Friday, August 18, 2017

If You Take Care of the Process....The Product Will Take Care of Itself

I have a confession to make:  I am more than a couple of pounds overweight.  In fact, I've fought a weight battle my entire adult life.  Every so often I get sick and tired of the way I look and feel and then do something about it, but I'm the classic yo-yo dieter--and on every pass the low weight gets higher.  Of course, aging doesn't help with that, and the last couple of times I've tried to lose weight I've given up in disgust after a few weeks because the scale wasn't moving, at least not fast enough. 

This time, I'm trying something different--no I'm not going gluten free, low carb or following any of the trendy diets of the day.  I'm sticking to the old-fashioned eat less and exercise more plan.  We are taking my daughter's Girl Scout troop to New York City next summer and I don't want to be miserable walking through the city with the girls.  What am I doing differently?  I'm only getting on the scale every other month.  

Instead of worrying about the PRODUCT--the weight loss, I'm worrying about the PROCESS--controlling my eating and getting my body moving.  If I limit my calories and exercise regularly, I will lose weight.  Some week's I'll lose more than others, and realistically, some weeks I'll be going places or doing things that involve eating and usually broiled fish and steamed vegetables aren't what I want (if they are even available).  I'm in this for the long haul and I'm not going to eat only grilled chicken breasts for the next year.  

After limiting my calories and increasing my exercise for two months, I lost 15 pounds.  I'm hoping for 10 more pounds when I get on the scale six weeks from now.  After two months, if I've done what I'm supposed to do (followed the process) I should see noticeable weight loss, which is reinforcing.
So why am I writing about weight loss on a financial blog?  It struck me that saving money is much like losing weight.  You give up what you want today in hopes of a better future.  You have a lot of competing interests--should you put that money in the bank, or buy the new toy?  However, the bottom line is that if you don't do what you are supposed to do, you'll pay the price, and if you do, you'll reap the rewards.

There are bloggers out there who pride themselves in spending almost no money.  They live in small houses, rarely eat out, drive old cars and only buy secondhand clothes--and save a huge percentage of their paychecks.  Their goal is to amass as much money as quickly as possible so they can retire and spend the rest of their lives doing what they want to do. If that is their goal, they are welcome to it. 

In much the same way, there are people who always watch every bite that goes in their mouth.  They never eat a dessert that is not unadorned fresh fruit.  They work out over an hour a day every day.  They look great, and if it is worth it to them, they are welcome to it.

But what about the rest of us?  The ones who want to spend some of our money today, because we know we aren't guaranteed tomorrow?  The ones who want their chicken fried, or their sweet potatoes with praline crunch on top?  Hopefully we realize and accept the cost of what we are doing.  

Back to what we were talking about earlier.  The process of investing for the future involves spending less than you earn and investing the difference.  When the stock market is blowing and going, and you are watching your net worth go up all the time, staying motivated is easier than when the market is in a downturn and, despite investing more money, the value of the account goes down.  In a similar way, it is easy to stay motivated on the weight loss journey when the weather is great outside, you have lots of time to exercise and a friend to join you, and  harder when you are rushing and grab fast food for lunch and skip the exercise due to bad weather.  

In both cases, the trick is to remember the process and accept that there will be short-term setbacks.  Find a check-in period that works for you.  Weighing weekly was too much for me--I got discouraged too quickly.  On the other hand, I have no trouble checking in weekly with my investments, even when they are going down. 

You also need to find a process that works for you.  Some people swear by the fad diet of the week and others religiously write down everything they eat, weighing it and computing calories.  I've tried that, and for me, it doesn't work--it feel constrained, and I hate paperwork.  I have some "go-to" breakfasts and lunches for which the calories are either on the box or easy to compute.  For supper I just watch m portion size.  It is working for me.  

In the same way, some people create and stick to elaborate budgets that give a job to every dollar.  That would drive me nuts.  Overall our lifestyle is lower than our paychecks can afford.  A certain percent of our paychecks goes into savings before it hits our bank account.  Once that's taken care of, the rest is available for spending.  Some months we spend more than others and once a certain amount has built up in the checking account it gets invested.  We set up a process that, if followed, allows us to achieve our goals.  

With both weight loss and saving money, if you take care of the process, if you do what you are supposed to do, the product, the end result, will take care of itself.

Saturday, August 12, 2017

Should My Next Computer Be a Mac, a PC or a Chromebook?

One trick to getting your money's worth with any purchase is to buy enough product to meet your needs, and not more.  If TV is your major source of entertainment, the big-screen, all the bells and whistles model may bring you a lot of pleasure.  If you watch it an hour or two a month, just about anything will probably be fine.

