On April 20, 2014, (my first article on DivHut), I wrote a blog post titled, “My First Dividend Purchase.” I thought that it was important for me to share with you how I was introduced to dividends and subsequently got “turned on” to the idea of getting checks in the mail every three months without really doing anything (lesson in passive income). Well as it turns out I was digging through some old paper work in my closet and came across a stock receipt for the very first stock purchase I ever made, Homestake Mining Co. As you can see the paper is a bit yellow but you can clearly see the date of my first transaction, 9/27/88. It shows I bought 100 shares at $14. Another interesting thing you will notice is the column to the left of the trade date which says “EXCH. PSE.” The “PSE” refers to the old Pacific Stock Exchange which was eventually, through a series of buyouts and mergers absorbed into the New York Stock Exchange. I think it’s cool to share a little bit of stock trading history and share with you how I got my start in stock investing.
Another interesting point from the scan is the “cheap” commission of my discount broker of only $41.52 for the trade. Actually this was cheap for the time because “full service” brokerage houses, as they were known in the day, charged hundreds of dollars for every trade placed. Of course, these days no one would even consider a stock brokerage that would charge such a hefty fee. In the era of the Internet and information fees are almost always under $10 a trade and with many high quality brokerages to choose from like Glenmore Investment today’s investor has all the tools available to successfully trade.
And now on to the reason we all invest in dividend stocks… the dividend. Among my old papers I also happened to come across a couple of stubs including the one from my very first dividend check I received in the mail. As you can see from the date 11/15/88 I became an official dividend investor.
Things weren’t as automated as they are today. Imagine getting an actual check in the mail from all the dividend stocks you own today and having to go to the bank to make deposits. Of course, there is something more tangible about getting a paper check in the mail and depositing it into your bank account. It makes it more real. Kind of like paying cash for an item as opposed to swiping a credit card. Still, I know it is much safer, easier and practical to have my dividends placed into my account automatically and reinvested without having to think about it. Another point to mention is that automatic dividend reinvestment did not exist back in the 80s unless you joined a DRIP program for each company you wanted stock in. These days with Sharebuilder and Scottrade’s FRIP, reinvesting is free, easy and automatic.
So there you have it. A blast from my investing past. I was just a teenager at the time yet understood the importance of investing. I only wish I understood the concept of dividend growth investing back in the late 80s. Of course, it was a different time. In those days you could put your money in a CD and earn between 8% and 9%. Still the lesson of buying my first stock was never lost on me and I continue to this day.
Any “old” timers have actual paper stories to share?