing our site by image compression plugins and working with Bluehost to do everything we can to increase speed.
Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!
I regularly comment on other blogs. I wanted to share why I do this, why others should do this and what I learned after commenting on 30 blogs in a week.
I’ll admit, I originally wanted to comment on 100 blogs in a week, but not only was that impossible with a full work schedule, I don’t know that many good blogs. Suggestions?
So Why Do I Comment On Other Blogs?
When I first started blogging. I searched specifically for personal finance blogs because that’s the niche I’m in. I wanted to learn what they were doing, what made their blogs “special” and better than mine?
I later expanded to travel and lifestyle blogs.
Blogs usually are the personal journeys, a combination of lessons learned and personal achievements that transcend their niches of “Finance”, “Fashion”, “lifestyle”, etc. When I find a story that resonates with me, I usually comment a similar struggle or congratulate them on their win. As a blogger, I know these words of encouragement help as much as an extra 1,000 page views.
When Do I Comment On Other Blogs?
Personally, I like to start after the end of each month. Many of the blogs I follow release Monthly Income Reports. These usually summarize their highlights on the month as well as their income from investments. It’s really cool to see their investments grow!
Wallet Squirrel is no exception. Our Income Reports continue to be our most popular post for commenting. I think most finance bloggers would agree with this.
The only exception is when bloggers publish a new post, there seems to always be a mad rush to be the first one to comment. I see this on popular blogs like Mr. Money Mustache. Some people set alerts for new blog posts because when they’re the first to comment, they’re higher up on the page for more backlink views. We’ll get to that in a sec.
What Blogs Do I Comment On?
I have a list of about 80 blogs (let me know if you want to be added in the comments below) that I keep in an excel sheet. It’s nice because all the blog names hyperlinked, so 1-click sends me to straight to their site. I also include their Twitter handle because it’s appreciated to send a tweet after every comment if it’s a good article.
Personally, I track each time I comment on each blog so I’m not leaving duplicate comments or ruining relationships with other bloggers because I haven’t been to their site in 4 months. I try to visit my top 30 blogs every month.
You’ll notice I also added Moz’s “Domain Authority” and SimilarWeb’s “6 Month Visitor Count” but this is more for me to track how these sites are growing and compare to Wallet Squirrel. You’ll see I don’t only comment on popular sites, I focus on the ones I enjoy!
My Excel List for Blogs I Follow
What Makes A Good Comment?
Honestly, I don’t know what makes a good comment. Usually they’re supportive, grammatically legible and entertaining. If you disagree with something, be respectful. There have been a couple times I learned from a mistake through comments pointing it out. I’m incredibly thankful someone took the time to point it out.
My favorite is when Adam wrote his Ask for Raise article “A lawyer could state that if they when a particular number of cases.” our friend Trist pointed this out “did you mean win?” (not in the comments). After 10 minutes of laughing, we appreciated the comment.
In my personal experience, bloggers love comments regardless of grammar. It’s a great way to show support without giving them money.
Where Did I Leave Comments Last Week?
This list is made up of some of my favorite blogs and a few blogs I’ve been wanting to check out for awhile. I’m glad I did. I hope my comments helped, they were genuine thoughtful comments totaling over 2,558 words or an average of 85 words per blog in a week.
Here are the 30 blogs I commented on this last week. All very awesome.
What I Learned After Commenting On 30 Blogs In A Week?
It’s important to look over an entire blog. I saw on one blog that they were featured on Rockstar Finance through their sidebar. I ended up reaching out to Rockstar Finance and they added me to their membership directory! Plus I’m currently working with them to feature a Wallet Squirrel Article. I didn’t even know about Rockstar Finance before finding it on a new blog I now follow.
Don’t comment only to create backlinks/traffic to your site, it not effective. I used to think this was a great way to create tons of traffic back to my website. It’s not. After commenting through the week on 30 blogs, I only received 30 new visitors from those backlinks. Commenting is great if you’re genuine, but if you’re only trying to create backlinks and traffic back to your site, there are better ways to do it.
Always subscribe to be notified of follow-up comments by email. Bloggers like myself leave REALLY good responses to good questions. We sometimes write paragraphs in a response to a good comment because we’re appreciative you read our article and left a good comment. Don’t miss out on a great follow up comment by not subscribing to follow up comments.
Read the whole article! Bloggers (and me) hate it when people leave comments that ask questions clearly answered in the article. It just shows you didn’t read the article and you’re only there to create backlinks.
Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!
Here is an example of a Cost Benefit Analysis I did regarding what I should do with my upcoming tax refund. I pay a ridiculous amount in student loans and to the government annually. So I can usually expect a sizable chunk back. Now I face the question of using my tax refund to either pay off my car or use it to invest.
Why Student Loans vs Car Loan?
