Thursday, October 29, 2015

Did I make a mistake? Also, Recent Buy!

Hi Everyone,

This post is a bit behind but nonetheless, here it is.  We were able to pull out one purchase recently even though our expenses have taken a bit of a hit this year.  I have mentioned in a few areas of the blog that I need a truck to do my job.  Well, my previous truck crapped out on me and I was getting tired of buying higher mileage trucks and needing to put work into them a few years down the road.

Because of this, I ended up buying a used Dodge Ram 2500 with only 13,000 miles on it for an enormous....   $35,000....   OUCH!!!  I have felt uneasy about this purchase over the past couple weeks because I have never had a car payment before.  We were able to put down $20,000 on the truck which we are very thankful for, but the $400 car payment showed up in the mail and I got choked up a little bit.  It's a weird feeling but I only drive about 10-15K miles per year so we realize that I could have this truck for 15-20 years, maybe longer if things go well...  fingers crossed!! 

I think I've held off on writing this post because this goes against the retire early community big time. To think that $35,000 at 4% is $1,400 in dividend income I'm missing out on is a heart breaker.  That would pay for more than a month of our mortgage payment per year.  Or, that would take care of all of our additional expenses for one month every year...

But then I think about all the good things.  The truck is beautiful.  All chromed out like I have always wanted, fully loaded, large crew cab (think car seats for babies!) low mileage, one year old, cheaper than brand new since its slightly used, no thought of it breaking down in the near future and most importantly...   I will make money with it!  The truck should pay for itself in just a few years time and if it lasts 15-20 years, you are looking at 10-15 years of positive cash flow.  

Other than our house, this is the biggest purchase I have ever made.  Hopefully it will last for years to come and awesome memories will be made with it!  

With that being said, our goal to invest another $6-10K this year will be very tough.  I highly doubt it will happen because I'd love to be able to pay off the truck by December/January by using some of our emergency fund and any additional savings we will have. But we will see.  If the markets tank, I might decide to buy some stocks instead!

Now the good news...  

My wife and I bought Kinder Morgan (KMI) on October 1st.  With this purchase, we have put a total of around $42,000 to work since the beginning of 2015.  My goal of investing roughly $40,000 has been accomplished! So now for the numbers... 

We purchased 73 shares of Kinder Morgan at $28.25.  This purchase adds $148.92 of annual dividends to our account.

We now own 173.151 shares of KMI as this was an addition to previous purchases.  We are invested in 39 individual companies.  

KMI has fallen roughly 40% from its highs with the pull back in oil and the energy sector as a whole.  I think this will round out our position for now in KMI.  The position was already quite large but I just could not pass up a yield of over 7% on such a juggernaut of a company.  We will just sit back and see how it goes for now.  They are still looking to grow the dividend at 6-10% for the next few years and if that happens, I'll be tickled to death...  7% yield with 6% growth per year is pretty sweet! 

You can check out all the other purchases we have made for the year on my Stock Purchases and Sells page.

So there you have it.

What do you think of the new truck purchase?  What do you think of the KMI purchase? What are you looking to buy next?

ADD

12 comments:

  1. Ya, don't beat yourself up over it. The frugal community has many different goals. If you don't want to retire as early as others because you want to enjoy a truck then go for it. Especially since you have already put so much money to work for you this year. Nice job on that!

    Also, my family just paid off our brand new Honda Odyssey. Ouch but we have the same intent as you... To drive it forever.

    Nice KMI purchase. I own some and would like to average down at these super low prices.

    -Adam

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    1. Yup, I've always treated my trucks really well. I've driven every one till it has died and now that I have one with quite a few less miles on it, it should last a heck of a lot longer before it dies.

      Thanks for the vote of confidence on the purchase, I appreciate it

      Delete
  2. We have all made those "mistakes", but as long as you enjoy the truck its all good.

    I have also recently initiated a position in KMI. I consider it a bargain a this price level.

    Dividend Freedom

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    1. I can only hope this "mistake" last about 15 years. I like KMI as a company still but will probably make this my last purchase in them for a while until the energy sector seems to start coming around again. I'd like them to bring their debt levels down but I doubt that will happen. I would like this to be the lowest "bargain" it gets too though just for sanity sake.

      Thanks for stopping by!

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  3. ADD,

    I think you are doing just fine. It's something you wanted and it is necessary to get your work done at the same time. It might have costed more than you would like, but oh well you have to be able to enjoy some things whether a nice vehicle or homes there is nothing wrong with that. You are still doing much better than most of the people who have minimal investments or cash flow coming in.

    I can see the reluctance to post that. It's similar to me buying Fiat Chrysler recently without a dividend to get some of the perceived upside catalysts and spinoff shares of Ferrari in January. I still own many dividend payers and prefer that strategy.

    I also initiated 10 shares of KMI today a couple days late for this dividend unfortunately. Long time follower of the company and first time owner!

    Best,

    SWAN

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    1. We are certainly fortunate to be able to drop $20,000 at one time to purchase a "want" and we completely understand that. We are quite thankful to be in the position that we are in and if we don't get to retire quite as early, than that's okay.

      Glad to have you as a fellow shareholder!

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  4. No mistakes here. As long as you get utility out of the truck it was a wise purchase. KMI is in my opinion a great choice. I added 50 more shares on Friday, the price is fantastic. Enjoy your truck.

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    1. Thanks IH. I'm certainly enjoying it so far! Hopefully KMI pulls through the tough times we are experiencing now and comes out the other end with flying colors.

      Thanks for stopping by!

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  5. I wouldn't worry too much about your truck expense. You put a huge amount down, and quite frankly, you need this expense as it relates to your work. No truck, no work. Right? And, as you stated, by buying a newer, lower mileage auto you will most likely have it serve you for a long, long time. The DGI journey isn't about spending $0 and living like a hermit. Congrats on your milestone of investing $40k for the year. Just think, keeping up with your dividend growth investments, one day you'll have enough dividend income to cover that car expense should you have another one down the road.

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    1. Thanks for the kind words DivHut. I can't wait till the day our dividends are taking care of our expenses. With any luck, we will be able to put away another 40K next year. Projecting $7000 in dividends by end of next year would be huge and that's what I'm shooting for. With the new truck, that total could be in reach so I'm certainly going to give it my all.

      I appreciate the post DH,
      ADD

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  6. I wouldn't worry too much about the expense. You are doing fine and you need the truck for work, simply as that.

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