My First Dividend Purchase

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?

28 thoughts on “My First Dividend Purchase

  1. The first company that I purchased myself was EOG Resources, O&G E&P. I didn’t buy it at the time as a dividend growth company but it’s continued along increasing its dividend and has doubled for me so far. I imagine you could find a lot more true deep value candidates before the internet made everything accessible but it was surely a lot more work to get the information.

    • “A lot more work” is certainly and understatement. But I never saw it as work. It was almost like a hobby, an interest, I felt as if I was learning so much on my own that it did not seem like any effort on my part. Just imagine sifting through thousands of pages, randomly sometimes, just to learn about the financials of a company, which was only as recent as the last date the book was published. Again, it was more fun and learning than work. At least, that’s how I saw it. Thank you for checking out DivHut. Though only a couple weeks old, I am very excited to join the online dividend investing community.

  2. Keep up the good work with your blog!

    My first stock purchase was a combination of MSFT, PFE and AMZN in Jan 2012 and I received my first ever dividend payment in March. At that time I decided to go with dividend only stocks in my taxable brokerage account and sold AMZN soon after. I’m still learning about stocks and my original purchases were simply because I thought the companies had strong brands and market position.

    • Thank you for the support. Much appreciated. Your picks are all solid but I can’t justify buying anything that doesn’t pay me to wait. And with regard to AMZN, I have a hard time paying for something that has such a sky high multiple. Call me old fashioned, call me narrow minded, I just won’t buy unless there is a dividend and a “normal” PE.

  3. Walmart.

    When I was 15 my Grampa gave me 275 dollars to invest in WMT. That was my first foray into investing, but it was not of my choosing.

    I started investing in the market near the peak of 2007 and bought BWLD. Ended up making a little money, but it was a terrible return from the time I bought till the time I sold it.

    Good luck!

    • Hi ILG,

      Love the fact that your grandfather gave you money to invest and you went with WMT. Your choice or not, no matter, you had the seed of investing planted in you and that’s what really counts. I would have loved to have an elder in my life buy me KO, DIS, PEP or whatever when I was much younger. I am sure it would have shaped my investing style at a much earlier age.

  4. Hi Divhut, nice story!

    It took me a long time to finally open a brokerage account. I live in Quebec (french part of Canada) and I honestly didn’t know anyone in my family or friends who were investing by themselves in the stock market. It’s not part of our culture it seems…

    When I told them I would, most of them told me I was crazy and that I would lose all my hard-earned money because they all knew someone who had invested in Nortel just before the tech bubble! But hey… I have made my homeworks and read books after books, blogs after blogs (thanks to this community), all the letters to shareholders from Warren Buffett, I read and re-read Benjamin Graham… I even read the CFA level 1 course that we can find on investopedia. I still have a lot to learn and I made and will make other mistakes but it made me feel confident.

    My first stock purchase was Jean-Coutu, a very well known pharmacy/drugstore here in Canada. It was 7 months ago and I can honestly say that I should have overcome my “fear” of investing by myself a long time ago! We are often better served by ourself in the end! Even though no checks were actually mailed to me, I have received 4 dividend deposits in my account since that time from Jean-Coutu and from other companies and man… it feels so great and weird at the same time! I can’t wait for june to come. More “checks” are coming in!!! Since I bought my shares, the stock price increased by 31% and the dividend already increased by more than 17%… I guess it’s the newbie luck! πŸ˜‰ but I’ll take it! It’s not everyday that we get such an incone increase!

    You want to know something? Now my family and friends all want to know more… My brother opened a brokerage account three months ago, my father is interested too, my girlfriend too and I even converted (while it was not my intention lol) a Twitter investor into a dividend growth investor. Poor guy… Twitter soaked last week… He bought at 64$… He’s now avidly reading books and blogs about dividend growth investing…

    Thanks

    • Hi Allan,

      This is a great story and thanks for sharing. It’s always exciting getting those “checks” from your stock. As a matter of fact I was digging through my old paperwork and found the check stub from my very first dividend check I got in 1988. As you said we are often better served by ourselves. As you can see from my portfolio I just stick with the big name companies that have a long history of growth and dividend increases. I am not after the high flying PE’s of the dot com stocks or other hyped up stocks. Don’t care if Twitter or Tesla goes to $500 a share I don’t want any part of it. Just give me good steady growth and I’m happy. The good thing about the stocks I have is that I can sleep well at night. I’m not worried about the crazy fluctuations in price or crazy valuations. I am impressed with your enthusiasm for investing. That’s what it’s all about. Read, learn, read some more. It’s not that hard. Learn some basic concepts, don’t trade in and out of stocks and buy dividend growth stocks. The place I started when creating my portfolio was the dividend aristocrat list. It’s a great place to start looking for an investment.

  5. My first dividend growth purchase was Altria (MO) when I first started buying individual stocks after investing in mutual funds for a few years. While it doesn’t have high dividend growth, I liked the high initial yield and long history of increases. Also with the company diversifying into other markets besides just cigarettes, they should still be able to grow earnings at a solid rate going forward even with the decreases in smoking rates here in the U.S.