If sitting at an antique table set with beautiful china and real silver gives you pleasure and you can afford it, go for it. If all you see is furniture to dust and silver to polish (what a pain) then you'll probably be happier with a Wal-Mart table and stainless steel flatware (and save a few dollars).

What about your next computer?  Until recently, you had two basic choices:  you could buy a PC or you could buy a Mac.  Now you have a third mainstream choice--a Chromebook.  Should you buy a PC or a Chromebook?  Should you buy a Mac or a PC?  Let's look at the options.

Things to Consider When Buying a New Computer

  • What would you like to use it for?  If you could spend as much as you want, what would your new computer do? If the answer is send emails and surf the internet, you will probably be happy with a lower-priced machine than the person who wants to play graphics heavy games.  If you have particular software you want to run, check to see if it can be run on the computer you are considering.

  • Where do you want to use it?  Obviously if you want this computer to travel with you, it will need to be some sort of laptop.  If it is for office use only, you may prefer a tower hooked up to multiple monitors (though you can hook your laptop up to multiple monitors as well).

  • Who is going to be using it, and how computer savvy are they?  Some people like to tinker with their computer and software while others just want it to work.

  • How much do you want to spend?  How important is price?  
  • Reasons to Buy a Windows PC--And Reasons Not To

    A PC (personal computer) that you buy in a store runs the Windows operating system, which is the most commonly used operating system today.  Today you can get a desktop computer, without a monitor, a laptop, or an all in one desktop computer that integrates the processor and the touch screen.  Generally speaking the desktop design gives you the most processing power for the dollar, though laptops are more comparable in price now than they were a few years ago.  All in ones are the new kids on the block and like most things, if you want the newest, you'll pay more.

    The main reason to buy a PC is compatibility.  Since the Windows operating system is the most popular, particularly with businesses, there is more software available for it than for the other systems, so if you need to run software that is only written for Windows, you may need to buy a PC (there are ways around it, but they generally require some level of technical expertise to implement and maintain). 

    Overall, Windows works reasonably well, though you won't find many people who love it, and because of its ubiquity, finding people who know how to tweak it or fix problems isn't difficult.  On the minus side, that same ubiquity means Windows is a popular virus target.

    One thing some people consider to be a big minus for Windows (and others consider an advantage) is that they have moved to automatic updates.  Rather than releasing new versions of the software, Microsoft is pushing updates to current users.  While they will take "not now" for an answer, they keep requesting to update and even if you don't want to do so, you may eventually end up accidentally hitting the "yes" button and updating.  Microsoft does this to keep the program secure, but people with finely tweaked systems or who are running outdated software may find that one of these updates "breaks" their system.  

    Reasons to Buy a Mac--And Reasons Not To

    Like PC's Macs (Apple Computers) come in desktop and laptop versions.  

    People who use Macs often love them and hate to even think of going to Windows.  People who do a lot of graphics or other artistic work tend to use Macs more than most businesses, so if that is your field, you may need a Mac to be compatible with other people--and I tend to think that if most people in a field are using Macs there must be some economic advantage to doing so.   

    Macs do not tend to get the viruses PCs do because there are not as many of them and because  they work differently.

    While Windows has become a lot more user-friendly lately, Macs have a reputation of just plain working--if you want something to fiddle with and tweak, go buy a Windows  PC.

    While you can buy Windows PCs in a lot of different configurations, made by a lot of different companies, at a lot of different price points all Macs are made by Apple and there are relatively few price points.  In general Macs are more expensive than Windows PCs, but they are durable and high quality.

    Reasons to Buy a Chromebook--And Reasons Not To

    The new kid on the block in the computer business is the Chromebook.  In a lot of ways, these computers are glorified web browsers, or tablets with keyboard--and whether that is a good thing or bad depends on your needs and wants.

    When you turn on a Windows PC you have to wait for it to "boot up", for all the background programs to start, before you can start doing what you want to do.  Chromebooks turn on in about 5 seconds.  

    Chromebooks are designed to be connected to the Internet and to run apps rather than locally installed programs.  While you can use them offline, it is not what they were designed for and if WiFi is not generally available where you are going to be using this computer, a Chromebook is probably not the best choice.

    The main strengths of Chromebooks are their price, ease of use, and battery life.  Even with a keyboard, their size and weight are closer to tablets than laptop PCs. They are becoming school favorites because they can be made school-ready (connected to the school's network, with chosen apps downloaded) in a matter of minutes.  Updates can be made to all computers in a school via a central control panel in a matter of minutes, whereas Windows PCs must be individually updated. 

