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...