Money Reasons

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Archive for March, 2011

Dividend Stocks, Free Lunch Experiment #9

March 21st, 2011

Lunch Experiment Update:

Dividend Experiment Update

I have finally paid off the loan to myself that I borrowed to buy the latest stock that I bought (CIM). This last repayment time to myself went really fast. In fact, it went so fast that I’m done borrowing money from my checking account to fund my stock purchases. From now on, I”m only going to use the money that I save, and perhaps money from the dividend checks received from the fund itself.

And Now on to the Analysis of My “Lunch Experiment” Investments:

First let me say that I”m excited to say that EVEP has doubled for me (woo hoo)! Unfortunately, it’s also the position I have the lowest initially investment in (boo). Ironically, stock appreciation isn’t what I’m really shooting for… not that I’m complaining! But the real game in this experiment is reoccurring dividend payouts.

Overall, the “Total Return” of my investments since investing in 2009 is up 19.31%. Note, this number is not per year, but simply the percentage gain of what was originally invested vs the current value. In case you are wondering, yes, I do follow the KISS principle.
The ”Cumulative Value” of my investments equal $6,548.90! This is money that would have went to the restaurant owner and to the waiter in tips. But now it’s sitting in my brokerage account earning me a dividend.
With a dividend of $14.88 a week, I can easily afford to go out twice a week with the guys at work. Especially if I buy cheaper meals such as soup. Believe it or not, soup at a decent restaurant actually tastes great!

Experiment Observations To Date:

This experiment will span 2 years. I’ve done much better than I anticipated! While my dividend stream is extremely high risk, the money involved is practically free money since I would have been spent on dinning out at lunch anyway! It’s also not diversified very well either! But this is an experiment, and the normal nature of such experiments come with certain levels of risk.

So with this particular experiment, I’m shifting gears into overdrive for a smoother ride until the end of the two years (2 years is the length that I initially defined as the duration of this experiment).

If you have read this experiment from the start, thanks for hanging with me, it’s been a great ride to date!

Do you have any questions about my experiment and more importantly, do you see the value in doing something similar?

-MR

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Posted in Experiment

Tags: dividend experiment Dividends buy my lunches! free lunch Lunch Experiment money saving experiment money savings

MR Cache 2011 March 20 – World Turmoil

March 20th, 2011

Weekly Thoughts:

On the global level, things still look pretty bad! The Japanese earthquake/tsunami was much worse than I imagined. Whereas I expected casualties of a few thousand, the number is really larger than 10,000. What a terrible loss of life! And that not taking into account the nuclear threat! While I don’t expect a total meltdown, it would be nice if the nuclear problems could get under control sooner than later… Here is wishing the best of luck getting it under control!!!

I just read online that the UN bombed some strategic locations in Libya. Mostly planes and airfields were destroyed I believe. Hopefully the Libya conflict will come to a close soon, people are suffering.

On a personal note, I’m going great. Most of the earlier conflict from the beginning of the year is now water under the bridge. My family seems to be going well, and everybody is healthy.

Spring is around the corner, and I’m going to welcome the season with open arms! I’ve got cabin fever and I’m ready to get out of the house for a while!

My Favorite Reads of the Week:

Momvesting: WAHM – Take It Up a Notch – I like this article, because I uses similar techniques to get myself out of a rut. If you are in a slump, check out her site, perhaps some of her methods can help you get out of your blahs…
First Gen American: Tour of Babci’s House- A central theme of Sandy’s blog is her mom Babci! Here Sandy take her readers for a tour of Babci’s house and discusses some of the interesting habits of Babci.
Budgeting in The Fun Stuff: St. Patrick’s Day – Make Your Own “Luck of the Irish”- Wow, this guest post from Kevin at thousandaire.com is very powerful and a great read! I’ve never heard of such a tactic that he used to get the job that he talks about in the article. Especially since he was rejected! Kevin must have a high degree of confidence! Kudos to him!
The Ultimate Juggle: Why I Love My Job III- Much like BIFS’s article above, this one was also a St. Paddy’s post. It’s a bit on the humorous side, and a very fun read. I wish my job were as fun as The Bloggette’s
Get Rich Slowly: Reader Story: How I Avoided Student Loans- This is BIFS’s guest post at one of the largest and arguable the best personal finance in the blogosphere. Congratulations Crystal!
Everyday Tips and Thoughts: Thoughts For Thursday: Cars, Driving, and Smoking! – I thought it was cool that Kris wrote this article right before she bought her new Ford Escape revealed in a later article. I agree with all of her thoughts as I usually do. Interesting read, and if you read her article, check out her newer car purchase article too!

