Category Archives: Finances

Investment Update

Published / by Annie / 2 Comments on Investment Update

The other day I closed out my books for the month of August. Here are the numbers:

Beginning Balance: $1,340.61

Dividends received: $20.46
Personal Investment: $286.00
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Total Invested in the stock market: $1,647.07

August was a tight month. I had to set aside some funds to celebrate my daughter’s 19th birthday. Since this very well might be the last chance that I have to spoil her I wanted to do something memorable, so in addition to her birthday gifts I treated her to a meal out and consented to get my nails done with her. She’d never had her nails professionally done before and didn’t want to go through the experience alone.

It was a first for me as well. Never in my life have I splurged on those fancy nail coatings so while I choked on the $35 fee it was worth it, not only to make my daughter happy but to see what all of the fuss was about. As long-time readers are well aware, I’ve always been a bit vain when it comes to nail care. It didn’t hurt to try it once, especially since it made my daughter so happy.

Even with the birthday splurge I was able to chip in a bit more than just my book royalties towards my investment goal. It wasn’t much but every little bit counts. As soon as the funds hit my account I will make my next stock purchase.

I am looking forward to it.

Maybe one of these days I’ll be able to get my nails done without having to choke at the price. I’ll have enough money coming in on a regular basis so that I can afford to treat myself to the occasional manicure. Who knows? Regardless, it was a fun experience to check off of my bucket list.

In the meantime I only have $58,352.93 to go in order to attain my goal of investing $60,000 into the stock market. I am quite pleased with my progress.

Did you make any progress towards your goals last month? Please share your stories in the comments below.

The Art of Definite Action

Published / by Annie / 16 Comments on The Art of Definite Action

As I mentioned in a previous post I am concerned about my finances for the upcoming winter. Rather than allow the fear to eat at me I decided to take some definite action and meet the concern head-on.

Up the street from my home is a gas station that happens to be hiring, not only for cashiers but for management as well. The work is full-time. Cashiers start out at $9 an hour so while I’ve no idea how much management earns it is safe to say they make even more.

I turned in my resume the other day. Should I receive just the cashier’s position at their starting wage I will have increased my weekly income by close to $100 a week. It will go up even more should I net a management position.

I will have to make some adjustments if this comes to pass. I’ll be working at least 15 more hours a week at a public job than I do currently so I will have to reduce my posting frequency. That said, based on my monthly expenses here I should be able to invest close to a week’s wage every month towards my goal of financial freedom even during the winter months in addition to investing my book royalties. That will cut down the amount of time needed to save up $60,000 by over half.

If other jobs come available within walking distance to my home I will apply for them as well. Something will come up. While I’m not thrilled at the thought of going back to full-time, the thought of gaining my freedom is driving me forward. I am going to do whatever it takes to achieve financial freedom again. I want the option of not having to work, whether I choose to exercise it or not.

What steps are you taking to work towards your future? Please share your stories in the comments below.

Winter Worries

Published / by Annie / 10 Comments on Winter Worries

The kid will be moving out this winter. She plans to get married once her fiancée graduates BASIC training and move on base with him once he gets things sorted. Here’s a picture of him in training:

The demon Fear has raised its ugly head since I’ve received this notice. She will probably move out mid-winter when the bills are at their highest. Should this come to pass I might have to suspend my investment plan until spring returns just to survive.

Sometimes working for minimum wage sucks.

I’ve gotten rather spoiled with her sharing our household expenses. As a result I’ll have to limit my spending just to make the bills. Since I only bring home about $600 a month from my public job I’ll have less than $100 a month to buy food and supplies while I wait for spring to come back around. I might have to use my book royalties to make things easier, at the cost of my future.

I don’t like that thought. Every penny that I invest takes me that much closer to achieving financial freedom. I miss my freedom. I also don’t like the thought of having to tighten my belt once more. The memory of those two lean years still haunts me.

But that’s okay. I know I can make ends meet regardless. It might be tight but it’s not impossible. Some way, somehow I’ll not only scrape through, I’ll figure out how to continue investing at least a little bit towards my future.

One bright spot: I’ll be able to sleep in a bedroom for the first time in over seven years once the kid moves out. I’ll even be able to rearrange a bit to make this place more usable.

Look on the bright side Annie. 

Maybe I’ll stumble across a way to increase my income so things won’t be so tight. Who knows? Anything can happen. In the meantime I am thankful that my daughter is on the verge of a brand-new adventure. I am also thankful that I know how to live extremely cheap. It allows me to survive in situations that would make the average person choke, so despite my fears I know that I will be just fine. I just have to ride the emotional wave.

How do you encourage yourself when fear raises its head? Please share your stories in the comments below.

