Roaming Returns

031 - Tim's Top 6 BDCs In Early 2024 That Issue Extra Dividends

January 30, 2024 Tim & Carmela Episode 31
Roaming Returns
031 - Tim's Top 6 BDCs In Early 2024 That Issue Extra Dividends
Show Notes Transcript

There are many high yielding BDCs to choose from but they don't all pay juicy supplemental dividends like the ones Tim covers in this episode.  When you add in those extra payments these babies pay out way more than their posted yield.

If you're not familiar with BDCs, go back and listen to Episode 11 first.

Tim begins narrowing down the list of contenders by comparing a specific BDC's P/E Ratio to this sector's average P/E Ratio, which is between 15.8-17.3 right now (depending on where you look). Only move forward on ones that are undervalued. 

After checking the dividend yield and P/E Ratio, the other main things that Tim looks at when he's analyzing BDCs are:

  • Payout Ratio
  • Supplemental Dividends
  • Dividend Growth Over Time
  • Limited to No Dividend Cuts

And from all that research we've settled on the top 6 BDCs discussed in this episode.

  • MAIN
  • HTGC
  • CSWC
  • ARCC
  • TRIN
  • HRZN

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Welcome to Roaming Returns, a podcast about generating a passive income through investing so that you don't have to wait till retirement to live your passions.

Every income investor needs to have some BDCs and today's episode is going to be all about the top best six that you can pick right now to our must haves to get your portfolio off on a great start for 2024 Here we go y'all all right, we are back with the BDC episode it
was gonna be three guys get bonus tickers bonus,
it was gonna be three C's, but there's so many good ones that Yeah, we could not narrow it down that far. So you're getting bonus stuff? Yes.
BDC. If you haven't listened to when we talked about them previously, our business development companies they basically are like venture capitalists, they just invest in startups or companies of a certain liking like some like tech, some like real estate, some like oil and gas and things of that nature. So now I don't have all the cool data that I have in the REI T one because BDC is reported differently. So it's very difficult to get the same information. But I do have what I see find to be the pertinent information in these Oh, that's all the matters is all it matters. So again, my opinion it's not I'm sure if you read other stuff people be like well, there's better BDCs out there although two of these I'm pretty sure it's on every list like for real like two of these are just shabam Sure. Wow. Wow. Wow. amazeballs Yes. So first thing what preface is say that the price to earnings PE average for the BDC sector is 15.8 to 16.2 to 17.3 depending on what you look at sector that they lump it into. So we'll just say 1616 Sounds good. Nice average, nice round number. Okay, the first one, and I do believe this one should be a holding in every income portfolio. I've said it in the email a couple of times are we're in it. Her mom's in it.
I'm pretty sure we've mentioned in a couple podcast episodes that it should be everybody's portfolio No,
that's no that's that's the second one. The first one's main main street capital M ai n. Now it doesn't yield a lot like if you do do like a an average of BDCs they just generally are like nine to 11% yield. But I liked the fact that it only has a 60 66.6% payout ratio, which means that it can sustain its dividend probably raise it because payout ratio is going to change as they generate more revenue by investing in companies invest mainly in lower middle market companies. What that means is that like if you do a market cap of like all the stocks, it'll say like this is a $2.6 billion market cap well lower lower to middle market means it's like under a billion dollars basically.
So it has a micro sector within a micro niche micro VC says
like most of them don't do lower, lower to middle market most of them are middle market or higher. So and that's its specialty is lower to middle market companies. It doesn't like actually have like a criteria where you have to be a tech company or you have to be a life sciences company. Or you have to do this. It's literally if you've if you fit the metrics of the lower middle market and you actually have good financials because all six of these there's going to be six. All six of them don't invest in like startups and they don't invest in companies that are struggling, like there are some BDCs or invest in companies to turn them around. These none of these do that they all are established. Good balance sheets, good revenue generation and they all have senior secured loans meaning if they what they invest in goes under they'll get the merchandise or
what is the word they get tangible assets back to make up for the inventory
like inventory to like then sell off and make up their make up the losses.
