Author Archives: Annie

stop button

Moratorium

Published / by Annie / 1 Comment on Moratorium

Everyone’s needs change over time. You may slow down or stop using an item, or you may start to use something else instead. It’s just a part of life.

For instance, I was a big fan of pencil and paper. I not only write copious lists, I also composed my book/blog drafts and kept a journal in paper format. To save money I stocked up on pencils and notebooks the other year when I caught them on sale.

Since then my needs have changed. My journals are now stored electronically, written in plain text format and stashed on my computer. I save photos, scanned papers, and other relevant items in an annual folder with the file names sorted by date. While I still use pencil and paper for my lists, my usage of these items has went down drastically.

While I’m delighted at the lower cost of maintaining electronic records, the change in my habits left me with a small stockpile of pencils, pens, and notebooks. Instead of having a year’s supply on hand as per my plan, I have a tote of supplies now that won’t get used up for several years.

Since the items will get used eventually it doesn’t make financial sense to eliminate them. In fact, I’m sure my daughter and grandchildren will make a dent in them over time even if I don’t. Even so, it would be stupid for me to add to my stockpile this year. A stockpile is only worth the time and expense when it actually gets used in a reasonable amount of time.

As a result I have now instituted a spending moratorium on certain office supplies. No more paper, pencils, or similar items will be purchased until we use up what we have.

Period.

It doesn’t matter if we stumble upon a cute little notebook with a funny little saying or a crazy-cheap sale during Back To School Season. I refuse to buy what I don’t actually need.

Spending moratoriums can apply to all areas of your life. If you have a sizeable collection of books, music, movies, video games, or whatnot that you haven’t used, it makes sense not to purchase any more until you’ve actually enjoyed what you already have.

If you have food in your pantry that is in danger of going bad, don’t buy more until you use it up.

If your closet is overflowing, stop buying more clothes!

That’s why we stay broke, folks. We spend money on crap we don’t need when we have more than enough already. It’s one thing to stock up on stuff we need and actually use, but when it gets to the point where we have more on hand than we can use up in a reasonable amount of time, we need to stop.

Buying for the sake of buying is stupid.

What areas of your life do you need to impose a moratorium on? Please share your stories in the comments below.

Living Large on a Shoestring

Published / by Annie

I might live cheap but I do live well. I like to take advantage of sales in order to enjoy life as much as possible. One of the major ways I do this is on food.

I am a huge fan of quality meat. I enjoy a nice steak as much as the next person but I rarely treat myself to them.

Unless I catch them on sale, that is.

The other day my store offered T-bone steaks at $3.99 a pound. In the year I’ve worked there I’ve never seen such a bargain. Normally the steaks cost around $9 a pound though occasionally they offer them on sale for $4.99 a pound.

After work I looked over the selections so we could have a treat. I purchased two thick steaks and carried them home to surprise my daughter.

It was a simple meal. We marinated the steaks and served them with mashed potatoes. We even had enough for leftovers the next day and the mutts got some bones to chew on. Life is really good.

Have you scored any serious bargains lately? Please share your stories in the comments below.

Evaluating My Possessions

Published / by Annie

My daughter and I make a point of going through all of our possessions at least once a year. This allows us to refresh our memory about the items we own, reorganize these items to better accommodate our current life, and to figure out what we need to buy (or not buy) for the coming year.

As we were sorting through one section my daughter held up a tennis racket. “Where did you get this?” she asked.

“I thought it was yours,” I replied.

Katie chuckled. “Me, play tennis? You’re joking, right?”

I thought for a moment. “Maybe Little D brought it over to play with when he spends the night,” I suggested, naming my grandson.

“If he did, I’ve never seen him use it,” Katie replied.

“Fair enough.”

With that, we eliminated the mystery tennis racket from our life. There’s no logic in keeping something that never gets used!

Regardless of how much or little you own, everyone should go through their possessions occasionally to make sure that they aren’t holding on to things they don’t need or use. Why store something if you don’t have to? Owning things for the sake of owning them is just plain stupid. Why spend your precious time and money hoarding useless crap?

This week’s challenge is simple. Go through one area of your home and eliminate everything you don’t need and use, then share the story of your success in the comments below.

Have a great day!

Why I Won’t Invest in Index Funds

Published / by Annie / 8 Comments on Why I Won’t Invest in Index Funds

I’ve had a lot of recommendations concerning Index Funds as of late. It seems that many people believe that they are the way to go.

I happen to disagree, especially with current market trends.

An Index fund is a business that buys shares in some (weighted funds) or all of the companies listed on the stock market. As a result, the value of your investment goes up and down in relative sync with the stock market itself. These have become famous in recent years as Warren Buffett and others began recommending them for folks who don’t know much about the stock market.

I have a big bone to pick with them, however. When you purchase shares in an Index fund, you don’t own a piece of the individual companies. Instead, you own a piece of a company (or fund, whatever you want to call it) that happens to own pieces of individual companies. You don’t actually own a bit of the individual companies themselves.

I prefer to cut out the middle man because I’m ornery like that. Why pay someone else big bucks so they can buy and benefit from the stocks? If I wanted to go that route, I’d simply start collecting shares on my own (which I might do someday).

