How Do You Help Yourself?

   Living in Canada, everyone knows how important the oil industry is not only for Western Canada but for the entire country.  As the jobs in the oil industry are high paying, people travel from all parts of Canada to work in the oil patch in western Canada.  Canada has conventional oil, which is the involves the drilling rigs. It is said that one rig operating is 135 jobs.  These jobs involve working long hours, which is a completely different life from a person who works 8 hours a day and goes home everyday. 

Fig 1

    Currently with the price of the barrel of crude oil, there has been a lot of layoffs in the oilfield.  As the oil field workers maker a lot of money, and at times are paid expenses  such as hotels and meals by their employers when they are working. The typical shift is usually 2 weeks on and 6 days off. When the oilfield service workers are traveling to various rigs they often stay in hotels and eat in restaurants regardless if it is a city, a town, or small rural area.

Fig 2.

      As you can see from the above chart the drilling rig utilization is way down year over year. The average utilization of 25% has drastic effects on the economies of western Canada.  With the massive amount of layoffs comes less traffic on the roads going to and from rigs.  This also means other sectors are being effected including hotels and restaurants.
       The other type of oil exploration in Canada is the oil sands.  This involves no rigs but huge machines digging.  The extraction of oil  comes through separation the oil from the ground that is dug up. This is done though things such as processing plants.
    

 Events of Last 15 years

   Their has been major things that happened in the last 15 years.  We had the dot com bubble, the global financial crisis in 2007-2009 and now the low oil prices. These have caused major problems in the financial industry.  The financial crisis is the worst recession since the great depression.  Currently, we are in living with the low price for a barrel of crude oil.  The fall of crude oil prices started in September 2014. We are currently testing the $40.00 a barrel threshold for WTI prices. We have no idea how long this low price environment is going to last.  Some analysts predict the price will go down lower while others predict it will be 2020 before we see $80.00 a barrel oil. 

     

What Can A Person Due To Help Themselves?

    When a person works at a job they do not have many tax advantages that they can take advantage of.  A person needs to save a percentage of their after-tax income by paying themselves first.  This pay yourself first concept was popularized in the book called The Richest Man in Babylon. The goal is to grow this money by putting it to work.  As the amount grows, a person can buy income producing assets such as stocks that pay dividends, rental properties, bonds etc.  The income from these assets are "children" of your investments.  Then you put these "children" to work along with new money from paying yourself first to grow your passive income.  This will allow your assets and their income to compound exponentially.  As first the going is slow, but over time the compounding becomes more noticeable.
     By creating passive income, a person helps to reduce stress in their life as they have more income from just one source, which is usually from a job.  A job is no longer secure.  If a person is building their war chest and receives a layoff or gets fired from a job, then they have income to fall back on .  The ultimate goal is to have more money coming in from investments than going out to pay expenses.  Once the passive income coming in is greater than expenses, then the person is financially free.  
    Imagine, being able to go on vacation whenever you want.  While you are on vacation, you do not have to worry about money as your investments are providing you with NEW money.  Going on vacation like this is only possible with receiving money from other sources rather than from a job.   

Fig. 3

 Photo Credits:  Fig.1 - www.precisiondrilling.com
                          Fig.2 - www.caodc.com
                          Fig.3 - www.weknowyourdreams.com 

DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.
 

Weekend Reading - Aug 8 2015

 

    So the US dollar continues to gain strength against our Canadian Dollar.  At this very moment while typing this, the exchange rate is a follows:

                              $1 USD = $1.31 CDN

                               $1 CDN = $0.76 US

    The weaking of the Canadian dollar has been greatly impacted by the lower price of a barrel of crude oil. It is strange how Alberta has the greatest amount of oil in the world except for Saudi Arabia, but Alberta economy is dependent on the actions of OPEC for the most part.  With the exchange rate as it stands right now, a lot of Canadian investors are only investing new money in Canada. An investor can also buy a Canadian ETF that holds US equities, if they want exposure the the US companies.

     In Canada at the moment, their is a federal election going on right now in which the voting takes place on October 19.  Who ever Canadians elect to form government is going to affect the markets also along with the low oil prices

Some articles that I read during the week, that you might find interesting are as follows:

Dividend Mantra recently published about his averaging down in CAT in his Recent Buy post. I do believe this stock will face some headwinds in the short term, but it will be a great long term holding for dividend income now and increasing dividend income in the future.