    Chromebooks under $200 are easy to find, though a recent Amazon search also found one for over $400.00.  The one my daughter's school required cost right at $200.  Most Chromebooks will last close to eight hours per battery charge, far more than the average Windows laptop.  

    The main disadvantage of Chromebooks is that they do not run Windows software (though they can connect to Cloud Office).  If you have a need for a particular program and there is no Chrome app for it, you will have to chose another platform.  If your need is for web browsing, basic word processing and basic spreadsheets, a Chromebook will probably meet your needs.  

    What will your next computer be?  At this point, I'm still thinking Windows PC but Chromebooks are looking better all the time.

    Disease Called Debt

    Friday, July 28, 2017

    Why I Bank At Metairie Bank

    I've seen a lot of blog articles over the years praising certain banks and offering handy affiliate links that allow readers to open accounts, and bloggers to be paid commissions.  I have nothing against bloggers making money, and I'm certainly open to earning more of it.  However, you will not find any affiliate links in this post, nor will I be paid for writing it.

    Years ago I wrote an article about how we came to be customers of Metairie Bank. Basically I felt that our prior bank, Chase, stole $6.00 from my son.  He did not have a bank account (or any money) but had received checks as graduation gifts.  I had him endorse the checks to me, take them to my bank (Chase) deposit them in my account and then cash a check I had written to him.  Since he did not have an account, they charged him $ 6.00 to cash his mother's check, drawn on their bank.

    This week I found yet another reason to be pleased that we chose to move our money and banking business to a relatively small local bank, Metairie Bank and Trust.  We have several large bills that are due only once or twice a year and we've had to pull money from savings to help pay for some of them this year.  I've read several bloggers who have suggested creating separate bank accounts for bills like that, and contributing to those accounts monthly, so, via the website, I opened a new savings account to cover such bills.

    When the bank statement came, I found that I had been charged a $15 service charge, and since I had never seen a service charge on my other savings account, I called the bank to find out what I did wrong.  The clerk who answered the phone could not help me but put me through to the officer in charge of my accounts.  I left a voicemail message and she called me back within a couple of hours.

    When I told her what the problem was, she explained why the service charge had been assessed--there was a minimum balance requirement that I had not met.  I told her I'd accept responsibility for not reading the fine print, but that I needed to close that account before that charge hit again.  She said that wouldn't be necessary and asked me what I expected the minimum balance to be and how many transactions per month I expected.  When I told her, she changed the type of account--no more than six transactions per month (more than I need) and no minimum balance and no fee.

    I then asked her if I was going to be charged for a paper statement, like I was on  my Girl Scout account and on the account for my Dad's estate.  I told her that with those accounts, I was willing to pay for the paper because it wasn't my money, but that I'd be ok with online only for the savings account.  Again, she said that wasn't necessary, and then went through all my accounts with me and changed them to accounts that met my needs and didn't charge ANY fees.

    My whole family banks at Metairie Bank.  They offer free teen accounts which require the teen to get parental permission for large debit card withdrawals.They are everything I want in a bank and I hope they are in business for a long time because I have no desire to go back to doing business with a behemoth like Chase.  While Metairie Bank probably isn't in your area, I'll bet there is a small local bank that offers better service than the "big boys" do; give them a chance.  You may be as happy as I am.

    Friday, July 21, 2017

    Can You Make Money with Amway or Other MLM Companies

    One way many people make ends meet, or gain extra cash for investments or luxuries is via "side-hustles", jobs they do when not at their regular employment.  One such side-hustle that has been around for years is direct sales, otherwise known as "Multi-Level Marketing".

    What Is Multi-Level Marketing?

    Multi-Level Marketing is a business model wherein the company's products are sold directly from one person to another, without a physical store.  The sales people are independent contractors who set their own hours and find and service their own customers.

    It is called "multi-level" marketing because one characteristic of these businesses is that if you recruit and train a new sales representative, you get a share of his/her commissions, and depending on the company, a share of the commissions of the people those people recruit.  The people whose sales earn you money are called your "downline".  Generally speaking, people who make a lot of money in multi-level marketing companies are people with big downlines.

    What Types of Products Are Sold Via Multi-Level Marketing?

    The multi-level marketing model is used to sell products from insurance to cosmetics to toys or kitchen gadgets.  Well-known names include Avon, Amway, Pampered Chef and Discovery Toys. 

    How Do I Start With MLM?

