Monday, January 24, 2011


I have to admit, one of my big weaknesses when it comes to spending money, is my fascination with electronic gadgets.  I love computers, the new android pads and now ipods.  Yes, that's ipods, plural.  I resisted buying an ipod for years, thinking I'd never really get any use out of it, after all, my Palm Pilot has about 2 years worth of dust on it now, but boy was I wrong.  I finally bought a 6th generation 120 gb Ipod classic and have enjoyed it tremendously.  It's probably the best $50 I've spent on entertainment for as long as I can remember.  I was so pleased with it and the amount of use I've gotten out of it, I decided to buy a used 2nd generation 32 gb Ipod touch.  Picked one up for a bargain price of $169 and can't wait to try it out.  It arrives tomorrow, so I'll happily be busy figuring out how it works when I pick it up at the post office after work.

Also decided to buy a newer computer.  I've wanted to switch from my Dell Optiplex to a Hewlett Packard desktop for a while now, but have been putting it off to save some money.  Recently came across a great deal online.  While it's still a Windows XP Pro desktop, it's equipped with a 3gb dual core processor and 2 gb ram, so it should run circles around my old Optiplex.  The hard drive is only 80 gb, which is small by todays' standards, but more than adequate for my purposes.  At any rate, I plan to pick up one of the newer external terabyte drives sometime soon, so onboard storage won't be such an issue.  Also got a 23 inch HP wide screen flat panel monitor for $119 to go with my new tower.  I've had no problems with Windows XP Pro and my laptop has Windows Vista, which has also worked well for me, so I'm not in any real hurry to upgrade to Windows 7. 

So, even though I finally gave in and spent some money on electronics I think I've come out quite well price wise.  For a grand total of $576 I bought an HP desktop computer with 23 inch flat panel monitor, an Android tablet, an Ipod classic, an Ipod touch and accessories for both Ipods.  That's a lot of equipment for less than $600.  To make it an even better deal, I sold my Optiplex tower for $120 and still have my 19 inch flat panel monitor, which I'm sure I can sell for an additional $50.  By the time all is said and done, I'll have gotten all the updated equipment for $406.  Not bad for a couple days online shopping.

Sunday, January 23, 2011


Want to create your own cash machine without having to keep track of a lot of different stocks?  How about 3 stocks that pay monthly dividends.  When it's all about creating cash flow, you can hardly beat stocks with monthly payouts.  Here are 3 that I believe will do well and have invested in for the long term:

1.  Gas Natural Inc. (EGAS) formerly Energy, Inc., distributes natural gas in Maine, North Carolina, Wyoming and Montana.  Founded in 1909, the stock pays a dividend yield of 5.1% with a price to earnings ratio of 7.03.

2.  Realty Income Corp. (O), a real estate investment trust, has been around since 1969.  They specialize in commercial retail real estate.  Their dividend yield is 5.1% and the stock trades at 16.9 times forward earnings.

3.  Calamos Convertible and High Income (CHY) has a fairly high yield of 8.2%, however, the management fee is a little on the high side at 1.13%.  Trading at about a 1.5% discount to net asset value, this CEF, founded in 2003, invests in high yield fixed income securities and convertible securities.

(I currently hold shares of EGAS in my IRA account and have positions in O and CHY in my regular taxable investment account.)

Saturday, January 22, 2011


Quote for the day:

"Bulls think gold is God without the letter 'L' but they're wrong for worshipping at its' alter."  Doug Kass, President of Seabreeze Partners Mgt.

Gold has had a great run over the past 11 years, going from $250 an ounce to around $1,340 an ounce.  Barring a major catalyst to drive it higher, it looks as though the rise in the price of gold may be nearing its' end.  Now may be the time to take profits and put money to work elsewhere.

Tuesday, January 18, 2011


Still think healthcare reform was a good idea for the working poor?  Let's go over a few of the highlights:

1.  Starting this month, Americans can no longer use pre-tax health savings accounts to purchase over the counter medications.  Also, withdrawals from HSA's and FSA's will now be taxed at 20%, twice the original 10% amount.

2.  Starting in 2013, Americans will no longer be able to deduct prescription drug coverage as part of Medicare part D.

3.  The biggest tax hikes for healthcare reform go into effect in 2014, starting with employers.  If they employ at least 50 people, they will be mandated by law to provide insurance coverage or be fined $2,000 per employee.  Should they make the employees wait, they will be fined an additional $400 per employee.  This cost could be catastrophic to some small employers.  If they go out of business, who covers the unemployed?

