Friday, March 31, 2006

REITs

REIT (Real Estate Investment Trust) - A company that purchases and/or manages real estate properties, using money invested by its shareholders and typically pay back 90% in dividends.

Some REITs are paying back around 20%+ in the form of dividends and are doing very well. I see strong growth in the economy for at least the short term and I don't expect the "housing bubble" will have much effect oin it right now.

The only disadvantage to REITs is you are fully taxed on the capital gains as opposed to the 15% that you would usually get taxed on for stocks that are held for at least 1 year.

I am currently screening REITs for >= 4% dividend yield, >= 5% dividend growth and >= hold recommendations by analysts. TMA has caught my eye right now.

Thursday, March 30, 2006

Finding good websites

A great site that I use for finding popular websites:
http://del.icio.us/popular

Just type in a keyword into the search box and it comes up with the most popular results.

Thursday, March 23, 2006

Out with the Singles - In with the Index Funds!

I have put sell limit orders on my single stocks. I have read quite a few articles recently many stating that it is very difficult for the individual investor to compete against large institutions. Individual stocks tend to have large swings and are not diversified. I truly believe in the performance of index funds so I will increasingly be investing in them - plus they are diversified already.

Advantages of index funds vs. other funds:
  • Cost. You will pay more expenses on actively managed mutual funds than you will on index funds, since they are passively managed.
  • Performance. Index funds perform better than 85% of all mutual funds (1998 data). This is very surprising. Managers of mutual funds get paid for what they do and if 85% of them were unable to beat the market what does that say about them? By investing in index funds you will only make what the market makes but you are still better off than 85% of mutual fund investors and have lower expenses to pay!
There are many index funds available and Morningstar.com has a great ETF screening tool that I use.

Warren Buffett Trip Approved!

I have just been notified that I was chosen to visit Warren Buffet next month. A group of 30 of us are bussing down to Nebraska to visit two of his companies and to sit and talk with him. I have prepared a few questions to ask him so far:
  • Is it true that you are in the process of writing an autobiography and will it outline some of the investment techniques that you have used over the years?
  • What is your reasoning for keeping Berkshire’s stock price so high? is it to weed out the smaller investors?
  • Do you feel that the market is overvalued and if this is the case would you ever issue a Berkshire dividend or would you use other investment avenues?
  • Could you give us some insight on which way you think the economy is heading?
  • Which investment books/articles/newspapers do you recommend?
I still can't believe it...

If anyone has any questions, please comment.

Wednesday, March 22, 2006

Unique Ways for Getting the Job

A friend, Brian has been trying to get into the firm that I am working at (or will be in August). I had given him many tips and hints throughout the interview process. Unfortunately they did not accept him to go to a second round interview. He seems extremely interested in the job and is very persistant. He has been talking back and forth with two of the Directors there and has requested to work over the Summer for free (my suggestion).

Free Labor. Working for free shows that you are willing to put in the time and produce the drive to succeed at something you really want. It also gives the company a chance to see how well the person performs and how they blend with the culture. I give Brian credit for asking and he is currently trying to work something out with the HR Department.

Persistant vs. Annoying. There is a balance between being persistant and being annoying. You have to be persistant enough to show your interest but not too much which can be annoying. I wish Brian luck as it will be difficult to balance I'm sure.

Tuesday, March 21, 2006

FREE Razr Phone from Verizon

I am really not all that impressed with Nextel's mobile phone service over the last few years. It hasn't been terrible but it doesn't really work in my house... which is the real problem. I wanted to switch to Verizon because I have heard great things. Amazon.com has the Motorola RAZR V3c for FREE after rebate which looks like a deal to me. I read a few reviews online about the phone and they seemed to be mixed, some love it and some hate it. I need to make a decision in the next day or so.

Monday, March 20, 2006

Applied for a new credit card

I just applied for the Citi Dividend Platinum Select for College Students credit card today. It looks like a good card with great cash back perks. It gives back 5% on gas, grocery and drug store purchases and 1% cash back on ANY other purchases. I will be using this for all gas, grocery and drugstore purchases and probably most of my other purchases also. I am not worried about the high APR because I will be paying it off every month, on time.

