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Friday, December 30, 2016

December Dividends

As 2016 comes to a close I end the year with another record month of $8.70 in dividends. I've only been at this a little over a half year and it is nice to see the steady progress. Here my December dividends.

WFC  0.76
EMR 2.40
CMP 1.39
FLO 1.60
GM  1.14
BAC 0.15
FTR 1.26

I can feel the $10 mark coming soon. Possibly next quarter.

Wednesday, December 28, 2016

Why I continue to Fund a 529 Plan My Daughters will Probably Not Need.

I loved everything about college except the cost. A price, that I didn't truly understand until  nearly two decades of monthly payments. A good chunk of those payments went to interest. To this date we're still paying my wife's college loans. I have to say as the years have passed college has felt more and more like indentured servitude.

This was the legacy I wanted for my children. So when my oldest daughter was born I vowed, that even though I didn't have much, I would start saving early and continuously. That I would up the amount whenever possible. It took me bout 8 months to recover from life after bringing home a child and finding the right place to save. I settled on the New York 529 Direct Plan through NYSaves based on its performance and low fees.

I started funding just $25 a month.  Every couple months I added $5-10 to my payment. Additionally when family sent my daughter money for her birthday, I deposited every dollar into the fund.  A couple months before my daughters third birthday I had close to 4k saved. It wasn't much, but given the budget I was on I was proud of the discipline it took to save that much.

Then I received some fantastic news. My mother just came into a large sum of money and she wanted to do something for my daughters. (Our youngest was just born). She was going to setup two 529s of her own with a significant enough of a lump sum that the girls wouldn't have to worry about college. For my mother this was a legacy for her to leave to her grandchildren. She is battling cancer and one of her biggest fears is that the girls won't remember her. It also is some relief for my wife and I that we won't have to worry about putting two children through school with our own retirement looming.

It was a fantastic gift. But it left me with a dilemma. What about the account I started? Do I continue to fund it?  I had a lot of other savings goals. There was retirement, a house, paying down my wife's student loan. And I was starting to look into dividend growth investing. I simply have a lot of buckets that I wanted to put money into and not enough money to take from.

After thinking long and hard I decided to drop the amount to $25 a month but to continue to fund my oldest daughters 529 plan. Here are the four reasons behind it.

1. What if the market doesn't do what it is supposed to do? If the market performs like it is supposed to over the next two decades my girls should be fine. But there are no guarantees. Since the money went in as a lump sum when the market was doing well, I feel it is a little more vulnerable to a single bad event.

2. Can't project the future: College costs are out of control. My mom put away more money than I could have imagined saving. But if prices continue to rise, there is a chance that they may even price out of her savings. Also if one of them get into an Ivy school or wanted to go to an expensive graduate program, they may need more than what has been put away from them. 

3.   The legacy: The great thing about a 529 is that it is transferable. So if my daughter didn't end up exceeding what my mother put away from them it could be used for grandchildren. The idea of potentially allowing money to grow tax free for a grandchild decades before they're born is beyond exciting.

4. Very little downside: Suppose my kids don't end up needing the money for school. The worst that would happen is that I give it to them and they have to pay regular taxes and a 10 percent penalty. If I let my girls take the money our during say their senior year, they will be in a very low tax bracket anyway. And the money will have tax free for decades. It would essentially be like my 403b plan only with low fees.

Tuesday, December 27, 2016

Recent Buy AMGN

Just bought 1 share of AMGN for 147.98.

Yield 2.7
P/E Ratio 14.9
Price Target 180
Payout Ratio 37.9 percent
5 Years Dividend Growth

Saturday, December 3, 2016

When to Have the Personal Finance Conversation with Your Spouse

My wife is my hero. In terms of salary, I wouldn't call her the breadwinner (we need both our incomes to live), but she brings home the bacon. She also commutes nearly 2 hours a day each way to do it. This in addition to taking my daughter to sacrificing sleep, weekends, to being a devoted wife and mom. Being exhausted has never stopped her from taking my oldest to Dance class, the park, or playing games in the house. She paid for my principal certification and is extremely supportive of my career. She has the fancy finance MBA and I'm the teacher.  But she is the one dodging the savings question while I am thinking about it non-stop.

