Foreclosure Rental Program

Bank of America is starting up a new program of taking ownership of a home that a person is unable to make payments and then renting it back. The following is my opinion on this...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

I first read about this from Investing Early. Some others brought it up and I wanted to give my opinion but knew it was going to be lengthy. To be clear my concerns are largely unfounded as far as facts of the program are extremely limited. But the implications of what might come up from this could be big. No doubt all the other banks are looking to see how this turns out. At best this adds one more layer of complexity for people to understand. If a large number of society failed to understand or failed to care about the implications of an adjustable rate mortgage (ARM) or interest only mortgages then there seems to be similar risk when banks start righting a foreclosure rental program into the mortgage as a requirement to get your house in the first place.
As a correction.. Nixon took the U.S. off the gold standard in 1971, not 1970.

Here is the book I mentioned, Debt: The First 5,000 years.

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

Week 48 update and emotion on Apple

Though the Model Portfolio has no shares of AAPL there is a lot that we can still take from the past week and learn from.

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

I made a comment that some AAPL investors bought their shares in the past couple years for the wrong reason. How could I say that when the price has gone up 180% since beginning of 2010?!?
Because not everyone invests to make money. They may say they do but they are lying to themselves. Some wanted to have a connection to Steve Jobs. As I said in the video that is fine everyone can do what they want. But if they were invested in Apple to make money they wouldn't be selling a 12 P/E growth company where their customers line up overnight to buy a 3rd release of a product.
In the video I said I "owned" shares, past tense. I still do.

This is an important thing to keep in mind. Why are you investing? If we can get to the core root and the true answer to that we might be able to save ourselves a lot of frustration. It probably deserves its own video.


Weekly Activity
$100 deposit into Investing
$76.23 deposit into Trading
Purchased TCAP
$1.74 dividend from ERF

Model Portfolio Totals

Trading Account: $1,169.62
Estimated Monthly Income: $0 (Not ready to trade until Phase 1 completed)
Max loss per trade (1% of account): $11.62
Portfolio stop (3% account): $34.86

Investing Account: $2,739.72
Estimated Monthly Income: $9.77 ($0.200 from DRIP)
Stock
     ABT: $0.76 income/month
     WMT: $0.58 income/month ($0.004 from DRIP)
Energy
     COP: $0.77 income/month ($0.007 from DRIP)
     ERF: $1.75 income/month ($0.063 from DRIP)
REITs
     O: $1.08 income/month ($0.027 from DRIP)
Bonds
     JNK: $1.67 income/month ($0.070 from DRIP)
     PCY: $1.14 income/month ($0.030 from DRIP)
Maneuvering Cash: $650

Savings Account: $1,300
Emergency: $1,000
Portfolio Protection
     Trading Account: $50
     Investing Account: $250
CDs: $0



Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

Starting Garden Project 2012

The goal of the Garden Project is to show the economic benefits of growing your own food that hopefully the Theoretical Family can use to save money and then help fund their portfolio.

First off lets review 2011. Since I live in a town home I do not have much ground space so I built 2, 8'x4' raised gardens. I actually built them a couple years back but for purposes of the Model Portfolio I feel it proper to add in their cost for those gardening to save money.
As an additional handicap I have no windows appropriate for seedlings. Only east and west and I have large trees blocking most of the sun. I had set out my starter pots and a nasty wind storm knocked them over and blew half the dirt away. This left their roots exposed and they dried out. To try to salvage something of the year I bought some pre-grown plants from Lowe's.

Not a good year but I did learn quite a bit. Primarily that Bobby (my 140lbs Saint Bernard) thought it was a fun game to jump into the garden and jump out in an effort to get me to play with him. A few plants didn't care for that one bit and were killed by his paws.
The second thing I learned is that plants have an incredible bounty of vegetables on them for even a small amount of land.
Lastly I learned that the squash family of plants are A-holes. They spent their energy growing vines around other plants to kill them off! On top of that their leaves are gigantic with some being 10" wide. That resulted in them growing over top of the other plants blocking the light and another attempt to kill their plantae brethren. I spent a lot of time cutting of the vines and they didn't have the courtesy to grow anything edible.