That's part of their contracts. If you go back to the BDC episode, I know we go into detail so Mainstreet
capital has a nine PE so it's undervalued by about 40% compared to the industry average, it only yields 6.6%. But, again, I'm gonna give you some numbers here that make that yield worthwhile. It has had nine dividend increases in the last five years and has had 12 supplemental dividends the last five years. It is a monthly payer so that means extra compounding so you're getting a whole year's worth of supplemental income in five years. So that's what about 20% 20% of the time they give you an extra dividend and it has had a 90% five year dividend growth meaning that it would it pays now 26% I think it was paying like 18% like five years ago. It keeps raising it so that's its normal dividend. That's not the supplemental one. The supplemental ones are all over the place, anywhere between like eight cents and like 66 cents. Depending on like what they do is they will if they have extra extra money leftover at the quarter when at the end of the quarter. They'll just give it to the shareholders. I love that and they all do that i every one of them has a supplemental they have extra money they just give it to the shareholders I don't like carried over try to reinvest or whatever else. Now with BDCs. How they differ from most other sectors is they will have a lot of debt because they borrow money to then make loans out to these companies we're talking about. And how they make money is they borrow it at 5% they'll make their loans at 789 percent and they'll take the difference in the interest rates and that's how they generate their revenue. Mystery capital. Awesome. Awesome. Awesome one. The second one is one that I've said everybody should have in their income portfolio. And I mentioned that time after time after time after time, it is my favorite. It's Hercules capital H T GC Dilys. Murphy's? Yes, it has a 10.9% yield, which is really good for considering what it does and how well well rounded it is. And it has a 10 pe. So again, it's undervalued compared to its peers. Now where it differs from mainstream why Mainstreet is number one and Hercules is number two is because Hercules has a 92% payout rate which was getting it's getting kind of iffy as up there. Generally BDCs will have like between 90 and 100% payout ratio, some will actually have over 100% payout ratio compared
to the other ones on the list. Yeah.
Yes, it's the second highest with this one. Basically invest specifically in technology and life sciences or they'll do if you're established company in any of the either one of those fields of ill you alone, it doesn't matter if it's lower middle market, middle market, or I think it's like a 6040 with a middle market versus lower middle market. So invest slightly more in middle market companies, which is I think between one and 3 billion or something like that. I don't know the exact figures because I didn't look it up because I'm hazy. Yeah,
right. You just get all this research
lazy. It has had six dividend increases in the last five years and 17 supplemental dividends in the last five years. So this one pays you a lot of extra bonus. Bonus dividends. What I mean by supplemental as well as sometimes labels extra or special or whatever the case may be it's like they give you your normal dividend which is 48 cents and then they'll tack on a few cents to 25 cents to 50 cents depending on what they're paying for their supplemental again they whatever they have leftover in the quarter they return to the shareholders, which is awesome.
We have to do that according to that regulation. Right. They have to disperse 90% 90% Yeah, but I assume that's why they do that.
That's probably easier for them and it keeps more people invested in me excited. Yes. Because most of these trade for between like 12 and $20 I mean main streets, steel main streets like 40 some dollars a share. And when we get down to a trinity is no turn these 15 was and then went off capital Southwest is 26. So most of them but but generally they're between the 12 and $20. A share. Hercules is a quarterly one. So if you do five years quarterly, that would be 20 possible dividends and they pay you 17 supplementals, that means you're pretty much getting the supplemental dividend every time they give you a dividend, which is awesome. That is why I think it's Blitz. Why why I think it's my favorite is because you get a freaking extra dividend every time you get a dividend. It's awesome. Number three on my list is that capital southwest that we just mentioned CSW C for whatever reason I whiffed on this one I just found it like last year I should have should have been in this one, as long as I've been in Main Street in Hercules, but where why it's number three is because its payout ratio is 120 1.7 which is rather high meaning the dividend may or may not
be 120 1.7%. Yeah, so it's paying over 100% Yes. Yeah, that's a red flag, right? Yes.
