My *personal, non professional* opinion would be:
1. Calculate your monthly bills, whats necessary to survive, and multiply it by 8 for 8 months of an "emergency" fund. put the rest of the money to "work". -- Reason being, IF something were to happen, you got 8 months to "fix it" (find a job, or whatever), and then if you dont, you can start pulling that money out that was working for you.
2. Put the extra money to work:
a. Max out your ROTH IRA each year with Investing 102 stocks (dividend champions that YOU are comfortable with).
b. Put the rest of the money to work in a brokerage account, again with dividend champions. - in case of emergency, you got 8 months backup above to work with, before you have to touch this account.
3. Keep some as an "extra" or normal savings. for those purchases that you dont have cash for in your sock drawer. because we NEVER touch the emergency fund. Not unless you lose your job or some catastrophic event happes. -- that money dont exist.

On a side note, find a bank that gives a decent interest rate. ING Direct has 0.80% interest on all their free accounts. Its not "great" but its still "working for me" while it sits in there.



As for the down stocks, I have a couple in my portfolio that are like that too. Some "bad choices"... I figured, i'd leave them there. They arent worth much of anything at this point, so why spend more money to sell them. and who knows, maybe in 10 years they'll be worth something again. What am i going to gain from selling them at this point? nothing. i've got time on my side (32 yrs old), maybe they'll eventually make a comeback. Im not out any more money to hold them, so its not costing me anything to play the wait and see game.

Just my 2 cents...

by the way, you got a good start for your age!!!!

Sokoloka --

Number one -- KUDOS TO YOU MY FRIEND! You're way ahead of the pack!


Just so you know - there is no "right or wrong" guide to investing or how much cash to have on hand etc. It's more your personal comfort level. However.... having said that.... you have WAY too much dead money (savings).

At your age -- you should have maybe 10K in savings for peace of mind - and the rest should be in best of breed high quality stocks. The 80 + 55 - 10 is a nice 125K to invest which should MAKE YOU 6K a year in dividend income.... reinvested - you're going to be very very comfortable in retirement!


I'd hold the Citi.... banks suck right now but that won't be forever. Depending on what you have invested in it ($$ amount) you might see what it takes to average it down. It will pay a "real" dividend eventually as banks return to profitability. Read this thread --- think LONG TERM --- and it can pay handsomely to invest in "normally decent" stuff - when everyone else is running for the hills. Citibank ain't likely to go away. They really just need to get rid of Vicram but that's a different thread! LOL


Now -- on holding a years worth of "income" --- that's just nonsense. You're thinking like a guy that has no assets! When you have assets (liquid) you have options. Keep 10K for emergencies. Invest the rest. If you are unemployed for long term - you only need to sell or cash the dividend checks enough to live on in an emergency situation. You have 100K plus... you could make 5 to 6K a year in dividends alone - with ZERO growth (I figure 4% on average to be extra conservative)... so with minimum growth in capital - you'd have 10K a year (growth plus dividends) before you touched the principle and you still have the 10K emergency cash (so that's 20K for a year) to get you by on top of unemployment etc. You don't' own a house --- so you really just need to get by for awhile.

In your case - given your age - I'd put MINIMUM down payment and hold as much invested as you possibly can. Banks would look favorably on a guy with liquid assets. You're going to make money on your investments NOT on your house. That's a common fallacy. Even in good times nobody really makes any money on their primary residence - because as your house rises in value - so does everyone else's. You're just trading dollars. Investments make money and they double and double again.

Your 125K now - should double every 7 years. Let's look at what that looks like.

125K
250K
500K
1 MM
2 MM
4 MM

So in 35 years - 4 Million -- let's say you suck as an investor and only make 7% total return per year.... you're still going to be a couple million. At 2 million paying 5% dividend - you have 100K income.

If your house quadrupled during the 30 years you make payments on it -- back out the payments and interest - then factor in "you must live somewhere therefore you have a cost".... and the house doesn't pay you.

I'm not saying you shouldn't own a house... I'm just saying I wouldn't be robbing your savings which in the long run will make you far more money on your money.

:lateral: :cheers:

Sokoloka --


Get busy and put that money to WORK!