    -SFZ

    • Exactly. You hit it on the head. MO for decades has been an incredible stock to own. In fact, I just wrote about it recently “Why I Love Stock Spin Offs” where I mention how MO spun off PM, KFT and MDLZ. Imagine buying just one company and today owning stock in four different ones all paying a dividend.

      • Doesn’t get any better than that. πŸ™‚ I also own PM and am interested in both Kraft and MDLZ due to their large brand portfolios, just need to do some more research on them before investing.

    • Hi HHWG,

      Glad you liked my story. Like you I didn’t know what a dividend was, just pleasantly surprised to get a check in the mail every 3 months. Actually, I found my original stock receipt and first dividend stub in my closet not long ago. I will blog about on 5/11/14. Thanks for stopping by.

  6. The first time I ever came across shares was at work, I was a lowly apprentice back then (Many years ago.) and the guy I was learning from/working with was much derided by others, he didnt do the usual things that all the other men in the factory did, betting on horses,football pools,getting blind drunk Friday and Saturday night, No what Cuthbert (Still remember his name) did was buy dividend paying shares with his weekly pay packet for his retirement.

    One particular day he brought in a fist full of certificates (You got paper certificates back then, pretty too) of BP dating back to the 1950’s I think and another one I’ve forgotton, might have been Shell, but yeah it made me think!!

    • That’s a good story. I think we often are lost on the incremental gains made over time and all seek a fast lump gain. Anytime you hold some well known dividend paying stock for a few decades you know the return will be amazing. A fact that many have written about that most of the stock market gains made has been return of capital via dividends. I guess we all dream of being that person in the future holding shares of a company for 25 – 35 years and reaping the decades long compounding and reinvestment.

  7. First stock purchase was ORCL via ESPP in 1997, but no dividends back then. 1st Dividend stock purchase was IBM in 2005 via ESPP. Neither of those two positions are still around. IBM did send paper checks though πŸ™‚

    • Hi Brian,

      Some of the newer dividend investors don’t realize that good old fashioned paper was sent in the mail to receive dividend checks. I wish I had understood the power of compounding and dividends when I was a teenager and received those first checks in the mail. At the time, I simply thought, “Cool, money for me.” Thanks for sharing your first purchases.

  8. Hi,great post my first dividend paying shares were aviva and i still have them, i am getting more into dividend stocks and see this as my way forward. Keep up with the good work and great posts , i eagerly await for more.

    • Hi daren,

      Thanks for stopping by and commenting. It’s always fun to look back and see where a particular journey has started. Keep checking back as I continually write posts about different dividend investing themes as well as update my own portfolio and recent purchases I make.

    • Hi FRD,

      Thanks for sharing your first shares owned. Unfortunately, your story sounds very familiar. Too often people are blessed in the first place by owning a great dividend paying company only to regret, years later, for selling out of the position. Believe me, I wish I had held on to my CHV (now CVX), MMM and IP since 1997 and never sold. I think everyone has a story of a stock or two that they regretted selling.

      These days, many aspiring dividend investors have a ton of resources at their fingertips. I remember when I started out all the information was available at your local library. Not as convenient as today of course. At least you started your journey when you started. It may not be at 16 but it’s better late than never. Thank you for commenting.

  9. I can’t remember with my first dividend paying stock. But the first one I intentionally by was KO, Coca Cola, I had like $8000, the dividend was so small that I don’t remember enjoying it at all. I sold it shortly after (within 2 years), because I loved Coca Cola as a child, it was such a treat. As I grew up, I learnt so many bad things about it, 1/3 of American are obese or on the heavier side. I no longer believe in the product. So, I sold it. Moved on. But it’s like Disney stock, it’s the name brand. It represents!
    Vivianne recently posted…A letter from father to his son – Eleven advices to his sonMy Profile

    • Hi Vivianne,

      Thank you for sharing your story about your fist dividend paying stock. KO is certainly a rare breed when looking at all the dividend paying stocks that are out there and no doubt has been a great long term hold for decades. I continue to hold KO in my portfolio along with PM, MCD and YUM which don’t necessarily contribute to the overall health of its consumers but still can offer great long term growth as well as dividend distributions. As you mentioned, it’s the brand that is often the most important factor for these companies. It’s great to have fond memories of a company or product and be a participant in its business profits by being a shareholder. Thank you for stopping by and enjoy your DIS stock too.

  10. Wow Homestake Mining Co. Ironically I’m vested in Barricks right now. Besides finding Dividend Mantra, one of my first dividends that I’ve received was from Barricks as well! I do love the idea of dividends and how they pay you ever quarter to just own their stocks (business). I’ve been following your blog for months now and love your dividend portfolio. Hopefully one day mine will grow as big as yours! Also, I had a similar idea of starting a dividend portfolio for my kids once I have them of course. 18 years of investing and reinvesting would certainly allow the dividends to pay his or her college! Keep up the good work and I’ll be watching your portfolio grow!

    • Hi DL,

      It’s nice to read about someone who actually knows about Homestake Mining Company. It was my very first stock I owned and, bonus, dividend payer too! While I sold out of that position a long time ago I wonder what it would be worth today had I simply kept the shares which eventually became ABX. Thank you for following my blog. I very much appreciate your readership and comment. Just keep buying solid dividend paying stocks, don’t get lured in by excessively high yield and your portfolio will resemble mine in time.

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