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I remember the luxury tax of 91 even though I was only 11 and far from luxury. I remember it because twice a day I would cross the bridge into and out of Thunderbolt, Georgia and get to see the yachts and sailboats that were being worked on in the town. Seemed like in one day they disappeared and the company folded. It took a very long time for another business to open shop and be successful in that area. There was another shop in Savannah that I didn't get to see that also lost a lot of business due to that tax. I too can see something similar happening should dividends become ordinary income tax. Only the harm will be much more broad. Let's hope no one gets any dumb ideas about changing the tax code and punishing retirement savings. |
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Obama would mostly likely love to issue an "executive order" to mandate taking 75% of my income so he can "redistribute" it to someone that hasn't held a job in their lifetime.... That would most certainly be very helpful to the economy.... for a day... until the recipient was broke again the next day and back on the free food wagon. |
Wow. MSFT and AMZN on the move today! Sheesh.
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You'd have had to have a lot of "conviction" to have held AMZN or MSFT for a long enough period to get to this point. Both of these stocks have had lousy performance for quite awhile. If you chart them for comparison sake - only the move yesterday pulled them into "decent" performance category. I charted both against Snap-On (SNA) just for fun and SNA beats MSFT handily -- over a 5 year chart (212% vs 55%) and even beats AMZN (212% vs 209%). I'm laughing here because who'd have thought Snap-On could pound those two.... The performance would be even worse if you backed up a week (before the latest move). Now --- punch FaceBook (FB) into the equation... it's only up 113% over the same period. HAHAHAHAHAHAHAHA |
Here's an interesting little tidbit.... I'd have never guessed in a million years. Apple raised it's dividend 11% which is nice... but it still doesn't pay much "percentage wise"... at 1.42%
But here's what shocked me..... Apple is now the largest payer of dividends writing checks for $12.1 billion a year, topping Exxon Mobil at $11.6 billion. |
Isn't Apple still at the top of the list for companies with the most cash on hand?
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According to this quarters report -- cash on hand - which included short and long term investments (bonds etc) is a whopping 192 BILLION. That's more than Microsoft and Google COMBINED. Astounding... In full disclosure I own 2000 shares. Gwen and I discussed them (AAPL) the other day (she was a Microsoft exec for 19 years beginning in 1984 before they were a public company) - where MSFT seems to just come out with an "upgrade" which many times seems to us to be more complicated to use, or add ons that we don't need or use.... Apple manages to come up with truly useful products and software upgrades that enhance, or makes our lives, more fun or more productive. As a company for investing in -- being able to charge a premium price is directly linked to that companies ability to create desirable products. I think Apple (AAPL) has done this time and again. I only wish they shared that cash hoard with their shareholders. But it's hard to argue with their TOTAL RETURN. Remember we have to balance the dividend payout with growth... but the goal is fantastic total return. |
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You missed the part about TOTAL RETURN for investors being the key. That is made up of any combination of growth and dividend. Apple (AAPL) has a 1 year total return of 56% - a 3 year T/R of 60% - and a 5 year T/R of 270% I'll take a triple of my money in 5 years as a successful investment any day. :>) |
I have Apple and it has worked out nicely for me. I wasn't sure when it was dropping like crazy, and I wanted to run. Then I remembered to stick it out, don't panic, low haul, and then it split, and has been doing great.
Thanks Greg. |
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I especially like the one where they can buy Ford, GM and Tesla and still have $41 Billion umm, left over!
http://business.financialpost.com/bu..._lsa=4dd2-6966 I finally bought Snap-On in October after seeing a Snap On truck every week for 25 years and always knowing they are by far the best tools. It was right under my nose all that time! I can't find a more stable, better looking chart. |
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That's some crazy statistic Erik!! Hard to imagine that much money.... Just WOW!! I own Snap-On (SNA) --- not a good dividend payer so I only own 500 shares -- but it's a great company - great brand - I buy their stuff.... so why not! |
After all these years finally looking at investing on some stock,
Any thoughts on CVX vs Exxon, |
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Good question Frank.... I've been buying "oil / oil related" all along during the big "sell off" / "oil is going to $10 a barrel". We ALL know oil is not going to stay at these low levels. If you pull a 5 year chart on these two companies they mirror each other - and their dividend is within a half a point of each other... so either one will serve you just fine. Don't fail to compare TOTAL RETURN and slug in some other similar names just for your own peace of mind. |
Again , thanks for the info Greg. I figured if I don't buy some now , I'll be mad my self 5 years out.
