Saturday, May 21, 2016

A lot of Updates - Part 2 - Recent Buys!

Hello again,

A continuation from the last post results in great information for you guys about what has been going on around here. First of all, the...

Stock Purchases and Sells

...pages have been updated.  Perhaps you noticed the stock purchases and sells page already in the last few days and in that case, you'll see that a lot of purchases were made!!

I alluded to the fact that my wife is awesome in the previous post and now I'll tell you why.  Many years ago, she was given a small inheritance when an aunt passed away.  This inheritance paid off her small student loans, a new car (Nissan Versa), a trip to Ireland and finally it has increased our pursuit of early retirement!

We have had roughly $16,000 sitting in a separate bank account for the past 2+ years.  Over the course of these 2 years, a lot of uses for this money has been talked about but nothing has ever been done.

First, we wanted to update our master bath.  We wanted to knock out a wall, put in a shower (so we have two) but the contractors we had come in to give us an estimate wanted $5,000 or more.  That number scares us both because personally I think I can do all that work for much cheaper.

Then, we wanted to completely redo our kitchen.  It is closed off, old cabinets, no pantry, fridge is in a weird location, etc.  No contractors for this to tell you quotes, but just new cabinets alone were running $5,000.  Our kitchen is perfectly fine the way it is.  It does everything we need it to do and in the 4 years we have owned the house, it has never let us down.  So why change it?

Finally, the big one...   Completely finish our unfinished basement.  I have started this undertaking already.  The studs are up, all duct work is framed out, and some additional pieces (doors and such) have been purchased.  Thing is, we never go down there currently and there is no reason to.  Our living room already has everything we need.  It is just my wife and I in a 3 bedroom 1.5 bathroom house.  The only thing a finished basement adds is more costs to furnish it, more time to keep it clean, and more space that we currently don't use, etc.

So that brings us to two weeks ago.  I received our QUARTERLY statement from the bank account and what I saw was shocking...   We made, wait for it...   SEVEN DOLLARS! in 3 months!  Roughly $2.33 a month in income.  Absolutely PATHETIC!  Reading early retirement blogs have changed my life and this bank statement was just the kick in the ass I needed to try to persuade my wife into using this money to make more money.

Before I go on, can we all admit that the interest the banks pay out...   SUCKS!

I sent my wife a text the next morning telling her I wanted to discuss this situation and she agreed.  We went out for a nice dinner (not frugal, but we had not in a while, and I was about to take $16,000 from my wife) and due to the situation, I thought it was worth it.  $40 dinner for potentially $16,000 in return..  pretty damn good if you ask me!

The dinner was very civilized.  I stated my intentions, told her the pitiful amount of interest we were making and then the hard part.  Convincing her that I do not want to update our house.  She has been gung ho on making these updates.  Her reasoning has always been when we have kids, there will be no time, less money coming in (stay at home mom) and she wants it.  Well, unfortunately we have been trying to make a baby for a year now, she has undergone surgery to help and the doctor said it could be six months to a year for her body to heal and be in perfect condition to make a baby.

With the plans of a baby being potentially push back for 1 or more years, the thought of making $28 dollars in interest per year, bugs the hell out of me.

This same amount of money, invested at 4% yield would make $640 per year or more including reinvestment.  A $610 DIFFERENCE per year!  If invested wisely, we might also get some capital gains as well.

Furthermore, if we continue to save and invest at our current rate for 5 years, I strongly believe that we will be able to do what we want.  Not quite retired, but, the ability to cut back hours at work, travel more and start making updates on the house.  If my calculations are correct, in 5 years we will have enough money to pay off our house and still be making $10,000 a year in dividends.  At current spending rates this is enough to pay for almost half of our expenses.  Incredible, and the reason to get this money in the market sooner rather than later.  Plus, with more time to do things, I'll have the ability to search craigslist/scratch and dent places and such to find cheaper building materials to complete the house to her standards.  In five years, $640 each year is $3,200 and if you include reinvestments/dividend growth you are looking at roughly $4,000 total.

So, after it was all said and done, she gave me permission to invest all the money!

So like I said in a previous post, my wife is AWESOME!

Without her and the willingness to continue saving/investing money instead of living for the here and now would not be possible.  I can be tough to live with sometimes with regards to finances but I hope she can see that everything I'm doing is for the both of us.  The more we can save/invest, the quicker we can get to the point of doing what we want when we want.  So thank you babe...