I needed two more open lines of credit because I only have one open credit card at the moment. Refer to my First House post about why.

How much do you need to retire?

Most people that I have asked have no idea how much money they will need to retire. Everyone's requirements will be different but I found a nifty tool to give you an idea of what you will need (it will probably be a lot higher than you expect).
Use CNN's Retirement Planner!

Friday, March 17, 2006

Buying on Value

I'm a good saver when it comes to money. I buy things on value - or what they are really worth. If I see a deal on an item, I ask myself, can I get it cheaper anywhere else?

The value of an item is it's fair price or how much it is worth if you sold it now. If you buy an item for $100 and can sell it for $80, you have lost $20. It is not about how much an item costs, it's about how much it is worth.

The people you call penny-pinchers and cheapskates are typically just cheap and do not buy on value. They buy the cheapest product to save money which can later end up costing them more (cheaply made so it breaks, no warranty / customer service support, etc.).

Don't be afraid to spend extra on an item or to buy nice things. I splurge every once in a while but I like nice things. Going to the bar and buying overpriced beer is not buying on value... or is it? You go out and have a good time, meet new people and strengthen bonds with friends. To me, this value is worth every penny even though you can't compute it on paper.

Talking to People / Creating Conversations

Most Important Rule: Be Interested In THEM
  • Find out their interests. All it takes is a little charm and a few good questions. Start off by finding their interests and ASK about them. If you know something about their interests you can add to the conversation, if you don't - it's not a big deal, you can learn from what they have to say. I have found that many people love talking about either themselves or their interests. Your job is to get them to start talking and hopefully the conversation goes well from there.
    • Good starter questions:
      • Hi, I'm xxxx, what is your name?
      • What are you studying in school?
      • What do you do for work?
      • What do you like to do in your free time?
      • Have you seen any good movies / listened to any good music lately?
It is difficult to talk to some people, it may be that they are shy. A majority of people are interested in meeting new people - keep this in mind. You just have to find a way to get information out of them, everyone is different but it comes easier with practice.

Sell Your Stuff On Ebay

Get rid of all the things you don't need! It is just money sitting around, collecting dust and losing value as time passes - unless we are talking about precious items or antiques.

Take a look around your house and see what you can get rid of. Anything that is no longer 'needed' (key word) is fair game. I try to get rid of any electronics that I don't need as soon as possible, as these items lose value very fast.

Get on Ebay and set up a Seller's account, there is really nothing to it. Either that or sell items to your friends or post ads in the classifieds.

Don't be lazy, you mind as well burn it if you're going to let it sit around.

Warren Buffett Opportunity

As the trip date nears (April 14th) I am filling out an application and hoping to get picked to go. I am friends with Simon, who is picking the people to go, so I'm keeping my fingers crossed!

Wednesday, March 15, 2006

Efficiency with Computer Programs

I have some applications that are always open on my computer to save me time throughout the day:

Microsoft Outlook (Calendar)
  • I use this to put all my important dates and tasks in. You can have it notify you so you don't forget. I then have it sync to my iPod and it alerts me on there if I am away from my computer. A PDA or PocketPC would be easier but I do not have one right now.
Mozilla Thunderbird (Email)
  • A great email program! I have set up my three email accounts and Thunderbird checks them all automatically and I don't have to deal with logins or passwords every time I check my email.
Mozilla Firefox (Internet Browser)
  • The best browser in my opinion. It is secure, has tabbed browsing and has some great plugins and extensions so you can do basically anything you need.
Newz Crawler (News Aggregator)
  • A newly found time saver! This neat, little program takes all the news and posts from my frequently viewed websites and puts them all into this program. It saves me hours by not having to browse each website to check what's new.
Quicken (Money Management)
  • Excellent for tracking your finances. It is very powerful and pulls my two bank accounts and brokerage information in, automatically. You can view your portfolio performance, net worth and track your expenses.
iTunes (Music)
  • The best music player that I have found so far. Better than Winamp, Windows Media Player and MusicMatch. It is easy to use and every song is at your fingertips. I put all of my songs in the library and then I create playlists by dragging and dropping. I sync it with my iPod and can also burn CD's from it.
Gaim (Chat)
  • If you have multiple chat programs you use, they can all be combined into this program. I only use AIM but this program is simple and easy to use. My favorite features are the tabbed chat and away message checking in which you just hold the mouse over the user you want to view.