Liquid Independence wrote an article about How Much Money Is Enough For His Retirement. Some people put off saving and investing until later in life, but it is definitely a lot better to start right now. Compounding is said to be the 8th wonder of the world. So the more time you have, the more time money has to compound. 

Liquid Independence talks about how he got started in farmland investing as he was interviewed by Jessica at momoneymohouses.com, which you can listen to here.

Dividend Hustler wrote about Recent Sales which you can read about here. At the top of this post I wrote about the low Canadian dollar. To avoid the exchange rate  if you have US equities doing well, you can sell them and purchase other US equities that are undervalued.  Dividend Hustler is going full steam with investing in dividend growth stocks. 

Tawcan recently published a post about Recent Buys in the Health Care space. As the population ages, there will be a greater need for  nursing homes and long term care facilities. These purchases will make great long term holds. 

Passive Income Mavericks recently published his dividend income for July.

There are some interesting articles and videos recently published at www.sharpetrade.com.

Photo  Credit : www.cafepress.com

DISCLAIMER

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Week End Reading - May 9

 

  This was an eventful week in western Canada.  Alberta had a provincial election on Tuesday, and the outcome has brought fear to the energy sector on both Canada and the United States.  The Progressive Conservative Party was decimated in the election. They were in power for 44 years straight. With the fallen oil prices, Premier Jim Prentice and the PCs released on budget with new tax increases and user fees etc.  They asked people who make more to a pay a little more.  The PC party did not raise corporate taxes.  Premier Prentice said the budget will start a plan in which the province doesn't rely on oil and gas royalties to run government and provide services. Prentice believed that an election was the right thing to do because the budget was so drastic compared to previous budgets.

    Previous scandals that plagued the government under former Premier Alison Redford, not raising corporate taxes, and Premier Prentice telling Albertans to look in the mirror when it comes blame who cause the financial problems of the government over the years.  The PC party lost 61 seats in the election and do not even form the official opposition. The NDP government won 53 seats and formed a majority government. An NDP government is not good for Alberta and lots of business people agree.

    On election night, Prentice resigned as leader of the PC Party and resigned as MLA before all the votes were counted, saying it is "time to spend time being a husband, father and grandfather".  He was  running to be Premier , which would be the total opposite of this statement because he would be traveling a lot plus would be out of his constituency a lot.  I do not vote, but from previous experience living in a province with NDP government it was quite bad.  

    I am a shareholder in companies that are involved in the energy sector, so I will be paying attention to what happens more closely with government announcements.

Some articles that I read during the week, that you might find interesting are as follows:

Dividend Mantra, wrote a posted on his Freedom Fund.  Dividend Mantra is making remarkable progress in his goal to obtain financial independence.  If you have not started saving and investing money start now! It won't seem significant at first, but you will start to see great results in a short will.  I continue to add to my portfolio every month.

Liquid Independence posted his fiscal update.  Liquid is making tremendous progress in his goal of being financial independent. Some of his investments differ from most of the bloggers in the financial area.  

Dividend Hustler posted about one of his goals.  This is a great read and I highly recommend everyone to read this post. A lot of people what everything all at once such as big house and new expensive car or truck. An investor has to make sacrifices now to have a better life with less stress down the road.  Growing passive income allows you more freedom to choose what to do with your time which is the reason why I love increasing my passive income. 

Tawcan posted about frugality.  For me, being frugal allows me to have a higher savings rate which leads me to be able to invest more money and grow passive income at a quicker rate. I choose to buy a bus pass each month instead of having a car.  I choose to not have cable, but instead watch some shows on the computer such as Shark Tank and Dragon's Den. 

I wrote about my most recent buy, which was an investment in dividend growth stock.  This investment is one I want to hold for a long time as it has strong competitive advantages. 