I have $64,450 in Student Loans (5% interest) and a $10,132 Car Loan (2% interest). So you think I’d be paying WAY more on my student loans per month. Actually since it’s spread out over twenty years, I actually only play $487.06 in student loans a month. My car loan is $340 per month because it’s over five years (I’m on my third year now).
So if I pay off my car loan, that will free up an extra $340 a month I can use to invest, but is it worth it? To figure out if I should pay off my car or invest my tax refund, I’m doing a cost-benefit analysis!
Cost Benefit Analysis Definition
A cost benefit analysis is a financial model to compare two or more different “what if decisions” usually centered around how much it would cost. This is just like the pro/con list you’re used to making, but you’re analyzing the detailed cost factors of both decisions.
Cost Benefit Analysis Example Infographic
How to do a Cost Benefit Analysis? See my example
Question: I want to compare if I should use my tax refund combined with 3/4 of my stock portfolio to pay off my car loan or should I invest my tax refund. Which would be a wiser investment?
Math: So I pulled all the info on my car loan and stock portfolio below. Using the Pay Off Date of my car loan as the end date, I can calculate two options. In both options I would continue to invest $120 per month in my stock portfolio.
Tax Refund
Tax Refund = $3,200
Extra Money = $500
Car Loan
Amount Left – $10,132
Monthly Payment – $340
Pay Off Date – October 2nd, 2019
Interest Rate – 2.89%
Stock Portfolio
Stock Portfolio – $8,548
Historical Stock Market Interest – 7%
Option 1 – Pay Off Car – If I pay off my car loan, that that would free up my car payment of $340 per month. So if I pay off my car loan in April, 2017 that would free up 29 payments of $340, adding to a total of $460 per month into my stock portfolio with my regular $120 monthly contributions ($340 + $120).
If I invested that $460 monthly, with compound interest onto the remaining $2,116 in my portfolio (tax refund + stock portfolio – car loan) , it’d equal $16,500 by October, 2019.
I even went so far as factoring in my new insurance rate because it would be lower with me owning the car. I actually called my Esurance agent and asked what my new insurance rate would be if I fully owned my car vs having a car loan. You should do this, it’s super helpful! The new insurance rate would be $336 per six months vs the current $588 per six months. So this would save around $500 a year.
I’d also recommend talking to your bank holding your car loan and asking them if there are any penalties for paying off your car early? Remember they make money off the interest and if you pay early, they are missing out on a few extra bucks. Luckily the credit union where my car loan was under had no penalties for paying off early. Again, it’s super helpful to find out all these little factors before you make a decision, these all factor into the cost benefit analysis.
Option 2– Invest My Tax Refund – If I continued to invest instead of paying off my car loan. I’d dump that $3,400 tax refund (plus $500 extra) into my investment portfolio for a total of $11,748. Then add $120 per month for 29 months till October, 2019. With compounding interest, I’d have $17,489 by October, 2019. That’s about $1,000 more than if I paid off my car.
Plus it could be even more since I used 7% stock market interest and last year it was more like 13%, but I wanted to use historic returns because past performance doesn’t mean future performance. 😉
There’s more to it
So if I continue to invest in my portfolio instead of paying off my car loan, I’ll have a little over $989 more by October 2nd, 2019. but that’s only the numbers.
There is a certain amount of freedom to having an additional $340 a month. If I have an unexpected expense, that’s $340 extra I have to cover it if needed. I’m not going to lie, it would be nice to have that extra cash each month. It’d solve a lot of nightmares in the middle of the night of not having enough money.
On the other hand, if I don’t have the extra money each month, I can’t waste it. See it’s a dilemma! At least I NOW know how much I’d have with both options because I did the Cost Benefit Analysis!
Cost Benefit Analysis Template
Here is the excel sheet I used to calculate my cost benefit analysis. It’s pretty simple, but you can see the formula I used for “Future Value” to calculate the final amounts. It was really cool tinkering with the different values to see how the two options compared. Try it for yourself by downloading the excel sheet I used.
I inputted in all the variables which you see above. Then broke down the new principal of my stock portfolio in each of the options. In Option 1 (Pay Off Car) it was $2,216 and Option 2 (Invest) the principal was $11,748. Then added the new monthly payments of both Options. Lastly I used the formula “Future Value” to break down both Options after 30 months.
Future Value Formula
The formula “Future Value” in excel was new to me, so let me break it down.
Cost Benefit Analysis Template
=FV (rate, nper, pmt, pv, type)
*note that the future value formula is in years, I had to adjust since I was using monthly deposits
Rate – The Interest Period (mine was 7%) Nper – The total number of payment periods (months divided by 12 for number of years) Pmt – The payment made each period (my monthly contributions times 12 for a year) PV – The present value (my starting portfolio amount) Type – When payments are due. 0=end of period, 1=1 beginning of period (most people I saw use 0)
How can you Apply this to your life?