I do understand her perspective. As long as both our kids are in daycare, she still has student loans, and we rent an expensive apartment, there isn't a lot more we can do. She comes home each day exhausted and doesn't want to spend time worrying about finances now. Truth be told, she doesn't spend frivolously. She's probably more frugal than I am in a lot of ways. I do believe we could be living in a smaller place right now. But if this along with a high quality daycare are our only real luxuries. When daycare and student loans are gone we should have an extra $2,500 per month. And that doesn't account for salary increases. We are both on a trajectory for more senior positions that pay more. We also both have parents that are in positions to help us and will. So the outlook is positive.

But what worries me is not having a holistic picture of where we are. I have an idea of our finances and I have some worries. I don't think we are saving enough collectively. But we also aren't in a position to right now.  Our situation is not dire but it made think about the fact that finances are among the leading causes of divorce for many couples. So it made me think about when to have the finance conversation with your spouse. For the record given our other stresses I'm okay putting off our discussion. But I was wondering under what circumstances the conversation is necessary.

1. You or Your Spouse is Doing Something Destructive: If you notice a change in spending habits this can signal a need to talk. Money leaving your joint account, an increase in credit card charges. Do you suspect a problem with such as gambling, shopping addiction, or drugs. Ben Franklin said a stitch in time saves nine. Better to discuss a small problem before it becomes more serious.

2. You Haven't Set Goals or Contingency Plans: What are your financial goals whether it is buying a house, to be in a position to support children, retirement, or what you'd do in the event one of you were unable to work. Do you have a will or life insurance? I've known many people that haven't taken these important steps.

3. A Lack of Financial Collaboration: My wife and I both have our own bank accounts in addition to our joint account. We also divide which bills we pay. This has many advantages. I love the independence of not having to discuss every small purchase. But it also leads to inefficiency. My wife carries small balances on her credit card for no reason. It's not a lot of money but why pay interest when you don't have too. I'll admit I've not been as focused at lowering the electric bill as I should because I'm not the one paying it.

4. Future Planning: I think it is really important to set short and long term goals and to make sure you are working towards them. Whether it is saving for a home, college, retirement, or simpler things like the next family vacation, car, or home improvement it helps to have a plan in place.

5. Debt Management: When I got engaged I had 39k in student loan debt and 19k in credit card and car debt. My wife entered a full time graduate program at NYU and had car debt. Today our only debt is some low interest student loans of my wife's and we have a modest savings. That wouldn't happened without a plan.  

November Dividends

November dividends are in and I'll gladly take it. I earned $3.71 This is my second best month ever. This is more than double what I did in August. I'm really excited for December dividends as it is  quarter month.

Here is the breakdown:

T: $2.88
KMI: $0.50
INN: 0.33

Friday, November 25, 2016

Visiting the Ghost of Investing Past

One of the things I'm most proud of is getting out of my terrible 403(b) plan. Two years ago I started a Roth IRA with Betterment and this past may I started getting involved in Dividend Growth Investing. I can't believe how liberating it has been to get away from the fee pit of the 403(b) plan and take control of my own financial future. However, from time to time I'm still haunted by the ghost of investing past.

I have $13,500 sitting in an account with high fees, (including a random $30 annual fee for having a balance of less than 25k.) The problem is I can't get the money out unless I change jobs and am lucky enough to land in a place where the 403(b) vendor isn't a provider. Unfortunately it seems this particular high fee mutual fund vendor is in a lot of places.

If I try and withdraw the money I get hit with regular taxes, plus 10 percent early withdrawal, plus surrender fees. But the alternative is to continue to pay high fees for decades which is also not desirable.

So the way I see it I have three options. Unless I change school districts to one that doesn't use the 403b vendor.

1. The nuclear option early withdrawal and all the penalties. But the money would then be mine and I'd be rid of the high fees going forward. (Not a good choice)
2. Wait out the surrender fees. I believe I have another 5 years. Take the tax hit and withdraw the funds.
3. Wait until I'm 59.5 or retirement and rollover the money then into an IRA.