Photo Credit : www.cafepress.com

DISCLAIMER

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Week-End Reading Apr 26 2015

 

    During the past week, I added a new link on the top of the blog.  The 'Resources' link has some of the books that I have read over the years. These books have all helped me on my journey to financial independence.  My only regret was that I didn't take immediate action right after reading the books.  I basically woke up one day and decided I didn't wanted something more out of life, and started applying some of the concepts in these books.  One of the most important concepts is Paying Myself First which is first discussed in Richest Man in Babylon.  Although I wish I would of started on my journey earlier in life, I am thankful to be able to start the journey and life gets easier and easier every time I make an investment. I am still in the rat race, but I am way better off now than I was 5 years ago.

   During the past week, some of the articles I enjoyed reading or podcasts that I listened to are listed below.

Reaching Financial Independence  The Dividend Mantra Way

      Kraig Mathias at createmyindependence.com talks with Jason Fieber, aka Dividend Mantra, about what he has been up that last while. Dividend Mantra has been writing for about a year full time after leaving his full time job at a car dealership.  Dividend Mantra talks about his past and dividend growth investing in this podcast and it was good to listen to the hour long podcast.

The Dividend Mantra Way

Last Sunday, Dividend Mantra wrote a post about publishing his first book. It is an e-book which can be purchased on Amazon for $4.99 US.  The book is already listed as a best seller in the Investing category.

 Recent Buys by Dividend Hustler

Dividend Hustler recently published a post about his recent buys. I am a shareholder in 2 of the 3 companies he bought shares in.  I believe all three of these companies will do well over time.

 2015 Federal Budget in Canada

Liquid Independence recently wrote about the 2015 federal budget.  Some of the politicians outside of the government believe the increase in TFSA contribution limit to $10000 a year from the $5500 a year will only benefit the rich.  With the increase limit, it might benefit people to save and invest more into this vehicle when they realize the actual benefits of investments that will grow tax free. People will come to realize when they take money out of the TFSA, it is tax free also.

 Sharpe Trade : Money Management Series Post

Dan, aka Aileron Trading, wrote a post in his money management series about forms of risk. This post is on the Sharpe Trade website, in which Dan is apart of.  This post also has a video component to it also.

Photo Credit : www.cafepress.com

DISCLAIMER

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Where To Put Your Money?

     A coworker of mine recently stated that the put money into RRSPs. I asked here why? She said to reduce her taxes. Where am I going with this?
   
Looking At Things Different

     A few years back, I came across a book at the book store in the financial  section. When I noticed the title I remember I saw the author on the Oprah Winfrey Show.  The book in question is Rich Dad Poor Dad by Robert Kiyosaki.  The book challenges your beliefs about money and gets you to look at money in a different mind set.  So I bought the book and took it home. I read it but never took action. My biggest lesson I took from this experience is that you can read all the books or attend seminars on investing, trading, rental real estate and entrepreneurship that  you can get your hands on, but nothing will happen unless your take ACTION!!!!. So after reading the book, I did not take action out of fear.
      A few years after this book reading, I heard about Canada's Youngest Retiree Derek Foster. Derek Foster is just an average guy who escaped the rat race at the age of 34.  Derek didn't invest in RRSPs as it didn't make sense to him as he was in the lower tax bracket. Derek also wanted to retire early as he did not like working.  He invested in stocks that paid dividends and income trusts and REITs that paid distributions.  A couple of things helped him a long the way. Derek purchased a huge amount of shares on margin in a cigarette company after the stock tanked due to a lawsuit. These shares increased in value and he sold.  Another thing Derek did was take out a loan at 8.5% interest to buy RioCan REIT which was paying a 11.5 % yield and was a monthly payer. So the distribution paid the payment each month. With the distributions increasing over time the loan was paid  off quick. The latter to things helped him to escape the rat race a lot sooner then just buying the stocks without any debt what so ever.
       Derek became an author and started speaking about dividend investing. I think he now has 5 or 6 kids.  He is still out of the rat race and him and his wife home school there children.

So What Did I Finally Decide to Do?

