SPY and PEY Dividends

I just received my dividend payments for my holdings of SPY and PEY. SPY only pays its dividends out quarterly, and I've anxiously been awaiting this payment to see the increase due to compounding since the last payment in April. I received $1.62 from SPY and $1.82 from PEY, both of which were reinvested back into the same funds. The summer, with our big move and my lower teaching load, had cut back on my investing a bit; but now that summer is rapidly winding to a close, I am looking forward to getting the ball rolling again and to seeing the compounding effect over the next year.


Roth IRA Dividends:

iShares Russell 2000 Index ETF (IWM):

03/29/07: ($0.64)
07/05/07: ($0.86)

S&P 500 Index "Spiders" ETF (SPY):

04/30/07: ($1.27)
07/31/07: ($1.62)

PowerShares High Yield Dividend Achievers ETF (PEY):

04/30/07: ($1.11)
05/31/07: ($1.38)
06/29/07: ($1.39)
07/31/07: ($1.82)

Money Market Fund:

02/21/07: ($0.47)
03/21/07: ($0.53)
04/23/07: ($0.64)
05/21/07: ($0.26)
07/23/07: ($0.36)


Taxable Account / Emergency Fund Dividends:

Advantage Energy Income Fund (AAV):

03/19/07: ($0.87)
04/18/07: ($0.91)
05/17/07: ($0.94)
06/19/07: ($0.99)
07/19/07: ($1.01)

Money Market Fund:

02/21/07: ($0.35)
03/21/07: ($1.55)
04/23/07: ($3.25)
05/21/07: ($4.62)
06/21/07: ($2.68)

Free Vistaprint Cards Arrived

I just received my free Vistaprint business cards, and I must say that I am impressed with their quality for such affordable cards. My new cards are admittedly a little cheesy, but I wanted something money-themed to advertise this site. I am a firm believer that all professionals should have business card to advertise themselves and their services. You just never know what business or employment opportunities might arise from a chance encounter and the offering of your card. So if you have not already done so, take advantage of Vistaprint's free business card offer and get your own business cards. And don't be afraid to hand them out to those you encounter.

I Love Dividends, Yes I Do. I Love Dividends, How 'Bout You?

And the dividends continue. Here is a quick update to reflect my recent Dividend payout from Advantage Energy Income Fund (AAV) and a money market fund dividend payout. This dividend list is designed to be a visual representation of dividend-growth over time. Although I have only been an investor since January, there is already a perceptible difference in the amounts of the dividend payouts from my first dividends to now. I will have a few more dividends to report on after the end of the month, so tune back in for more dividends from my S&P 500 Index ETF (SPY) and my PowerShares Dividend Index ETF (PEY) in a few days.

Here's the dividend report:


Roth IRA Dividends:

iShares Russell 2000 Index ETF (IWM):

03/29/07: ($0.64)
07/05/07: ($0.86)

S&P 500 Index "Spiders" ETF (SPY):

04/30/07: ($1.27)

PowerShares High Yield Dividend Achievers ETF (PEY):

04/30/07: ($1.11)
05/31/07: ($1.38)
06/29/07: ($1.39)

Money Market Fund:

02/21/07: ($0.47)
03/21/07: ($0.53)
04/23/07: ($0.64)
05/21/07: ($0.26)
07/23/07: ($0.36)


Taxable Account / Emergency Fund Dividends:

Advantage Energy Income Fund (AAV):

03/19/07: ($0.87)
04/18/07: ($0.91)
05/17/07: ($0.94)
06/19/07: ($0.99)
07/19/07: ($1.01)

Money Market Fund:

02/21/07: ($0.35)
03/21/07: ($1.55)
04/23/07: ($3.25)
05/21/07: ($4.62)
06/21/07: ($2.68)

$11.80 From Cafepress; Straight Into My Roth IRA

I got a nice surprise in the mail yesterday. A while back I was experimenting with the Cafepress.com affiliate program on my various websites. I had so completely forgotten about this that I was surprised to get an envelope from Cafepress in my mailbox yesterday. I opened the envelope to discover a check for $11.80 for business generated via my affiliate links.

It's not much money, admittedly, but that $11.80 is going straight into my Roth IRA in addition to my regular contribution. $11.80 today will be worth many hundreds of dollars in thirty years, so the lesson is clear: even small amounts of money are significant to one's overall retirement plan.

