I guess you could say that I became a dividend investor without really understanding what that meant. I was about 16 years old, a sophomore in high school, when I became fascinated with the stock market. Back then, 1989, there was no Internet to speak of so all research had to be done at your local library. Enter my first introduction to stacks upon stacks of books outlying all pertinent stock information in neat two page summaries called Value Line. To think of the countless hours spent at the library sifting through thousands of pages of stock data trying to figure out what my very first stock purchase should be compared to the seconds and minutes it takes these days to find way more information than you often want via Yahoo! Finance or some other financial web site. It was during one of those days at the library I met up with a long time family friend that suggested that I buy a stock that he believed was a good long-term investment, having owned it himself for over 20 years. Being young and very inexperienced his stock sounded as good as any to me so I went for it.
My first stock purchase Homestake Mining Co. Homestake was one of the largest gold mining companies in north America for well over 100 years. To me it sounded wonderful knowing I owned a small piece of a gold mining company. In all honesty, I simply thought I was cool. Of course, this was just my first taste of the investing world. I would soon learn a lot more about the ups and downs of stock ownership while also receiving a quarterly surprise in the mail. My first dividend checks. See, while I was a novice to the investing world, what my family friend taught me at a very early age was that no matter the ups or downs of a daily stock quote, I would always get paid to wait. This concept just floored me as a teenager. To think I would receive a check in the mail every three months without having to do anything for it. My first lesson in passive income.
To say that I was excited to receive a check in the mail just because I owned some shares of Homestake Mining is an understatement. Yes, it was a physical check in the mail back in 1988. No matter, I went to school, hung out with friends, just continued to live as any other teenager, except I was getting money passively. It felt as if my birthday came every three months. I ended up owning Homestake Mining for almost 2 years. In that time the stock appreciated from $14 to a little over $23. A nice gain to say the least but made even sweeter with my eight dividend checks as well. Homestake was later sold to Barrick Gold Corporation and still pays a dividend. While I’m not really a fan of gold mining stocks these days I can definitely say that for my first taste of stock investing that sector left a good taste in my mouth.
How about you? What was your first dividend purchase?