    Many people have been invited to parties where the purpose is to display and sell MLM products.  You can go to parties selling Pampered Chef kitchenware, essential oils, candles or even sex toys.  Besides taking orders for merchandise, the sales representative is almost certain to tell you that you too could make money selling this stuff.  Today, many MLM sales people offer merchandise via facebook or webpage, and, again, let you know that you too could be doing this. In short, anyone who purchases anything from a MLM representative is likely to be encouraged to become a sales representative themselves.

    Why Would People Recruit Competitors?

    If you and I pretty much have the same circle of friends, why would I recruit you to sell the same widgets I'm selling?  Isn't that self-defeating?  There are three  reasons MLM sales people try to recruit friends and family to sell:
    • They receive commissions from their "downline".  When a representative recruits you, he or she trains you as well, and for the rest of your MLM career, will get a commission on things you sell.
    • It turns you into a regular customer.  Many MLM products are small low-priced consumables. They are things that will pay a very low per-item commission--the money is made by acquiring repeat customers who purchase multiple items per sale.  By signing someone up as a salesperson and giving them the "dealer" rate on the product, you improve the chance that they will buy the product regularly, even if they don't sell any.
    • They get to sell you a kit and starter supplies.

    How Much Money Can I Make Selling Mary Kay?

    There are people who make a living selling Mary Kay, Pampered Chef, and other MLM products.  However, according to this website, in 2010, Mary Kay had about 30,000 representatives in Canada in 2010.  Of those, about 3,800 had both been with the company for a year, and had earned commissions in 2010.  Over half of that 3,800 earned less than $100 in 2010.  However, Mary Kay did have 24 people in Canada who earned over $100,000 in commissions.

    I researched this subject a couple of  years ago and at that time most of the companies had a document on their website that showed the number of distributors they had and the percent of people with various earnings.  I can't find such charts now so the law that required them to be displayed must have changed.  Nevertheless, the figures I remember were similar to those listed above for Mary Kay--namely that few people stuck with it very long, and most of those who did still didn't make much.

    The other thing to remember is that while companies tout commission rate of 50% or more, they don't emphasize things like shipping, maintaining inventory, gas to deliver product or the cost of brochures or other advertising.  If you are going to sell essential oils, diet supplements or Amway products, you are running a business and will have business expenses.

    Still, I think many of us know people who have been selling these products for a long time.  Some readily admit they aren't making much if any money.  They like the products and sell to a few friends.  They aren't making real money because they don't treat it like a real job.

    Is MLM the Side Hustle for Me?

    Honestly, probably not.  First, realize that with ANY sales job, if you are selling low dollar products, you are going to have to sell a lot of them to make money. The higher the price of the product, the harder you are going to have to work to find customers, and the less often they are likely to buy.  Think car dealership vs grocery store.

    The Car Dealership

    When you walk into a car dealership, you probably want to buy a car.  However, there is a good chance you are going to walk off that lot, after spending time with a salesperson, without buying anything.  If you do buy something, chances are you will not be back for years.  On the other hand, the salesman who does sell you your car will probably make a day's pay (or more) on the deal.

    The Grocery Store

    When you go into the grocery store, you probably want to buy groceries and it would be unusual for you to leave without buying anything.  Chances are very good that unless you are visiting from out of the area, you will return to that store in the near future.  While the per product mark-up of about 15% isn't that much per item, when you consider the number of items moved per day, most grocery stores are profitable, even after paying the help--and speaking of  "the help", the amount of employee time  you consume per item is pretty minimal.

    MLM Products

    The price of most MLM products is closer to the price of groceries than to the price of cars.  If I run out of lipstick, and you happen to call and ask if I want some today, I may buy, but unless I am highly invested in your brand or product, calling you for it is an extra step and if I have to wait for you to get it before I can get it, then I have all the reason to buy a competing product. As a dealer you need me to return over and over again, just like the grocery store does, but you are giving me the attention that I get at the car dealership.  

    Think about it.  How much do you spend on make-up every month, total?  $100?  To me that is high,but let's go with that number.  If I buy $100 worth of cosmetics from you every month and you have no other customers, you make $50.00. Sounds good, right?  If all you want is enough money to buy your own make-up, then maybe, especially if we are friends, will see each other regularly, and you know that I will not need samples or freebies, and you know that I won't be getting any of my makeup at the mall.  

    What is more likely is that you happen to catch me at the right time or that you have a product or two that I like, so I buy it from you periodically, when I want it.  If you want to sell me other stuff, you need samples, you need to spend time talking it up.

    What Kind of People Make Money With MLM?

    People who make money with MLM are people who can sell--not only can they sell the  products to retail users, they can sell the concept of running your own business to other people and they can keep those people motivated to continue to sell both product and program.  They are also people who work their business full time.  