     In the early months of 2010, I decided to take action after waking up one morning and saying to myself that I didn't want to live like this anymore. So I decided to start paying myself 30% of my income regardless of where it came from. So two thirds of the 30% went into savings and one third to investing. The money left over at the end of the month went all into the investing account.
     As the savings grew and the interest rate on my bank account decreased, I paid myself first 30% of my income to the investing accounts. At the end of the month, I would pay myself first 30% of the investing accounts and 30% of the savings account. If I was cash flow positive at the end of a month, the entire interest from savings account and entire dividend amount paid for the month would stay in their respective accounts.
        In an RRSP or 401k, the money is locked in. Therefore if you take it out you are penalized and have to pay tax at your marginal rate as it taxed the same as interest. So I put my money into a margin account and a TFSA account. Although a TFSA is a registered account, you deposit money with after tax dollars so the gains and income within a TFSA are tax free.  For disclosure, I have put money into RRSPs in the past, but do not do it anymore.

Conclusion

       After deciding to pay myself first, I found life getting less stressful as I was building passive income. The passive income has growth to about $300 a month. I get paid this money regardless of what I am doing and where I am at in the world.  These companies tend to grow their earnings and therefore increase dividends to their shareholders.
        I am have since moved up paying myself 35% and then recently started 37%.  

For those who are interested,  there is a company called Sharpe Trade LLC.  This is a website that has 2 well known known people writing posts , doing podcasts and videos.  There is people behind the scenes also.  The two well know people also have a premium portfolios, in which they discuss why the enter a trade and exit a trade before it happens.  The website is www.sharpetrade.com.  On of the 2 well known people also has a portfolio in which he calls Sharpe Income.  This started with $500 and $25 dollar contributions each week. This person also goes on the show his results through a PDF and a spreadsheet.

Disclosure:  I have no affiliation with Sharpe Trade LLC.

DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.   

Week End Reading - Feb 7 2015

 

As the weekend is coming to an end, it is time to share some of the posts I read over the last week that some of your readers might find interesting.

Dividend Stock Fish published an update about his stocksnowball portfolio.

Dividend Mantra published his January Dividend Income.  I always like to read other people's dividend income updates and see people snowball getting bigger and bigger.  Dividend Mantra also post about increasing passive income gives you more peace of mind and choices, which you can read about here.

Liquid Independence wrote about a different way to look at bank fees.  Instead of you paying the bank fees to hold "YOUR" money, why not have the bank pay you instead.  Liquid also had an interesting post about debt.

Tawcan wrote an interesting post on how him and his wife got started in dividend investing.

Brad, aka pullingmyselfup, of Sharpe Trade wrote a few posts about REITs. The first post is talks about what a REIT is and the second post is about FFO.

Susan Brunner wrote a couple of posts about Shaw Communications which you can read about here and here.  I own the class B shares of Shaw, which is listed on the Toronto Stock exchange.

Disclosure : Long SJR.B

Photo Credit : www.cafepress.com

DISCLAIMER

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Environment

     Who do you associate with? Are your parents upbeat people? Do you parents support and encourage you to pursue your dreams? Do your friends push you to be more successful and pursue your dreams?

"You are the average of the five people you spend the most time with" - Jim Rohn

If the five people you spend the most time with are broke, then you will be the sixth.  If the 5 people you spend the most time with are wealthy, then you are more than likely be the sixth.  Try to hang out with people who are more successful than you and will lift you up.  We have know of someone who wanted to start  a business, but as soon as they tell someone, all the individuals hears is something negative. The negatives include such things as "you can't do that !",  "it will never work",  "if it was that easy, everyone else would be doing it.",  or  "you're crazy!!"
       As an investor in dividend paying stocks, people tell me all the time that the stock market is for gamblers. They fail to realize that when an investor buys shares, they become a partial owner in that company.  The ownership means they are help producing products or services, along with helping to create jobs.   If you tell a non-investor that you invest in the stock market, you will likely hear something negative from them over them be supportive and willing to learn from you by asking questions.
        Robert Herjavec, a judge on Shark Tank, and a successful entrepreneur , had a life changing attitude due to a situation with his father.  When Robert came home from school one day, he was complaining as he had a bad day, to which is father replied, " Never complain! Be thankful for what you have and the opportunities that you have".
          So why do I have a blog and follow blogs about personal finance?  I want to be around people who are uplifting and learn from them.  Some people  who are quite upbeat are Jason of Dividend Mantra and Liquid Independence of Freedom Thirty Five Blog.  Jason had recently left his full time job at a car dealership to try make a living from writing. The only thing that seems to upset him is when someone has something negative to say about his diet.  All posts on Dividend Mantra are positive as Jason likes to try to inspire people through his words and to show people the nuts and bolts on how to reach financial independence without a huge salary.  Liquid Independence takes a different approach to investing by using farmland and the markets. Liquid Independence is showing the accumulation of wealth through a different medium than most financial bloggers.
    The financial blogosphere is quite upbeat with people pursuing their goal of acquiring income producing assets to help them become financial independent.

