Yearly Archives: 2011

A Different Approach to Giving – Personal Charity

by

My Personal Charity

Money Gift

 

As Christmas grows near, many times (including this year) I don’t have an extra $1000 or even $100 to give to charity.  At this point in my life I don’t have enough  or make enough to give that hard-earned money away, especially after buying presents for others.  Still, I would like to help people in need out, especially near Christmas…  I could give to the Salvation Army (and actually I do), but I’ve been thinking that I would rather do something on a more personal level, and since I like dividends, I thought why not invest my money in some dividend stocks and use the dividend for charity!

Charity Funded By Stock Dividends

Using dividend stocks to fund charities could also serve as an unofficial emergency fund in case of a downturn in the economy or something horrible happen to me like the possibility that I would lose my job.  While it might not be a lot of money, every bit helps!

The best thing about giving money to a Charity (or Charities) with the dividend payments from dividend stocks is if the stock has a consistent history of increasing dividend payment, each year the payout from the dividend (minus the tax consequence) would increase!  So each year the payout would become more and more, not to mention that you buy more shares of the stock every year too!

Starting A Personal Charity, A Small Beginning

Okay, now let’s look at the details…  Let’s say that you were able to save $1,000 per year for the “Dividend Stocks for Charity” fund.  So is the dividend payout came to 4%, that would be $40 for the first year (I’m skipping the taxes here because the amount is so low).  There isn’t too much you can really do with $40, except:

  • Give the $40 to a few (or one) favorite servers (waitress, or similar) that you know that always makes you enjoy your time at the location they are working at!
  • Drop the money in a Salvation Army Bucket…
  • Anonymously mail some deserving child (or family) that is always nice but may be having trouble financially.  Perhaps address the mailed gift from Santa, or “A Friend That Knows the Good You Do”, or something similar…
  • The Salvation Army’s kettle is always a good option for charity, if you are too busy.
  • Perhaps there is a community project that is accepting donations, or a specialized community group that would benefit…
  • Or you could go out and buy toys for the “Toys for Tots” program.

The thing is that you can do anything your want with the money!  You wouldn’t be restricted to just organized charities!  In fact 100% of your personal Charity fund could go directly to the cause that you want to give it too.  With large business charities, a lot of the money goes to support the running of the business of the Charity.  Sometimes more than half the money you would contribute wouldn’t even make it to the cause that needs the charity.

A Personal Charity just Feels Better!

For me personally, I prefer to have feedback and accountability for the money that I give away to charity!  With my own personal charity, I’m able to see the results of the money that I gave away.  If I decided to buy a child a bike, I can roll the bike to the doorstep where the child lives, that way I know the child received the gift, and I might even be able to see such a child riding that bike someday.  I’m sure that would be an awesome feeling!

Of course we would still contribute the our regular “business organized” charities also…

Here’s wishing you the best of holidays this year!

MR

Dividends Paying Expenses – My Thoughts

by

A friend at work asked why am I working so hard to saving dividends to pay for my lunch expenses.

Cross-over point to the positive

He was actually referencing the fact that I don’t go out as much because of my experiment called: Lunch Dividend Experiment.  He thought it was a risky move because what happens if the stock stops paying dividends or goes belly up and I lose my entire investment in that company.

Well, my friend is only seeing part of the equation.  The part he forgot about was that if I paid for expenses with my earned income, my money is gone after I pay for the expense.  However, with stocks that pay dividends, I have the opportunity to keep my initial investment, only spending the dividend portion.  It’s true that such stocks won’t increase in value as fast that way, but the idea is someday that I will increase my investment in that stock too, once the dividend payout is more than what is required to pay for the expense and taxes.

At the very least, I’m not spending my earned income, never to see that money again!

That said, I won’t be able to use dividends to pay my mortgage (if I still had one), but everything else is fair game!

Almost all of my dividends are overloaded in purpose.  By this I mean that I’ll use my dividends for a want, but if something happens, I’ll switch it to cover a need. For example, I’m working on building up my dividend payouts so that they can cover future vacations, or at least help pay for vacations, but if some disaster happens like I’m unemployed, that dividend stream will go to other more important things such as food or paying my real estate taxes.

That the beauty of dividend goals!  Just because they are ideally focused on one goal, doesn’t mean that they can’t be switch to a new high priority goal if the need arises.

Bests,

MR

Too Error Is To Learn

by

Always try to learn from your errors!

I was watching Morning Express with Robin Meade, when a new clip came on about a man that shot mistletoe out of a tree in a parking lot.  Obviously he was arrested.  When they went on to interview him, apparently this had happened before when he shot mistletoe out of his neighbor’s tree the previous year.