And it's piece 15 So it's like pretty much fair, fair market value of what his trades at right now. 26 But it has a 9.0% yield the payout ratio, like I said, they sometimes will pay over 100% I don't know
like the we can't keep that up consistently. That's
why like, it's I assume that they're not going to have a dividend increase the revenue their revenue keeps increasing, like exponentially, but how they do it like they'll they'll take their current dividend and they'll put it into their last quarter's revenue. So that's kind of 121 like looks high, but it's probably a bit it's probably around 100% If you do like current dividend with current revenue. In the last five years CSW C has had 13 dividend increases. So at the most, yeah, I think it is the answer the most on the list. And it's had 20 supplemental dividend. So that one will literally is every time it pays a dividend, it gives you an extra bonus dividend. It's awesome for that. That's probably why that number is so high. Well, I
have a question about this one. Do you actually recommend buying this now? The fact that it's so close to the P E number?
I wouldn't I would,
especially since we were just saying that it's paying a higher percent than 100%. I almost think that it's like due for a dividend decrease.
They won't. They won't decrease the dividend. They'll just keep it where it's at until the price goes down. Payout number goes down because like I said, it's whatever reason they get has the current dividend. If
they have a dip in price they'd have to decrease dividend to follow suit otherwise they stay well above 100. Again, right.
They should cut the dividend but I don't think they will.
Okay. Carry see what happens with that one. We have this one. Your
mom's in this one. That's the one where I took the profits and I just left whatever's left leg whatever was left as letting it ride.
Oh, so we have that one fully paid back. Yeah. So I'm curious because I think we've mentioned this before that my mom is like one of those people that can fall and shit and come out smelling like roses. So if it's only at her Profolio I'm pretty sure it's actually going to be a winner. That's just seems to be how things roll for her. So funny.
This one invests in middle market companies. So again, like a mainstream capital, you'd have to be established and blah blah, blah, blah, blah, and it's had a 33% five year dividend growth. So it's, it's it's doing quite well with its dividend increase. And that's what I like. I like mentioned previously I look for dividends, obviously, no cuts, obviously. And I'd like to find ones that increase their dividend. And this one checks all the boxes, but that 120 1.7 pay percent payout pretty high. It was undervalued more so if it had a PE of 910 11 around there, then I would be like, Oh, you could probably get it to an I wouldn't buy this one. Currently I wait for a pullback because there'll be a pullback at some point. Hold on a second. We got a plane. Yeah. Hear me they're like oh my god. shut him down. He's spreading knowledge. And they pay a court I do mentioned quarterly so Okay. Number four on the list. ARCC Arias capital it's quite popular amongst income investors. So that is kind of like, why I don't get into it more is because it's because everyone's trying to get into it. So as a as a contrarian investor, like if everyone's trying to get into it. I'm kind of like, Man, I'm good. What's the p nine? So it's undervalued? Slightly, but like I said,
a bias. No, yes, I heard bias. No,
instead of ARCC. I got into Trinity. Trinity. One literally went straight up so her mom is an ARCC as well invest in middle market companies. But there's a trend here they'd like to do it except for Tim loves, except for main mainstream capital and one that does the lower middle market. ARCC okay. Like I said, nine P E. It has a payout ratio of 78.5. So it's dividends quite sustainable, and then probably will increase it at some point 9.4% yield, which is really good. I think that's like the third highest on this list and the fourth highest on this list. The third highest of six. Yeah. Okay. So it's had four dividend increases in the last five years, so it doesn't increase its dividend as much as some of the others and it's had eight supplemental dividends in the last five years with a 21% five year dividend growth number. You're starting to see a trend I hope here like the best BDCs that you can find, if you don't like my recommendations, you're like, oh, garbage, blah, blah, blah. To do your own research, you want to find ones that actually will pay out supplementals, like a lot. There's a lot of, sorry, a lot of BDCs out there that don't pass up metals and they don't do dividend increases. But they have, you know, a better payout ratio, or maybe they'll have a higher yield. I think you should be looking for supplemental dividends because that is it's awesome getting extra money every pretty much every quarter.
But the reason that's important is if you're on a fixed income, and you need to have that you know exactly what you're getting paid every month, potentially the other ones that we're not talking about maybe the better fit, but we kind of look at it as if you bank on the whatever the typical dividend payout and ignore the supplementals. The supplementals are just bonuses at that point. That gives you like a security fund or a safety fund.
