Latest Buy: KO

The stock market is having a nice pullback! Coca-Cola hit a 3% dividend yield, I couldn't pass that up. Better yet, this month Coca-Cola will announce a dividend raise, just like it did the last 51 years.

Today's buy:

• 40 Shares KO @ $37.31

This purchase will add $44.80 to my yearly income. This is based on the $0.28 dividend KO pays every quarter, but like I said, they will announce a raise very soon. My total position in Coca-Cola is now 76 shares.

I purchased some Coca-Cola stock earlier in december 2013, where I talked a bit about the company.

Coca-Cola is the first stock that comes to mind when someone asks me what a good dividend growth stock is. It is a must have for every dividend growth investor in my opinion.

I found a fun article a while back. Charlie munger is explaining Coca-cola's strategy how to become a 2 Trillion dollar company in 150 years. A very good read.

http://mungerisms.blogspot.nl/2010/04/charlie-munger-turning-2-million-into-2.html

Thanks for reading.

Latest Buy: KO

Right before the ending of the year I decided to buy some shares of this beverage behemoth.

Today's buy:

• 36 Shares KO @ $41.35

This purchase will add $40.32 to my yearly income. This is based on the $0.28 dividend KO pays every quarter, I'm expecting a dividend raise in February, so the real income amount is higher.

This company needs no introduction. It's the biggest beverage company on the planet. As far as I know, you can get a Coke in every country on the planet (except North-Korea). Coca-Cola is an invaluable brand name and the distribution network is irreplaceable. In the coming years, 700 million people will enter the middle class all around the world, this is where Coke's growth opportunities are.

The stock is a classic dividend growth stock, it has paid a dividend since 1919 and raised it dividend for more than 50 years. You can almost say, there are three things certain in this world, death, taxes and Coca-Cola's dividend every quarter.

The stock isn't cheap at 21x earnings, but in the last 15 years its price moved out of the stratosphere, in 1998 investors paid more than 40x earnings for a share of KO!

Thanks for reading

Warren Buffett on rising Coca-Cola dividends

Warren Buffett is one of the most successful investors in history. Berkshire Hathaway's chairman has a reputation of eloquence in his annual shareholder letters. I was reading the 2010 annual letter to shareholders this morning. One of my favorite passages came from page 18, he was talking about how time is the friend of the wonderful business.

I couldn't agree more. I try to spot great businesses, acquire them for a reasonable price, let time do the heavy lifting and compounding work its magic. A great business at some point generates more money in the form of dividends than you put into, you can use that money to fund your lifestyle, retire early or buy more pieces of great businesses.

Buffett on Coke's rising dividends:

Other companies we hold are likely to increase their dividends as well.  Coca-Cola paid us $88 million in 1995, the year after we finished purchasing the stock.  Every year since, Coke has increased its dividend.  In 2011, we will almost certainly receive $376 million from Coke, up $24 million from last year.  Within ten years, I would expect that $376 million to double.  By the end of that period, I wouldn’t be surprised to see our share of Coke’s annual earnings exceed 100% of what we paid for the investment.  Time is the friend of the wonderful business.

When you start out collecting these stocks that pay rising dividends it might be frustrating because the cash generators only produce a trickle in the beginning. But a trickle becomes a drip, a drip becomes a stream, a stream becomes a torrent and a torrent becomes a deluge. That's how compounding works. It starts small and starts growing, faster and faster. Nobody started his first year dividend investing and getting thousands of dollars in passive income immediately. It starts small, that shouldn't stop you from beginning.  You have to start somewhere!

For more shareholder letters from Warren Buffett, read more at www.berkshirehathaway.com/reports.html

Thanks for reading.