I realize some investors out there may be interested in investing in dividend stocks but may not be ready to purchase their own stocks and manage their own portfolio. Additionally some investors may not have the time or want to select their own stocks but want the benefits of investing in dividend stocks. Exchange Traded Funds (ETFs) are a great way way for investors to participate in stocks but not have the burden of selecting individual stocks.

First a definition of ETF. An ETF is a group of stocks similar to a mutual fund except ETFs are traded on the stock exchange like other company stock. Most ETFs are based on a stock index such as the S&P 500.

ETFs provide more flexibility since you can trade them on the stock market any time during the day. Low costs are another advantage of ETFs because their expenses are typically lower than mutual funds including index funds.

To get the maximum cost saving with ETF, look at using a low cost or no cost broker. Vanguard charges no commission to trade shares of their ETFs and Fidelity offers no commission on many iShares ETFs. Even with low fees, brokerage commissions can seriously erode ETF benefits when investing small sums of money.

The number of Dividend ETFs has been exploding with more coming to market each month. One of the oldest is iShares Dow Jones Select Dividend Index (DVY) from BlackRock. DVY was started in 2003 and has more than $6 billion in assets. One of the newest ETFs is the iShares High Dividend Equity Fund (HDV) which seeks to replicate the performance of the Morningstar Dividend Yield Focus Index.

Most Dividend ETFs can thank the Jobs and Growth Tax Relief Reconciliation Act of 2003 for their popularity. This tax act was signed into law in May of 2003 and lowered the tax rate on dividends to 15%. REIT's and foreign company dividends were excluded from the lower tax rate of this law.

Here are links to some popular Dividend ETFs

DVY iShares Dow Jones Select Dividend Index
SDY SPDR S&P Dividend ETF
VIG Vanguard Dividend Appreciation
VYM Vanguard High Dividend Yield
DTN WisdomTree Dividend Top 100
FDL First Trust Morningstar Dividend Leaders
PEY Powershares High Yield Dividend Achievers

Here are links to some of the major providers of ETF's.
BlackRock iShares
Vanguard
Invesco PowerShares

State Street Global Advisors SPDR
WisdomTree

Disclosure: The Div Guy owns shares of dividend ETF IDV - iShares Dow Jones International Select Dividend Index Fund

Today, a majority of consumers are experiencing some sort of financial difficulty causing a significant impact on their everyday lives. In fact, Americans carry more than $2 trillion in consumer debt and 30 percent of consumers report having no extra cash; making it impossible to escape the burden of living paycheck to paycheck.

In honor of Financial Literacy Month, the experts at Money Management International (MMI) created FinancialLiteracyMonth.com. No matter what day or month of the year a consumer begins their 30 step path to financial wellness, it will help them to create a successful strategy to better their overall financial position.

The site also has free tools such as a Net Worth Worksheet, Financial Goal Worksheet and Daily Expenditures Worksheet.

Financial Literacy Month

Follow the 30 steps to improve your financial fitness this month and they will benefit you for a lifetime.

Most of us are saving for retirement, but how big of a nest egg will you need at retirement? People save and invest in 401(k) plans and IRA accounts but have you calculated how much you need at retirement to live comfortably?

How do you calculate how much you will need? What factors do you include in your retirement calculations such as rate of return, retirement age and how long you expect to live in retirement. How important is retirement saving versus maintaining your current lifestyle?

Here is a link to my favorite Retirement Planning Calculator from Bloomberg. It's an easy to use tool and is great in calculating your magic number. You just need to provide a few inputs such as what percentage of your current income you would like at retirement, rate of return before and after retirement.

I like to run the calculator with an 8% investment return before and after retirement, exclude Social Security and select 100% of income at retirement. Click on “View Report” to see a nice chart showing your expected retirement balances.

I have calculated how much we will need at retirement and come up with around $2M as the amount of our nest egg to retire comfortably. Depending on how much we save currently and how well our investments perform I should be able to retire somewhere between 60 and 63 years old.

Right now we are well on our way to our goal of $2M and here is how I got started on my goal toward retirement.