If I was going to say probably the reason that I think Mainstreet is number one is because it's a monthly payer, so you know exactly what you're getting per month and it raises its dividend a couple times a year plus it gives you a couple of supplementals every year. So like you if you know what the dividend yield is, and you're an income investor where you need the income. That's what you bank on. So if it raises the dividend, awesome, if it gives you a supplemental, awesome, but you you need to know make sure that it doesn't cut its dividend and there's a couple that I looked at where they would cut their dividend but then they do a dividend increase and they do a supplemental and they would cut their dividend and to me as an income investor, that's not an option because you have no freaking clue what you're getting. You
have no consistency to rely upon. And since we're income generation based, that's that's like a big red flag. So that
is areas capital. Number five is probably like the best investment I made in 2023 which is Trinity capital. Tr i n. I got this at like it's probably three year low and it's literally just done nothing but went straight up
since I got it. So this is the one where you bought like a dam your rock bottom I bought at
rock bottom and I've sold off so many profits. And I'm still up so much money. And I'm like I don't know what to do with it because it's it's
I don't know. Well, you were just talking about that one when you were over there brainstorming and didn't you say something about we might have to actually stop taking profits in this one because you said you think it's very new and it has a lot more room.
Well, this one's only been around for three years. The other ones have been established. They've been around for years and years and years and years. So this only has we only have three years of data on this one. What I like about it is it's p is six. So it is like the most undervalued of all these according to its peers. What I don't like is that it has a 92% payout ratio. Let's get kind of high for a new company to be paying out that much. Just I don't know that seems like to me that seems like a red flag but either they have their shit together. Not enough of a red flag to sell. This one yields 13.7 So like it yields the most on the list. And in three years, it's had 11 dividend increases and it's a quarterly one so that means out of 12 Li craughwell Possible 12 Possible dividends they've increased it 11 to 12 times. That's crazy and it has paid six supplemental dividends through over three years. Okay, that's even crazier. So it means you're getting the dividend pretty much every every for every, every quarter that we've held Trinity, we've got a dividend increase, and then we've got supplemental dividends two out of the four times. So like and it's three years and it's three year this little number three year dividend growth is 44%. So it's grown its dividend but damn near 50% in less than less than three years. I think the first year didn't have any increases that's unheard
of. So
this one is a probably one to watch. If you don't feel comfortable investing in the BDCs but if you do I would probably get into this one because like I said the P B E is really low compared to its peers. But aside from that you're getting 13.7% and probably a 75% chance that you're gonna get a dividend increase or supplemental, maybe 80%. I don't know it's higher and might it's a high number. So as an income investor, you like the 13.7 but then you also like the fact that it's going to give you extra money, give you extra money pretty much every quarter and the sixth one is another one of my favorites that I've been in for years and years. It's a horizon HRC and it pays monthly, and because it's monthly doesn't have as many increases. I mean, I guess that makes sense. You think about if you're paying someone every month a dividend, you're not going to have a lot of opportunity for dividend increases. Has an eight p e with a 67.8% payout ratio, a 9.7 yield. Like I said one dividend increase only in five years and only for supplemental dividends over the five years and only a 9% five year dividend growth so it is the worst of the six. And yet this sort of reason I can't can mix it from a list Okay, so it like we've been in that for a while like your mom has and then I have a Frankie Alex or and that. I really like monthly dividend payers
Oh yeah. Are those the only two the Main Street and horizon? Yeah, on this list.
They're the only two that are monthly dividend payer very very partial
to the monthlies
like my problem like I like them because like what you'll find is when you're constructing a portfolio is probably 80% of the time it's a quarterly dividend payer.
I think we've talked about laddering before where
are you so what happens is a lot of a lot of them will pay in the same quarter so you're left with like say January and January and then April and then August or something like 147 and 10 Whatever the months are July and October, where you'll have less because the quarterly ones all kind of like lineup together. So like I like to have a lot of monthly dividend payers and if you look at when we did the portfolio, like half of our dividend half of our investments pay a monthly dividend, specifically because I like to get money every month but then I liked the months to kind of line up because I'm kind of OCD about that.
