Keeping Your Eye On The Prize

Before last year I never really had a budget.  Starting in 2014 I started using YNAB.

I won't go so far as to say it changed my life but establishing an amount of money to spend each month for a category and then watching that allocation get adjusted multiple times per month has really helped me.  I really don't like seeing when I spend over my allocation (because I manually enter all my transactions) and the YNAB method puts it squarely in your face so you can be really aware that you went over.

Couple this with Loyal3 where I get to send any money for the month I didn't use there to buy more stock == double win.  This year I've been able to see and track my net worth grow and even though everyone's portfolios took massive hits this month, my net worth increased. It's really a good feeling.

Net worth tracking since May 14 via YNAB

July EOM Wrapup

Survived another month!

July was especially fun with the unexpected KRFT payment. I was going to be on the bubble to reach my $1500 yearly goal but now I'll far exceed it.

Charts

Purchases

Loyal3
-Normal buys
BUD
DIS
KO
UL
INTC

-Took a speculative position in FTR. I mostly took the position due to dividend yield and that i can buy it commission free and DRIP via Loyal3. Its also nearing all time lows. I don't insist on waiting for a bottom but this one was near lows so figured I'd take the purchase.

FTR

Taxable

Canadian Banks are/were on sale due to a rate cut announced in  July. So i purchased:
BNS
RY
BMO

Ford  (F) was cheap, so I added some additional shares

I also averaged down on :
IPPLF
EBGUF

Lastly,  a speculative position on CSD http://guggenheiminvestments.com/products/etf/csd  CSD is a spin off ETF and allows me some exposure to companies i wouldn't want to buy individually or too difficult (for me) to track.

Of course all the above (with the exception of F) is in the red with how the market is :-/ I'll keep looking for opportunities when sectors are on sale.

I've updated the portfolio spreadsheet Google doc.

May EOM Wrap Up

May EOM Wrap Up

May was my biggest dividend payout to date at: $161.60 :-)

Charts:

Dividends by Month

2015 Dividend Goal Progress

Purchases:

I had a side hustle pay out some money plus an equity grant so I made some purchases in taxable accounts

This month I bought:

F @$15.53  for a starter position.  Weekly chart is looking pretty weak so I'd be willing to add more in the 14.00-14.50 area. 

Some reasons for the purchase: 

http://www.thestreet.com/story/12993172/4/8-recession-proof-stocks-to-prepare-your-portfolio-for-the-next-cycle.html?startIndex=0 and 3.92% dividend yield.

WBK @$25.64 for some foreign (AUS) financial exposure. Weekly chart is looking weak (you'll detect a trend here) Looking to buy more below $25.00. Did miss the ex-dividend date though :-(

Reasons:
One of the four big banks in Australia, but the only one on NYSE and 5.72% dividend yield. I want to continue to get more foreign exposure although I will probably primarily do this via PID or IDV


HSY @$93.37 in my Loyal3 account  I would love for it to get back down to $90/91 area and i'll buy more.

Reasons: 

chocolate!

NVDA @$20.54 

Reasons:
I'm bullish on NVDA for long term with their attempt to become the NFLX of gaming.  Its also a tech company that at least pays a little (1.53%) to own it.


PG @$80.28

Reasons:  it was $8 dollars cheaper than i bought it for my IRA back in Dec/Jan.  Its on sale at the moment.  Weekly chart is looking weak though. I plan to add more between $75-$78. 3.34% dividend yield.

JNJ @$100.91  

Reasons: I own it, like it, its 6 dollars cheaper than I own it in my IRA.  Looks like it found its bottom around 98 for the time being. 2.97% dividend yield.

Normal Loyal 3 purchases for May:
K, KO, DPS  

Reasons: I buy whatever is red on my tracking chart for that month to average down.

Things I wish I knew in my 20's

Continuing on from my first post on things I wish I knew when I started working are things I wish I knew in my 20's.

At this point I was getting a steady paycheck and was in the military. Some topics I really had no clue about include:

1. The key to saving is living on less than you make.

To anyone that practices any sort of frugality you know this one already but I think it is lost on the majority of people in their 20's.  Now to be fair I had several bosses that told me to live on my previous salary and save the difference. I mostly heeded this advice but banked the cash only to piss it away on other things later.  Plus I was mostly brought up to equate stuff with caring/love. So buy all the things!

To be fair its suuuuuuuper difficult at that time in your life not to blow all your money on stuff.  Going out with friends, traveling, eating out, you can finally afford a nice-ish car, etc.  Happy to hear advice on how you bypass this stage to pass on to the little ones.

