Start Small and Test Thoroughly

This morning I attended a training meeting from one of our vendors where they talked about a number of their product offerings. They highlighted the various tools available and when you would use one versus another. As I listened to the different options, I realized that a small proof-of-concept implementation is really the best way to gain experience with the various tools.

There are a number of recent examples where engineers didn't understand the technology decisions they made and failed miserably. The big one that comes to my mind is the original healthcare.gov website. On the first day it immediately crashed because of all the traffic. Comedians and late-night-talk-show hosts used it as joke material for a long time claiming they should have hired porn-site developers who know how to create high-traffic websites. Another service that had issues when it started is Disney+. Fortunately they had a much easier time scaling up to meet customer demand.

Starting small and testing thoroughly is not reserved for building computer systems. It is a principle I use in my own investing. Lately I have been looking at buying dividend stocks that pay periodic cash simply for owning it. While most companies pay quarterly dividends, there are some that pay monthly. That sounds pretty good doesn't it? Well you do have to be careful. I found one stock that is paying the equivalent of 25% annually. Instead of dumping a lot of money into it, I bought a few shares and watched it carefully. Yes, I received my monthly dividend but the price of the stock dropped more than the dividend paid. It dropped so much, the company did a reverse 5 to 1 split. That means instead of owning 10 shares of the stock, I now only own 2. Furthermore, the stock continues to fall. This is why I am glad I didn't dump thousands of dollars into it.

I have had some success with other dividend stocks and that is because I have started small. If I see one performing well, I reinvest in that same stock when I receive the periodic dividend. I am using now to learn what strategies work and not listen to over-hyped ones that don't. My hope is that I'll have it figured out when it comes time to retire and my income is based on my investments.