Net – Worth Update

Liabilities Value Assets/Cash Value
Student Loan A 0 Investments 12,073.27
Student Loan B 0 Cash 7,216.63
Student Loan C 0
Total 0 Total 19,289.90
NetWorth: 19,289.90

My Portfolio

Today, I want to talk about all the things that I have invested in, and what I learned from doing so.  With that note, let’s first talk about the four main accounts that my portfolio currently consists of.

  1. My checking account
  2. My brokerage account
  3. My US treasury account
  4. My LendingClub account

Combined, these 4 accounts hold every single penny I own.  Furthermore, it gets even more complex because I have sub-accounts inside of my main accounts.  Without further adieu, let’s get started talking about my portfolio.

The Chase Checking

My chase checking is pretty much the middle man of my investment scheme.  I use it to collect money I earn from working.  Unfortunately, I’m actually earning 0% interest on it.  However, I am glad that the account doesn’t come with any fees, as I always have a balance over $1500.

The Schwab Brokerage

Typically if you want to trade stocks and other securities, you need an institution to hold them for you.  For me, that’s schwab.  The thing I really liked about schwab was that once I put in my information for a taxable brokerage, I was able to open IRA’s with schwab using a few clicks (since they already had my information).

Taxable Brokerage

In my taxable brokerage account, I hold two different positions.

NNA, Navious Maritime Acquisition Corp.

Navious is an oil shipping company.  Basically, they have a bunch of boats that they fill up with oil and transport around the country.  Let’s take a look at how the stock has performed since I purchased it.

I purchased 883 shares of NNA at a price of $1.31 each

As you can see from the graph above I’ve made quite a bit of profit off of NNA.  My initial investment of $1104.85 has grown to $1433.85 (not counting dividends).  Essentially, I’ve earned a return of about 30% over the course of two months on this stock.

Why I decided to purchase NNA

I purchased NNA because it looked stupidly undervalued.  Let me explain why I thought it was undervalued.

It’s dividend yield was 15%

For the past 5 years, NNA has consistently paid a dividend of $0.05 per share.  At a price of $1.31, one share of NNA would earn $0.20 per year.  This means that every year, I earn 15.26% (0.2, the dividend per year / 1.31, the price per share) on my initial investment.

5 years of 5 cent dividends

15% dividend yield is very uncommon, and most stocks cannot sustainably pay a 15% yield.  However, after looking at NNA’s dividend history and financial cash flow, I was convinced that it wasn’t overpaying dividends.

NNA had very low valuation ratios

NNA Ratios, as of 12/30/2016

At the time of my purchase, NNA had a Price to Earnings ratio (also known as a P/E ratio) of about 2.  What this means is that for every $2 worth of NNA shares, NNA (as a company) earned $1 dollar.  Right now the ratio is at around 4.  Typically, the lower a P/E ratio, the “cheaper” a stock is.

In addition, NNA had a very low Price to Tangible book ratio (also known as a P/B ratio).  To better explain what this means, lets imagine that NNA decided to close down and sell every single tangible asset it had (boats, equipment, investments), pay off all of its debts, and then split that remaining money among its shareholders.  The P/B ratio would be the price that the share is trading at divided by the amount that NNA paid you per share (after selling everything).  If the P/B ratio is less than 1, you would get more money than what you paid for when NNA splits its money among the shareholders.  If the ratio was higher than 1, you would get less money than what you paid for.  Just watch out for negative P/B ratios (those are really bad)!

However, it wasn’t all great.  NNA had a lot of debt!

I was a bit apprehensive about purchasing NNA because of the debt it owed on its ships.  Giant oil carrying ships are not cheap!  They can cost millions of dollars.  As a result, NNA financed their ships with debt.

The reason I was scared about investing in a company with a lot of debt is because the company has to pay off its debt before it pays me.  As a result, if there was a sudden downturn in profit, I would easily lose my dividend, as all of the debt has to be paid off first.

Lesson learned

However, despite the massive debt, I still decided to purchase NNA because it had decent financials and was extremely undervalued.  However, I also don’t know that if winning with NNA was due to beginner’s luck or a successful analysis.  I plan on picking other stocks in the future to see if I actually know what I’m doing.


MLPA isn’t a company like NNA, its an ETF.  Basically, its a fund composed of many other companies compressed into a single stock.  MLPA focuses on the energy industry, (which means that it buys stocks related to energy).

I purchased 2 shares of MLPA for $11.51 each

Why I bought MLPA

Unlike NNA, I didn’t actually do any significant analysis into MLPA.  The only reason I bought it was because I had money sitting in my brokerage after getting a dividend from NNA.  I chose MLPA because it paid a decent dividend (~7%) and did not cost any commission to purchase.  (Typically when you purchase stocks, you pay a commission to the broker that initiates the transaction for you.  Some funds waive that broker fee, like MLPA).