    But I Want to Try MLM

    The first step in "starting your own business" to sell MLM products is to purchase a sales kit of one sort or another.  The kit will contain samples, sales materials and perhaps some saleable products.  New sales reps are encouraged to "invest in their business" by buying more than the minimal kit and by investing in training classes.  If you want to try MLM sales, the first thing to do is determine how much you are willing to lose in the process--and then limit the amount you invest in product and training to that amount until you have earned enough to recoup your investment.  

    While some of the MLM companies sell products people really enjoy, the reality is that most of their sales representatives do not have earnings commensurate with the efforts they employ.  There are plenty of available side hustles that are worth more to the average person. 
    *Part of Financially Savvy Saturdays on brokeGIRLrich. *< and The John and Jane Doe Guide to Money & Investing. *

    Friday, July 14, 2017

    Update: Second Quarter 2017

    Hard to believe another year is half over.  Since it seems to be the thing to do for financial bloggers, I'll take a look at how this year has gone.

    This is the year we are learning how expensive new(ish) cars are.  We unexpectedly ended up buying an almost new car Labor Day weekend last year, and since we had just cleaned out our account buying a used car for my college girl, we decided to finance it.  Our interest rate is low, we are glad we have the car and financing it was a better choice than liquidating assets but we definitely notice that payment coming out of our account.  We also notice that it costs more to insure an almost new car than one that you only carry liability on.

    This has been the year of medical and dental bills.  I'm in the middle of getting an implant and crown, and I had a wisdom tooth pulled.  In March I had what I thought was a bladder infection, except that the tests came back negative for that so I ended up getting a bunch of other tests to rule out more serious causes of blood in the urine.  They came back negative as well, but the bills will be about $800.

    My teen starts Catholic high school in the fall, meaning her tuition is twice what we have been paying, and that it was due two months earlier.  To have the money, we had to liquidate assets, and chose to do so from our Lending Club account.  I'm not sure we'll be able to pay ourselves back this year, it just seems like every month there is something. To avoid this problem next year, I have started putting 1/12 of her tuition plus 1/12 of our insurance bills into a savings account each month.  The way those bills fall, we should be able to pay them from the savings account.  I'll be the first to admit that discretionary spending slows around here when the checking account balance gets low.

    Finally, with my college girl graduating and hopefully moving into an adult job (and out of the house) soon, we figured this spring would likely be our last full family vacation and even though we spent less than a week in Orlando, amusement parks aren't cheap.

    Luckily, our major savings in our 401ks are automated, and fortunately, the stock market has done well this quarter.

    Let's take a look at some numbers.


    My husband and I have Roth IRAs and regular IRAs, and a taxable account.  We deposited $300 in each Roth IRA this quarter.  The combined dividends from these accounts totalled $1922.60.  These accounts consist of a variety of mutual funds purchased for us by our ex-financial advisor, along with Vanguard's International Bond Index Fund, Total Stock Market Index Fund, 500 Index Fund, Total Bond Market Index Fund and REIT Index Fund. In the last year, our rate of return has been 11.8%.


    My 401k has a year to date return of 11.75 %, and the account paid dividends of $407.98 this quarter.  It is invested in Janus Triton,  Oppenheimer Int'L Small Mid Co A, MFS Government Securities Fund-A , Pioneer Fundamental Growth Fd-A,  and Delaware US Growth Fund-A.  My firm contributes 5% of my salary, and I contribute 6%.  


    My husband's 401K is with AXA and it has increased in value, though not a lot.  He puts in the minimum necessary for employer match.


    The initial investment in this account was $7,000.  It began the quarter at $8176.26.  Even though we've withdrawn dividend payments, it ended the quarter at $8,355.99,  So far this year the account has paid $78.98 in dividends.  I have invested in "Motifs" or baskets of stock with a variety of themes including dividend payers, things I like and online gaming.  Motif has changed their fee policy such that if you have less than $10,000 and do not have any commissions in a given six month period, they charge you a $10 fee.  To avoid that, I am planning on moving money from Lending Club to Motif.

    Lending Club:

    My returns have been steadily dropping.  Accounting for expected defaults, Lending Club estimates my return since I began the account at about 5.05% annually, whereas three months ago it was  5.68% annually.  I had a negative return last month--more write-offs than interest paid. From what I've read in various places, I'm not the only one whose returns have dropped. As notes mature we are not re-investing; we are moving the money to Motif and to our Roth IRAs. 


    My returns here have dropped as well, but not as drastically.  Right now my annualized net returns are still 6.9%, and my "seasoned" returns--the returns on notes that are more than ten months old are 6.23%.


