Wednesday, July 31, 2013

Something to do in your first year of early retirement that will continue to pay "dividends"

I've been thinking a lot about early retirement lately mainly due to the great time that I've had on my days off. It's worked out to where I've been off more the last 1.5 months than usual which has been absolutely awesome and led to some great time with family at the beach and my wife on our several outings.  I love the summer months since she's a teacher and is off, so whenever I get a chance to be home it's wonderful to get to spend the whole day with her.  There's nothing that I want more than to have all of my time to spend with my wife, family, and our future kids.

Saturday, July 27, 2013

Weekly Roundup - July 27, 2013

This past week was great.  Everything went smooth with work at least as far as my end.  We almost set a record for drilling a well but missed it because the motor ended up breaking so we had to come out of the hole to change that out.  Overall it was still a great well and despite the extra time coming out of the hole for the motor we still beat the previous well we drilled by a day.  This ended up being a 8.6 day well.  I like having really fast wells but stacking them back to back like this is going to set some high expectations.  Whenever we drill a well a normal speed they're probably going to be wondering, WTF?  But the best part about this week is that I get to go home again for a few days and go spend time with my wife.  There's a drive-in theater that's relatively close to us and we're going to see about heading over there this weekend.  I love that drive-in because even after buying food/drink and tickets it still only works out to a little bit over the price of just seeing one movie in the theater, and we get double features.

Friday, July 26, 2013

Recent Buy

Well I wasn't planning on doing much to the portfolio other than selling off more shares of HAL, my employer's stock.  General Electric reported a great quarter with a huge list of back-orders and I'm not really sure how I've never picked up any shares.  It's not a steal of a price but the potential for both capital appreciation and dividend growth is there.  Management has stated they are targeting dividend growth that matches earnings growth, which if you believe management and analysts that should be around 10% for the next five years.  I'm hoping for the markets to pullback some other the next few weeks so I can average down my cost basis for the new GE position.

4 Tips for debt relief to lead you towards financial independence

The following is a guest post by Billy Patterson.

Financial independence is something that everyone dreams of. It’s neither too strenuous nor too easy to achieve. However, it’s possible to relish the benefits of financial freedom by managing your debts and other financial obligations cautiously.

Some valuable tips to achieve financial independence

Financial problems are not unique at all. Quite obviously you can’t expect your problems to disappear in a day. It’ll take time for you to achieve a financially stable life. You need to follow the right tips rigorously until you succeed in your endeavours. Following are the tips that may help you in achieving a debt free and financially successful life. Have a look:
  1. Careful expenditures is what you should follow: Impulsive expenditures are perhaps the biggest hurdle in the way towards financial independence. So, you must work to overcome that hurdle first. Plan your expenses according to your affordability. Learn to compromise a bit with the level of your lifestyle. Formulate a strict budget plan and spend within your limits. In this way you’ll never have to worry about huge shopping bills. You’ll be able to pay off your bills on time. The chances of debt accumulation will reduce. You’ll get to save also to pay off your due debts.
  1. Don’t fall for attractive offers on credit cards: Every now and then, credit card companies come up with lucrative offers to allure customers. Think twice before falling for any offer. There is no point in using your credit cards just for collecting some reward points or to get certain offers. This will increase the amount of your bills too. So, be very careful and stay away from unreasonable credit card offers.
  1. Take care of your debts: Apart from managing your expenses, you must also take care of your debts. Neglecting debts is a habit that most people have. This can be really disastrous for your financial health. That’s why it’s always better to take care of your debts on time. If you aren’t that much confident about the whole process, then get professional help for better debt elimination. Make it a point to pay off the regular installments of your due debts every month. In this way you’ll be able to reduce your debts gradually.
  1. Never ignore paying off bills: Unpaid bills only aggravate your debt problems. So, piling up unpaid bills is definitely not great idea. Be a bit more responsible and pay off your due bills as soon as possible. This will reduce your burden in a big way and you’ll be able to relish financial freedom at its best.
As you can see, it’s not that difficult actually to get debt relief and achieve financial independence. All you need is to be more responsible towards the way you use your income and savings. Apart from savings, work hard to increase your income too. Get some part time job or ask your family members to share the responsibilities. If you’re confused about how to start with the whole process, then you may contact some financial advisor. The advisor will surely suggest you the right way.