Increasing your retirement contributions by even a percentage point or two can dramatically increase the value of your retirement nest-egg when you retire. So if you haven't made an increase to your 401(k) or your Roth IRA contributions in a while, take a moment to up your contributions by a percentage point or two. You won't miss the money, and you will thank yourself later.

Happy Birthday to Me!

So today is my birthday, which I spent working all day. Birthdays are a justified reason for splurging a bit and setting frugality on the shelf for a day. My wife and I are treating ourselves to massages at the local day spa tomorrow evening. Camping at Mt. Lassen was also a real birthday treat this year, and I spent far too much money on the camping trip. But the time around the campfire with family and friends, the hiking, and the fishing were worth every penny. It is a reminder that there are more important things than money and that money does not buy happiness.

In other news I made a $100 birthday contribution to my Roth IRA for myself today, just in time for the market downturn that wiped out a fair amount of my gains for the year. While that last statement probably sounded a little negative, I have trained myself actually to look forward to market downturns due to the opportunity to purchase my investment securities at a relatively lower price. Then when the market recovers (and it will recover!) I will have have purchased more shares than if I had bought the shares at a higher price. While I am opposed to the gambling nature of trying to time the market's ebbs and flows, I certainly do not object when my dollar cost averaging strategy allows me to buy stocks at a discounted rate! When I retire in thirty years or so, today's market downturn will be so much minutiae and barely noticeable on the long-term chart. So in the meantime I will relax and enjoy my yellow/chocolate birthday cake (courtesy of my wonderful wife!) and leave the market worrying to those foolish day-traders. In thirty years I will be laughing all the way to the proverbial bank.

Investment Metaphor #10: Trout Fishing

I just got back from a five-day camping and fishing trip to Lassen Volcanic National Park. While I was fishing in Hat Creek, and simultaneously observing other nearby fishers, it occurred to me that trout fishing was itself a good metaphor for long-term investing.

While fishing, I was struck by the large number of impatient fishermen out there. Anglers would cast their lines a couple of times, get bored with the lack of success, and move upstream to try another spot along the creek only to be met with similar lackluster results. I, on the other hand, chose to remain stationary at a spot I knew would be successful based on past experience. While I may not have gotten as much exercise as my impatient competitors, I was able to walk proudly back to the campsite with two robust looking rainbow trout.

Patience and faith in a reliable fishing strategy were the key to a successful fishing excursion. Likewise, in investing, patience and faith in one's long-term investment strategy is the key to financial success in the future. Those who practice the short-term day-trading model of investing are bound to be disappointed, just as the impatient fishermen were disappointed by their empty trout stringers. Find a good long-term investment portfolio (such as the one I use here) and do not give into the temptation of impatience in your investing. True, such investing is boring, but no more so than enjoying a rainbow trout dinner after a successful fishing trip. The fishing itself was rather monotonous, but the resultant trout dinner was fit for a king!


See below for previous installments in my series on investment metaphors:

Investment Metaphor #9: Truthiness
Investment Metaphor #8: World of Warcraft
Investment Metaphor #7: Commuters
Investment Metaphor #6: Live 24/7 Webcasting
Investment Metaphor #5: Johann Sebastian Bach
Investment Metaphor #4: Investment Blogging
Investment Metaphor #3: Potatoes Revisited
Investment Metaphor #2: Fractals
Investment Metaphor #1: Cane Toads

Laundromat Post #1

Our new apartment comes with free DSL service, but unfortunately it does not have a laundry facility. So for the first time in many years I am slumming it in a laundromat to do my laundry. The plus side to this otherwise negative coin is that the closest laundromat to our new place also has free Wi-Fi service for its customers, which means more than a few See Me Get Rich blog are likely to be written on location at our scenic local laundromat.

Speaking of laundromats, one encounters a curious cross-section of locals there. One might say that laundromats are the great equalizer. Rich or poor, big or small, Mexican or Filipino, we all must have clean clothes from week to week and the quarters to go with them. Laundromats are similar to funeral parlors in their ubiquitousness in our society. You have heard of death and taxes; but one might just as well add laundromats to that list. It occurs to me that a laundromat might make a perfectly good business venture in the sense that it will always be required by those not fortunate enough to own their own washer and dryer. Even as I write this I can hear the quarters clinking out of the change machine and plunking into the commercial washer and dryer units at an exorbitant rate.