"If you want to change your financial situation, you sometimes have to change your friends." - Darren Weeks.  I heard this quote, the very first time from Darren Weeks and not sure of the actual author.

  Conclusion:

     Adults tend to do what their friends do such as going to events. We all know people who do things with their friends even though they are not in a a good financial situation. So by reading blogs and having a blog about personal finance, its helps me learn about investing in the markets and to discover other investor's thoughts and approaches. The moral of the story is to choose your environment carefully as it can make a big difference in your life.

DISCLAIMER
I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should not be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

Weekend Reading - November 29 2014

 

As the weekend is coming to an end, it is time to share some of the posts I read over the last week that some of you readers might find interesting.

Dividend Mantra recently published an article title Is Managing A Large Dividend Growth Stock Portfolio Time Consuming.  I agree with Dividend Mantra, you need to do a lot of research up front for positions before you make an initial purchase. Depending on level of risk of an investment, an investor has to follow the news and financial reports when it comes to an investment with a higher level of risk.

Sharpe Trade published a few articles this week that I found were good.  Sharpe Trade is a new website that aims to educate people about the capital markets.  There are several people involved in this site, including 2 that are very active in social media over the years. Brad B, aka Pulling Myself Up, wrote an post on "Dividend Growth Rate: How Growing Income Beats Inflation".  Dan Shy, wrote a educational post about the dividend payout ratio.

Asset-Grinder wrote about his 6 month anniversary with his blog. Asset-Grinder is making great progress in terms of page views and different visitors from all over the world.

Liquid, over at his Freedom Thirty Five Blog, wrote a post about Change.  Newcomers need to become financially aware and learn about investments. The more they learn now, the better they are at making better financial decisions in there future. The past can not predict the future, but if you want to understand where you are at financially and where you want to go, a good starting place is to track your own finances to find out where your money is going.

My Own Advisor posted on his blog a post about titled, "Stop Worrying, Make Your Portfolio Safer, and Choose Better Investments. ". An investor can definitely sleep better at night if they have safer investments.  I have a few high risk investments in Just Energy and Enerplus. These 2 companies are do struggle  a lot and this is reflected in their share price. With the price of  a barrel of crude now in the sixty-five dollar a barrel range this will greatly affected the bottom line for Enerplus. OPEC has stated that they will not meet again for 6 months after meeting this week.  I do not worry about my investments in Emera or Scotia Bank.

Disclosure: Long JE, ERF, EMA, BNS

Photo Credit : www.cafepress.com

DISCLAIMER

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Weekend Reading - October 19, 2014

 

As the weekend is coming to an end, it is time to share some of the posts I read over the last week that some of your readers might find interesting.

Dividend Mantra recently published a post titled Create Your Own Miniature Berkshire Hathaway. Berkshire Hathaway is the investment holding company that is run by Warren Buffett as CEO and business partner Charlie Munger.  Dividend Mantra currently has partial ownership in over 50 companies through the stock market.

Liquid Independence, over at Freedom Thirty Five Blog recently published a post about averaging down his position in Avigilon Corporation during the recent market pull back.

Mark, over at My Own Advisor, posted about it catching up with Canada's "youngest retiree" Derek Foster. Derek Foster left the rat race at the age of 34. A lot of people say Derek is not retired because he writes books and does speaker engagements.  He is financially free and can choose to write books, do speaking engagements, or do whatever he wants with his time. That is what we are all after in the long run in having the CHOICE to do what we want with our time.

Susan posted a two part post about Canadian Railway, which you can read about here and here.

Aileron recently posted a video on his You Tube page titled, "It's Never Enough of a Good Fight".  Aileron discusses why he loves the capital markets and the challenge of why things happen in the markets. Please note that Aileron is a dividend investor and trader.

Photo Credit : www.cafepress.com

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Weekend Reading Aug 16, 2014

 

I have been super busy at work, so not as much posts as I would like.  I try to keep up on some blog posts from fellow bloggers though.