Wednesday, July 24, 2013

2013 Goals - 1st Half Update

I can't believe the 1st half of the year is already over with.  Or July for that matter.  It seems like July 4th was just yesterday but the end of the month is almost near.  Now that the 1st half is done, it's time to look back and see where I'm at on the goals that I set back in January.

2013 Budgeting Goals - 1st Half Results
Goal 2013 Amounts Status
80% take-home pay savings rate 82.55% average savings (Jan 85.35%, Feb 82.23%, Mar 84.41%, Apr 84.18%, May 81.40%, June 77.71%) Exceeded Goal
Less than $1,400 required expenses $1,387.13 average (Jan $1,304.19, Feb $1,500.33, Mar $1,314.30, Apr $1,361.56, May $1,399.65, Jun $1,442.76) Exceeded Goal
Reduce Misc. Expenses by 15% (Exp. < $96.51 per mo) $118.42 Needs Improvement
Reduce Restaurant Expenses by 10% (Exp. < $128.31 per mo) $109.77 Exceeded Goal
Reduce Grocery Expenses by 5% (Exp. < $205.64 per mo) $195.57 Exceeded Goal

Monday, July 22, 2013

Expiration Friday

The third Friday of July came and went meaning it's option expiration time.  Three different options expired on Friday with my 2 call options on Halliburton (HAL) being in the money and my put option on Clorox (CLX) expiring out of the money.  So I had to sell 200 shares of HAL but got to keep the full option premium on CLX as profit.

Saturday, July 20, 2013

Weekly Roundup - July 20, 2013

Just a quick roundup this week because work has been taking up too much of my time.  I can't wait to put an end to that, although that's still a few years away.  This past week was pretty good, we finished drilling one section of the whole and then we picked up tools early this morning.  Now hopefully it goes as smooth as the last well from here on out.  We didn't set a record on the last one but it was still a really good well.

Friday, July 19, 2013

Recent Sells

Well I've been active this past week in trying to unload some shares of Halliburton (HAL) which is my employer.  I purchased the shares through the employee stock purchase plan and I believe that if one is offered at your employer and you get a sizable discount you should participate if possible.  Just don't go overboard and allocate too much capital to your employer's shares because they're also your source of income.  And if hard times fall on the company you could be left with no job and investments that are dropping like a rock.  If my wife and I weren't planning on purchasing our first home together during the second half of the year, I'd be a bit more strategic with unloading the shares by selling call options.  But I'm not blessed with the luxury of time right now and the 2 sales represented solid gains.

Wednesday, July 17, 2013

Payback period

One of the stats I like to keep track of with my FI Portfolio is the payback period.  Essentially the payback period is how long it would take an investment to return the original cost of the investment.  In other words if you bought a business for $100k and it returned $20k in profits directly to you each year that would be a $100k / $20k = 5 year payback period.  Now of course this isn't taking inflation and the time value of money into account but it's a good general overview.

Monday, July 15, 2013

ESPP Taxation

Last week I sold 67 shares of Halliburton (HAL) that I had purchased through the employee stock purchase plan (ESPP).  While purchasing shares through an ESPP can be risky due to having both investments and your income tied to the health and growth of your employer, I feel that it's a risk worth taking if you are given a discount on the purchase price.  Most plans do allow for a discount and luckily mine is at the maximum of 15%.  The discount is just too much for me to justify passing it up.  Plus my plan has no stipulation on when I can sell the shares, although your mileage may vary.

Sunday, July 14, 2013

Weekly Roundup - July 14, 2013

Well my first attempt at the roundup for this week went horribly wrong.  I had finished and scheduled it for yesterday morning and then wanted to add one more thing to it and changed my mind.  Needless to say I didn't save it again and then it got deleted.  Note to everyone else, save.

It was a pretty good week and everything went smoothly at work until we had finished drilling.  Then it was issue after issue and it took us forever to get my tool back topside.  30+ hours for something that should have been around 20.  So that pushed my return trip home back until yesterday and I didn't get home until early afternoon.  Oh well, I'm still away from the rig and back home for a few days.