My primary concern at the moment isn’t quite that nitpicky, however. My concern is with the fact that the stock market seems to be on the verge of a bear market. As a result, the value of Index Funds could drop dramatically. It’s gotten to the point that Vanguard no longer allows its employees to invest in their own product, the S&P 500 Index Fund.

When a cook refuses to eat their own cooking you need to run for the hills because something is seriously wrong.

I believe I know what it is. Here is a screenshot of the S&P 500 Index:

See that slow, downwards trend? That’s the value of an S&P 500 Index Fund starting to go down around mid-January of this year.

Here’s another one:

This is the Dow Jones Industrial Average. It’s been trending downwards as well this year. Like the S&P 500, the trend is gradual, but it’s still there. In fact, the only major one still trending upwards this year is the Nasdaq:

The Nasdaq is very tech-oriented, so its gains are doubtless tied to the FANG stocks (Facebook, Amazon, Netflix, and Google). I suspect that upwards trend is about to change. Look at this:

This is a long-term view of Amazon’s stock rise. See how steep the trend is? If there is one thing I’ve learned during my research, the steeper the trend, the less sustainable it is. Amazon is the darling of the stock market but you can bet your buttons it won’t be able to sustain that momentum forever. It will tank, and tank hard. The only question is when. If you look very closely at the chart (just click on the image to see it full-size), you can see that the top is already beginning to round out. This may very well signal that the price is about to drop, though it is a bit too early to tell at this point.

I read somewhere (I really wish I had saved the link), that it is the FANG stocks currently supporting the stock market averages. Facebook, Amazon, Netflix, Google (now called Alphabet), and by extension Apple, Microsoft, and Intel are providing around 85% of current gains on the stock market. As a whole, over 60% of the stock market is down, so when the FANG stocks plunge, those invested in Index funds will see their nest eggs wiped out.

The worst part is, that plunge is already starting. Here is a screenshot from Facebook’s stock:

See that big drop, like the stock fell off of a cliff? It will take them months, if not years, to recover. I suspect that the price of the stock will fall even lower before it’s done since they usually do.

Here is Netflix:

Netflix is on its own roller coaster ride downwards.

Google (Alphabet) is the only one of the primary FANG stocks that seems to be in a stable trend upwards:


So out of the four primary stocks fueling market gains, only one of them seems to have the ability to continue to move upwards for the long term.

In addition to this, as I look through what I call the “bargain bin” I am noticing that many of the stocks there began a major downtrend in January, coinciding with the start of the downward S&P 500 trend that’s starting to appear. My guess is that these companies are the “canaries in the mineshaft”–more sensitive to change than the overall market. I’m seeing stocks that traded for $5, $10,  or more a share prior to that time taking a sudden drop–and staying down despite the fact that nothing within the company has really changed.

I may be far from an expert but to me the warning signs are significant enough to pay attention. We may not be in what is called a Bear Market right now (I don’t even think they are calling it a correction yet) but I highly suspect that one is coming. Those who are heavily invested in high-flying stocks like the FANG group or so-called “safe” Index Funds will be hurt the most if I’m correct. Vanguard has apparently seen the writing on the wall but since they will make money on their Index Funds regardless of how well (or poorly) they do, they will continue to market them to the unsuspecting general public as they protect their employees by not allowing them to invest in it.

In conclusion, as a result of my research, my answer is a firm no. No, I will not invest in Index Funds at this time. If Vanguard doesn’t even recommend for its own employees to invest in their product, I refuse to touch it with a ten-foot pole.

I hope you understand my reasoning now. This is why I firmly believe that my best bet is to scrounge around the “bargain bin” for companies already suffering from the downtrend. For the record, all of this could very well blow over–if it does and my concerns are eased, I will consider the investment.

For Further Reading:

Top Economist: Get Ready for a Stock Market Drop

Why the 1929 Stock Crash Could Happen in 2018

‘A storm is brewing’ in the US economy, says economist Diane Swonk

The Challenge of Investing in the Stock Market

Published / by Annie / 17 Comments on The Challenge of Investing in the Stock Market

One of the major challenges of entering the stock market on a shoestring is brokerage fees. These are fees that you have to pay any time you buy or sell a stock. While there are a number of discount brokerages out there, many of them require that you open an account with anywhere from $500, $1,000, or even more. When you live on minimum wage, saving up that sort of money can be daunting!

Once you open a brokerage account the challenge doesn’t stop there. In order to reap a profit you have to factor in those fees. For instance, the last I checked, a popular Dividend Aristocrat, Proctor and Gamble (PG) was trading at $79.28 a share with a quarterly dividend of $0.717.

Think about this. You work minimum wage. If you’re lucky, you might be able to save up $100 to invest every month or so. That means you will only be able to purchase a single share of the stock at a time. Using my brokerage fee of $6.95 as a guideline, in order to purchase a single share of Proctor and Gamble at $79.28 a person would actually have to spend $86.24 for the privilege. If you were just investing for dividends, it would take you over 27 months just to recoup the fee you paid to buy the stock! I’m not including the potentially increased value of the share itself since appreciation is not guaranteed. In fact, the value of your stock can tank overnight so in reality, when one invests for dividends the safest attitude to have is that you might very well lose the entire price you paid for a stock if the market turns. Even if the market didn’t turn against you, in order to receive a profit from that single share you would have to wait until the stock sold for over $93.19 simply to recoup the amount you paid to buy and sell it!