So the question then becomes does letting the money grow tax free and avoiding 10 percent penalty worth it? If I leave the money where it is I pay a 1 percent fee. But then all the average funds my money is invested in also have fees. My guess is my total cost is between 2.5-3 percent. But that is just based on what I've heard most insurance companies charge. I don't exactly know, because the company doesn't make it obvious what each fund charges in fees.

Has anyone else been in a similar situation? I guess the positive is that I know they aren't getting any more of my money.

Wednesday, November 23, 2016

Tiny Recent Buy Unilever and Flower Foods.

It's hard to bargain hunt in this market. I've been thinking about Unilever for two weeks. The company comes up on almost all the blogs I've read. The Dividend has been growing forever. They have great products. The only negatives I've been hearing is the exchange rate may make the dividend lower than what it seems and that at 70 percent the payout ratio is creeping up. The positives are that the company itself is diversified. They've raised their dividend forever, and the valuation is near a 52 week low. With Flower Foods it was another chance to bring down the average cost per share. Overall it is another small buy aimed at adding yield.

Here is the purchase

2 Shares Unilever @ 39.10 per share.

1 Share of Flower Foods @15.64 per share.

Tuesday, November 1, 2016

October Dividends

I'm going to blame the new job, for being a little late in posting my October Dividends. In my new role as Dean of Students I've had to fill out more referrals in two days than I have in the last 10 years as a teacher. 

Now that I have a moment to breathe here are my October Dividends. 

TIF 1.35
GE 0.23

For a total of $1.58. Nothing to write home about but I'll take free money that I didn't have to work for. This is just the baseline. I can't wait to see where I'm at in 5 years. 

Friday, October 28, 2016

Big Moves for the Career and this Tiny Portfolio: This Week's Buys T, DIS, EMR

This week has been one of the most exciting weeks of my life. Aside from getting into college and being hired as a teacher, this may be my most significant career move. I took my first step towards becoming an educational leader. After 10 years as a middle school social studies teacher, I accepted a position in my school as the Dean of Students. I start on Halloween. This is an excellent opportunity for me to grow, and will prepare me for my ultimate goal of becoming a Principal. 

Gaining this position led to some unexpected money from my mom. She gave me a little bit of money. A portion of the money went to expenses. I'm on family leave so getting a paycheck,  (though I will get a decent reimbursement from the state.) And daycare for two starts on November 1 and has already been deducted from my account. The majority of money will be used to invest both in myself and dividends. There is an age old saying dress for the job you want not the job you have. Well both my new job and the one I'd home to get down the road require a wardrobe upgrade. I have been slowly doing this one outfit at a time. This weekend I plan on buying a second suit and couple of new professional shirts/ties and pants. 

But I wanted to make sure I also used a portion of the income to invest in my portfolio. So this week I made a few buys.  

On the 24th I bought another 2 shares of T at 36.93 per share. This continued my trend of buying the dip over the Time Warner Purchase. 

However, I realized I have been buying a lot of telecom as of late between T and FTR. I also realized that a lot of my recent buys have been high dividend stocks and I wanted to diversify and add some stability to my portfolio. 

On October 25th I bought a single share of Disney for $92.82. This might not seem like much. But for a portfolio under 2k that share alone is a significant percentage. For me this was a no brainer. The Dividend is low but there is a ton of room for growth as Disney currently has a P/E ratio of under 17. And without a doubt Disney will also ways be around. The company also is incredibly diversified owning ESPN, theme parks, movies, streaming etc. 

My largest buy of the week was EMR 5 shares@49.85 per share. This was another boring buy. The share price has been largely flat for the past 9 years and the dividend growth has slowed considerably lately. But at the end of the day it is a Dividend Aristocrat with a P/E ratio of 17.78 well below its competitors in the field. The yield is a very solid 3.79 and the payout ratio of 65.1 shows that the dividend isn't in any jeopardy. They have a 4 star rating from Morning Star.

Overall it was an exciting week. With this latest investment I can now revise my 2017 Goals and reach a little more. 

Thursday, October 20, 2016

The month of T... and beginning to watch CVS.