Personally, if I were to get arrested for shooting mistletoe out of my neighbor’s tree, I certainly wouldn’t take my shotgun to a parking lot and try to shoot the mistletoe out of the tree in a public location!  When they showed the man talking on TV, it was pretty obvious that he wasn’t the most clever individual.

All of this leads up to the fact that if you error, you must learn from the experience or else you will continually lose and never get ahead personally or financially.  Most of us can’t play a perfect game in life and the stock market, even the investing legend Warren Buffett hasn’t played a perfect game!

I remember the first stock that I bought that went bust (or belly up)!  It’s was a small Canadian company call “New York Seltzer”, and while the company was questionable since part of their name was New York (even though they were based in Canada), their product was great!  So as a young teen with big dreams, I plopped down an even $200 in a company that I thought would expand and grow like crazy.  I was very, very wrong.

From my “New York” seltzer experience, I learned at a young age that sometimes having a great product isn’t enough.  Those that run the company are critical, and if you don’t have an “A+ team” running the company, then even with a great product, you can still lose!  Later, there was a company called SyQuest that also made a superior product (at the time) called Sparq drives.  I bought their product and loved it and considered buying stock in the company.  But then I looked at how it was run and the way they advertised their product and I decided not to take the leap!  This turned out to be a good move.

The point is that we all make mistakes, it’s part of being human, and life would be pretty dull if everybody was perfect.  But continually making the same or similar mistake is something to be avoided!  The man mentioned above should have learned from his mistakes last year, and if you aren’t sure about something, then Google it.  While Google doesn’t guarantee that the answer is correct, most of the time it will be if you read a few articles.

When you make an big mistake, think about and learn what happened and take corrective actions so it doesn’t happen again.

What do you do when you make mistakes?

MR

P.S. I know my title looks weird, but “Too Error” is actually a play on words, the real words phrase is “To Err”, but I thought it would be funny to error on the title (lol)…

Controlling Christmas Costs

by

How I Controlled Christmas Costs in the Past

Christmas Presents

Christmas Presents

I’m constantly looking out for value in Christmas Gifts.  For example, my wife is a big book enthusiast, so whenever I see certain authors in the Bargain Bins, I snatch them up!  Some of her favorite authors are Stephen King, Grisham, Ken Follet and others…

Sometimes, I would cheat by going to a used book store and look for volumes that are in pristine condition.  I once bought a hardback book for $1 at one thrift shop.  After examining the book for any obvious marks or dog-eared pages, I bought it.  I wrapped up my used-but-new-looking Christmas Present, and gave it to my wife and she was none the wiser.  Later I told her what I did, and she was honestly impressed (or understood that we didn’t have much money back then).

Now I often buy first editions of her favorite authors on eBay.  They are not $1, but we now have a bit more money to spend on such things.  The shipping on such purchases is very reasonable, and currently (although this may change soon) there is no sales tax on item bought online (and in particular eBay) unless the buy and seller is in the same state (at least that’s the way it is in my state).

As a bachelor, I often got by at Christmas with only spending $100 on Christmas presents.  And of that $100, fifty of it was for my younger sister as a big surprise (back then the money meant more to her than it does now).  I use to get various size boxes and put the money in the boxes hidden so she had to search for it, or fight to get it out of the package.  It was a fun time and something that we both looked forward to, but now since she’s an adult, that has fell by the wayside.

How I control Christmas Costs now

Now my methods are simplified!  All I do is create a budget of how much I’m going to spend, and then try to stick to it.  If we go over, then I try to make up for it by reducing my cost for other things over the following months until I hit my initial budget numbers.  Unfortunately this happens a lot of the time…

We usually spend a bit over $1,000 now, but a lot of that reason is because we have kids!  Kids grow up quickly, and Christmas is like magic for them, so we try to make the best of it.

How I would like to Control Christmas Costs in the Future

This might not be a surprise to my regular readers, but I would like to have money invested in dividend stocks or bonds that would provide dividends or interest money at certain intervals.  This would be my Christmas Dividend Fund and I would use that money for Christmas present purchases.  Sometimes I wonder if I should have called this blog moneyreasonsfordividends.com (lol).

I’ve had the dream of a Christmas Fund that would pay for my Christmas gift purchases, even since I was in college.  I need to start this now instead of later if I ever expect to have such a thing.

Control your cost today to enable you to have more elaborate Christmas experiences and gifts in the future!
MR