Favorite Posts from MoneyReasons.com for the Recent Past:

Are Cigarettes Keeping You Poor Both in Wealth and Health!- This is a post about the incredible expensive habit of smoking these days! Perhaps it’s always been expensive, but with the sin taxes imposed on cigarettes, its way to expensive for my taste. I’d rather go on a fancy vacation with that money instead.
Why We Didn’t Buy The Most House We Could Afford – This article is really about making sure you are not in the pickle of being “House rich but cash poor“! But I also provide a reason why we didn’t want to be “House rich” and it kind of took over my post. The comments are very interesting… more along the lines of SAHMs vs Daycare, but still a good read.
How Many Millions Does It Take to Feel Rich?- What is your number where you would feel rich? over 40% of people who are millionaires say 7.5 million or higher. Personally, I think 2, 3 or 5 million would suite me just fine. Although, I’m starting to doubt 2 million after writing the article…
Uncrushed Aluminum Can Infestation – We started crushing aluminum cans as part of my son’s recycling experiment. I discuss a technique that speeds up the process for crushing the cans too.
How Rich People Think (Book Review) – I was pleasantly surprised as I read the book (How Rich People Think) by Steve Siebold. While the chapters are typically a page or a page and a half, the information it covered was amazing! It’s a great drive-thru, traffic jam, doctor’s waiting room read! I’m actually going to read it again (slowly), but keeping it in the car for all of the reasons listed above.
3 Videos On Investing, Including Warren Buffett’s Technique – As an investor, I found all three of the videos every entertaining! The Day Trader video was incredible. It was cool watching the Nasdaq Level 2 quotes flow on this screen. The Warren Buffett video was very interesting too. He is somewhat of a paradox these days. Amazing man!

Carnivals and Mentions This Past Week:

Skilled Investor.com, Carnival of Financial Planning – Edition #176 – March 18, 2011
Young and Thrifty: Yakezie Carnival Yakezies unite for Japan Edition

Closing Thoughts:

Now that spring is just around the corner, I hope to pick things up again and become more active. It seems like I’m in a constant state of learning lately! Oh, I just a translator link to translate my blog into a different language using google’s translate app.

We’re still hoping for the best for the world!

-MR

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Posted in Weekly Review

Tags: great pf articles personal finance articles Weekly Review

3 Videos On Investing, Including Warren Buffett’s Technique

March 19th, 2011

I decided to include these great videos on how the stock market works or how investors trade on the market.

I came across this incredible entertaining, but old video on how the stock market works. It’s a cartoon, but has a fun, warm feeling to it. It’s from the 1960s, and it’s very interesting to see how it was back then versus today. I think you’ll enjoy it, check it out:

Now as a contrast, consider the flow of this next video where a day trader has a good trading day. It’s amazing how fast the market moves now, what would have taken hours and perhaps days in the 60s is now performed almost instantly. That’s the power of technology used to make a liquid market!

And finally a video on the most successful investor of the present times, Warren Buffett! I think as you watch this, you’ll realize that liquidity, while important to Buffett, doesn’t really have a bearing on when he buys or sells.

Surprisingly, Mr Buffett seem more in line with the 60s video than that of the tech savvy day trader video!

Actually, it’s not that surprising since Warren Buffett doesn’t even use a computer to make trades. From what I read, Warren uses his computer mainly to play an online bridge card game.