This is turning into the month of AT&T. I like the dividend and long term this is a stock I would like to be one of my core holdings. I was able to get another single share today for 38.83. The logic was simple. If I like T at $39 and change, I also like it at a cheaper price. One of the advantages of Robinhood is it allows me to breakup buys in this manner. I am aware that T is taking a larger percentage of my portfolio. But my portfolio is so small that is going to be the case for a lot of my holdings early on. I'm not too concerned with this now because I plan on building on my other holdings as well. I also really like the price point for CVS right now and may move on it in the next couple of months if it stays cheap. Also considering adding shares of KMI, WFC, and CMP.

Also Goal Number 2 for 2016 is accomplished. I just passed $1,500 for my portfolio.

Tuesday, October 18, 2016

Just bought another share of T

Nothing flashy here. I bought another share of T today at 39.21. I had $40 in my Wells Fargo Way to Save Account and decided to put it to work. This is probably my last buy until November when I start getting paid again.

In other news I updated my goals page to start looking towards 2017. I realized my dividend goal for 2016 was a little ambitious given that I was starting in May. So I put up a number that should be a lot more achievable for 2017. I'm really excited for what 2018 or 2019. My oldest will be done with daycare/private kindergarten (We haven't yet made a decision there), and that starts freeing up some money to invest.

Friday, October 14, 2016

Another small buy 1 share of Flower Foods

Almost not worth posting about. But bought a share of Flower Foods on Wednesday at $14.92. Things are tight while I'm on leave. But I'll take slow and steady.

Tuesday, October 4, 2016

Recent buys, One Goal Complete

I recently purchased two shares of T on Robinhood today. I originally was only going to purchase one share at $40.42. However, when I saw the price dip a little further I bought a second share are $40.11. I had wanted to own 5 shares of this Dividend Aristocrat by the end of 2016 and I think I got in at an okay price. I also added a single share of FTR at $4.04. I don't see myself adding more FTR in the near future. But the dividend is still solid for the time being, and the price was 20 percent cheaper than it was just a few months ago.

Updated: Bought a third share of T at $39.89. This is the nice part about using Robinhood. I dow wish I was more patient and got all three shares under $40.

Friday, September 30, 2016

September Dividends

What an exciting month of dividends for this small timer.  This month I earned $6.63 in dividends. This shatters my previous record of $1.63. I know my numbers are small. But I only have a little to invest for the time being. I'm excited by this result and happy to continue taking baby steps. I have a feeling I'm going to enjoy these quarter months going forward. Below is my dividend breakdown.

WFC .38
CMP 1.39
FLO 1.28
BAC .15
GM .76
PEP 1.51
FTR 1.16

Thursday, September 8, 2016

A Quiet September

This is the start of a quiet stretch for me. My family leave starts after next week and so do my paychecks. I did manage to purchase a single share of GM at 31.78. Essentially the company has a great dividend is profitable and the valuation is low at just over 4 times earnings. I do like these quarter months. I know it won't be much overall. But I will be shattering my record for dividends this month. I don't predict much more activity from me this month. Perhaps another small buy like this one.

Wednesday, August 31, 2016

August Dividends

My August Dividends are $1.63. A new record. I know the number is small. But there is only room to grow. I've only been at this since late May. I crossed the dollar mark.

INN: 0.27
KMI: 0.50
LAZ: 0.38
T: 0.48

Investing will be tight over the next two months and the near future. I take a 6 week family Leave in a few weeks. Then I go back to work, but will have two in daycare full time.

Tuesday, August 30, 2016

Shifting Focus

So I have been squeezing every dime the last couple of months to try and find more money to invest. I plan on continuing to do so. I'm not going not going to extremes and eating Ramen Noodles. But I have taken some steps to save money.

1. As a teacher on Summer break I waited on the haircut and didn't shave for most of the summer.

2. My Costco membership expires at the end of August. I'm loading up on items now so I can wait an extra six weeks to renew the membership.

3. Using my rewards card to pay all my bills. Then immediately paying off the balance to collect the rewards.

4. Cutting out flavored drinks in favor of water. Watering down my three-year-old's Apple Juice. This is a double win because I'm cutting down her sugar intake in the process.

