Category Archives: Personal Finance

Time to Go Christmas Shopping

For stocks that is!  🙂

I recently came upon some new capital to be added to my portfolio via the sale of an old mutual fund account that I plan on putting to work in DGI stocks soon. First, some back story.

While I didn’t get into individual stock investing until last year, I actually started out investing in mutual funds back when I was around 14 years old, kind of by accident. Growing up I always worked during my summer vacations from school and by this point had amassed a nice little amount of cash in my savings account (I think around $4K) from a lot of lawn mowing and odd jobs over a couple year timeframe. Knowing that I didn’t know what to do with it, besides put most in the bank and spend the rest on pizza and soda at the variety store after school, my Dad forced strongly encouraged me to invest it in a mutual fund through our family’s financial advisor/insurance salesman. I ended up putting all of my hard earned cash into a utility sector stock mutual fund that I remember promptly dropping in price shortly thereafter. Between “losing” a lot of money right off the bat and then getting interested in a whole host of other things as a teenager  😉 , I pretty much forgot about the account, just letting capital gains and dividends reinvest since then. Plus since 14 year olds can’t legally have these types of accounts on their own, it was set up as a joint account with my Dad who has paid the taxes on it in the meantime. Thanks Pops!

During my recent vacation home, my father had the account transferred over to my name. The account transfer was completed a couple days ago. After taking a look at the fund’s low yield and lack of consistent dividend growth, I decided to sell all the shares. While I’ll end up possibly having to pay capital gains taxes on it, I plan on reinvesting the cash received into dividend growth stocks which is my preferred method of investing, allowing me to get that much closer to financial independence.

So what to buy?

With the price of oil dropping lately, and sending all the major oil stocks down with it (anyone else see the crazy swings on oil stock prices on Black Friday?), I’ll be turning my attention to that sector first to add to my stake in BP, Chevron, and initiate one in Exxon Mobil. Even though this will put my portfolio very overweight in the energy sector, I’m comfortable not being too diversified right now in the very early years of the accumulation phase of investing. Over time, things will start to balance out. Until then, it makes sense to just buy whatever presents good value.

Looking at the rest of my portfolio, IBM has pulled back quite a bit since the last time I purchased shares back in 2013 so it makes sense to average down on that position which quite a few other DGI bloggers have also been doing lately. While the company is currently struggling with revenue growth, I like the long-term prospects and the company’s commitment toward transitioning for the future into cloud and big data.

With whatever cash is left over, I’ll put into Loyal3 and continue dollar cost averaging into Disney, Unilever, etc. Speaking of Disney, has everyyone else seen the new Star Wars movie trailer yet? Check it out below. Can’t wait until December!

Hope everyone had a great Thanksgiving!


Disclosure:  Long BP, CVX, IBM, DIS, UL, and have a current buy order placed for XOM.

What do you think of investing in the oil sector today? Any other stocks on your watchlist?

How Would You Handle Financially Supporting a Family Member?

As much as my parents taught me about financial responsibility which sparked my interest in investing and then eventually pursuing financial independence, they haven’t always followed their own advice.

A fairly recent divorce has left both of them struggling financially. I hadn’t realized my Mom was struggling so much until fairly recently when I spoke to my grandfather who suggested I should send her some money. I’d have no problem doing this since I live on less than 50% of my income each month and would gladly suspend my investing activities for a while to help out my family.

But how do I go about approaching this? Do I just send money without any warning like my grandfather suggested? Do I talk to her about it first and see what kind of help she needs? Both of my parents have always been very self-sufficient, hard working individuals that prided themselves on being able to take care of themselves without help. I don’t want to insult anyone if I just put a check in the mail without talking it over first.

So what should I do? What would you do in this type of situation? Has anyone run into something similar?

How to Start from Zero Financially

One of the interesting things about running a blog is looking at what readers use for search engine terms to find your site. The other day I was looking at my stats and came across this search term question: How to start from zero financially? Great question! Considering the name of my blog I can see how they made it to my site and I thought it would make for a good post.

So how should you start out if you’re starting from zero, as one reader is asking? Of course this all depends on what the person’s goals are but let’s say for the sake of this post lets say they are looking to save for retirement. This a pretty common savings goal for most people.

Since they are asking about starting from zero, I’m assuming they have no debt. If they do, eliminating short-term debt like credit cards and car loans should become the priority before looking into investing. I’m really not an expert in getting out of debt since my only experience with it was a very short-term car loan so I don’t want to get into that too much here.

The first step I would suggest to someone starting out is to educate themselves on finances and investing. If you are in debt, spending the time while you are paying off debt can be a great time to learn about investing to better prepare yourself. I personally spent about a year reading everything I could on investing before I bought my first stock. And you don’t have to go out and buy a bunch of expensive books either. I used to borrow ones from the local library. Rich Dad, Poor Dad is probably one of the best out there if you’re looking for an introduction to personal finance and investing. If you’re the kind of person whose only financial education has come from the limited curriculum of our public education system, this book can really change the way you think about finances. I first read it when I was a teenager and have since reread it several times. After that you can get into more investing focused books such as those by Peter Lynch and Jim Cramer.

While you are educating yourself, the next logical step would be optimizing your cash flow and increasing your savings rate. Most of the mainstream financial advice out there is to put 10% away from your retirement. That’s bullshit and just teaches people to be irresponsible with their money. Granted 10% is better than nothing, but why should you limit yourself to just what the “experts” recommend? On the flip side you don’t have to go crazy and save upwards of 60-70% like us early retirement crazies. 😉 You just have to find that right balance that will still allow you to meet your goals.

Once you got your finances under control, the next step would be building up an emergency fund first, before doing any investing. You always want to have some money stashed away to use to fall back on in hard times so you don’t have to dip into your retirement savings. Before investing you also have to decide what type of investment account to use. Some of the common options are a Traditional IRA, Roth IRA, and 401k. I detailed the differences between these accounts and the types that I use here in a recent post.

Once that’s done comes the fun part, actually investing to work on accomplishing those goals. By this point, through your reading hopefully you’ve picked an investment strategy you’re comfortable with. I’d recommend actually writing down your investment plan so it can help you stay on track. While I personally prefer to invest in dividend growth stocks you should choose a strategy that you both understand and will remain committed to over the long-term. While choosing a strategy of trading growth stocks sounds good in theory, will you be tempted to sell low the next time we get a bear market and the value of those high-flyers plummet? If so, you may want to look into a more conservative strategy like dividend growth stocks or index funds where the focus is on the long-term and building wealth slowly.

Well that’s about it, in a nutshell. 🙂 For some other great resources in helping start from zero financially, check out the great advice and financial journeys from fellow bloggers over at my Blog Roll, this article I contributed to on investing advice for beginners, and this recent post on where to research stocks. Good luck!