When I first had the dilemma what to do with my efile tax return, my friend suggested a cost benefit analysis to analyze both options. While this was a good idea for my tax return, it’s a valuable tool for weighing pros and cons of any financial decision.
You can use this for compare cars when you’re buying new vs used, figuring out car loan costs. Or you figure out if you can buy a new house vs continuing renting. It’s a really a great tool to use!
What am I going to do?
Well that’s a good freaking question. What am I going to do? I need to do something because I have received my tax return and have $3,200 sitting in my savings account only earning 1% interest.
You’ve heard both options with the pros and cons of each. I have a logical decision which is to invest the cash right away in my stock portfolio to make more money or a financially freeing decision which would free up an extra $340 in month income. You’ll have to find what I’m going do in an upcoming post!
Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!
Think about sitting down with your boss to ask for a raise. This can be a very nerve-racking experience. There are so many ways your boss can respond. He can laugh at your request. This question can set him off with anger. Or there you can get a simple, “No.” Now add let’s add some complexity to that thought of asking for a raise. Think about going to your future employer to ask for a raise when you haven’t even started the job yet. Who would do this right?
Personally, I highly recommend it based on an experience I recently had (read on for that story). I look at a built-in raise as a win/win situation for both parties. For you, there is a raise waiting for you just a few short months after starting. For your future employer, they get to look at this raise as almost a retention bonus. They know this extra incentive will increase the chances of you sticking around for that time frame.
Before the Meeting
All of three of these methods have some steps in common. Firstly, you should always write down and practice the pitch to your future employer. Never go into this meeting unprepared which leads to the second step. Do some research! You do not want to go to this meeting being asked a question that you are not prepared for. Research as to why you need this raise and what other companies are doing. Lastly, practice your pitch! Did I say that already? I cannot stress how important this is. Your future employer will wonder who they hired if you cannot put together sentences with strong answers to their questions.
Build in a Future Raise
There are times a company does not have it in their budget to provide a higher starting salary you asked for. When they tell you this news, do not freak out and say goodbye. Slow down a bit before you start looking elsewhere for a new position but rather continue the conversation with your future employer.
Have a raise built into your contract for a later date.
You will want to talk about is the possibility for a future raise. Discuss the timing and what works with their budget. Maybe their fiscal year is over in three or six months from when you start. You could get it written on your starting contract that you would receive this raise when the next fiscal year begins.
Idea: Mentally prepare yourself for how far out this raise could come. They might not have the money to give you a raise for a full twelve months. When you ask for a raise, try to be assertive to get that time frame shorter but do not be aggressive. You do not want to insult your future employer by starting your tenure with a sour taste.
Performance Benchmarks
I will keep this method short and sweet for you. Some positions out in the working world are very performance orientated. Some examples would include sales or even law. A lawyer could state that if they when a particular number of cases that they would be in line with a higher base salary. Or an insurance salesman could ask for a raise to be built in if their margins hit 10% above average.
Idea: Before heading into the interview do some prep work. This prep should consist of researching what the benchmark should be. Do not come to the meeting just with what the benchmark but you should also be prepared as to why the standard should be set where you set it.
Completion of School
With this method to ask for a raise, I had a personal experience with. It worked out well for my family and me.
Back in 2015, I started a new career venture by starting my masters in software development and programming. In 2010 I received my bachelor’s degree in landscape architecture. Honestly, I should have gone into the IT world right out of high school but that is alright. Landscape architecture gave me some amazing experiences such as taking me around the country and world. It also is how I met two of my best friends, Andrew and Tristan.
Moving on from this past and onto my future in the IT world. I planned on work in my retail position while I finished my master’s degree at DU. Once I finished the program I would go out to the real world to grab a new high paying job. As plans usually go it did not go as, well, planned. Actually, everything went better than I planned. A couple terms into my degree I had the opportunity to apply for a job at a local university here in Denver. After the interview process, I landed this position.
Set a raise to be built in after you graduate school.
This was an amazing opportunity that I was given. This meant a lot to our family financially. It allowed us to save for a down payment on a home which is a challenge here in Denver. We have also become more aggressive on our car and student loans though not aggressive enough for my liking.
When negotiating the salary for the new position I got my starting salary right in the middle of the range they were willing to pay. I thought this was a win, especially since I did not have any experience. The key aspect of the contract was we negotiated in an automatic 10% raise. This raise would come when I registered for my last term in my master’s program. This raise took my salary at the top end of the initial range they were willing to pay. I was very happy especially since raises that big is basically unheard of at the university.
Idea: Your future employer might want to see your transcript when you ask for a raise of this type. Mine did. So be prepared by getting that printed off beforehand.
Conclusion
If one of these three “ask for a raise” methods will work for you, then go for it! For me personally, it was reassuring to know that I was going significant raise within six months of starting my new raise. This was especially reassuring after I got to know the company more and realized that raises like mine rarely happen.
