Category Archives: Investments

The Fear of Being Wrong

Published / by Annie / 2 Comments on The Fear of Being Wrong

I ran my bank account a bit lower than I like at the end of August. It was a deliberate choice; not only did I want to give my daughter one last, really nice birthday in light of the fact it may be the last one I spend with her, it was the last time I would have free trading on my investment account. That said, at the end of the month I took my book royalties, chipped in a bit more from my checking account to round it out, and sent the money to Merrill Edge.

And I choked. I completely choked. I didn’t break down and sob like a baby but I had to force myself to sit back, close my eyes, and breathe for several minutes to slow my heart rate before I made my monthly stock purchase.

I mean, what if I’m wrong? What if the criteria I’m using to invest is completely incorrect? What if I lose every penny of the money I’ve scrimped and saved? I’m blinking tears from my eyes right now as I think about it. I don’t know if it’s just hormones. I don’t know if it’s simply the fear of doing something new. I don’t know what is causing this.

All I know is that, right now, the thought is scary.

But I’m not going to stop. I’ve started this path. I’ve set my goal and by golly I’m going to see this through to the bitter end. If I lose it all I’ll just start over. If I don’t do this, if I don’t at least try I know for a fact that I will be doomed to working a public job for the rest of my life, and I don’t want that. What’s the point in struggling so hard if you don’t have at least the hope of a better life in the future?

There is no point if I don’t have hope. I am going to do whatever it takes to achieve financial freedom.

Regardless of my demons.

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
————————————————

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 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.

The Art of Staying Motivated

Published / by Annie / 4 Comments on The Art of Staying Motivated

The other night I came home after an exhausting shift at work. I plopped down in front of my computer to check my emails before engaging in my nightly habit of reading a bit before I went to bed.

As I sat there I thought “what’s the point?” What was the point in reading more when I was so drained? It’s going to take years for me to achieve my goal, so what would be the harm in skipping a single night?

That’s when I realized I had a problem. I was losing my motivation.

It’s easy to lose motivation when all you can make are baby steps. When you have to wait days and weeks before you can take another step forward. But that is the reality of my life. I can’t afford to plunk down thousands of dollars and then wait to reap the profits. I have to invest in stages while working to increase my knowledge during my downtime. While I know that every few months I will receive a small payoff in dividends it is a cold hard fact that this project is going to take a while to really begin to pay off.

So how do I stay motivated? What can I do to encourage myself to move forward on the nights when I’m too tired to think, much less move?

With a heavy heart as I considered this I skipped my nightly reading and went to bed. I’d have to find a solution soon or risk giving up.

A few days later I walked to the store to purchase supplies. On a whim I headed to the school supplies section, thinking that a new pencil or ink pen would be a treat. I didn’t need one but sometimes it’s the little things that encourage us to continue moving forward. I found this:

Meet my new Goal Journal. I photographed it with the little piece of inspiration I carry with me daily, one of the silver rounds from my very first investment.

On the very first page I wrote down my goal. I wanted to see it every single time I opened the notebook.

Once that was completed I was stumped. Do I use the journal to chronicle all of my thoughts or to keep track of specifics? I decided to dedicate a single page each month to a cold, hard summary of my progress. I’ve decided to share it with you now.

I didn’t tell you at the time but I began this journey on my birthday earlier this year. I was hesitant to share because the idea sounded stupid even to me. Seriously, an old woman working part time for minimum wage who wants to enter the financial ring with the Big Dogs? The idea was laughable! Who the hell do I think I am, even considering this? Because of my inner demons I kept quiet until I became comfortable enough with the idea to have the courage to share.

The next month I decided to jump in with both feet. I scraped together every single penny I could spare from my book royalties and my income tax refund, took a deep breath, and kissed that money goodbye. I knew that I didn’t know much; I could very well lose it all, but I had to at least try, you know? Wishing wasn’t going to get me anywhere without definite action:

I managed to score free trading from my brokerage until August 8th. Sometimes it pays to ask plenty of questions. I took advantage of the blessing to make a few experimental trades so that I could figure out just how this stock market thing worked. I was completely clueless and I knew it. To my surprise I did pretty well. Not only did I manage to profit from my trades, I even received my very first round of dividends. I was chuffed!

July was the last full month that I qualified for free trading. I’m sure I drove the workers at my brokerage batty with all of my questions that month! I discovered the difference between exchanges, the fact that my brokerage will not allow anyone with a balance of less than $25,000 to trade on certain exchanges “to protect them,” and lodged a formal complaint about not being allowed to invest in the real “penny stocks” — those whose shares trade for literal pennies. A worker there actually called me to apologize personally for the limitation after that stunt and he helped me figure out exactly what I was allowed to invest in through the brokerage. I modified my search criteria appropriately, albeit grudgingly. As I explained, the five or ten bucks I’d planned to toss towards those particular purchases would not be near enough to budge the stock prices and I was well aware of the risk I was taking. By this point I was literally kissing my money goodbye as I transferred it to my brokerage account, and I STILL feel that my brokerage should eliminate that limitation.

