Tag Archives: business

Financial Independence 101: What are Stock Dividends and Stock Splits?

This is a continuation of my Financial Independence blog posts related to financial education. I’m creating the blogs so that our two sons that will be graduating college soon will have a better understanding of personal finance.

What are Stock Dividends?

Profit is the amount of money a business has left over after paying all its expenses (revenue – expenses). The goal of most businesses is to make a profit because it adds value to the business and allows it to grow.

Stock dividends and stock splits

So what happens if a business makes a profit? They can take that profit and reinvest some of it back into the business to allow them to build better products and services. But many times, there is still money left over after that. When this happens, the business will normally give part of that money back to those who invested in their stock. This is done with a dividend.

Not all companies pay dividends, especially startups. They normally want to keep all of the profits to reinvest into growth. But well-established companies will often pay dividends.

When looking at your investments, you must look at stock appreciation and dividends to calculate the total return on investment.  For example, if you purchase stock A for $100 per share and stock B for $100 per share and both grow to $125 per share after the first year, your return on investment is 25% on each. However, if stock A also paid a 5% dividend, your return on stock A is actually 30%, so it is a better performing stock for you.

Dividend paying stocks (or mutual funds) can be great investments once you retire because they normally pay those dividends quarterly. When they pay the dividends, you can spend that money on retirement expenses.

What are Stock Splits?

When companies grow and are more profitable, the price of their stock tends to rise. Once the stock price rises over a certain price (normally around $150 per share), companies look for ways to reduce the stock price so that smaller investors can purchase shares. This is accomplished with a stock split.

Stock splits

With a stock split, the company will cut the price of their stock but will give their stockholders more shares. For example, if a company’s stock is $200 per share, they may cut the price to $100 per share but give all their existing shareholders twice the number of shares that they had before. This is called a 2 for 1 stock split. They can also split it by any denomination. In the previous example, they could have done a 4 for 1 split, reducing the cost to $50 per share but giving each stockholder 4 times the number of shares than they had before the stock split.


Now that you have an understanding of stock dividends and stock splits, let’s get to the bottom line. Once you start your career, set aside money for savings and have that money automatically deducted from your paycheck. Start with 15% of your paycheck, more if you can swing it.

Open up a Fidelity account and begin contributing money to a few mutual funds. If you want to really diversify, I suggest these 4 funds to invest equal amounts in:

  • FUSVX – A mutual fund that invests in S&P 500 stocks
  • FSEVX – A mutual fund that invests in small and mid cap stocks
  • FSITX – A bond fund that invests in credit-worthy bonds (note: if you are young and have 30 or more years before you retire, you may consider delaying the purchase of bonds for a while since you will not care as much about market fluctuations).
  • FSIVX – A mutual fund that invests in international stocks (like those in Europe).

aMemoryJog Web - Best Password Manager

Finally, track your budget and investments with an online tool. Personal Capital is an excellent tool for this and best of all, it’s free**. This is a great start to financial independence!

About this Blog

Steve and his wife built a software company, sold it and retired early. Steve enjoys blogging about lifestyle freedom, financial independence, and technology. If you like this blog, subscribe here to get an email each time he posts.

If you like this post, you might also like these prior posts:

What do you think of these financial independence training articles? Leave me a comment to let me know your thoughts!

Follow me: Twitter  |  Facebook  |  LinkedIn  |  Subscribe to this Blog

aMemoryJog - Best Password Manager for iPhone

Why it’s important to have Twitter Followers (and how to get them)

Just a year ago, I had 630 Twitter followers. At the time of this writing (November 2015), I have 22,600 Twitter followers. By growing your Twitter followers, you will get your message out to more people. This will result in more sales (if you are a business) or more visibility and social clout if you are doing it from a personal perspective.

Twitter statistics

So how did I go from 630 followers in November 2014 to over 22,600 a year later?

Related post: Success stories for driving more blog visits

Follow Others

The first key is to follow other Twitter accounts, especially people who have similar interests as you or to what you are selling. When you follow someone, they are more likely to follow you back. I try to follow about 500 new people per day.

Unfollow Others

If you begin following someone and they are not following you back, consider unfollowing them. There are times when you will want to follow people who are not following you back. For example, you may follow business mentors, famous people, or others that are unlikely to follow you back. That’s totally fine and it makes sense in those scenarios. But for the most part, unfollow those that don’t follow back.

