Wednesday, October 22, 2014

Interesting Reads

Man has it been busy lately. Life has been busy but a deadline at work as  things especially crazy the last two weeks and probably next two. I had to work last Saturday and I'll need to work this Saturday too. Its a major bummer I really can't complain too much. I am salaried but I get paid for overtime; plenty of people have to work long hours without any additional pay. Also, this surge in work is temporary and I hope things will get back to normal by the beginning of next month. Finally, have a deadline and a distinct set of objectives makes work more interesting, gives me a sense of accomplishment, and helps work fly by, so other than time away from home, the extra hours are not really a struggle.

But this is just a reminder of why I want to become financially independent. While I like work and I enjoy the challenges and sense of accomplishment that it brings, I would rather spend that time doing things I want to do, setting my own schedule, and not having to worry about other people's deadlines. With financial independence I could go explore another part of the world for a month and not worry about how much vacation time I have or whether or not my vacation occurs during "a busy time". The happened to me recently, I had started planning a nice trip for me and my girlfriend, we got ourselves all excited but instead I was told it was busy time and was "advised" against it. One day that won't be an issue and the harder I work now the sooner that day will come.

It's been a while since I posted and it may be a while before I post again so I thought I would write something quick and include some recent articles that I have found interesting. Without further ado....

What tool do you use to track your expenses?
Joe at RetireBy40 posted an article on his preferred app for managing his budget.
I use a boring old spreadsheet because I like the amount of control it affords me. I have tried a few budget apps and websites and have not been impressed, they never seem to let my do what I want. What do you use?

Would you eat your own fish?
Mr Money Mustache had a very interesting article on aquaponics, which is the growing of vegetables in concert with the raising of fish. The fish fertilize the plants and the plants clean the water for the fish, it is very efficient farming technique and the article includes a link to plans to build you own system. I am very interested in this and I will definitely be doing some more reading on the subject. I always figured I would build a greenhouse one day when I bought a house but perhaps this system might be better. Just don't start naming the fish or it might be hard come "harvest" time...

Is it a good time to buy IBM?
Both Dividend Mantra and  Dividend Developer wrote articles about IBM and their recent drop in price due to poor Q3 results. DD has some links to additional articles on Seeking Alpha.
I am considering IBM but I doubt I'll make a move anytime soon. Any extra capital I have I am going to put toward paying down my students loans...I am so close I can feel it. But one of my concerns with investing in IBM is that I am not a direct customer of IBM, I don't understand what they do and that makes it harder for me to make judgements on their brand, performance, and placement in the competitive environment. I'll be keeping an eye IBM for the time being.
What about you? Would you buy IBM?

Well that's all for now. I have a post I have been working for a while and I hope to get that posted this weekend. See you soon!



Wednesday, October 8, 2014

September Wrap Up

Phew! Another month come and gone, man is time flying by. In some ways its great; I keep plugging away at my day job earning money, paying down debts, and investing when I can, building a nice nest egg I can rely on in the future. The faster time goes the sooner I am on my way to financial independence. On the other hand, each day that passes is one more day where I am getting older and one less day I have to live. A sad thought but no less true. Well, let's hope that financial independence can come sooner rather than later giving more time for me to do the things I really want to do: travel, read, learn, live, explore, and just plain being me.

Well September was a great month here in the Pacific Northwest, the fall rain started but we had some great weekends so there wasn't too much to complain about. Its been a busy month, I ran the Tough Mudder (had a great time, I already purchased a ticket for next year), work has been busy, my basketball leagues started, I starting an online class (which I will get into in a future post), we attended a wedding, had a housewarming party, went to Fremont Oktoberfest, and of course I started this blog! This is my first monthly roundup and I hope to use these posts to discuss my current state of affairs including income/expenses, stock buys and sells, dividend income, and of course my progress on all of my yearly goals. It might be a lot for one post but we will see how it goes!

My expense are listed to the side, on each line I have the budget amount per month, the actual amount spent for the month of September and finally the total amount spent in that category for the year. Those items in yellow have either exceeded or are in danger of exceeding the total amount budgeted for the year. It was not a great month and I wish I could get caught up on those items that are high for the yearly total but it would be hard to get there unless I simply quit spending in those categories. Luckily some of my other categories are low so I should still be able to meet my financial goals for this year.

Paycheck: $4,222

% Expenses = 66%  of income
OUCH, not a good month...

Dividend Income:
Because I have been working hard on paying down my debts, I haven't been able to add much to my portfolio this year. But the great thing about dividend investing is that its still working whether I am adding to it or not. This month I earned $180 without lifting a finger, not bad. For this year my high for monthly dividend income was $194 in August and my low was $97 in July, so this was a pretty good month.

The core concept of dividend investing is to buy shares in a strong company with a history of increasing dividends and hold on to that company until, well if its a good company, forever. So selling off stock is usually a rare event for dividend investors usually only initiated after some fundamental change in company's performance. I had one sell and one purchase this month. I sold all 18 of my Federal Express (FDX) shares and used the proceeds to buy 48 shares of Aflac (AFL). I originally bought my FDX shares last year after my first exposure to dividend investing through Dividend Mantra. At the time I knew I wanted to get started but didn't know what I was doing so I searched through David Fish's list of Champions, Contenders, and Challengers and looked for companies on the list that I liked. FDX was one of those companies but I failed to realize how low the yeild on FDX is (currently it yields 0.5%) by the time I realized the error of my ways I decided I might as well wait until selling the stocks was under the realm of capital gains. So, when FDX hit a 52 week high and AFL hit a 52 week low on the same day I decided it was time to pull the trigger and go with the company  more commonly associated with dividend investing, AFL.

Scottrade offers a Flexible Reinvestment Plan, where dividends from qualifying companies can be used to purchase shares in any other qualifying companies without any commission. So I take advantage of this every month and I usually use it to build up my positions in companies where my positions are lagging.
This month my dividends were used to purchase 7 shares of Kimco Realty Corporation (KIM) and 6 shares of Chimeria Investment Corporation (CIM).

  • Spend less than 50% of my net income - While this month wasn't good, I am still at 50% for the year so I will need to be careful to make sure it stays that way
  • Pay off one of my student loans - I paid down this loan by another $2,000 this month for a current balance of $3,065, I should have no problem paying this off my November.
  • Keep taxable income in the 25% tax bracket - My current federal taxable income is $68,000 from my day job and considering dividends, capital gains, and interest I am 80% of the way to the 25% bracket limit of $89,350 and we are currently 77% complete with this year. So, I need to watch this carefully and probably increase my pretax 401k contribution.
  • Weight under 200 lbs - Current weight at 204 lbs but that was after basketball so I was probably a couple of pounds lighter.
  • Run a half marathon - COMPLETE
  • Complete the Tough Mudder - COMPLETE
  • Work out my legs regularly - I have not been as good about this lately, I've been too busy. with other things basketballs, Tough Mudder, hiking, etc.
  • Increase my running pace - I have not been running lately either for the same reasons as above.
  • Take an online class - I have chosen a class but have yet to start, when will I find the time?
  • Work through my backlog of magazines - I started reading for a book club of sorts so I have not been getting around to the magazines lately.
How was your September?

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