Liquid Independence posted an article about  Going Cold Turkey. Liquid is going to try to not use other people's money for the rest of the year and to only invest his own money.  I think it is a good call especially with the stock market at these high levels.

Dividend Mantra recently published a few posts. The first is averaging down is recently acquired position in Deere &  Company. You can read about this purchase here.  The second post was actually a guest post on his site. This post was about how to figure out when you can quit, which you can read about here.

 

Mark, over at My Own Advisor, recently wrote a post on 2014- Financial Goals he and his wife made at the beginning of 2014.

Kraig, over at Create My Independence, recently published a podcast titled Should you Focus

 on Earning Money or Building the Asset.  Kraig recently left his job over a year ago to start his own business.

Photo Credit : www.cafepress.com

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Week End Reading - July 12

 

The work week has come to an end for the most of us this past Friday.  It is also a time for catch up on some reading of posts from fellow bloggers.

Liquid Independence posted and article about the Richest Canadians People or Families.  It is interesting to see the percentage of how much their wealth grew.

Dividend Mantra recently published a post on Why Dividend Growth Investing is a Good Strategy.  In this post, that Dividend Mantra talks about things such as Dividend Growth Investing is more passive then other forms of income such as rental properties.  Although there is research that has to be done up front, there is little work to be done after the initial purchase. The investor will have to pay attention to news on the company and listen to conference calls roughly every 3 months.

Pulling Ourselves Up Financially posted a monthly update for June 2014. 

 

Dividend Stock Fish (DSF) recently posted about the Risky Assets : Captain of the Titanic. Investors have to pay attention to the news regarding their companies they are currently investing in.  Investors need to have adequate cash on hand to take advantage of opportunities when they arise.  Investors can also put on hedging strategies as insurance to reduce their losses or protect their money.

Photo Credit : www.cafepress.com

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Week End Reading - June 27

 

Another work week has been completed.  The stock market keeps marching higher and higher as the days go by. As of June 27, 2014, S&P 500 is up 6.08% YTD and the TSX Composite Index in Toronto is up 10.81% YTD.

Are we due for a stock market correction in the near future? It will actually be quite nice especially when I am looking to buy more equity positions at the moment.

A few of my fellow bloggers, had some great post during the past week that are worth reading.

Dividend Mantra recently published a post on Frugal Fitness. In this post, Dividend Mantra spells out his weekly fitness routine that he does since making the journey home to Michigan from Florida. This article point what any person can do on a tight budget to get some exercise to make yourself feel better and healthy.

Liquid Independence over at freedomthirtyfiveblog.com recently published a post titled Options Trading Successful. The stock in question is Teck Resources Class B stock listed on the TSX in Toronto, Canada. Liquid Independence sold a naked put with a strike price of $23.00 and expiration date of June 21, 2014.  I recently sold my first naked put, which was in Rogers Communications Class B stock and it was assigned.

Kraig, over at createmyindependence.com, published a video podcast on reasons to ditch your job and start a business. When running a business it gives you more choices what to do with your time on a daily basis.

Dividend Stock Fish (DSF) recently posted about the Amazing History of Oil. As oil is important for every life, it is also a great dividend payer from the companies that are involved in sections of the oil industry. There is also a video  by DSF in this post in which he discusses the oil industry.

EDIT:  when you sell a put and have to purchase the 100 shares, it means the option was assigned.

Photo Credit : www.cafepress.com

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Weekend Reading - 2014 June 7

 

Another work week has been completed.  The stock market keeps marching higher and higher with little drops along the way.  This means an investor has to work even harder to find good quality stocks trading at reasonable prices. An investor must narrow their list of stocks to consider buying at this time and then research the company and its fundamentals in depth.

During this week, a few articles the I read that I would like to share from fellow bloggers.

Dividend Mantra, who has recently left his job in Florida to move to Michigan to be closer to is family, posted an article entitled Extreme Frugality Revisited.  Dividend Mantra is making sacrifices right now in his life to be closer to his family and doing things he enjoys.  One of his passions, is writing and inspiring people. It will be surprising to know that he actually stopped blogging for 3 months a few years ago and wasn't sure he was going to blog again.