Yeah, the one that he ran over here and he's like, look what I did. To the portfolio. He's like, every month is almost the same. I was like good for you, babe. Well, like, I'm not sure that would bother me so much. But then again, I'm not in there, tinkered around every month and like having the extra capital to then put into whatever you see, because that's the other problem. It's like when you don't have that that slush fund dividend income mercs
of yield man says they pay every month. So you're getting every month you're getting a slush fund,
then it's like when you see something good opportunity at the right time you have the liquid cash. And if we
ever get to the ETS, the ETS pay out every month as well.
They're kind of taking the backburner because they're not as I mean do we think that they're actually going to run in 2024? With everything else? I think they're less priority right now.
The silver one won't the gold one probably won't. The crudo one might, depending on what happens, but
we're basically trying to give you episodes that are more relevant to the current environment. And economic climate so you can take advantage in a timely fashion. We'll get to them eventually.
So I'm going those are the six BDCs I came up with like I said, there's no like a lot of like, information like the last one where they're talking about revenue and year over year and all that stuff because and that's
very difficult to find. And that's the thing, each of the different sectors kind of has like its own slight variation of research required and metrics, like you start to learn and pick it up as you go. But some stuffs important in certain sectors and other stuffs irrelevant and others
will the most important part about BDCs is what I like what we went over is the payout ratio and the dividend growth. I think the two most important things I think
we've mentioned in the last episode how REITs are a lot more detrimental when interest rates go up but BDCs actually have better years and higher interest rate market mob economies right now. No my question.
Actually, they their revenue. It kinda is a wash because they'll borrow they borrow money so consistently that they're borrowing money, they'll lend it out. So their revenue kinda should kind of go in that upward trajectory regardless of what interest rates you're doing, because if the interest rates are 2%, they're borrowing at 2% and they're going to lend it out a fiber.
So that actually answers the second question. I was going to have this or so with a comes out in the wash because check borrowing to lend and it's only it's all has the same gap no matter what interest rate it's at. It really does come out in the wash. I was going to ask how do you think that's going to reflect in a year where interest rates are supposed to come down but you already answered that. So
there will run ran and they have a good good balance and their payout ratio is now high. It won't matter.
I mean, I would think if they refinance their debt, they could potentially get a bigger profit buffer. For some of it maybe
what they tried to do. Now I've learned this, the last, say 12 months, maybe 16 months, I don't know. What they'll do is they stagger their debt like we do with our dividends, like okay, like so they borrow a bunch of money, they make sure it's due like in 2025 and then they'll borrow a bunch of money and make sure it's due in 2026 and so on and so forth. Because it's easier if you have a staggered, staggered payback time than if you had like there's a couple of them that have like shipped the bed because they borrowed like MPW at one time, MPW as as a as a REIT. It borrowed the money and it's all coming due in 24 and 25. They have like literally have nothing coming through. It's 26 But they're to get through 24 and 25. They're going to have to borrow it shit ton of money. Yeah, high interest rate, and that's going to come to you at 26 so they can stay afloat and 24 and 25. So like, the more and more I look at MPW that's what's going on with it's not so much like the bad. The bad news that you're hearing, like oh, the so and so is not paying the rent, it's more that their debt is structured in particular structure.
Yeah, they've restructured it retardedly sounds like that person needs a fired and they need to put somebody in there with half a brain.
I mean, it makes it that actually kind of sounds like dollar cost averaging concept where it's like you don't in theory, like you kind of average out your loan interest. And the other thing a lot of people don't realize unless you've actually refinances there's fees and stuff that come with refinancing. So refinancing isn't as favorable as getting a good loan. Criteria out the gate.
