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Tight-Wad Tuesday’s ~ What a surprise!

I was trying to think of some cheery way to start off a personal financial post for this Tight-Wad Tuesdays but my cold put up a wall of accessing warm-n-fuzzy land.

But THEN I got a little gift in the (e)mail from an new,blogger that made my day, Gull at The Magfiqueway. Check out the surprise: http://themagfiqueway.wordpress.com/2013/02/05/reader-appreciation-award-i-feel-blessed/ . She ‘smiles’ through her writing, is very likeable, open to everyone and a bit of a fashionista. OK, a BIG fashionista! Drop by and say Hello.

I’ve enjoyed this blogging world from meeting many new and interesting people. I’ve said this before. But it really tickles me when I can connect with someone from around the world; someone from a far-eign land, maybe different culture, different life yet we can still find things to make each other smile. Too cool! The world is a smaller place now and filled with great, interesting people that one ought to know, like you; and Ms. Gull! Thanks WordPress.

So did you guess what the $219,000 stood for? I was afraid it was too ambiguous but then outta nowhere Kelly (One Fit Momma), up in Canada, nabbed it. I mean she defined the answer word for word. It turns out she spent some time in the financial industry too, illustrating again that there is way more to a book then just the cover. Great job Kelly!

So, yes $291,000 is what you and your spouse will need just to eat in your retirement. 2 people x 3 meals a day x 20 years x 365 days / year x $5.00 / meal. Just to eat? What about other things in your retirement like utilities, medical, along with the things you’ve earned the right to do like travel and spoil those cute grand kids? How much will that take over time? And at tomorrow’s costs?

So does this make you think a little bit? Do you have a plan? Are you ready to make a plan?

The good news is that younger readers have lots of time to prepare.  If you are close to my age, you better have a plan in place.

How do you want to live your golden years?

Have you ever thought about this? On a budget or a lifestyle that you worked hard to earn? And people are living longer every year!

The good news is I am here to offer some suggestions to help you get started. It’s what I do, er, did. You can thank me later. There are several, easy, almost painless ways to build wealth for your style of living. It is up to you to commit to them.

But wait!

People say, I’m scared; I don’t know anything about investing, I’m afraid I’ll make a mistake; I don’t know where to start, I don’t have any money to get started. I’m not that smart.

If you know that $10 in sales is better than $7 you are equipped to do this. If you can divide $1.56 into $43.80 you have the technical know how to make a fortune (Dividend Yield). I think, if you are smart enough to write a coherent blog and disciplined enough to do it on a regular basis you will be fine. If you know how to do a little research online and have confidence in yourself you can do great things!

MS-Nest Egg

Simple plans to build for a comfy retirement nest egg:

  • 401k’s: simply this is free money. If you have one at work, enroll and put at least the % of your wages that your employer will match. FREE MONEY. Make a good salary or live below your means? Put another % or two in.  Over time this can be your best ally for a jet set retirement. But, a 401K (free money), by itself, is not all the answer. $219,000? Travel? Grand kids? You’ll need more!

Here and here are a couple of posts that discuss how your 401K can perform like the Dream Team. If you have funds in a 401K you want them to perform like LeBron, not Randy Moss. If you  have 15 minutes you can have yourself an All-Star team in your 401K

  • Dividend Reinvestment Plans (DRiPS): Simple, slow, painless, investing on auto pilot, where you don’t need a lot of $$ to get started and dividends build up over time and snowball into a great sums of money along with a comfy quarterly dividend in retirement.


DRIPS, I believe, are the easiest way to accumulate wealth. Again, the younger the better. We have several plans we are in now, so I am not just preaching. I have gone over them in detail in previous Tight Wad Tuesday posts here and here and ending up here. Any questions, I am here to help!

  • Regular contributions to an IRA at your bank or other financial institution. The key here is low cost investing and fees. If you have to pay more than 1.5% commission you are paying too much. DRIPS are far better at low cost investing.
  • Join an Investment Club: Invest with your friends! Google investment clubs in your area where people like yourself get together and learn about stocks and investing. Club’s often invest a little bit of money to get their feet wet but you can take those experiences, plus leverage everyone else’s research in the club, to make very qualified decisions on your own.Bivo-friends

You can invest a little bit of money with the club but put your new found knowledge to work for you at home. Investment clubs can be fun, you don’t necessarily need to be a nerd to join one. Don’t look at me! Simply joining others interested in being smart with their money and watching it grew a little (a lot). I ran an investment club in the 90’s with the likes of Air Force pilots, grad students and future Senators! We do look kinda nerdy, don’t we?


Does any of this make sense? Would you like to learn more?

Investing doesn’t have to be complicated with pyramid schemes or selling futures. Simple investing strategies include ‘Follow the Leader(s) (i.e. Wal-Mart, Apple), Dogs of the Dow or Value investing, and Dividend Investing where your risk and returns are minimized by regular quarterly dividends. These are easy steps that make sense, easy to research and follow. And whether you prefer to do some research on line or with the help of an investment club these strategies can work for you. I have a few links in my TWT header to get you started.