    Loyal3 went out of business. Rather than selling the fractional shares and moving the whole shares, I just sold everything and applied it to the tuition bill.  


    At this point I own shares of AT&T, Visa, CVS, Lending Club and Hanesbrands.  Robinhood is an online broker that uses phone apps only, no webpage.  They charge no commission and allow you to place limit or market orders.  They also allow you to initiate bank transfers and then invest the money immediately--you do not have to wait for the tranfer to complete.  You do have to buy whole shares.  I've added money to this account that I've withdrawn from Kickfurther and right now the value is $442.96.  So far this year, dividends from this account total $2.24.


    This is an online broker for whom I wrote a sponsored post.  I invested $100 in Johnson & Johnson through them.  They charge $0.99 per trade, so even though they sell fractional shares, I don't recommend investing less than $100.00 per trade.  I plan to keep the account and use it when I want to buy shares of stock that are substantially over $100, since my investments in individual stocks are as much toys as investments and I don't plan to put too many dollars in any one stock.  My J&J stock is now worth $100.33.  


    I'm in the process of withdrawing my money not only because I'm in the red (an expected risk of investing) but because I've become convinced that Kickfurther is going to fail.  They have too little business at this time and while they have tightened their contracts and changed their business model somewhat, I've just seen too much incompetence to believe that the investment risk is the only risk I'm bearing and the returns have not justified the risk.

    All in all, the second quarter of 2017 was a good one investment wise. Hopefully during the second half of the year we can return some of the capital we had to withdraw during the first half, but I'm seeing some big expenses down the road.  If I could just get these kids to move out....(actually they pay rent, not what they cost us, but something).

    The Bottom Line

    As compared to the beginning of the year, we are about $50,000 richer, but most of that is stock market gains, not savings.  We did put more in our 401k accounts than we pulled out of the others so we are going in the right direction. 
    *Part of Financially Savvy Saturdays on brokeGIRLrich.*

    Thursday, July 6, 2017

    The State of My Blog

    I was looking back at my Blogger dashboard the other day, studying my stats and looking at how many hits I'd gotten on various posts.  I realized I'd been writing this blog for over two years now.

    What started as I gathered research on how to handle an inheritance has grown into a hobby that has earned me a couple of dollars, plus taught me a lot about both blogging and investing.  This blog led to me giving freelance writing a try, something I'd always wanted to do but never realized how to get started.

    So, what did I learn looking at my dashboard?

    My Five Most Popular Posts

    Not surprisingly, four of my five most popular posts are Kickfurther Merchant of the Week posts.  I was able to promote these posts on a subreddit run by Kickfurther and sometimes the featured company promoted the post as well.  These posts also had giveaways and I was able to promote them on giveaway link-ups.  

    Surprisingly, my most popular post, whether I look at the day, week, month, or all time, is For Where Your Treasure Is: Should I Give to Them?  I can't figure out how or why people are finding the post but they keep on reading it.

    Where I Get My Readers

    I get a lot of my readers from Financially Saavy Saturdays.  Another source is Rockstar Finance, which provides feeds for over 1100 blogs.  I can also see that substantive blog comments draw readers from other blogs.

    How Many Readers Do I Have?

    According to Google Analytics, which I have just recently installed, I had 246 active users in the last 30 days.  According to adsense, my views have doubled since this time last year, which is a good thing.  According to Blogger, my pageviews in June are about where they were last year, and WAY down from previous months--but there was no reason for them to be that high for a the last few months so I suspect a bot.  

    Am I Making Money?

    I'm making a little money.  Adsense pays me about $5.00 a month.  I'm about to write my third sponsored post.  I participate in a couple of affiliate programs but the only one that has paid me anything is Kickfurther.  I've gotten a couple of free sample products from Kickfurther merchants and found a freelance writing client via this blog.  However, if I was in this strictly for the money, I wouldn't be getting anywhere.

    What About Social Media?

    I have a facebook page for this blog and a Pinterest account to which I pin things from this blog.  I am on Bloglovin and so far, traffic from them seems to be the exception rather than the rule.  I also have a Twitter account and all most post go there via Bloglovin but again, I never see any traffic.  I'll admit that I don't "get" Twitter.  I follow a bunch of people but rarely look at my feed, I just don't see the point.  

    What's Next?

    Well, I'm playing with MailChimp, so soon I may be like all the big kids and ask you to subscribe to my email list.  First I have to figure out what I'm going to mail you.  Like I've said before, this blog is a toy, and not a job.  I don't want to be spending hours every week designing emails.  

    I plan to keep blogging here as long as I'm enjoying it.  Hope you stick around for the ride. 