Just to add ======= here's what those dividends start to look like. This is what I've gotten just this month so far -- and is just a snap shot of ONE account .

05/09/2012 JNK SPDR BARCLAYS CAPITAL HIGH YIELD BOND ETF
type: ORD DIV - CASH
$2,462.88
05/09/2012 STDBANCO SANTANDER SA ADR FSPONSORED ADR
type: FOREIGN TAX PAID
-$1,819.81
05/09/2012 STD BANCO SANTANDER SA ADR FSPONSORED ADR
type: QUALIFIED DIV
$8,665.78
05/07/2012 HYG ISHARES TRUST IBOXX $ HIGH YIELD CORP
type: ORD DIV - CASH
$3,307.32
05/07/2012 PFF ISHARES S&P U S PFD FUNDS&P U S PFD STK INDEX FD
type: ORD DIV - CASH
$2,119.42
05/01/2012 T A T & T INC NEW
type: QUALIFIED DIV
$6,600.00

Sokolka...

Nice job at such a young age...:thumbsup: :thumbsup:

I agree with having the emergency fund and putting the rest to work..

It took me a while to convince the Wife to not tie too much money into the house... She understands now..

As Greg said, the house will stay flat in value , while you double your money over time.

For some, paying off more on the house "feels" better, but good luck trying to get the money out if you should need it...Banks suck..

I prefer to have my money at work, 24/7, and my House loan rate low...

Then I control my money.. I have people with paid off houses because they were afraid of the market... Now they cannot access their money and they live on a tight budget...

Of Course , never an annuity, EVER...But I think you know that..

Well done...At your age I was just getting started, and I still ended up retiring at 52...Due to health reasons, but i still was able to do it...

YOU....Oh my, you will retire when ever you want at this rate..:hail: :hail:

I have to disagree somewhat with the advice on real estate, especially if you are talking about San Diego. Real estate will not stay flat over the long term in San Diego. I live in San Diego and can give you a real life example on one of the houses that I purchased. In 1994 I bought a house with a $30,000 down payment. Sold in 2006. My annual compounded return equates to 29% per year. That would be very hard to beat in the stock market, unless you happened to have put all of your money in Apple. When I bought in 1994, the market sucked and no one wanted to own real estate, just like today. The market stayed flat for a few years, but took off in the late 1990's. I would say now is a very good time to invest in real estate in San Diego, especially with mortgage rates at historical lows.

You might argue that my timing was perfect and I sold at the peak of the bubble. That is probably true, but while the value of the house is lower today, I still would have made a 15+% annual return if I had held and sold today.

Sure you have to make mortgage payments and pay taxes on the home, but don’t forget those are tax deductable and part of the payments are going towards paying down the mortgage.

I don’t disagree that investing in dividend stocks is a great idea, but personally, I would make my first investment in real estate assuming you are planning to locate in San Diego and remain there for the long term.

Greg's post reminded me to look at my account today and I started cracking up...

Here's interest from the cash sitting in one of my accounts (lazy workers)...

04/27/2012
SCHWAB1 INT 03/29-04/26
type: INTEREST
$6.52

Here's the dividend from about the same amount of money parked in a fairly conservative investment (more productive workers)...
05/07/2012
LQD ISHARES IBOXX INVESTOP IBOXX $ INVESTOP CORP
type: ORD INC DIV REINV.
$1,014.80

The point is, it is better to have your money working (even in something boring like LQD), versus lazing under a shade tree collecting dust. After puking in my mouth a little, I put some of those lazy dogs back to work today.

Good point, Vancouver, BC, Canada is very similar.

I know of alot of Italian construction companies that are local that are building and developing in San Diego. That is really good news for you.

Up here there's a huge influx of cash and investors from Asia buying real estate and prices just keep going up and up to the point where crack shack homes in certain parts of town are $1 million or more. I have more than doubled my money on my home if I sell. But I think GW is preaching the slow and steady investing approach here. Real Estate investing is timing and holding as well.

My point about real estate vs investing is that your primary residence is NOT an investment. It's overhead/cost... and it's a time proven fact that the stock market outpaces ANY other investment including real estate.