The catch? First you have to know what kind of investor you are?

Does investing make you lose sleep at night or do you feel confident in your good choices? What is your timetable before you need to access your savings? As you get older you typically move from an aggressive to somewhat conservative stance, not wishing to lose the empire that you built. Understanding what kind of risk you are willing to accept should be a place to start.

If you are interested, next Tuesday I will offer an Investor Risk survey used by Charles Schwab associates to map out what kind of investor you are. A  short few, simple questions will reveal what type of Warren Buffett you are deep down inside.

It’s your life. You are educated, have the initiative, and the good research skills to be good at this.

Don’t you deserve some $15.00 meals in your retirement, instead of $5.00 meals? Don’t you deserve to travel to see all those other great places and meet interesting people, like Gull and Kelly, from around the world when you finally have the time?

I think you deserve it. You just have to start somewhere / sometime.


Congratulations again Kelly and thanks to Gull for a wonderful Tuesday surprise!

TWT’s: Pop Quiz

A Blonde is watching the news with her husband when the newscaster says
‘Two Brazilian men die in a skydiving accident.’

The blonde starts crying to her husband, sobbing ‘That’s horrible!!! So
many men dying that way!’

Confused, he says, ‘Yes dear, it is sad, but they were skydiving, and
there is always that risk involved.’

After a few minutes, the blonde, still sobbing, says, ‘How many is a
Brazilian? It sounds like a really big number.’

I wanted to use that old Hooters joke to lead into this quick question. See, I was cleaning out some more closets this weekend and ran across this old forgotten number:


I wanted to ask everybody if they know what this number represents but, I know without any context, that question would be lunacy. So let me give you a hint:

2 x 3  x 20 x 365  x 5

Their is a clue in there somewhere but to give you a bit more context let me tell you this is the number I used in the beginning of my Financial Advisor presentations when I met potential new clients. It represents a significant number in your financial future.

Phew! Practically giving it away there.

Now, anyone that can guess the meaning or the significance of that number I will do a guest post for. ~Sorry, we are squirreling our nuts for the big move so no big cash prizes.

I will field some answers tonight and tomorrow and give you my answer(s) on a Tight Wad Tuesday post on, er, Tuesday.

Go (insert team name)!!!

Good Luck!

Oh, and it involves your retirement…


Tight-Wad Tuesdays: Aim for a Soft Landing

My wife is addicted to the extravagant Housewives franchise on reality TV. Last night there was a season ender with a wedding in Beverly Hills (Housewives of Beverly Hills). Love ‘em or hate ‘em, it was clear this housewife loved her daughter and put out an incredible event for her daughter’s wedding.

Beverly Hills wedding

It left me with the thought, wouldn’t we all like to do that for our kids that we love on their special day. I turned to my wife, breaking the encouraged silence, “I better start saving now for our girls”. Their big day may be only 20 years away. How else can I afford the rose petaled chandeliers, 100 of our closest friends, parking for said friends, the $9000 wedding cake and so on? My wife gave me a confirming nod.

Now that I have the job again, its fun to do all the fun financial planning. The first thing we talked about was where we are going on our next vacation, followed by a new deck for our backyard, funding the kids educational 529’s and our retirement DRIPs. It feels good to get back in the drivers seat!

If you are young and reading this you may think all that is a lot to pay for with a weekly paycheck. If you are older you know how it all somehow falls into place. Planning the short term stuff is fun and easy. It’s the long term commitments that are more challenging and may get brushed aside.

As a financial adviser I can tell you most people think their 401k’s will fuel their retirement. That’s the easy way for planning and wrong on so many levels. First there is the thing called Enron. Those employees lost their entire 401k savings from the wrecking of a company.

Bye-bye Enron!

Second, how long are you going to live in retirement? People are living longer every year. Plus, in today’s standard of living, people actually think they are going to retire early, adding more need for a hefty safety net..

Third, what are things going to cost when you are ready to retire? What did cars, or a loaf of bread, cost 20 years ago? What will it cost in 20 more years?

These are just a few signs that tell you 401k’s are not the sole answer to living a lifestyle you worked so hard to build over your first 60+ years. I don’t know about you, but I want my savings to last a long time, going down slow like a parachute instead of plummeting like the speeding impulse of the bungee jumper.

So wouldn’t you want to retire a millionaire? A million dollars won’t even be that much in 20 more years. We better get started!

I told you an easy, painless, carefree, so-simple-you-won’t-even-know-it way to build for a comfortable nest egg when you are through with work. I showed you the things to look for when investing in great companies, such as generous dividends and a good dividend yield. I also showed you some of the cream-of-the-crop, as far as dividend paying, reinvesting companies. So now I want to show you exactly how to do this.

