Thursday, January 31, 2019

Stock Investing Test Run....



After getting out of debt, building an emergency fund and taking advantage of tax-incentive investing (IRA/403b), I started looking at other investment options. Fidelity and Vanguard both make investing easy, with numerous low-fee accounts. After picking some high dividend paying index funds, I also decided to experiment with the stock market. After considerable research, I began investing in individual stocks which meet the following criteria:

·       Low debt ratios: After personally observing the positive impact that eliminating debt has had on me being able to start creating real wealth, I will only invest in companies that follow this same principle.
·       Good cash flow: This principle isn’t really possible without the previous one, as they go hand in hand, but I won’t invest in broke companies, even if they have no debt…
·       Low price to earnings ratio (P/E): I’m looking for companies trading at no more than 15 times their earnings to ensure the opportunity for growth, even though I’m really investing for…
·       High dividends: Let’s face it…another recession is coming, and likely sooner than later. However, dividend paying stocks pay out whether the company goes up in value or not, so if I can get 4+% in dividends from a stable company, I will.
·       Trading at a discount: I’m only buying companies trading at at least a 20% discount from its 52-week high. If all the other principles are met, this final requirement all but ensures a long-term profit.

A big reason for this test is that I plan on shifting the bulk of my retirement portfolio to dividend paying investments when I leave the workforce in a few years and what a better way to test the waters ahead of time….

I decided on the investment platform Robinhood for this test, as they do not charge any fees and are incredibly easy to work with to date, so….

This month, I invested in 3 different companies that met all of the principles listed above and have increased my portfolio by 11.75%. And to be honest, while the gains are nice to see, these investments are more about the dividends. More to follow in the months ahead as my test continues….

Sunday, January 27, 2019

Weekly Retrospective....



What I’m Reading:  Everyday Millionaires by Chris Hogan...

What I’m Listening ToBigger Pockets Money podcasts…

What I’m Working OnCertified Financial Planner (CFP) certification at UGA Terry College of Business….

Where I’m succeeding: Getting back to training after shoulder surgery ….

What I’m grateful for: Life ….

Quote that has me thinkingPlease believe that things are good with me, and even when they're not, they will be soon enough.Stephen Chbosky

What I’m excited about: The gourmet package I just bought from Findley's Butcher Shop

What I’ve been pondering: Our RAK group’s Habitat for Humanity build next weekend ….


Thursday, January 24, 2019

Life@Sea....



Ragnar (literally) chilling at work….

Sunday, January 20, 2019

Sorry....



To the handful of readers of this blog, I want to apologize for my original post from yesterday on my 2018 personal finance summary. I rushed and failed to proofread it before I posted, which is a cardinal sin of blogging, or writing in general. It was sloppy, and there is no excuse for shoddy work.

Going forward, I will do better. In the meantime, please message me with any suggestions for what you would like to see in 2019 and I will do my best to provide you with information on those topics. For now, some regular blog post topic goals of mine include the following:

·       Personal Finance
·       Gardening
·       Fitness
·       Diet
·       Life Quotes

2018 Personal Finance Update (updated - see follow-up post and reread) .....


2017 was the year of eliminating debt. 2018 was the year we began focusing on investing. At the beginning of last year I set some personal finance goals, including the following:

·       Establish emergency fund consisting of 6 months of living expenses (cash)
·       Live off 35%, save 50% and give away 15% of bring home pay
·       Look for real estate investment opportunities
·       Drastically increase retirement and non-retirement investments
·       Create additional income streams
·       Increase my earning potential
·       Read at least once personal finance book per month

2018 was a successful year. After building up our emergency fund in our credit union money market account, we started investing the majority of my wife’s paycheck into her 403b account. Next, we created a brokerage account with Fidelity, allowing us to take advantage of their low fees, and maxed out IRAs for both 2017 and 2018, choosing index funds that pay regular dividends. We then started investing in non-retirement accounts, using the same investment strategy. Additionally, we bought a minority stake in an investment partnership. After conducting some research, we found a high yield saving account (Synchrony) which paid more than 3X our credit union money market account (2.2%), where we transferred the bulk of our savings, along with purchasing several high yield CDs that pay significantly higher than average yields (this was done to offset volatility in the stock market). Finally, we began using cashback credit cards, generating more than $800 in returns for simply spending money were were already spending, without paying a penny of interest. I earned my Six Sigma Green Belt Certification and started looking into the C.F.P. program at UGA. Finally, I read 18 books this year, the majority related to finance, as I looked to improve my money acumen.

