Common Sense Tips to Building a Solid Investment Portfolio

A solid investment portfolio takes its cue from one of the oldest proverbs known. Never put all of your eggs in one basket. Diversification of assets means that the overall portfolio is at a lower risk for losing a large chunk of value. Traditional investments have always included stocks and bonds, but with recent fluctuations in the market, many are looking outside and into the realm of alternative investments.

In alternative investments, there are core strategies, such as real estate, or commodity trading in precious metals. Then there are investments that are considered fringe, but yield exceptional results, such as bitcoins.

Bitcoin

Bitcoins are a relatively new investment opportunity, but not one that should be overlooked. A form of digital currency, their scarcity and growing acceptance have driven their prices up enormously. For example, in 2009, an investor in Oslo, Norway, purchased $26.60 worth of bitcoins. He forgot about them and was reminded of his purchase in 2013. Their value had shot up to $886,000. In 2017, the current value for that amount is $6.7M!

An alternate method of purchasing bitcoins is to invest in their creation, or “mining.” Mining companies, such as Genesis Mining, allow investors to get into the lucrative bitcoin currency without a huge outlay of capital. As a currency investment, bitcoins are a volatile commodity, but their potential for staggering growth is one that investors are wise to pay attention to.

Precious Metals

Precious metals have always been recognized for their value, and almost every wise investor will include some gold, silver, or platinum in their portfolio. Although the market for precious metals remains volatile on a micro-scale, as a long-term investment, they still offer amazing returns.

Gold prices operate less off of supply vs. demand and more on what the world sentiment is. When people feel that the economy is unstable, there is significant political upheaval, or the threat of conflict, investors flock to gold as a means of safeguarding their wealth. A person can carry their entire fortune on them in the form of gold; because of its inherent value, it can be exchanged readily for goods or even safe passage out of the conflict.

Silver and platinum also have short-term volatility. This is because they both are heavily affected by industrial demand for limited supply. Both platinum and silver are used in numerous commercial applications, including catalytic converters, bearings, and electrical connections. Still, in the long run, both metals offer a solid investment for a portfolio.

Real Estate

When it comes to core alternative investments for a solid investment portfolio, real estate is one of the most solid items a person can have. There are three primary methods that an investor has at their fingertips to add real estate to their portfolio. The first is direct investment. This is where an investor selects individual properties to purchase. The advantage to this is that the investor exercises complete control over their properties. The primary drawback to this method is that it takes a lot of capital to diversify real estate holdings enough to minimize local fluctuations.

The second method of investing in real estate is a real estate mutual fund. The mutual fund handles investing in REIT stocks. This allows an investor to add the nearly guaranteed long-term growth of real estate to their portfolio without a large investment of initial capital.

The last method is to invest in a real estate investment trust (REIT). This is perhaps the best way for an individual investor to add real estate to their portfolio.  This is essentially a publicly traded company that offers stock. However, the REIT is a company that operates in real estate, such as strip malls, larger malls, and hotels. The stock price for an REIT is much more volatile than the value of a direct investment. Also, the price of REIT stock is significant, making it a barrier to most individual investors. However, the trade-off is that management issues over individual properties are handled by the REIT.

Final Thoughts

There are many alternative investments that a savvy investor can and should add to their portfolio. All of them however, entail their own risks, but with proper research, a small investment at the correct time can lead to huge windfalls over the years. 

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For more saving money, making money, and investment ideas go to www.MoneyAhoy.com

Interested in Investing in REITs?

In an ideal world, everyone’s investment portfolio would contain some real estate.

Unfortunately, that’s not really likely, as cost barriers for buying a property are too high for most. Likewise, owning property also isn’t for everyone, even if they have the means. Some people aren’t too hot on the idea of settling down in one place for the immediate future and then being burdened with a property that takes time to eventually sell.

For all those people who can’t, or don’t want to, own a property, there are Real Estate Investment Trusts.

REITs can be bought on the stock market as if they were shares of Apple or General Electric. They’re companies that own income-producing real estate, so by investing in them, you’re investing in the real estate market. When the real estate market is high, shares will likely rise. The opposite will happen if the real estate market starts to decline, however.

All types of real estate are available to invest in, from retail to office to apartments. In essence, an REIT offers the ability to invest in the real estate market without physically owning the property. You can sell at any time and, mercifully, won’t ever have to deal with a real estate agent. You’ll have exposure to the ups and downs of real estate industry without having to pay property taxes or maintenance costs.

Historical Returns of REITs

REITs are a great component for anyone interested in diversifying their investment portfolio without having to drop hundreds of thousands of dollars on a physical property. They’re steady and fairly safe investments, despite the housing bubble that burst back in 2007.

Those were lean years for REITs, having lost 17 percent of their value in 2007 and an additional 38 percent in 2008. Historically, U.S. REITs have had an impressive 11 percent return over the past 15 years. Over ten years, the average gains are a respectable seven percent. With those returns, REITs prove to be a worthy investment for anyone’s portfolio.

Different Types of REITs

There are several different types of REITs, not to mention many individual REITs within those categories. All told, nearly 200 REITs are listed on the New York Stock Exchange. Like actual house hunting, it’s all a little daunting at first to find one that’s the best fit. The two most common that you’ll see are the Equity REITs and the Mortgage REITs.

Equity REITs are based directly on property and its assets. This would mean that the money generated by a shopping mall from rent-paying retailers or an office building from tenants is regarded as equity.

Mortgage REITs generate earnings through the mortgages that property owners pay. Money is generated by the interest on the mortgage. These are less common than equity REITs, and are arguably less tangible.

The Simpler Route to REIT Investing

If you can’t really decide which REITs works best for you, why not invest in a lot of them?