I am definitely partial to business models that consist of profit generated by no actual work on my part (other than maintenance, cleaning, etc.). Perhaps this is why I am also drawn to dividend style investing due to the increasing dividends paid over time for exactly zero effort. As the old adage goes, the poor and middle class work for their money while the rich make their money work for them. The day when I truly make the transition from one field to the other for my bread and butter is a day I look forward to. I do not believe idleness to be virtue, but I do await the day when I can have the time and energy to pursue my own affairs and interests unfettered by the constraints of traditional employment. In the meantime, though, I'll be advising and writing to you all from the ever-present laundromat.

Ethics, Credit Cards & Free Will

A friend of mine recently accused me of being inconsistent by being a personal finance blogger dedicated to helping people be more responsible with money while simultaneously holding a job in which I promote the use of credit to increase consumers' purchasing power. This accusation merits attention in this blog due to the fact that I believe this combination to be perfectly consistent on my part.

The feature of human existence that allows for the compatibility of my views on personal finance with my employment activities is free will. In general I am what could be described as a "libertarian"; not in the political sense but in the sense of believing that each of us must take responsibility for our own actions and the consequences thereof. Under this view, taking out credit is not, in and of itself, a bad thing. However, the abuse of credit through lack of personal and fiscal responsibility is a very bad thing. It is for this reason that I do not feel remotely remorseful about recommending credit to my customers. I even (generously!) go so far as to recommend to my customers that they immediately pay off their balance in full when using their new credit to receive promotional savings. But even if this were not the case on my part, the decision to take out credit for one's purchases is up to the individual consumer, who is the sole person responsible for handling his/her new credit wisely.

There are certainly rules of thumb to follow when taking out credit, such as not carrying a balance on a high interest credit account, and it is up to the individual consumer to educate himself/herself about the sound use of credit before taking on a responsibility that he/she does not understand. I view this blog as part of my own larger responsibility to educate people about responsible money management (including the responsible use of credit), but I also believe that credit can be a benefit to many people if handled properly.

Personal responsibility and free will are distinctly human qualities, and I have little tolerance for those who refuse to take responsibility for their own financial situations (although there are certainly genuine cases of victimization in which one's poor financial situation is not his/her own fault). My own personal financial situation, such as my owing many thousands of dollars in student loans, is purely a result of my own decisions and my own cost/benefit analysis as to whether it would be worthwhile to incur the debt. If those decisions lead me into trouble in the future, I have no one to blame but myself. It is a red herring to blame the loan companies or the university when the responsibility for taking out, and for repaying, the loans is solely my own. And my credit customers are in the exact same position. The customers are informed of their responsibility when taking out new credit, and they themselves are human beings with unrestricted free agency and free will to decide whether to accept the terms of the credit agreement.

In conclusion, please remember that there is nothing with wrong with credit in and of itself. Like a weapon (such as a lightsaber, for all you Star Wars fans out there), it can be used for good or for evil based on the intentions and responsibility of its bearer. One should never carry a balance on a high interest credit account, and one should always pay off the balance in full each month so as not to incur any interest charges. But should this guideline be ignored, those who do the ignoring have no one to blame but themselves and their own poor judgment.

Investment Metaphor #9: Truthiness

Almost everyone is now familiar with the term "truthiness," which was coined by Stephen Colbert to describe a fallacious appeal to emotion in political rhetoric/discourse. If you will allow me to put my philosophy-teacher-hat on for a moment, it should go without saying that an emotional appeal constitutes a logical fallacy in most types of argumentation. The same is true about investing. Many investors play the stock market as day-traders, buying and selling stocks on little more than a gut intuition about which stocks will rise in the future and which will fall. It goes also goes without saying that these are often the very same investors who lose their money in the stock market and would have been better off throwing their money in a checking account.

Just as truthiness should be avoided in politics, so should intuitive investing be avoided when choosing your investment strategy. Find a good long term investment plan and stick to it. This amounts to little more than picking diversified investments (such as Index ETFs), regularly investing a portion of your income, and ignoring the hype associated with minor, short-term market fluctuations. In twenty or thirty years those minor ups and downs will barely be perceptible, and you will have made yourself a nice retirement sum.

Don't give in to truthiness, and definitely don't trust your amateur instincts to guide your investments. Just pick a good lazy portfolio (any one of these sample portfolios would be just fine for a buy-and-hold long-term investment portfolio) and let the power of compounding work its magic. Keep the faith, my faithful readers, and happy investing!


