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Archive for September, 2006

A Dripping plan

September 28th, 2006 at 06:38 pm

Not the best title here, but who cares. OK, my last post brought up the question of what my DRIPs are. Instead of answering in the responses, I thought this deserved a lil post.

For some background ... there are different ways to look at investing, and getting the most bang for the buck. For the micro investor, its really hard to have a good plan. It turns out I have had a little plan in my mind, even if not really thought out. Maybe a week ago I read someone who was proposing that investing for yourself (preferably through DRIPs) would be the most cost effective for large cap companies, whereas mutual funds would be better for everything else (small cap, foreign, REITs, etc...) This is due to the cost of research and knowing what you are buying. For the little investor, it probably makes sense to stick with larger companies you know.

While I hadn't looked at it that way, that has been pretty much my strategy. I figure I can invest myself in the large companies, do it on the cheap, so even if my return isn't quite up to snuff, when you figure I don't pay any maintenance fees, I should come out ahead of most any large cap fund returns. I let my 457 plan get full of small cap growth funds, and international funds, and hope the managers know better than me what they are doing.

So, with that said, here is a high level view of what I have (Drip - Market Category):

Dominion Resources - An energy utility
Aqua America - A water utility
Disney - Entertainment
Home Depot - Durable Goods (I think)
Heinz - Food

Well thats the list, and they don't total $10k yet, so I'm no tycoon. I have been trying to diversify, looking for stocks with a good record of dividends in different market sectors. Its hard to do without tons of money.

Anyhow, banking is another area I wanted to start in, and Bank of America has good dividend rates, and most analysts are high on it right now. Some other companies (areas) I have wanted to get started in (at the right price) include Pfizer(pharmaceuticals), Johnson & Johnson (consumables?), Anheuser Busch (Food & Entertainment), Norfolk Southern or BNSF (Transportation).

One area you might notice isn't included is defense industry. That looks like a good area for now, but may falter down the road. But in any case, thats not why its missing. I have an old 401k from when I worked for a company bought out by a defense contractor, and their stock fund became a defense contractor stock fund. So it holds about $6k in their stock, and I am using it as a pseudo DRIP right now for defense stocks. Therefore I consider that area covered.

Some other notes here. J&J won't let you start a DRIP without already owning their stock (as well as Coke), so for now I have passed on trying to start DRIPs with them. Down the road... perhaps.

OK, any ideas here?

OK, I got some money, what next?

September 27th, 2006 at 07:44 pm

A while back I mentioned that I might be getting a small inheritance in the near future. Well my relation decided to give some of the money out while she was alive and I picked it up this weekend. It was a little more than I expected, but nothing huge. Still, its nothing to sneeze at.

So it leaves me with the question of what to do with it. Some plans competing in my mind have been:Fully fund a Roth IRA for this year - This is one I know I should do - but who should I set one up with?Buy some new DRIPs - Bank of America has been in my sights as a new one to startSet up new CDs - There is a new online bank (ELoan) that has 5.75% CDs available for one year. While its a good rate, the min requirement would swallow my whole windfall, and there would go my Roth IRA for 2006. They do have a savings rate of 5.50%, so maybe I can split the difference?Up my 457 retirement savings to the max for the year - I could do it, but that would mean my take home pay for the rest of the year would be some ridiculously small amountBuy a lightly used car - ok anyone believing that one should go to the back of the class

Right now I'm leaning towards the Roth / Online Savings split, with leftovers going toward setting up a new DRIP. At the moment there is a hold on the check until next week, so I have the weekend to decide. And sorry if it sounds like bragging, but this is the first windfall I have gotten since .... well ... forever.

Who says that recycling doesn't pay?

September 19th, 2006 at 12:29 pm

Today I took my recycling along with me on my way to work. Also took two small bags of garbage that were left by my renter (he moved out yesterday). I don't know what he was doing, but he filled up by himself two big bins just full of bottles, and they could barely hold them all. Doing this and not paying for garbage pickup saves me $30 a month.

Anyway, thats not what "paid" me today (although it is a help in the finances). The smaller of the two garbage bags I took seemed extra heavy, and I couldn't understand how it could weigh so much. It was a tied up grocery bag, and it looked like there were papers inside. So, I thought... "Why don't I open the bag and put the papers in with the recycling?". (See, I am a good person sometimes) At the next light I untied the bag and pulled out a number of apartment guides he had been using. Then I noticed a zip-loc bag at the bottom. I picked it out and it was full of coins! No wonder the bag was heavy.

Apparently he kept the coins in case he travelled toll roads or went through tunnels (He was going through Baltimore). This bag had coins, and not that many pennies either! At work I took the coins out and counted. It came up to $8.73 I'm not going to get rich with them, but hey, it was certainly worth the trouble.

So you never know. Recycling can come up with furniture for the house (see my last post), or even coins of the realm.

Yard sale find (sorta)

September 16th, 2006 at 07:05 pm

Went out today and everything was wet - it rained last night. Didn't find many yard sales, and all I got was some kids clothes, a child's winter jacket, and beanie babies (50 cent each). I think I spent $5 on everything.

... HOWEVER ...