REIT mutual funds and index funds are made up of a broad swath of individual REITs, so you’ll limit risk and ensure that your money is spread to different REITs. All the big financial companies, from Vanguard to Fidelity, offer their own real estate funds.

Many of these funds also contain real estate-related companies, like Gladstone Commercial, in addition to REITs, so check the makeup of each one to see which fund makes the best fit. Also, make sure to check the fees of the funds so you don’t see any of your gains needlessly erased over time.

Interested in Investing in REITs? – Final Thoughts

Are REITs essential for any investor? Probably not. They’re still a good idea, though. Paul Merriman said it best on MarketWatch when he described an investment portfolio as a pie made up of “carefully chosen, productive slices.” REITs make the flavor all the better.

Anum Yoon is a personal finance blogger and writer. She created and maintains her personal finance blog Current on Currency. You can subscribe to her blog newsletter right here for her weekly updates.

The post Interested in Investing in REITs? appeared first on MoneyAhoy.

For more saving money, making money, and investment ideas go to www.MoneyAhoy.com

We Owed $4,300 on Our Taxes for 2015

Spring is in the air – the flowers are blooming, leaves are coming out on the trees, and there is pollen everywhere!!  One nice thing is that temperatures are increasing down here in southern Georgia, but it won’t be long until things get too hot (think over 90F).

Every year as spring comes around our way, like it or not my mind turns to incomes taxes.  I do find myself stressing about whether we will get a refund from the IRS or owe some money.  Now that tax season has come and gone, (if you have been living under a rock – your tax return was due on April 18th), I can share with you how we fared for the 2015 tax season.

I don’t really like to talk much about taxes here on the blog because I find the subject kinda boring.  But…. taxes really need to be brought up from time to time to ensure you have optimized yourself from a personal finance standpoint.  I certainly did not tax full advantage of tax deductions and various money saving strategies for 2015, and we are paying the price (literally)!

How Did We Do for 2015 Tax Year

I spoiled the surprise already in the post title, but we actually owed $4,300 to the IRS :-(!  When I found out the number, I felt pretty sick to my stomach.  How could we owe so much?  Once I calmed down a bit from the huge sticker shock, the $4,300 started to make sense when I thought more about it.  Here’s a rough breakdown of why we owed so much – I just assume a 38% tax rate to keep things simple:

• Dividends – We had ~$6,100 in dividends for 2015.  About $3,000 were qualified and $3,100 were ordinary.  This means our tax from this should be ($3,100 * 38% + $3,000*15%) = $1,628 taxes
• Small Business – MoneyAhoy.com made about $4,000 after expenses for 2015.  Our tax from this should be ($4,000 * 38%) = $1,520 taxes
• Missing Property Taxes – Our mortgage company somehow screwed up and didn’t charge us for property taxes all of 2015.  As a result, we were not able to deduct ~$2,000 for this.  Our “extra tax” from not getting the deduction here is ($2,000 * 38%) = $760 taxes
• Student Loans – We paid off my wife’s student loans in early 2015.  As such, there was no more deduction for interest on those student loans.  This accounts for ~$400 in deductions in past years.
• Childcare – Thankfully, our childcare bills were much, much lower in 2015 vs. 2014 because my wife is now working part-time and can watch the kids in the afternoon.  As a result, we save ~$17,000 a year here!  The downside is that we don’t get a nice tax bonus deduction in the category.

Why I am Not Complaining That We Owed $4,300 to the IRS

Most folks would be furious if they owed this much money to the IRS.  I was mad for about all of five minutes before I got my head on straight.  Here’s why I am not mad that we owe $4,300 to the IRS:

• We had an extra $10,000 of income in un-taxed income ($6,000 dividends + $4,000 business income).
• We did not pay property taxes on our home ($2,000) – **we will have to catch this back up, so it is more of a deferral.
• We did not have to pay for student loans ($3,000)

I will take an extra $15,000 in my pocket if I have to pay a $4,300 fee any day of the week :-)!

Because we did owe so much, I guess the IRS figures you should make quarterly payments along the way.  We did not do this, largely because I’m lazy and cannot be bother to pay attention to this (so far).  Because we did not do this, there was a small penalty of $42.  This turns about to be just about 1% of the tax owed.  A one-time charge of $42 is no big deal as far as I am concerned, but we probably need to start paying a bit extra each quarter in 2016 just to avoid this kind of fee.  I will look more into how to do this as we are already in the second quarter.  It may be easier to just adjust my W4 from my main employer so they are taking out a bit more each paycheck – I haven’t decided yet. A w4 calculator would make easy work of that.

Tax Deductions That We Missed Out On

As I mentioned, I really dislike thinking too much about taxes.  That bit us in the butt a little bit as we could have saved a couple thousand if we had followed a couple of these tips – WARNING – they are a bit on the complicated side of things:

• Capital Gains Tax Loss Harvesting – You can deduct up to $3,000 each year by selling stocks that are “down” or “losing you money”.  You can even carry forward the losses into an unlimited about of years.  This means an extra ~$1,000 in your pocket each year ($3,000 * 38% = $1,100+).
  • The only trick here is that if you sell the stock for a loss, you cannot buy it back until 31 days later – this is the wash sale rule.  That shouldn’t be a big deal if you are investing in ETFs as you could just flip over to a “similar” ETF for a month, then flip back into your normal one if you’d like.
  • I didn’t go through the trouble of doing this in 2015, and I am now kicking myself for NOT doing this.  It’s basically a free $1,000 that I missed out on :-(.
  • The thing with this is that you are just offsetting the tax you will eventually pay further and further down the road.  You would think this would eventually mean that you would pay a huge tax bill when you actually go to sell the investments (without re-buying them back) down the road.  You would likely be wrong tough! Understand that if you die, you can give the investments to an heir and the total capital gains get completely erased at the time of transfer!  It would be like the heir just bought the stocks that day at whatever price they currently trade at.  Pretty cool if you are planning on handing down those stocks!
  • Also, you get a credit in today’s dollars of 35% (or whatever your tax bracket is), then down the road you pay on the larger capital gains amount, but only at the 15% long-term capital gains rate!  Woohoo!
  • This all just basically boils down to receiving a tax free loan from the IRS that you may never need to pay back!
  • Now that I know more about how this works, I plan to get my capital gains tax loss harvesting on each and every year :-)!
• Solo 401(k) – If you own your own business (and if you don’t, why don’t you startup your own company today!) you can qualify for this cool tax deduction.  If your company does not have any employees (folks working over 1,000 a year), you can create your own self-employment 401(k) for you and your spouse.  Even if you you work full time at a “normal day job” and participate in that company’s 401(k), you can still take some of your side-business income and put it in another separate, solo 401(k).
  • If you work a full-time job for an employer, the most you can contribute to your 401(k) is $18,000.
  • If you work for yourself, the most you are able to contribute to a solo 401(k) is $53,000!  That’s a significant tax savings!!  You can put in $18,000 and then 25% of the total profit for the year up to a combined total of $53,000.
  • If your company also has your spouse working for it, you can double up here for $106,000 in total contributions to a solo-401(k)!
  • It gets a bit complicated if you are working full-time and have your own side-hustle business.  Suffice it to say, you can normally find a way to bump up the total amount of 401(k) contribution from $18,000 total to $53,000 total with a little creative work and understanding in how things work.  This all assumes your company makes a lot of money each year – I’m still working on that :-).

We Owed $4,300 on Our Taxes for 2015 and I’m Not Mad – Final Thoughts

Although we had to pay the IRS a lot of “extra” this year, it’s all for good reason.  We made a lot of extra money in 2015, and we are both really thankful for that.  We could have done more with our tax deductions, but that’s something we will plan on getting right in 2016 and beyond.  How do you fare this tax year?

The post We Owed $4,300 on Our Taxes for 2015 and I’m Not Mad appeared first on MoneyAhoy.

For more saving money, making money, and investment ideas go to www.MoneyAhoy.com

The Stock Market Is Down – Should I Panic?

If you have been paying attention to world markets at all in the past two to three months, then you know that things are not all peaches and cream.  US and World Markets are all down quite a bit in recent months.  Is now the time to sell your stocks and get out?  Should you panic?

Are You Scared Right Now?

The S&P-500 Index is currently down about 11% from its 2015 high.  Other global market are down more than 20% and are technically in a “bear market.” For the new investor that hasn’t experienced a bear market before, things are starting to get a little scary.

If you are nervous about your current stock market portfolio, that’s a good sign that you are taking on more risk that you are ready for with your investments.  If you are new to investing, you cannot fully appreciate how much risk you are really willing to take.  Many folks new to investing will over-estimate how much risk they are really willing to take.  When we see large stock market corrections, they buckle under the stress and end up panic selling at the worst possible time!  I wrote an earlier article entitled Know Your Risk Tolerance – I suggest you check this out if you are feeling a bit scared about the current stock market.

How Much Risk Should You Be Taking?

Some people liken the stock market to gambling, similar to games of chance that you might find at this website.  Others view stock market investing as an essential activity to engage in to build long-term wealth for yourself and your family.  While the stock market investing does entail risk, this is largely controllable with how you allocate your investing dollar.  I fall into the second camp and highly recommend stock market investing for long-term wealth building.

Many beginning investors find that taking a “small” to “medium” amount of risk is right for them as they are getting started on their investing journey.  Once they get their feet wet with investing (likely through market index funds), and experience a downturn or two successfully, they will be ready to consider taking on more risk.  If you are new to stock market investing, I suggest you checkout my free Ebook – Stock Market Investing for Newbies.  Section 5.5 of my stock market investing Ebook talks all about asset allocation basics and helps you to decide what type of asset allocation will be right for you once you have a feel for how much risk you should be taking.

The Stock Market Is Down – Should I Panic? – Final Thoughts

A bit of anxiety when the stock market dips is completely normal.  If you are distracted during the day or having problems sleeping at night thinking of all the money you are potentially losing, then you are invested in something that is just too risky for you!  You need to change your asset allocation!  If you think this is you, then please take extra time to better understand the ins and outs of investing and asset allocation so that you prevent yourself from making a big mistake like I did!

Now that I have learned much more about stock market investing, have learned my own risk tolerance, and have made a few investing mistakes along the way, I view this downturn in a new light.  I think the recent downturn as a very good thing.  Friends and co-workers are trying to trade this downturn and predict just how low things will go.  That’s a fools errand and very much like gambling.

On the other hand, I can keep my investments on cruise control and continue to dollar-cost-average my monthly investment dollars.  This will allow me to purchase stocks at a “discount” compared to where they were valued just a few months ago.  I can feel good about my investments because of my asset allocation – I have some cash, real estate, and bonds in my portfolio to help cushion against a drop in the stock market.  I am also reassured in that I plan to leave my stocks invested for a VERY long time before I will need to sell them for living expenses.  If we do see further drops, I have a long time for stock market prices to come back up.

A little education goes a long way when it comes to stock market investing… Should you panic now that the stock market is down?  NO!!  I hope this short article has convinced you that if you are panicked because of the downturn in the stockmarket, then you need to make some investing changes and educate yourself more!

The post The Stock Market Is Down – Should I Panic? appeared first on MoneyAhoy.

