Tuesday, July 27, 2010


Had some extra cash from dividends in my money market account and decided to put it to more profitable use. So I put in an order and picked up more shares of Universal Insurance (UVE: AMEX). I'm currently long on UVE although I have traded in and out in the past. I especially like their dividend yield right now of 9.60%, which beats the you know what out of the return I was drawing from the money market account. They're currently trading near their 52 week low, most likely due to hurricane season, so I'm taking advantage of the low price to increase my stake and boost my return from dividends. I've noticed it's not unusual for the price to drop during spring and summer months and rebound when hurricane season ends in September.

I'm currently sitting on some nice paper profits, but haven't decided to pull any cash out at the present time. I'd like to make a couple more trades where I pull out my initial investment and keep the remaining shares, in effect gaining "free" shares. While I am in a position to do this with a few of my current holdings, I haven't found any new investments that I prefer over the ones I already own. So I'll sit tight for now and keep my eyes open for a good opportunity.

Bought a commercial carpet cleaning machine for $700. I've made a deal with my apartment complex to clean all their carpets as tenants move out. I figure that I can easily earn a 40-50% return on dollars invested in the machine by doing 8-10 apartments per year. But if I only do enough to earn 20% on dollars invested, I'd still get my money back in 3.6 years and everything after that is pure profit. Not to mention that I can clean my own carpets without paying for a rental machine. So I think this may actually be one of my best investments of the year.

Wednesday, July 21, 2010


I've been reading a great book for people who are new to investing. It's not a new book, but it does a great job of covering all the basics of investing in stocks, bonds and mutual funds. It is very well written and easy for anyone to understand. The book is titled, "The Small Investor" and is written by author Jim Gard. I'm reading the second edition which I picked up at a used book store, but I'm sure it's still available through Amazon or Barnes and Noble.

Along with covering all the basics of investing, the book also explains why the small investor actually has an advantage in some ways in the marketplace. It tells you how to work with professionals such as investment counselors, brokers, money managers, and others whose services you may or may not need. It's not a get rich quick scheme, but it can help you make a personal plan that gives you your best shot at a reliable return on your investments, with manageable risks.

I highly recommend the book for beginning investors.

Sunday, July 18, 2010


My car has been paid off for a little over 2 years now. It's still in pretty good shape, even though I bought it used (2 yrs old at time of purchase). But I've been thinking a lot lately about buying a newer model. I wanted to wait until I could pay cash or work out a great deal with a trade in and large down payment, so I could pay off the remaining balance in 3 years with small payments. Then I started to think a little more about the return on investment here.

We all know that cars are not really investments. You pay a large price, you pay even more if it's financed and the value steadily drops the longer you own the vehicle. Not to mention all the money you put out along the way for maintenance and repairs. All that aside, let's pretend for just a moment that you consider your car an investment of sorts. Say you were to buy a nice used car for $12,000 for 60 months, with payments of $200 per month. At the end of the 5 years we'll generously assume that you're able to sell the car for $4,000. Instead of spending the money, or using it to pay on a newer model, you decide to pay yourself equal monthly payments for the next 5 years (60 months) from the $4,000. You would be able to draw roughly $66.66 per month for 60 months ending with a $0 balance. O.K., that doesn't sound too bad. But let's consider another scenario. Instead of buying a nice used car, you decide to make do with the vehicle you have and invest $200 per month in dividend paying stocks. At the end of 60 months instead of having a $4,000 car to sell, you have accumulated roughly $12,000 worth of dividend paying stocks. From personal experience I'd say you could expect to draw $75 per month for the next 5 years in dividend payments, at which time you still own your $12,000 investment portfolio, instead of being back to $0. But it doesn't end there, because as long as you continue to hold your stock, you continue to draw dividends of $75 or more per month.

I realize the preceding scenarios do not take into account everything you would want to consider in making an informed decision. However, the basic lesson holds true: It's always better to buy things that put money in your pocket than something that takes money out of your pocket. So the real choice you'd be making here was whether to buy a new car or purchase a new future for yourself by investing in something that pays you back and keeps on paying.

Wednesday, July 14, 2010


Just bought an Amazon Kindle as a birthday present for one of my family members. I have to admit that I didn't really know much about the Kindle until I bought this one. Now I've decided I've got to buy one for myself :0) Being a tech and gadget junky and a voracious reader as well, this is something that's right up my alley. Can't wait to get one for myself!


I've decided to add shares of Credit Suisse (CS:NYSE) to my regular stock account. The principle activity of Credit Suisse Group is the provision of global financial services including a range of banking and insurance products. The company has earnings per share of $5.05 and pays a dividend of $1.78 which represents a 4.15% yield on their recent price of $43.01 per share. They carry a price to earnings of 8.5 and their current stock price is well below the 52 week high of $60.08. Operating out of Switzerland they are a global presence in banking with a terrific franchise name. I'm thinking it will make a great dividend play with possible capital gains as well.