I started a 401(k) plan at my first job out of college. I was able to contribute 10% of my salary and my employer added 15% as a profit sharing arrangement. This 25% contribution went a long way towards getting my nest egg build up during my nine years of work at that company.

I currently work for a non profit that offers a 403(b) that has matching contributions with variable annuities as the investment options. I contribute to this plan up to the match along with a Roth IRA which I invest in the Vanguard LifeStrategy Growth Fund.

I also contribute money to about 30 dividend stocks. I plan on growing the dividend stocks to produce anywhere from a third to half of what I will need in retirement. Currently I am earning more than $6,300 in yearly dividends from my stock portfolio.

So make sure you calculate how much you will need in retirement and come up with a plan that works for you. Spend some time now on planning your retirement so you will be in good shape twenty to thirty years down the road.

By Rachel Beck, Associated Press

NEW YORK — U.S. companies increased their dividends a record amount in the first quarter. Since the start of the year, 117 companies in the Standard & Poor’s 500 index said they would raise or start paying dividends. That amounts to a record increase of $16.6 billion, according to Howard Silverblatt, senior index analyst at S&P. Just 78 companies raised their dividends in the same period a year ago.

The surge in dividends reflects a turning point in the long recovery from the financial meltdown in 2008. In the months that followed, companies were frozen by fear. In many cases, the answer was to slash or eliminate dividends and do what many Americans did: put the cash in the bank and sit on it. As a result, U.S. companies have amassed a record $940 billion in cash.

But now the economy is recovering, profits are rising and investors are demanding something for their patience. The easiest way to keep investors happy, besides a rising share price, is to restore or raise dividends. JPMorgan Chase (JPM), for example, is increasing its dividend payout by a record $3.1 billion.

Even companies that have long resisted dividends are instituting them. Cisco Systems (CSCO) said it would begin paying shareholders $1.3 billion per year, a record amount for a first-time dividend payer.

“The fact that dividends are increasing is a clear signal that the economy and businesses worldwide are on a much firmer footing than a few years ago,” said Kent Croft, the manager of the $421 million Croft Value Fund.

Here is more evidence of the dividend boom:

— Financial companies raised dividends by $7 billion, accounting for 42% of all S&P 500 dividend increases. That came after the Federal Reserve announced March 18 that it would allow some banks to raise dividends if they passed certain “stress tests.” JPMorgan, Wells Fargo (WFC) and State Street (STT) were among those that increased dividends for the first time since the financial crisis. Citigroup (C) reinstated its dividend.

— Ten S&P 500 companies announced during the first quarter that they would begin paying dividends. That’s the most for any three-month period since at least 2003, when Silverblatt began collecting data. Besides Cisco, discount department store Kohl’s (KSS) and health benefits company WellPoint (WLP) also became first-time dividend payers.

— Besides financials, industrial companies and businesses focused on consumer products had the most dividend increases during the quarter. Among those raising their dividends: cruise operator Carnival (CCL), retailer Limited Brands (LTD) and manufacturer Eaton (ETN).

A strong recovery in dividends hasn’t make up for the losses sustained since the financial crisis. The total amount of money that large U.S. companies are paying in dividends is still running about 13% below the peak in mid-2008.

Some of the companies that have raised dividends aren’t back to where they were before the recession. That is particularly true for banks and other financial services companies. Their dividend yield, which measures how much cash is being paid per share, runs around 1.41% today, far below the 3.32% yield in 2007.

JPMorgan raised its annual dividend sharply, from 20 cents a share to $1. That’s still well below the $1.52 a share it paid in 2008.

Citigroup will pay just 4 cents a year, the maximum federal regulators are allowing the bank to pay under provisions of its bailout package. Citigroup had paid as much as $2.16 per share before the financial crisis.

Bank of America (BAC) wasn’t given the OK by the Fed to raise its dividend, which is also just 4 cents per share. At its peak in 2008, the company paid annual dividends of $2.56 per share.

“Companies are paying more dividends, but they are also taking it slow,” Silverblatt says. “Dividends are far from being completely back.”

