Why I Cancelled My Gym Membership

I've been working out in some form or fashion since I was 11 years old. I was adopted by my aunt and uncle after my parents were unable to care for me and my three sisters any longer. Moving to a small town in the middle of nowhere proved to be quite difficult as I had lived all my life in a rough part of Detroit, Michigan up until that point. I was picked on constantly and started to seek out an avenue for some of that anger, and found working out a great stress reliever as well as a way to build my physical stature to the point where I wouldn't get picked on anymore. This worked out quite well.

Fast forward to 2011. I'm turning 30 next year and I've always enjoyed working out. I'm still in pretty good shape and I'm actually a former competitive bodybuilder. But, it seems my new sense of frugality and finance are coming to odds with my gym membership. Notice I said gym membership, and not workout routine. It's still possible to work out without a gym membership, or a gym at all for that matter. As frugal as I've become it wasn't until recently that I realized this for myself. In a quest for financial independence and a sustainable long-term plan I've come to the conclusion that having as little recurring bills/responsibilities as possible is desirable. A gym membership is an easy recurring expense to cut.

What Are You Buying?

As we look forward to December, and the holiday season, I'm hoping Santa delivers me some great deals in the stock market. The euro zone crisis has been sending people with short-term outlooks running for the hills and that leaves a lot of deals on the table for a long-term investor like myself. If you're looking for a little risk and excitement, stocks based in Europe are trading at very attractive valuations. I know my foreign holdings in Total S.A. (TOT) (ADR) and Telefonica S.A. (TEF) (ADR) have been hit pretty hard and are pretty dirt cheap. If they weren't already large parts of my portfolio I'd be a buyer at today's prices.

Santa is definitely keeping his elves busy and I see some pretty solid deals in the market. I'll likely have enough capital to make two purchases in December. I receive my commission check from my employer on December 8, so I'll be ready to play on that date or after. Keep in mind, the market may continue to head lower with the weakness and negative headlines coming out of Europe, but as a long-term investor I try to make monthly purchases and average my way into positions. My crystal ball is always cloudy.

The list I'm going to present includes a few stocks that I'm currently interested in adding to the Freedom Fund. This list may change slightly depending on how the market changes over the next couple weeks. As of now, I find all these equities at attractive prices that presents a long-term dividend growth investor solid opportunities to build wealth.

Here's my short watch list:

My Second Job Isn't A Job At All

This article originally appeared on The Div-Net on September 17, 2011.

It's a tough economy right now. The unemployment rate is currently at ~9.1%. I feel lucky to have a full-time job and I put in 50+ hours a week, working as hard as I possibly can to create value for my employer. But, as someone who wants to become financially independent at a young age, diversifying my income has become paramount. However with jobs scarce and my time limited, I don't see a second job in my immediate future. That's why I have a second source of income from my main job that's completely passive. This source of income will hopefully one day outpace the earnings I receive from my main job and exceed my expenses.

Considering The Downside To Early Retirement

In all facets of my life, I always try to calculate my potential upside and downside to any decision I make. This is never more of a truism than when I consider investing. If you invest $2,000 in a company, the worst thing that can happen is that you lose that $2,000 investment if the company goes bankrupt and you're last in line after assets are sold. That's your downside: $2,000. What's the upside? Well, the upside is that the company can become phenomenally successful and you make a ton of money. In theory, your upside is infinite. That's why I love investing in the stock market.

Let's translate this a little to my ultimate personal finance goal: becoming financially independent and retiring from full-time work at a young age; preferably by 40 years old.

My Food Budget Demystified

In my recent income/expense report where I showed the world my exact budget for October, I got some interesting comments about my food budget. It seems that some readers are either confused about how I keep such a low budget or are under the impression (due to my own fault) that all I eat are ramen noodles. I'm writing this article today for two reasons. First, I want to show readers exactly what I eat on a daily basis which may or may not actually change anyone's mind on how healthy my diet is. Second, for anyone who's so inclined to try and dramatically cut their food expenses this post may serve as motivation or may provide an example of how it's possible.

Recent Buy

I've been a bit greedy and aggressive lately. I don't know what's gotten into me. I dipped into my cash reserves this month to go a little heavy on the equity purchases. This is actually quite unusual for me, as I usually only do that when the markets experience precipitous drops. But, when I see an opportunity I strike fast. I seen a few things I liked and I decided to roll the dice and go a little strong this month. We'll see where that decision takes me in the future. What can I say? I'm addicted to dividends!

As part of my Recent Buy series, I try to let my readers know of any equities I purchase soon after the transaction is completed. This is just one way I try to document my progress toward early retirement and financial independence.

I alluded to a purchase in my last Weekend Reading article, taking advantage of a large drop in the market on Wednesday,  November 9. I was holding a little capital in my brokerage account, waiting for a drop. The market opened significantly lower on last Wednesday and I made a move.

Income/Expenses For October 2011

Each month I will post my income/expenses for the previous month. I track every dollar in and out, so what you see is exactly what I earned and spent (rounded to the nearest dollar).