With that sobering reality, it would be better for the shoestring investor to stash their cash in a savings account.

So how do these big dog investors make money then? They buy in bulk, that’s what they do. It costs the same whether you buy one share or 100 shares so they leverage that to reduce their trading fees to an acceptable level.

Using Proctor and Gamble as an example, if a person bought 100 shares of the company the trading fee works out to seven cents a share to buy, or fourteen cents a share to both buy and sell. The first round of dividends would be $71.70, an amount that completely covers the brokerage fee to purchase the stock and netting a $64.75 profit. Every quarter after that would be pure profit. When the stock increased in price just fourteen cents a share, the brokerage fees would be covered even if you didn’t hold the stock long enough to receive a dividend.

There’s one major problem with that scenario, however. Folks on minimum wage generally don’t have $7,928 to invest at one time. While you can adjust the numbers to accommodate purchasing a smaller amount of shares, one has to be very careful. The goal here is to make a profit–not give it all to the brokerage firms!

My goal here is not to just feather my nest. I want to work out a way that an average person on minimum wage can invest in the stock market and receive a profit. With that in mind I am going to rule out the big dogs as an investment option. While I’m good at saving money I have no desire to save up an entire year’s wage before I could invest.

There has got to be a better way. I have noticed that there are a lot of companies who have seen their stock prices tank starting back in January of this year. I am going to sift through this “bargain bin,” searching for quality companies to invest in. To minimize my trading fees I intend to purchase no less than 50 shares at once, though if at all possible I want to be able to acquire a minimum of 100 shares per purchase.

Is this risky? Yes, it is. I could very well lose every single penny I invest in the stock market using this method but that’s okay. The very worst that can happen is that I have to continue working until I die. Considering the fact that I’d have to do that anyway, the fear doesn’t bother me.

This isn’t the first time I’ve risked everything. When I left my husband, all I had to my name was a ratty old mobile home. I didn’t even have a job when I started but I made it work. I risked it all again when I decided to become a full-time writer. I managed to live on my royalties for several years as a result of that leap.

As for this? This is about more than just me. If I can pull this off, if I can figure out how to play this game and make a profit, I can figure out a way to distil what I’ve learned and teach others how to escape the rat race. I’ll not only achieve my own personal financial freedom, but I’ll be able to help others do it as well.

I’ve got to try.

 

How I Made an 82.82% Investment Return on $7.56

Published / by Annie / 4 Comments on How I Made an 82.824 Investment Return on $7.56

One of the smartest decisions I have ever made was to take business classes in high school. I learned how businesses save a fortune simply by buying the items they use in larger quantities instead of as they use them. Unfortunately, this teaching runs counter to how many people manage their finances. They only have so much money until payday that they need to spend on A, B, and C. While they’re at it, they also want to eat out a time or two so instead of stockpiling something they use every day (like bathroom tissue) they purchase just enough to last until their next paycheck arrives.

This is why so many people stay broke. They think short-term instead of long-term in regards to their purchases.

The truth is this: when you purchase items in bulk you can save a small fortune. It doesn’t take a lot of money to do this, either. All you have to do is select a single item that you use regularly and purchase a larger quantity when you run low. Eventually you will amass a stockpile that will save you a LOT of money in the long run.

For instance, I am a big fan of melamine sponges (magic erasers). Add a little water to these beauties and you can clean almost anything without a lot of scrubbing or unhealthy chemicals. Despite the fact that they tear up easily, these little sponges are an essential part of my cleaning arsenal since my time is limited these days due to working a public job, volunteering, and writing.

A two-pack of these sponges costs $1 if you purchase the generic brand at my local Family Dollar so I usually stock up whenever I make it to WalMart since they cost 88 cents for a two-pack there. I realized that I might be able to apply the bulk buying principle to these erasers. I went online and discovered that I could purchase 100 of these sponges at Amazon for $7.59 with free shipping.

I saved almost a day’s wage just by buying them in bulk! If I were to purchase 100 of these sponges at my local Family Dollar I would have spent $50 before tax. If I had bought them at WalMart I would have spent $44. I saved $42.44 and $36.44 respectively as a result.

I don’t know about you but I love having an extra forty dollars in my pocket. I would rather have that money to spend on other items instead of spending it on a single item. This one purchase earned a whopping 82.82% return on my initial investment. Considering that you’re lucky to receive 1% interest on a savings account these days I consider this a major win!

While it might take several years for me to use up that supply of sponges they neither eat nor drink so they will cost nothing to store on my shelf. Even better, I won’t have to worry about the cost of these sponges going up for some time in the future.

Today I have a challenge for you. Instead of spending seven bucks at your local fast food dive for a bunch of unhealthy junk food, why not invest that money by buying something in bulk that you use on a regular basis instead? Shop around for a good deal on an item you use regularly and stock up to maximize your savings. When you’re done, calculate how much money you saved and share it in the comments below.

You will save a fortune.

The Luxury of a Vehicle

Published / by Annie / 2 Comments on The Luxury of a Vehicle

A few weeks ago a friend asked for some help. He needed to locate a vehicle that would start and run for $1,000 or less–in two weeks.