For more saving money, making money, and investment ideas go to www.MoneyAhoy.com

How Much Are You Paying to Invest Your Money?

If you’re already on top of your finances and investing ten percent (or more!) of your income in a retirement fund, congratulations! You’re exactly where you should be, and way ahead of many Americans who don’t have any savings at all. Your 401(k) or IRA plan should help you reach your retirement savings goals over the course of your career so you can enjoy financial independence when you reach the end of your working years.

Once your retirement fund is set up, you can’t just fly on autopilot until you hit age 65, though. You still need to stay well informed about exactly how your money is being managed. One major bit of information you need to know is just how much you’re paying in fees for the privilege of investing your money.

Chances are good that, like most people, you don’t give your 401(k) much thought. However, take the time to understand the fees you pay to invest, because they can add up if you’re not careful. Here are the major fees you might be paying to invest in your retirement.

Account Fees

Depending on the type of investment accounts you have, you’re probably paying account fees. This is typically an annual fee paid to cover the management of your account. It’s how financial planners make money, and they earn that fee by changing your investments as needed by the current vagaries of the market.

When your manager is doing a great job, they stay ahead of market trends to earn you the best return on your investment. Some advisors work on a commission, which is a percentage of the returns they earn for you. Others charge a flat fee at the beginning of each fiscal year for their services.

To find out what your account fee is, all you have to do is ask. You should also check to see that you’re getting your money’s worth for the amount you’re paying. A commission is straightforward, but if you’re paying a flat fee, check your account’s buying and selling records to be sure your manager is rebalancing your account regularly and making adjustments appropriately.

Mutual Fund Expense Ratios

Mutual funds contain a mix of investments and are actively managed, so fees are needed to cover salaries and other overhead. This fee is called the expense ratio, and it’s a simple percentage of your investment.

Mutual fund fees vary widely, from as low as .20 percent to ten times that amount. Expense ratios can also change over time, so it’s important to check them regularly. Though funds with international stocks are more expensive to operate than domestic ones, a general rule of thumb is that you shouldn’t pay more than a one percent expense ratio for any of your mutual fund investments.

Brokerage Commissions

In addition to the expense ratios of your mutual funds, look out for transaction fees and brokerage commissions when you buy, sell or trade your investments. These fees aren’t always clearly disclosed, but they can make a big dent in your returns if your account manager does a lot of trading to play the market.

Why Understanding Your Investment Fees Matters

Over time, each one of those fees can add up to a large chunk of your return on investment. For example, if you pay a one percent fee to your account manager, a one percent expense ratio on the mutual funds they have chosen, and then you average a half-percent fee on trades, you’re paying a total of 2.5 percent for the privilege of investing your money.

In a slow year, you might only earn 2.5 percent in returns overall, which means you’re not really earning any profit once your fees are paid. Likewise, you shouldn’t be too excited about a year in which you make 7 percent returns. It’s really only a respectable five percent when you consider the fees.

If you’re concerned your fees are too high, talk to your financial adviser. They should be more than willing to break down the costs of your investments and explain what you may or may not be getting out of those fees.

If your portfolio is doing well and consistently beating the market average, you may decide that your fees are worthwhile. If not, consider exchanging expensive mutual funds for low-cost index funds, which are tied to the overall market average and require little active management.

How Much Are You Paying to Invest Your Money? – Final Thoughts

Remember, if at any point you’re not satisfied with the answers you’re getting from your advisor, it may be time to find a new one. A great relationship with your investment manager is crucial to make sure your retirement portfolio is on track to meet your unique needs in the future. After all, it’s your money, and you should feel 100 percent comfortable that it’s being well managed and working for you.

Anum Yoon is a personal finance blogger and writer. She created and maintains her personal finance blog Current on Currency. You can subscribe to her blog newsletter right here for her weekly updates.

The post How Much Are You Paying to Invest Your Money? appeared first on MoneyAhoy.

For more saving money, making money, and investment ideas go to www.MoneyAhoy.com

Benefits of Forex Trading over Stock Trading

The foreign exchange, or Forex, market is the largest and most widely traded market in the world. Because of this, there are many benefits of forex trading over stock trading.  It offers 24 hour trading throughout the working week.  While there are dozens of currency pairs that can be traded, most of the market is concentrated on the four major pairs. This means that the trader doesn’t have to meticulously study thousands of companies and read hundreds of press releases every day.  A forex trader can open and close trades easily, while benefiting from tight spreads and minimal or no commission.  Try going to your stock broker and asking for no commission trades!

Benefits of Forex Trading over Stock Trading – Top 3 Benefits

1. State-of-the-art trading platforms – There are many benefits to Forex trading through a trading platform like OANDA.  Because forex is global, the software to conduct trades is as robust as it comes.  This software of platform offers state-of-the art charts, graphs, and exceptional execution.
2. Volume, volume, volume – The volume of trades conducted every day is arguably the biggest benefit of Forex trading. It is this volume that gives the market the level of liquidity that traders benefit from. Whatever currency pair you are looking to trade, and however large your proposed trade, you will be able to open or close that trade. When trading stocks, this isn’t always the case.  Even if you are looking to buy or sell some of the most popular stocks, you may have to wait and potentially lose out on profit or endure further losses before your transaction can go through.
3. Market size – The size of the market also means that any single trade is unlikely to yield positive or negative effect on the overall market conditions. Fund managers, who invest billions of pounds in stocks, can drive prices upwards and downwards according to whether they buy or sell in a specific company. The sheer size of the Forex market means that no single trade can have this effect.  For normal folks like you and me, this can be less of a concern as we aren’t risking millions at any one time

Benefits of Forex Trading over Stock Trading – Around the Clock Trading

There are other great benefits of Forex trading over stock trading.  As well as being liquid, Forex naturally means trading in a number of currencies which, in turn, means that trades occur at different times of the day. The trader can manage their trading schedule themselves, and it is even possible to open and close positions late at night or early in the morning before stock markets are even open.