If you want to invest in real estate as an INVESTMENT -- that is an entirely different discussion. I own commercial and residential investment properties. But they are INVESTMENTS not my primary residence.

My point to the original question was to invest the most he can since he's young - and put as little down as possible in his primary residence. Since everyone has costs of living somewhere - just make it that. And make some money in the invested assets.

SUCH A GOOD EYE OPENER!!

I love it!!


:lateral: :cheers: :woot:

FACEYBOOK


Okay -- I've had about a zillion emails / PM's / Calls asking if "I should - could - would" buy into the FACEBOOK IPO. So here's my take on it - it's GAMBLING - it's HYPE - but it also appears to be BIG....

SO because of my "accounts" -- I've been "allowed" to get into the IPO at offering price ($28 to $35) one of my brokerages. I have asked for 2000 shares. Remember that this is 'over subscribed' so I might not get any - I might get 100 I might get 10.... I'll get what I get and pay the "set" price at OPEN.

I would NOT buy RETAIL -- in other words --- the first trades AFTER the IPO set price! That could be 60 - 70 - 80 - 100 who knows -- but since I can get in at the set price - I stand a chance of having a gain.

I'm sharing this - as I do my other "investment life" as a "here's how all this crap works investing 102 experience". So as usual -- this is a "it takes money to make money" moment. I wouldn't be allowed into the IPO if I didn't already have a substantial account! The guy that needs it the least - gets the most... I don't happen to like that morally but it is what it is.

This is expected to price TOMORROW --- so you can all live vicariously and see if I sink or swim. I don't like Facebook - I don't use it - but EVERYBODY but me does... I think it's a fad but I'm not against making money - regardless of what I think.

Nice!

the question is, do you hold or do you sell for a quick 2x-3x profit if it goes that route... That'd be the hard decision for me to make. LOL.

i agree with the "fad" comment. its the "best thing" out right now, but it only takes one good competitor to come up with the "next best thing" to knock it off its block.

on a side note, i use it for personal use (keeping up with friends/family) AND for my freelance photo business (www.facebook.com/albertd.photography). It makes a GREAT small business advertising tool!!

Greg what's going on!!! :lol: Hope you make a bundle buddy. :thumbsup:

Can you buy some for me at 28-35 I'll gladly take them off your hands. :D

Great question Albert -- and regardless of what you do - you'll always second guess it and do it WRONG. Sell and it'll go to $1000 hold and it goes nowhere and you wish you'd have flipped it when you had a double... ME? I'll do it the conservative way -- if it goes gangbusters I'll sell some and hold the house's money.... It's the old pigs get fat and hogs get slaughtered. Of course that depends if I get any at all...

I'd do that if it was legal tax wise.... but it's the old "fair market" rule that kicks in.

Like I said -- if I get it for the IPO set price -- great - otherwise I wouldn't bother.

:cheers:

Did your brokerage ask you about holding it for awhile? I ask because my buddy got offered to buy some as well but they asked him (not required) to hold it for a bit (I think 90 days?) before selling. Very casual and nothing on paper. I found that kinda strange.

Seems like a strange investment for a website you've never experienced. What's your alias? John Doe Jack Smack Rodney Snodgrass??

Thank you for all the positive replies! Nice to have a feel good every once in awhile.

It seems like I inherited a little of the immigrant mentality from my parents and have this innate desire to own my own home outright as soon as possible. I agree that I have too much dead money sitting around currently, and realistically I'm at least 9 months out from purchasing anything.

I adjusted my position in Citi two days ago, and low and behold the little man in the market got me AGAIN. Seems like the dump JP Morgan just took for $2B smashed all the banks down too. Should have waited one more day to adjust!! Interestingly enough, the girl who I'm seeing over here in London is a risk analyst for their hedge arm. Apparently the investment arm in question has no risk division themselves haha. Surprise!

When it comes to dividend investing, is there a "historically" BETTER time to get in? I.e. a month prior to the anticipated dividend date, after earnings, after the most recent dividend etc? Or just jump in, ride the wave and hope that the market appreciates the base stock while pumping out dividends on a quarterly basis?