See below for previous installments in my series on investment metaphors:

Investment Metaphor #8: World of Warcraft
Investment Metaphor #7: Commuters
Investment Metaphor #6: Live 24/7 Webcasting
Investment Metaphor #5: Johann Sebastian Bach
Investment Metaphor #4: Investment Blogging
Investment Metaphor #3: Potatoes Revisited
Investment Metaphor #2: Fractals
Investment Metaphor #1: Cane Toads

Business Card Power

Being successful is as much about promoting yourself as about promoting the product or company you are affiliated with. One of the simplest and most cost effective ways to promote yourself, your website, or your services, is to have a business card (see my card at right). A business card is a tangible item that will connect you to your potential clients/contacts in their memories. I would not be shy about giving your business card out to everyone you come in contact with. You will never know beforehand what opportunities may come your way because you took the time to make yourself and your services known through something as simple as a business card. The business card need not be anything expensive. In fact, VistaPrint.com has made a small empire from offering free business card printing. If you yourself do not have your own business card yet, I highly recommend visiting VistaPrint.com and ordering a batch of free business cards. Who knows? Your business card may very well land you your next big job, your next big client, or your next best friend!

Move Out Bonus

As I blogged about a couple of days ago, my wife and I are finally moved into our new apartment (a very comfy and quaint basement apartment in an old Victorian style house). We were forced to move due to our last apartment complex going condo later this year. Fortunately for us, and for the complex's other residents, all residents who are being dislocated were/are being paid a move-out bonus equal to a month and a half worth of rent, which for use worked out to about $2,100.00. I received the final account statement from the apartment complex today, and we should be receiving the move-out bonus in the mail any day now.

I plan to use the move-out bonus to pay off a large chunk of my high-interest credit card debt, once it is abundantly clear that we will be in good financial shape for the rest of the summer. I do so wish that I could justify pumping all $2,100 into my Roth IRA, but it is a smarter move to pay off that high interest debt as quickly as possible (although I may still put a little in the Roth IRA, just to splurge a bit and watch my IRA balance grow!). In any case, this move-out bonus will be the easiest $2,100 I have ever made, and I am thankful that our old rental company is being so generous to us for the inconvenience of our being dislocated so soon after having moved into that complex in the first place. I definitely feel that we are being treated more than fairly.

Dividends Upon Dividends Upon Dividends

Dividends are amazing things. Your invested money continues to make money for you with absolutely no work on your part. And the best part is that your dividend payments themselves will earn further dividends if your dividends are automatically invested back into the original holdings that generated the dividends in the first place. I am attempting to keep track of all my dividend payments so that I can watch the power of this compounding effect in action in my own accounts. So here is an updated list of all the dividend payments I have received since I became an investor in January of 2007:

Roth IRA Dividends:

iShares Russell 2000 Index ETF (IWM):

03/29/07: ($0.64)
07/05/07: ($0.86)

S&P 500 Index "Spiders" ETF (SPY):

04/30/07: ($1.27)

PowerShares High Yield Dividend Achievers ETF (PEY):

04/30/07: ($1.11)
05/31/07: ($1.38)
06/29/07: ($1.39)

Money Market Fund:

02/21/07: ($0.47)
03/21/07: ($0.53)
04/23/07: ($0.64)
05/21/07: ($0.26)


Taxable Account / Emergency Fund Dividends:

Advantage Energy Income Fund (AAV):

03/19/07: ($0.87)
04/18/07: ($0.91)
05/17/07: ($0.94)
06/19/07: ($0.99)

Money Market Fund:

02/21/07: ($0.35)
03/21/07: ($1.55)
04/23/07: ($3.25)
05/21/07: ($4.62)
06/21/07: ($2.68)

You will notice above that the dividends in my taxable emergency fund account have dropped over the past month. This is due to my having used my emergency fund as a vessel for my summer savings, knowing that I would be low on teaching work for the summer. This should recuperate as I rebuild my emergency fund as the summer's end draws nigh. I am looking forward to watching all the above values grow as my investments grow and continue to pay out increasing dividends over time.

The True Cost of an Apple iPhone.

It should go without saying that modern conveniences fall into the category of luxury expenses. We as a species have functioned quite well for thousands of years without such items as laptop computers, digital watches, and mp3 players. Money spent on these luxury items is in my view better spent preparing for one's future by saving and investing that money, rather than wasting it on fancy high-tech toys. Nothing represents this awful and irresponsible waste to me better than the Apple iPhone.

While I myself am not opposed to splurging on something fun once in a while, the iPhone takes this spending to a whole new level. Ranging in price from $500-$800 depending on which model and on where and if you are able to locate one, the iPhone represents more than a simple high-tech toy. It is a downright waste of money for all but the wealthiest of consumers. It took me several months to get my own emergency savings and Roth IRA accounts to the level of $800 after my necessary expenses like rent, etc., and I can't imagine throwing all that money away on something as frivolous as an iPhone.