Liquid Independence over at freedomthirtyfiveblog.com recently published a Fiscal Update for May 2014.  Liquid recently received his semi-annual rent check for his farms he leases to a tenant farmer in north eastern Saskatchewan, Canada. This  fiscal updates on a monthly basis shows how an average income earner can grow their wealth more quickly using leverage.

The Loonie Bin Blog recently posted a Dividend Income update for May 2014.  This individual won't invest unless he comes across a stock trading with  a decent price.

Over at $25000 Dividends, shared his Dividend Income Update for May 2014.

Dividend Stock Fish (DSF) recently posted a video on YouTube about DRIP - Dividend Reinvestment Plan  .  In the video, DSF also shows some of the resources he uses to find information about various dividend paying stocks.  I DRIP a few stocks in my brokerage accounts and 2 stocks directly with the transfer agent.

Kraig, over at Create My Independence, recently published a podcast  where he discusses some questions people struggle with in their lives. Kraig, in the last year, decided to leave is job and start his own business.

Photo Credit : www.cafepress.com

DISCLAIMER

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Weekend Reading April 25th

 

Another work week has been completed.  Some interesting news out this week in regards to Canada's railroads. The two companies are Canadian National Railway (ticker symbol : CNR) and Canadian Pacific Railway (Ticker Symbol: CP).  The government has brought in new rules for the railways for shipping dangerous goods (mostly crude oil) after the horrific train accident in Lac-Magentic, Quebec in July 2013. The old rail cars, known as DOT-111 cars, are highly succeptable to puncturing and leakage. In less than 30 days from today, these rail cars will be prohibited in Canada. Rail cars made after 2011, are better designed and are known as CPC 1232. Cars will have to meet this minimum standard in a few years time.

www.cnrail.com

Some interesting posts from other financial bloggers to read this weekend :

Liquid Independence has an interest article about Money Perception Over Time.  I agree with him that I look at money different then was I was a youngster.

Dividend Mantra talks about sacrifice  of living below means in this great  article. Dividend Mantra is living below his means so he will have freedom from working all his life. I agree with him in regards making sacrifices today for a better tomorrow by living below my means.. The put a lot of money into savings and investing to have my money work for me over having material things right now.

Dividend Stock Fish had an interesting article from a few months ago. In this article, there is a video about How the economy works. The video is an interesting video about how the economy actually works.

The Passive Income Earner has a good article about having 50k Ready to Invest. By transferring his RRSPs to an RRSP account where he can purchase dividend paying companies directly allows him or her to have better control over his finances.

An interesting video by Bill Ackman on everything you need to know about finance and investing in less than an hour in this video. Bill Ackman is CEO of Pershing Square Capital Management.

Photo Credit : www.cafepress.com

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Some Weekend Reading

As we get ready for the start of another work week.  Some articles from around the web that you might be interested in reading.

A portfolio update for March 2014 over at Pulling Ourselves Up Financially.  This guy spread sheets are really in depth.  Like the rest of us, he making sacrifices with money to grow his money.

Dividend Mantra published a post on Break in Case of Emergency.  I agree as your passive income increases it reduces the stress in your life. If you were to lose your job or something major happen in your life, the passive income coming in helps a lot.

Liquid Independence has a few interesting articles. His investment in Dollarama.  As people try to save money they often pay visits to the dollar stores. All though there are lots of different dollar stores out there, Dollarama is quite a large thrift store chain. A second post, Financial Confidence is about financial literacy. People need to seek out information about financial topics or investments that they are interested in ..I agree if you decided to investigate further into a topic, it will allow you to make the decision to TAKE ACTION easier to make.

