So Many Scores from A+ to F-
In high school I went from being a “C” student as a freshman to an “A” student as a junior and senior. This transformation was the result of God’s grace in giving me some trials during those years. I wasn’t the same person as a senior that I had been as a freshman. As a freshman I didn’t take much time to study or to prepare. Because of a family move from Illinois to Wisconsin, and some confusion about what school district we were in when we moved to New Berlin, I went to four different high schools in the first two years of my four years in that phase of my education.
The turmoil of those years caused me to become more disciplined and attentive and that discipline has paid dividends. The question I would challenge you to consider is, “What scores matter in your life?” We will start with one that doesn’t matter (to me) and some that matter greatly, finishing with one that matters the most.
The Credit Score Doesn’t Matter
Some of you think your credit score is the most important score. I understand your concern. However, if you manage your spending, saving, and have a rational budget, obtaining a good credit score is the easiest score to obtain. It requires work, but the value of the credit score diminishes as you mature if you have been prudent with other scores that do matter.
Stocks, Bonds, ETF’s, and Mutual Funds Scores from Seeking Alpha: B+
Scores don’t matter much to me when I am buying or selling investments. That isn’t to say that they have no value. The Morningstar ratings are helpful, but they don’t determine my buying or selling. I like to look at the Seeking Alpha ratings, especially the QUANT ratings and DIVIDEND ratings, but they don’t sway my decision if there are other factors that are more important to me as an investor. The Seeking Alpha Scores have helped me be a more careful investor, so, I will give myself a B+ for following the advice of others in my buying and selling activities.
Increasing Dividends Score: A-
Dividend growth based on growing company earnings does matter. Some dividend scores I look at include, 1) the dividend payout ratio (20-70% is usually good for most investments); 2) the dividend growth rate (more than 5% per year is good for a five year period); and the number of years the dividend has been increasing. One investment I like is FNF. Fidelity National Financial has an excellent QUANT rating on Seeking Alpha, excellent factor grades for valuation, growth, profitability, momentum, and revisions, and FNF’s dividend grades are perfect. The payout ratio is 23.98%, the five-year dividend growth rate is 19.68%, and the dividend has grown for seven years.
Using my approach, our overall dividend income growth is more than sufficient to cover our desire to give and share more with others. For that reason, I think it is reasonable to say I achieved at least an A- in this area for 2021.
Options Trading Growth Score A+
During 2021 I became a more successful options trader. A covered call option is a contract to sell an investment if it reaches a certain price by the expiration of the contract. My goal for 2021 after I created my options trading requirements and process was to reach $50,000 in additional income for the year. I will give myself an A+ for this aspect of my investment life. It appears I can easily hit $80,000 by December 31.
Charitable Giving Score is: Unknown
As a follower of Jesus, the only life score that really matters is the score he would give. He told his disciples this as recorded in Matthew’s gospel: “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.” Matthew 6:19-21
Cindie and I strive to be good stewards of the options and dividend income God has given us. We don’t know anything about tomorrow apart from what God has promised us and we trust Him. We know we are called to love God, and this includes obeying his commands. We are also called to love others, and that includes carefully trying to help them with their needs. As I mature, it becomes more important to me to be thoughtful and careful about the score Jesus gives. I would like to hear him say, “Well done, faithful servant.” I think I still have some work to do to improve my heavenly treasure. That is for God’s glory, and it is for our good. Giving is an investment. Invest well.