Unfollow Inactive Twitter Accounts

Some people create a Twitter account but never use it. If they are not using it, they will never see your message, so there’s no need to continue following them. My rule of thumb is that if someone is not active in Twitter for a month, I unfollow them.

aMemoryJog - Best Password Manager for iPhone

Follow Competitor’s Followers

If you are selling a product, it’s a good idea to find out who is following your competitor and follow those people. If they were interested enough in your competitor’s tweets, they are probably open to seeing yours.

Follow People with Similar Interests

If you are selling a product that helps with productivity, you can easily find Twitter accounts that follow productivity experts. By following those people, they will probably be interested in your product since it solves an issue they are already interested in.

Tweet Often with Good Content

I normally tweet about once an hour and I tweet articles that I am interested in. I figure if I find a cool article, my Twitter followers will also enjoy that article. By streaming hourly Tweets, you will build fans that want to see more of your tweets.

Twitter Automation

If you made it this far into this post, you are probably scratching your head saying “how can you follow 500 people a day and tweet every hour?”. The secret is automation. I spend about 30 to 45 minutes a day building my Twitter followers and setting up automated tweets that fire every hour.

I use a tool called Crowdfire to follow 500 people a day, unfollow those that have not followed me back, unfollow inactive Twitter accounts, and to find new followers with my interests or from a competitor. Crowdfire costs me $9.99 a month and is well worth the cost.


To tweet every hour of the day, I use a tool called ViralContentBuzz. ViralContentBuzz allows you to post your own articles for others to tweet. In exchange, you can find interesting articles that others have posted and schedule them to tweet on whatever schedule you decide (I do it hourly).


ViralContentBuzz has a free edition (that’s the one I use) and it allows you to build up credits by tweeting other people’s articles. Since I am doing this hourly, it gives me plenty of credits to allow other people to tweet my articles.

Further Reading

If you really want to maximize visitors to your website or blog, there are other strategies you can use as well. For example, you will need to implement good SEO strategies, post your articles on different distribution platforms, and market your blog. If you want more information on that, see an article I recently wrote entitled “WordPress SEO: 10 Tips to Boost your Google Ranking“.

Also, check out these success stories I’ve been a part of for driving more blog visits.


By following the tips in this article, you will begin gaining more Twitter followers and driving more traffic to your website or blog. If you’ve discovered other strategies that have worked, please share them in the comments below.

About this Blog

Steve and his wife built a software company, sold it and retired early. Steve enjoys blogging about lifestyle freedom, financial independence, and technology. If you like this blog, subscribe here to get an email each time he posts.

If you like this post, you might also like these prior posts:

Follow me: Twitter  |  Facebook  |  LinkedIn  |  Subscribe to this Blog

I sold my Business 6 Years ago Today

Today marks the 6 year anniversary of selling my business and reaching financial independence.  We closed the deal on September 11, 2009, I was nervous about closing on September 11 because of the 2001 World Trade Center disaster but decided that this could be positive. A new way of remembering 9/11.

Celebrating the selling of the business

Leading up to the sell was a bit unnerving. Even though I built the business with the end in mind, I still felt like I was selling my baby. Should I keep it a few more years and continue to grow it? What happens if a larger competitor comes along and squashes us?

These are the kind of emotions you feel when you are approached about selling your business. You feel a pain in your gut, a nagging voice in the back of your head saying “Am I making the right decision?”  “What will I do with my days?”,

Fast Forward 6 Years after I sold my Business

Reflecting back, I had fears about selling.

Will my Product Continue to Grow?

It has grown much faster than if I had not sold it. The acquiring company has more resources to commit to it and has done a great job increasing the market share.

aMemoryJog - Best Password Manager for iPhone

Will my Employees Thrive once I Leave?

Only one of my original employees currently work for the acquiring company. If I had foreseen that when I was contemplating selling, I would have freaked out. However, that actually worked out to be positive. Each former employee has an even better job, making more money and with more responsibility. So it was just a natural progression of their career path.

Will I Get Bored Being Retired?

I thought I would really miss being in the corporate world but the reverse is true. I love being able to craft my day the way I wish. I can exercise in the middle of the day, golf when it’s less crowded and volunteer when I feel inspired.

I can also work on projects that really inspire me without the need for a steady paycheck. I’m now developing mobile apps in my spare time and blogging a lot. My wife and I also travel a lot. I’m not bored at all.


If you’re an entrepreneur that has built a business than can provide financial independence and are faced with a decision to sell, believe me, it works out just fine!

About this Blog

Steve and his wife built a software company, sold it and retired early. Steve enjoys blogging about lifestyle freedom, financial independence and technology. If you like this blog, subscribe here to get an email each time he posts.

If you like this post, you might also like these prior posts:

Follow me: Twitter  |  Facebook  |  LinkedIn  |  Subscribe to this Blog