OFF TO A GOOD START

Well the week is off to a good start with the stock market closing slightly higher.  I suspect the higher close is mostly attributable to less than expected damage from hurricane Irene over the weekend.  Given that, and remarks from Bernanke on Friday of last week, I still wouldn't hold out much optimism for any major upward moves anytime soon.  Right now I'm sticking with the buy low strategy, adding to positions in some of my best holdings while the price is down.  If I'm right, it could be a big payoff somewhere down the road and in the mean time I'll collect more in dividends with the increase in number of shares in my portfolio.


Got some great deals over the weekend at Gerbes and Walgreens matching coupons with store sales.  Saved 40% on my grocery store purchases and closer to 70% from Walgreens.  Anybody not using coupons is passing up a great opportunity to save, save, save!!!

Got my sign-up paperwork back from Edward Jones for the company savings plan.  Kind of anxious for payday to see if they've started the witholdings.  If, as I suspect, the before tax witholdings have little effect on my take home pay, I'll most likely increase witholdings within the next month or two.  I'm not maxed out on matching contributions, so I could increase my own contributions as long as it doesn't cut me too short on cash flow.  Just have to wait and see...

Requested another check from SendEarnings.com.  This will be my third check from them.  I intend to use it to repurchase some UVE stock I sold in my taxable account.  Got the medical bills down from my heart attack and follow up care, so I'm really concentrating on rebuilding my investment and cash positions.  If my health and the economy holds out, at least as well as it has been going, I should be in pretty good shape by this time next year. 

COMPANY SPONSORED SAVINGS PLAN

Recently I was talking to one of the guys at work about signing up for the company sponsored savings program.  Although he is also eligible, he said he was probably not going to enroll.  Now our company, like many others now days, is a little tight fisted when it comes to giving raises.  They are few and far between and you're not going to get much of one regardless of performance.  The guy I was talking to is also one of those guys who are constantly complaining about not getting a raise.  Yeah, I like raises too, but there is something to be said about the number of people out of work right now and being thankful that you at least have a job.  That being said, why would you pass up an opportunity to help yourself to a raise.  Where we work, they might be stingy with raises, but their savings plan is quite generous, offering a dollar for dollar match of employee contributions.  For every dollar we put in, our employer contributes an equal amount, up to a certain percentage of our pay.  Why would you pass that up???  It's like they're offering you the opportunity to give yourself a raise.  I don't know about anybody else, but if the only thing I have to do is save a little money to get more money from work, I'm going all in.

I'm afraid he didn't see it that way.  He said he couldn't afford to defer any of his pay for savings, even though I explained to him that money withheld in "before tax" dollars would most likely make little if any difference in his take home pay.  This is something most people fail to realize.  If you're withholdings for savings are in "before tax" dollars, your taxable income is less and therefore you pay less in taxes on the remaining paycheck.  Which means that often times, your take home pay remains relatively unchanged.

As I've mentioned before, I have no real plans to continue working for my current employer until I retire.  However, why shouldn't I take full advantage of all the benefits they have to offer while I'm there?  No matter how much I end up saving, with employer matching contributions and more than 10 years before I plan to retire, it could definitely add up to a significant amount of money when I'm likely to need it most.

AUTOMATIC WEALTH BUILDING WHILE CUTTING INVESTMENT COSTS

I just finished reviewing my investment strategy for my taxable investment portfolio, and came up with an idea to increase my cash holdings, boost the number of shares I own overall and cut costs at the same time.  Sound too good to be true?  On the contrary.  Here's how I did it: 

In my taxable investment portfolio I hold investments in total of 25 dividend paying stocks and funds.  My investment company (ING Sharebuilder) allows free reinvestment of dividends.  So I set 8 of my stocks to reinvest dividends automatically (at no cost) for a total of 56 investments per year, or roughly 4.67 investments per month.  For the remaining 17 stocks in my portfolio, I'm having the dividends paid in cash, for a total of 68 dividend payments per year, or 5.67 dividend payments per month.  Since I'm paying nothing for reinvested dividends, I'll be reducing costs by eliminating commissions on stock purchases altogether.  At the same time, I'm building my cash position by continuing to collect the balance of dividend payments as cash, paid to my money market account.  I'll still have to pay purchase commissions on new investments and commissions on sales, but I should see a significant increase in holdings while also benefiting from greatly reduced costs.  

As a tweak to the system, I'm also reinvesting in stocks which I believe have good long term prospects but are currently selling below my original purchase price.  Reinvesting dividends in these holdings will have the added benefit of reducing cost basis and adding to overall returns in my portfolio.