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Here's a very good article on how to get started SMALL in investing -- it takes Kinder Morgan Inc (KMI) and just talks about the power of small savings to get started and walks you thru what happens over a 5 year period.
I own KMI <15,000 shares> and it pays me $28,000 per year in dividends. What this article does is walks a guy thru the process and THINKING about how to get started. Dispelling the notion that you have to have big money to start with. Come to think of it - this is exactly what I've been writing about here for a couple years now! LOL |
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That's great. But the world wide web is pretty big and a link would really help me out there BIG BOYEE. |
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WHINERS!!! LOL http://seekingalpha.com/article/3148...-kinder-morgan |
I've stated in this thread many times that I HATE BONDS.... The reason I hate bonds is because they are sold to people as being the end all be all SAFE investment. Well.... That's very true as long as you plan to buy the bond and hold it for it's maturity, and if you're happy with ZERO growth in your money. Since you'll hold the bond to maturity and only receive you're money back. Buy a 10K bond = hold it for 10 years = collect the yield = Get your 10K back.
Now -- here's why I really hate them. Because they're NOT SAFE. Hell no! Right now -- if you'd have bought a bond that paid under 2% (less than the rate of inflation!) and you wanted / needed to sell... you're going to get clobbered on the price of the bond. Remember that the YIELD rate is fixed on the bond.... so in order to get more YIELD - the new buyer needs to PAY LESS than you did - in order to RAISE the yield to whatever the current levels of new bonds are yielding. So you hold a 2% bond - and a guy can buy a new bond tomorrow that pays 2.5%.... in order to have your bond yield the equivalent of 2.5% the buyer would only offer you "X" (well below your 10k). Your CHOICE would be to take the loss or to continue to hold the bond til maturity.... so let's say you bought it last year... you now have 9 more years to hold your "safe" bond -- collecting your lousy 2%.... and in the meantime the yields rise to 6% (more normal rates).... and you're only going to get your face value back 9 years from now. That scenario is pure LOSER. My MIL got talked into bonds and annuities 30 years ago -- I guess that's why we help support her today. Sad. Don't be that guy. I love it when people tell you to buy stocks and then as you near retirement you should switch to bonds and "safer" investments. REALLY?? So wait -- let me think about this.... I've been investing in stocks for 25 years - and I've tripled my money and I'm getting a 8% yield on my cost basis.... and I'm planning on being retired for another 25 years.... WHY WOULD I ABANDON A STRATEGY THAT HAS MADE ME NOTHING BUT MONEY for something that is going to lose me money and the ability to stay well ahead of inflation?? WHY?? Because someone wants a commission... oh -- and that someone is still working for a living. IF they were so F'n smart with their money - why are they 63 years old and still working?? (okay - that's cruel.... but is the question I'd love to ask them). |
Only time I've ever been involved with ANY success in regards to bonds was back in the early 2000s. Our company's defined benefit pension plan was completely overfunded because of our very successful aggressive investing strategy and the actuary specialist told us that no matter how much more money we made inside the plan, Uncle Sam was going to get it all... So we switched everything over to Treasury bonds to ride out the rest of the term within the plan. This was just a few months before the dot com bust...
Sometimes it's better to be lucky than good... I got beat up pretty good in the high yield municipal bond market during the 2008 CDO debacle... Again, they were sold to me as the safest way to create steady income with the added benefit of avoiding income tax on the dividends. The municipal bonds themselves held inside the funds weren't hurt by the mortgage scandals, but they got drug down in the mud with them as they were in basically the same market...some of which still haven't gained their value back 7 years later now. Greg is spot on with his assessment above... |
^^^^, as usual.
So true though, the phrase "if it ain't broke, don't fix it" comes too mind. And i dont think that assessments "cruel", just stating a fact. Alot of people (financial salespeople) dont "figure it out" till late in life, better late than never i guess. Heck, i'm still having trouble assembling this spreadsheet of stocks... |
Seems like an interesting topic for this thread.