Considering that my days off rarely match up to the friend in question I considered this an almost impossible task. Not only can it take months to stumble on the perfect deal, the absolute best bargains are on vehicles that need immediate repair before they can be driven.

My friend vetoed those outright.

As we inched closer to the deadline I found myself having to reject vehicles that I would personally buy if I were shopping for myself. Vehicles that need some work can be bought for a song if you know how to do it. That was how I acquired the last van I owned. I paid $500 for it when the transmission went out and had a rebuilt one installed. For $2,000 I ended up with a vehicle that blue-booked for twice that amount and drove it for many years.

"You know, you may not be able to afford the luxury of a vehicle right now," I consoled after the last round of inspections failed to locate something suitable. "You could always walk to work and save up some more money while you look for something you like. It would be tough but you live close enough to your job to manage it."

He gave me the look that one reserves for the crud on the bottom of their shoe. "Cars are not luxuries," he sniffed. "Not if you actually go places."

I didn’t know whether to laugh or be insulted. While I understood that my friend was scared, what he didn’t understand is that in some cases a car is a luxury. When you live in town within walking distance to work and stores you can live without a vehicle, especially in this age of Internet commerce. I know; I’ve done it for years.

Unfortunately, most people have been brainwashed into believing that a vehicle is a necessity regardless of circumstances. I’ve seen folks go without food or hit up charities just to make their car payment.

"Well unless you get really lucky you might just have to," I countered gently.

Fortunately for my friend a few days later we struck paydirt. We located a car being sold for a song that was in desperate need of some tires and cosmetic work. We limped the car to a repair shop, scored a used set of rubber, and went on with our lives.

"You know, you should really buy yourself a car," my friend counseled when he caught me walking to work in the rain several days later. "It makes no sense to walk in the rain when you can afford not to."

"I’ll think about it," I replied as we said farewell. I would rather save money for the future instead of spending it on repairs, insurance, and the myriad other costs that come hand in hand with vehicle ownership. While I might buy another car some day, for the moment I am content.

What is the one thing your friends consider essential that you do not? Please share your stories in the comments below.

Bargain Food

Published / by Annie / 1 Comment on Bargain Food

One of the ways I stretch my dollars is by taking advantage of the fact that I work in a grocery store. Every single shift I look around for good deals and take advantage when I can. For instance, when my employer issued coupons for a free 24-pack of bottled water with a purchase a while back, I bought some groceries and squirreled away the water in our assigned area so I would have something to drink on my breaks–completely free.

One major way I save money is on milk. I wait until we mark down the ones that are nearing the expiration date to buy as much as possible. Since a gallon of milk costs $2.49 here that saves us quite a bit! I keep our refrigerator on the coldest setting so that the milk doesn’t spoil before we use it.

We do the same with eggs and other items. 

This is one reason why I am very thankful that my daughter and I work in grocery stores. We both do this routinely in order to save money. While I’ve not calculated exactly how much we save doing this, I’ve no doubt that we manage to pare down our expenses by a couple hour’s wage at the least. Over time that adds up.

Does your current situation allow you to save money on things you need and use? Please share your stories in the comments below.

Evaluating my Decision to Stockpile

Published / by Annie / 1 Comment on Evaluating my Decision to Stockpile

I had a bit of a panic attack the other day while I was cleaning my house. As I was rearranging the stockpile of food and supplies I’ve acquired over the past few months I froze in shock over the sheer volume of what I had acquired. Oh, my goodness, I thought in dismay, have I become a mindless consumer?

I’ve preached against mindless buying for ages so the thought was more than a bit disturbing. I tore through my house, evaluating all of the purchases I’ve made over the past year to discover the truth of my actions.

I found:

  • Bathroom tissue
  • Paper towels
  • Soap
  • Vinegar
  • Pinalen (like Pine Sol, only cheaper and actually smells like pine)
  • Odoban (the best disinfectant and deodorizer I have ever found)
  • Toothpaste
  • Deodorant
  • Shampoo (I don’t always use baking soda to wash my hair)
  • Toothbrushes
  • Pet supplies
  • Office supplies
  • Books
  • FoodfoodFOOD! My pantry is stocked and my chest freezer is full.

Those were my major acquisitions over the past year. Every single one of these items will get used in time. None of it will go bad before I use it.

I do need to curtail my spending on groceries but other than that I can breathe a sigh of relief. I’m not mindlessly consuming things, I’m doing the exact same thing I did for years before I started my hard-core minimalism experiment.

I’m stocking up.

The primary way I’ve managed to survive during the hard times of my life was by stockpiling the things we use when money allowed. Since we don’t switch brands or products frequently (if at all), we don’t have to worry about switching brands before our supplies run out.

Fortunately I’m nearing the end of my stock-up phase. That means I’ll be able to save even more money towards my goal of building my savings account.

Even better, by stockpiling items that we use when I find a really good deal I’ve saved several weeks’ worth of wages that I would have otherwise been forced to spend on these items.

For the record, however, I’m kinda glad that the stockup phase is almost finished. I’m tired of spending so much money.

Do you ever evaluate your purchases to see how you’re doing financially? Please share your stories in the comments below.

