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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. 

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