First, your homework. I showed you a sorry graph on dividend paying companies last week; companies we all know and love. Otherwise great investments, right? But the last two were not so. Why?

We are planning for the future, right? We want to be sure whatever companies we invest in will not only be around but going strong in the future; a good 20 – 30 years from now… at least.
Phillip Morris (PM) is doing better than ever right now. Its stock price has hit record highs this year. Its dividend paid is far superior to most companies. What’s the problem?

You know how Phillip Morris makes the bulk of its money, right? Cigarettes. Each year the government is making it harder and harder to stay in business via levying taxes. Its industry is under constant attack from legal issues and people wanting millions of dollars in law suits because cigarette companies lie in their advertisements. And lifestyle changes! I am not so sure this company will be around in 20 years, or at least doing the level of sales as it enjoys today. I don’t think buying this company would be so smart for over the long haul. McDonalds and hamburgers yes. Cigarettes, no.

Eastman Kodak. Did everyone’s family have a Kodak camera at one point? Pictures printed on Kodak paper? Everybody had these! The graph I left tells the story of Eastman Kodak. They have fallen all the way down to a Penny Stock. Quite coincidently, Kodak filed for bankruptcy the day after I posted my blog last week. Why?

Their business was making and printing pictures…the old fashioned way. Kodak cameras and Kodak paper. Today everything is digital. The cameras are and the pictures sit in our computers; not so much on glossy paper. Kodak stuck to its guns and did not adapt, or tried way to late. They were a great investment years ago, paying a hefty dividend them self. But now they are filing for bankruptcy.

The lesson to learn is, when picking a company for the long-term, pick a staple that everyone will want and need in the future. Staples like healthcare, food, household items, hospitals and so on. Don’t pick todays hot company or latest trend. The world is changing at a rapid pace. And nobody wants cameras with rolls of film that need to be shipped away before you can see them anymore.


1) Pick some companies you know and love. This way, if the way the company’s business changes, or would no longer be in style, you will know when it happens. These companies are not hard to find. You buy them every day stores.

2) Research the company’s dividend. How much is it? Is it fair in relationship to the price of the stock ? (dividend yield) Don’t sweat this! You can find this number on any computer’s homepage under ‘Finance’, then ‘Price Quote‘ and then ‘Fundamentals’. Try this now with Coke (KO).  Dividend yield is on the first page under ‘Quote’. The actual dividend paid is on the next page, or ‘Fundamentals’ and it took you less than 60 seconds to find this out. And 2 minutes to write down the information you want.

3) Research your preferred companies Dividend Reinvestment Plan. You may find this under the company’s web site; under ‘Investors’. You may also find the info at a Transfer Agent’s web site, like Computerhare. Take an evening after work to compare the specifics and what you are looking for in a plan. This is the bulk of the investment of your time in DRIPs,  so take your time. The things you want are under last weeks blog (little to no fees, automatic bank drafts, possibility of making larger cash payments).

4) Buy your first shares! To buy your first shares you may have to go to a bank this one time and ask to speak to a professional adviser. They need to purchase your first shares for you. Sometime stocks want as much / little as a $500 investment; or only one share. Just ask first. Some transfer agents let you buy your first shares directly from them. (Lots easier! ~ bookmark this page) Your research in the various plans will tell you this.

5) Get the shares in YOUR name. If there is any tricky part, it is here. When you go to your professional you must ask / insist the shares be put under your name. All trading houses buy shares for you but they hold the title to them until you are ready to buy or sell again. Ask for the stock to be put in your name! The adviser will comply. Go with your spouse or a friend to the bank just to hold the adviser to it.

6) Set up your DRIP with the Transfer Agent. If you buy the shares under your name the company will send you these shares ( I think they look so cool). They will also send you literature about their Dividend Reinvestment Plan and how to set it up with their preferred agent.  Contact the agent to set up your Golden Parachute account! They will need a bank deposit ticket for the automatic bank drafts funding your retirement package.

That’s how it is done! There is nothing tricky are too hard that your education has not brought you to. There is no need to be an expert, a doctor, adviser, lawyer, or anything. These plans are set up for the common person. (Look at me! ~ I’m so common)

If you want some additional info on setting up a DRIP accurately here is a link and here. Take some minutes or read this info and be comfortable with the process. The entire process may take up to 2 months to complete. Nothing will sneak by you. Now, have a party! You just bought your first company! At your age! (Your family will be so proud)

Finally, daydream about where you want to spend your life when you are tired of working, the car you will drive, the vacations you take, the foods you eat. You just funded that comfortable landing in your retirement. Great job! Your soft landing has just been put on auto-pilot from here.

Home Sweet Home!

~ If you have any questions about anything I have gone over the last 3 Tuesdays, don’t be a Tight-Wad,please ask me and I will do my best to help:  Mccleafhome(at)comcast(dot)net

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