2011 Cost Basis
Raised gardens: $154
Seeds and soil: $27
Pre-grown plants: $46.50
Total cost: $227.50
Total profit: $15.50 from 5 lbs of tomatoes ($2.50/lb), 2 green bell peppers ($1 each), 1 yellow bell pepper ($1.50 each)

This year should be quite better.
1: I will be using both garden beds. Last year I only used one as I didn't want to spend too much money on the pre-grown plants.
2: The Jiffy starter pots are nice but too small. I have saved sour cream, cottage cheese, and large yogurt plastic containers throughout the year and bought dirt for them. They will have 3 months to grow in these larger containers before I plant them.
3: I'll be adding some wire fencing along my privacy fence that the garden is up against for Beans and Peas to grow up. Horizontal ground space is limited so I will attempt to make use of my vertical space.
Seedlings: Tomatoes, Cherry Tomatoes, Okra, Cucumber, Radish, Peas, Green Beans, Rosemary, Thyme, Basil, and Jalapenos.

2012 Cost Basis
Seeds: $16.50
2 bags of Jiffy Potting soil: $6
Miracle-Gro: $10 (while I have had this 5 lb bag forever from a previous house even, I felt it fair to add this price into the numbers)
2011 carry over net loss: $212
Total cost: $244.5

If the conventional wisdom of a new business is that you expect to lose money the first year or two then I am  right on track for this "business". I had my one time start up costs of the raised garden take up the majority of my expenses and the first year and I learned some tricks of the trade. $244 seems like a lot but I have seen my friends with successful gardens. The yield is just ridiculous and they ended up giving out a lot of the vegetables because they couldn't eat them fast enough. I'm hopeful for similar results.



Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

New Investment: Triangle Capital (TCAP)

The order for the investing account through and the Model Portfolio owns its first Business Development Company...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

In the video I explain TCAP's strengths but I didn't go into what it adds to the portfolio. At 16:42 in length I think it was long enough but being a Business Development Company (BDC) they can get a bit complex and it was necessary to cover this type of company.

TCAP is the first BDC of the Model Portfolio so its going to add in diversity of tiny equity sector. Since they invest in dozens of tiny companies we can think of TCAP as a no load, no management fee, nano-cap mutual fund. Nano-cap being a company of less then $50m while Micro-cap is $50m-$300m. Its a good way to gain access to that level of company and thusly the economy without being in a true mutual fund.

The 9.72% yield sure doesn't hurt either! That makes it the highest paying position in the portfolio edging out ERF. With a high yield it must give poor dividend growth right? Nope it has a 5 year 7.1% annual growth of the dividend. This means both the portfolio's average yield and average dividend growth grew with this investment.

That high yield comes with a risk. Although TCAP has only 9% of the investing account's money it accounts for over 20% of the income. If I was trying to live off this and only had these positions I would be in trouble if TCAP cut or eliminated its dividend. By the end of Phase 2 of the investing account I'll have 25 positions so long term this is not a risk and since I am not needing to live off of it until long term then there is no risk to endangering my income.

Graphs provided by Fastgraphs.com

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

Tax time rant

Just a little rant about the Think or Swim to TD Ameritrade to Sharebuilder transfer

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

The best part of this so far is that Penson/Think or Swim didnt pass on my purchases to TD Ameritrade so my cost basis and purchase dates of the purchase are not on the same forms. Basically it means twice the work.

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

Week 47 and the Garden Project 2012

Ahh spring time and warm weather...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

Some of you might wonder why I talk about psychology and philosophy so much with investing and trading. I have been on a LOT of online communities. I see new people trying their hand and making money on their own. Far too often I see the same repeating cycle. They hit a few obstacles and get discouraged. If this was a day job they would have their boss as a mentor to teach them what to do and how to overcome mistakes. Coworkers who know what to do show you the tricks of the trade.