In conclusion, I think for the best financial advice it probably would be best to find a few investing sources and experiment with them until you find one that works best for you.

I hope you enjoyed the three different but all interesting videos! I know I did!

-MR

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Posted in Investments

Tags: Day trading How the Stock Market works stock market video warren buffett warren buffett investing video warren buffett video Warren Buffett's way of buying stocks

How Rich People Think (Book Review)

March 18th, 2011

How Rich People Think

When I first received this book, I thought it was going to be another “This is Bill, he lives next door and he is rich and here is his story” kind of book (which I eat up, I love that kind of stuff). Boy, was I wrong… but in a surprisingly good way!

The book “How Rich People Think” by Steve Siebold, contrasts the thoughts of the middle class and the “world-class” (rich) groups. The author does this through many interviews with some of the richest people in the world. Let me quote two chapter headings from the book:

Middle class minimizes the importance of money with their kids… World class teaches their kids the importance of money

Middle class thinks about money in linear terms… World class thinks about money non-linear terms

Each of the two examples above has a page to a page and a half of material that expands on his thoughts. Those thoughts were very original and refreshing!

What I really loved about this book though was it is a perfect “quick read while waiting” book. So when you are in a dentist or doctors office this book is perfect for reading while waiting. The books was also practical for getting your oil changed, traffic jams, or in a drive though line, etc.

The thoughts the author writes are perfectly digestible in small chucks. I also enjoyed the famous quotes and the recommendations for other books to read for further information on each chapter.

So the question is, do I recommend this book? Yes, it has digestible and interesting material. Is it my utmost favorite book, no, but it is very good in its own right.

I guess I like the convenience of the style of the book. I wish more books were like it, just to add a little change of pace every now and then.

Have you read this book? and if so what was your take on it?

-MR

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Posted in Book Reviews

Tags: How the Rich Think middle class versus rich class thinking rich thoughts the way the rich think

Uncrushed Aluminum Can Infestation

March 17th, 2011

We have an Infestation of Uncrushed Aluminum Cans!

Aluminum Cans

It’s true, if you go into my garage, we have 2 full bags of uncrush cans that are practically spilling over! My wife is sick and tired of looking at all of THOSE CANS!

I can’t blame my wife for wanting them gone, but this winter has been so cold, snowy and overall soul zapping, that I just didn’t have the spirit to try to eradicate them.

That will all change tomorrow though, I’m going to RAID the infestation and exterminate those nasty uncrushed cans! You see, tomorrow the temperature is supposed to kiss at least the low 60s! So I’m going to drag my son out into the garage to dig into them.

He started crushing cans to make money as an experiment. In case you didn’t get a chance to read my article, it’s called, ”Is Recycling Aluminum Cans Worth Doing Anymore?“. In it, I examine if it’s really worth it to recycle cans.

Even though he likes the money and likes the environment impact that he is making, he still hates to crush the cans and does a sloppy job sometimes, but he’s only 10 years old. At first I didn’t understand why he did such a sloppy job, but after spending a few hours crushing cans the last time, I understand. It’s because it’s a hard process, especially for a light 10-year-old!

Since that last time I crushed the cans, I’ve learned how to optimize the process so that the cans could be crushed both more optimally and quickly.

MR’s Improved Crushing Process:

First I use the can crusher shown below
Next I’ve learned to slightly bent the can siding so that it’s just a very slight bend to it. Too much and the can buckles. When a can buckles, it bend and you get a bad crush since it just bends in half. By slightly bending the can, the act of crushing the can is at least 2 fold easier to do in the can crusher device! That’s because when it’s unbent, it has structural strength! But a slight dent on the can wall is it’s Achilles heel.
Crush the cans above ground level and drop the can in the bag that’s directly below the crusher and can. This makes it much nicer on your back.

Can Crusher

It’s good to find little tricks of the trade, and just a little bend on the can container makes a huge difference!

I’m looking forward to getting rid of the cans along with the bad weather!

-MR

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