Benefits of Forex Trading over Stock Trading – Final Thoughts

Specialization is possible in any market, but it is easier in a market that only has several dozen options and four main options, compared to a global stock market that has hundreds of thousands of options. This enables the trader to pay greater attention to the currencies and currency pairs that they trade, and this specialization can help to ensure greater results and larger profits.

Remember, forex trading is very high risk.  This means that to receive the benefits of forex trading over stock trading, you have to be willing to lose a lot of money for a chance at a big payout.  You need to have a very high risk tolerance and be trading with money that you can afford to lose.  If you are willing to take the risk, the payouts can be quite large if you bet correctly.  For those of us with a lower tolerance for risk, long term investing in market index funds (buy and hold) may be just what the doctor ordered.

The post Benefits of Forex Trading over Stock Trading appeared first on MoneyAhoy.

For more saving money, making money, and investment ideas go to www.MoneyAhoy.com

May 2015 Money Report

Check out my May 2015 Money Report!  We have been working on improving our personal finances through MoneyAhoy for more than two years now – let’s see if our money saving, money making, and investing is paying off!

To view any previous monthly money reports, check these monthly money reports.

Actions Plans for May 2015

Let’s start with a review of goals for the month of May to see how well I did at clearing the bar:

Key: Complete/Some Progress/No Progress

• Post at least 2 videos on MoneyAhoy Youtube Channel
  • Complete – I posted 4 videos total – all of these are in relation to the PC space-sim game Elite Dangerous 
• Continue investing $25,000 per month until cash from home sale is fully invested
  • Complete – this was an easy one – just a few button clicks
• Write 8 posts for MoneyAhoy
  • Complete – I had 8 posts total for May.  You can get links to all of them below.
• Research potential financial blogs to purchase (plan to scout out sites on Flippa.com)
  • Complete – I will call this one complete.  I could not really find exactly what I was looking for, so I made the decision to start another blog from scratch.  More on that below in the “Other Points of Interest” section.
• Post some Vera Bradley purses (I think 4) I bought from yard sales on eBay
  • No Progress – I am going to punt on this one and give the purses to my Mother-In-Law to sell in her thriftshop.  I’m going to work on higher return activities with my time like starting the new blog
• Post new video card (I got for free) from yard sale on eBay
  • Complete – I priced it pretty high, so I may need to lower it a bit so it will move in a timely manner.
• Post two old kids bikes (they’ve outgrown them) on Craigslist
  • Some Progress – I was able (I think) to negotiate with my wife that we will host a yard sale some time within the next couple of weeks.  This will be a good opportunity to get rid of a bunch of junk including the kids old bikes

I hit 5 out of 7 on my goals for the month.  That’s pretty good I think.  I set the bar pretty low for the month, and it feels good to hit a good completion percentage.

Now, let’s look at some numbers on how we did financially for the month of May:

Notes on Making Money for May 2015

Nothing real surprising from a money making standpoint in May 2015.  My wife worked a couple of extra hours for the month, so that helped with income a bit.

Dividend income is steadily increasing, and I love to watch that little graph continue to tick up month after month.  I continue to reinvest all dividends into my monthly stock purchases to put the power of compounding interest to full use.

Side-hustle income held its own for May and seems to be hovering around an average of $500 for the past nine months.  All-in-all a decent month from a total income standpoint.

Here are the side-hustle income highlights for May:

• Sponsored Posts – $300
• Monthly Dividends – $127
• Start You Own LLC Affiliate Links – $112
• Youtube – $29
• Ad in sidebar – $25
• Google Adsense – $13
• Stock Market Investing for Newbies book – $1
• TOTAL = $610

Total side income (dividends plus side-hustles) came in above $600 for the month.  You will see below in the “Other Points of Interest” section that I’m in the planning stages of starting another blog to help boost my monthly side income even higher and help even more people!

Notes on Money Saving for May 2015

We set a new low record for total monthly expenses in May 2015!  We are finally able to get our monthly expenses under $3,000 a month!  As you can see from the “Total Monthly Expenses” trend, this is less than half of what we used to spend each month a year or two ago before I got started with MoneyAhoy!   It’s been a long journey to get expenses this low, and it feels great to hit this major milestone!  Next stop is $2,500 a month

After spending a ton of money last month for our 2015 vacation to Disney World and purchasing new patio furniture after putting it off for 10 years, our “other non-routine expenses” were also the lowest on record for May 2015!  We really only spent a bit of money on Mother’s Day presents for the month…

One challenge going forward for June and July is that our childcare/summer-camp costs are going to average around ~$900 a month now that the kids are out of school  You have to spend money to make money I guess…

Overall, we had a savings rate of just 30% for the month.  Why so low?  The credit card bills came due for our Disney World trip and the new patio furniture we bought.  We should bounce back to the ~50+% range going forward now that we have taken care of those major expenses.

Notes on Investing for May 2015

For the month of May, I purchased:

• 500 shares of VEA at a price of $40.56 per share.  VEA is the Vanguard Developed Markets ETF that pays a ~2.8% annual dividend.
• 120 shares of VBK at a price of $134.70 per share.  VBK is the Vanguard Small-Cap Growth ETF that pays a ~1% annual dividend.

We are almost finished converting our cash from the sale of our Virginia home into stocks.  We were around 16% cash a month ago and now we’re down to less than 9%.  My target is to hit < 5% cash so that we are invested for the long term.