I have a few more money moves to make but my goal is to diversify into the GW school of investing by mid-June and see where it takes me from there. Took two sizable (for me) gambles on open market shares yesterday both in my own company and my parent's company. Both are clost to 52 week lows - hope there's some appreciable correction in the near future.

I've always been a pretty good saver while never really denying myself anything that I REALLY want. Sometimes I chuckle to think how much more investment "capital" I'd have if I didn't start this damn corvette! But where would the fun in that be? :thumbsup:


E

"Tittykaka"

:D
I don't think I'd refer to it as an "investment".... I'd call it gambling. Which is why if it pops - I'll dump some. And I highly doubt I'll get the 2000 shares requested - but if I did - that would be 70 grand... My thinking is I might get 100.

BTW right there is the lesson for "102" -- while 70K seems like a lot -- it's money that % wise for me would be like finding a nickel in the street... so if I lost it - I wouldn't notice. Most everyone that's asked me about FaceyKissyBook really can't afford to gamble like that and shouldn't be invested in it yet they're the ones that will have to pay retail - are the most eager to jump into it - and are the least sophisticated investors. AKA: The ones that should not be buying it - but will anyway.

No they didn't ask anything like that Dave. But it doesn't surprise me. If his brokerage is one of the "underwriters" - they wan to see the stock pop - and STAY up... and or go higher.

The stock market is just a market --- so if there are more BUYERS than SELLERS -- the stock goes higher.... Thus "it pays" to ask people to refrain from selling right away. It makes more headlines - and makes the underwriters look "successful" in their underwriting efforts. Remember that they're salesman and they make big fees doing underwriting.... so they want to show others thinking about going IPO that they're the ones to do business with. :cheers:

Life should be part investing -- and part fun too... it's not all about just investing. But you are a CLASSIC example of how it should be done -- i.e., SAVING EARLY IN LIFE. That's what this thread is trying to get people to understand - is that TIME factor and how much it affects your ability to gain.


So the "jump in" question ------ There's no right answer --- and market "timing" never seems to work (remember the little man!).... and there's many theories written about when to buy a dividend stock. To which I smear at and say -- if it's a great company - pays a good dividend - is a best of breed name - then just buy the damn thing and if you looked at those total returns and 5 and 10 year charts... does it really make any difference in your performance if you'd saved 50 cents or a dollar on the buy? I think not.

I have a good stake in Annaly Capital Management (NLY) because of it's outsized dividend - and frankly - because it doesn't really move much - it goes 25 or 30 cents one way or the other. BUT -- at one point a month or so I showed a "loss" in the name of 20 grand or so... And you look at that when everything else (pretty much) is green and say WTF! But then I pull up my Excel spreadsheet and see that NLY pays me 19,950 PER QUARTER (35,000 shares @ .57 quarterly dividend).... so the 20K underwater goes away with the next quarterly dividend payment. Does that share price (at any given moment) really mean much right now.... HELL NO! And if it was down 40K? NO! Because I'm even in 6 months -- and if you were reinvesting that dividend you'd be buying in at lower prices.

So - that's a long answer - but if you are INVESTING -- not trying to trade.. then I wouldn't spend any time trying to game the market. The investments are so much bigger than that over time.

BTW -- Using Annaly (NLY) is just using it for an example. I'm not saying anyone should be in the name - in fact - it's most likely an INAPPROPRIATE investment for most - and especially for people that are NOT watching the market - and or interest rates etc. It is not a buy and hold investment. It is highly interest rate sensitive and will get hammered (perhaps) if we get interest rates moving to the upside.

I am NEVER trying to recommend stocks/investments. I'm only trying to get people to see actual results by using some of my own personal investments.


:cheers:

OK I must have read this wrong...
 

If I read this correct... 1000 shares of this (10K VALUE) WOULD PAY 1109.00 Dividend per Month?



Open 10.76

EPS (Trailing 12 mo.)
1.672

Dividend Yield 11.16%
Monthly Dividend 0.1015
Ex-Dividend Date 5/29/12
Dividend Payable Date 6/22/12

No, it would pay $101.50 per month. 11.16% is annual yield.