As I drove down a side street I never go to (I did this time because of a YS sign), I passed a dresser left out for garbage (or for someone to pick up?). I decided to stop even though it looked big and I might not be able to take it even if I decided to try. Usually the things I check are awful, and don't bother with them. Well this one looked salvageable, and I could just barely fit it in my hatchback. After I got it home, and checked it more thoroughly, I found it was mostly solid wood (some plywood - no fibre board), no breaks at all (really built well), no water damage, all the hardware is there except a few knobs (I have plenty available in a can). Only a few scrapes and wear on the top. It looks to be a $250 - $350 dresser when new (4' wide by 3' high). After cleaning, & staining, it looks nicer than what I use now. I should be able to polyurethane it this week, and I think it will look close to new.

So this isn't a yard sale find, but it was during my rounds, and well... it sure beats paying a few hundred for it new.

Financial News & Notes

September 11th, 2006 at 05:59 pm

Hmmmm, spending the weekend out of town was tiring but worth it. Of course, what does this have to do with finance? Not much, except for tracking gas prices as I made a 200 mile round trip. I didn't quite know what to think. I found gas prices where I was staying about 25 cents less than at home (it was 2.79 when I left), so I filled up when I started back on Sunday. OK, that was only 4 gallons, but I thought it would be worth it. Ooops. As I travelled, the prices kept getting less and less. First 2.49, then 2 miles later 2.43. About 10 miles later I saw 2.39. Finally at the half way point (say 45 miles) I saw one station at 2.25. After that the numbers zoomed back up to hit 2.75 near my house. As I drive a 35 MPG hatchback, I'm not too concerned about getting the absolute lowest price, but wow, those numbers were all over the place. Next time I make that trip I will pay more attention to the prices on the way there.

Today I got my Shell gas card. Real low limit for purchases, not that I care. I just want to get that $40 back after 3 purchases. With prices dropping, the gas is going to be mucho cheaper.

(Warning: serious sarcasm ahead) And my last item (and only other item in the mail box) is an "offer" for a "smart banking package". FYI, this offer is from HSBC. Lets see, what all does it offer? Interest checking is highlighted. Of course to avoid monthly fees you need to have direct deposit, and have at least $3000 deposited. OK, not terrible, though not appealing. Sooo, reading the fine print, what is the current rate with the checking account? An APY of 0.15%. That's right, if I were to deposit, ummmm $10,000, I would be able to get $15 after one whole year!!!. I could get a whole half tank of gas! Who needs those silly 6% CDs when you can get rates like that? Then it mentions you can have free internet banking with Bill Pay. But in the fine print it states that this service is free to all HSBC customers. Well, that certainly makes this offer sound appealing. It comes with other things like home equity line, which according to their own numbers would cost from 8% to 10%. Be still my heart. Oh, and to top it off, it comes with a free debit card - truly stunning. LOL. Even the one thing that sorta sounds appealing - one free night for two at a Marriot hotel has a serious flaw. Reading the fine print shows that they will report the cost of the hotel room on an IRS form 1099. After you pay taxes based on the "no discount" rate, it will cost little less than getting the room at discount. Sheesh. Seriously, this might have been a decent offer 10 - 20 years ago, but come on guys, this is 2006. (On second thought, I wouldn't have been impressed 20 years ago either.)

The latest check has been deposited.

September 6th, 2006 at 07:06 pm

Warning: A bit of bragging here.

As the title says, the check has been deposited. What check? Oh right. That is, a check with cash from my credit card at 0% through my March 2008 statement (a balance transfer to another CC). A $6k amount I should be able to set up with a CD at 5.35%. Yumm, another $25+/mo. free cash.

My latest credit card endeavour is from Shell gas, where I am supposed to get $40 back if I make 3 fill ups in 2 months. If I only do the three purchases, that is $13 off a tank of gas. I normally do 3 tanks every 5 weeks, so no problem there. If I get this card (I'm waiting to hear from them), with prices of gas dropping, a fill-up for my hatchback is currently about $30, so I could fill up 3 times for a net of $17 each time. Yep, that sounds like a winner to me. Smile

Changes are a comin'

September 1st, 2006 at 05:05 pm

What is the saying? "Nothing is constant but change?" Something like that anyway.

While I wait for the hurricane to blow through, I get to consider what I am going to do starting next month. Why? Because my finances are going to be getting an extreme makeover. OK, that's a lil extreme, but there will be changes, and I need to consider what I am going to do, if anything.

What's up? Here is the list:
My renter (a room) is moving out by the end of September. There goes $475/mo.My earnings from 0% bank transfers should hit $180/mo. (3 months ago it was $0)I should be getting a raise of around $100/mo.My payments to my ex wife end in October. That will free up $1,000/mo.With the renter gone, the utilities will probably drop $25-$40/mo.

Ok, that looks like it for now. Overall its a positive (~$800/mo.), but having my renter leave will cut back on the gains I was hoping to start in November. I could get a new renter, and may very well do that, but I am not in the tight situation I was in when he moved in about 18 months ago. But if I am going to start dating again, would having the house to myself be better than having that extra $500/mo.? I dunno. Its no rush, but dang I got lots to think about this weekend.