The toughest part is getting over those nerves to ask for that raise. I completely understand those nerves. I mean, you haven’t even started the job yet and you are already asking for a raise. Trust me though, it is not that hard. Just remember to do your research to make a solid case. The worse that can happen is your future employer says no. At least you will have an answer with no regrets.
It is time to formalize Wallet Squirrel’s SEO Strategy for 2017. This strategy will help get the website to rank higher within Google and Bing. Over the next 12 months we will give you updates on how the process is going, where we rank, and where we still need improvement.
Andrew has done a nice job over the last couple of years by laying down a solid foundation for Wallet Squirrel and its SEO strategy. The most important thing he did is he built the website using a highly responsive Enfold WordPress theme. Google gives Wallet Squirrel a score of 99 out of 100 in their Website Mobility Testing Application. This is great news because if he did not do this, we would be redesigning the website to meet this criteria.
Google’s Mobile Friendly Tester helps our SEO Strategy for 2017 by ensuring our site is mobile friendly
Another nice thing Andrew has done is create some great backlinks. About 70 percent of the links he has created are dofollow links as well. This seems like a healthy balance between the two. A lot of the research I have found shows that you want a balance between Do Follow and nofollow links. In case you do not know what those two types of links are, I will explain.
Dofollow links allow juice to travel from their site to your site giving Wallet Squirrel more power/authority. Nofollow links do not allow that juice to flow from site to site. Simply put, dofollow links allow humans and the search engine to travel to Wallet Squirrel through the link but nofollow links only allow humans to do so.
Nofollow links do not allow that juice to flow from site to site. Simply put, dofollow links allow humans and the search engine to travel to Wallet Squirrel through the link but nofollow links only allow humans to do so.
SEO Strategy Starting Point
Before we begin to dig into what our new SEO strategy for 2017 is I must disclose some information. Since neither Andrew nor I are SEO experts we have done a lot of research to come up with a plan. We chose the tips on this page because they were consistently talked about throughout our research. Also, Google and most other major search engines have never formally disclosed what makes a website rank higher. They have hinted at things but they like to keep this information a secrete just like the Coronal’s Famous Crispy Chicken Recipe. So everything below are educated guesses as to what makes for a great SEO Strategy.
Focus on topics for Wallet Squirrel’s audience
We need to find what our audience is really looking for. The main question we need to ask ourselves is, “What do you, the audience, want to read?” If we take Wallet Squirrel down a path of topics that people do not care about then we will not receive any interest. This simple question seems like common sense but it can be an easily overlooked part of SEO.
The process is fairly easy with a little bit of practice and increase of knowledge as to where to search. During this phase of our SEO Strategy we will look for five to seven broad topics to look at. These topics will not be our keywords, those come in the next step. They will be for defining the broad ideas we write about.
Defining Topics
To be able to define these topics we need to do a lot of research as to what current trends are. Our main goal during this research period is to find the readers pain points. What do they need to know about? For example, credit cards. Now a days pretty much everybody has one. These little pieces of plastic control the lives of many people. Within this topic there are dozens of articles that could be written about. Some include how to choose a credit card, how to properly manage payments, how to payoff that debt, tricks to earn more awards, and so on.
Flipboard Application helps us with our SEO Strategy for 2017 by finding trending topics
As I mentioned before, finding these pain points can be tricky. We will need to search around the web for trending topics as to what is being talked about. This can be on the news, demographic profiling tools, social media, or any other creative place you can find. I personally like searching through social media with hashtags because it is the most current. Another source I have been using is the application Flipboard. This news application allows you to customize content based on topics. It then pulls in trending articles. Looking through those articles I was able to find some patterns to help identify some broad topics.
Find Keywords Within those Topics
Now that we have found the topics that the audience is looking to read about, it is time to find keywords to create content around. This is where Google’s Keyword Planner comes into play. Here is how I gathered keywords for each topic.
To-Do:
Firstly, I opened up a new blank Excel document and named it “Topic Keywords”.
I created new tabs for each topic and named them accordingly.
Next I went over to Google’s Keyword Planner and signed in.
I opened the “Search for new keywords using a phrase, website, or category” section and typed in one of the topics to search for such as “Credit Card”.
After hitting search, Keyword Planner takes you to the next page to show you all of the keywords that would fit under that “Credit Card” topic.
Next, I selected the “Download” button and selected “Excel CSV” for my export.
In the new Excel CSV that I downloaded, I select everything in “Keyword” and “Avg. Monthly Searches” columns.
I copied and pasted those columns into my “Topic Keyword” Excel file under the “Credit Card” tab.
Now that I have retrieved all of the “Credit Card” topic’s keywords, it is time to grab to the rest of the keywords for the remaining keywords. To do this, I repeated steps four through eight.
After all of the topic tabs are filled out, the real fun can happen (sarcasm). It is time to clean up our new keywords list. This is done by deleting out irrelevant or poor keyword choices. Also, we will lay out a priority list by marking higher priority keywords with a certain color and lower ones with another color.