Panic Attack

Published / by Annie / 3 Comments on Panic Attack

Earlier this month after paying expenses I decided to get a jump on my new goal. Instead of absorbing my current round of royalties into my life I decided to transfer the amount into my brokerage account instead. While I had planned to start next month, I was anxious to begin. I sat down at the computer and logged into my accounts. After calculating exactly how much royalties I had received last month, I started setting up the transfer.

I suddenly couldn’t breathe. My heart beat a staccato in my chest and I started shaking. What the hell? I stood up on wobbly legs and staggered out to the front porch. I needed to breathe, I needed to stop trembling, I needed to think, dammit–what in the world was wrong with me?

It took several moments of deliberate breathing for my mind to function again. It dawned on me that I was having a panic attack at the thought of saving the source of money I had relied on for several years. The reaction made no logical sense; I’ve ran the numbers so I know for a fact that I can afford to live exclusively on the income that my public job provides, especially now that I’ve gotten the bulk of my house sorted for the long haul. To make things worse, I’ve spent the past couple of decades relying on every single penny I could manage to earn.

I closed my eyes and just breathed. I knew that the reaction was illogical. I wasn’t blowing the money; I was simply shifting it into another account. I would have it available to use should a need actually arise. In the meantime, that money would earn a bit more money for the future.

Bit by bit I regained control of my body until, still trembling, I went back in the house, sat down at my computer, and finalized the transaction. Wiping away the tears from my weakness I finished getting dressed and headed to work.

My boss was confused when she saw my upset and promptly gave me a hug. We talked for a moment about how the mind can play games with us before I clocked in to work. I forced my emotions aside and focused on my duties.

Guess what? I lived. I not only lived, I arranged for the transfer to be as automatic as I could make it in the future. While I’ll have to manually transfer the money some of my distributors pay (since they only pay by PayPal), the bulk of my royalties will be automatically deposited into my brokerage account each and every month. In the meantime I am growing accustomed to having a lower balance in my checking account.

Sometimes you have to face your fears head-on in order to grow.

What fears have you faced lately? Please share your stories in the comments below.

A Lesson in Silver

Published / by Annie / 13 Comments on A Lesson in Silver

My silly little silver investment has paid off, not in dollars, but in knowledge. I’ve not only learned how to read price charts now but I’ve also realized that there is a big difference between investing in precious metals and the stock market.

While silver, gold, and other precious metals might go up in price you never know exactly when that is going to happen. It is also something of a chore should you decide to sell. If you don’t sell it locally then you have to arrange for a sale with an online broker, package it all up, ship it to them, then wait for them to pay you.

That alone is a pain in the tukus.

The stock market, on the other hand, is a whole lot easier. You buy your stock, wait a bit for the price to go up, then press a few buttons to sell it. You’ll get paid within minutes. I learned this after making a few experimental trades with my new brokerage account. I made a $40 profit just playing around in the past couple of weeks, while the value of my silver has essentially remained flat.

Even better, I’ve learned that certain stocks issue dividends. Buy these stocks and you will receive a small amount of money every one to three months (depending upon how they do their accounting). They are like buying a cow and then selling the milk!

If I can learn how to combine the two methods of investing for dividends and harnessing stock price increases, I should be able to grow my little nest egg into a tidy profit over time. It won’t be overnight, especially with the current stock market fears, but it’s something to look forward to.

In essence, my silver investment may have ended up being a short-term bust, but it taught me more than I would have learned had I not experimented. I’ve even gotten a little memento to keep in my pocket to remind me of what I’ve learned.

What have you learned from your mistakes? Please share your stories in the comments below.

The Art of Owning Your Issues

Published / by Annie

This old broad is sad to report that she is quickly becoming a toothless crone. The other day I had two more teeth pulled and my dentist asked if I would consider getting dentures. I informed him that I had been exploring my options for quite a while.

I could blame my current dilemma on the doctor of my youth. When my parents expressed concern at how skinny I was the gentleman recommended that my parents encourage me to eat junk food and drink lots of soft drinks to add weight to my slight frame. I could blame my parents for following his advice, creating a bit of an addiction to sugary soft drinks and junk food that I’ve battled for many years.

I could blame the soft drink companies for designing a drink so harsh that there is an actual term for what I’m suffering from called “Mountain Dew Mouth.” While most soft drinks contain some sort of acid that eats at your teeth, Mountain Dew seems to be the biggest culprit in my area.

I could even blame my genetics since my Auntie informed me that our family has always had weak teeth…

…Or I can simply suck it up and move on.

This is me, moving on with a few less teeth in my stupid head. One of these days I am going to have to bite the bullet on a pair of dentures but today is not the day. I’m dreading it. With money being tight I’ll have to go around completely toothless as I wait for the gums to heal before they can fit me with a plate but who knows? Maybe I’ll get lucky and my book royalties will increase so that I can afford a better option.

What issues do you have to own? Please share your stories in the comments below.

My Silver Has Arrived

Published / by Annie / 10 Comments on My Silver Has Arrived

The fruits of my very first investment have arrived. The mailman delivered the package just a bit ago. My hands shook as I opened the box.

I cried as I held that silver in my hands for the very first time.

