Each week you'll learn how to be a better dividend investor and follow the journey of a welder with a passion for passive income to $1,000,000 and beyond.
TD set aside an extra $2.6B to cover expected fines, selling 40.5 million Charles Schwab (SCHW) shares to do so.
The allegations? Chinese drug traffickers used TD to launder at least $650 million from 2016 through 2021, and an employee took a bribe to facilitate this mess.
The cherry on top is potential "non-monetary penalties," which could restrict future growth and operations for TD in the United States, which accounts for about 25% of revenue.
My Response
I threw in the towel, selling all 157 TD shares for a total return of +1.6%.
🎉Congratulations, TD; you're the first recipient of my Mr. Yuk sticker!
The "Safe" Canadian Banks Myth
Everyone raves about the "Big Six" Canadian banks' safety and nearly two centuries of uninterrupted dividends.
TD hasn't reduced its dividend in 167 years and has a 13-year growth streak. Impressive, right?
Source: SimplySafeDividends.com
But I had a "come to Jesus" moment. Do I REALLY understand this bank? Or am I just justifying my investment because of its long dividend history?
The Complexity of Modern Banking
TD's business spans checking accounts, savings, loans, credit cards, mortgages, investing services, insurance, etc.
It's a complex financial ecosystem that takes time to grasp fully.
I've listened twice to every Berkshire-Hathaway annual meeting.
In 2013, investing legend Charlie Munger said he thinks big banks' financial statements are way harder to understand than they used to be.
He said they do so many different things and have so many footnotes and gobbledygook that it's hard to understand.
If Charlie freaking Munger has difficulty understanding big banks that do more than simple deposits and loans, what chance do I have?
The Danger of Complacency
I'd think, "They're too big to fail" because the Canadian government monitors its biggest banks closely, and they're so important to the country's economy that if one fails, it could cause serious problems for everyone in Canada.
But is that a good reason to invest?
Lessons Learned
Only invest in what you understand
A long dividend history isn't reason enough to own a stock
Sometimes, it's ok to admit you're in over your head
What's Next?
We now have $10K cash in our self-directed IRA, which is earning a measly 0.45% APY at Schwab.
Source: Schwab.com
I'm eyeing some REITs we own, like Agree Realty (ADC) and VICI Properties (VICI), but they seem pricey.
The Silver Lining
This lesson cost us nothing (we even made a 1.6% return).
The future value of this experience? Priceless.
Your Turn
Are you investing in TD or any other bank? Hit REPLY and let me know. I'd love to hear your thoughts!
😁THANK YOU to everyone who responded to the last newsletter!!
Co-founder and former CEO of Yum! Brands (YUM) David Novak was on the Afford Anything podcast for an excellent interview that has something for everyone, including the story behind Crystal Pepsi!
Crystal Pepsi
🎦If you missed it, this is a SUPER niche video for those who invest and play dynasty fantasy football!
🤑Rick Stambaugh from Orange Mountain Financial brings you ‘Grow Retirement Income.' He’s a seasoned pro with over 30 years in trading and a passion for guiding folks to a prosperous retirement.
🚨Seeking Alpha Labor Day SALE!🇺🇸
Official Affiliate of SeekingAlpha.com
Click the image above and save $25 on an annual premium subscription + receive 2 FREE Alpha Picks!
*This is an affiliate offer, and I will receive a small commission at no additional cost when you buy a premium annual subscription after clicking the image above.
*Alpha Picks adds two stocks per month - on the closest business day to the 1st & 15th. Alpha Picks removes stocks based on rating thresholds (i.e., when a rating changes to a sell). Performance is calculated and reported daily using time-weighted returns. For more details on the performance calculation and methodology of Alpha Picks, click here.
*Introductory offer for the first year only. $214 is charged automatically for an annual subscription. Auto-renews as annual subscription at the then current annual list price. Plus sales tax/VAT, where applicable.
Each week you'll learn how to be a better dividend investor and follow the journey of a welder with a passion for passive income to $1,000,000 and beyond.
As I write this, my wife Jena is down with a migraine. She has had them her whole life, and if you’ve never had one, it can literally wipe out a whole day. And I wish there were a simple way just to make it stop for her. That got me thinking about something I have heard said about investing. Some of the best companies to look at for the long term are the ones that solve migraine-level problems. The kind of problem people will gladly pay to make go away, over and over again. So I found a few...
I think I might be addicted to a dividend. Nobody needs to stage an intervention, but I own a stock that pays about 10%, and every time I think about selling it, I find a reason not to. And lately I've been wondering if the reason is just... Loving watching that money roll in every 90 days! What got me thinking about all this was when Ares Capital (ARCC) reported earnings, and on top of that, they announced they're buying another company called MidCap Financial (MFIC) in a deal worth about...
Happy Halloween! I thought it would be fun to find a few companies that fit the season and pay you to own them. This is a very quick read, not a deep dive. It’s just enough to put a few ideas on your radar. 3 numbers to know first: 10-Year Dividend Growth: How fast the dividend grew each year, on average, over the last 10 years. Growth Streak: How many years in a row the company has raised its dividend. Free Cash Flow (FCF) Payout: Free cash flow is the money left over after a company pays...
