Thursday, October 31, 2013

Recent Buy

I try to be as open and transparent as I can with my investing decisions in order to give a real life example of what it takes in order to become financially independent through dividend growth investing.  In order to keep track of my reasoning behind a purchase and inform you all about what's catching my eye, I have my Recent Buy series.  This allows me to have a written record as to why I made a purchase for my portfolio and be able to look back and see if that holding is still serving its purpose.  On Wednesday I decided to continue building my budding real estate empire by purchasing 100 shares of the diversified REIT, American Realty Capital Properties (ARCP).

Wednesday, October 30, 2013

Recent Buy

I try to be as open and transparent as I can with my investing decisions in order to give a real life example of what it takes in order to become financially independent through dividend growth investing.  In order to keep track of my reasoning behind a purchase and inform you all about what's catching my eye, I have my Recent Buy series.  This allows me to have a written record as to why I made a purchase for my portfolio and be able to look back and see if that holding is still serving its purpose.  On Monday of this week I purchased 40 shares of the healthcare REIT, HCP Inc.

Monday, October 28, 2013

2013 Goals - 3rd Quarter Update

Somehow the 3rd quarter has already passed us by and we're almost done with the 1st month of the 4th quarter.  Really?  I'm a bit late on this, seeing as how the 4th quarter is quickly passing by but it's time to look back to see where I'm at on the goals that I set back in January.  There were a lot of changes to my financial world in the quarter as my wife and I purchased a house.  Unfortunately this will mean that our monthly expenses will be increasing but I'll do my best to stay on track with my financial goals.

2013 Budgeting Goals - 3rd Quarter Results
Goal 2013 Amounts Status
80% take-home pay savings rate 82.90% average savings (Jan 85.35%, Feb 82.23%, Mar 84.41%, Apr 84.18%, May 81.40%, June 77.71%, July 79.71%, Aug 86.60%, Sept 84.49%) Exceeded Goal
Less than $1,400 required expenses $1,434.18 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, July $1,454.40, Aug $1,489.46, Sept $1,640.97) Needs Improvement
Reduce Misc. Expenses by 15% (Exp. < $96.51 per mo) $119.16 Needs Improvement
Reduce Restaurant Expenses by 10% (Exp. < $128.31 per mo) $118.28 Exceeded Goal
Reduce Grocery Expenses by 5% (Exp. < $205.64 per mo) $209.37 Needs Improvement

Saturday, October 26, 2013

Weekly Roundup - October 26, 2013

It's been a pretty crazy week for me and my wife.  The joys of home-ownership started quickly as a one of the main branch roots for a tree at the new house busted out water line.  When I got home I dug out the water line where the leak was coming from and there were some pretty squirrely things going on.  There ended up being 5 PVC pipes all on top of each other and of course the bottom one was the one that was broken.  Long story short I ended up having to get a plumber out there because just repairing the broken area wasn't going to solve the problem of the tree being the "root" cause.  Get it? Root cause?  So the plumber came out and we got everything lined up for a trench to be dug and a new water line run.  It's a flex pipe, I think it was PEX, and based on what he had said about it it seems to be really good.  So the new water line is now away from tree roots and shouldn't have any issues.  But I'm still curious what's going on with the other 4 pipes.  When they had dug the new trench and I went and looked in to see if those pipes were running to the water main.  And they weren't, they didn't even go straight to the box and you could see that they ran past the meter box.  They're too small and too close to the water line to be sewage so I really have no idea what's going on with those.  All the more reason I want to design my own house and be there for construction.  There's so many hidden things when you purchase a house that's already been built.

Thursday, October 24, 2013

Recent Option Transaction

I had a recently executed call option on some HAL shares last Friday and the capital from that transaction plus the capital that I've been able to save from my job has led to a fairly sizable cash position for my portfolio.  I'm sitting around 10% cash now and there's just not a log of bargains that I see in the market to really get my mouth watering.  To be fair there's plenty that are hovering around the fair value price points from my stock analyses, but nothing that I'm excited about.  The way I see it, I have two options.  Wait for Mr. Market to give some better prices or you guessed it, turn to the options market.