5. Eating in a lot more.

However, I've been neglecting the most important thing. Job searching. I recently completed a Principal Certification. It cost 5 figures to complete it. I had stopped applying for jobs at the request of my wife. We just had our second child in June. Well the time has come to get back on that horse. No amount of savings is going to make up for the 30-40K per year raise I can get if I get one of those jobs. My resume is in great shape. I went into teaching 11 years ago with a plan to one day be an administrator. So while many people I'm competing with have padded their resume in the last two years, I have more than a decade of resume building. Hopefully this translates a new job and with it a greater savings.


Wednesday, August 17, 2016

Further Consolidation

After todays move I have nearly $1,300 dollars spread across across 13 stocks. For most people this would be a single buy of a stock or less. I can get away with spreading my buys out, because I'm using the fee free Robinhood App. However, I would like to consolidate my investments a little in the short term. 

This weeks casualty was Lazard LTD. Lazard is a solid stock. It's up over 22 percent since I bought it,  has a solid history of dividend growth and a little room left to run. But I simply couldn't see myself buying anymore of it. It is based in Bermuda which means an extra tax form. I already own Bank of America and Wells Fargo and feel like any more money I would invest in banking would go there. 

So I sold my share of Lazard and bought 2 more shares of Frontier Communications and another share of AT&T. FTR has a great dividend right now and is projected to grow. And T is a high-yielding aristocrat that I'm looking to slowly buy every chance I get. 

Friday, August 12, 2016

Buying the Flower Foods Dip

It has been a big week for buys for this small timer. Since adding to my stake in Tiffany and Co. I also decided to buy into the Flower Foods dip of the course of two days.

Overall I bought 5 shares at a cost of 15.89 per share over the two days of FLO.

I also added a share of Wells Fargo at 48.50 and one share of Frontier Communications at 4.84.

I'm hoping over the next couple of months to add to the stake in the 14 companies that I have. Especially the ones that have shown good Dividend Growth. Unless something really jumps out I don't see myself adding anything new in the near future. In fact there are a couple of stocks that haven't been real growth stocks that I may sell to consolidate further. Eventually I do want to diversify. But it doesn't seem to make too much sense to own 1 share of a lot of different things.

Tuesday, August 9, 2016

Sold Macy's and added to my 2 shares of TIF

Going to keep this reasonably short. I still think Macy's is a solid company despite the struggles in the consumer sector. But thought long and hard as to why I bought into it in the first place and it was largely the valuation. Yesterday I was able to bank an 11.46% return in less than a week.  I decided to put the money from this sale and add to my stake in Tiffany and Co.

The rationale was simple. Tiffany had a longer track record of dividend growth, a solid dividend and should be around for years to come. The valuation is great. It is a Morning Star Wide MOAT. Also I realized that I was using the free trading in Robinhood to spread myself a little thin. I don't own $300 in anything and was spread across 14 stocks. I do want to diversify, but right now am looking to increase my stake in the dividend growth stocks I already own.

I sold Macy's yesterday and wanted to sleep on my next buy. My plan this morning was to buy one share of TIF and then either a share of Wells Fargo or another share of TIF. I bought the first share of TIF for 63.44 and then decided to go for another share of TIF at 63.31. I still like WFC and may buy later in the month. But I already own two shares of Bank of America and a share or Lazard. I felt like I banking was already a significant part of my portfolio.

Friday, August 5, 2016

Teachers and Other Public Workers Beware of Your 403B Plan

I started working as a public school worker in New Jersey nearly 11 years ago. On my first day of orientation I sat in on a presentation from an insurance advisor and I was sold on a 403b plan. A plan I contributed to for more than a decade.  In a way this was good. It got me putting some money aside for my retirement. But if I had it to do over again I would run for the hills. Now a good chunk of money is stuck there for a very long time. 

This is not an attack on all 403b plans I'm sure there are some good ones. If you work for a company that is matching any of the funds, it's free money. It is also true that the money grows tax free, which is a huge plus. But this is a warning to do your research before starting a 403b plan or continue contributing to one that there are dangers. Here is a list of some of them

1. Your money is going to be with them for a while: Entering into a 403(b) arrangement is kind of like making a decision to have children with someone. You will be connected to them for life (or at least until you turn 59.5. ) Any attempt to withdraw funds early (before 59.5) are subject to normal taxes plus a 10 percent penalty. This is fine. What's not fine is the surrender fees. If you are unhappy with the performance of your 403b plan or the advisor fees, good luck. Some companies have surrender fees that last a decade and are as high as 8 percent. This means it could cost you up 8 of any contribution made in the last decade just to switch. Not all companies have surrender fees that are that high or long. But it is something you should know before entering a 403(b) plan. If you do decide to switch plans you may be better off leaving your money with them until you can avoid paying fees on them.  

