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Friday, October 22, 2010
Thursday, October 21, 2010
how rich people think
How Rich People Think is a 205 page book by Steve Siebold that I enjoyed very much. The book basically puts forth 100 ideas on how rich people (the World Class) differ from the middle class in their way of thinking and actions. For example:
Middle Class waits for their ship to come in...World Class builds their own ship.
Each of these comparisons are then explained in a one to two page summary after the comparision, making up a chapter. The book is nothing if not motivating, inspiring, and forces one to begin to think outside of the box that many of us find ourselves in while enduring the rat race. The ideas are based on a quarter century of interviews with millionaires. If you feel that you are stuck in a rut, and are looking for some motivation whether you want to take your career in another direction, start a business, grow your business, or simply make a large investment this book might help you get into the proper mind set to do so. You only live once so don't settle; strive for your dreams!
Friday, October 1, 2010
sold two names to raise cash
To raise some cash for a business venture I sold my entire stakes in the following stocks this week.
Saputo (SAP) - The Canadian Food producer had run up so far from my adjusted cost base that it seemed like an obvious choice to take a nice profit. The stock is now trading at a P/E of over 18x, which strikes me as a little rich.
Scotts Miracle Gro (SMG) - This stock never really fit into my dividend growth model and the stock has run up very nicely in recent months. The stock likely has more room to run however it seemed like an ideal time to take a profit and exit the name for the time being.
Posting on the moneygardener should pick up over the next little while as I realize I have been nowhere to be found lately.
Saputo (SAP) - The Canadian Food producer had run up so far from my adjusted cost base that it seemed like an obvious choice to take a nice profit. The stock is now trading at a P/E of over 18x, which strikes me as a little rich.
Scotts Miracle Gro (SMG) - This stock never really fit into my dividend growth model and the stock has run up very nicely in recent months. The stock likely has more room to run however it seemed like an ideal time to take a profit and exit the name for the time being.
Posting on the moneygardener should pick up over the next little while as I realize I have been nowhere to be found lately.
Monday, August 16, 2010
Leon's hikes dividend / Scotts doubles dividend
Canadian furniture and electronics retailer Leons (LNF) has raised it's dividend by 29% to $0.09 per share. The raise came on a nice earnings announcement where Leon's beat expectations quite handily growing their earnings per share 42% from last year.
US Lawn & Garden manufacturer Scotts Miracle Gro (SMG) doubled it's dividend on the back of a very solid earnings report. Scotts reported an earnings increase of 12.5% versus the same quarter last year. This news beat expectations and propelled the share price higher.
Owning both stocks, I've been having good luck with dividends lately...
US Lawn & Garden manufacturer Scotts Miracle Gro (SMG) doubled it's dividend on the back of a very solid earnings report. Scotts reported an earnings increase of 12.5% versus the same quarter last year. This news beat expectations and propelled the share price higher.
Owning both stocks, I've been having good luck with dividends lately...
Monday, August 9, 2010
The Instant Millionaire
Do the very wealthy think differently than the rest of us?
The Instant Millionaire by Mark Fisher is a fable which has been re-released in this new second edition by the New World Library. The book describes an amateur / mentor confrontation over a few days and conveys the lessons that the mentor teaches in an interesting way. The old wise millionaire mentor attempts to teach the young ambitious, yet naive amateur how to get into the mindset of a millionaire in training.
If you are looking for strategy on getting rich including specifics on wealth building, this book is not for you. This is one of those books that you will be tempted to read multiple times and I must admit that I plan to read it again. It is an easy read at about 120 pages, however the book will leave you thinking for days after you turn the last page. Several of the principles, habits and, life approaches that the mentor describes are thought provoking and had me wondering how I could adapt them in whole or in part in my own life. The book is nothing if not inspiring but yet it remains so abstract that it will leave most readers wanting more like a good movie with a short ending.
Overall I recommend this fable and it makes me want to read others like it including The Richest Man in Babylon and Think And Grow Rich.
