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!! 


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