Credit Card Keyword Planner used in our SEO Strategy for 2017
Loose Guidelines
Phew, now we are done with finding keywords! We do not have to follow these keyword lists to the dot. There will be other topics that we will want to be write about. This list is a nice guidance to keep us focused on those broad topics but it is there to help with content ideas. It is time to move on to the next step in our SEO Strategy for 2017, creating lots and lots of content.
Create Lots of Excellent Content
Google’s Algorithms are said to rank good solid content higher than poor content. What does this mean? You should create content that is written to the highest standards. It should be highly readable and informative for the reader. The content should also have a lot of substance. The days of writing short 300 word articles are over. Any article should be 1,000 words or greater. So grab a cup of coffee, find a comfy seat, and start writing!
Our articles should be based on a keyword that is searched for monthly. It does not need to be a ground breaking keyword with 100,000 searches per month. Anything with 100 searches a month is a great place to start.
We also need to make sure to do internal linking. Creating deep links from the home page and throughout the website allows for the Google Bots to crawl throughout the website easier. This helps provide more page authority and domain authority to more fresh content.
Build strong Headlines and Titles
During my research I found that building strong headlines and titles for each article does help it rank better. For last week’s post, Way #73 – How to Earn More Money in 2017 – The Achievement App, I used an application I found off of Money Lab. The Headliner Analyzer Tool by CoSchedule analyzes the phrasing and word structure of the soon to be headline or title. It gives it a simple score between 1 and 100. The higher the score the better.
When reading, it sounds like a score around 75 is pretty darn awesome so I shoot to get something around there. I consider something below 60 as pretty low but what do I know. The application also gives you a breakdown of word types used within the headline. I try to get a healthy balance between all four of those types. This tool will be used when we go through to update older yet high performing posts (see last step below).
Define Our Competitors
Many of you reading this post are friends to Wallet Squirrel so do not be hurt by this headline. Defining our competitors is not us putting every financial blog in our cross hairs rather it is about something else.
When we write a brand new blog post, we choose a keyword for that post. For example, this keyword could be puppies. Who doesn’t love puppies, right? After publishing this new article about puppies over on the blogroll we will go see who the article’s competitors are. Within Google’s search bar, or any other search engine preferred, I type in the articles keyword, puppies. Every website that pulls here are our competitors for the blog post on puppies. Next, we will look into how we can copy the backlinks they are getting as well.
Puppies search in Google to find competition.
Spying on Our Competitors
After defining the competitors, we need to spy on our competitors to see what they are doing. Chances are they have a lot of referring links coming in from people who wrote about their article. Here might be an opportunity to see if those people will want to link to our article as well, especially if it has better content. Here is what we need to do.
After defining our competitors we need to go to Backlink Watch and enter in the exact URL of your competitors page. This is the exact URL that competes with your keyword.
Backlink Watch will bring up a list of referring sites pointing to the competitors page.
Click on each link and contact the site owner/author about the new blog post we just posted that focuses around the keyword.
Backlink Watch helps us find who is linking to our competition.
Backlinks
During my research I keep reading that backlinks are not as important as they use to be for ranking. I personally do not think you should take backlinks lightly for several reasons. Firstly, as we compete against several other blogs out there, these backlinks might just be enough to take Wallet Squirrel above and beyond. Secondly, Wallet Squirrel has been around for a couple of years now so it is not exactly young in the internet world. It is very immature with its reach though. These backlinks can help with exposure to the site as we try to broaden our reach around the internet.
We will make sure to post to credible websites that provide backlinks to each new article. These can vary from other blogs, social platforms such as StumbleUpon, social media, and others. There will not be a set list of sites to post on for each post. This is because each article will be about something different and the previous backlink sites might not fit properly.
In the past, on a previous website, we have paid for backlinks. My research has consistently told me that this might be a waste of money now. We will try not do this and see where it takes us in 2017. What do you think of purchasing backlinks?
SEO Strategy Extra Points!
After completing all of the above steps we still need to use the little remaining time we have on these remaining SEO Strategies for 2017. These are more advanced SEO Strategies that will take a lot more time (not sure where that is going to come from). It will be interesting to see how we can fit these techniques within the overall strategy.
Infographics
Infographics are becoming more and more popular. Luckily we have an immensely talented guy on our team to make gorgeous infographics, Andrew. If you have not seen his What Happens To Debt When You Die – Infographic, you need to head over there next. Plus, the other dude on the team, Adam, wrote his Master’s thesis on Data Visualization. So we should have no excuse to make amazing infographics for Wallet Squirrel’s audience. They have a great potential to bring in a lot of traffic to Wallet Squirrel.