Earlier this year, My Own Advisor shared some of his predictions for this year. Take a look at some of his predictions in this 2014 Predictions.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Another Source of Income

    Today, people are starting their own home based businesses to supplement their income.  With inflation, the costs of things rise usually each year. The cost of things that are essential such as food, water, and shelter rise almost each year. The rent people pay for apartments continues to go up, usually once a year, as their landlord's cost increase. Some individuals try to find a second job to supplement their income. This can affect you taxes in a negative way as not as much taxes are taken off your check.  As taxes from jobs are the highest, an informed person realizes there has to be a more efficient way to increase there income. These individuals might look for a different option then working a second job.
     Some individuals start side businesses at home. A popular thing to do is businesses that involve network marketing. Some common examples are Arbonne, Avon, Scentsy and Grace Adele.  People become independent distributors starting off. They get a percentage of their own sales as commission.  To increase there income, they try to get people to sign up to be independent distributors who are underneath them. In turn, they a small commission on the sales from the people they signed up.  Next, then these people will try to recruit people also.  A majority of the population refer to this as a pyramid scheme.  One book that is about network marketing is Flip Flop Ceo.
    Individuals could also start home-based businesses that do not involve network marketing. With a home based business, there are tax deductions an person can take advantage of. 

Disclosure: I do not have a network marketing business and recommend individuals to do thorough research about the industry if they are interested in that type of business.


DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Why invest money? Part 2

This is post in a continuation a recent article called Why Invest Money ? Part 1.

The traditional way to save  money was to put your money in  a bank account. This bank account will then pay you interest on the balance of the account calculated over usually over a calendar month. This interest rate is very small as interest rates are at historic lows right now. Also, the interest received is taxed at marginal rate. Therefore, when saving money in a bank account right now, an individual is actually losing money because of inflation.  Having a bit of savings is important though, such as for an emergency fund.  Savings can be used to help pay for a down payment on a house or wedding for example.
   I invest money in companies that pay me to own them. I am mostly invested in corporations and REITs at the money.  These companies pay me once a month or once a quarter. This money in the form of dividends or distributions is more tax efficient than interest from a bank. When a company makes more money they often reward their shareholders with increased payouts. The increase in payouts is, in most cases, greater than the rate of inflation.

        Yield on Cost  (YoC) = annual dividend rate / purchase price
    
         Current Yield = annual dividend rate / current price

 Example : If stock ABC pays a annual dividend of $1.00 per share and I paid $20.00 per share, then
                  yield on cost is 5%.   In 5 months time, the price of the stock goes to $25.00, then the                   current yield is 4%. If company ABC raises the dividend by $0.05 to $1.05 per share,                    YOC increases to 5.25% meaning your initial investment is working harder for you.

The interest rate on a savings account will not have increases that are greater than the rate of inflation.


With the dividends and distributions being more tax efficient, that means I get to keep more of my money. As the amounts of dividends and distributions I receive on an annual basis increases, I am able to have more options. This money can be used to enjoy a better lifestyle, to save for retirement of financial independence at a quicker rate, or to leave a job if it is not a good fit for me.

 If a person is living paycheck to paycheck, they have to keep working there to they are able to find a different job. The job they hate currently have a negative effect on their mood which can have negative effects in a interview setting.

Increasing passive income allows a person to have more options. They are able to sleep better as they are less stress. Financial independence is when there is enough passive income to exceed expenses. When this occurs, an individual can CHOOSE to do what they want with their time.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk

Why invest money ? Part 1

     We all have been around the people who say "you only live once". These same people can't wait to get paid from there jobs so they can spend the money.  These people have the best video game console, big screen tvs, a good car. When the end of the month comes,  they are completely out of money and saved nothing. I have been around people who say things like " I am too old to start investing" and "I will have to work until I die". These same people seem to be stressed out a lot more than people who spend less.

       I decided I didn't want to be like these people. So I decided to read more and more financial books.  I read Rich Dad Poor Dad by Robert Kiyosaki.  Robert and Kim Kiyosaki started out paying themselves first 30% of their money regardless of where it came from.  With this money that they paid themselves first which was used to buy cash flowing assets. So I basically started with the 30%  as a number  to pay myself first. The 30% was divided 2/3 to savings and 1/3 to investing. I want to make it clear that I do not agree with everything Robert Kiyosaki does.
        What has this done to by life? I found I have been able to sleep better as I am less stressed. I have been raised in a household were money was not mentioned. My parents didn't invest or know anything about investing. I have built up a portfolio that generates approximately $3000 in annual passive income. This is money that I don't have to physically work for. Everything single month my passive income grows through DRIPs and on occasional an investment purchase.

        The investments decisions I make today, will help in dealing with inflation. Their are companies to invest in that increase there dividend annually and it if often greater than the increase in inflation.

DISCLAIMER:

     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk