Memories Made

Well, we’ve gone and done it again. This time it was a Flexibly inspired 3 day surfing trip across the state. The picture below has been on the Income Surfer ABOUT page since the beginning. It was taken about 25 years ago, and shows me surfing with my father and grandfather. We all shared a love of surfing, and a couple times per month my dad and I would drive over to the east coast to surf with my Grandpa. We followed this routine for fifteen years, ebbing and flowing a bit as our “real world” lives got more or less busy. We surfed the same two breaks for years, and all those years splashing around together were really good times. We bonded very well over our love of surfing and travel, and I cherish those memories.

3rdGenerationSurfer

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Business Development Companies: Yield Goldmine or Ticking Time Bomb?

Today’s post is by Grant Bledsoe, CFA, CFP®, a Portland financial planner who runs the personal finance blog Above the Canopy. He’s also the founder of Three Oaks Capital Management.  The opinions contained herein are entirely his own.  He has no position in the securities mentioned below.

When you have a little extra cash and are poking around for potential dividend paying opportunities, what’s your process? Do you pore over each stock in the S&P 500? Or do you prefer small cap stocks with less analyst coverage?

Another way would be to take every single equity that trades on the open market, and sort them by dividend yield. And if you did that right now, the results would make you raise an eyebrow….there are six different companies out there with dividend yields of over 15% per year.

I don’t need to tell you that this is a fall out of your chair, jaw dropping, slap your grandmother level yield. The 10 year U.S. government bond now yields less than 1.5% per year. The dividend yield of the S&P 500 is only 2.2%.

How on earth can these companies pay out 15%?!? Continue reading