The Instant Millionaire by Mark Fisher is a fable which has been re-released in this new second edition by the New World Library. The book describes an amateur / mentor confrontation over a few days and conveys the lessons that the mentor teaches in an interesting way. The old wise millionaire mentor attempts to teach the young ambitious, yet naive amateur how to get into the mindset of a millionaire in training.
If you are looking for strategy on getting rich including specifics on wealth building, this book is not for you. This is one of those books that you will be tempted to read multiple times and I must admit that I plan to read it again. It is an easy read at about 120 pages, however the book will leave you thinking for days after you turn the last page. Several of the principles, habits and, life approaches that the mentor describes are thought provoking and had me wondering how I could adapt them in whole or in part in my own life. The book is nothing if not inspiring but yet it remains so abstract that it will leave most readers wanting more like a good movie with a short ending.
Overall I recommend this fable and it makes me want to read others like it including The Richest Man in Babylon and Think And Grow Rich.
 |
| The Instant Millionaire by Mark Fisher |
Wednesday, August 4, 2010
Saputo grows dividend
Dairy and grocery products producer Saputo Inc. (SAP) has increased it's quarterly dividend by 10.3% to $0.16 per share. This increase came on the heels of a 32% increase in basic earnings per share for the quarter.
What I really like about Saputo is that their product lines represent products which are very resilient to consumer discretion but yet they seem intent on growth and are not afraid to make acquisitions to get there. Here is how my investment in Saputo looks at the moment:
Adjusted Cost Base (average cost) = $21.34 (2 purchases made)
Yield on Cost = 3.0%
Stock's Current Yield = 2.0%
Stock's Current Price = $31.30
Total Appreciation Including Dividends = +51%
What I really like about Saputo is that their product lines represent products which are very resilient to consumer discretion but yet they seem intent on growth and are not afraid to make acquisitions to get there. Here is how my investment in Saputo looks at the moment:
Adjusted Cost Base (average cost) = $21.34 (2 purchases made)
Yield on Cost = 3.0%
Stock's Current Yield = 2.0%
Stock's Current Price = $31.30
Total Appreciation Including Dividends = +51%
Monday, August 2, 2010
budgeting sustainably for real life
Drawing up a useful, sustainable monthly budget for your family does not have to be a complicated, or difficult exercise. The primary goal for putting a budget to paper in our case is saving money and living well within our means. This will enable us to save enough money so that we can maximize investment growth, capital stability, and be financially secure for years down the road. You can tailor your budget to serve as a tool for meeting your financial goals.
If you have some basic Microsoft Excel skills you can draw up a useful budget that can serve your tracking needs for years. I'm not referring to an advanced budget that they might teach you in an online MBA program; just a simple budget. First you should check your pay stub and your partner's pay stub to determine exactly what your net income is.
(I use the net amount that we bring home in employment income after RRSP contributions, taxes, etc. The reason that I do it this way is that our RRSP contributions are fixed and they are deducted automatically so that we never really see this money. I know what our RRSP contributions are and if I wanted to I could calculate these savings as extra to our budget later on. For now I just choose to exclude them and know that we are setting aside at least 10% of our income before we even get started here.)
This will be your INCOME section. Use your net employment income and any other income you receive along with any government child care benefits. Enter the monthly values in Excel and get to a total income number.
(I choose not to include investment income here because I save 100% of these funds and they get reinvested. I don't consider this as flexible, liquid funds such as employment income as the money really never leaves our portfolios)
Next you need to create your EXPENSES section. This involves categorizing and filling in all of your monthly expenses from mortgage payments to gym fees. Try to think of everything and try to be conservative for fuzzy ones. For some fixed costs such as property tax you will be able to enter an exact amount and for some categories such as entertainment you will need to ballpark what you spend in this area in an average month. Total up this area as well.
Then take your total from your INCOME section and subtract your EXPENSES section. Hopefully you get a positive value. Your will arrive at a figure which I call my "TOTAL NON-REGISTERED SAVINGS PER MONTH".
