A nice personal financial goal to have is to own the same companies that you use, so that you will receive in dividends the same amount that you spend with them. This way you are kind of using their service for free. To do this, just calculate how much money you spend annually for a service, then see how much that company pays in annual dividends, and finally calculate how many shares you need to own to cover your expense. Lets look at some examples to illustrate this idea.

Your mobile plan costs $25 per month, which is $300 per year. Lets say your plan is with AT&T for example. Their dividend is $2.08 per share, so you would need to own about 144 shares of their stock.

Maybe you like to drink coffee at Starbucks once a week for $5. So that is $20 per month or $240 per year. Their dividend is currently at $1.64, so you would need about 146 shares to fully cover the price of your coffee.

Or maybe you like to eat at McDonald's three times a month for $8. Your annual expense is $288. The dividend is currently $5 so you would need about 58 shares of stock to cover those Big Macs.

But what about something like Netflix that doesn't pay a dividend? Well, we can just take a shortcut and calculate a dividend based on 3% yield, or 2% if we want to be really conservative. Netflix stock is around $330 as I write this, so with a 3% yield the dividend would be $9.9. If your subscription is $8 per month, or $96 annually, you can cover that by owning 10 shares of Netflix.

Of course this would be an ideal situation to be in, but it is not realistic for most people to own enough stock to match their spending. But it is a good goal to work towards. In the meantime, make up something that works for you. Instead of having 100% of your expenses covered by dividends, make it 50%. So for each $1 that you spend for a service, you will receive $0.50 back as dividends. Still too much? Then use 25% to get started. I guarantee you that the coffee you drink at Starbucks or the Big Mac you eat will taste better when you're thinking to yourself that you're getting it at a 25% or 50% discount.

For a product that lasts many years and you just pay once, you can ignore the dividend and just buy enough stock to match the value of the product. So you want to buy a shiny new iPhone from Apple for $800? First you have to buy 4 shares of Apple stock (roughly $230 a piece as I write this). Yes, you buy the stock first, before giving yourself the permission to buy the product. After you have put money away for an investment, only then you have earned the right to buy the product. If you also want to buy a MacBook for $1300, you add up all the products for that brand. So now you need a total of $2100, or 10 shares, of Apple stock.

Or maybe you want to buy a nice BMW for $10k? You can do that, but only after you have $10k of BMW stock first. There is a saying which says that if you can't afford to buy something twice, you can't afford it.

Clothes are somewhere in between. They are one-time payments but are items which get worn out and thrown away relatively fast. So maybe a good rule of thumb would be to spend annually 10% or 20% of the value of the stock for clothes. You want to give Nike $200 of your hard-earned money every year? First you have to own $2000 of their stock.

I guess the one exception to this is your living expenses, whether you pay rent or own your house/apartment. Because that tends to be the largest expense for most of us, it is not realistic to "match" our investment with the expense, or doing so would not be wise because we still have to diversify our investment portfolios. But if you have a mortgage and you are paying interest payments to a bank, why not be a shareholder in that bank and get some of that money back as dividends? Why not own a piece of your electricity company and get something back from your monthly utility bill?

The advantage of this method is that it aligns your spending and investing together. If you want to spend more, you also have to invest more. Don't have money to invest? Then you probably shouldn't be spending a lot either, at least not on luxury goods. This is like an automatic mechanism which prevents you from buying stuff you don't really need. How awesome is that?

The flipside of this is that it answers the question of "Can I really afford this?" for the conservative person and natural saver, to whom it is not easy to spend money. If you can afford to buy the stock and the product, then the answer to the question is yes, you can easily afford to buy it, and don't need to have any feelings of guilt about it.

Yet another aspect is that if you are using the products of some specific brands in your daily life, it is likely that you have determined them to be good and high quality products, worthy of your money. Perhaps other people think same, making them good investments as well. But it is important to note that this only works with fairly high quality brands, where you can be pretty sure they will be around a few years from now. You still have to do all the due diligence which is normally required for investing in a company.

Of course this method requires a lot of discipline to put into action. It is easy to be a consumer and a spender, but not so easy to be a saver or an investor. But that is a choice every one of us must make for ourselves. At a minimum, you should think about how you can align your spending and investing together so that they are in balance. This post offers one way to think about that. Without balance one may end up with shiny gadgets and toys but an empty bank account.

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