If you are interested in stock market investing but don’t know where to get started, check out my excellent book: Stock Market Investing for Newbies.  It will get you up to speed with stock market investing very quickly!

Actions Plans for June 2015

Here are my goals for the upcoming month of June:

• Continue investing ~$25,000 per month until cash from home sale is fully invested.
• Write 8 posts for MoneyAhoy.
• Finalize naming decision and register new money/health blog domain name.
• Read the book: The New Meaning of Rich: Four Principles of Wealth That Will Change Your Life.
• Read the book: The Connection Algorithm: Take Risks, Defy the Status Quo, and Live Your Passions.

Other Points of Interest

I am in the stages of planning/brainstorming the concept for a new WordPress blog.  This blog will focus on money and health.  It will be similar to MoneyAhoy from a money and personal finance standpoint, but it will also include more tips around healthy eating, living, and exercising.  I plan to use the blog to help motivate me to get in better shape and learn more about fitness and health.

I was in the process of looking to purchase another blog, but I could not really find anything that fit well with my interests that was available for sale.  So, I decided to just fire up my own   It’s going to be A LOT of extra work to start a new blog from scratch and get it to the point where MoneyAhoy is currently (over 200 posts!), but I am committed to making it happen!

I haven’t finalized on a name yet, but I will be sure to share it here once I have everything registered and the new blog up and running!

If you missed any of the below posts for May 2015, be sure to check them out:

1. Steak ‘N Shake Coupons – Save Yourself a Bundle!
2. 5 Best Credit Card Hacks You Need to Know (guest post)
3. April 2015 Money Report
4. Your Complete Washer And Dryer Buying And Maintenance Guide (guest post)
5. Now for the Low, Low Price of…
6. Why Should I Invest In The Stock Market? (sponsored post)
7. Teaching Kids About Money and Investing
8. Looking to Startup a Business – Try Something Different! (sponsored post)

What are your money saving, money making, and investing plans for June?

The post May 2015 Money Report appeared first on MoneyAhoy.

For more saving money, making money, and investment ideas go to www.MoneyAhoy.com

April 2015 Money Report

It is time for the April 2015 Money Report!  I have been working on improving my personal finances through MoneyAhoy for two years now – let’s see if my money saving, money making, and investing is paying off!

To view any previous monthly money reports, check these monthly money reports.

Actions Plans for April 2015

Let’s start with a review of my goals for the month of April to see how I fared:

Key: Complete/Some Progress/No Progress

• Spring cleaning – shed websites from my portfolio that are not generating money
  • Complete!  I got rid of FrugalCalc.com and OfficeForNewbies.com as they were not generating any money and I did not have any energy left to pump into them.
• Read the book: Managing for Success: Practical Advice for Managers
  • Complete!  This was my second time through this book and I love it.  I really has helped me with my day-to-day job as a technical manager.
• Post at least 2 videos on MoneyAhoy Youtube Channel
  • Failed with no progress!  I have not made any videos for MoneyAhoy in several months.  I really am being lazy in this category
• Continue investing $25,000 per month until cash from home sale is fully invested
  • Complete!  I hit the target again for this month.  See the investing section below for details.
• Post 2015 goals for myself (saving, making, and investing, and general)
  • Complete!  You can read about my goals for the upcoming year in my two-year birthday post here.
• Write 8 posts for MoneyAhoy
  • Complete!  I had nine posts total for the month.  You can read more about them at the end of this post.
• Research potential financial blogs to purchase (plan to scout out sites on Flippa.com)
  • Complete!  I spent a good bit of time on flippa looking for a personal fianance blog so I will mark this one as complete.  I did not find one to actually purchase, so the hunt continues
• Setup and install News Pro Theme from StudioPress for MoneyAhoy.com
  • Complete!  I got the News Pro theme up and running and customized around the middle of the month.  I love the new layout, and it’s mobile friendly!  Just in time for Google’s mobile search update (otherwise known as mobilegeddon)- how lucky is that?!?!?

So I hit 7 out of 8 on my goals for the month.  That’s a home run as far as I am concerned  I’m happy with that.  I have struggled a bit over the past couple of months on hitting my goals, so it is nice to get some stuff completed.  I’m glad I still have it in me to turn out a good month here and there

Now, let’s look at some numbers on how I did financially for the month of April:

Notes on Making Money for April 2015

Nothing real surprising from a money making standpoint in April.  We did receive an unexpected ~$1,600 tax return – so that was a huge plus!  I counted this in income for the month.

Dividend income was also unexpectedly good for April – so that was a special treat.  Side-hustle income was down a bit as I only had one sponsored post for the month, but some of my affiliate stuff is doing nicely.  All-in-all a really nice month from an income standpoint!

Here are the side-hustle income highlights for April:

• Monthly Dividends – $421
• LegalZoom Affiliate Links – $166
• Sponsored Posts – $150
• Ad in sidebar – $25
• Youtube – $21
• Google Adsense – $14
• Stock Market Investing for Newbies book – $2
• TOTAL = $812

Total side income (dividends plus side-hustles) came in above $800 for the month.  Hard to complain about that!

Notes on Money Saving for April 2015

Let’s start with the good news first – our total monthly routine expenses are cratering!  We nearly broke under $2,000 a month!  Since I have started MoneyAhoy, we have been able to cut our average monthly expenses by more than half!