I’ve done it. I’ve made my very first step into the big leagues. Tears are streaming down my face as I write this. All of my life I’ve been told that you have to be rich in order to have investments yet here I am, living on minimum wage, holding ten silver rounds – my first investment – in the palm of my hand.

The big dogs might laugh at me for my paltry purchase but I don’t care. My tiny little paycheck might not be much but that’s not going to stop me! I’ll invest and I’ll keep investing until I achieve my goal of true financial independence. And once I figure out how to do it I will stand on the rooftops and shout it out to all of my friends. You don’t have to remain poor, even if all you have to your name is a minimum wage income. For far too long the realm of building wealth has been the domain of the Big Dogs; let’s see how they like it when us scrappers enter the ring.

Unlike those rich farts I don’t need a lot of money to live on. That gives me a big advantage. It may take me a while to do it but I know how to save money and I’m learning how to make it work for me. They’ll be no stopping me once I figure it out.

But for now I am going to sit here and play Scrooge MacDuck. I’m going to close my eyes, play this silver through my fingers, and imagine what it will feel like as my safety net builds. After that I’m going to march my happy butt down to the bank and stick nine of these coins into my safety deposit box. I’m keeping one in my pocket for inspiration.

Getting Serious About Finances

Published / by Annie / 6 Comments on Getting Serious About Finances

While many of the so-called experts are crying, I’ve discovered that my decision to enter the stock market could not have come at a better time. The US Government has decided that inflation is out of control so they’ve started to raise interest rates to “cool off” the economy.

According to my research, every single time the Fed raises rates, stock prices take a hit as emotional investors panic and others move out of the stock market into safer investments like government bonds.

This is very good news for me, because it means that I’ll be able to buy stocks at bargain basement prices.

In order to maximize my long-term profit, I need to take advantage of this dip. The more I can invest now, the better off I’ll be in the future. That means I have to get really serious about my finances.

I picked up a copy of Your Money of Your Life in hopes of some pointers. The book is filled to the brim with helpful information, but one thing I gleaned from the text was the fact that I need to account for every single penny I spend in order to learn where I stand financially and keep track of the progress that I am making.

I tried to do this on the computer at first, using my knowledge of Excel, and I fell flat on my face. I spent more time trying to use the darned program than actually entering information. I switched around to several free finance applications, only to run into the same issue. I ended up being so frustrated that I was ready to toss my computer against the wall!

So I went back to what I know. I understand the basics of paper accounting. I used that method to keep track of my budget for years during the early days, until my budget became so low I didn’t need to bother. I invested in a ledger and got to work.

Every single penny I spend is documented accordingly. It’s a bit of a chore, but it has made me more conscious of how I spend money. For the first time in my life I’m actually documenting how much I spend on food, books, and other items. I intend to use that knowledge to target areas where I can save in order to maximize the amount I have to invest while the market is in this slump.

Once I have a few months’ of numbers available, I’ll even go into parts of my budget that I’ve never discussed before–like groceries. Perhaps that will help you learn a bit more about controlling your finances, as well as show you a bit more about how I spend my money on a daily basis.

If you’re interested, that is.

Have you ever kept track of every penny you spend? Please share your stories in the comments below.

A Bit of Holiday Fun

Published / by Annie / 2 Comments on A Bit of Holiday Fun

One of the things I am thankful for is that I have the freedom to do little things for fun at work. It started out during Halloween last year when the manager in charge of decorating the store gifted me with some spider pins for my smock. I ended up being the only other person who dressed up for the holiday. I donned a geeky bandanna from my collection and added a few other touches from my wardrobe to become a geeky pirate. Here I am with one of my bosses in a silly picture captured by a coworker.

My daughter got in on the fun by dressing up for her shift at the store next door. Here is a pic of her with my grandson when he came to visit us.

I started something that day. As each proceeding holiday rolled around both coworkers and customers began to ask if I planned to dress up again. My boss has even started gifting me with silly little hats and headbands for the season. I’ve donned reindeer antlers, Santa hats, bunny ears, and a myriad of other items designed to give the world a chuckle.

It doesn’t take a lot of money to have a bit of fun as you go through your day. Most of my acquisitions cost less than a dollar if I purchase them myself and will be used for many years. The smiles I receive in exchange are a priceless return on my investment.

While I still don’t bother decorating my home for the changing seasons, I have realized that doing these little things at work not only makes my day more enjoyable but lightens the mood of those around me as well. It’s hard to be in a bad mood when your cashier is sporting a goofy hat.

Here in a few minutes I will need to dress for the holiday and head to work. I’m rather looking forward to it.

Do you wear silly things to celebrate the holidays? Please share your stories in the comments below.

Learning From the Past

Published / by Annie / 3 Comments on Learning From the Past

Back in the 1980’s my father, encouraged by friends and family, decided to get involved with the stock market. I’ll never forget my surprise when I discovered that he actually checked two books out of the library and started reading them. Dad never read books.

But these he did. Then he snagged a subscription to the local Herald Leader. He poured over the financial pages, weighed his options, opened a brokerage account, and invested in American Motors.

A few months after that he pulled out at a significant loss.

What can I learn from this? I’ve dug through my mind, searching for clues in hopes of learning from my dad’s mistake, and I’ve learned a lot as a result.