I have a small position in nly. I must of bought it when you were down cause its been green the whole time i owned it. About a month now. LOL

I'm going to post a link to this article -- not because he's pushing McDonalds stock -- but because of the first paragraph.... which you'll have to read to find out. But it's a mirror of what I tell people all the time... and it's appropriate today given the interest in FaceyBook etc.


http://seekingalpha.com/article/5845...g_income&ifp=0

IPO's from 10+ years ago still hanging on as a reminder of what not to do:

-----------------------------------Mkt------Cost------Net Gain

MAXYGEN INC 100 @ $5.61 $561.00 $791.25 -$230.25

MICRON TECHN...200 @ $6.36 $1,272.00 $2,869.00 -$1,597.00

PERICOM SEMI... 200 @ $7.89 $1,578.00 $3,550.00 -$1,972.00

Do I wish I would have bought shares of McDonalds now? :yes:

All the dividend stocks I've bought since this thread inspired me closed comfortably in the green Friday. :unibrow:

Guy shows a good example of what just $5k will do in MCD. I of course bought high, and have been in the red the whole time on this but I'm holding it long term 30+ years.

EXACTLY -- because if you go back and look at the chart -- it's low on the left and climbs steadily to the right... and there's no reason to believe that it's somehow - after you bought it - going to start a long term decline. In the meantime - they send you money every quarter as a reward. WTF is not to like about that?


I'm down 60 GRAND in Banco Santander.... what do I do? Buy more... increase my dividend "reward" and kick back. I have 20+ "green ones" that more than cover the 2 or 3 in the red ones... and every one of them sends me checks. :cheers: :woot:

Greg,
Again this is all very good reading and education. I tried the search function for "stop loss" but as you can imagine on a car site that comes up with a lot of hits! Anyway as an investor, do you use either fixed stops (periodically adjusting with gains/losses) or trailing stops on your investments for the catastrophic market collapse. I know if "trading" and not investing the rule of thumb is 3% below the 30d moving average (or other similar rules) but as a long term "investor" what is your policy? When the markets tumbled last fall when the US rating was lowered did you stop out on anything or let it ride knowing the 5-10 year chart is bullish? How about in 2008? Do you try to anticipate earnings reports for the unexpected after hours plummet?

Thanks for all the insight-
Wes

Good questions --- simple answer. NO.

I own nothing that I want to be arbitrarily sold out of. I'm not afraid of the ups and downs of the market... Remember -- they pay me to sit on my hands. So I don't have to wring them trying to figure out the markets next move. AND --- if you've owned your stocks over time -- other than a wild market aberration like '08... (which if you sold into - you lost your ass)... and if you held into - you made all your money back plus some -- and if you reinvested the dividends - it was the greatest gift EVER....

That's the difference between investor - and trader - and buying for pure growth over growth with INCOME.

Thanks-I had assumed that was your take but wondered. I need to train myself to look way out in time and forget the noise as you've mentioned. The media tries its best to magnify every up and down in the market.

Investing......

Wes

Investing isn't gambling.... Yeah - market goes up - market goes down.... but if you look at those long term charts... then you learn to ignore the noise because that's all just a distraction.

Look at it like you bought a large class A apartment complex... it's paying you good cash flow... You don't trade that just because the market is off this year, it's still paying you to own it.

This is why I say "buy best of breed" stuff that you don't have to follow the market value every day - or even every month. While I look - listen and learn - and keep my eye on the ball --- It's more just to occupy my time than looking to see that I'm down $2.00 on a $100.00 stock "today". The day after I sell at $98 -- it'll jump to $101. In the meantime - it's paying me $5.00 a year just to own it. After 10 years I've taken $50 out of the stock -- and after 10 years it's most likely worth $175....

People that want to get rich quick are always in the poorhouse.

In checking some names this morning - that I own.... I noticed only a couple were trading in the green... One of which is Kimberly Clark (KMB). With all the excitement around Facebook etc which is "fun".... and KMB has to rank right up there in the super boring range. BUT -- Always a big BUT -- Year to date Kimberly Clark is UP 8.16% --- AND it pays 3.72% dividend!

That is how - over time - you get ahead.

