It seems like an amazing event and I certainly have intentions on visiting Ecuador at some point or another as I understand it’s quite the frugaltastic place to live, especially Cuenca. Not sure I can deal with Seattle-like weather, though.
Anyway, I initially accepted the offer as I was simply overcome with joy and excitement. The thought of spreading the message to a new audience seemed like a fantastic opportunity and challenge. However, the more I investigated the potential readership that might be visiting, the more I felt like I was coming from a totally different perspective.
I’ve spent some time poking around Jim’s and Pete’s posts (and Pete’s forum) through the years and I’ve sometimes found a disappointing dogma regarding investing (if you don’t invest in index funds, you’re a fool) and frugality (you should always try to make more money and if you don’t earn $100k/year, you’re a fool). I’m not trying to paint anything with a broad brush and we all have varied attitudes toward saving and investing (as it should be), but I also question whether or not someone who has the kind of money (and time) to spend on a Chautauqua in Ecuador is really coming from the same place as me? And would I be able to provide value if I’m uncomfortable with coming from such a different perspective?
After considerable thought, it occurred to me that I’m really not interested in selling anything at all (my strategy or any other). I’ve shied away from arguments more and more in regards to frugality, financial independence, investing, and saving, as it’s almost impossible to say that one strategy is somehow perfect for everyone. Personal finance is personal for reason. So if someone disagrees with what I’m doing, that’s fantastic. I encourage everyone to find what’s best for them. But I also have no interest in flying halfway around the world to engage an audience that is perhaps uninterested in what I’m talking about and what I’m doing. I’m only interested in inspiring through action and showing what the journey to financial independence looks like on a modest income, high savings rate, and investing in high-quality dividend growth stocks. If someone thinks what I’m doing is unsound, well…it costs you nothing to come and go.
But it all worked out in the end as I’ll be able to continue focusing on doing what I normally do best that week I’d otherwise be in Ecuador – writing my heart out and living a really blessed and wonderful life. And I think that’s a pretty good alternative.
So I guess I wanted to share some behind-the-scenes action with you readers. And I continue to appreciate all of your support. Perhaps I’ll branch out at some point, but I’d prefer to speak at an event that was perhaps more catered to what I’m doing and what I’m talking about so as to not feel like a fish out of water. However, I’d also feel quite okay with this blog (and my freelance writing) being the totality of my creative output. I’m blessed to even be here in the first place, which means I don’t feel the need to push the envelope even more. Someone once asked me if I’d be okay not growing the blog (and my income) any more and just cruising to financial independence with the status quo, and my answer to that question is yes. I’m really fortunate to have a great balance going on right now.
As usual, I’m including a few articles I wrote or read this week and enjoyed, and I hope you readers enjoy them as well.
Have a great weekend!
Buffett’s Latest Trades: Buys 15 Stocks, Sells 5 Stocks
I was up until 4 a.m. this past Wednesday putting this piece together. I not only listed every transaction from Berkshire Hathaway’s common stock portfolio from the fourth quarter of 2014, but I also discussed a little about what each transaction possibly means and where the portfolio is going. As I wrote about last quarter, there is a continued trend away from energy and toward media, which is really interesting. Also notable was the fact that he didn’t actually sell out of Deere & Company (DE), but was actually buying the stock all along. He received special confidentiality treatment from the SEC, which made it look like he sold out of DE in Q3. I remember a few readers asking me if I was still going to hold DE if Buffett was selling. I answered the same as what I’m recommending now: As always, it’s important to think independently and come to your own conclusions. Selling DE just because Buffett was (or it looked like he was) would have been a mistake if you believe in the company’s long-term prospects.
Bill Gates’ Latest Trades: Buys 3 Stocks, Sells 4 Stocks
This article didn’t take me as long, but was, in my view, just as insightful and interesting as Michael Larson is a well-regarded investor. It’s particularly that Larson and Gates also closed out their Exxon Mobil Corporation (XOM) position like Buffett.
“What do you do?” Are you a plumber, or a hiker?
Steve wrote an article that strongly reminds me of a piece I wrote a couple of years ago. And it’s basically questioning who you are. My answer to that question – who are you? – was never my job title. Because I’m much more than that. While this needn’t be true for everyone, I’d be willing to bet that most people can (and probably do) offer much more to society than just what they do during their workday. As such, your answer should reflect that.
January 2015 Dividend Income Update – Milestone moment
Mark’s on pace to cross $10,000 in annual dividend income later this year. Excellent work. Think of what you could do with an extra $10,000 every year that you not only don’t have to work for, but also will likely increase faster than inflation. Now we’re talking, right?