Two Books Do Not Knowledge Make

Dad based his knowledge on two books that he checked out from the library. I’m not even sure that he read both of them. Dad was certainly not a reader. If there is one thing I have learned in my life, it is to not base your knowledge (or your financial future) on just one or two books. The more you read, the more pieces to the puzzle you will find, and the more practical knowledge will stick in your brain.

I’ve easily gotten my dad beat on this score already. I’ve read a handful of books and I’ve got even more on the way to read and study. I’ve even working up a list of books on specific areas of the stock market to acquire and study as time and money allows.

I Have the Internet

Unlike my dad, I’ve got the Internet–and I know how to use it. I can use the Internet to do in-depth research on a company, and I have just enough bookkeeping knowledge thanks to my failed attempts at college to read the SEC filings and translate them to English. I might not be able to understand everything that I read, but I can understand enough to know whether a company is making money, has a history of turning a profit, if they have a long, stable history of issuing dividends even in financial down-turns (we’ve had several of them over the past couple of decades for reference), and whether insiders are buying or selling a particular stock.

I can also go online at any point to immediately see how my stocks are doing. I don’t have to call a broker or trust him to do what I need; all I have to do visit a website.

This is a huge advantage in itself.

I Have a Different Mindset

My family was struggling back in the 1980’s. Dad had his leg amputated early on in that decade so he had went from making big bucks by working two jobs and owning rental property to supporting us on Social Security Disability. During the stretch of time when he became involved in the stock market, he’d also lost the ability to bootleg for extra cash thanks to some legal problems he was involved in.

Because of his personal challenges, he was scared. He was darting around, trying to figure out ways to make a quick buck because he didn’t know how he was going to be able to support us otherwise. My parents may have been cheap but they weren’t necessarily frugal. As a result, they didn’t know how to live on extremely little.

I may be poor but I’m far from desperate. I know beyond a shadow of a doubt that I’ll be just fine working a minimum wage job. I could even get a higher-paying job if I wanted one.

Most importantly, I have no one to support but myself now. My kid is grown and paying her own way in the world. I know what it’s like to worry about how to support your family, how frightening it is trying to make your money stretch as far as you can. Unlike my father I have no one to support but myself.

Instead of looking at this as “I’ve got to make money in order to survive,” I’m looking at this as “if I can figure this out I’ll be able to feather my nest so I won’t have to work so hard in the future, and I won’t have to worry if something happens that prevents me from working later on in my life.”

I also know that if I lose money that I’ll be able to survive the loss. I’ll be able to make it back. I could get a better paying job, re-open my computer repair business, promote my books a bit harder…as long as I don’t go overboard and destroy my pillow, I know I’ll be just fine, regardless of what happens.

I Have the Advantage

In looking through the past I’ve learned that I have a distinct advantage over my father. I intend to take that advantage and run with it.

What’s the worst that can happen? I lose a bit of money, end up having to work through my retirement–I’ll have to do that anyway if I don’t try, so unlike my dad I’ve got nothing to lose. Even better, if I make this work I’ll be able to help others learn how to improve their lives as well.

Looking to the Future

Now that I’ve analyzed my past, it is time to look towards my future. Time to get back to work.

Have you ever analyzed your past in order to learn from yours (or others) mistakes? Please share your stories in the comments below.

What Can I Use to Become Rich?

Published / by Annie / 2 Comments on What Can I Use to Become Rich?

Okay, I’ve calmed down a bit since I wrote that last post. I’ve realized that I want to do this, despite my doubts and fears. The next step is to figure out what I have to work with right now. I’ll worry about how to apply that in the future.

I bring home $600 a month from my public job. I can live on that easily with my current expense rate. That leaves me $84 a month (give or take) in book royalties I can invest but if I work it right, I might be able to chip in a bit more by conserving the money I earn from my day job.

I am an expert when it comes to frugality. I know of no one else who can live on as little as I do. I can use that to my advantage to achieve this goal.

I also have another advantage: I can learn how to do anything by reading books and stuff. Over the years I’ve taught myself how to fix computers, repair things that broke in the homes I lived in, do basic repairs on the vehicles I owned…I even used this skill to learn how to write online, start this website, and eventually write and publish books. If I apply this skill to the task of learning how to earn more money, I’ll eventually hit on an idea that will work. I’ll probably encounter a whole lot of ideas that don’t work, but that’s part of the process.

With this in mind it is time to officially alter my game plan. I will invest extra money left over from my day job into books about business and finance. I already started that a while back when I scored several books at the library book sale while I was contemplating this decision so it is time to get to work. Between socking away my royalty income and searching for answers, I’ll figure out a way to do this.

 

 

Who Do I Think I Am, Wanting to Get Rich?

Published / by Annie / 18 Comments on Who Do I Think I Am, Wanting to Get Rich?

The past few days have been filled with tormenting thoughts. Just who in the hell do I think I am, trying to get rich? Even though my goal is simply to become financially secure, to have enough money to be safe in the event I ever have to stop working again, the thought torments me just the same.

Think about it: I’m an uneducated, dirt-poor single mother probably suffering from Empty Nest Syndrome as I listen to my daughter discuss her plans to marry and move away. I bring home about $600 a month in a minimum wage job. Last month I received a whopping $84 in book royalties yet here I am, studying my ass off as I work to come up with a plan to spin that paltry amount into enough money to provide a living wage to prepare for a point in the future where I wouldn’t have to work.

