Where did I go?
Yeah, it’s been a while since I wrote here. I have been writing offline, and I hope to have something about that sometime soon on here. But more to the point I have been struggling with making up my mind about this new direction and how to go about it. It has become quite obvious to me that I need to make adjustments to my portfolio, and I have not been able to figure out how. What changes to I make? I keep saying that I am going to do something and then changing my mind to another way, and then go back to the first one. Yesterday, I did pull the trigger on a few changes but there are more that I need to make.
I spend too much time thinking and not enough time doing. That’s what it comes down to. I am afraid that I will make a mistake, and in fact I know that I already have made quiet a few, so I don’t want it to get worse. I wonder if Warren Buffet agonizes over the changes that he makes like I do. Probably not.
Something that drove me crazy
My wife wanted us to get a new car. And she is talking “new” new. I understand. We normally drive a 2012 minivan which is 14 years old, has a few problems we haven’t fixed and yet it works perfectly fine. But we have a long trip coming up where we will be on the road for quite a while and while she has been wanting to do this for 3 years, she knows that it would be better to have a newer car to make this trip. But getting a new car is an adventure of it’s own.
First, you have to decide on what car to get. Then you have to go to a dealership. Then you have to fight with the salesman who wants to sign you up on a long-term loan and pay lots of interest. I wanted to bargain for a deal (something I have never been that good at) and then you have to fight to find a way to give them money. They won’t take a check, and you can’t just do an ACH from your bank to them. These guys are not financial geniuses! Next time I’m going with cash in a briefcase.
But they insist on a loan where they can get extra money from the finance company. Jeeze! Just sell me a car for goodness’ sake!
Anyway, that was three weeks of going to the dealer, going back to the dealer, and then going back again. It took up all our time, trying to watch videos about negotiating with dealers (they are tricky little people) and even practicing what to say and do in the dealership. In the long run, we got the car we wanted at the price we wanted and frankly I paid off the loan they made us take a few days after. That’s all done, and we have the car. At least now I can get back to doing what I want to do and not concentrate so hard on all of that!
War, Iran, Gas Prices, Grocery Prices, Inflation.
The news is kind of quiet on the war situation. It’s not the daily information of this strike on them after they did this strike on us. I get the sense that the president is bored with playing war and just wants to put people in this country in jail for not liking him and building a bunch of non-essential statues to himself. Shouldn’t be surprised. He’s just a real estate person who wants to build stuff with his name on it.
Anyway, the Strait of Hormuz is still blocked off, and now Iran is working with another country to create a deal that will probably mean that they will both charge ships for going through. They have said that Iran doesn’t want our president to be included in the negotiations but they are stating that the deal won’t go through unless the president takes certain actions. Like paying them a bunch of money (which we don’t have) and removing all our safety net troops out of the area. I don’t think we can do either of those. I suspect the whole thing is just a delay tactic.
None of that has helped with gas prices or grocery bills. It’s just getting worse. The Fed is off for the month of August so there will be no interest rate changes till at least September. The president wants the interest rates dropped, but he thinks he is still running a (un)reality TV show and will change the script to make everything work. But for those of us who live in the real world the interest rates will have to go up to get things under control. At least I suspect so.
The inflation numbers are rising around 4.1% which is double what the target is. Gas is above 4 dollars a gallon, almost double what it should be. That makes delivery charges higher and thus food prices higher and thus making it tougher and tougher on us normal people. The president says he doesn’t care and I think that’s one of the few things he says that I can believe.
With that comes my changes
With the price of everything going up, I need to look at some way to increase my cash flow. I’ve been talking about that for a while now, but it’s starting to get critical. I need to get a paycheck of some kind. I can’t go back to work. I asked myself how to use what little I have so that I can make an income from my money without touching the principle. Since the principle is basically my emergency fund that I have saved up, I don’t want anything to happen to it, but I also want to have a way to make more cash flow.
So I have a money market that pays 3% which isn’t all that bad at this point. I also have some money in a SPAXX account that pays 3.29%. That means that if I buy anymore stocks, the dividend yield has to be more than that and I just try to count on 4% at least. The problem is, if I buy stocks with the money, then I don’t really have that money in my money market or SPAXX accounts.
So, I sat around this weekend and looked at where I could find such stocks. I know that there are stocks that say they pay 13% or more, but they are risky. Then there are the most reliable stocks which are less risky (investing always have risks, so never listen to some random guy in an investing adventure blog!) but only pay 2 to 3% which means that I might as well leave the money where it is. Also, most stocks pay dividends quarterly rather than monthly so it’s even harder to get some regular payouts like I want.
I worked hard. I found that in my own best interest, I should take on some risk, but just not more than I can stand. I figured if I went for some of those risky ones, I would have to only invest what I am comfortable with losing. I did put some money into AGNC that pays 13% dividends and we will see how that comes out. I also decided to put some money into DOC which is a healthcare REIT and see if it can do well. It does pay a monthly dividend (about 10 cents per share) which I like. It’s roughly a 5.6% dividend. I already owned some UPS stock, so I bought more of it, and the dividend on that purchase is about 6.2%.
I bought some SGOV stock which is an ETF and you can’t easily judge the percentage of dividend on ETF’s as easily as you can stocks. I have the same problem with the SPYD and SPHD ETFs that I bought. You can see historical dividends but that’s only a “cross your fingers” guide. They yields listed for both were above 4% so hopefully I will do ok there.
Bear in mind, I have not sold any of my other stocks, but I think I’m going to have to now. I’ve basically run out of investment money for the time being. And besides some of them are holding me back. Sure, a lot of my stocks pay some kind of dividend, though I have some that are strictly growth stocks. I have changed some of my criteria for specifications of stocks. I used to think that any dividend rate made it a dividend stock instead of growth stock. Now, I consider anything that has a dividend rate of less than 3% to be for growth.
Some of my growth stocks, I don’t want to get rid of because I am emotionally attached to them. You know, like Intel that means so much to me after all the years of using them. Some I hate to get rid of because they are doing so well and growing like I want them to. But at some point here, I’m going to have to put my big boy pants on and sell them off to get more cash flow stocks.
But I am anxious to try to find monthly payouts instead of quarterly. I don’t know how feasible that is but I will try. If not I will still try to eliminate some of the lower paying stocks for some higher paying ones. I still hold the ones that are stable too. So many things to think about!