4.  The  absolute worst part of this reform for the working poor is the mandate that requires the employee to purchase this coverage.  If you choose not to, you will be hit with a penalty of your own, to the tune of 1% of your income in 2014.  If you do not have coverage by 2016, the penalty is increased to 2.5% of your income. 

Does any of this sound good to you?  If it does, I can only surmise that you are not a small business owner and you are not part of the working poor.  I personally know people who could not squeeze another $10 a month out of their current budgets to purchase insurance, so how can anyone with half a brain think these people can afford to give up 1 to 2.5% of their income?  The people I'm talking about are not lazy, they work all the hours they can get, rarely miss work and use their hard earned income to pay for food, housing and transportation, not drugs or alcohol.  So why should they be beaten down by a government that is claiming to do them a favor in the guise of providing health care coverage?  For that matter, if the Democratics, who were so proud of themselves for passing this "coverage",  are going to force the poor to pay for it, they aren't "providing" anything.  Their only real accomplishment, as far as I can see, is that they've managed to put a spin on raising taxes for the poorest of the poor, while creating an atmosphere in the small business community that makes it even harder to do business and provide jobs for many of these same people. 

The real beneficiary here is the federal government.  Under the guise of health care reform and helping the poor, they've manage to pass one of the most outlandish tax hikes in history. 

Tuesday, January 11, 2011


As part of the rebuilding process of my investment portfolio, I picked up more shares of Bristol Myers (BMY:NYSE) for my taxable account and Philip Morris (PM:NYSE) for my IRA account. 

BMY has a dividend of $1.32 per share which represents a 5.10% yield on their recent share price of $25.74.  They have a ROE of 40.5% which is always good to see.  Since my heart attack I've become familiar with Plavix, one of BMY's popular prescription medications and look for them to do well in the foreseeable future. 

PM currently pays a dividend of $2.56 per share which represents a 4.50% yield on their recent share price of $56.51.  They have earnings per share of $3.76 which makes their payout ratio 63.00% of earnings, leaving room for a possible increase in dividends.  Both are long term holdings for my investment accounts.

Monday, January 10, 2011


It really is a happy new year for me.  For one thing, after suffering a heart attack toward the end of last year, I'm still here!  Not only am I still here, but I'm doing pretty well with my recovery and luckily managed to avoid wrecking my finances with medical bills.  As soon as I hear back from the emergency room physicians billing office, I'll pay my final two bills and I'll have all medical expenses paid in full. 

I did have to dip in to my stock account to come up with enough cash to pay my cardiologist, but it was a small price to pay to be alive.  The guy does good work and I'll be relying on him for my future well being, so I definitely want to make sure he's paid!

At any rate, I was able to pull all this off by taking advantage of assistance programs from the hospital and calling the other billing offices to request discounts for private pay.  What I found is that most of them were quite willing to accept reduced payments (as much as 50% in some cases) and some even wrote off the entire amount, simply because I called and asked!  Makes me wonder if we really needed any kind of health care reform after all?  I'm thinking probably not.

I've already got a plan in place to rebuild my stock portfolio and replace the money I withdrew.  It will be a monumental task filling out my federal and state taxes for 2010 due to all the stock trading I did last year, but I'm still expecting a refund.  So I've earmarked any refund as a means to jump start my portfolio rebuilding plan and am planning on starting a new side business in flea marketing this summer.  I've located a good local flea market and will rent a booth to sell items I've picked up from rummage sales.  My goal is to buy items I believe I can quickly resell at double what I paid.  I'll get my initial inventory from items I no longer want or use from my own home.  By selling these and converting them to cash, I'll have the money I need to start my business without using any cash out of pocket.  I've done this before, back in my younger days, so it's not really new to me.  I'm excited about getting back in to the business.  It's a great way to make extra cash and a great way to meet a lot of interesting people and it's fun for me, so it's not really like work at all.  If it goes well, I may decide to cut back my work schedule at my job and concentrate on building the business.  Profits will go towards reducing what little debt I have left and building my investment portfolio.  I estimate that I should be able to recover all the money I've spent on medical expenses and then some by the end of 2011. 

So it really is starting out as a very Happy New Year for me and I hope it's going well for all of you as well!