We ended up very close to our established spending goals of living off of 35% of our bring home income (we lived off of 34%), saving/investing 50% (we saved/invested 49%) and giving 15% (we gave away 17%).

Despite a bad year in the market (the Dow was down 6.3% and my personal investments were down more than 10% overall), we increased our net worth by more than 7% (7.3%), thanks mainly to employer retirement contributions and a high savings/investment rate of almost 50%. Overall, the breakdown of our net worth change was as follows:

·       Retirement Accounts: -0.1% (market losses were offset by personal/employer contributions)
·       Savings/Personal Investment Accounts: +349.5% 
·       Real Estate: +13.9% increase in value 

Compound interest is a great thing. In 2017, we increased our net worth by 28%, the majority of which was the result of paying off debt and excellent returns from the stock market. In 2018, despite a market drop, we increased our net worth by 7.3% thanks to a major increase in free cash flow.  However, our overall increase in net worth the past two years adds up to 37.4% thanks to the power of compounding.

I failed to invest in real estate in 2018 despite 2 opportunities which both fell through, likely due to my being too conservative and walking away when counter-offers did not meet my expectations. I will continue to look for potential cash-flow purchases, while avoiding taking too much risk in the coming year.

We look forward to 2019, including looking to increase our cash % of net worth to 7.5+% (currently at 5.9%), starting work on my C.F.P. (Certified Financial Planner) certification and continuing to increase returns from dividends, interest payments and cashback rewards. We will attempt to live on 33% of our bring home pay, while saving/investing 52% and giving away 15% and will also continue to read at least one book each month in an effort to increase investing knowledge.



Wednesday, January 9, 2019

Life@Sea...


Ragnar continuing to set the standard and challenging me to get back to work….