We want to make sure our infographics can be found. Submitting to infographic directories will help gain more exposure for each one. Though this will be time consuming, it should be worth it in the long run. The article by Modern Marketing Partners provides twenty sites that we can submit too.
On top of this we want to make it easier to share the infographics from Wallet Squirrel. Making information easy to share for our readers will increase the likelihood of it being spread across to broader audiences. We have not figured out this method yet but once we do, I am sure we will keep you posted. Ideas?
Guest Posting
We will continue to jump on any guest post opportunity that comes our way. Some people are nervous about doing guest posts because you are creating other content for your “Competition”. Then your “competition” gets all of the viewership and affiliate links. I will be challenging us, Team Squirrel, to not think this way. Other financial blogs are not our “competition” but rather friends and colleagues who are also reaching for financial freedom.
I personally think guest posts can work be very effective! They help spread our voice across the internet to other audiences. Essentially, I see it as putting in a little work for some easy advertisement to the blog. We will want to be somewhat picky as to who we guest post for. It will be important to make sure that the other blogging website has a similar vision and morals. It would not be good to guest post for a website that could bring negative feedback to ours.
Story Time
Trey Ratcliff, who is the photographer that inspired me to get into photography. About five to seven years ago he was doing something most other photographers were not doing on the internet. He was uploading high resolution photographs without a watermark to a downloadable site, SmugMug. He would put his content under the Creative Commons Non-Commercial license. Everyone was saying he was crazy to do this. People kept saying “bad” people could take his work and use it illegally. He thought so what, at least my photography is getting out there and viewed. Trey is now one of the world’s most popular photographers. He even has work in the Smithsonian! I believe he made it to where he is today because he let the leash loose on his photographs allowing his viewership to expand even more rapidly.
SSL Certification
Google helps promote websites with the newish SSL certificate. I have read in several locations, including Moz, that this certificate is really important now. You can tell if a website has the SSL certificate when its URL starts with https://. Wallet Squirrel does not have this certificate…yet. Adding the SSL certificate should be a fairly easy item to check off our SEO strategy for 2017 list.
The SSL Certificate should be apart of anyone’s SEO Strategy.
Slow Website Speeds
Research tells us that Google will ding websites with slow loading speeds. When running tests on the Wallet Squirrel, the site fails miserably. I will work on trying to figure out what is causing this slow down. Firstly, I will check with our web hosting provider Bluehost about what might be going on. They have amazing customer service so I am sure we can get to the bottom of the issue.
There are several other ideas that could be slowing the site down. The first item I will explorer is checking to see if the images are too large. Secondly there is a possibility that there is too much JavaScript and CSS code. This code could be imbedded into the WordPress theme that we use. I really hope Bluehost is able to help us because I do not want to go digging through code.
Let me know in the comment section if you have any other ideas?
Index the pages
We need to make sure that our pages are being indexed on Google and Bing. This can be done on Google Webmaster Tools as well as Bing’s Webmaster. This is a very easy process of making sure Google or Bing Fetches the website or blog post.
Another tool recommended by Neil Patel Is the Ping-o-Matic. The application will allow us to ping high authority search SEO service directories. According to Neil, this allows Google’s bots to crawl the website a lot quicker and easier.
Our goal will be to create a document on each site that can push more visitors to Wallet Squirrel. This is obviously easier said than done but is not out of the question. First we will want to pick one of the social platforms to create a new document such as Slideshare. We will want to pick a trending topics that relate to Wallet Squirrel. We can use GrowHackers.com or Google Trends to help us search for those trending topics.
After finding an awesome topic to create a slideshow about it will be best to do research on how to make it spectacular. Luckily, we can look at the what other slide shows are doing themselves. Looking at what those authors did we can figure out what works and what does not work to create something jaw dropping. Creating well written content within the slide share will help engage the reader but more importantly we will want to add images. Adding a visual dynamic will create a more well-rounded presentation to keep our audience roped in.
Return to Old Blog Posts
We do not want older but popular articles to go stale. Google does not like stale content and will lower its ranking within search results. So every three to six months we need to examine older articles to refresh them a bit. First it is best to find what the best performing articles from that time frame are. One example for Wallet Squirrel would be Andrew’s Review of the Robinhood App.
First we went to Google Analytics
Under the Behaviors Tab I found what the top posts were three to six months ago.
After finding the top three or so posts are we can go ahead and update them.
Updating old but high performing posts every three to six months is an extra point item to our SEO Strategy for 2017
There are several ideas as to what to update. One thought is to update the headline or title of the article. This would be another great opportunity for us to use the Headline Analyzer talked about earlier. Also, as time progresses we usually learn more about that particular subject. We can update the article to include this new information.
Measuring Progress
So I have decided on a few metrics that we will use to measure the progress of our new SEO Strategy for 2017. All numbers are current as of March 16, 2017. We will update them as the year progresses.