Yeah, as much as you're screwed because unless there's a huge
gap, a huge gap talk a huge gap like back when I was at the government when they had that when we dropped interest rates down to like, less than 4% people were refinancing when they were paying like four for it at four and a half. And I was just like, You guys are all engineers like did you not take math classes like do not understand how interest in compounding and and all the terms and all that stuff works plus your freakin closing costs. I was like, You guys are idiots. Like I literally was just like, what's wrong with you? And then the other thing people don't understand is if interest is if what most loans are interest heavy upfront. So if you refinance you actually have to pay all that interest upfront again, you're better off actually just increasing your payments to decrease the amount you're paying in the long term. We should do an episode on that at some point how's it is like is
we go back to the biases we talked about. The herd mentality the FOMO oh my gosh the interest rates this i Oh, I'm gonna miss out on
an ego thing too. They want to be like oh my loans only three point whatever percent.
Like the the the the term logical is thrown out the window whenever there's like a herd mentality, like stampede and refinance.
I literally was just like, What is wrong with everybody and I said something and I was like, Do you guys not understand math? Like you guys are supposed to be frickin engineers? Like okie dokie.
Yes, you should just work with what you got. I would think I mean, even I'm guessing if what's better than again with everything else like if you bought a house like last year when interest rates are 7% I can see refinance in like three or four years whenever the interest rates like 3% Yeah,
that makes sense. That's a big enough gap that it makes sense. But to do like what people were doing seriously, it's so stupid, so stupid, or
if you bought your house way back in the 90s, or whatever
I think the banks knew it because I got like 12 or 13 Different refinance letters, and I was like, I have a 4% and a frequent seven, five, like, why would I do that? Like a
lot of that is to do with like, I think the refinancing trend is so that you have extra money because once you refinance
it that's how they hook everybody they say that your monthly payments gonna be lower your monthly payments
lower which you end up paying more in the long run it is and then you get more money back because you they take into account what your house is worth. And then they'll like, do all that so like you're getting like a $10,000 check back plus a lower interest rate. So people are like, Oh my god, I have to do that. It looks do the actual mathematics behind it. Like oh,
the hidden fees, the closing costs, the other stuff that you tack on there and then you realize like, like it really actually adds up. Because I
remember when I saw a book sold my house I never like when I bought the house I didn't look at like all the all the all the everything. All the hidden fees are the small tax. When I sold the house, I was like Jesus you guys have a fee for everything you do. There's a
fee for frickin everything that's my closing costs are frickin I
think there was even a fee. By recall. There was one I was like what there was a fee for document prep, which I understand but then document delivery was like What? What? Yeah, guess they pay that for people to drive the papers over to the place could possibly be a document delivery of I'm going to email you the documents because it was like $375 just to email documents. That's
absurd. But I'm not surprised. I would not be surprised if that is legit. The thing I could
see if someone actually had to hop on their minivan and drop
okay when they bring the papers actually the closer you get to the sign sicker doesn't make 335 paper I could see
that maybe but
so and that's that's the thing and honestly, funds are the same way if you really really analyze the fees and funds like Well, that's why I don't like funds.
Mutual funds have a ridiculously like if you're gonna buy a phone you want an ETF exchange traded fund because the like the fees are like negligible compared to like a mutual fund is like 1.5 on average and ETFs like point two to five on average.
And the other thing too, like people don't realize just like Tim's grain of sand analogy from the other one and the compounding stuff we talk about all the time, those fees the difference in fees from like a 1% to 2% might not sound like a lot but they add up over the time that you're holding it and there's actually it's probably more fees than even that number because they can actually hide other fees in the background and they don't have to disclose in that percent, which is what they want an entire topic and how
they come up with the averages is it's like 1.5% on $10,000. So if you have a sizable portfolio and you haven't solved in mutual funds,
and fees, and that affects your ability to compound on the years up to your retirement they like some of the books I've read, they've done actual math with the whole thing and people have lost like the ability to make $100,000 Less by the end of their actual retirement time up to their retirement time over because of the fees that they pay and the lack of compounding, because lost money isn't just lost money. It's lost money that can compound.
So actually I just read an article this completely off the topic. We're not talking about BDCs now so whatever you definitely want to hear if so, yeah. I just read an article. And like 85% of people are going to work until they die because they can't they don't think they can retire because the the quote, mainstream retirement these $100 million and they don't know that we're about a million dollars. Talk
about this in a couple of episodes. We should probably rehash that. I
just just read it like 20 minutes ago. That's why that one, like the ad like I think it's like 85% are going to work until they die because they can't make a million dollars.