Either way, its true, the key to saving is living on less than you make.

http://www.successwithmoney.com/live-on-less-than-you-make/
http://www.thesimpledollar.com/rule-1-spend-less-than-you-earn/
http://www.mrmoneymustache.com/2012/06/01/raising-a-family-on-under-2000-per-year/

The part that's missing in that advice is to properly do something with that extra money. I touched on this in the previous post about wishing I knew something...anything...about retirement accounts but understanding the power of compounding is also key.  After a brief stint with FirstCommand where I was sold high load funds and life insurance I didn't need I eventually did end up with a Roth IRA in an S&P fund.  Unfortunately I put the financial education journey on pause there and really didn't pick it back up for 10+ years.

2. Avoid credit card debt at all costs.

This should be obvious but sometimes it is not.  In college everyone is throwing credit cards at you. You need to strike a serious balance between building credit and buying crap you don't need or have money for on credit.  It took me many many YEARS to finally get out of credit card debt.

Credit Cards are a tool that can be used to build credit and earn reward but they must be used appropriately and not as a way to buy things you don't have money for.


3. Establishing a budget

What the heck is a budget?! The key to #1 and avoiding #2 is the budget. AKA why I can't have any fun :-)

To be serious though, I never could understand why I made OK money in my 20's (and now good money) but never had any. It wasn't until I started tracking where it all went that I had my answers.  The One-Page Financial Plan by Carl Richards is an ok place to start. Its very simple, lay it out there and track the money just to see where it goes. Then go looking for things to cut out.  When I decided to try to meet with financial planners many of them asked if  I had a budget and the better ones would only see me after I had it to bring in with me :-)

 If you want some more ammo Dave Ramsey's books are ok as well.  Plus there are tons and tons of resources on this now on the interwebs.

I do this religiously now with YNAB. The manual part is what works for me but its ok to try a few tools to see what sticks and fills the need.


4. Understand Roth vs Traditional IRAs.

TLDR;
**Do the Roth until you make too much**

Reference: http://www.investopedia.com/articles/retirement/03/012203.asp

Where to put the money?

• No idea:  Target Date Funds via low fee mutal funds or ETFs
• Some idea: Proper mix of domestic, foreign stocks and bonds via low fee ETFs
• Lots of ideas: ETFs and dividend growth stocks (see below)

Also understand lower the management fees the better:

Reference: http://www.thesimpledollar.com/why-fees-matter/

5. If employers do any sort of matching, make sure you contribute enough to get that match no matter what.

You want that free money to accumulate as much as you can for as long as you can.

Relevant blog posts:
http://blog.mint.com/saving/goodbye-college-hello-future-why-retirement-savings-matters-in-your-20s-051215
http://www.bankrate.com/finance/retirement/5-retirement-savings-ideas-for-young-people-1.aspx
http://www.kiplinger.com/article/saving/T063-C006-S001-10-financial-commandments-for-your-20s.html
https://www.millersmoney.com/money-weekly/free-money-for-your-401k

6. Understand dividend growth investing or at least the buy and hold mentality.

-Learn basic stock analysis

-Learn what a trend is and wether a stock is in an uptrend and downtrend
-Learn about timeframes and how we care about Daily..really more  Weekly/ Monthly charts when it comes to investing.
-Learn about the Dividend Aristocrats and its ok to devote a portion of saving/investing to these Dividend Growth stocks
-Read A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton G. Malkiel
-Read The Intelligent Investor: The Definitive Book on Value Investing. by Benjamin Graham

Things I wish I knew when I started getting a paycheck

Things I wish I knew when I started getting a paycheck

1. I wish I knew retirement accounts existed and the power of compounding && time doing its magic

My first entrance into any sort of investing was in my military days with First Command (http://www.glassdoor.com/Reviews/First-Command-Reviews-E37701.htm). In retrospect it was better than nothing but if you do some Googling it wasn't a great service. They put you in high load mutual funds and sell whole life insurance (which i really didnt need with Army Life insurance). I got half the message that they were less than optimal advisors but decided "it was too hard" or "I didn't have time" to learn a better way to invest my money. I ended up purchasing a S&P 500 Roth IRA  but not putting nearly enough  in (aka the max every year).

What I plan to do about for my kids:
I've already started trying to educate my oldest on investing with her Motif. I also **plan** to initially fund her IRA once she starts working as well as do more education on the power of compounding. I should have some good ammo by that point with my own retirement accounts plus this blog. Hurray for fancy graphs and mad excel skillz.


2. I wish I knew that even saving $100 a month or per paycheck would have probably made me a millionaire now.

I started working at 14, so over the course of my life so far there were tons of opportunity to bank cash into an IRA for the future but I didn't.  I have little to show for it except for maybe some hazy  memories of nights out on the town.   There are many many resources on compounding both in IRA and with dividend growth investing. Here is one that is a decent example:  http://www.businessinsider.com/amazing-power-of-compound-interest-2014-7 and another http://www.getrichslowly.org/blog/2008/04/02/the-extraordinary-power-of-compound-interest/


What i plan to do about for my kids:
See above

3. I wish I knew/understood that buying stuff is really a waste of money.  Most of my life I spent every dollar I made mostly on stuff i didn't need instead of stashing it away.  This is mostly a result of upbringing and my parents views on money.