How To Use Your Budget
Creating your budget is only one third of the battle. How you are going to use it is the second piece of the puzzle. Instead of holding us to only spend $40 per month on haircuts I don't pay particular attention to these small details once they are part of my budget calculator. The way I use the budget tool is that I key in on our TOTAL NON-REGISTERED SAVINGS PER MONTH. This is our pass or fail mark. If this guide number is $1,000 and a month goes by where we saved only $500, I usually know why this has occurred. Could have been that the dishwasher needed replacing, or it perhaps we went on a small vacation. If I don't know why, I better re-visit the budget.
Obviously the third piece of the puzzle is actually matching your life to what you you have entered on this Excel calculator. If you are regularly spending $500 per month on clothes then don't enter $50 per month in your clothes category. You will certainly need your partner to be a team player throughout this entire process
I find this to be a pretty useful way to budget. You don't have to watch your nickels and dimes and track every penny. Just pay attention to how much money you are actually saving versus what your budget says that you should be and you will be well on your way to achieving your financial goals.
If you have some basic Microsoft Excel skills you can draw up a useful budget that can serve your tracking needs for years. I'm not referring to an advanced budget that they might teach you in an online MBA program; just a simple budget. First you should check your pay stub and your partner's pay stub to determine exactly what your net income is.
(I use the net amount that we bring home in employment income after RRSP contributions, taxes, etc. The reason that I do it this way is that our RRSP contributions are fixed and they are deducted automatically so that we never really see this money. I know what our RRSP contributions are and if I wanted to I could calculate these savings as extra to our budget later on. For now I just choose to exclude them and know that we are setting aside at least 10% of our income before we even get started here.)
This will be your INCOME section. Use your net employment income and any other income you receive along with any government child care benefits. Enter the monthly values in Excel and get to a total income number.
(I choose not to include investment income here because I save 100% of these funds and they get reinvested. I don't consider this as flexible, liquid funds such as employment income as the money really never leaves our portfolios)
Next you need to create your EXPENSES section. This involves categorizing and filling in all of your monthly expenses from mortgage payments to gym fees. Try to think of everything and try to be conservative for fuzzy ones. For some fixed costs such as property tax you will be able to enter an exact amount and for some categories such as entertainment you will need to ballpark what you spend in this area in an average month. Total up this area as well.
Then take your total from your INCOME section and subtract your EXPENSES section. Hopefully you get a positive value. Your will arrive at a figure which I call my "TOTAL NON-REGISTERED SAVINGS PER MONTH".
How To Use Your Budget
Creating your budget is only one third of the battle. How you are going to use it is the second piece of the puzzle. Instead of holding us to only spend $40 per month on haircuts I don't pay particular attention to these small details once they are part of my budget calculator. The way I use the budget tool is that I key in on our TOTAL NON-REGISTERED SAVINGS PER MONTH. This is our pass or fail mark. If this guide number is $1,000 and a month goes by where we saved only $500, I usually know why this has occurred. Could have been that the dishwasher needed replacing, or it perhaps we went on a small vacation. If I don't know why, I better re-visit the budget.
Obviously the third piece of the puzzle is actually matching your life to what you you have entered on this Excel calculator. If you are regularly spending $500 per month on clothes then don't enter $50 per month in your clothes category. You will certainly need your partner to be a team player throughout this entire process
I find this to be a pretty useful way to budget. You don't have to watch your nickels and dimes and track every penny. Just pay attention to how much money you are actually saving versus what your budget says that you should be and you will be well on your way to achieving your financial goals.
Thursday, July 29, 2010
would you like to purchase a warranty?
I am always interested in the innovative ways that companies try to grow their bottom line in dealing with consumers. The promotions, warranties, freebies, bogos, and 'don't pay' sales often have me scratching my head at the stupidity of retailers or their naive customers.
