Sunday, January 31, 2010


I recently reviewed the terms of the merger between PBG and Pepsi Co and decided instead, to take advantage of recent price increases to sell my position in Pepsi Bottling. I also decided to sell my stake in Pfizer due to lackluster performance and poor dividend returns. The proceeds from the sale of these two stocks will be reinvested in Linn Energy LLC (LINE: NASDAQ).

Linn Energy carries a dividend payout of $2.52 which works out to over a 9.5% yield on their recent share price of $26.03. Linn Energy, LLC. is an independent oil and gas company focused on the development and acquisition of long life properties which complement its asset profile in producing basins within the United States. The company's properties are currently located in the Mid-Continent and California. The company seeks to be the operator of its properties so that it could develop drilling programs and optimization projects that not only replace production, but add value through reserve and production growth and future operational synergies. The development program is focused on lower risk, repeatable drilling opportunities to maintain and/or grow cash flow. The oil and gas industry is highly competitive. The company encounters strong competition from other independent operators and master limited partnerships in acquiring properties, contracting for drilling and other related services and securing trained personnel.

Adding Linn Energy to my investment portfolio should work well with my goal for 2010 of increasing dividend income. With the recent increase in demand for oil and gasoline along with rising prices, I think Linn will do well for the foreseeable future.

Sunday, January 24, 2010


Last week's lackluster performance of the overall stock market convinced me more than ever of the wisdom of investing for dividend income, rather than potential capital gains. I've been investing for quite a few years now and I've had my share of terrific gains, buying low and selling high. But when I decided to redirect my investments towards only dividend paying stocks, I've seen a steady increase in my investment income.

When the market took such a tremendous dive in 2008 and early 2009, I was as concerned as anyone else. However, when I realized that the dividend income was only minimally affected by the drop in stock prices, the whole situation came into perspective. What I also realized was that I had been presented with a wonderful opportunity to increase my holdings at greatly reduced prices, which is exactly what I did. At one point during the recession, the value of my total holdings was down nearly 50%. During that time I added to my investments as much as my budget would allow. Now my stock portfolio and IRA have recovered dramatically and since I bought more during the worst of the recession, my personal stock portfolio is worth more than it ever has been.

The real thing to keep in mind here, when you're investing for dividends the ups and downs of the market become almost irrelevant. As a bonus of this type of investment strategy, companies who have a long history of rewarding shareholders through steady dividend payments also tend to do well as far as gains in stock price. Who says you can't have your cake and eat it too.

Tuesday, January 19, 2010

Star Gas Partners, LP

My first new investment for 2010 is Star Gas Partners, an energy limited partnership. Their dividend yield is 6.50% on their recent share price of $4.14 and the company has a great deal of cash per share. Earnings are more than sufficient to maintain or increase their current dividend, so I think it will be a great addition to my regular stock portfolio.

Star Gas Partners, L.P., a publicly traded Delaware limited partnership was formed on October 16, 1995. The Company is a home heating oil distributor and services provider with one reportable operating segment that mainly provides services to residential and commercial customers to heat its homes and buildings. The general partner of the Partnership is Kestrel Heat, LLC, a Delaware limited liability company is appointed by its sole member, Kestrel Energy Partners, LLC, a Delaware limited liability company. Petro Holdings, Inc., an indirect wholly owned subsidiary of the Partnership is a Northeast and Mid-Atlantic region retail distributor of home heating oil and related services. The Company is a retail distributor of home heating oil in the United States. It also sells home heating oil, gasoline and diesel fuel. It installs, maintains and repairs heating and air conditioning equipment for its customers and provides ancillary home services, including home security and plumbing to its customers. The Company's suppliers include Global Companies, Sunoco Inc. and NIC Holding Corp. It competes with distributors offering a range of services and prices, from full-service distributors, like companies in the home heating oil business. Star Gas Partners markets its products and services under number of trademarks include such as Petro and Meenan. The Company segregates its customers in two catogories residential and commercial. It is subject to number of federal, state and local environmental, health and safety laws and regulations.

Tuesday, January 12, 2010


I was reading some of my older posts and came across "Never Spend Your Capital" from December of 2007. If you'd like to read the original post you can find it in MBCI's archive posts for the 14th of Dec. 2007.

The point I most wanted to make with that post is to set a rule for building your investments. Once you commit a dollar to your investment plan, never take it out. When you make it a rule to never spend your investment capital, that money will work for you 24/7. Like I mentioned in the earlier post, it's like having your own money machine. You earn whether you do any physical work or not. So you've set that money aside, let your investment dollars continue to work for you.

It's Not Your Bosses Job to Make You Rich

Since starting my new job, I've mentioned in some of my posts that I'm not making as much in pay as I'm used to. However, I don't want anyone to get the wrong idea. I'm thankful to have a job. Whatever the pay is, I always create a budget based on current income. For several years the income from my jobs went up. Now it's gone down, but I've still budgeted to live on the money I have coming in from my paycheck. I make allowances for my bills and living expenses and for building my investments.