Frugality and the Pareto Principle

Published / by Annie / 2 Comments on Frugality and the Pareto Principle

According to the 80/20 Principle, 20 percent of actions will provide 80 percent of results. This is especially true when it comes to frugality.

When you break it down the majority of money I personally save falls into two main categories: housing and auto. By renting a one-bedroom house in a less than ideal area, I saved $200 a month back when I first moved here in 2011. Since rental prices have went up slightly since then I’ve saved even more.

By allowing my daughter to become my roommate instead of simply encouraging her to move into her own place I increased my savings even more by halving my already low expenses. While this also has the added benefit of providing my daughter with a safe place to live at a price she can definitely afford (while teaching her how to manage money), that is simply an added bonus.

Eliminating my vehicle saved me another thousand dollars a year. While I didn’t have the burden of a car payment (or the cost of the full-coverage insurance that comes along with it), that savings has added up as well.

I manage to save $5,000 a year on just these two expenses alone. The other little frugal decisions I’ve made pale in comparision. To be blunt, I would either have to take a second job (I would need to work an additional 34 weeks a year at my current $150 a week public job income) or locate a position that paid twice the hourly wage that I currently earn if it were not for the money I save in these two areas if I didn’t want to reduce my standard of living.

If you are serious about saving money I urge you to give these numbers serious consideration. While eating out less, eliminating phone service, cancelling subscription services, and other things do save money, you will receive higher savings if you focus on just these two areas of your life.

Running the numbers has shown me that making your own laundry detergent and simply living on less is not enough if you want and need to save serious money. It’s the big expenses that really destroy your budget. However, if you are interested in paring your expenses even further, I urge you to check out my books The Shoestring Girl and The Minimalist Cleaning Method.

Have you ever analyzed where the bulk of your money goes? Please share your stories in the comments below.

Why Bother Saving Money?

Published / by Annie / 4 Comments on Why Bother Saving Money?

A common question I receive from family and friends is “why bother to save money?” Their reasoning is that, if they can afford it, they should enjoy every penny they have to spend.

There’s nothing wrong with this logic on the surface. We’ve been trained to believe that we no longer really need to save for retirement or for protection in the event we become seriously ill or injured. Social Security was created to take care of us in those cases.

The truth is far different. Social Security was designed to replace only half of our earnings. My $600 a month employment income translates into roughly a $300 Social Security retirement benefit. While programs like SSI are in place to raise your monthly income to a more livable wage, in order to qualify you can’t have much at all in assets like money in the bank. For instance, a family member was recently informed that she had X amount of time to spend down the $5,000 she had managed to save before she would lose her benefits. She had been so proud of her savings! She had scrimped and saved in order to afford a down payment on a house but the government didn’t care. She was forced to give up her dream of home ownership and bought a car with the money since she couldn’t qualify for a mortgage with such a low down payment in her area.

If you are injured it can take years for you to qualify for Social Security Disability benefits if you qualify at all. The odds of being able to survive financially during this time are slim without extensive support from friends and family.

This is the reality that we live in. The safety nets we have been taught to believe in are not as safe as we believe them to be. As a result, we need to save money not only to survive while we recover from an injury but to supplement the limited retirement benefit that Social Security provides.

It is not always fun to scrimp and save when everyone around us spends money like mad. It’s not fun to turn down invitations to spend time with friends or catch their condescending looks when they show off the things that you know you can’t afford.

It’s not fun being poor, period. If your assets and finances are so low that you qualify for public assistance people judge you for every move that you make. I cannot count how many times I’ve heard someone behind a person on food benefits remark negatively about the fact that a mother purchased snacks for her kids or bought some microwave meals to eat at work, and I’ll never forget the time a worker at a dental office commented on my daughter’s brand-new shoes.

They were the first pair of brand new shoes my daughter had owned in years.

I’ve lived an extremely frugal life for over 20 years. I deliberately worked lower-paying jobs and saved my money so that I could take periods of time off and savor the fleeting childhood of my children or be home for them when they got off the bus after school. While I have no regrets, I didn’t always enjoy the experience.

So why save money?

You need to have money to live on in the event you get hurt. You need to have money if your roof springs a leak or your car needs repaired. You definitely need to have money saved up when it comes time to retire unless you want your income sliced in half.

Most importantly, you need to save money if you want to have any hope of escaping poverty. There are a number of ways to invest your savings that will help you climb the financial ladder but that option is completely closed to you if you don’t have any money to invest. While you may have to hit the books in order to learn how, it is possible to escape poverty by learning how to invest in precious metals, the stock market, opening a small business, or other areas. You might not get rich but you’ll end up making a lot more than you would by leaving the money in savings at current interest rates. Ask Chris Gardner if you don’t believe me. He was homeless when he started out.