Female investors often beat men
It appears that not only do women, on average, generate greater total returns than men, but also do so with less risk. I guess I should have Claudia run the portfolio? It’s too bad she’s not interested. I don’t doubt the results here, but I do sometimes wonder where all the stats are coming from with these studies. For instance:
Females typically save 8.3% of their income, while men only save 7.9%, Fidelity found after looking at over 12 million retirement accounts and adjusting for certain pay disparities between men and women.
I wonder how Fidelity would have access to 12 million individuals’ exact income and savings records? Furthermore, that’s well above the savings rate information that I’ve come across, and we can see that, even within the personal finance community, everyone budgets a little differently. So I always take these kinds of studies and stats with a grain of salt.
The personality types that make the most and least amount of money
Another study, but it is unique in that I don’t know if I’ve come across one quite like this before. I’m personally an INTJ and a pragmatic. Looks like I’m underperforming myself, but I have no doubt I’d be right there where I should be if I were still miserable and working 50+ hours per week in the auto industry. But money buys happiness, right?
Is Ethical Dividend Growth Investing Possible?
I plan to address this topic myself at some point, though I doubt I’d be able to offer much of a different viewpoint or additional value here. DGI did a pretty good job. There’s certainly a spectrum there, as with anything in life. And ethics are a big gray area. I think on one side of the spectrum you have “Companies that are out to do nothing but evil” on one side of the spectrum. On the other, you have “Companies that do nothing but wonderful things with no negative aspects whatsoever”. Now, it’s obvious that no companies exist completely on either side of the spectrum. Where you fall in that spectrum, in terms of what you personally judge to be ethical and not ethical, is really a personal call. But maybe I’ll expound on that a bit more at some point in the near future.
Am I Crazy for Not Wanting a House?
I don’t think so. Neither does Robert Shiller, apparently. I’m a lifelong renter, and a happy one at that. Like the dogma I was mentioning above, those that believe you’re better off buying rather than renting 100% of the time regardless of your personal circumstances are just plain incorrect. Sometimes buying is better. Sometimes renting is better. Again, a personal call and also depends on your local market. I personally enjoy renting and via calculations have figured out I’m better off financially. However, even if owning were cheaper (which it’s not), I’d still rent. I enjoy the carefree lifestyle and it’s worth a premium if one were to be attached. But since residential real estate returns about 0% in real terms and stocks are somewhere around 7% over the long haul, I’ll rent the former and own the latter.
Trades – Emerson Electric (EMR) and Johnson and Johnson (JNJ) Purchases
Write Your Own Reality recently picked up shares in a couple of the greatest companies in the world. Glad to be a fellow shareholder in both of them!
I Added Shares To This Successful Spin-Off Company
Another stock purchase and another great company. I’m a shareholder in this company as well, but Ryan rightly pointed out the kind of shareholder wealth that Baxter International Inc. (BAX) has generated via spin-offs. And guess what’s coming up? Another spin-off.
The Early Retirement / Financial Freedom Spreadsheet!
J$ put together a cool spreadsheet that can give you a pretty good idea as to what age you’ll be financially independent. I personally prefer a calculator and a piece of paper, but spreadsheets are nice too. I downloaded it and replaced J’s information with my own and it looks like I’m on pace for FI by 38/39 years old, which is right about where I figured I was. Of course, that’s factoring in that I’ll continue to remain just as aggressive with saving and investing, but online income can oscillate a bit. Nonetheless, there’s a margin of safety there with being a year or two early, so I’m feeling extremely confident here.
Monthly Expenses (January 2015, Taipei, Taiwan)
I always enjoy seeing what other people spend, not to benchmark myself but to be inspired to spend less and/or see what’s really possible in terms of a budget. And Jeremy and Winnie are showing how much it costs to travel the world in relative luxury. Good stuff!
One More Stock To Build A Retirement Portfolio Upon At Any Age
Regarded Solutions has put together a series of articles that focus on core stocks to build a portfolio around so as to have a reliable source of growing passive income in retirement. This latest article focuses on Realty Income Corp. (O), which is a company I wish I had a bigger equity stake in.
Kahneman: Clients Driven by Losses, Not Gains
This was an interesting piece on investors’ psychology. I agree that people are more fearful of losses than they are excited about gains, but I’m not necessarily sure that’s a bad thing. A 10% loss takes an 11.11% gain just to break even, so I like to rely on Buffett’s two rules: #1 – Never lose money; #2 – Never forget rule #1. However, I disagree with the thoughts on Buffett near the end, as Buffett was a stock picker for years, especially early on when he achieved some of his biggest gains in percentage terms.
Somewhere over the rainbow
When I grow up I want to own my own island like Richard Branson. For now (and probably forever), I’ll have to enjoy the public beaches here in Sarasota, which are a lot cheaper and pretty enjoyable.
Full Disclosure: Long DE, XOM, JNJ, EMR, BAX, and O.
Thanks for reading.
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