Weekend Reading - November 12, 2011

Another week and another roller coaster ride in the markets. The euro zone debt woes continue to monger fear among investors, there are government shakeups going on in Greece and Italy and it seems good news and bad news see more flip flops than my local beach.

Can you spot the buying opportunity?

The chart above is the Dow Jones Industrial Average over the last five days, starting on Monday, November 7. That gaping hole in the middle of the chart has nothing to do with long-term fundamentals, but rather short-term noise. That big hole is called "opportunity". As they say...buy on the dips. And buy I did. I'll discuss what I added to the Freedom Fund this week!

Here are some excellent articles from fellow dividend growth investors, frugalists and personal finance bloggers from the past week.

Dividend Income Update - October 2011

This article originally appeared on The Div-Net on November 3, 2011

Dividends. There are few words I like writing or speaking more. The very word conjures up images in my mind of financial freedom, still far off in the distance. Every month of dividends collected brings me one step closer to that far off destination.

The dividends I received for the month of October were less than what I received in September. It's not a total disappointment because I'm still building my Freedom Fund, and due to such the monthly dividend totals are a bit volatile right now. I suspect that within a year or two the monthly dividend totals will be a bit more steady and rising. One aspect of my portfolio that also causes excess volatility in monthly dividend totals is the fact that I have holdings with Telefonica S.A. (TEF) that pays semi-annually and I also hold Total S.A. (TOT) that just switched to quarterly dividend distributions from a formerly semi-annual dividend schedule. My portfolio has also experienced a lot of growth this year, as I started this year with just over $20k in equities value. Without further ado:

Recent Buy

 

Well, I've decided to make a move in this volatile market. I believe in dollar cost averaging, and my take on that strategy is to purchase high quality equities that are fairly valued or undervalued every single month, no matter what the market is doing. I do try, however, to purchase less when the market is up and more when the market is down, but ultimately I believe in accumulating assets that pay me to own them when I have the capital available to do so. If I wait for the "perfect" time to buy stocks, I'll be a lonely, old man.

As part of my Recent Buy series, I try to let my readers know of any equities I purchase soon after the transaction is completed. This is just one way I try to document my progress toward early retirement and financial independence.

Using Reward Programs To Your Advantage

I recently discussed my use of credit card reward programs to get a little cash back on the purchases I make everyday. I obviously don't spend a lot of money, as you can tell from my income/expense reports, but on the little bit of money I do spend I certainly won't pass up the chance at receiving a little extra cash in my pocket.

I also participate in a reward program at my work. Every month I get a chance to rack up reward points based on certain performance parameters that I meet or exceed. I have racked up over 60,000 reward points since the beginning of the year and I have saved most of them for the holiday season. For reference, 10,000 points equals approximately $50.00 worth of goods. I purposely saved up most of my points so that I could give gifts from this reward program instead of purchasing items.

Weekend Reading - November 5, 2011

It's our first weekend in November and the holiday season is just around the corner. Are you ready for it? Thanksgiving is just a few weeks away and Christmas will be right behind it. I'll be flying up to Michigan to see family in December for Christmas. I'm looking forward to it! The cost of the flight is going to throw my budget off a bit, but that's alright. I'm very excited to see my family. Life is more than finances.

I hope all my readers out there are having a fantastic weekend. I had to work this morning, so my weekend started off a bit intense. Have fun this weekend! Life is short.

Here are some excellent articles from fellow dividend growth investors, frugalists and personal finance bloggers from the past week.

Low Yield, High Growth

This article originally appeared on The Div-Net on October 27, 2011.

I'm a firm believer in the dividend growth investing strategy. One of the premises behind this strategy is to invest in stocks that pay a dividend yield that offers a solid entry point with growth of the dividend that outpaces inflation. Generally, I'll accept dividend stocks that offer an entry yield of at least 2.5% as part of my entry criteria, but I often look for at least 3% as a solid starting point. In addition, I also look for a history of growth of that dividend of at least 6% annually but prefer double digits when I can get it. 

However, I'm also a person who likes to learn and stay open minded. I think it's always a good idea to expand one's horizons and stay open minded to opportunities wherever they can be found. Ultimately, I'm looking to make money when I invest and if money can be made I'm interested. Today I'd like to look at a few interesting opportunities that fall outside of my general entry criteria, but still offer potential opportunities. I'm going to look at three stocks that offer low entry yield, but very high growth. That high growth could turn what starts as a small yield into a very large yield on cost over a short period of time.

Freedom Fund Update - November 2011

Well, the time has come to update the Freedom Fund once again as we start another month. The Freedom Fund is my portfolio, and I think it's aptly named. My portfolio is my way to freedom; freedom from working at a job I don't enjoy to purchase goods I don't need to impress neighbors I don't care about.

The S&P 500 is up 10.77% over the last 30 days, but today's precipitous drop of 2.47% put a damper on the recent rally the market has been experiencing. This also put a damper on the total value of my Freedom Fund. That's perfectly ok with me, and I actually hope the market continues to fall back a bit. I think things were getting a little heady when the Dow Jones Industrial Average eclipsed 12,000 points recently and I think the market is getting a little ahead of itself on the overall excitement and anticipation of a debt deal in the Eurozone.