So many people seem to think they are underpaid and in some cases, maybe they are. But what everyone should keep in mind is that it's not your bosses job to make you rich. Your reward for your hard work on the job is the pay and benefits package you agreed to when you accepted the job in the first place. Your bosses job is to see that you get what you were promised and that's it.

It is each individuals job to make themselves rich. And the way to do that is to learn to handle your cash flow. Whether you make a lot of money or minimum wage is irrelevant if you are unable to handle your money properly. If you constantly mismanage your personal finances, no matter how much money you make, you will never get ahead. That is why I feel so strongly about financial education. Accepting responsibility for your own financial future and taking action to reach your goals is about the only way the average person will ever hope to achieve wealth. Basically what I'm saying is, it's not how much you get paid, it's what you do with it when you cash your paycheck.

Sunday, January 10, 2010

Is The Rally In Stocks Over?

There seems to be a lot of talk going around that the rally in stocks is over. On the other side of the coin, some are saying we'll see a continued upward trend for the first half of this year.

Personally I think we'll see an erratic movement in stocks with a lot of ups and downs, with an overall upward trend. For those who say the market can't go higher after last years gains, I would remind them the Dow was over 12,000 not all so long ago. Recently the Dow closed at 10, 618, so why would it be so hard to believe in a continued rally?

Job losses have slowed, although there are a lot of people still out of work. I was one of those people until October of last year. I had been unemployed since the first of January and finally went back to work the middle of October. Granted it is a much lower paying job, but it's nice to have a job again just the same. I think we'll see more improvement in the job markets this year, especially with companies who overly reduced work forces having to call workers back and for companies who benefit from the Federal Governments job creation incentives. When the job market improves the rest of the economy will follow suit.

One really good thing to come out of the "Great Recession" is the Americans decrease in credit card spending and increased personal savings. I only hope the benefits that come from this are not outweighed by heavy increases in deficit spending by the Democratic congress and the Obama administration. All this spending has already led to increased taxes and more are sure to come. Increased taxation is bad for the economy and bad for businesses and jobs creation. I was surprised to hear California's Republican Governor proposing a cut in corporate tax breaks at a time when California is facing such severe budget shortfalls. Many corporations have already left California for more tax friendly states and further cuts in tax incentives will only lead to more companies relocating out of state at a time when they really need to be more friendly towards business and jobs creation. I'm starting to wonder if Mr. Schwartznegger is aligning himself more with the Democratic agenda rather than the Republican party?

When all is said and done, we have to be prepared for another difficult year in the markets and be very selective when it comes to picking stocks for our investment portfolios. Only time will tell if the rally will continue, but doing your homework before investing can help alleviate downside risks. True investors make money whether the market is up or down, so our main goal is to educate ourselves as much as possible and become "true investors" and avoid random trading in and out of the stock market.

Wednesday, January 6, 2010

Income Producing Assets

In Robert Kyosaki's books (Rich Dad Poor Dad Author) he talks about the importance of creating income producing assets. One of the income producing assets I'm involved in is my membership with SendEarnings, a paid email program. It is free to join and you get paid for reading emails, taking surveys etc.. I got my first check in the mail today, which also means that I've qualified for gold membership, making it easier to earn even more money.

I'm using the money I receive from my membership to purchase dividend paying stocks for my investment account, to generate even more income. Since participation in their program is free, this is one way I came up with to create an income producing asset without investing any of my own money. Investing the income from this asset in dividend stocks is a good example of making money work for you instead of working for money.

If you'd like to learn more about SendEarnings program you can click on the link on the right side of this page.

Tuesday, January 5, 2010

Savings For the New Year

Just started my new job around the middle of October. Wasn't sure about it at first, but I've decided I really like working there. Guess they're happy with my work since they've already given me a raise. Still well below what I'm used to making, but I'm doing O.K.. With the raise in pay and rearranging some of my debt, I should be able to direct more cash towards my investment accounts. Still working on my goals for the year.

For the beginning of this year, it will help out that I've transferred some high interest debt from my old Chase credit card to a much lower interest rate card. I plan to make the same amount of payments each month, but since the interest rate is now 14% lower, I should have the debt paid off much sooner with a substantial savings on interest. I should be completely debt free by the end of 2010. Once my debt is paid off, I will divert the cash I now use for credit card payments towards building up my IRA account and my regular stock account.

Currently my stock accounts are performing well and the dividends increase month after month. Eventually my dividend income should outpace my earned income from work, but even now I'm feeling more financially free because I don't have to rely entirely on my paychecks anymore. Whether I work or not, I get paid every month of the year. Now it's just a matter of building those payments up by continuing my investment program. Although I do add to my accounts every month, it's also nice to know that even if I never invested another dollar, my accounts would continue to increase every month. My additional contributions accelerate the process and I find it's getting much easier to make more money with the stock market as I increase my knowledge about investing. My biggest regret is that I didn't start earlier in my working career.