Alexa Ranking – 3,609,825
Sites Linking Into Wallet Squirrel (by Alexa) – 30
Moz Domain Authority – 18
Avg. Weekly Views – 329
The goal to our SEO Strategy for 2017 is to climb the ranks with Alexa
SEO Strategy Resources
To put this SEO Strategy together, I looked all around the internet for consistent recommendations from credible sources. I must give credit to the sites that gave me each idea first. I wish I could name all of the sites that confirmed these ideas but that would be too long of a list!
Believe it not, but registering Wallet Squirrel as an LLC was pretty freaking easy.
Personal Goal – I’ve always wanted to be a business owner and now is the moment. Wallet Squirrel is legit!
My fear – I was always terrified that registering a company would put a spotlight on me by the IRS to rummage through everything I’ve ever done and hunt me down like a hawk. Perhaps that’s a little extreme, but it’s something that kept me up at night. I’ve finally got over that fear because of two reasons. First, I just have to register it if I expect to earn any income from Wallet Squirrel I need to have it separate from my personal assets. Second, I’ve finally become comfortable knowing that Wallet Squirrel doesn’t make a lot of money, it’s not going to be a ridiculous tax bill.
Why now? – Mainly because Wallet Squirrel continues to see more and more growth. So if Wallet Squirrel plans on making money, I should really file that separately from my own tax documents. PLUS as Wallet Squirrel continues to make a name for itself, I need to have that name protected. Look forward to my trademark post coming up.
How to Set up an LLC in Colorado?
I will breeze through this part because it’s pretty simple.
Check to see if your company name (name + LLC) is available in the naming database. Check here.
If your name is available. Start here to enter the name you want to use.
Fill out your address like 4 times and the rest of the form.
Pay $50 and you’re done.
That’s basically it. I received an email notifying me that Wallet Squirrel is registered as an LLC in Colorado.
Conclusion
I’m super excited to be a legit business owner now, but still have some details to finalize like obtaining an EIN (Employer Identification Number) so I can set up a business bank account for Wallet Squirrel. That’s about it though, I just wanted to share with everyone how EASY it is to set up an LLC and say that Wallet Squirrel is officially legit!
Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!
Is it possible to love good grammar but be awful at it? YES, absolutely. Story of my life.
Now, while I am a stickler for good grammar, I’m not a jerk and anticipates calling people out on the wrong use of effect vs affect. It’s a pretty common mistake, but here’s the thing. It doesn’t have to be. Here is my Grammarly review.
For the last 8 months or so, I’ve been using a Google Chrome Extension called “Grammarly“. It’s been a huge life saver for me and it can absolutely work for you too. Specifically, I’m addressing other Bloggers and Website Commenters. You’re like 90% of my audience.
You can bully on YouTube comments all you want, but let’s use good grammar people.
Grammarly Review: What does Grammarly do?
Grammarly in essence is an online grammar checker. There are two ways to use Grammarly:
1. As you type within comment boxes online on any site, you’ll see a solid red underline as Microsoft Word but it’s Grammarly checking both for spelling and correct uses of words, commas, sentence structure, etc. You’ll see a nice little Grammarly logo, so you’ll know it’s working.
Here is the comment form I recently left on Dividend Diplomats blog, awesome blog check it out.
2. You can also open up to the actual https://app.grammarly.com website and create a blank document so you can either type your documents there and copy and paste into your actual web form or document. OR you can copy and paste your document into the Grammarly website and it’ll auto identify any mistakes. This is what I do.
Here is the App view, it opens Grammarly in a new tab via your web browser and identifies all the mistakes on the side.
Did I mention Grammarly is free? Well, it has both a free version and paid version.
Free Version
I used the free version for the first 2 months, switched to the paid version for 2 months and now back to the free again. It’s fantastic. The free version is exactly the same as the paid version but I believe it only catches the obvious mistakes. By obvious mistakes, I mean 90% of the errors you make. This is still pretty significant. In my experience for this Grammarly review, the free version is the best for the value.
How they hooked me into the paid version (for a few months)
Like I said, the free version will catch 90% of your mistakes. The other 10% are usually just commas in certain locations that perhaps an English professor would pick up on.
As Grammarly is reviewing your document/web form/text. It’ll identify all your mistakes and give you suggestions on how to correct this. HOWEVER, it’ll also identify 3-9 errors that it won’t highlight and tells you that you need to buy the paid version to see these. At first, I freaked out. WTF am I missing here. They hooked me, I paid for the free version.
Once I had the free version, those 3-9 errors it suggested were just commas. SERIOUSLY! I didn’t gain much value out of paying the extra $30 monthly for it to tell me I had additional comma options and perhaps a few synonyms it suggested. This is why after the 2 months of trying it, I went back to the free version. Usually, people are forgiving if you miss a comma in the wrong location, spelling and sentence structure is just stupid. Grammarly will correct these in the free version.
How do I use Grammarly?