I mean, I’ve ran the numbers. It would take $500,000 at 1.5% interest (my current savings account rate) to generate $7,500 a year annual income. That amount would bring in less than $600 a month income after taxes ($625/month pre-tax). I can’t even conceive of having $500,000 in the bank, much less how to build up that type of money. There is no way on earth I can just stick that $84 a month into a savings account and build it to that amount in my lifetime, much less in a shorter amount of time.

If I took part of that $500,000 and invested in a cheap home for me, that would eliminate my rent expense, however. When the kid moves out I will have to pay the whole amount of $250 a month for rent. Using that as a base number (since the kid leaving is inevitable), if I continued to pay $250 a month to myself after I had a house that was paid for, the gap between where I am and what I want to do gets a bit easier to manage. If I reserved $100 a month of that amount for property taxes, repairs, and maintenance, I would then have another $150 a month to invest.

That would allow me to save a total of $234 a month towards my goal of being financially secure when combined with my monthly royalty payments, provided they stay steady.

But there’s a big whopping problem with that scenario: I’d have to find the money to buy a house in the first place. I don’t have a large amount in savings aside from the $1,000 pillow I keep in my checking account for emergencies. That is not near enough for what I would need to start that plan.

So who the hell do I think I am, getting the high-falutin’ notion of becoming rich? The odds against me are so astronomical I cried myself to sleep last night just thinking about it. It’s no wonder so many people in my situation don’t even try.

Okay, I’ve had my rant. It’s time to suck it up and move on. I don’t have to worry about the end point right now; all I have to do is focus on the Baby Steps. I can do this.

I hope.

 

I’m Making a Profit!

Published / by Annie / 2 Comments on I’m Making a Profit!

The other day I mailed off a check to buy 10 ounces of Silver Bullion at $16.45 an ounce.

I checked the market prices today.

I bought ten ounces of the stuff; that means that so far I’ve made $4.10 on my investment and it hasn’t even arrived yet! Oh my God! That’s over half of an hour’s wage!

Okay, so in the long run four bucks isn’t much but it’s a start. Even better, that’s a helluva lot more than I would have earned if I had stuck that paycheck into savings. It would have taken me YEARS to make that much money at 1.5% interest!

I’m chuffed, to say the least. My very first investment is actually earning a profit. Can’t wait to see what I’ve bought!

My First Investment

Published / by Annie / 2 Comments on My First Investment

Note: this website runs a bit behind my real life. Judge my numbers accordingly.

Baby steps can move mountains. I know this; I used a progression of baby steps to not only manage to survive while raising my kids as a single mother, I used baby steps when I began my computer repair business and to learn how to start a website, write and publish books for extra money.

But it takes money to make money, or so the saying goes. It’s the ones with the big bucks to invest that make the fortunes. I don’t have big bucks; all I’ve got to start is one $160 paycheck. Sticking that puppy directly into my savings is highly tempting; the money will be insured and I’ll earn a few pennies in interest.

Can I do better than that?

I stumbled upon an article the other day that declared the death of the Silver Market. I’ve heard time and again that the most successful investors sell when others are buying and buy when others are selling. Silver has been used as currency for thousands of years; even now it is popular in the jewelry market. I’ve always loved silver jewelry, so much so that my daughter even bought me a sterling silver Mother’s Ring for my birthday earlier this year:

With that in mind I decided to check out the Silver Market. I quickly read up on it, learned how to figure out the current price of silver, and how to buy the stuff. There are two ways to do it. You can buy paper Silver, which is essentially a piece of paper that says you own X amount of silver that is stored somewhere else, or you can buy pieces of the metal yourself in the form of coins, rounds, or bars. If you buy pieces of silver, they will be shipped to you so you also have to work out how to keep them safe until you decide to cash in your investment.

The good thing about actually buying the pieces of silver is that I could stash them away somewhere. I wouldn’t be tempted to spend them every time I check my bank balance. More importantly, I would have something to actually hold in my hand for inspiration whenever I became plagued with doubts.

Worst case scenario I could have it melted down by a jeweler to create jewelry if the investment fails to pay off. I’d have a pretty piece of bling at least.

I found a reputable dealer online after a bit more research. To my delight, they were running a special: ten troy ounces of silver rounds at spot (market) price. Since most places charge a bit over market to cover shipping and make a profit I was delighted. To maximize my investment I decided to lock in the price on their website and mail them a paper check. They charge extra if you pay online.

So now, not only am I doing better than many Americans because I have more than $500 in the bank, I now have an investment in precious metals on the way. They will ship as soon as my check clears the bank.

I have no idea what the heck I just ordered to be honest. According to the description I will receive a tube that contains ten silver “rounds” – whatever that is. All I know is that it will be .999 pure silver bullion. I know that I’m taking a risk, considering how little I know about this stuff but you know what? I’ve wasted more than that doing stupid stuff before.

I’m scared but exhilarated just the same. I’ve made a baby step, wrong or right. That’s progress at least. Whatever happens, It sure beats the hell out of just sitting here reading books and wishing for something to happen.

I’ll keep you posted.