Monday, March 13, 2006

First House

I had dinner with a friend and his dad, who is a real estate broker. We talked for 3 hours about how to get started, no money down loans, government rentals and flipping properties. It was very interesting and now have a great connection if I have any questions or need help.

I start my job in August so I will not have much of a paycheck or steady job until then. I have to wait until at least a month on the job to be able to get a loan so that puts me somewhere into September/November. I plan on looking now to get familiar with the market and to see what is out there and what I want. This is what I have in mind:

Price: $125,000-$150,000
Solid structure but needs work: Foreclosures are a good place to start.
Find renters: Find trustworthy friends that won't trash the place or mind me renovating while they live there.
Good school district: Families typically move into houses around this price range so the school district is very important which helps the resale value.
Low taxes: The lower the property taxes... the better.
No down-payment loan:

  • I am able to get one with the following criteria:
    • 3 open lines of credit that are used frequently: Credit Card, Gas Card, Home Depot Card.
    • 1 year of previous living payments: I can use the rent payments while I was in school.
    • Good credit.

The Plan:
Buy a undervalued, foreclosed home, with a no down-payment loan (watch out for high interest rate). Fix the house up with the money I saved from not using it on the down payment while my friends and I live there. Get the house re-appraised after the renovations and then re-finance. I will now (hopefully) have more equity from re-financing to play with. I can use the money to either put more money into the house, buy another house or for other investments. If everything goes well I can sell within a year or two and move to a house of equal value (new appraised) and avoid capital gains taxes.

Sunday, March 05, 2006

Why Do I Want To Be Wealthy?

Why do I want to be wealthy?
  • I want to provide for and help others. I want to be someone who friends and family go to for advice and help. I want to be able to provide my family with anything that they deserve. If you feel that your wife deserves a new car and can't provide it for her, then I would personally feel like I am not doing enough.
  • Less worries. Who wants to worry about money all the time? It's just one less thing to worry about in life. Money doesn't make people happy but I feel that it can make people unhappy.
"The deepest human need is to feel appreciated" - William James
Many people have more appreciation for people who are wealthy. I WANT people to look at me as a successful person and many people view success through wealth.

I have appreciation for certain people who have money. People who I have less appreciation for are the people that have ruined others lives, have done immoral things or are greedy just to make a buck. For example in the movie Lord of War, Nicolas Cage is successful and has many material things but I do not respect him or appreciate him more because of the way that he obtained his wealth.

Gold Diggers

Definition. A gold digger is someone who looks for or expects to receive expensive gifts or money from another person.

Wasting Time
. I think I have been paying more attention to gold diggers as I am getting older. I really want to find someone who I am compatible with and can spend the rest of my life with. If you meet a gold digger, chances are they are not in love with you or interested in you, they are just in it for the money. I am not stingy with my money, nor would I have a problem sharing with anyone, but if I am wasting my time on someone who is ONLY in it for the money - then that is a problem. Someone should be more focused on getting to know you in your first few dates and not on what you are spending. If you find they are more focused on where you go for the dates and what you buy them - cut your losses - get rid of them. Once you have established a connection with them after a few weeks you can start spoiling them.

Thursday, March 02, 2006

Helping Out Others

I have always believed in helping others out. Sometimes giving to other people can help you more than just simply helping youself or can just make you feel like a good person. I recently have done a few things to help others out, which align with some of the values in my personal mission statement:
  • Refrain from competing and add to other's success.
  • Be interdependent in my relationships with others.
  • Give more and expect less.
I recently had two job offers from two financial companies. I could only obviously choose one offer so the other became worthless to me. I figured if I am not going to be working there, I mind as well try to help out a friend and attempt to get him a job. I forwarded his recommendation and name to the recruiter soon after I declined the job. He eventually got an initial interview and then made it to the second round. He is still waiting to hear about an offer but it makes me feel good to know that I had an impact on possibly getting him a job. Maybe someday he will repay me but that's not what I did it for. It has strengthened my relationship with him and it seems like others view me as more of a giver, both of which are rewarding.