2. Fees, Fees, and more Fees: School districts have to give their employees a choice of 403(b) vendors. However, most aren't spending time to research which ones are the cheapest. Especially when they have advisors from company's coming to them and marketing their plans.  Keep in mind most advisors are selling a set of cookie cutter options that they will revisit with you once a year. In most cases this means 1 percent of your investment goes to paying an advisor fee. In addition to that the funds you are investing in also have fees, typically higher than average fees, especially if you are investing in an annuity. In addition some companies charge additional fees below certain minimum balances. In many cases you may be better off starting a Roth IRA and investing in a low fee index fund. Your total fees may be .25 percent as opposed to paying fees over 2 percent. 

3. Limited Investment Options: 403(b) advisors can only offer the funds by their company. If an advisor is trying to sell you on their funds it may payoff to look them up on Morning Star and see what they're rated. It can help avoid paying higher than average fees, for a below average fund. 

4. The Guaranteed Interest Fund: One of the ways that advisors attempt to protect their clients against market volatility is to tell people to invest a portion of their income in a guaranteed interest account. I would be cautious about making this investment.  If the company was to offer a 3 percent guaranteed interest account. You are still paying an advisor fee on that money. Leaving money in a guaranteed interest account may be just keeping up with or losing to inflation. So in essence you are safely losing money over time. 

In closing I am a social studies teacher and not a financial advisor. Please make any decisions based on this post. In some cases the work plan may be a good option. I am simply trying to encourage people to do their own research before blindly signing up for the work plan. 

Wednesday, August 3, 2016

Recent Buy Macy's, Impulse Control, and Lessons Learned

So I realize that I'm being too impulsive with my buys. Today was just the worst example. I know enough not to react too much to the market short term and start selling. I can't say the same for buying. Macy's wasn't even on my radar. I was actually starting to screen utilities for more diversification and looking at which current positions, I might like to add to. Next thing I now I bought two shares. This was a wakeup call. From now on things will be different.

This started yesterday. I saw Macy's, Nordstrom and other consumer stocks took quite a dip. I remember being a little shocked that Macy's would fall so quickly. When I think of Macy's I think of the parade. They are so diversified, selling anything from shirts and suits, everyday clothing, perfume, makeup, jewelry, kitchen wear, bedding etc. That their price points attract large segments of the population and that they are excellent at e-commerce as well for those, that prefer to shop at home. But aside from that, they sell items that people buy in person. So when the stock dropped 7 percent yesterday I had to take a closer look. What I saw was a great P/E Ratio of around 10. A stock that had been trading at $70.12 in the last year valued in the low 30s. How much lower could it really go. The dividend yield was over 4. I get the falling price makes the yield seem high. However,  Macy's has 6 consecutive years of significant dividend increases.
When I was looking at the literature surrounding Macy's falling price, most what I was reading was mixed. That Macy's is losing market share to e-commerce companies like Amazon and that it might be a shift in how business could be done. Even so suits aren't going to be ordered solely online. People like to try on clothing. Surely Macy's has enough of brand and is large enough that it has the potential to reinvent itself. Maybe I'm naive, but I just don't see department stores disappearing overnight.

I decided to wait and see what happened when the markets opened this morning. I saw Macy's stock go down almost another four percent almost immediately. So on impulse I bought 2 shares for what I believed to be a great price of 31.40 per share. It seems others had the same idea I did. The stock ended the day at 33.43.

I honestly see two major problems with my buy. First I didn't even look for new information. I saw the price drop and I swooped in because I saw a good valuation and a decent recent dividend history.  The second problem was I wasn't even planning on buying anything. In hindsight I don't believe I made a terrible buy. But I don't think it was the steal I was thinking in the moment either. I really think it could go either way. The valuation does mitigate some of the risk. But overall I believe my decision making was both reckless and sloppy.