For the retail investor and trader? It can be daunting and at times lonely that you are doing this on your own. Coming up with tricks to keep yourself going and talking with others, networking, is critical.

Weekly Activity
$100 deposit into Trading
$1.08 dividend from O

Model Portfolio Totals

Trading Account: $1,093.39
Estimated Monthly Income: $0 (Not ready to trade until Phase 1 completed)
Max loss per trade (1% of account): $10.93
Portfolio stop (3% account): $32.80

Investing Account: $2,641.73
Estimated Monthly Income: $7.75 ($0.188 from DRIP)
Stock
     ABT: $0.76 income/month
     WMT: $0.58 income/month ($0.004 from DRIP)
Energy
     COP: $0.77 income/month ($0.007 from DRIP)
     ERF: $1.74 income/month ($0.052 from DRIP)
REITs
     O: $1.08 income/month ($0.027 from DRIP)
Bonds
     JNK: $1.67 income/month ($0.070 from DRIP)
     PCY: $1.14 income/month ($0.030 from DRIP)
Maneuvering Cash: $800

Savings Account: $1,300
Emergency: $1,000
Portfolio Protection
     Trading Account: $50
     Investing Account: $250
CDs: $0



Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

What happened to the coin flip account?!

What an interesting turn of events...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

At this point I do not think the Coin Flip methodology will work for me for live money. Stress on the ME part of that sentence.  Its money management is still very good and over the long run I should have excellent runs of numerous big wins. It is the lack of control that I am not liking.

To be clear let us review what control I would have over my trades in the markets...
1: When I enter a market.
2: How much money put into the trade
3: When I exit the market.
That is it. Who knows how big a winner could be before it turns against me. With slippage I cannot even know what my loss will be. For that matter, the argument could be made that I will not even know exactly I enter or exit depending on when my orders get filled.


Can I have it both ways though? The money management with me being in control? I think that I can as the lack of control aspect was in not being able to change when I entered (through the use of technical indicators or anything really) nor being able to make adjusts to losses (nothing to change with the plan).
The money management in the form of the trailing stop and profit stop are independent.



Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

What happens if you have to make changes

What are the odds that the first thing you try with investing and trading will be successful?

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

I really don't hear about this sort of thing talked about much. About making changes and scrapping something that doesn't work. Nearly every blog I have read is from an expert who already knows exactly what they are doing and what they want to do. They then pass on that knowledge to their subscribers. However there are aspects to the learning process they probably have forgotten about because its happened to them 10 or more years ago. I always told myself if I started a blog I would start something from scratch to simulate that effect.

On the other hand I didn't want this 100% fumbling around while learning something new.I consider myself a very solid dividend investor. I would consider it my financial skill set. That will not change here with the blog and is my financial pivot point.   I am not going to scrap the forex trading. It will be a process while I work through trying to figure out how I want to trade it. More on that next entry on what I will change.


Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

Anytime now

With the condition of Europe and the trend of the EUR/USD I only have one one thought...
Anytime the coin wants to come up tails will be fine by me.
On a semi serious note I wonder if just a pure rotation of Long, short, long, short wouldn't work. Of course I wasn't worried when I had my win streak was I?

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

Week 46 update

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

So in my video I mentioned that I was waiting for WM to hit 4% yet it already is there. Since I am basing my entry point on past valuation and past price action I want to also price it at the past dividend. It recently got a raise to its dividend that I do not want to add in quite yet into my decision of what a good price is.