What I plan to do about for my kids:
Education when we are shopping, reminding grandparents to not equal love with **stuff**, tell stories about my shitty finance habits once they are old enough to understand better.

Getting Kids Interested In Investing With Motif

Eyes On The Dollar had a fabulous post on getting kids interested in investing. It is available here:

http://eyesonthedollar.com/get-kids-excited-about-investing/

The TLDR of it was have the kids pick companies they know and have heard of and buy a Motif (referral link) with the stocks.

I've been slowly introducing my oldest to stock trading. Not wanting to be too pushy with it but enough to teach her things like basic stock patterns and what trends are and other basics.  I have far to many computer friends that can do amazing things with computers and code but are scared to tackle investing.

Anyway, we spent a few days talking about companies, how to find their tickers, how to look and see if the companies were in an uptrend or downtrend, and if they pay a dividend or not.  I ended up taking the companies we talked about  and scrubbing the ones that didn't pay a dividend. The result is the following motif:

 

Link in case the fancy iframe isn't working:
https://www.motifinvesting.com/motifs/stuff-faith-likes-pays-dividend-Lsj7mn67


We funded it with a bit of her savings account money and I plan to check the progress with her periodically and hopefully can spark an interest for later in life.  It was also fun for me as it gave me a reason to check out Motif. I plan to make a motif with some of the my "stocks to throw the dice on" and now that I can essentially buy them all for the price of one commission it seems like a good time.

-CG

[Shared] Dividend Growth Investing 101

worth a read if new to the concept of dividend growth investing.

http://www.thediv-net.com/2015/01/dividend-growth-investing-101.html

[Shared] 12 More Things People Who Make a Lot of Money Do

12 More Things People Who Make a Lot of Money Do

http://www.wisebread.com/12-more-things-people-who-make-a-lot-of-money-do

1. Skip TV (Especially Reality TV)

Corley found that 67% of wealthy people watch one hour or less of TV every day versus 23% of poor, who watch more. Further, only 6% of the wealthy watch reality TV.

2. Meditate

A Huffington Post article highlighted 10 wealthy people (including Oprah, Larry Brilliant, and Bill Ford) who all meditate daily to help them focus.

3. Exercise Regularly

Many studies tout the benefits of exercise to improve not only physical health, but also mental health. This is probably why 76% of the wealthy Corley studied exercise aerobically four days a week.

4. Invest Their Money

The Millionaire Next Door found that millionaires, on average, invest nearly 20% of their household income each year; with the majority investing at least 15%. And 79% of millionaires have at least one account with a brokerage company.

5. Keep Their Mouths Shut

People who make a lot of money don't gossip or say whatever pops into their head at that moment. Corley found that only 6% of wealthy say what's on their mind.

6. Wake Up Early

Are you best friends with your snooze button? If you want to act like a rich person, better start waking up early. Laura Vanderkam, author of What the Most Successful People Do Before Breakfast wrote in an article for Success.com that of 20 premier executives, 18 regularly woke up before 6 a.m.

7. Eat Healthy

People who make a lot of money don't just eat "well" in terms of high end restaurants, they also eat healthy food. Rich people, on average, eat less than 300 junk food calories per day, according to Corley.

8. Read (for Work or Pleasure)

Whether it's for work or pleasure, people who make a lot of money read, read, read.

Rich Habits highlights that 88% of wealthy read for 30 minutes or more each day for education/career and most of them (86%) state that they love to read.

9. Have a Nightly Ritual

Having a nightly ritual helps people who make a lot of money collect their thoughts, wind down, and prepare for the next day. 

10. Start Their Own Businesses

The Millionaire Next Door found that most millionaires are entrepreneurs who start their own businesses. It doesn't have to be a start-up technology company. Even owners of waste-removal services do quite well financially.

11. Keep a Running List of Tasks

If you make a lot of money you need to keep track of what you have to do. In fact, Corley found that 81% of the wealthy maintain a to-do list and actually manage to accomplish about 70% of their tasks each day.

12. Network

You don't make money in isolation, it takes getting out there and meeting other people. And 79% of wealthy network five hours or more each month according to Rich Habits.

If people who make a lot of money do these things, do they do them because they make a lot of money? Or do they make a lot of money because they do them? It's a bit of a chicken and egg problem. But, many of the above require diligence, self-control, persistence, and hard work. So, chances are, if you have or develop these traits and do the same things people who make a lot of money do, you too will earn more.

[Shared] Want To Rebalance A Portfolio? Use Cash, Cash, Cash

Interesting perspective on rebalancing and the idea to rebalance with new infusions of cash and not by selling winners just because you are overweight or not balanced.  I like it

http://theconservativeincomeinvestor.com/2014/12/29/want-to-rebalance-a-portfolio-use-cash-cash-cash/