http://www.brainjet.com/random/5642/...es-they-goofed |
Having been to the Monaco Grand Prix (Gwen and I went to the 75th running).... everything this guy writes, is spot on about the event! The money that attends is WORLD CLASS... the cars are world class... and the yachts are the biggest I've ever seen ANYWHERE (200 footers are TINY - I'd be embarrassed to be on one).... but it's the way the author rolls right into an analogy of racing and INVESTING that caught my attention and thus sharing here. LOL
http://www.uncommonwisdomdaily.com/w...race-car-20567 |
McDonalds
This IS NOT good news from McDonalds (MCD).... Think about it this way. If your sales are going gang busters you WANT people to know about it! It's good for shareholders... it makes the news (free advertising) etc. When your sales SUCK... then you hide the info. No thank you. Too many other good, growing, companies out there to invest in with better dividends.
http://www.bloomberg.com/news/articl...me-store-sales I post this because I always discuss FUNDAMENTAL CHANGES. This is a fundamental change that someone should be concerned about. These are all the little details you need to learn to avoid land mines in investing. |
While watching part of the Chevrolet Detroit Belle Isle Grand Prix race today, I saw this e-trade commercial and it really solidifies the mentality that Greg has been trying to emphasize.
https://www.youtube.com/watch?v=cXYO0DBb-sM |
What do you all have started for your children?
My son is 1 1/2 years old. Did you guys start a 529 college fund Or is there something else I could start for him. As I understand He cannot start a Roth because you need to have earned income. Can I gift money into that? Thanks John |
John you may want to sit down with an accountant for something like this. I'm not sure about the Roth but that may be the case with him having no income. The reason I say sit down with an accountant is because you mentioned the 529. If your goal is to save for college, it's a potential source for such a goal. However, there are tax implications involving the 529. Your state may give you a tax break for investing in a 529. Or, it may be better to invest in another state's 529. I know Utah has or had one of the best 529 plans in the country for a while.
The other issue in general is you're doing this for someone else. It could get tricky and you'd want to make sure it's shielded as best as possible now and for when he comes of age. There's also the issue of what happens to it should something happens to you, death or a law suit even. Maybe I'm going overboard but I think putting money away for someone else is not easy to do correctly. Too many what if's. Good luck |
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Trey gave you some good advice John --- see a professional with these kinds of questions. There's about half a zillion different ways to save money for a child -- but there's no one right way. It needs to be worked out for YOUR goals and income strategy. There are "gifts" you can give --- each spouse - to the child - tax free - for both of you. There are limits per year and per lifetime etc. So you really need to get educated on all this stuff. IT will make a huge difference for them. |
I haven't posted much lately -- mostly - because the thread just gets longer and longer --- but there really isn't much "new" to add to the thought process that is BASIC investing. Basic investing is so simple. You save some money - buy some shares in a great company that pays a dividend... add to the pile as you can.
So having said that -- I always have "cash" that isn't doing anything. Don't ask me why... because I have no answer. I just like a margin of cash that is ready for "whatever". We're not talking about $500 either... so it's really dumb. Summer is a time when the market typically just drips AWAY day after day. People get busy with vacations... there's not much news... and the market just takes a break. So - knowing that... This is when I usually look to pick away at adding a name or adding to a position. But -- always the big butt -- like everyone else... I'm on the fence watching the affect that a FED rate hike will look like. Do we get crushed (temporarily)? Does the market shrug it off? Is the signal from the FED that the economy is doing well - so the market should be good because business is good (that is the bottom line after all)? The other thing that runs thru your (and mine) head is always -- is the market overvalued (too high) and I should wait for a big pullback?? So having said that -- I want you to pull up a 5 year chart of BlackRock (BLK).... this is a rhetorical question... at what point in the last five years would that chart (if you did NOT have this historical look now) tell you it's overvalued and to wait for a buy? LOL Thus my post today... HOPEFULLY this thread - if it's done nothing else - has taught you to take a far longer term approach to your investing. Are we investing for what might happen 6 months from now - or are we investing for 20 YEARS from now?? |
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Thanks, Don |
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So here's always been my point about this - and I've been retired for 23 years now (I'll be 62 this summer). If a strategy that worked well enough to get me to retirement - which may have taken years - why would I change that? It might have taken 25 or 30 years to get enough of a nest egg that would see me thru retirement.... and perhaps I have ANOTHER 25 years of life left!! I sure hope so!! 65 to 90 is 25 years! Will there be ups and downs in my portfolio over that time? Hell yes! Many of them. But if I've followed the plan --- I'm living off the dividend strategy -- not the capital. Oh - and by the way - that capital should have grown many fold over the time I've been investing. So if I've got 300% more than I put in -- and it's down 20% -- who cares?!?!? I'm not spending (or selling) all of my capital "this year" (the year or two or three when it's down from the HIGH). The key to happy retirement is to have your spending "in check" -- there just shouldn't be much outgo... and your Social Security should only be a supplement to your real income from your investments... and the dividends should have grown over time from when you first bought "X". Maybe the actual dividend percentage being paid on your original investment is now 20% or more!! Say you bought at $50 and it paid 5% ($2.50 per year dividend) and now 20 years later it's paying you $4.00 per year in dividends. That's now paying you 8%.... and think about this as well.... it's been paying you $2.50 or better per year for 20 years --- at a steady rate of $2.50 for 20 years that's all of your money back ($50 in total dividends per share!). Hopefully you choose to re-invest the dividend all those 20 years and you now have a bunch more shares than you started with. Here's a real life scenario --- that just happened to close this week. In 2005 I invested $200,000 in an apartment LLC (Limited Liability Corp). The dividend paid was 7% ($14,000 per year).... "We" just sold this property and my net cash out is $655,000. So in 10 years I collected $140,000 in dividends - and I got a net (gross actually) check for $675,000. Now - if I get a call next week from the same group and they ask me to buy into another apartment.... would I say "F" you! I'm retired!? Let me do the math - in 10 more years I'll be 72 - I hope to still be racing with Charlie.... and maybe if this new investment works as well as the last one did -- I'll get a check for 1.5 million (investing $500,000 in the new deal) and the $500,000 at 6% will be paying me $30 grand a year... So I ask you.... should I change my strategy??? Or should I buy another race car? |
Option C. BOTH! :D
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Don |
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In our personal situation - "retirement" accounts don't make any sense. I've already BEEN retired 23 years... Gwen has retired TWICE... and she's younger than I am. So the point it - in a retirement account we'd have money tied up that we'd have no access too. Having said that we do have them and they're 7 figure accounts... but that's because they were well invested and have been for many years. Now --- You have to be really really careful about buying REAL ESTATE investments AKA "passive" investments inside a retirement account. I have done that - mistakenly - and that IRA had to file an income tax form every year and pay taxes. I'm not a "tax" guy... Taxes are way too complicated for my feeble brain - and my stuff if far far too complicated (last years filing was almost 200 pages!). So I stay away from stuff I don't understand as I've made that mistake in the past. The other thing is -- DIVIDENDS -- are taxed at 20%. They're NOT "earned income" or interest... and the LLC's I've invested in are DIVIDEND paying set ups. That -- and much of the income - if not all of it - is offset by the DEPRECIATION that you get (again - complicated and much more to it than meets the eye). I first got into real estate LLC's via my tax accountant... so since he put his money where his mouth is - and understood our situation - if he said I should do it - I did. Other than that.... I'm an idiot about most of it. The part I do know -- every one of them has worked out in OMG fashion... OMG as in GREAT. |
Thought of something this morning while reading the "business news". The headline says the US stock market follows Europe down over the Greek debt issue.
I thought to myself.... REALLY? So McDonalds and Coke and Caterpillar are going to be sold off because "WE" are worried about whether or not the Greeks can pay their bills. You know what.... I didn't get up this morning and change a single thing I'm doing or planning based on this kind of info. Frankly - I could care less if they're in or out of the whole "euro" currency thing - because I don't care about the "euro" - who's in it or what it's even all about. What I do care about is whether or not the businesses I'm investing in are paying their bills - whether or not their sales are higher going forward - and what their willing to share with me as a stockholder. I looked around and didn't see a single company that I'm in that was dependent on Greece for their business. What's my point?? The point is that the "news" can drive you crazy.... which is why I call them "talking heads". 10 years from now we won't even remember who Greece is let alone whether they "reformed" or not. It's like discussing a pimple. Greece isn't China. I'll get worried when China can't pay it's bills. |
Embarrassingly I've known about this thread since it began and something recently sparked me to start reading it. I've read through page 57 over the last couple days.... which is interesting because I can see the advice and discussions and then what happened in the market following the discussions.
What is your advice on getting caught up on the thread? I can slowly work my way through all 500 pages but that'll take some time. I need to refine my own investments and feel like I'm in a very good position to use the lessons in this thread. I'm 31 and have a 401K, ROTH 401K, ROTH IRA, HSA, a managed portfolio as well as other mutual funds and am a partner in a craft brewery. I've been wanting to get into real estate but my location makes it somewhat prohibitive (Santa Barbara, CA). Thanks! Dave |
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