Weekly Activity
$100 deposit into Investing
$1.59 dividend from JNK


Model Portfolio Totals

Trading Account: $993.39
Estimated Monthly Income: $0 (Not ready to trade until Phase 1 completed)
Max loss per trade (1% of account): $9.93
Portfolio stop (3% account): $29.80

Investing Account: $2,624.44
Estimated Monthly Income: $7.75 ($0.184 from DRIP)
Stock
     ABT: $0.76 income/month
     WMT: $0.58 income/month ($0.004 from DRIP)
Energy
     COP: $0.77 income/month ($0.007 from DRIP)
     ERF: $1.74 income/month ($0.052 from DRIP)
REITs
     O: $1.08 income/month ($0.023 from DRIP)
Bonds
     JNK: $1.67 income/month ($0.070 from DRIP)
     PCY: $1.14 income/month ($0.030 from DRIP)
Maneuvering Cash: $800

Savings Account: $1,300
Emergency: $1,000
Portfolio Protection
     Trading Account: $50
     Investing Account: $250
CDs: $0
Precious Metals: $0


Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

Greece Restructuring Deal

After months of maneuvering the Greek debt deal seems to be completing...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

From what I can gather it seems all this work and loss that private investors will receive ends up saving Greece 15 billion euros. Why only that amount? Because all that the IMF and ECB are doing is giving Greece money to pay the existing debt and roll it over into new ones. IMO the IMF and ECB didnt go in and save Greece. What they did was tell Greece "If you want our money we want the safety that you will pay us back so you need to push loses onto others."
I think in 3-5 years time they will find they are going to be on the other end of that deal.

Now isnt that a prediction of the future and I said in this video I don't make predictions?
I enjoy predicting the future for conversation's sake but I place no money down on that prediction. That's the big difference. I see so many people who are having a lot of worry over their investments based upon what happens in Greece that carries over to the EU that carries over to the rest of the world.

If you are worried about a position that means you have too much money in that area for your risk tolerance. I can and probably will make an entire entry on that idea. That goes to weighting and turns out yes those people have way too much of their total money in European debt and stock markets.

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

Week 45 update and dividend growth

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

A quick update this week but a good one for the investing account. As I have mentioned before, the 1st quarter is the busiest time for dividend raises. Getting that yearly raise is not only an important aspect to dividend investing but it is quite enjoyable. While the world focuses on European debt problems added to the U.S. federal budget deficit problems, getting a raise to my income for free sure is good.

On top of that add the power of DRIP shares and we can get some nice income even for us do it yourself little guys.




Weekly Activity
$100 deposit into Investing
$2.29 dividend from COP
$1.11 dividend from PCY
WMT raises dividend 9%


Model Portfolio Totals

Trading Account: $993.39
Estimated Monthly Income: $0 (Not ready to trade until Phase 1 completed)
Max loss per trade (1% of account): $9.93
Portfolio stop (3% account): $29.80

Investing Account: $2,520.7
Estimated Monthly Income: $7.74 ($0.174 from DRIP)
Stock
     ABT: $0.76 income/month
     WMT: $0.58 income/month ($0.004 from DRIP)
Energy
     COP: $0.77 income/month ($0.007 from DRIP)
     ERF: $1.74 income/month ($0.052 from DRIP)
REITs
     O: $1.08 income/month ($0.023 from DRIP)
Bonds
     JNK: $1.66 income/month ($0.060 from DRIP)
     PCY: $1.14 income/month ($0.030 from DRIP)
Maneuvering Cash: $700

Savings Account: $1,300
Emergency: $1,000
Portfolio Protection
     Trading Account: $50
     Investing Account: $250
CDs: $0
Precious Metals: $0



Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

February review of the Coin flip account

Its the end of the month so lets review how the forex trading went...

EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.

Its easy to spend time working towards the goal of becoming self sufficient financially. Its also easy to dream of the benefits but talked less often is the drawbacks.

The size of the losses should not be underestimated. Hopefully one will be able to focus on the profit and total net gain in accounts. If you think you cannot then perhaps trading and investing is not for you. That is not to dissuade anyone but to bring up all aspects of this lifestyle we choose to pursue.


Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.