Thursday, June 29, 2017

Purchase #5 – (O) Realty Income Corp

Below is what I am currently watching.  The top 3 on the list are what I currently hold.  The next 6 on the list are what I am looking at for my next purchase.  Wanting to diversify further, I’ve been looking at REIT’s – Real Estate Investment Trusts and was watching (HCP), at the bottom of my watch list, but (O) – Realty Income Corp has been popping up a lot lately on other blogs and in the news and I started watching it and researching it.

Realty Income Corp looks like a strong position to have.  They have been more than active for the past 20 years and they pay a monthly dividend (which is also something new to me as I thought dividends were always quarterly).  Their main focus is single-tenant commercial properties and they own over 4900 properties throughout the U.S. and have less than 5% vacant properties.  Should I be concerned with their P/E Ratio?  I still don’t understand this metric!

Someone Help Me Understand P/E Ratio

EDUCATE ME - I still don’t quite understand P/E Ratio and why it’s one of the main metrics that investors look at.  From what I know, we want the ratio to be at or below the market, but how do I see what the market is doing?  Is there a particular ticker symbol I can add to my watch list to see this?

Monday, June 26, 2017

Why I keep Buying Ford (F)

Image result for ford

Back in the remaining months of 2008, when the shit hit the fan and a recession hit, was probably my first real look into stocks and the stock market.  With everyone I knew freaking out and losing net worth almost instantly, my buddy Mike educated me on the stock market and let me see what he was doing using e-trade.  I don’t remember what his portfolio was, but we got to talking about Ford (and the other 2 of the Big3) and the cost to purchase.  At the time, I was still married and broke as f#$%.  My ex and I were easily sitting on 150k in student loans, cars loans, and multiple credit cards, not even mentioning the mortgage.  We were making really good money, but didn’t follow a plan and pretty much lived paycheck to paycheck.  Daily, I checked the stock prices and wished I had cash to invest in Ford.  I drove a Ford at the time and have owned several prior and after.  It was a company my family purchased from and still does.  With my daily following of Ford in the 2008/2009 time frame, and at least monthly since, I grew more trusting of Ford and had faith in their ideals.  As far as my knowledge of Ford goes since the crash, and before the crash, they have worked hard to get through it.  Ford saw what was happening and tried hard to cushion the blow by selling off assets in preparation.  They never played the victim and needed or wanted a bailout from the government.  Sure, they took a loan when offered, but it was (and still is) a loan, which they have been paying on.  The loan was mainly used for re-tooling a truck assembly plant to a small car assembly plant.  Part of the loan was also used for future electric vehicle development and they are still pursuing that development.

Ford hit their low on November 19, 2008 with a closing price of $1.26/share.  Today Ford is running around $11.10/share (undervalued in my opinion), which is not a bad increase at 881% in a little under 9 years.  I don’t imagine Ford will be trading much over $35-45/share anytime soon, and I have no idea what factors would make any stock do such a thing, but I do see they are making positive changes in staff and investments and it seems to me that there is room to grow in their current share price.  This fellow at investorplace is of the same opinion and sees Ford growing up to 20% by the end of this year.

MMM, Mr. Money Mustache, recently posted about his excitement for the next recession and how a lot of investors take advantage of the low prices and buy heavily when costs are low.  I too, am excited and hope to be in a better position to actually purchase low with long-term goals of growth.

Wednesday, June 21, 2017

My Savings Rate as of 6/21/2017

My savings rate is actually a new concept for me.  For the past couple years getting out of debt, I had no, nothing, nada, ZERO, savings rate.  I had a small emergency fund of $1000 that I often used and replenished as needed, mainly for emergency car repairs or other such unbudgeted items.  That small emergency fund saved me numerous times.  For anyone trying to get out of debt, it is a necessary first step before paying any extra on your debt.  Don’t miss this important step.

Today, my savings rate is 10.6% consisting of the following:

    • T. Rowe Price – Simple IRA – 3% of my before tax pay is invested in my employers Simple IRA Plan to get the 3% match offered. While still in debt, I did not put any money into this as I used all extra cash to help pay the debt down. I enrolled in the IRA plan in October of 2016 and finally glad to use this employer sponsored benefit. I plan on increasing the percentage of my contribution by the end of 2017.
    • Savings Account – With my Investment Plan, I am saving 3.8% of each paycheck to build my emergency fund to a comfortable level that will give me 3-6 months of living expenses.
    • TD Ameritrade Account – Also with my Investment Plan, I am using 3.8% of each paycheck to purchase Dividend Paying Stocks.

    I’d like to track my savings rate quarterly, so I’ll start documenting it as below:

    Quarterly Savings Rate

    2016 – Q3 – 0%
    2016 – Q4 – 3%
    2017 – Q1 – 3%
    2017 – Q2 – 10.6%

    Net Worth Update – APRIL 2019 - $40,623 (+$2,234)

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