Well I purchased my first share! I actually purchased it awhile ago, it has just taken forever to get confirmation and get enrolled on the DRIP plan. But today I received my confirmation and am now officially a shareholder and have my first DRIP plan set up. Now if only the share price would drop a bit more... :P 

Presently, Monmouth REIT (NYSE: MNR) is trading at $10.75 I'd really like to reinvest in it at $10/share though and they require a minimum contribution amount of $500 (yikes!!). I guess I'll be socking away some money to cover this (courtesy of Barclays). :P Fortunately for me, they charge no fees for processing contributions and, best of all, I get a 5% discount off the market price when purchasing through my DRIP plan. That is like receiving a 5% gain right there! 
I initially stumbled across MNR while researching dividend stocks. It attracted me due to its low price and high dividend yield. Since I am strapped to a tight budget, my best bet for accumulating dividends quickly is to identify lower cost shares and increase the quantity of shares I own. The best way to do this is by purchasing companies that provide a dividend with a lower share price (less than $30). MNR popped up at $11 and change/share with a 5% dividend yield. This is even more attractive as it means I only need 20 shares before the dividends I receive would purchase me one additional share and from that point on it would simply compound itself. :D

Now of course I didn't just buy the share without digging into the fundamentals. First I had to figure out what in tarnation an REIT is. I've never heard of REIT's before. So I set about reading up on REIT's. Their primary drawbacks for me lie in the fact that I will end up paying much more in tax than I would otherwise for the distributions (which I learned aren't technically dividends anyway). I suppose increased tax is the price of awesomeness in this case. 
Apparently, REITs are a special organization that pools the money of thousands, even millions of investors in order to purchase real estate and then lease this real estate to people. They are then mandated to distribute 90% of any profits back to investors. There are a broad variety of REITs ranging from specializing in mortgages (I don't understand these so am avoiding them) to straight out owning the real estate and leasing to tenants (this makes sense to me) which range from hotels, to commercial and industrial businesses, to residential set ups. MNR specializes in commercial real estate leasing and their biggest customer is FedEx, which has locked in and renewed several leases as well as a new facility. 

What particularly impressed me about Monmouth REIT was their balance sheet. I did a bit of digging and pulled up their financials reported to the SEC from 2009, just to see what things looked like for them at the height of the real estate melt down. The results shocked me. In 2009, they had total assets of $394 million and total liabilities of $229 million. Fast forward to 2014, 5 years later, and they have doubled their total assets to $743 million, while only increasing total debt to $323 million. In other words, the management not only weathered our nation's financial woes in the great recession, but came out swinging to grow the company's assets by 17.6% while only increasing debt 8.2% annually. This actually lowered the debt/asset ratio from an already fair 0.58 to 0.42. With numbers like these and a price tag hovering at $11, which makes it affordable for even my tight budget, I had to pull the trigger. :) 

Now, as a bonafide, shareholder, I am excited to begin my foray into the world of investing. We'll see what the future brings and I am sure I'll have a lot of ups and downs and critical lessons to learn. But for better or worse, I am now a stock market investor!! 
 


Comments

04/08/2015 5:23am

I really enjoyed reading it, you are a brilliant writer. I actually added your blog to my favorites and will look forward for more updates.

Reply
Pizza Guy
04/18/2015 2:18pm

Thanks for the comment and the add to your favs! I am pretty new to this platform so it took me awhile to figure out how to respond to your comment. :)

Reply
11/27/2015 1:10am

Very useful posting for new investors ,this article is helpful for us. Thanks for sharing!!!

Reply
08/13/2015 7:14am

I have read your blog, so I would like to know one things what will say for beginners?

Reply
10/22/2015 11:22pm

I really enjoyed your post. Thank you for sharing your experience with us. This post is very helpful to freshers. Wonderful post.

Reply
03/22/2016 11:29am

Growth stock investing is a typical way to long term investing. When we hear the phrase "stock market", we might think of shares being traded every day. But trading in stock market is different from growth stock investing. In trading, traders only take advantage of the stock's price fluctuation. Normally, a trader buys a stock at a lower price and sells at a higher one. More references to finance can be seen in childcaresales.com.au.

Reply
05/02/2016 11:55pm

Pizza hut is the international brand of fast food. In every country have the many branches of pizza hut and provide the best quality to your customer. Well, not many people reason in the line of the expense instead the reasoning is all about not wanting to get tired.

Reply
05/07/2016 10:48pm

Hmm, yeah, I've never heard of REIT's before too...

Reply
05/12/2016 5:02am

I really enjoyed your post. Superb!!!! Thank you for sharing wonderful post. Please keep updating!!!!

Reply
06/08/2016 10:02am

The best pizza ever!

Reply
06/30/2016 2:41am

Pizza i like it

Reply
08/29/2016 12:14am

Yeah, sharing smiles is a very good thing ;)

Reply
08/29/2016 11:37pm

Hello me and my friend who works in childcaresales.com.au as business advisor,On the off chance that you think you need to know a ton about organizations, inside data, statistical surveying, monetary reports, and still, at the end of the day it's insufficient to profit in stocks, you're off-base. There are truly just 3 things a stock can do: go up, down, or stay about the same.

Reply
08/30/2016 12:18am

After a long time I had read informative post. I hope this useful post will help all the readers.

Reply
09/14/2016 4:33am

As the admin of this web page is working, no question very soon it will be well-known, due to its feature contents.

Reply
10/21/2016 2:16am

I read you article, I really appreciate you for sharing this great.

Reply
11/14/2016 2:41am

The experience of the agent matters, all things considered, in the venture and exchanging purposes. He can help you with the best penny stocks on the web furthermore with the purchasing and offering of the stocks at the ideal time just when he has great learning about the market and is very much aware of the market patterns from quite a while.

Reply
11/21/2016 2:46am

Very useful information especially for the new investors. TradeBizz Research provides you with stock tips of NSE with high accuracy and effective call. We provide an option of free trial tips, this will help you to know about our effective and accurate services.

Reply

Professional and Experienced SEO Experts that will boost your organic ranking on major search engines, Proper Strategy and Complete Supervision of our SEO specialist will help you stand out.

Reply
12/09/2016 3:23am

vice sharing

Reply
12/23/2016 2:10am

I've invested in the stock market as well and your method's really great through the dividend reinvestment plan. I've invested as well but I had to take a loan at first though.

Reply
03/16/2017 2:35am

We getting nice information through this blog.
It’s Great and Very Helpful.
Thanks again and keep up the great work!

Reply
04/20/2017 12:13am

First time I visit this blog and found a valuable post and it's a very appreciable for everyone those who visit this blog or read this..

Reply
05/19/2017 11:02pm

Paid services offered by brokers and independent Forex analysts are called Forex trade signals. These services provide you with email, pager alerts, and desktop alerts in addition to analyzing the market for you. The Forex trade signal market conditions are analyzed using a combination of indicators.

Reply
05/26/2017 2:42am

This site is really very Nice but it is my request please add some more information about financials services in this site.

Reply



Leave a Reply