If you want to survive in this world you need to save. If you want to improve your lot in this world, you need to save. If you want to have any hope for a better future, you definitely need to start saving.

Starting now.

If you are new to saving money, check out my book The Shoestring Girl. I’m one of the few frugality experts who actually knows what they’re talking about when it comes to saving money

The Magic of Time

Published / by Annie / 2 Comments on The Magic of Time

I moved to this house in April 2011. In the fence row of the front yard was a little sapling beside my front gate.

My friend Mr. A wanted to chop it down. I told him to leave it; it would grow into a fence post eventually. That sapling was so insignificant that I never even bothered to photograph it. I finally located a photo of it I snapped a year later when we acquired Lilly. You can see it on the right-hand side if you look closely. It’s growing alongside the post that the front gate is attached to.

I’ve never really thought much about that sapling over the years; it was just there. A few neighbors have commented on how shady my yard stays, how private it is now but that’s about it.

Until this morning.

I woke up, and as is my habit I brewed my morning coffee and sat on the porch sipping the first cup while my dogs had their morning sniff/potty break.

That was when I finally saw it, I raced inside to grab my camera:

That tiny little inconsequential sapling is now a luxurious tree.

A small insignificant incident in my life culminated in this moment. More than anything that has happened in the seven years I’ve lived in this tiny home, that tree represents the changes I’ve experienced in my life.

It wasn’t the only sapling I saved over the years. I propped up the tiny survivor of a hollyhock bush on the left corner of my yard after the local water company decimated the primary bush in my neighbor’s front yard. A year or so after that a child of that bush appeared near the area where I keep my trash can. A sapling I preserved that doesn’t appear in this photo grew into a mulberry tree. The squirrels are grateful for that one since it feeds them. They hop from the branches of the one I photographed into the branches of the mulberry tree whenever they want a snack.

Maybe this is why I’ve grown so attached to this little house over the years. I’ve established roots. For the first time in my life I can sit on my porch and say “that tree was just a sapling when I moved here.” For the first time in my life I can look out and actually, physically see the fruits of my labor.

The magic of it is that I really didn’t do much. I just let it grow, and now look at it!

There is a lesson in that tree. Small actions can have a huge impact on our lives over time. A blog I created on a lark developed into a business. A book I wrote for my aunt became another and another until the royalties grew enough to support us for several years.

The royalties from those books, as I invest the money, will support me again in the future as my hair continues to grey.

Baby steps. It works.

A Goal of Freedom

Published / by Annie / 9 Comments on A Goal of Freedom

With all of the work I’ve put in to learn about investing and the stock market I’ve allowed one important piece to fall to the wayside. I need a concrete long-term goal to focus on in order to not only have a measuring stick of my progress but to inspire me during the dark hours.

I woke up this morning with that question burning in my mind. Just what do I intend to accomplish here? It’s not that I want to become rich, though to my current mindset it certainly feels that way. Studying the financial markets, investing in the stock market–those are actions that rich people take when viewed from the eyes of the poor.

And let’s face it: I’ve been poor my entire life. While there have been times of both feast and famine, overall I’ve spent my existence hanging out at the bottom of the food chain. There’s no sin in that but it does color my perceptions.

With the question of my goal in mind I sat down with a cup of coffee this morning. I turned my lucky coin over in my hands as I considered what I want to achieve here. I think I’ve finally figured it out.

I want to achieve financial freedom. I want to get to the point financially where I can work if I want to but I no longer need to in order to make ends meet with some money to spare. The taste of freedom I experienced for those years I lived on my book royalties was beautiful and I want to recapture that. More importantly, I want to do it in a way that can be duplicated by others who want to achieve freedom as well.

The next question is: how do I measure my goal? I can’t just say I want to achieve financial freedom and leave it at that. I need something concrete to work towards and in this case I need a number with dollar signs in front of it to aim for.

I know for a fact that I can live on $500 a month but to be honest I want to aim higher than that. To be truly comfortable living on my own I would really like to have $1,000 a month in passive income but that’s where I run into a problem with my mindset. Every time I run the numbers for the amount I have to invest to achieve that return I choke. It is simply too much money for me to comprehend having personally at this point in my life.

I need a number that I can actually visualize myself being able to achieve within the next twenty years–the time I would like to completely retire. A low number, one that I can actually conceive of to use as a starting point. I can always aim higher later.

If I am able to receive a 10% return in the stock market (which is doable if I’m careful with my investments), it would take a minimum of $60,000 invested to receive a $6,000 annual return.

