Hey guys. So I’m still focusing on building my side business this week, but I also don’t want to let my primary goals go either.
Today, I’ve been getting things set up for taxable investing. Last week, I set up a brokerage account with Vanguard for this very purpose and went through the trouble of transferring some money over only to learn that, for an account the size of mine, they only allow $7 trades for the first 25; after that, they become $20 each. So I decided to use Scottrade in the mean time while my Vanguard + Brokerage add up to more than $50,000. After that point, the trades become $7 each with no limit.
Once that happens, my plan is to consolidate everything over to Vanguard so that both my taxable and non-taxable accounts are there. Whether that will actually happen is up to future me and how much it will cost me. Ideally, it would be nothing since I’d want to hold on to the same stocks and such. Worst case, I can keep trading with Scottrade.
On the other hand, the reason I’d like to keep things with Vanguard is that once you have $500,000 with them, all trades become $2! I’m sure there’s something even more amazing out there, but for someone who’s as green as I am to stock trading, that seems like a pretty great deal.
And as some of you are probably paying close attention, you’ll note that I already have a brokerage account through Chase, but my plan is to also consolidate that. I hate having so many accounts all over the place. I’d rather have everything set up simply so there’s less for my simple mind to worry about.
All that being said, my account with Scottrade should be ready for funding this week and I should be ready to get things started with some dividend growth stocks. From what I’ve read recently, Coca Cola isn’t a bad one to start with, so I’ll probably go with that and a few other familiars just to get things rolling. I’m only starting with $2500, so I’ll probably invest in a handful of stocks in addition to KO (most likely borrowed from the amazing Dividend Growth blogs I follow). I’m still trying to come up with my own vetting process which, admittedly, is also largely borrowed from the blogs I read.
For those of you who I’ll be stealing from, please accept it as flattery more than outright theft! I just want to be more like you fine people.
I’ll probably update once things are actually set up and I’m ready to start buying, but while we’re on the subject…
Any recommendations for my first five or so stocks?
Any links to a checklist I should go over to vet each one before buying?
You know what’s not easy? Making money on the side.
At least for me it isn’t. For the past few days I’ve been looking into a whole bunch of different business ideas, and I think I’ve stumbled on something that works.
Of course, I’ve tried things in the past and they worked okay I guess. Mostly, I dabbled in Internet Marketing a few years back and that … didn’t end well. Yes, I made money. That was the upside. But the downside was stress. Lots of stress. I was spending thousands of dollars just to churn out a couple hundred dollars or profit margin on the other side. In fact, that margin was always a moving target and knowing when to stop, say, a pay per click campaign became an art. It’s what I imagine day trading to be like, except on fast forward. On top of that, there was a nagging feeling that I was doing something wrong and so I stopped. Some of the things I was selling seemed to promise the moon without much substance.
I don’t ever want to be in a business that could possibly screw people over.
So I’ve been focused on legitimate businesses, which are rightly more difficult to build and more prone to failure. That risk of failure is what scares me. Ideally, I’d like to build my own brand of something I wouldn’t mind selling to my mother. Er, well, I’d give it to my mother, but sell it to other people.
I’m not a monster.
For a long while, I’ve had a good name for a potential e-commerce business with not much more than a name to show for it. Mainly, that’s been because I wanted to either build products myself or find a supplier that made products I wouldn’t mind putting my name on. Well, building products myself has a steep learning curve, especially if I want to scale my business. It’s not out of the question, but I just don’t have the time.
After all, I haven’t become financially independent yet.
So, now it comes down to finding a supplier. Or two. You know, just to get things rolling. And that’s been the hardest part overall, because I just don’t know where to look. And from what I’ve read, wholesalers generally don’t want to get involved with those of us who are a little green behind the ears (only established businesses need apply). Jerks.
What I’ve been looking into this week is just the material I’ve been looking for to jump start that part of the business, so as you might imagine, I’ve been soaking it up like a sponge.
The next part is buying actual products that I can put either on an e-commerce site or even use Amazon FBA (Fulfillment by Amazon) for, or … both!
I’ve read about people who do okay with Amazon FBA using arbitrage, but I don’t have time at this point for such low numbers. I’m really after higher numbers, which means I’m going to need to put more money into purchasing and branding up front. I’m convinced that building your own brand of quality products (that people already use) is the way to go. That way there’s no competition for the same product, which means higher profit margins. Then I could laser-beam focus on marketing while Amazon takes care of all the other things.
So, for now, I’m still trying to find products but at least I have a better idea of how to vet them. I feel closer now to the prize at the end of the rope because I’m not just going blindly about it anymore.
It’s sort of like having a mentor. Mentors, as it turns out, are super important. Having someone who knows the ropes and has gone through doing what you want to do will decrease the distance from start to success because they remove many of the unknowns, including the unknown unknowns! As much as I may know about programming, web application development, Internet marketing and the like, these are only pieces to a larger puzzle.
