Tag Archives: dividend experiment

Dividend Stocks, Free Lunch Experiment #9

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Lunch Experiment Update:

Dividend Experiment Cafe

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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Paying An Adult Allowance, A Lunch Experminent

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I’ve decided to pay myself an experimental Adult Allowance!

Currently, as I mentioned in a previous post, I pay my kids an allowance.  A few months ago, joking around, I told my son I was going to start to pay myself an allowance too.  That got me thinking about potential savings from my lunch expense.   In the end, my joke was exactly what I decided to do!

Let me provide my previous background:

Prior to starting my “Paying myself an allowance” experiment, I was spending about an average of $12 on breakfast and lunch per day, for a total of $60 a week.  That’s almost $250 a month!!!  I like going out with friends for lunch, but I don’t like paying that kind of money.

So, I decided to pack breakfast and lunch 4 times a week; enabling me to save at least $40 a week.  This is effectively money that I would have spent by going out to eat with friends, so basically it’s free money for me.  If it wasn’t for this experiment, I would still be spending that money on lunches out at work today!!!

Yeah, the math doesn’t work out perfectly, I left a buffer for special situations that don’t occur regularly, like Co-worker birthdays, cost of packed food, etc…

So you might be wondering how I’m spending on my new revised lunch budget?…

drum roll….: 70 cents a day, $3.50 a week, $14.80 a month.

I’ve  been able to accomplish this by eating instant oatmeal for breakfast, and 2 eggs with ramen noodles (or a small bag of peanuts) for lunch.  The people I use to eat out with looked at me eating my lunch a little oddly at first, but they got use to it.  Plus, I still go out with them once a week, so I’m not a total lunch recluse.

The idea is to save that money in dividend yielding stocks, bond or money markets, then after 2 year, to start using the interest earned off of the investment for other things… maybe even an additional lunch out every other week.

Ideally, after my experiment is over, I’ll be so use to eating out only once a week, that I’ll probably just stick to it.

-MR

UPDATE:  This idea has been implemented as a Lunch Experiment as I describe above!  Read about my “Lunch Experiment” here!