Sending dividends to a separate account stopped me checking the price daily

I wanted income that didn't come with a phone call at 9pm about a water heater, so in the spring I put $18,000 across two mortgage REITs, one agency name and one more diversified. Roughly $9,000 each.

Six months in I've received $1,120 total, so a bit under $190 a month averaged. The agency one pays quarterly, the other one pays monthly, which I didn't plan and turns out I like, because something arrives most months and it makes the whole thing feel less like a lottery ticket.

The part that nearly broke it was February. The diversified name dropped about 9 percent in three weeks on nothing I could identify and I had the sell screen open. What kept me in was a rule I'd written down before buying, that I'd only sell on a dividend cut or a book value decline of more than 10 percent over two quarters, and neither had happened. Price alone wasn't on the list. Writing that rule down before I owned anything is the single most useful thing I did.

Two things I'd keep. I turned automatic dividend reinvestment off and route the cash to a separate account, so I can see the income as income rather than watching it vanish back into the position. And I sized it so that if both dividends went to zero tomorrow, nothing in my life changes. That second one is why February was survivable.

I'm up about $400 on price on top of the dividends, which I'm treating as noise. Ask me again after a rate move.

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2omar_haddadActivePRO11

The rule written down before buying is the real content here and it's the same thing that saves me on renovations. Scope written before demo, or the job grows teeth.

The part that sounds easy is your sell rule, and I'd test it. A dividend cut is your trigger. Fine. But cuts usually arrive alongside a price drop that already happened, so by the time your trigger fires you're selling into the news. What does the rule actually do for you at that point? And book value gets reported once a quarter with a lag, so a 10 percent decline over two quarters means you might be six months into a problem before the number confirms it.

Also $190 a month on $18,000 is roughly 12.5 percent annualized and I'd want to know what that yield is telling me before I called it income. Six months isn't long enough for either of us to know. Come back at 24 and I'll be genuinely interested.

Sending dividends to a separate account stopped me checking the price daily

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