Now for the not so good news – our non-routine or “other” expenses were the highest on record  I had to actually adjust the scale on the graph to make it fit.  We had two major expenses that really put the nail in the coffin for the month of April.  Here are some of the top non-routine expenses for the month:

• $1,817 – We are going to Disney World for our family vacation this year.  This is the cost of tickets and 9 days at the Fort Wilderness campground.  This could easily have been a lot worse if we stayed in a normal hotel, but we are planning to tent camp on the same site as our in-laws with their motor-home.  I think that’s an overall win, but the price tag still gave me sticker shock!
• $1,744 – My wife decided April 2015 was the month that we needed patio furniture.  I will probably do a whole post on this later.  Her plan was to bring in our leather couch from out on the covered screen porch (after cleaning up the mold that was starting to grow on it) and then get a nice patio set that wouldn’t mold.  I have been able to hold her back from buying a patio set for the past 12 years, and I finally couldn’t hold her back anymore. She had the look in her eyes that this had become non-negotiable at this point…. oh well.
• $304 – Vet bill to neuter our dog.  The bills keep piling up here!  I think we’ve spent nearly $1,000 total on our new puppy.  Yikes!  Hopefully this is last major vet bill for a long time!
• $182 – We took a short four-day beach vacation in St. Augistine, Florida with our tent.

Overall, we had a savings rate of 75% for the month – gnarly!  I hope that we can take it easy in May with the non-routine expenses and give our wallets a rest!  Once school lets out for our kids, the normal summer daycare/camp costs will kick in.  That’s something I am not really looking forward to :-(.

Notes on Investing for April 2015

For the month of April, I purchased 325 shares of VNQ at a price of $80.06 per share.  VNQ is the Vanguard Real Estate Investment Trust ETF that pays a ~3.7% annual dividend.  The total I invested for the month was $26,020.

We are continuing to covert our cash from our Virginia home sale into stocks.  Our cash % was closer to 30% just a couple of months ago, and now I’ve worked it down to under 16%.  A couple more months and we will hit our target or < 5% cash.  I am guessing we have about two months let on that.

If you are interested in stock market investing but don’t know where to get started, check out my excellent book: Stock Market Investing for Newbies.  It will get you up to speed with stock market investing very quickly!

Actions Plans for May 2015

Here are my goals for the new month of May:

• Post at least 2 videos on MoneyAhoy Youtube Channel
• Continue investing $25,000 per month until cash from home sale is fully invested
• Write 8 posts for MoneyAhoy
• Research potential financial blogs to purchase (plan to scout out sites on Flippa.com)
• Post some Vera Bradley purses (I think 4) I bought from yard sales on eBay
• Post new video card (I got for free) from yard sale on eBay
• Post two old kids bikes (they’ve outgrown them) on Craigslist

Other Points of Interest

Below are the articles I posted for April 2015:

1. How to Get Rich Quick and Easy!
2. My Stock Market Investing Book is Free for the Next 5 Days!
3. How to Send Free SMS Text Through Email
4. February & March 2015 Money Report
5. How to Become an Investor (sponsored post)
6. How to Increase the Value of Your Home (guest post)
7. 7 Tips to Plan a Beach Vacation on a Budget (guest post)
8. Is It Better to Get a Tax Refund or Owe the IRS?
9. MoneyAhoy.com is Two Years Old!

What are your money saving, money making, and investing plans for May?

The post April 2015 Money Report appeared first on MoneyAhoy.

For more saving money, making money, and investment ideas go to www.MoneyAhoy.com

MoneyAhoy.com is Two Years Old!

MoneyAhoy.com just turned two years old this past weekend!  I can hardly believe I have been at it for two solid years!  My goal for this blog was twofold: to help build the discipline I needed to take my personal finance to the next level and to help others save, make, and invest their money better!  This blog has been awesome for me, and I hope that it has helped you in some way.  Let’s look over the highlights of year two in MoneyAhoy’s history.  If you are interested in year one, check out: year one in review.

Top-5 Posts

Here’s a listing of the top most popular posts for the past year in terms of traffic:

1. How to Make Your Own Microphone Stand for Cheap – I made this post and video as I tried to save money by making my own microphone stand.  Lots of folks from YouTube have thanked me for it
2. Make Money on Craigslist with Flipping – This was a guest post from Thomas over at IneedMoneyASAP.com.  It’s a great post and I suggest you check it out.
3. How I Almost Bought an $80,000 Car – I shared a story of how I was inches away from buying an $80,000 BMW M3.  I’m glad MoneyAhoy helped bring me to my senses!
4. Yard Sale Arbitrage – Wii Games – This post covers simple ways to buy Wii games from yard sales and flip them for a profit on eBay.
5.  How My Wife and I Made $370,000 in One Day! – It’s true – this post details how my wife and I made $370,000 in one day?  Sound too good to be true?  You may be closer than you think to being able to achieve similar results!

Money Results

This blog continued to allow me to focus on saving more, making additional money, and getting disciplined about investing.  Let’s look at each category to see what happened.

• Saving – Last year I stated that this blog was able to help me save ~$4,500.  For year two, the savings are even better!  When we moved to Georgia, we downsized our home considerably – we cut our square footage by half!  That simply would not have happened without MoneyAhoy and the discipline this blog helps me to achieve when it comes to money.  Our total savings for year two (compared to year one) is over $8,400!  That’s a total savings over the past two years of >$17,400!
• Making – For year two of MoneyAhoy, I made a total of ~$6,900 in side hustle income!  This includes the blog, eBay/Craigslist flipping and book sales.  For the two years combined, MoneyAhoy has made nearly $8,700!  That’s pretty nice!
• Investing – The biggest area where MoneyAhoy has helped me is with my investing.  I really got burned in 2008 and 2009 by trying to trade the market instead of invest :-(.  This caused me to be really gun-shy when it came to investing in the stock market.  For year two of MoneyAhoy, this blog helped me to maintain the discipline to invest > $118,000 in our private investment account (this is above and beyond our 401K investments).  With all that investment comes dividends – for year two I generated ~$2,600!  That’s really got me excited!  Rolling everything up, for the two years total of MoneyAhoy, I’ve invested $153,000 and received over $3,300 in dividends!