In conclusion, here is what I did with the money:

  • Apple (AAPL) - 20 shares at $93.44 on 5/10/16
  • Stag Industrial (STAG) - 85 shares at $21.25 on 5/11/16
  • Pebblebrook Hotel Trust (PEB) - 65 shares at $27.95 on 5/11/16
  • Omega Healthcare (OHI) - 273 shares at $32.75 on 5/11/16
  • Cardinal Health (CAH) - 23 shares at $78.50 on 5/11/16
  • Archer Daniels Midland (ADM) - 47 shares at $38.27 on 5/11/16
  • Under Armour (UA) - 52 shares at $37.32 on 5/13/16

I used all of her money, plus some additional savings that we had built up in our accounts to invest roughly $20,000 in the span of 4 days.  

These investments yield $1,042 in dividends over the next 12 months or roughly a 5.20% yield.  I went slightly higher with regards to yield and especially in OHI because I think it is one of the most under-appreciated REITs out there right now.  Unfortunately, the Fed looks like it is still going to raise rates come June so the REIT's all took a bit of a hit this past week.  All the stocks I purchased that are not REIT's are all up since these purchases.

So there you have it, you guys are all up to date!!

Let me know what you think, I'd love to hear what you have to say!


P.S. Love you babe...


  1. Hey ADD I must commend you for your courage haha not an easy thing to do! I am now starting my DGI as well but still in college so can't really go all in yet! I purchased STAG recently and am waiting for June to add more to my REIT collection depedning on the fed decision. Luckily I owned BAC before I decided to do DGI so guess I will win no matter what that decision is but if they raise rates and the REITs drop some more I want to add more to these holdings.

    1. You're telling me. My wife is usually understanding about things but this was a tall order to ask. $16,000 is certainly not pocket change.

      I like the STAG purchase and you can always average down! Same goes for insurance stocks too. Interest goes up, they make more money. That is why you diversify. When something goes down, something else is hopefully going up!

      Thanks for stopping by

  2. ADD,

    Bravo! Having been invested mostly in cash the past six months I can totally relate. It's one thing when rates are in the 2-4% range, but at near zero it can be incredibly frustrating keeping money in checking and savings accounts.

    Congrats on the $1,000 of income you just created.


    1. Thank you very much MDP! We aren't able to put away as much as you do every month but we are still doing quite well for 28 years old. I'm definitely looking forward to see that $1000 start compounding!

  3. Awesome! IMHO, you guys made the right choice. When I first began investing in stocks, my wife was sceptical. But 8 years later, she can see the results and loves the idea buying stocks in solid dividend growth companies.

    1. I made a promise to my wife that I will start keeping her in the loop on our dividend income, net worth, stocks, etc once a month. I believe this will do a few things for us. One, showing her that all the money we save is now working harder than we ever could creating more income. Two, reduce the skepticism surrounding investing in the stock market (for her sake though I hope they go up.. short term :) ). Three, bring us closer together regarding finances.

      Right now I basically just tell her... Stop spending money!! Now, I'll be able to show her why!

      So far, she has told me to buy 3 stocks... PG, KRFT, STJ .... lets just say that she is 2 for 3 on picking stocks that have been bought out for a significant premium. Maybe the end result is she starts doing all the investing haha!

  4. I started investing even before i got married ,but some of the stocks didnt turn out well,but you learn and move on .From last year i have been following DGI community and so far it turned out good for me.We have common companies aapl and OHI.
    Good luck

    1. Both great companies in my opinion. Best of luck

  5. Congrats on the recent buys. Awesome to put all that money to work. We are contemplating doing the same with an account we have. Although it earns 3% annually, you have to jump through all these hoops every month or else you dont get anything that month. Lame. I am waiting for a big market correction, then I will take that money and dump it in. If the correction never comes, I will eventually just make the leap. Thanks for the post!

    1. They always say time in the market is better than timing the market but you've got to think at some point the market will pull back from these obscene levels.

  6. Lots of good purchases there and it's always better to have money in the market than out of it for the long term. Hopefully you and your wife can sleep easy with that money in there if the market drops.

    1. Well, she never looks at it and i know that its the dividends that will fund our lifestyle so I think we will be fine! Honestly, I hope they all double along with the market in the next 6 months so I can sell off, pay off the house and then wait for a drop. Bound to happen some time!