    Disease Called Debt

    Friday, June 30, 2017

    Blogging About Blogging

    I've been blogging a lot longer than most people.  I started my first blog, This That and the Other Thing in 2005. I had no real focus (bet the title gives you some clue about that) but I liked to write and thought it was neat that I could put up a blog and people would eventually find it and read it.  My first readers were a few online friends who were also trying out this blogging thing.

    In the Beginning

    When I started blogging I had a dial-up internet connection, no digital camera and no real idea of how to format posts or do much of anything, and if you look at those early posts, it shows.  I posted sporadically in 2005 and 2006, sharing links to interesting websites, giving my opinions about current events or writing about my faith.  In late 2006 I discovered book blogging and I gradually became a book blogger, at least most of the time.

    Much of my early on-line activity was with a Catholic moms group on AOL and while I've never been one of those bloggers who talked about faith in every post or really set herself up as an online religion teacher, I did (and still do) have posts about my faith and for over five years I hosted a Catholic bloggers link-up. 

    Different Types of Blogs

    Over the years I've participated in a lot of blog link-ups and other blogging communities.  I find it interesting to compare and contrast the various types of blogs I read. 

    Book Blogs

    While reading is generally considered a solitary hobby which is enjoyed by introverts, book bloggers are a very community-oriented group.  Many bloggers regularly participate in one or more of the "book haul" memes like "It's Monday, What Are You Reading", and  "Mailbox Monday" .  "Library Loot" is on Wednesdays.  If memes aren't your thing, maybe book challenges are.  Most of these start in January, but some start during other seasons.  Bloggers write posts about how many books of what type they will read, and link up their original posts and follow-up posts.  

    Of course the main thing book bloggers write about is books.  Book review posts are mainstays along with author interviews, chapter excerpts and book spotlights.  

    While book bloggers may have ads on their sidebars and Amazon affiliate links in their posts, most book bloggers are not in it for the money, they are in it for the books.  Anyone who has had a book  blog for any length of time and who has evidence that her (and most book bloggers are "her") blog is read by others will be able to get review copies of books at no cost.

    While there are a number of programs and publicists which send out hard copies of books for review, more and more of them are moving to digital review copies.  While I sometimes miss the days when the mail carrier brought me two to three books a week, the fact of the matter is I now no longer have to figure out what to do with all those books.  While I could have sold some of them, from what I could see, the little money I would make was hardly worth the trouble.

    While there are many self-hosted WordPress book blogs, there are plenty of us on Blogger and the free WordPress site too.  

    Mommy Blogs

    These seem to mostly be written by stay-at-home-moms of small children.  These bloggers seem pretty community oriented and tend to participate in link-ups.  Some are clearly just showing off their kids and trying to meet other moms.  Others seem to be trying to make money--or at least to score offers to review good products.  

    By the time I discovered blogging, my children were beyond the super cute stage and I didn't want them to be embarrassed if a friend found my blog, so I haven't written a lot of "cute kids" posts though I have talked about my son's  struggles with autism and my struggles parenting him.

    Financial Blogs

    Financial Blogs are all about making money.  They have ads, sponsored posts and some of them seem written as much for search engines as people (nope, not naming names).  There are some link-ups, like Financially Saavy Saturdays on Broke Girl Rich and people do read a comment on each other's blogs but I don't generally see financial blogs (except some dividend investor blogs) that advertise other blogs on sidebars.  Financial bloggers do not seem as fond of link-ups and memes at book bloggers and mommy bloggers.

    There are definitely more professional bloggers in this area tha professional book bloggers--unless you count authors who use their blog as a personal public relations page.  I suspect there are as many professional mommy bloggers as professional financial bloggers, its just that there are so many hobby mommy bloggers out there, whereas I'm one of the weirdos in the financial blogging world who has no intention of putting enough time or money into my blog to make it into the big time.

    Religious Blogs

    Depending on the people, I've found (and this is my experience which may not be true for all) religious bloggers to be some of the nicest bloggers, often rallying around each other and supporting each other's efforts or some of the nastiest.   

    Why Do I Blog?

    I blog because it is the ultimate in vanity press.  At no cost (because I'm one of the few financial bloggers who hasn't used on of those handy-dandy links on every financial blogger's "how to blog" post and gone self-hosted) I can write what I want, and hope someone reads it.  I like to read, I like to write and if I can make a few dollars (and yea, its a few) and get free books (more than I can read) then I'm happy.

    How About You?

    What kind of blogs do you like to read?  Are you a blogger?  Do you have more than one blog?  Why did you start blogging?  How long have  you been blogging?  Are you still blogging for the same reason you were when you started?