If I didn’t establish this already, I use this program and no they are not paying me to write this Grammarly review. Do people actually get paid to write reviews? If so, it doesn’t happen to me.
My process usually involves writing my blog posts in Microsoft OneNote first (awesome program). After the post is finished, I usually create pretty pictures or an infographic in collaboration. Why, because they’re cool. =)
Then I paste the text into Wallet Squirrel, which is WordPress platform. As soon as I paste the text into WordPress, Grammarly automatically starts reviewing my text and doing the solid red underline thing for any grammar issues. For spelling mistakes, it gives me multiple correction options and same for grammar mistakes and the use of wrong words like effect vs affect. Grammarly is especially good at helping with the right word choices. Using this process gives me double the grammar checking of both Microsoft and Grammarly. In my opinion, they are very similar.
After though, I love Grammarly for when I post on social media and comment on other bloggers, the Grammarly Chrome Extension constantly works to correct any issues on all of these platforms. So I don’t have to copy and paste my comments, I can type directly into these web forms and Grammarly picks up on the text and provides corrections if needed. It’s really a bloggers best friend.
Grammarly Competitors
This is by no means the only grammar checking software out there. It’s just the one I use and keep in mind you can use multiple apps here to create exceptional text if you’re paranoid, but I personally only use Grammarly though I may include Hemingway in the future. Here are the few others out there:
Hemingway – Best for overall readability of your text. It’s great for helping you write better.
Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!
On Friday, I sat at lunch with some friends talking about life, weekend plans, and personal finance. I’m a dork I know, but I found myself explaining what are dividends and dividend investing. So let me take a shot at this since I talk about them ALL the time.
What are Dividends?
Let’s start with what are dividends. Dividends are a portion of a company’s profits that are paid regularly to the company’s shareholders. The amount of profits shared among shareholders is a percentage of the stock price called “yield”. This is shared sometimes annually, quarterly or monthly to the shareholders depending on the company.
Dividends are popular because not only do shareholders of a company’s stock see the price move. They receive dividends just for owning the stock. It’s like a small bonus.
For example: Apple (AAPL) stock price is currently $100. Apple has an annual dividend yield of 2.27%. Shareholders will receive $2.27 throughout the year just for holding onto the stock. The neat part is shareholders will receive income from their investment without selling.
Why do stocks produce dividends?
First, not all stocks produce dividends. Stocks like Google and Amazon don’t produce dividends. Every company decides for themselves whether they want to or not.
Stocks like Google and Amazon don’t wish to produce dividends because they want to focus all extra capital for research and development. Typically younger companies like this don’t pay dividends. However if you look at Coca-Cola, while they do innovate, their extra cash is distributed as dividends because they found it’s better put towards dividends to attract more investors. Dividends are very attractive to investors because of compounding.
Let’s Talk Compounding!
The idea is that dividends will compound increasing your investment. Let’s say you invest in 50 shares of stock ABC at $100 a share with a 3% dividend yield, you’ll annually earn $150 per year in dividends. However if the stock increases its dividend 5% (not stock price value, but dividend yield), your $5,000 investment in 20 years will be worth $13,143. That’s a 162.85% gain! Here’s a great dividend reinvestment calculator.
That’s if the stock stayed the same price at $100, but typically the market increases annually at 7%. So both the stock price and dividend will increase. Cool right?
What is Dividend Investing?
Dividend Investing is the idea of investing in only stocks that produce dividends. The purpose being of living off the dividends produced by the stocks you own opposed to selling your stocks for money. It essentially creates passive income.
Let’s say you plan to live roughly till your 92, and you want to have $60,000 per year for retirement. If you retire at 65 you would need to have $1,620,000 (before taxes) saved up to spend $60k every year. Yet, by 92 you will have run out of money, totally broke, dirt poor.
However dividend investors use dividend yield to create passive income for retirement. In the same situation, a dividend investor would save a larger amount upfront, $2,000,000 in a portfolio of dividend stocks at a 3% dividend yield. That 3% yield will create $60,000 (before taxes) per year. If you never touch your principal (that $2,000,000) you’ll be able to keep receiving dividends every year, forever. So even if you live to 126 (oldest person in the world), you can rely on that $60,000 every year since people seem to keep living longer and longer. I personally plan to live to 182.
Dividend Investing is relying on a reoccurring stream of income that never runs out opposed to a stash of cash that will eventually run out. If you haven’t figured it out, I’m a dividend investor.
Fun Fact: All five of Warrant Buffett (one of the greatest investors of all time) largest stock holdings pay dividends. These are Wells Fargo, Coca-Cola, American Express, IBM and Wal-Mart. He lives on the buy and hold strategy. He invests in good companies that pay dividends and sits back and receives a paycheck. Sounds like a dividend investor to me.
I’m constantly wordsmithing on how to explain what are dividends and dividend investing to people. How’d I do? Any tips on explaining it better?
Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!