What I realize now is that I need to better formalize my criteria for screening and buying dividend stocks. That I also need to be more disciplined and measured about my buys. Investing with real money isn't a video game, and reacting the way I did today could in the end lose me money in the long run. This is part of the reason that I am grateful for the Robinhood App. I'm able to go through this learning curve at reasonably low stakes.

Disclaimer: This post is for entertainment purposes only. I'm not a financial advisor. I do not even play one on tv. Please do your own research before entering into any investment. 

Friday, July 29, 2016

July Dividends. (My first)

So here it is my first dividends as a dividend investor.

Disney $0.71
GE: 0.23
A total of $0.94

A very humble beginning. But we all have to start somewhere.

Latest Buy Tiffany & Co.

Buying on a budget isn't fun. But I had enough for one share of Tiffany & Co. (TIF) and I couldn't pass it up.

Here is what attracted me to this buy.

1.  It is greatly under valued. I bought in at 63.40 while Tiffany 52 week high is 96.43. So I got it at two thirds the price it was trading at earlier this year. This company has been around since 1897. I don't believe it is going anywhere. There will always be a need for diamonds and high end jewelry.

2. It seems that the major banks also see a lot of room for growth. Tiffany's currently has a 97% institutional own rate. The consensus price target is $74 per share. Seven banks currently have strong buy recommendations.

3. Tiffany's holds a solid 2.84 Dividend yield and a low P/E rate of 18.2.

Friday, July 22, 2016


Let me start by saying I'm no expert and anything posted on this blog should be for entertainment purposes only and not investment advice. I'm an 8th grade social studies teacher. Like many young professionals I got taken for a ride by an insurance advisor. I ended up a decent amount of retirement savings locked into a 403b account with average funds and high fees and surrender charges.

Since then I've learned my lesson and stopped putting my money in that fee pit. But to be honest I don't really have much place in the market right now. I have two beautiful daughters going to daycare, a house fund, 529 plans, and a Roth IRA through Betterment.

Under normal circumstances I couldn't even think of investing in individual stocks. The fees would eat away at any profits I could hope to make. However, the arrival of the Robinhood App has changed all of that.  I'm aware that Robinhood has a lot of negatives. You can't day trade, long term there are questions if the company can sustain itself, it lacks the standard features associated with most brokerage firms. But for my purposes it will do just fine.

I'm looking to make tiny investments each month into strong companies that offer dividends each month. I'm looking to learn a little about how to invest now when it's low stakes, so I can be a better investor in the future. There are no lofty goals of retiring early or living entirely off of dividends. My goals are much more modest. I would like to supplement my pension and social security to retire a little more comfortably.

July 1, 2016 Portfolio

As of July 1, 2016 here is my portfolio. Nothing too exciting to see here.

It is nice to be able to use the Robinhood App and be in the market with such a small amount of money. Given their trade restrictions I totally get why bigger investors want nothing to do with the App. But for a small time guy like myself Robinhood is the only way I could be in individual stocks at all. I'm hoping to continue to build slowly over time. I have been tracking my portfolio in Google Finance. I wish it had an option to show Dividend Yield to this screen but overall I'm happy with it.  Again if I'm able to stick with this. I think this post might be nice to look at 5, 10, or 20 years down the road.

Last Week's Purchase

Okay so my portfolio is a little over 800 dollars. So clearly anything posted by me is clearly for entertainment purposes and not investment advice. I'm just a social studies teacher trying to build some passive income. I normally wouldn't go near a stock trading so low. Frontier Communications trading at $5.17 is practically a penny stock. But for several reasons I started a small position (even by my small time standards) The fact that I'm paying zero brokerage fees on my Robinhood account allows me to do it. The reason I like $FTR is:

1. It has the interest of the big banks.
2. Has a huge dividend yield
3. It is dirt cheap.
4. Lots of growth potential.

There is a lot of momentum around this stock and it has a dividend yield of 8.1 percent. There is a consensus price target of $6 with Merrill Lynch posting a $9 price target. This is a relatively tiny stock that is 69% institutionally owned by the big banks. A look at their financials does show some signifiant concerns. The company doesn't produce enough income to cover its dividends. But they appear to have plenty of cashflow. They've just acquired billions assets that will assist them with their growth. The risk is that the telecom industry is highly competitive and they are going to have compete to keep their newly acquired customers. Overall I've tried to avoid risk. That's why in a portfolio as tiny as mine I own a share of Disney and a couple of shares of Pepsi. I'm still very new to stocks and maybe I will learn a lesson about these type of stocks with this buy. But given where the market is now with so many stocks trading so close to their all-time highs, I thought this stock was worth the risk on its dividend and growth potential.

Finding Money to Invest on a Budget

As a New Jersey teacher that is married with two children one of the biggest challenges I face in finding the money to invest. My salary is very much a middle class salary.  My expenses are high. I try to cut costs, but there are certain things I can't compromise.

1. House size

We live in a decent townhouse near a train station and a good commute away from my school. It is also a short distance from my mother who has had some health issues. We probably could downsize in order to save. Maybe we should. However, I the location is very important to me and the space matters to my wife. Especially since we have enough room to take in my mom if needed. Our rent is high and it takes a good chunk of our salaries.

2. DayCare -- Daycare has become like college tuition. But the people that are watching our children isn't something we are willing to compromise. Unfortunately we cannot get free care from our relatives full time. So unfortunately it often seems like a second mortgage payment.

3. Other Investments -- I'm not a financial expert. I don't even play one on TV. I am learning and starting to understand some of the basics. But I'm not by any means ready to take responsibility for my entire families portfolio. I'm just not there yet and may never be there. So my wife and I are hoping to soon own a house. The majority of these savings are being invested through Betterment. I also have a modest Roth IRA through Betterment that I'm using to supplement my income.

So where is my investment money coming from?

1. Monthly budget -- I have allocated $30 a month to deposit into Robinhood. That's not near enough. So I have done other things to add to the costs.

2. Revenue from past investments -- I have a small amount of money invested in Lending Club Notes. I have been taking the monthly revenue there of about $20 per month and investing it in Robinhood. This gives me a solid $50 per month.

3. Summer Break -- Being a teach has its advantages. Not driving to work during the summer saves me about a tank of gas per month. That's another $20 per month I can invest in Robinhood.

4. Eating cheap -- I'm at an age that I can't eat like a college student all the time. But nothing wrong with Peanut butter and jelly for one or two meals a week.

5. Grandparents -- The newborn baby has brought temporary 2-3 days of help from my mom and in-laws.They often bring food.  Not shopping for the whole week allows us to save money and prevent waste.

6. Being a stay-at-home dad has been a huge cost savings. For the summer. No mortgage payment. My wife also staggered her leave around my summer. I then will take a delayed family leave in mid-September through October. This allows us to skip September and October daycare costs. Though I will be getting paid at a lesser rate when I'm on leave it is still a huge cost savings. That said most of this savings is just going into our bank. Our monthly daycare is about to double and this will help us pay those costs for he rest of the year.

7. Summer shaving and haircuts. School being out for the summer means I can walk around with facial hair and delay haircuts by a few weeks. This isn't a huge savings but every dollar helps.

8. Mentoring and Class coverages -- As a teacher I often have a chance to make a little extra cash. New teachers need mentors. That is an extra 500 over the course of a year. and since it is unexpected it is investment money. On the flip side if we are short on substitute teachers I can give up a plan period to cover a class and make extra-cash. Again since this is found money, it can go right into the investment fund.

9. Free entertainment for my toddler. Instead of paying money I have a friend with a pool, I take my daughter to parks, I take advantage of free trips to Sesame Place gifted by my aunt. My mom is a retired elementary teacher and I let her shower my daughter with free gifts.

10. Dividends -- They aren't much now but I'm just starting out. The good news is everything I get can be reinvested.

Reasons to be optimistic. I'm scraping dollars just to get started but I have reason to be positive. In the next 5 years my family income will only increase. Daycare will be off the books, student loans will be paid, we will be home owners and no longer paying high cost of rent. There will be a lot more to invest and I will be a much smarter investor.

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