While I may not have the kind of money to open a Swiss bank account, I do like the idea of owning shares in one of the largest and best known Swiss banks in the world. I also like the idea of increasing my diversification outside the United States.

Sunday, July 11, 2010


Hate to say I told you so, but Spain beat out the Netherlands to win the 2010 World Cup Soccer Championship!


Saturday, July 10, 2010


World Cup Soccer: I'm predicting Spain will win. I'm a big fan of the Spanish team and I have a really good feeling about their chances tomorrow.

Stock Market: I'm predicting that the stock market will rally this fall, despite negative rhetoric from the news media. I see an especially strong rally if the Republicans win big in the November elections. It's my opinion that the slow down we've seen in the past month or so is simply a return to normal summer slump in the market and too many nervous/sensationalist reporters are making it out to be more than it actually is.

Thursday, July 8, 2010


When times are tough, like they have been for the past year or so, you have to look for every way you can to increase your personal earnings. My sister emailed me today with a great offer from one of her banks. For each person she refers to the bank who opens a free checking and savings account, she gets $25 added to her account and the person she refers gets $50 added to their checking and $50 to savings. You have to agree to online banking, but otherwise there are few restrictions to the offer. I decided to take $300 from my emergency cash reserve in my passbook savings and open a checking and savings account with her bank. In addition to the $100 they pay within 3 days of opening the accounts, I'll also receive double the going interest rate on savings for the next 6 months. So I'll actually be making more than a 33% return on my original investment. This is money I keep close at hand that has been earning very little interest. Now I'll be able to make a quick $100 and earn twice the interest on any money I deposit into this account for the next 6 months.

O.K., so maybe you're saying it's only $100, but I'll be doing next to nothing to earn it! If you start thinking of ways to increase your income without increasing the amount of physical labor you personally perform, that's when you truly begin to do what rich people do. When you get good enough at doing what rich people do, you eventually become one of the rich people.

Tuesday, July 6, 2010


U.S. markets ended their seven day slide with the Dow gaining 57 points. Investors seem to be trying to make up for some steep losses by searching for value plays after the 4th of July holiday weekend. I picked more shares of General Mills (GIS) and am looking to add to some of my other positions, if the prices are right.

Had a great holiday weekend! Got to watch a couple of World Cup games. Was happy to see Uruguay win in sudden death over Ghana. Uruguay's goal keeper did a great job! Also saw the match between Germany and Argentina. I have to admit that I've never seen the German team play until now and I was expecting Argentina to win. What a shock, when Germany mopped the floor with them!!! It was an exciting match and I can't wait to see more from Germany!

Saturday, July 3, 2010


Wanted to wish everyone a happy Independence Day! In keeping with the theme, part of my celebration included placing an order to purchase more share of General Mills (GIS). While celebrating America's Independence I'm also working toward my goal of financial independence. Stocks are down, but far from out, so I figure now is a good time to pick up additional shares in some quality corporations.

Friday, July 2, 2010


Just finished reading an article at cnbc.com about the governor of California ordering state workers pay reduced to minimum wage until the state government can come to some agreement on a budget. What I found even more interesting than the article itself, were the comments following the article.

One guy railed against the governor, the Republican party and corporate America, supposedly showing his support for the "little guy." Which of course lead to several arguments about how civil service workers making more than their private sector counterparts and how taxpayers can no longer afford such largess. I can see valid points from both sides. I agree that there is corruption in corporate America and that executives don't always have the best interests of the shareholders, or the corporation they're supposed to be managing, at heart. On the other hand, I firmly believe the average American citizen is overtaxed and both state and federal governments need to make drastic spending cuts. The higher taxes go in this country, the worse the economy seems to get. No matter how high the taxes are, the government always seems to "need" more. I think it's time for average U.S. citizens to voice their disapproval with greedy corporate executives by either voting out the board of directors, or pulling their money out of the companies who allow these practices to continue. As for greedy politicians, the tax and spend and spend and spend types, they need to be voted out of office as soon as the next election rolls around.

One more observation about the guy who was portraying himself a sticking up for the "little guy" while telling everyone else they were idiots: His arguments would have been a little more convincing if he hadn't regarded other's comments with such vehemence and contempt. It is also not very convincing to talk about being one of the "little guys" while at the same time saying you had to get busy planning your trip to Europe. I don't know too many "little guys" who can afford a trip to Europe. Maybe this guy is not quite the genius he thinks he is?

For more on this article, see: http://www.cnbc.com/id/38053858/