Wednesday, October 23, 2013

Recent Buy

Last week International Business Machines reported their quarterly earnings.  While they ended up beating on EPS by $0.03, the top line growth in revenue fell short by about $1 billion.  Mr. Market did not like this one bit and the share price dropped over 6.50%.  For me this was just a chance to pick up some more shares and average down my cost basis.  The lower share price fits right into IBM's management's plan to continually provide shareholder value both through rising dividends and share buybacks.

Tuesday, October 22, 2013

Recent Option Transaction

Well the third Friday of October rolled around and that means that it's expiration day for those that dabble in options.  I had originally sold a call option on 100 shares of HAL which I purchased through the ESPP program at work back in August.  I chose the $48 call option and sold it for $1.43 which netted me $135.01 in option premium to use as I pleased.

Monday, October 14, 2013

PepsiCo (PEP) Dividend Stock Analysis

If you look at my portfolio you'll notice that it's lacking exposure to the food industry.  Specifically those weekly repeat purchase foods such as potato chips and other snack foods.  Coca-Cola is my only current exposure there and I'd like to have at least another company working for me.  While compiling my watchlist last week in anticipation of further weakness in the markets, I mentioned that Pepsi would be a good fit because I'd get to own the other half of the cola duopoly in addition to a wonderful snack food business.  Pepsi closed trading on Friday, October 11th at $80.83, offering a current yield of 2.81%.  I had last looked at Pepsi back in November of 2012, so it's time to update my analysis to see what's has changed and if it still represents good value.

Company Background (sourced from Yahoo! Finance):

PepsiCo, Inc. operates as a food and beverage company worldwide. The company’s PepsiCo Americas Foods division offers Lay’s and Ruffles potato chips, Doritos and Tostitos tortilla chips, Cheetos cheese flavored snacks, branded dips, and Fritos corn and Santitas tortilla chips; Quaker oatmeal, Aunt Jemima mixes and syrups, Quaker Chewy granola bars, Quaker grits, Cap’n Crunch cereal, Life cereal, and Quaker rice cakes; Rice-A-Roni, Near East, and Pasta Roni side dishes; Quaker-brand cereals and snacks; and snack foods under Marias Gamesa, Cheetos, Doritos, Ruffles, Emperador, Saladitas, Elma Chips, Rosquinhas Mabel, Sabritas, and Tostitos brands. Its PepsiCo Americas Beverages division provides beverage concentrates, fountain syrups, and finished goods under Pepsi, Mountain Dew, Gatorade, Diet Pepsi, Aquafina, 7UP, Diet Mountain Dew, Tropicana Pure Premium, Sierra Mist, and Mirinda brands; and ready-to-drink tea and coffee products. The company’s PepsiCo Europe division offers snacks under Lay’s, Walkers, Doritos, Cheetos, and Ruffles brands, as well as Quaker-brand cereals and snacks; beverage concentrates, fountain syrups, and finished goods under Pepsi, Pepsi Max, 7UP, Diet Pepsi, and Tropicana brands; ready-to-drink tea products; and dairy products under Domik v Derevne, Chudo, and Agusha brands. Its PepsiCo Asia, Middle East, and Africa division provides snack foods under Lay’s, Chipsy, Kurkure, Doritos, Cheetos, and Smith’s brands; cereals and snacks under the Quaker name; beverage concentrates, fountain syrups, and finished goods under Pepsi, Mirinda, 7UP, Mountain Dew, Aquafina, and Tropicana brands; and ready-to-drink tea products. The company serves wholesale and foodservice distributors, grocery and convenience stores, mass merchandisers, membership stores, and authorized independent bottlers through direct-store-delivery systems, customer warehouses, and distributor networks.

Saturday, October 12, 2013

Weekly Roundup - October 12, 2013

Well this past week was pretty uneventful for me.  Just grinding it out at work, as per usual.  The bright spot is that every day that I'm at work I essentially am saving 70-80% of that days pay.  That's the beauty of keeping your expenses low and investing the rest.  Creating and sticking to a plan is the difference between achieving your goals or not.

I can't say the week was uneventful for the government or the stock market.  The markets were whipsawed around by the continuing government shutdown and looming debt ceiling deadline on October 17th.  Of course as things usually go, I had no capital to take advantage of the drop early in the week.  By Thursday there were rumors of negotiations actually taking place and the markets rejoiced.  Me?  Not so much.  Just as I was starting to compile my hitlist and get capital transferred over to my brokerage account, the markets went on a big run on Thursday and Friday to erase some of the value opportunities that were available.  I don't expect anything major to come through this weekend and I'm hoping that negotiations end in a stalemate.  Much like all the other government involved fiscal crises, I expect the status quo of 11th hour agreements to come again.  Hopefully Mr. Market will be in a sour mood to start the week.  What's on your hitlist should there be further weakness in the markets?