It's not even about a million dollar. There's
people out there like us and then there's contrary and weekly they do the same thing. They're like you can retire on 500,000 400,000 200,000 would like their their numbers 500,000 you can retire 500,000 Well, it
really is subjective to the person what they need per month. But yeah, so like you don't have to think of a scene that's on like the average three $3,000 a month monthly or something
like that. Thanks, Alex. It's his Spiel as you can make 40,000 or 500,000 easily Yeah, that's 3000 a month. So you don't need to worry about the million Yeah, you don't that's a complete like but what the contouring weekly does if you guys like funds that like they literally that's all they invest in is closing
and funds. Closing funds are like the best funds you can find.
His name is Brett Owens. He's pretty good there. It's easy to read. You can get it there's like a free newsletter you can get like every day they'll send something to your your your email box with like what? Whatever his research he did and then they have a paid one that's which has their portfolio and it's not it's not a lot it's like 40 bucks for the year or something like that. So it's not terrible.
So how do you synthesize that information to bring the good stuff here? Yes. So take that for what it's worth if you want the extra details.
I mean, the only one He's not the only does close with the funds but like I used to like some of his his some of his research and then some of the I called the best research from all my readings and I put it all together for people here for free. Based on our experiences we were just talking about the reason that I don't charge is because I'm doing the work anyway. So only thing that I do differently is I type up a weekly email and I do all the extra admin crap that we do what we do podcasts, but whatever. That's that
because we love you guys and we want you to be able to be financially the next one we're doing so you said you wanted to do the three best utility
utilities. Yeah, that was that was gonna probably be more than three, two. Okay,
so if it ends up being six again whatever Tim doesn't really know till he does the research that's fine on the one after that cuz I think we do still need one more before I come back.
We could do that if you didn't like it'd be if you haven't subscribed, just grab the email. It's pretty cool. Like this week's was about they have something called investor portfolio. We're
actually a week ahead. So it was last week we actually Tim sent an email out of the subscription that talks about the
investor portfolio and like the way to determine your investor portfolio is to answer a questionnaire and you have to be honest about how profile investor profile is like, like if you answer the questionnaire honestly, it'll like let you know if you're a conservative investor, if you're a moderate investor, if you're an aggressive investor, and then like I put in data in there from my own experience, like I'm obvious, I wasn't a conservative investor because it just drove me crazy. I was only making like 2% 3%. So
basically, if you're not lined up with your investor profile, you end up losing money because you don't invest the way that that profile is set up. And you make stupid mistakes, whether you have FOMO or you have fear of the risk, and it's interesting, it is very safe. I think we'll actually do that as the next episode in conjunction with the the utilities because I love the personality type stuff. I fully believe in completely lining up with your own like who you are and being very intentional with like applying that concept to every area of life and financing is no
different. Actually, I've because like that's I've mentioned that like in real life. I'm crazy, but in investing, I'm very disciplined and very structured and very moderate. So like there are that's why I think it's important to take the questionnaire about your like your financial goals because it probably is going to be similar to your life but there's a chance he could be like me where you're like in real life you're like how I Wales crazy person but like when it comes to investing, very structured. It makes
sense. And there's other components to it that actually kind of pushing one direction versus the other depending on different times in your life. So we'll go into detail on that.
I thought it was important to bring that up is because if I just invested based on my personality I would be would be aggressive, but it's not how I am and like so that caused problems. When I tried the aggressive I agree.
I found that actually interesting what I was reading through that email subscription. Yeah,
whatever. If you just did a Google investor profile questionnaire and then answer it even more.
If you want to listen to us go through stuff. We'll do that in the next episode. So definitely something good to ponder whilst driving.
I would definitely have number one or number two and everything your income portfolio Mainstreet capital Hercules capital, because they're awesome and they for whatever reason, just keep going up and up and up and up and up and up and up and up. Just make more money. Alright guys, we shall see you next time. If you use this in conjunction with the REIT one your if you have four or five positions already that are awesome.
Yeah, we'll get you set up for 2024.
See you in the next episode. Bye