Generally, programmers aren’t exposed to the business side of the things they build. I know I’m not. So by the time I get to work on something involving, say, e-commerce, the real hard part has already been done so there is this illusion that it’s easy to get things going, when clearly … it is not.
I mean, programming isn’t super easy for everyone. I’m definitely not saying that. Actually, let’s throw an analogy at this thing. Those always work, right?
I’m not saying building cars is easy for everyone. I’m just saying that as well as an engineer or mechanic can put a car together, selling the car — especially in large quantities — is a different beast altogether. That’s why there are car commercials and pushy salesmen to deal with. You could have a lot of a million cars, but without someone selling the brand and the experience that is your car, they’re just going to sit there.
So branding and marketing are the missing pieces.
And brand-building is what I know virtually next to nothing about. That’s something I wasn’t aware of previously! First, that I needed to brand at all. I thought branding was optional — something you did once you were tired of eking out profit from selling other peoples’ already-popular product lines. Second, that branding was important. I was also of the mind that you could just sell things sort of haphazardly and just build your name up (which is sort of branding), and people would trust you, the salesman, no matter what you sold.
Hey, I never said I was bright. And this stuff hasn’t really been my serious focus until now, so forgive me being green. It certainly isn’t easy.
Maybe it’s because of the holiday weekend, or because this is a Monday or because I’m only one coffee-cup deep into the day. Whatever it is, it’s giving me writer’s block. The best approach to the writer’s curse, I’ve read, is to just keep writing, so that’s what I’m doing today.
This weekend was a great little mental vacation. I barely touched the computer, didn’t look at my spreadsheets and didn’t even touch Mint. It felt very free. I did, however, spend some time (using my phone) reading over some posts from Steve Pavlina on his Passive Income Series. Who knows whether I’ll actually use any of that information, but it’s generally entertaining to read his stuff. I’m not much for “personal development,” but I also appreciate the way some things make me think.
I made some headway this weekend with my wife. I didn’t really post about it because I prefer to keep my personal problems personal, but we’ve been hashing out the approach we’re taking toward finances as a family. This happened because one day I mentioned how I thought a particular Groupon deal she was interested in was a waste of money. Keep in mind, I have been drinking some of the Kool-aid from the folks who are frugal, and sometimes I get carried away with ideas.
So this became an issue.
All of a sudden, I’m a penny-pinching miser who isn’t the man she married. And I’m not that guy, but she had a point. I was just reacting to things with negativity because I’m trying to maximize our savings. It’s easy to forget that we’re all people and we’re all in this together. Plus, I hadn’t really discussed where I’ve been lately. Sure, I tell her about every bloody thing I read whether she’s interested or not, but that’s not discussing things. It’s not making sure we’re on the same page.
So finally, I apologized for getting ahead of myself and explained where I was coming from. It’s not that I don’t want to spend money on things that are important to us, it’s that I don’t want to spend money frivolously. More succinctly, I want to spend money on things we love, but cut way back on things we don’t. So it’s not that I’m turning into Mr. Cheapskate, it’s that my intention is to turn into Mr. Mindful.
And some of you may think me stupid for carrying this mindset, but I don’t mind, because each of us is on a different path. For my life, I want to save money but I also want to be able to have things I like along the way. While I don’t want to save life enjoyment for typical retirement age, I also don’t want to live a life of scarcity leading up to early retirement. There has to be a balance.
So that eased the tension and we were back to normal. I even worked in some ideas for some slow travel in there, because a significant portion of our monthly income goes to paying a mortgage on one fat house. The false dilemma a lot of people fall into is that you either need to rent an apartment or buy a house, but as I read and learn, there are a variety of other options. For example, we could sell this house, buy a couple houses (duplexes maybe) in different locations and then maintain a home base (which is important to people apparently) while renting out the unused (by us) units. This way, we could still travel all over. We wouldn’t be homeless nomads — a very important mental safety net for my wife and children — just wandering the earth.
The success there wasn’t that she readily agreed, but that she didn’t put up an offense to it. Honestly, there are some great reasons to get out of the main stream and venture into the wild unknown. For one, life shouldn’t be the same thing on repeat. Maybe I’m crazy, but I also think it would be far more interesting for my kids if they could experience different cultures both inside and outside their native country. I don’t know if there are published statistics on mental health for those who have traveled and those who haven’t, but I would hope it would have a generally positive impact.
I’ll have to look that up after I finish writing this post. Er, wait. Hold on. My inner critic is reminding me of kids that get moved from state to state, school to school, causing them to leave their friends behind each time. This could probably cause some damage in terms of an ability to form long-term relationships.
On the other hand, I drove far, far away from home when I graduated high school and basically left all my friends behind. I still keep in touch with some, but we all live some distance apart. Still, there’s something to be said for getting through school with the same set of friends. I was definitely able to do that, so I don’t know that I’d want to deprive my children of that experience.