Friday, October 11, 2013

What are you buying?

The government continues to remain deadlocked and it looks like that is going to continue up until the debt ceiling issue comes next week.  Eventually they will work all of this mess out, but in the meantime the markets have been none too pleased.  I'd expect volatility to increase leading up to any kind of resolution and that means it's the perfect time to build a watchlist and get some target entry prices.  Overall the markets haven't given too many opportunities, but with the current self-imposed debacle prices on some high quality companies are coming down to much better valuations with the chance for some fire sale prices if the government continues on its current ways.  In the long run, this is just noise.

Wednesday, October 9, 2013

Semi Recent Buys

I've been a bit lax in announcing my purchases over the last 1-1.5 weeks and haven't had the free time to get a post written up.  Well, that changes today.  I recently added to my positions in both Baxter International and Proctor & Gamble.  In late September I had initiated a position in Baxter and with a further dip in price I scooped up some more shares.  To close out September I celebrated by adding to my position in Proctor & Gamble after Unilever came out saying that emerging market growth had slowed leading to PG and following suit by dropping.  Over the long term I don't view either of these dips to be more than just noise in the long term.

Monday, October 7, 2013

Net Worth Update - September 2013

While cash flow is more important when it comes to financial independence, it's still good to look at the balance sheet too, which is why I provide these net worth updates.  The S&P 500 was down a little over 4% for the month of August which pushed the value of my investments down; however, thanks to my highest monthly income and a great savings rates I was able to counter the negative pull from market fluctuations.  It was a bit of a let down that my net worth didn't increase more considering I had my highest monthly savings total as well but that's what happens when you have more and more of your net worth tied to the markets.  I had a little over $1,700 in combined 401k contributions, $1,260 in ESPP withholdings, and over $9,250 in after tax savings from my income.  The rest of the change was due to market changes and dividends.

Saturday, October 5, 2013

Weekly Roundup - October 5, 2013

This has been a crazy and frustrating week.  First off they ended up calling us back to work on Tuesday.  That was even earlier than the last time they moved the rig which was annoying, but what really irked me was that we didn't pick up our tool until Thursday night.  I already get limited time at the house and with my wife so when I get called out 2.5 days early it really gets on my nerves.  In other news, the government shut down and the world didn't end.  To me this is just showing the incompetence of our elected officials.  I was listening to the Dave Ramsey show and his intro on the October 3rd show was spot on.  He was discussing the government shutdown, or any other media crisis, as it relates to the stock markets and investing.  While I don't believe that projecting 15% annualized returns is all that great, his advice on investing here was spot on.   The markets will cycle and have highs and lows.  You make your money in the markets during the storms and crises and learn to be a disciplined investor.

Friday, October 4, 2013

Income Update - September 2013

 I'm a big proponent of tracking every single penny that comes into your hands if you're really wanting to make a change to your finances.  Mental accounting is too difficult to keep track of and the mundane everyday expenses get forgotten.  Once you keep a detailed history you can see that you're really spending $400 per month on restaurants or $100 on coffee or whatever little expenses that are fine by themselves but add up quickly to destroy a budget.  This is why I like to keep track of all of my expenses to help keep myself accountable and looking to see what areas I'm just plain doing poor in.  If you want to improve your finances, then please track everything for a 3 month span and then take action to make positive changes.

Tuesday, October 1, 2013

Dividend Update - September 2013

September is now in the books and now it's time for again for my favorite monthly update, my dividend update.  These dividend updates reflect all dividends that I receive through my investing pursuits and I hope can help inspire you to take control of your own finances and investing to build a passive income stream.  What you use that stream for is up to you, whether it's to fund early retirement, just provide some FI/FU money, or even to provide for an annual vacation; the key is that it can provide options and opens up all sorts of possibilities.  Since most of my ownership stakes pay on the March, June, September, December schedule I get great results when each quarter closes.  You can check my dividend income or progress page to see what dedication to an investment plan can give you.  I was able to set a personal best in dividends received during a month during September which is great motivation for me to continue on.