When August is over I’ll add another page to my journal as I continue to chronicle my adventure. This will allow me to look back and see a visual reminder of just how far I’ve come. Due to the fact that I don’t require much to live on I’ve managed to accomplish quite a bit over these past few months. When you add the money I invested in early August I’ve managed to top $1,500 invested in the stock market–most of which came from my minimum-wage day job.

I’m not sure if I should be proud or terrified at the fact that I’ve hit it so hard. Fifteen hundred dollars isn’t exactly chump change for me. That’s three months’ worth of living expenses in my world. I guess time will tell as I continue this journey. In the meantime I have a physical reminder of my progress for those nights when I wonder why I’m even trying.

In addition to my goal notebook I carry that silver round in my pocket as I move through my day. Whenever things get tough at work I dig it out, turn it over in my hands, and repeat my goal:

I will do whatever it takes to invest $60,000 in the stock market.

I hope it’s enough.

What do you do to keep motivated about your goals? Please share your stories in the comments below.

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.

Missing the Boat

Published / by Annie / 2 Comments on Missing the Boat

One of the first stocks I researched happened to be the company that originally owned the store I work in. Since they had sold my company off I decided not to buy, but since the owners of my franchise happened to also own another store that was involved in the company, I set up some news alerts just to keep abreast of how they were doing.

The other day my inbox started buzzing. The trading volume on this stock was insane! I loaded a live chart of the action and watched the price of the stock climb higher as new 52-week highs were reached. This stock that originally traded for around $13 in March at their 52-week low was now selling for over $20 a share and going higher!

By the time it was done the company in question had been bought out by another company at over $32 a share. If I had purchased 100 shares of this company at its 52-week low, I would have netted a $1,900 profit.

But I missed the boat.

So what have I learned so far with these two experiences? I’ve learned to always wait to make sure that a stock has bottomed in price before investing. I’ve learned that, while cutting dividends to pay down debt or grow a company may be a good thing that investors don’t agree and the price drops drastically as a result.

I have learned the value of patience and research.

I’ve also learned that I am on the right track. I can invest in dividend-producing companies at their 52-week lows (after checking into why the stock dropped to make sure it is a good investment), hold onto the stock until it reaches a new 52-week high then sell at a profit, receiving dividends while I wait.

I’ve also learned that there is an odd chance that I might get very lucky and make a mint like the one I lost out on. I’m not going to count on that, however. Stumbling upon a coup like that is kinda like winning the lottery, in my opinion.

I’m finally starting to form a game plan. The proof will be in the pudding, however. It will take about a year before I learn if this method will work or not.

I can wait.

A Stock Market Ouchie

Published / by Annie / 3 Comments on A Stock Market Ouchie

While I was digging through the bargain bin at the Stock Market I stumbled across a company with a LOT of potential. This media company, while it has its fingers stuck in traditional media sources like television and radio stations, not only creates its own content but has been slowly transitioning to embrace the new way people receive media. I dug through their financials. They had a lot of debt but were otherwise doing okay. Even better, they had realized that the times were changing and, unlike other companies I’ve researched, they were adapting.

Due to the significant dip in their stock price, the dividend was very attractive, enough so that I continued digging. I realized that this company had something in the works to not only reduce its debt but to continue the transition that I’d discovered. I didn’t know what the plan was but I decided to buy in. I scrounged up every penny I could and bought 191 shares, planning to round it out to 200 shares as my finances allowed.

This stock was trading around $5 a share. I ended up investing close to $1,000 in it. Satisfied, I sat back to see what would happen next. Considering that this company, in the years it had been on the exchanges rarely traded for less than $9 a share I figured I could hold it a couple of years and then sell for a tidy profit while receiving dividends for my trouble.

I woke up one morning a couple of weeks later to discover the stock price completely tanking. My pulse went through the roof as I stared. What the hell? I hit the news feeds. As I had predicted, this company had taken some drastic steps to reduce its debt. It had not only written down the value of some assets in order to save money on taxes by reporting a loss for the quarter, it had used that legal jiggery-pokery as an excuse to slash the dividend payout. The money saved would be used to aggressively pay down its debt.

Oh, the financial reporters were screaming! I could almost see them shaking with rage as they ranted against the dividend cut online. This stock had been considered a staple in dividend portfolios yet the company had the nerve to actually slash it–how dare they! Retirees had been counting on that dividend!

As I watched the value of my investment tank I ran the numbers on the new dividend amount. At the price I paid for the stock the return was still a reasonable 5%, yet people were ditching the stock in droves. I watched as the value of the stock dipped lower and lower, debating. Should I sell and then re-buy when it finally bottomed? I’d already lost over $150 in value when I’d discovered the mess. What should I do?

I sat back, took a deep breath, and let it fall. When last I looked the stock was trading at $3.49 a share. It has lost almost $250 in value since I purchased it. I’ll finish up my lot and perhaps buy even more once it hits bottom, if only because I can tell even now that the company is a scrapper. They are paying down their debt while they work out the best way to navigate the challenging media landscape. While I’ve no idea how this will pan out I’ve got faith.

I cannot believe that I am taking this so calmly. Maybe I have what it takes to be an investor after all.

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.

 

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.

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.

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.

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.