I was expecting for July and the next few months to be pretty light as far as my portfolio goes but best laid plans right?  I ended up selling off some shares of HAL and closing out 2 open put options because I felt a bit over-leveraged, especially since capital will be lower the second half since my wife and I are needing to finish up saving for a downpayment.  I wanted to be able to pick and choose my spots a bit more since capital will be lower so I decided to close out some of the options.  In other investing news, my dividend income increased this past week with a 14.5% increase from Walgreens, a 25% increase from Cummins, and a 4.5% increase from ConocoPhillips.  I love dividend increase announcements.  You want to give me more money because your company is doing better?  Sure thing boss.

Friday, July 12, 2013

Recent Sell and Option Transaction

Well the markets were on a tear to start the week off and it allowed me to capitalize on some opportunities.  I was expecting for July to be kind of slow for my portfolio since my capital will be a bit lower since my wife and I are starting to look at buying houses and possibly purchase later this year.  On Monday I was able to close out my put option on Lorillard (LO) and while I didn't really want to close it out because I felt I was leaving some profit on the table; I also felt that I was a bit over-leveraged after all of my purchases in June left me with less capital to cover potential option executions.  Especially with my Clorox (CLX) put in the money.  Of course now it's not so I probably didn't need to close the Lorillard put.

Wednesday, July 10, 2013

Net Worth Update - June 2013

With talks of the Federal Reserve ending QE Infinity and interest rates rising, the markets went on a pretty wild ride in June.  The S&P 500 dipped about 5% over a short time and then recovered just as quickly.  I'm hoping for more and more gyrations in the market despite the negative short term effects on my portfolio and in turn my net worth.  I was actually surprised by my net worth calculation and figured I had to have a formula that somehow got messed up.  I haven't found anything yet, but the much lower increase for June surprised me.  The change in value was due to $825 in combined 401k contributions, $600 in ESPP withholding, over $5,200 in savings from my take-home pay, and then of course dividends, interest and market fluctuation.

Tuesday, July 9, 2013

Recent Option Transaction

Yesterday Lorillard (LO) traded 2% higher early in the day and that provided a good opportunity to close out the put option that I had sold.  I love when I get opportunities to close out puts early for a solid profit.  I had originally sold to open a put option back on May 1st and received $177.26 in option premium after commission and fees.  Lorillard has risen although slowly so I haven't had a really good chance to close out the position until this morning.

Monday, July 8, 2013

Income Update - June 2013

When it comes to succeeding in personal finance a good offense is great but I'm a firm believer in playing good defense in the form of limiting expenses.  By having your expenses in check it allows you to turn more of the increased income from better offense into capital that you can invest.  This is why I like to keep track of all of my expenses and post them live on the blog to help keep myself accountable and hopefully provide some inspiration to my readers.  Overall it was a great month despite some higher expenses.  Most of the increase was due to much higher then normal gas expenses for my car.  But when you have a 700 mile drive back home, 600 miles roundtrip for another job and then another 280 to another job the gas expenses tend to creep up.

Saturday, July 6, 2013

Weekly Roundup - July 6, 2013

The first roundup of the 2nd half of the year.  I still can't believe that 2013 is over halfway over.  This past week was pretty good.  It was relatively easy at work with pretty much 3 days of doing nothing.  Unfortunately that meant staying at the rig instead of being at the house.  Luckily last weekend my wife was able to drive over to San Antonio while I was free from work and we got to spend a good weekend together.  It wasn't nearly the cheap weekend that we had before with the museum and free concert, but splurging every now and then is okay.

Friday, July 5, 2013

Recent Buy

This morning I added a small position in Realty Income (O).  I couldn't really find a reason why but the shares took a huge hit on the open despite the overall market being relatively flat to slightly positive.  The shares actually shed over 3% very early so I took the opportunity to start a position.  I've been wanting to get a bit of real estate exposure and since I won't be making an investments into rental property anytime soon I figured a stable equity REIT is just as good.

Monday, July 1, 2013

Dividend Update - June 2013

Yet another month has rolled by and this one actually closed out the first half of the year.  Really??  Well the end of another month means it's time again for my favorite monthly update, my dividend update.  June was the best month I've ever had in terms of dividends surpassing the previous best from March.  Most of my holdings pay on the March, June, September, December schedule so those are always high months but June set a personal best record.  It was nothing to write home about when compared to some of the other bloggers/investors out there but it was progress.  And you can't really compare yourself to others when it comes to investing because we all started at different times and have different goals and capabilities.  Although I am trying to catch up to some of those that are ahead of me.