June 2014 Spending
Posted on | July 2, 2014 | No Comments
I would like to start saving more money consistently. The money that is leftover at the end of the month, I’ll transfer to my brokerage account to purchase stock. I plan on relying heavily on the meager income received from my portfolio to be able to retire early and for spending money during retirement.
Unfortunately, it didn’t work out this month. Here is my spending for June: Read more
Roth IRA as a Savings Account
Posted on | June 28, 2014 | No Comments
I really like the idea of a Roth IRA. If one meets the contribution limits, one is allowed to contribute after tax income and the money can appreciate and you’ll never have to pay taxes on the gains.
The other aspect I like about it is that it can be used a savings account. Once the account has been open for five years any contributions can be removed without penalty or tax. I highly recommend that everyone open a Roth as soon as they can to meet the five year requirement. Read more
Stocks to Consider Purchasing
Posted on | June 26, 2014 | No Comments
While reading financial news today, I came across the stocks below. I’m curious to research them further and I will consider purchasing them in the future.
–American Financial Group (AFG)
–American Tower (AMT)
–American Water Works (AWK)
–Automatic Data Processing (ADP)
–BCE Inc. (BCE)
–Chubb (CB) Read more
Saving for Retirement 2014
Posted on | June 16, 2014 | No Comments
I’ve had a busy few months and now I’m finally getting a chance to think about my finances again. I’ve decided to increase the amount I’m contributing to my 401k. This will reduce my taxable income now and defer taxes on the amount I set aside to a future date. The maximum allowed by the IRS this year for me is $17,500. I changed the amount I’m contributing such that in a full year, I will contribute the maximum I’m allowed. However, since I’m starting out in the middle of the year, I won’t reach the maximum this year.
I also plan on maxing out my Roth IRA contribution for 2014. I should have $5500 set aside by November. I’m not in too much of a hurry right now to fund it for this year since I believe that stocks are priced too high right now. I have a high percentage of my account in cash waiting for a correction so that I can buy additional stocks at a discount and increase my meager dividend income. If the economy holds up, the amount of money my stocks generate on a yearly basis will start to make a difference. Read more
Using Dividends to Buy Sempra Energy
Posted on | June 10, 2014 | No Comments
The S&P 500 closed at 1950.79 today. It is only 5 points down from yesterday’s record high of 1955.55. With the S&P 500 setting new highs, I’m trying to stop myself from purchasing stock. In the past, I’ve found myself chasing stocks on their way up and paying too much for them. Almost every time, I would have been better off waiting a few weeks and letting the price come down.
Case and point is my purchase today of Sempra Energy. I’ve been wanting to gain exposure to the Energy industry and to add a dividend paying utility stock to my portfolio. My purchase today was motivated by a belief that SRE might continue to go up before it came down to a more reasonable earnings multiple. Read more
Apple 7 for 1 Stock Split
Posted on | June 9, 2014 | No Comments
The Apple stock price has been on a tear lately and it is almost approaching its all-time pre-split-high of about $700 a share. I’ve owned Apple for many years now. I was pleased when Apple reinstated the dividend in 2012. The dividends are great because I’m able to receive a return on my investment without having to reduce my ownership in a company and incur a capital gain at the same time.
Unfortunately, I sold too early about 10 years ago but I’ve since established a new position in AAPL. I bought some shares in 2009 that I resisted selling and I also purchased additional shares when the stock price dropped last April. Read more
My IRA 7 Years Later
Posted on | May 28, 2014 | No Comments
Most of the people I know that own stocks focus only on the dollar value. They can tell you the balance in the account but they won’t know how much money they are getting or can expect to receive from their investments.
I am more concerned about the amount of income being generated by the stocks I own. My current investment strategy is to buy stocks that pay dividends and then reinvest the dividends to buy more stock to create an even greater dividend stream. When I eventually retire, I plan on relying on the meager income to cover my living expenses. Read more
I Refinanced My Mortgage Lowering My Monthly Expenses
Posted on | May 15, 2014 | No Comments
I’ve been wanting to refinance my mortgage for years now. My primary reason for doing so is that the monthly payment on the mortgage exceeds the income I’m receiving. So, in the event of a job loss, I would not be able to continue making payments on the property. If I were to get the costs and expenses closer to breaking even I would have more options.
I also wanted to lock in a long-term loan at a low rate. I am very jealous of those borrowers that were able to get loans at an APR of less than 4% especially if they were able to lock the rate in for 30 years. The Fed wants the inflation rate to be at 2%. But what if the inflation rate were to increase much higher, that would mean these borrowers would be making money on these loans, sort of.
I already missed out on the really cheap loans but I still wanted to refinance my mortgage. Currently, I owe more than the property is worth so a traditional refinance wasn’t going to work for me. I was given hope once the guidelines for the HARP program were expanded. Read more
PMI is Finally Removed!
Posted on | April 20, 2014 | No Comments
After months of following up with Bank of America, I was finally able to convince them that they should no longer be requiring PMI for my loan. You can read more on my thoughts on PMI here.
I’ve been rounding up my mortgage payment up to the next $50 for a while now. This is to reduce the overall interest I’ll be paying over the life of the loan. I also wanted to reduce the amount owed so that I could remove PMI. My monthly payment was $123.50 of which there was absolutely no benefit to me. I suppose maybe if I chose to default on the loan BofA would have continued getting paid on the loan and I could have held on to the property a little longer before it went to foreclosure and kept receiving rental income. Maybe that would have worked, I don’t know.
However, I wanted PMI removed which would reduce my monthly expenses. Read more
401k Loan
Posted on | February 7, 2014 | No Comments
I was forecasting my expenses and realized that I was going to be short on cash this month and I needed to make sure to contribute to my Roth for 2013 before April 15th. I did have the option of selling some stock but I did not want to incur capital gains taxes from doing so and then forgo the dividends I’m receiving from those equities. Instead, I decided to borrow from my 401k.
I’ve read many opinions from pundits stating that this is a bad thing to do. In general, I agree. However, I decided that I would do it anyway. Read more
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