Thus, whenever I have spare cash lying around, I’ll probably dump it into a share or two of MLPA.

The Roth IRA

I hold quite a few investments in my Roth IRA.  The main stock I hold in this account is NLY, Annaly Capital Management, which is a real estate investment trust (REIT).

NLY, Annaly Capital Management

As a REIT, NLY deals with real estate.  All REIT’s must pay out 90% of their profits as a dividend.  As a result they usually have high dividends.  Unfortunately for me, I purchased NLY right before interest rates started to rise.

I purchased 342 shares of NLY at a price of $10.97 each

As you can see from the graph above, I’ve lost nearly 10% of my investment in NLY (which will actually be closer to 5% after I get some dividends).  One of the reasons NLY has fallen in price is because interest rates are rising.  Business’s involving real estate are very capital intensive (meaning that they require a lot of money because real estate is really expensive).  When interest rates rise, it cost more money to borrow capital.  As a result, REITs (like NLY) have more trouble borrowing the money they need to expand their business.

Why I purchased NLY

The main reason I decided to by NLY was because of it’s super high 10% dividend, and my Uncle suggested the stock to me.  In addition, I really wanted to invest in something real-estate related, (mostly because of all the hype surrounding real estate).  I really should have done more research on this stock before purchasing it, instead of simply being blinded by its huge dividend.

Lesson Learned

Always thoroughly research a stock before purchasing it, as failing to do so is tantamount to gambling.  Also, don’t simply chase stocks that pay large dividends, as they may not necessarily be sustainable.  And lastly, pay attention to interest rates as they affect REITs negatively!

Other Misc. Shares

I also have 1 share of MPLA and 5 shares of PGX in this account.  I mainly bought these out of a whim, kind of just to try out buying stocks.  I’ll explain more about PGX below.

The Regular IRA

In addition to a Roth IRA, I also opened a regular IRA over at schwab.  The reason I did this was to lower my taxable income to the point where I qualified for the saver’s tax credit, (which basically saves me $200 on taxes).  I only have one large position in this account, which is PGX.  Like MLPA, PGX is an exchange traded fund (ETF).  However the difference is that PGX focuses on preferred stock instead of the energy industry.

PGX, Powershares Preferred Portfolio

I purchased 59 shares of PGX for $14.90 each and then later purchased 63 shares for $14.13 each.

After losing money on NLY, I decided to wise-up and dollar cost average!  Instead of purchasing all of my shares of PGX at once, I decided to spread out my purchase so that if the price dropped, I wouldn’t get screwed as much.

Why I bought PGX

There were two main factors that led me to purchase PGX, high dividend income and safety.

Right now, PGX has a dividend yield of about 6%, which is fairly high.  In addition, that dividend income came from preferred stock, which is significantly safer than regular common stock.  To understand why preferred stock is safer, let’s look at how cash flows in a company.

Basically, after paying off debts, the company is forced to pay preferred share holders.  By placing yourself higher on the cash-flow chain, you make it much more certain that you will end up getting paid.  That’s why preferred stock is usually safer as an investment compared to common stock.

Lesson Learned

Once again, interest rates have a negative correlation with the price of preferred stock.  If the interest rates rise, the price of the preferred stock drops.  So, it’s pretty wise to watch interest rates and adjust your investments accordingly!

The US Treasury

I didn’t want to put all of my money at risk, so I also bought an I-Bond.  The balance on the I-bond is only updated every 6 months, so I have “not lost nor gained” any money on my I-bond yet.  Regardless, I do have a nice $5,000 sitting protected inside of this bond.

Lending Club

I recently invested $5,500 dollars into a Lending Club Roth IRA.  I have not had sufficient time to actually invest all of the money into loans (as a matter of fact, my transaction has not yet cleared and my money is still pending transfer), but I plan on investing in high-risk notes earning 13%+ interest rates.  I’ll probably post an update on how this turns out later on.  But for now, I’m just trying to invest the money in my lending club account.


Here’s the summary of my investments in a neat, nice table:

One thing to note is that the interest on the I-bond is only added every six months.  However, its technically worth $5023 right now.

Finishing thoughts

Overall, I’d say that I got screwed over by fear of rising interest rates early on, and was able to recoup my losses thanks to a lucky investment with NNA.  I’ve learned so much about finance and investing over the past 6 months,  and am proud to say that I’ve successfully killed my student loans and build up nearly $20K worth of wealth!  Unfortunately, I’ve only got 10 months left to go on my 99K challenge, and I’ve got roughly 80K left to procure.  Regardless, I feel that I’m well on my way, and I’m feeling strong about my current position.  If you’ve got any questions about anything I’ve written here, feel free to comment below or email me (!

Week 12 Update                                                                  Week 16 Update