That’s a number I can work with. Sixty thousand dollars is the price of a nice house. I can conceive of $60,000. I can’t conceive of how I’ll come up with $60,000 at the moment but that’s okay. I know I’ll reach that number eventually if I just keep doing what I’m currently doing–invest my book royalties and any extra money I can afford to invest. I have a workable plan with simple steps to focus on as I move forward.

I’ve currently managed to invest $1,500 into the stock market so far this year. Due to my mis-step with the one stock I’m not up to my 10% return yet but that’s okay. There will be times that I hit, times that I miss, and times that I stumble upon a stock that doesn’t currently issue dividends that is too beautiful to pass up. It won’t be an exact science, especially as I’m learning and I’m comfortable with that. I have no doubts that I’ll work out the kinks as I focus on acquiring that initial $60,000.

I’ve got $58,500 to go. Not bad when you consider the fact that I’m bringing in around $600 a month from my minimum-wage job and under $100 a month (average) in book royalties. It looks even better when I point out to myself that I only started this project in May of this year and I’m not even factoring in the dividends I’ve reinvested so far. While not a huge amount, it’s still a start.

Now that I have a concrete goal it is time to work out the details. How in heaven’s name am I going to come up with $58,500 more to invest in the next few years?

I’ll let you know when I figure it out.

Frugality is Essential for Success

Published / by Annie / 2 Comments on Frugality is Essential for Success

Everywhere you turn these days one can find ads touting this investment or that business as the way to “get rich quick.” Just buy this course or whatever and money will flow into your life like a raging river.

Bull crap. There’s no such thing as “get rich quick.” It’s all a scam to part us with our hard-earned money.  Study the success stories of others and you will discover the truth: it can take years for one to achieve success.

After doing a lot of research I decided to invest in the stock market in order to increase my wealth and financial freedom. This avenue appealed to me because it doesn’t care about your race, your gender, your education–or even how much money you have to spend.

You can literally start from anywhere in the stock market.

The hardest part to any type of investing is acquiring the money to invest. This is especially hard for those of use who live on minimum wage. How can you save up any money to invest if you’re living at your financial limit?

The truth is that you can’t. If you want to buy a house, invest in the stock market, or just save up for a rainy day you must live beneath your means.

Frugality is essential if you want to improve your financial status. You need seed money in order to save or invest; the only way to get that is to live on less.

You can save money no matter what your income level. So far I’ve managed to invest around $1,200 into the stock market and I make less than $800 a month between my royalties and my day job. If I can do it, you can too. I managed this by watching my expenses like a hawk and making savings my primary goal because I know that, in time, I’ll be able to loosen the purse strings a bit as my investments start to pay off.

In summary, know that you don’t have to be wealthy in order to save and invest. You can start right now with what you have. Financial Freedom is accessible to all of us if we learn how to play the game.

If you want to learn how I personally save money read the older posts on this website or buy my book The Shoestring Girl.  I don’t want to bore you here by repeating myself.

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.

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.

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.

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.

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.

 

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.

A New Focus

Published / by Annie / 4 Comments on A New Focus

First off, I want to thank everyone who has commented or messaged me with suggestions. You are awesome, and you’ve given me a lot to think about.

Second, I’ve been burning the midnight oil as I try to work out a way where I, the Shoestring Girl herself, can build up some sort of passive income stream that will support me in the future so that I won’t have to worry about working should I become unable to.

I’ve temporarily ruled out real estate, though it is something I would like to explore once I get my income in a higher range. As it is, with Katie planning to move out at some point in the future, the expense of acquiring a vehicle to attend any real estate purchases is a bit more than I feel my current finances can handle. The insurance alone (since I haven’t had any for several years) would destroy my budget.

My research has revealed that the stock market has a very low entry point; you can start an account with no minimum deposit; a variety of stocks trading there go for a pittance. Did you know that Ford Motor company is currently trading for around $12 a share? I was floored at some of the prices listed. I thought you had to be rich to even enter that arena.

Thanks to Carla for recommending that I read about Derek Foster! I’ve got two of his books due to arrive any day now. In the meantime I’ve acquired several books on the stock market to read while I’m waiting. Here is a list of the titles:

  • Buffetology
  • Investing for Dummies
  • The Intelligent Investor
  • Get Rich Carefully

This is going to be interesting. I know nothing about the stock market except for the fact that my dad invested in it when I was a teen and lost a small fortune. Since he invested with Merrill Lynch I decided to sign up for an account with Merrill Edge, their online brokerage. They have no minimum deposit to start, they have a ton of information available to help beginners, and they charge a flat rate of $6.95 a trade. I found cheaper brokerages out there but sentimentality won out.

Let’s see if this old bird can figure this out.