I would put money on the fact that those people who are whipping out their wallets for an iPhone do not have either an emergency fund or a retirement savings account of any form. An iPhone is not much good when you can't afford car repairs if your car breaks down or rent if you lose your job unexpectedly. And that $800 purchase will be worth many times over if it were instead placed into a good long term investment account like a Roth IRA. Just for fun I typed $800 into a compound interest calculator, and I discovered that $800 when left to grow over 30 years will yield approximately $11,553.00 if properly invested. So how affordable does that iPhone seem now?

Wasting what seems like a tolerable amount of money, given the power of compounding investments, has serious consequences on how well off you potentially could be in the future. So don't give in to the techno-hype, folks. If you do, you are significantly short-changing yourself and your future. Instead skip the iPhone and other luxuries and place that money into a long-term retirement account. Trust me, you won't really miss the gadgets, and down the road you will be able to afford all the high-tech toys your little heart will desire; and those high-tech gadgets in thirty years when you do retire will make todays iPhone look like yesterday's slide rule.

Radio Shack 401(k) Enrollment: Denied!

I tried to enroll in my Radio Shack 401(k) today, only to find out that I must be with the company for a full year (despite the fact that I had six prior years of service with the company) to enroll in the 401(k). It's no major crisis, really, except that I was hoping to get the company matching benefits from the 401(k) as quickly as possible. So for now I will just have to enjoy the tax-free growth of my Roth IRA and try to pump as much of my paycheck as I can into the Roth IRA in hopes of maxing out the IRA for the 2007 tax year.

Speaking of the Roth IRA, I just contributed $330 within the past two weeks or so, which should finally bring the account to over $2000. My portfolio is still equally split between four Exchange Traded Funds (SPY, IWM, EFA, and PEY). For you new SeeMeGetRich.com readers out there in blogland, I recommend exposure to three main areas in your long-term investment portfolios: a broad market index like the S&P 500 Index, a small cap index like the Russell 2000 Index, and a foreign market index such as that covered by EFA in my own portfolio.

Roughly equal exposure to these three investment areas will ensure that your portfolio is adequately diversified and balanced for long-term growth. I also added a dividend paying fund (PEY) to my portfolio, which I am partial to because of the compounding power of regular dividends, but you could just as easily leave this out of your own portfolio and you would be in very good shape with a solid long-term investment strategy in place with only three funds in your whole portfolio.

At the risk of sounding redundant to my long-time readers, remember not to get too creative with your portfolio. Find a good, basic, long-term investment strategy and stick to it. Take a fraction of your income and put it into your Roth IRA every time you get paid (hopefully in addition to your company's 401(k) if you are eligible to participate), and maintain a very basic diversified portfolio of Exchange Traded Funds (ETF's) or Mutual Funds from the three basic areas referred to above.

If you follow this strategy, you will be rich when you retire. The earlier you start, the richer you will be, due to the mathematical power of compounding. So stay the course, troops, and let me know about your progress in the comments section. I would love to hear your personal finance and investing success stories!

Moving Day is Over

After weeks of painful preparation, moving day has finally come and gone, and we are settling into our new apartment. A brief apology for the lack of recent blog posts is in order, since I have been so busy over the past few weeks with moving and packing (and getting over a terrible sinus infection) that I have not had much time for daily writing.

As I write this I am looking out the window at a beautiful coastal morning, thankful for the gift of summer and its welcome reprieve from the stresses of the academic year. I still have a ton of dissertation work to do, but I am enjoying working at my new/old job and taking a much needed break from teaching. Even Jesus had to retreat to the wilderness to escape the crowds for prayer from time to time. My wife and I are taking a camping trip up to Mt. Lassen in a couple of weeks, and I plan to follow in his footsteps, using the wilderness as an opportunity for spiritual renewal.

As for things on the investing front, I have been so preoccupied with the move and with saving some money for the summer that I have contributed very little to my Roth IRA in the past couple of months. I did just make a $100 contribution the other day, though, which brings the Roth IRA up to approximately $1,800 in value. If I have a surplus of money at the end of the summer, I plan to pay off some credit card debt and to try to get the IRA maxed out for the 2007 tax year. We should be getting our deposit and move-out bonus (a month and a half worth of rent. woot!) from the old apartment soon, which should keep us in the black for the rest of the summer.