Not recommending the name -- I am just using it as another example of this theory of getting paid to watch and wait - and getting growth etc out of great, best of breed names, and sleeping well at night too. Boring? Yeah - pretty much... but FUN too when you're making money on your money. :cheers:

I was starting to research last night.. for my next two purchases.. and KMB is one i have my eye closely on. :thumbsup:

Morning Guys.

The Noise is going to get LOUDER and Scary...

Short term, which I am not a short term Investor, will be Bearish and Volatile..

These are the Times I go off and do other things..My health won't let me go crazy yet, but I am not worrying, and I am not taking any big risks right now..

Also I am not following things closely , because it is not worth it..If you have set a course, and you are looking down the road, I think it will all work itself out.

Plenty of stuff to keep me busy, and I am waiting on the opportunity to pick up more stocks, not sell.. I know people have been buying lately, and that is fine, but I am waiting because i think I will get a better deal.

Too many of my friends never listen to me and sell low,in a panic mode..

I am never a seller, unless I want to..The noise and the crazy market do not dictate when i sell..I do..

So plan your course, and keep the Bow into the wind...

That is why having Dead Presidents, Cash , is so important...It makes you not have to sell low, and it makes you have the funds to buy more when the time is right..

Otherwise cash is only for food and daily needs and Butt wipe..:lateral: :cheers:

Hey Mike! hope your feelin better...

I'm sittin waitin for whatever I "feel" as the bottom for when to decide to toss in my hat on another 2 purchases. :D

And, your right.. cant live without butt wipe... (another KMB reference) hahah

Well the joke is, the bad news is I am not feeling so good...But the good news, is that I have enough for the rest of my Life if I don't last many years....:wow:

Actually I have "planned " the portfolio to last me 30 plus years at the comfort level I am now, But I don't think I am going to make it.. If I do, then I am covered...If not, someone else,My Wife, is rich...:willy: :willy:

More good news is that if i don't feel better in the next few years, an AMG is going to be purchased...CPO of course, I couldn't take the hit of a new car , even if i can afford it...It would kill me,hahaha:thumbsup: :thumbsup:

I try to keep a good attitude and crack jokes about it...Whining is so not in my personality...I have always been a joker and a motivator..

Gotta love them dividends!! Sell in May and go away??? No Way... not when they pay!!

HAHAHAHAHA --- I'm quite the rhymer!


I'm NOT trying to show you "my" income here.... what I'm trying to do is to entice you - urge you - spur you on.... and also prove to you, by showing you that these dividends keep on coming - down market / up market / market noise / eurozone bank troubles.... WHO CARES.... this is real money that either buys (reinvested) more shares paying you even more dividend which buys more shares ---- Or you live off them like Mike and I do. Just depends on where you are in life. :thumbsup: :woot:



05/15/2012 (NNN) NATIONAL RETAIL PPTYS REIT
type: ORD DIV - CASH
$2,695.00
05/15/2012 (KMP) KINDER MORGAN ENERGY LP UNIT LTD PARTNERSHIP INT
type: ORD DIV - CASH
$7,200.00
05/15/2012 (EEP) ENBRIDGE ENERGY PTNRS LP
type: ORD DIV - CASH
$5,325.00

FORGOT TO REMIND YOU THAT DIVIDENDS COME FOUR -- COUNT 'EM -- FOUR TIMES PER YEAR!

Okay -- ONE more post because it's relevant given todays dividend post etc.... and more importantly -- the "downer" market we've been having (typical by the way in May).

Please go to Google Finance -- link pasted here -- and look at this chart. This is simply an EXAMPLE being used - since it just paid me a nice dividend....

What I want you to do is to click the "ALL" time frame (top of the chart) to expand (zoom) the time frame out... NOTE the SPLITS (2 for 1 --- TWICE!) and the line from left to right....

Now -- Note the DOWN blips in the chart... and ask yourself where you'd be had you BOUGHT then. Now note the HUGE dip where the world was coming to an end -- the sky was falling ('08).... and please note that had you bought THEN you'd have DOUBLED your money since....

I AM NOT recommending this stock! I'm using this chart because it's so typical and I'm trying to get you to understand that all the "noise" is just that.

http://www.google.com/finance?q=NYSE:KMP