Here are the top 20 stocks in my Dividend Portfolio as of 3/31/11 ranked by size of holdings.

1. Kinder Morgan Energy (KMP) USA
2. DCP Midstream Partners (DPM) USA
3. ONEOK, Inc. (OKE) USA
4. Johnson & Johnson (JNJ) USA
5. Barclays PLC (BCS) UK
6. Procter & Gamble (PG) USA
7. Abbott Labs (ABT) USA
8. General Electric Company (GE) USA
9. CommonWealth REIT (CWH) USA
10. Exxon Mobil (XOM) USA
11. Becton, Dickinson and Co (BDX) USA
12. PepsiCo (PEP) USA
13. Aircastle Limited (AYR) USA
14. Unilever NV (UN) Netherlands
15. Banco Santander (STD) Spain
16. GlaxoSmithKline (GSK) UK
17. Verizon Communications (VZ) USA
18. AT&T (T) USA
19. Pfizer (PFE) USA
20. Newell Rubbermaid (NWL) USA

Here are the top 20 holdings of the Vanguard High Dividend Yield ETF (VYM) as of December 31, 2010. The Fund consists of stocks that are characterized by higher-than-average dividend yields, and is based on the U.S. component of the FTSE Global Equity Index Series (GEIS). Real estate investment trusts (REITs), whose income generally do not qualify for favorable tax treatment as qualified dividend income (QDI) are removed, as are stocks that have not paid a dividend during the previous 12 months.

1. Exxon Mobil Corporation (XOM) USA
2. Microsoft (MSFT) USA
3. General Electric Company (GE) USA
4. Chevron (CVX) USA
5. Procter & Gamble (PG) USA
6. AT&T (T) USA
7. Johnson & Johnson (JNJ) USA
8. Coca-Cola (KO) USA
9. Walmart (WMT) USA
10. Pfizer (PFE) USA
11. Intel (INTC) USA
12. Merck (MRK) USA
13. Philip Morris International (PM) USA
14. Pepsico (PEP) USA
15. Verizon (VZ) USA
16. ConocoPhillips (COP) USA
17. McDonald's (MCD) USA
18. Abbott Labs (ABT) USA
19. United Technologies (UTX) USA
20. 3M (MMM) USA

My Annualized Dividend Income as of the end of March increased to $6,302 from $6,230 over the past month. This means my dividend stocks will pay $6,302 in dividends over the next 12 months.

I made around $700 of dividend stock purchases for the past month from new purchases and dividend distributions. The stock market was up for the month and we continue to see companies increasing their dividends this year.

I sold off shares of ACAS stock that was no longer paying dividend and will sell others that are not paying dividends throughout the year and add a few hundred dollars a month to our dividend paying stocks.

Most of my stocks are held in my Zecco Trading account and the rest are DRIPs. The dividends from my stocks are reinvested but I am keeping track of the amount of income I could receive once I retire or choose to receive the dividends in cash.

I will post my Top 20 Stock Holdings on Thursday.

As of the end of March our Net Worth increased to $950,835 from $947,444 for the month which is a .36% increase. The increase in net worth is tied to the small increase in the stock market for the month.

The breakout is as follows:
ASSETS
Retirement Accounts $512,472
Taxable Accounts $145,196
Cash $37,367
Home $205,000
Cars $6,600
Personal Property $3,000
Kids 529 Accounts $41,200

Here is the summary for this month:

The stock market was up for the month of March. The stock market was up .8% from where it stood at the end of February. The S&P also scored monthly rises in December, January and February. The US economy continues to show signs of slow growth.

We are still debt free since we paid off our credit card debt. We will continue to use our credit cards for rewards but payoff the balances each month. I received around $700 in dividends for the month and have used the cash from these dividends to make additional stock purchases.

We will be building up our cash over the next few months to increase our cash reserves. You can click on my Net Worth graph on the right to see the changes in each category from the previous month. We continue to fund our Roth IRA's each month.

I will post my Dividend Income Update on Wednesday.