    Friday, June 23, 2017

    Should I Buy Dividend Stocks or Growth Stocks?

    You don't have to read investing blogs very long before coming across the idea of investing in dividend growth stocks--stocks that pay a yearly dividend and which have historically increased that dividend on a regular basis.

    Those who champion dividend growth investing liken it to planting a money tree--once you have planted it (purchased the stocks), the fruit is there for the picking (dividends are paid regularly) and increases as time goes on.  The stock that pays you a $3.00 dividend this year may pay you $3.10 next year (or it may pay less if business is not good).

    Last week I read an blog post (and I wish I had bookmarked it) in which the author eschewed dividend growth investing, stating that generally when dividends were declared, the value of the shares dropped the same amount, giving you a zero-sum game, except that you had to pay taxes on the dividends.  Something about that statement didn't sound right to me, so I did some math.

    Disclaimer:  The last time I took a standardized test, my verbal skills were in the 99th percentile, and my math skills, dead average.  Make of it what you will.  

    Trying to figure out what WILL happen in the stock market is, at best, an educated guess and it isn't very useful for comparison purposes.

    The shares of a particular company pay increase or decrease in price due to factors unique to that company.  In other words, if a company has a great new invention that "everyone" wants to buy, investors may bid up the price of the stock in that company.  In the same way, if something happens so that the company's future prospects look bad, investors may seek to sell off the stock and the and the price per share will drop,

    On the other hand, sometimes the price of stocks will change, sometimes substantially, not because of anything good or bad that happened to the company but because the market as a whole has moved and they get caught up in it.

    In other words, while the price of a company's stock is, to some extent, a reflection of the current and expected profits of the company, there are times that prices of shares of stock in a particular company may drop for reasons that have little to nothing to do with the company.

    Dividends, on the other hand, are a reflection of earnings.  If a company isn't making a profit, the only way it can pay a dividend is to use savings, and no company can do that long-term.

    So, back to the question, is it better to own stock in a company that pays a dividend, or a company that does not, assuming the same rate of growth?

    I did the following math:

    Since I know the average stock market return over the long haul is about 7%, I used to randomize numbers between -10 and 20 to come up with a string of numbers that my eyeball estimate told me averaged close to that.  Actually I ended up with numbers that average a little over 5% and decided to stick with them.

    I used those numbers as the percent increase in the stock price in a given year.  I started with 500 shares of stock that cost $100 each.  Each year I assumed the growth rate was my random number and figured out how much I would have at the end of the year.  Here is the chart I got:

    YearReturnno of sharesopen price/shareend price per sharetotal value end

    I never took any money out of this account and at the end of eight years I had $74,305.06.  But what if this had been a dividend paying stock?  Would it make any difference?  My guess before I did the math, was that it wouldn't make a diffence in the accumulation  phase.  I was almost right.

    I used the same return rates on the second chart.  The difference is that I assumed that this stock paid a $3,00 per share dividend on the last day of the year, and that the stock then fell in price by 3.00. In other words, if the stock sold for $98 on the last day of the year, I opened it the next year at $95 rather than $98.  However, I used that $3.00 per share to buy more stock at that opening price.  At the end of the year, I computed the value by multiplying the number of shares from the beginning of the year by the post-dividend price, and then adding the dividends paid.  

    YearReturn# of sharesopen price/sharepre-dividend close$3 dividend post div closetotal end value

    What About During Withdrawals?

    I redid the first chart, only this time, after computing the value on the last day of the year, I withdrew $5,000, which reduced the number of shares with which I started the next year.  Here are my results:

    YearReturnno of sharesopen price/shareend price per sharepre-withdrawal valuepost withdrawal value

    I then re-did the chart, assuming that after the dividend had been paid, I used it as part of the $5,000 I withdrew.  I thought the dividend payer would come out ahead.

    YearReturn# of SharesPrice per sharepre-dividend close$3 dividendpost div closepre-withdrawalpost withdrawal

    Well, you can tell I write these posts on the fly because obviously, there is no difference (or at least no significant difference) between getting dividends and having the price of the stock increase, whether you are trying to accumulate more stock or whether you are trying to generate cash to spend.

    That conclusion, of course, assumes that there is no difference in the stocks, which is something that rarely happens.  In general, companies that are profitable and growing at a slow but steady pace, if at all, pay dividends.  Companies that are re-investing everything they have into growing the companies do not pay dividends, but hopefully the price of the stock will increase in the long run.  Of course if they overbuild, then the stock can crash for that reason.

    Are you a dividend investor?  If so, has my little exercise made you reconsider your stance?  Why or why not?