Of course, recently I met a well-traveled young lady who was wise beyond her years. Her father being a diplomat, she was moved from place to place while he was stationed for a few years in each location. Talking to her, I wanted the same thing for my children. I’m aware that there are no guarantees in life and that my wife and I are completely different parents in different situations to hers, but still, there is something alluring to that kind of life story.
I mean, if you could choose your sort of childhood experience, and you were given two choices, either — A, relating to most people by sharing in most of the same experiences or B, having unique and interesting stories to tell people — which would you choose? That’s not such an easy answer, and it might differ from person to person. It’s almost unfair to force it on children, one way or the other, but we do it anyway.
June has come and gone in a flash and with my little free time on this holiday weekend, I wanted to take the chance to update you on my net worth. While things went up significantly this month, I know I can’t expect increases like this for the rest of the year, but it’s still fun to see them on an upward trend!
June 2015 Net Worth: $432,866.16
Here’s the net worth statement for this month:
As you can see in the image above, that’s a total increase from last month of $10,823.90, or a 2.5% increase from last month’s $422,042.26. Also, the Emergency Fund is shown at $50,000, which probably won’t be increasing from this point as I consider that goal complete! Instead, you’ll hopefully start seeing increases in the Vanguard SEP IRA and after that, other yet-to-be-determined accounts that may or may not be taxable. We’ll find out soon. As soon as I figure that out, I’ll be writing posts to keep you all updated.
So, the reason my May net worth percentage change was so big was due in part to our tax refund. This month, however, I was still able to stash over $10k away and I’m pretty damned proud of that.
Another thing you’ll notice is that the home mortgage amount dipped below $500,000, which is an amazing feeling! I mean, it’s still quite a mountain to climb but it feels like we’ve reached the first base camp. Slow and steady gets you to the top of Mount Everest. On the other hand, my taxable brokerage accounts decreased due to the dip at the end of the month, but I just saw it as an opportunity to move more money into VTSAX (in the Vanguard SEP IRA), so no problem there. As always, I’m in it for the long haul.
Overall, June was a great month in terms of overall net worth. Next month probably won’t be as great, but as long as I make forward steps, that’s what counts.
I must have spent a good six hours re-making an old site that was just sitting there gathering dust. Well, sort of. Yesterday, I was just casually checking my AdSense stats which have been at an average of about $0.02/day now (up from $0.01! Yay!), when I noticed a single $0.15 click. Upon further investigation, it turned out that it was a site I’d sort of set up and forgotten about. So of course I had to dig in a bit more and it turns out that it’s ranked well for a number of organic search terms.
Naturally, there was only one thing to do — give that puppy a make-over while preserving SEO. And that’s what I did. As soon as work was done, I got to work. Luckily, my wife took the kids out for the night so I’ve been in focus mode the entire time (early retirement light, I guess). She’ll soon return, which is why I feel a bit rushed in writing this but I wanted to get a post out tonight. I hate breaking that chain.
Boy have I digressed from the title.
So today, I read a post from my buddy Adam over at I Want to Retire Soon (IWTRS) where he went over his progress for the year so far. I feel like I’ve been doing a lot of that, but one thing I haven’t really done is set any kind of public goals for me to embarrass myself with (just kidding), so I wanted to take the opportunity to set a few in the same vein as IWTRS. So without further adieu…
Goal 1. Fill Emergency Fund to 100% (Status: Completed)
Okay, I’m kind of cheating on this one but to be fair, it was the only real goal I publicly stated (besides my FI date goal stated in my About page, that is). Also, I killed that goal, so I’m going to give myself that one.
Goal 2. Reach $20,000 in investments for the year (Status: On track)
So far, I have about $12,000 invested (as you know from my many postings on the subject). This goal poses some threat as I have an upcoming dip in salary coming, albeit temporary (side hustles and side businesses — time to step it up).
Goal 3. Write at least 25 posts here per month (Status: Behind)
Last month, I wrote 24 posts. I feel like none of my posts are really super long, nor are they super short, so I feel like that should be a good momentum to maintain. However, I’m going to reach a little higher on this one and call it ‘Behind’ because I’d like to generate more quality content on a constant basis.
Goal 4. Comment on at least 20 posts per week on similar blogs (Status: On track)
I’m totally ripping Adam off here on this one, but I think this is vital to keeping involved and keeping the right mindset. If I’m constantly thinking about financial independence, early retirement, dividend growth investing, index funds, I will be much less likely to fail. I’m calling this one ‘on track’ because I comment on at least 5 blogs every day just because I enjoy it. And Adam, if you find a way to track that metric, please let me know.
Goal 5. Get my feet wet with Dividend Growth Investing (Status: Behind)
I’ve been bothering a lot of people in my attempts at researching this one, and I don’t think that will stop anytime soon. Still, I haven’t achieved it yet and I want to sort of pressure myself into it because I think it will pay off well in the long-run. Hopefully this one is set to “on track” by the beginning of Q4!
Well, that’s it for now. I’ve got stuff to do around the house since I’ve been staring at this stupid screen all day!