On the news tonight was a story about an 80 year old man who lost over $4 million dollars (JYP 360,000,000). Over a period of 40 years, he burried his stash… all cash moolah, in several places in his backyard. All of this $$$ was stolen, and apparently, the police have been investigating since late last year, and the story is just breaking now. The crazy thing is that the man passed away recently. Anyway, this news will probably be plastered all over the internets tomorrow.
Category Archives: Personal Finance
Follow the oracle?
I’ve been pondering adding a bank stock to the pocket change portfolio for a quite a while now, why? The reason being is financial companies usually provide a nice dividend, and that’s what my portfolio is all about. But with many of the financial stocks not doing so well, is it the wrong move? I think not. With a long term outlook, buying good companies in a slump is the best thing to do.
I think I’ll follow in the foot steps of Warren Buffett. With the weakened financials, he’s been adding to his holdings of US Bancorp and Wells Fargo. USB, is sporting an annual yield of over 5%, while Wells Fargo is distributing around 4.6%. Not too shabby.
Almost time for a new purchase
After a few minutes rolling quarters and a trip to the coinstar machine, I have $48 ready to invest. Sadly, the last time added new funds was last November. Being able to grow the account without a steady influx of new money is exactly why I choose dividend producing stocks.
Pocket Change Portfolio Valuation
One thing that I have been neglecting in my portfolio is comparing the returns to a major index like the S&P 500. After all, if I’m not beating the S&P 500, what’s the point of owning individual stocks. It looks like I’ve got my work cut out for me.
Through 2008 to date I’ve invested $860.00 of pocket change over 5 years, paid $24 in commissions, and earned $249.52 in dividends. A simple calculation leads me to a 38% return since day one. Of course, to find the true return, I’m gong to have to dig deeper.
Pocket Change Portfolio – Part III
To round out the portfolio, I decided to eat my own dog food. In April of 2006, gas was on the rise (although a lot cheaper than now), Exxon had posted its largest profits ever, and I was ready to buy a new stock. A gas stock. There were several companies I was considering: Exxon (NYSE: XOM), BP (NYSE: BP), Royal Dutch Shell (NYSE: RDS.A), and Chevron (NYSE: CVX).
Both BP and Royal Dutch Shell produced a nice dividend, however because they are foreign companies there is a tax on the dividend that would cut into my reinvestment earnings so I ended up passing on those two. In comparison of Exxon and Chevron, Exxon was in the news quite a bit and I felt that the positive news had driven up the stock price quite a bit. Chevron on the other hand, produced a decent dividend a little less than 3% and its stock price had not risen a whole lot. But more than that, it’s the only gasoline I put in my car. That sealed the deal.
In April 2006 I made a small purchase of $73, and a second purchase in November 2007 of $114. The prices of the stock back then were $60.84 and $88.02, respectively. Yesterday, Chevron closed at $100.73 falling back after getting upwards of $103 per share earlier in the week. Nice gains for the Pocket Change Portfolio.
Disclaimer: I am not a professional investor or anything of the sort, please do your due diligence and research your own stock purchases before deciding if any company I mention is right for your portfolio.
Pocket Change Portfolio – Part II
My next purchase for the Pocket Change Portfolio occurred near the end of 2004. Although a much different entity today, the company I chose had a long but controversial history, distributed a nice 4% dividend, and at the time was quite speculative. In November and December, I made two purchases of $132 and $77 of Altria (NYSE: MO).
Generally not recommended, my purchase of this company was very personal. Anyone who knows me well, knows that I absolutely hate smoking. So why would a cigarette hater purchase a company most known for its tobacco product? The answer is simple. I realized that tobacco is not going away, no matter how many lawsuits are made. If I have to be around smoking and smokers, I wanted to be making money off of their activity, buying MO was the logical choice for me.
Since my first purchase and several subsequent purchases, Altria is not the same company. Over 2007 and 2008 it has split up into Altria, Kraft Foods, and Philip Morris International. I have not sold any of the spin-offs yet, but may as soon as I come across another worthwhile investment. Strangely, I feel the best company to keep would be PM International, however it does not meet my dividend qualification yet, sad. To date, MO has been my one of my greatest investments, had I started with a “real” amount of money I’d be sitting on a nice chunk of change. But, since this is the pocket change account… my total cash gains have been small.
Disclaimer: As always, please do your own research before deciding whether any stock I mention is right for your portfolio.
Pocket Change Portfolio – Part I
I started my Pocket Change Portfolio 2002, with only $150 of saved up pocket change. At that time, I was working as a server in a restaurant, so I’d end up with change from tips every night. It was a better opportunity than my current situation of having to spend money to get pocket change.
In 2003, I made my first stock purchase after a couple more deposits totaling $385. There were a couple factors I used to make my decision. First, the companies I would purchase needed to be big and stable. Since I would not be trading regularly, as commissions would kill my little stash of money, I needed a company that I could just let sit around without having to worry about its daily ups and downs (Now, several years later I don’t think that’s possible anymore). Second, the company had to pay a good dividend. The bigger the yield the better, because it was the only way to provide regular growth using free dividend reinvestment, in combination with whatever capital I could scrounge together through pocket change.
After a lot of research, my first purchase was Allied Capital Corporation (NYSE Ticker: ALD). ALD first came on my radar after reading several websites and also in Beating the Street by Peter Lynch. Since the company was founded in the 60’s it has provided a steady annual yield of around 10%. It fulfilled my two requirements, and has done well for the portfolio over the past 5 years.
Disclaimer: I am not a professional investor or anything of the sort, please do your due diligence and research your own stock purchases before deciding if any company I mention is right for your portfolio.
Gas stations and pocket change
Taken from Yahoo! Finance today…
“…Look at your change at the end of the day as your 9/10ths of a cent, save it and let it grow. If you save a dollar a day from the time you’re 25 until age 65 in a Roth IRA that earns 8% a year, you’ll retire with an extra $94,555 in your account.”
Read the whole article here.
Costco + Sharebuilder
If you’re a Costco member, you can get up to a $90 account bonus and 25% in account rebates, by creating an account at Sharebuilder.com.
Sharebuilder is an excellent choice to start your very own pocket change account. It has low trading commissions of $4, if you use their automatic scheduling. But the two things that set Sharebuilder apart from other discount brokerages are:
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You can invest in whole dollar amounts, instead of buying per share. This means that if you only have $25 in saved up change, you can buy a fractional share of a stock that has a higher share price, or you could buy x-number of shares plus fractional shares of a stock priced under $25. It’s a lot easier to invest dollar amounts vs. having to calculate how many shares you want to purchase.
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Free dividend re-investing. When working with small amounts of money, like your pocket change, every amount helps. If you buy dividend distributing stocks, you can get those pennies re-invested in the same stock without paying a commission.
Leave a comment if you have experience anything positive or negative using Sharebuilder. Only you can decide if Sharebuilder is the right solution for your needs, please research all their fees and policies before deciding to sign up.
Project Pocket Change
I see a lot of pennies on the street, and usually pick them up. Hey, it’s free money right? Sometimes I luck out and pick up a nickel, dime, or even a quarter! I think most people overlook pennies lying in the street, or loose change in general, but I think all that loose change is a great source for savings. Even Bank of America thinks so, with their Keep the Change service.
Back when I was in Japan, I used to save 500 yen coins (~$5). Saving money like this is very popular in Japan, they call it go-hyaku-en chokin. Think about if you saved every five dollar bill that you received, it adds up real quick. After a little while, I had a nice chuck of dough, and used that savings to buy some cool electronics. After coming back to the US, I thought I’d try the same thing on a smaller scale, but with a twist. It’s been my pet project ever since.
What do you think would happen if each day you put all your pocket change in a jar? Eventually, you’d have a big jar of change… heck you probably have one sitting on your dresser right now. Well, what if you took that money and invested it in some sound stocks? If you chose correctly, you should end up with more money than you started with, like me.
Investing only my pocket change since 2003, I have been able to increase my investment by 38%. And while my pocket change has not turned into millions yet, and probably never will, it’s been nice to know that my otherwise useless pocket change has been put to work.
I’ll be writing more about this project, stay tuned.
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