I happened to come across an interesting one last night at Sears when I was purchasing a major appliance. As is typical the sales associate wound up with the usual warranty offering, usually as this is occurring I am glazed over and getting ready to politely refuse. However the Sears warranty threw in an interesting twist this time, which I have to admit, is clever and likely works well for them. If you purchase the warranty for $110 and nothing goes wrong with the item within the 3 year time frame of coverage you receive a $110 gift card for Sears. I still refused the offer as I want my precious $110 for myself for the next 3 years for obvious reasons to anyone who reads this blog. Also who's to say that I'll happen to want to buy something at Sears in 3 years time. That being said, I would imagine that many customers who typically waiver about warranties usually come over to join the protected now that this offer is presented.
I happened to come across an interesting one last night at Sears when I was purchasing a major appliance. As is typical the sales associate wound up with the usual warranty offering, usually as this is occurring I am glazed over and getting ready to politely refuse. However the Sears warranty threw in an interesting twist this time, which I have to admit, is clever and likely works well for them. If you purchase the warranty for $110 and nothing goes wrong with the item within the 3 year time frame of coverage you receive a $110 gift card for Sears. I still refused the offer as I want my precious $110 for myself for the next 3 years for obvious reasons to anyone who reads this blog. Also who's to say that I'll happen to want to buy something at Sears in 3 years time. That being said, I would imagine that many customers who typically waiver about warranties usually come over to join the protected now that this offer is presented.
Tuesday, July 27, 2010
quadrupled Bank of America position
It was nice to see my adjusted cost base plummet today as I quadrupled my stake in US Bank, Bank of America (BAC). The stock is trading around $14.25 per share. The dividend was all but wiped out during the financial crisis but I believe that it will come back with a vengeance over time. Bank of America is very well positioned to reap the benefits of a slow US economic recovery, which is probably in the works. The risk/reward on Bank of America trading at these levels seems very attractive as they own several valuable franchises, have great market share in US deposits, and have paid back their TARP funds. The bank is currently trading at a multiple on around $1.00/share of earnings which I believe has the potential to expand to $2 without much trouble. This would put the stock price easily into the $20s which is a signficant jump from here.
The dividend will come back as they years go on as inventors will want income from their investment in this large bank and the bank will no longer be tied down with the lingering issues of 2008. This stock is rated a strong buy by 70% of analysts that cover it. Earnings will come back as well albeit slowly and probably won't get to 2006-2007 levels anytime soon.
This is one of those trades where I felt like I needed to do the Warren Buffet thing and buy when others are selling; when the stock does not look attractive. This industry is still in the toilet, their balance sheet is still recovering, and the economy is still pretty bad. This is a good time to lower my cost base from my purchase years ago. One of those 'close your eyes and click submit' trades.
The dividend will come back as they years go on as inventors will want income from their investment in this large bank and the bank will no longer be tied down with the lingering issues of 2008. This stock is rated a strong buy by 70% of analysts that cover it. Earnings will come back as well albeit slowly and probably won't get to 2006-2007 levels anytime soon.
This is one of those trades where I felt like I needed to do the Warren Buffet thing and buy when others are selling; when the stock does not look attractive. This industry is still in the toilet, their balance sheet is still recovering, and the economy is still pretty bad. This is a good time to lower my cost base from my purchase years ago. One of those 'close your eyes and click submit' trades.
Friday, July 23, 2010
GE - party like it's 1999
Well General Electric (GE) who cut their dividend from $0.31 per share to $0.10 per share in early 2009 has now boosted their pay out to $0.12 per share. This 20% increase brings their dividend back to levels last visited in before the turn of the century. Yes, GE shareholders including myself are partying like it's 1999.
This increase came earlier than expected as GE had mentioned that they were looking to a dividend hike in 2011. They also announced an extension of their share repurchase program as they are sitting on loads of cash. I'll take a dividend increase any way that I can get one and I remain confident in GE's future. I especially like their involvement with alternative energy and developing market infrastructure. Their high weighting in financial services really hurt them during the financial crisis.
This increase came earlier than expected as GE had mentioned that they were looking to a dividend hike in 2011. They also announced an extension of their share repurchase program as they are sitting on loads of cash. I'll take a dividend increase any way that I can get one and I remain confident in GE's future. I especially like their involvement with alternative energy and developing market infrastructure. Their high weighting in financial services really hurt them during the financial crisis.
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