So, what’s the big picture?  All said, over the past two years combined MoneyAhoy has directly led to our net-worth increase of approximately $33,000.  This includes savings, money made, dividends, and capital appreciation of investments from my private investing account.  That’s a pretty good deal for just running a small blog  Along the way I also became an author and published my own investing book: Stock Market Investing for Newbies.  Crazy, right?

What’s Next for The Third Year?

I’ve got a number of things that I’m currently working on in the money saving, making, and investing arenas.  Looking back on my goals for year two, I hit all of them including downsizing our house!  Here are a couple of the major things I have planned for the next year:

• Continue to look for ways to save more, make more side hustle income, invest more money, and get closer to financial independence!
• Continue to crank out YouTube videos on saving, making, and investing money
• Create/purchase a second personal finance blog and get that up-and-running and generating some income
• Hit the goal of having a month where dividends are greater than our monthly house payment (currently ~$730/month)

I trust that you will stick with me this next year to see what type of progress I am able to make with the above items.  I hope this blog has been as helpful to you as it has to me, and I look forward to many more great blogging year ahead.  If you have suggestions on how I can make the blog even better, please comment here or send me an email!!

The post MoneyAhoy.com is Two Years Old! appeared first on MoneyAhoy.

For more saving money, making money, and investment ideas go to www.MoneyAhoy.com

5 Key Investment Styles From Top Investors

Studying how to invest is a valuable way to become an investor. However, to become a truly successful investor, you must spend time learning from successful businessmen and women. While studying is valuable, learning by example is invaluable.  This article on 5 key investment styles from top investors will give you investing ideas that you can put to work today!

While the best teacher is someone you can talk to in person, it’s still possible to get vicarious mentoring by following the blogs, books, and articles of successful investors. After Sam Walton’s death, Amazon’s founder Jeff Bezos still managed to follow his strategies closely by reading everything he could get his hands on about how Walton built WalMart into a $160 billion retail giant. It’s no coincidence that part of Amazon’s huge success is its focus on customer retention through low pricing.

Let’s take a closer look at successful people around the world who offer you an opportunity for learning how to make proper and successful investments.

Buy a Wonderful Company at a Fair Price

No article on international investment advice is complete without a word from the Oracle of Omaha. Warren Buffett is considered by many as one of the most successful investors to have ever walked the Earth. Apart from the fact that he is among the richest people in the world, his advice is sought by world leaders when it comes to developing economic policies.

“It’s far better to buy a wonderful company at a fair price,” said Warren Buffett, “than a fair company at a wonderful price.”

According to this key investment style advice, you should not expect to buy a quality company at a bargain price because you get what you pay for. If the price is low, chances are the company will not produce results. Conversely, if the price is high, it’s because the company has established a reputation for delivering on its promises to its shareholders.

Be a Long-Term Investor

Prince Alwaleed Bin Talal, a Saudi Arabian investor and the founder of Kingdom Holding Company, proved that he was a long-term investor when his stake in Citigroup in the US and his real estate in India was hit hard by the Great Recession.

“We’re getting hurt,” Prince Alwaleed Bin Talal said, “but I’m a long-term investor.”

Although it looked like a mistake at the time to hold on to his investments from 2007 to 2009, things slowly turned around and his long-term strategy helped him recover from what would have been considerable losses. His key investment style is one that the best investors in history have often used. The thinking behind this idea is that if you hold on long enough, the free market will eventually resolve its troubles and return to financial health. However, this does not mean that he never trades stock on a short or medium basis, but that he invests the bulk of his portfolio for the longer term.

Stocks That Serve the Society

Shailesh Dash, the founder and chief executive officer of Al Masah Capital Limited (AMCL), believes that an investor should serve the society in which the business operates. AMCL develops education and health because he believes that by focusing on education, it helps the younger population and by focusing on health, it helps the older population. Consequently, this type of structured help affects the whole gamut of a society.

In an interview with Abdul Basit in Khaleej Times, he said it’s better if you not only make money out of business, but also serve the society at the same time. He said that this is the target of his company for the Gulf region and in the UAE.  This is a key investment style that has served Mr. Dash very well.

Look Beyond Present Market Woes

Carlos Slim from Mexico has hundreds of companies with a quarter of a million employees. He was ranked the richest man in the world from 2010 to 2013. Today, his fortune of 74.6 billion USD (2015), puts him between Bill Gates at $81 billion and Warren Buffett at 73.1 billion. His financial empire is also worth twice as much as Facebook’s founder Mark Zuckerberg, whose fortunes are estimated to be around $34.3 billion.

“I am convinced that all this poverty in Mexico and in Latin America, like it’s happening in China is the opportunity to grow,” said Carlos Slim. “It’s an opportunity for investment.”

This type of key investment style which focuses on forward thinking represents a perspective expressed by the best investors. What’s happening now is not necessarily what will happen in the future. What great investors do is invest in the momentum of a company or an entire economy for a big move while no one else is paying attention.

Key Investment Styles – The Bottom Line – Why Not the Best of All Worlds?

Each of these investors has a completely different approach, but there is no reason why you can’t adopt all these strategies because they don’t actually conflict with each other. Like Warren Buffett, you can find the sweet spot when it comes to price. Like Prince Alwaleed Bin Talal, you can invest the bulk of your portfolio for the long run. Like Shailesh Dash, you can add value to society as you build your business. And, like Carlos Slim, you can find the hidden opportunity that will lead to a colossal gain.

The post 5 Key Investment Styles From Top Investors appeared first on MoneyAhoy.

For more saving money, making money, and investment ideas go to www.MoneyAhoy.com