Sunday, January 6, 2019

2018 Book Review....



I’ve always read a lot. I believe it’s imperative to increasing knowledge and personal growth, as is self-reflection and tracking inputs and outputs so that you learn what does and doesn’t work on a personal level. However, too often, I finish reading and move on to the next book without giving any thought to what I’ve learned or how I can best use that information to evolve and add to my mental toolkit for the future. So, going forward, I’ve decided to start summarizing what I read and will share my 2018 reading list, with personal takeaways here:
1.      The Holy Bible - 66 Books by Various Authors (but breathed by God: 2 Timothy 3:16-17): What can I say here? All of the answers to life’s questions in one place.
2.     Legacy Journey by Dave Ramsey: I started this book the end of 2017 and finished this past January. Dave lays out guidelines for how to use your personal wealth to create a lasting legacy. Important lessons for me here were sharing with my children the importance of financial responsibility (avoiding unnecessary debt and starting to invest in their future early on to get the power of compound interest) and using my wealth to help others in a positive manner.
3.     Think and Grow Rich by Napoleon Hill: Hill spent years studying how people of his age became rich. What I learned from this book was the importance of having the right mindset, along with how goal-setting can help you achieve financial success.
4.     The Richest Man in Babylon by George S. Clason: Written almost 100 years ago, this book encompasses everything you need be to be successful in managing your money. If I could only pick one financial book to gift to folks, it would be this one. Way ahead of its time.
5.     Unshakeable by Tony Robbins: Tony really got me thinking outside the box about finances for the first time with his book. Minimizing taxes and fees were the main takeaways for me.
6.     The One Thing by Gary Keller: As the title preempts, this book highlights the power that comes from a singular focus on what is important and using tunnel vision to accomplish goals.
7.     The Millionaire Next Door by Thomas Stanley: Dr. Stanley’s studies share that millionaires rarely come the professions you would think, but from all income groups who live within/below their means, minimize debt, practice intentional focus and invest in their future instead of trying to keep up with the Joneses.  
8.     The 10 Pillars of Wealth by Alex Becker: This book shared the importance of building a business until it was self-supporting while keeping your main job. The most valuable information for me, personally, was how to properly scale a business.
9.     The Man Diet by Chad Howse: Chad has built an internet following focused on bringing back masculinity in a world that doesn’t appear to value the importance of real men. Primary takeaways for me were the values of a balanced diet and only eating when you are hungry.
10.  You Can Retire Sooner Than You Think by Wes Moss: While Wes covers a variety of topics on being a happy retiree, his approach to investing changed how I pick mutual funds/stocks, as I now only buy low-fee funds which pay dividends/income. I’ve also started looking into how I will spend my time once I walk away from the ‘normal’ workforce in a few years.
11.   Principles: Life And Work by Ray Dalio: A ton of powerful insights here on how to treat yourself and others to obtain maximum results in both work and life.
12.  The Old Man and The Sea by Ernest Hemingway: I’ve been a Hemingway fan for years.  His simple, yet profound writing style is one I wish to emulate. This book, read in a couple of hours sitting on the beach, really got me thinking about living a life that allows me to avoid regrets.
13.  Divided Investing Made Easy by Matthew Kratter: This book gave me a sound understanding of dividend/income stocks, along with some real examples of solid investments. I read this as a follow up to the Wes Moss book above.
14.  The Power of Broke by Daymond John: Written by ‘The People’s Shark,’ John’s book was essential in helping me start my nonprofit this year. Specifically, I am keeping overhead low, taking on no debt and controlling growth to ensure the business is sustainable and provides value to customers for as long as possible.
15.  The Lost Art of Discipline by Chad Howse: This young man continues to impress me with his ability to recognize what is required for individual success in a world that continues to promote interdependency.
16.  David and Goliath by Malcolm Gladwell: Another excellent book by Gladwell, who continues to push me to think outside the box. Great example of how the underdog can gain the upper hand by paying attention to detail and shifting the tide to her/his benefit.
17.  Financial Peace by Dave Ramsey: I picked this up in the ‘free’ basket at the local used book store. Great background story to what led Dave to building the empire he has that has helped 10s of millions to transform their financial future, along with a simple game plan anyone can follow to accomplish their monetary goals.
18.  Warren Buffet Speaks by Janet Lowe: Series of quotes that helps any investor understand the mindset of the ‘Oracle of Omaha,’ the greatest investor of all-time.
19.  Rodney M. Davis: The Making of a Hero by John Hollis: I’ve become personal friends with the author of this true story of a man amongst men, leading to a scholarship in Davis’ memory via my nonprofit. A reminder that legacy is what you do, not what you say.
20. Think Like A Freak by Steven Levitt and Stephen Dubner: This follow-up to Freakonomics and Super Freakonomics provided the punchline for me: people respond to incentives, and to get what you want, understand those incentives.

Friday, January 4, 2019

2017/2018 Budget Compare....



As the handful of you who follow this blog know, we spent the majority of 2017 getting out of debt, which freed up more income in 2018 to give away and invest. As I have a more detailed post coming later, I wanted to focus on some specifics here:

We saved/invested 48.8% of our bring-home pay in 2018 versus 17% in 2017 when the first 10 months of the year was all about getting the whips off our backs. We maxed out IRAs for my wife for 2017/2018 and started investing heavily into her 403b plan as well. The rest of our investments were put into building up our emergency fund (a high yield account with Synchrony), a low-fee brokerage account with Fidelity and a minority stake in a new investment partnership. With more than 36% of our bring home pay going towards debt in 2017, you can see the difference getting out of debt can have in advancing your future.

We gave away 17.2% of our bring home pay in 2018 versus 13% in 2017. Sadly, we only gave away around 5% prior to 2017. And not to beat a dead horse but getting out of debt allowed us to contribute significantly more to the needs of others. Some of this went to creating a nonprofit.

The one constant the past two years was how much of our bring home pay that we lived on: 34%. The largest changes in this category were (increasing): medical (shoulder surgery), housing (new living room furniture), lifestyle (2 nice vacations), and; (decreasing): food (better budgeting) and insurance (thank you, Clark Howard)…

Again, a more detailed post coming soon….Happy New Year! Best of luck to all!!!!